Document:

Exhibit
10.6

 

EXECUTION COPY

 

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT, dated as of October 15,
2007 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”),
is entered into by and among JPMorgan Chase Bank, N.A. (“JPMCB”),
in its capacity as agent (the “Agent”) for
the “Lenders” under the Bank Credit Agreement (as defined below) (such Lenders,
the “Banks”), the holders of the Notes (as
defined below) listed on Annex II attached hereto and any subsequent
holder of Notes (the “Noteholders”;
the Banks, the Noteholders and the Agent, and any other holder of Eligible
Additional Senior Secured Indebtedness (as defined below) that enters into a
joinder to this Agreement between such holder and the Collateral Agent (the “Additional Holders”), together with their respective
successors and assigns, are herein sometimes collectively called the “Lenders” and individually called a “Lender”),
and JPMCB, in its capacity as contractual representative for the Lenders
hereunder (the “Collateral Agent”). Capitalized
terms used herein but not defined herein shall have the meanings set forth in
the “Bank Credit Agreement” and the “Note Agreement” and the “Eligible
Additional Senior Secured Documents” (each as defined below).

 

RECITALS:

 

WHEREAS, United Stationers Supply Co., an Illinois
corporation (herein called the “Company”),
United Stationers Inc., a Delaware corporation (the “Parent”),
the Banks, and the Agent entered into that certain Second Amended and Restated
Five-Year Revolving Credit Agreement dated as of July 5, 2007 (as the same have
been or may be amended, restated, supplemented or otherwise modified, replaced
or refinanced from time to time, the “Bank Credit Agreement”),
pursuant to which, among other things, the Banks have agreed to make certain
advances to the Company (the “Loans”) and to
issue letters of credit for the account of the Company (the “Letters of Credit”);

 

WHEREAS, the Company, the Parent and the Noteholders
listed on Annex II entered into a Master Note Purchase Agreement, dated as of
October 15, 2007 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Note Agreement”)
pursuant to which the Company issued and sold to the Noteholders $135,000,000
aggregate principal amount of the Company’s Floating Rate Secured Senior Notes,
Series 2007-A, due October 15, 2014 (the “Series 2007-A Notes”);
and which Note Agreement provides for the issuance by the Company of one or
more additional series of secured senior notes (“Additional
Notes” and, together with the Series 2007-A Notes, the “Notes”; the Notes, the Note Agreement, the Bank Credit
Agreement and any other document, agreement or instrument pursuant to which
Eligible Additional Senior Secured Indebtedness is incurred or issued and which
governs any Eligible Additional Senior Secured Indebtedness (the “Eligible Additional Senior Secured Documents”) being herein
referred to as the “Lender Documents”);

 

WHEREAS, pursuant to the terms of the Collateral Documents,
each of the Company and the entities set forth on Annex III hereto
(together with any other subsidiaries of the Parent or the Company that may
hereafter become parties to any Collateral Document, the 

 

 

“Credit Parties”) that have
guaranteed the repayment of all amounts due and payable under the Lender
Documents, shall, as of the date hereof, have granted a security interest in
certain of its assets to the Collateral Agent; and

 

WHEREAS, the Lenders desire to agree to the relative
priority of the application of payments received pursuant to the terms of the
Collateral Documents with respect to the Obligations (as defined below), and
certain other rights and interests;

 

NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein contained, the Lenders and the Collateral Agent
hereby agree as follows:

 

1.             Defined
Terms. As used in this Agreement, the following terms shall have the
following meanings:

 

“Actionable Default” means, under the Lender Documents, (a) a
Default or Event of Default (as defined therein) shall have occurred thereunder
as a result of (i) the nonpayment of amounts owing thereunder, (ii)
noncompliance with any financial covenant set forth therein or (iii) the
bankruptcy or insolvency of the Company or any of its affiliates, including,
without limitation, the Credit Parties, (b) a notice shall have been delivered
to the Company by the Agent under the Bank Credit Agreement or a Noteholder
under the Note Agreement or an Additional Holder under the Eligible Additional
Senior Secured Documents indicating that a Default or Event of Default (as
defined therein) has occurred and is continuing and the Obligations due under
any such agreement are immediately due and payable, to the extent provided for
in the applicable Lender Document, (c) a default shall have occurred under any
Collateral Document or Guaranty (defined below) and the Agent, the Collateral
Agent, or a Lender, as applicable, shall have caused the amounts owing
thereunder to become immediately due and payable, to the extent provided for in
the applicable Collateral Document or Guaranty or (d) any Lender shall have
exercised a banker’s lien or right of offset against any account of the Company
or any Credit Party maintained with such Lender after the occurrence of a
Default or Event of Default (as defined therein).

 

“Agent’s Expenses” means all of the fees, costs and expenses of the
Collateral Agent (including, without limitation, the reasonable fees and
disbursements of its counsel) (i) arising in connection with the preparation,
execution, delivery, modification, restatement, amendment or termination of
this Agreement and each Collateral Document, if not previously reimbursed, or
the enforcement (whether in the context of a civil action, adversarial proceeding,
workout or otherwise) of any of the provisions hereof or thereof, or (ii)
incurred or required to be advanced in connection with the sale or other
disposition or the custody, preservation or protection of the Collateral
pursuant to any Collateral Document and the exercise or enforcement of the
Collateral Agent’s rights under this Agreement and in and to the Collateral.

 

“Collateral” means all property of the Company or any Credit Party
in which the Agent or the Collateral Agent shall have been granted a security
interest or lien under any of the Collateral Documents.

 

“Collateral Account” means the collateral account established
and maintained by the Collateral Agent pursuant to Section 8.

 

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“Collateral Documents” means any and all security agreements,
pledge agreements, financing statements, and other similar instruments executed
by the Company or any Credit Party in favor of the Collateral Agent from time
to time pursuant hereto, in each case as such agreements, documents and
instruments may be amended, modified, supplemented and/or restated, and
together in each case with any other agreements, instruments and documents
incidental thereto.

 

“Distribution Date” means the second business day in each calendar week,
commencing with the first such business day following receipt by the Collateral
Agent of a Notice of Actionable Default.

 

“Eligible Additional Senior Secured Indebtedness” means all monetary obligations under the
Eligible Additional Senior Secured Agreements and that are permitted under the
Bank Credit Agreement, the Note Agreement and any other Eligible Additional
Senior Secured Documents (if in effect) to be secured by the Liens and security
interests under the Collateral Documents on a pari passu basis (on all or part
of the Collateral) with the Obligations under the Bank Credit Agreement and the
Note Agreement and any other Eligible Additional Senior Secured Indebtedness
(if in effect) so long as the property and assets covered by such Liens and
security interests also secure the Obligations under the Bank Credit Agreement
and the Note Agreement and any other Eligible Additional Senior Secured
Indebtedness (if in effect).

 

“Guaranty” means any guaranty entered into by a Credit Party in
favor of the Agent, the Collateral Agent, and/or any Lender guaranteeing the
repayment of the Obligations due and payable under a Lender Document.

 

“L/C Interests” means, with respect to any Bank, such Bank’s direct
or participation interests in all unpaid reimbursement obligations with respect
to Letters of Credit and such Bank’s direct obligations or risk participations
with respect to undrawn amounts of all outstanding Letters of Credit, provided
that the undrawn amounts of outstanding Letters of Credit shall be considered
to have been reduced to the extent of any amount on deposit with the Agent at
any time as provided in Section 9(b) hereof.

 

“Notice of Actionable Default” means a written notice to the Collateral
Agent from any Lender or Lenders stating that it is a “Notice of Actionable
Default” hereunder and certifying that an Actionable Default has occurred and
is continuing. A Notice of Actionable Default may be included in a written
direction to the Collateral Agent from the Requisite Lenders pursuant to Section
5.

 

“Notice of Default”
means a written notice to the Collateral Agent from any Lender or Lenders
stating that it is a “Notice of Default” hereunder and certifying that an Event
of Default (as defined in the Bank Credit Agreement or the Note Agreement or
the Eligible Additional Senior Secured Documents to which an Additional Holder
is a party) has occurred and is continuing.

 

“Obligations” means all of the monetary obligations owed by the
Company and the Credit Parties to the Lenders and the Agent under the Bank
Credit Agreement, the Note Agreement, the Eligible Additional Senior Secured
Documents, the Notes, the Guaranties, the 

 

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Collateral Documents, and related agreements, documents, and
instruments, including, without limitation, 
(1) the outstanding principal amount of, accrued and unpaid interest on,
and any unpaid premium or make whole amount (as defined in the Note Agreement
or, if applicable, any Eligible Additional Senior Secured Documents) or other
breakage or prepayment indemnification due with respect to, the Loans, the
Notes or any Eligible Additional Senior Secured Indebtedness, (2) any unpaid
reimbursement obligations with respect to any Letters of Credit, (3) any
undrawn amounts of any outstanding Letters of Credit, and (4) any other unpaid
amounts (including amounts in respect of fees, expenses, indemnification,
hedging obligations permitted under the Bank Credit Agreement and
reimbursement) due from the Company and the Credit Parties under any of the
Note Agreement, any Eligible Additional Senior Secured Documents, the Notes,
the Bank Credit Agreement, the Guaranties or the Collateral Documents; provided
that the undrawn amounts of any outstanding Letters of Credit shall be
considered to have been reduced to the extent of any amount on deposit with the
Agent at any time as provided in Section 9(b) hereof.

 

“Principal Exposure” means, with respect to any Lender at any
time (i) if such Lender is a Bank, (a) prior to the acceleration of the Obligations
under the Bank Credit Agreement, the sum of (x) the aggregate amount of such
Lender’s unfunded Commitments under the Bank Credit Agreement to the extent
such Lender shall be contractually obligated to make Credit Extensions (as
defined in the Bank Credit Agreement) pursuant to the terms of the Bank Credit
Agreement, (y) the outstanding principal amount of such Lender’s Loans and (z)
the outstanding face and/or principal amount of such Lender’s L/C Interests at
such time, (b) after an acceleration of the Obligations under the Bank Credit
Agreement but prior to the date upon which the Bank Credit Agreement has
terminated by its terms and all of the Obligations thereunder shall have been
paid in full, the sum of (x) the outstanding principal amount of such Lender’s
Loans, (y) the outstanding face and/or principal amount of such Lender’s L/C
Interests at such time and (z) the aggregate net early termination payments and
all other amounts due and unpaid from the Borrower to such Bank or such Bank’s
Affiliates under Rate Management Transactions, as determined by the Agent in
its reasonable discretion and (z) after the Bank Credit Agreement has
terminated by its terms and all of the Obligations thereunder have been paid in
full (whether or not the Obligations under the Bank Credit Agreement were ever
accelerated), the aggregate net early termination payments and all other
amounts then due and unpaid from the Borrower to such Bank or such Bank’s
Affiliates under Rate Management Transactions, as determined by the Agent in
its reasonable discretion, and (ii) if such Lender is a Noteholder, the
outstanding principal amount of such Lender’s Notes at such time, (iii) if such
Lender is an Additional Holder that is party to a secured revolving credit
facility or secured term loan credit facility (a) prior to the acceleration of
the Obligations under the such Lender’s Eligible Additional Senior Secured
Documents, the sum of (x) the aggregate amount of such Lender’s unfunded
commitments under such Eligible Additional Senior Secured Documents to the
extent such Lender shall be contractually obligated to make extensions of
credit pursuant to the terms of such Eligible Additional Senior Secured
Documents and (y) the outstanding unpaid principal amount of such Lender’s Eligible
Additional Senior Secured Indebtedness, (b) after an acceleration of the
Obligations under such Lender’s Eligible Additional Senior Secured Documents
but prior to the date upon which such Eligible Additional Senior Secured
Documents have terminated by their terms and all of the Obligations thereunder
shall have been paid in full, the outstanding unpaid principal amount of such
Lender’s Eligible Additional Senior Secured Indebtedness and (iv) with respect
to any other Lender that is an Additional Holder, the

 

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outstanding unpaid principal amount of such Lender’s Eligible
Additional Senior Secured Indebtedness.

 

“Pro Rata Share” means, with respect to any Lender at any time, a
fraction (expressed as a percentage), the numerator of which is the amount of
such Lender’s Principal Exposure at such time, and the denominator of which is
the aggregate amount of the Principal Exposure of all of the Lenders at such
time.

 

“Requisite Lenders” means, at any time, (i) with respect to the aggregate
Pro Rata Shares of the Banks and any Additional Holder that is party to a
secured revolving credit facility or secured term loan credit facility, such
Banks and Additional Holders whose Pro Rata Shares exceed fifty percent of such
aggregate amount plus (ii) with respect to the aggregate Pro Rata Shares
of the Noteholders and any Additional Holder not otherwise included under clause
(i) above, such Noteholders and Additional Holders whose Pro Rata Shares
(a) so long as the Series 2007-A Notes are the only Notes outstanding or with
respect to any matter in which the Series 2007-A Notes are the only series of
Notes affected, equal or exceed 60% of such aggregate amount and (b) in any
other circumstance, exceed fifty percent of such aggregate amount.

 

“Secured Parties” means (i) the “Holders of Secured Obligations” under
(and as defined in) the Bank Credit Agreement, (ii) the Noteholders and (iii)
the Additional Holders, together with their respective successors and assigns.

 

2.             Appointment;
Nature of Relationship. The Agent, on behalf of the Banks, and each
Noteholder and each Additional Holder by its acceptance of any Lender Document,
hereby designates and appoints JPMCB as its Collateral Agent under this
Agreement and the Collateral Documents, and each of them hereby irrevocably
authorizes the Collateral Agent to take such action on its behalf under the
provisions of this Agreement and the Collateral Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are incidental thereto. The Collateral Agent agrees to act as such on the
express terms and conditions contained in this Agreement. Notwithstanding the
use of the defined term “Collateral Agent,” it is expressly understood and agreed
that the Collateral Agent shall not have any fiduciary responsibilities to any
Lender by reason of this Agreement and that the Collateral Agent is merely
acting as the representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the Collateral Documents. In its
capacity as the Lenders’ contractual representative, the Collateral Agent (i)
does not assume any fiduciary duties to any of the Lenders and (ii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the Collateral Documents. The
Agent, on behalf of the Banks, each Noteholder and each Additional Holder by
its acceptance of any Lender Document agrees to assert no claim against the
Collateral Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each of them hereby waives.

 

3.             Powers
and Duties. The Collateral Agent shall have and may exercise such powers
under the Collateral Documents as are specifically delegated to the Collateral
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Collateral Agent shall have no implied
duties to the Lenders, or any obligation to the

 

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Lenders to take any action hereunder or under any of the Collateral
Documents, except any action specifically required by this Agreement or any of
the Collateral Documents to be taken by the Collateral Agent or directed by the
Requisite Lenders in accordance with the terms hereof. The Collateral Agent
shall not take any action which is in conflict with any provisions of
applicable law or of this Agreement or any Collateral Document.

 

4.             Authorization
to Execute Collateral Documents. If the Collateral Agent receives written
notice from either the Agent or a Noteholder or an Additional Holder at any
time or from time to time hereunder that Collateral Documents are required
pursuant to the Bank Credit Agreement, the Note Agreement or any Eligible
Additional Senior Secured Document in connection with the grant of a security
interest in and lien against the assets of the Company and/or a Credit Party,
the Collateral Agent is authorized to and shall execute and deliver such
Collateral Documents as the Agent or such Noteholder or such Additional Holder
shall direct requiring execution and delivery by it and is authorized to and
shall accept delivery from the Company of such Collateral Documents as the
Agent or the Noteholder or the Additional Holder shall direct which do not
require execution by the Collateral Agent.

 

5.             Direction
by Requisite Lenders. Except as otherwise provided in this Section 5,
the Collateral Agent shall take any action with respect to the Collateral and
the Collateral Documents directed in writing by the Requisite Lenders. Notwithstanding
the foregoing, the Collateral Agent shall not be obligated to take any such
action (i) which is in conflict with any provisions of applicable law or of
this Agreement or any Collateral Document or (ii) with respect to which the
Collateral Agent, in its opinion, shall not have been provided adequate
security and indemnity against the costs, expenses and liabilities that may be
incurred by it as a result of compliance with such direction. Under no
circumstances shall the Collateral Agent be liable for following the written
direction of the Requisite Lenders. In each instance in which the Requisite
Lenders deliver a written direction to the Collateral Agent pursuant hereto,
the Collateral Agent shall promptly send a copy of such written direction to
each Lender that is not included in such Requisite Lenders.

 

6.             Notice
of Actionable Default. Any Lender or Lenders may give the Collateral Agent
a Notice of Default or a Notice of Actionable Default in the manner provided in
Section 31 and shall give a copy of such Notice of Default or Notice of
Actionable Default to each of the other Lenders. If and only if the Collateral
Agent shall have received a Notice of Actionable Default, the Collateral Agent
shall, if directed in writing by the Requisite Lenders, exercise the rights and
remedies provided in this Agreement and in any of the Collateral Documents.

 

7.             Remedies.
Each of the Lenders hereby irrevocably agrees that the Collateral Agent shall
be authorized, after the occurrence of an Actionable Default and at the
direction of the Requisite Lenders or incidental to any such direction, for the
purpose of carrying out the terms of this Agreement and any of the Collateral
Documents, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or desirable to accomplish the
purposes hereof and thereof, including, without limiting the generality of the
foregoing, to the extent permitted by applicable law, to do the following:

 

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(i)            to
ask for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due with respect to the Collateral (except that,
without the consent of all Lenders, the Collateral Agent shall not accept any
Obligations in whole or partial consideration from the disposition of any
Collateral),

 

(ii)           to
receive, take, endorse, assign and deliver any and all checks, notes, drafts,
acceptances, documents and other negotiable and nonnegotiable instruments,
documents and chattel paper taken or received by the Collateral Agent in
connection with this Agreement or any of the Collateral Documents,

 

(iii)          to
commence, file, prosecute, defend, settle, compromise or adjust any claim,
suit, action or proceeding with respect to the Collateral,

 

(iv)  to sell,
transfer, assign or otherwise deal in or with the Collateral or any part
thereof pursuant to the terms and conditions of this Agreement and the
Collateral Documents, and

 

(v)  to do, at
its option and at the expense and for the account of the Lenders (to the extent
the Collateral Agent shall not be reimbursed by the Company) at any time or
from time to time, all acts and things which the Collateral Agent deems
reasonably necessary to protect or preserve the Collateral and to realize upon
the Collateral.

 

8.             The
Collateral Account. Upon receipt by the Collateral Agent of a Notice of
Actionable Default, and until such time as the Event of Default described
therein is cured or waived, the Collateral Agent shall establish and maintain
at its principal office an interest-bearing account that shall be entitled the “United
Stationers Collateral Account.”  All
moneys received by the Collateral Agent with respect to Collateral after
receipt of a Notice of Actionable Default shall be deposited in the Collateral
Account and thereafter shall be held, applied and/or disbursed by the
Collateral Agent in accordance with Section 9. In addition, any other
payments received, directly or indirectly, by any Lender of or with respect to
any of the Obligations (including, without limitation, any payment by any
Credit Party under any Guaranty) after giving or receiving a Notice of
Actionable Default (excluding any payments distributed to any Lender by the
Collateral Agent in accordance with Section 9), any payment received by
any Lender (whether direct or indirect, by foreclosure, set-off, exercise of
banker’s lien or otherwise) from the Company or any Credit Party made during
the continuance of an Actionable Default (other than scheduled payments of
interest, fees and principal in respect of the Obligations), and any payment
received by any Lender with respect to any of the Obligations in an insolvency
or reorganization proceeding with respect to the Company or any Credit Party,
shall promptly be delivered to the Collateral Agent and thereafter shall be
held, applied and/or disbursed by the Collateral Agent in accordance with Section
9. The Collateral Account at all times shall be subject to the exclusive
dominion and control of the Collateral Agent.

 

9.             Application
of Moneys. (a) All moneys held by the Collateral Agent in the Collateral
Account shall be distributed by the Collateral Agent on each Distribution Date
as follows:

 

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FIRST:  To the
Collateral Agent in an amount equal to the Agent’s Expenses that are unpaid as
of such Distribution Date, and to any Lender that has theretofore advanced or
paid any such Agent’s Expenses in an amount equal to the amount thereof so
advanced or paid by such Lender prior to such Distribution Date;

 

SECOND:  To the
Lenders, pro rata in proportion to their respective Pro Rata Shares as of such
Distribution Date; and

 

THIRD:  Any
surplus remaining after payment in full in cash of all Agent’s Expenses and all
of the Obligations shall be paid to the Company, or to whomever may be lawfully
entitled to receive the same, or as a court of competent jurisdiction may
direct, provided that if any Lender shall have notified the Collateral
Agent in writing that a claim is pending for which such Lender is entitled to
the benefits of an indemnification, reimbursement or similar provision under
which amounts are not yet due but with respect to which the Company continues
to be contingently liable, and amounts payable by the Company with respect
thereto are secured by the Collateral, the Collateral Agent shall continue to
hold the amount specified in such notice in the Collateral Account until the
Company’s liability with respect thereto is discharged or released to the
satisfaction of such Lender.

 

Notwithstanding
the foregoing, except for any surplus under clause THIRD above, the Collateral
Agent shall not be required (unless directed by the Requisite Lenders) to make
a distribution on any Distribution Date if the balance in the Collateral
Account available for distribution on such Distribution Date is less than
$10,000. The Collateral Agent shall not be responsible for any Lender’s
application (or order of application) of payments received by such Lender from
the Collateral Agent hereunder to the Obligations owing to such Lender. For the
purpose of determining the amounts to be distributed pursuant to clause SECOND
above of this subsection (a) with respect to the undrawn amounts of the
outstanding Letters of Credit, such undrawn amounts shall be reduced by any
amounts held as collateral pursuant to subsection (b) of this Section 9.

 

(b)  Any
distribution pursuant to clause SECOND of subsection (a) above with respect
to the undrawn amount of any outstanding Letter of Credit shall be paid to the
Agent to be held as collateral for the Banks and disposed of as provided in
this subsection (b). On each date on which a payment is made to a
beneficiary pursuant to a draw on a Letter of Credit, the Agent shall
distribute to the Banks from the amounts held pursuant to this subsection
(b) for application to the payment of the reimbursement obligation due to
such Banks with respect to such draw an amount equal to the product of (1) the
total amount then held pursuant to this subsection (b), and (2) a
fraction, the numerator of which is the amount of such draw and the denominator
of which is the aggregate undrawn amount of all outstanding Letters of Credit
immediately prior to such draw. On each date on which a reduction in the
undrawn amount of any outstanding Letter of Credit occurs other than on account
of a payment made to a beneficiary pursuant to a draw on such Letter of Credit,
the Agent shall distribute from the amounts held pursuant to this subsection (b)
an amount equal to the product of (1) the total amount then held pursuant to
this subsection (b) and (2) a fraction the numerator of which is the
amount of such

 

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reduction and the denominator of which is the aggregate undrawn amount
of all outstanding Letters of Credit immediately prior to such reduction, which
amount shall be distributed as provided in clause SECOND of subsection (a)
above. At such time as no Letters of Credit are outstanding, any remaining
amount held pursuant to this subsection (b), after the distribution
therefrom as provided above, shall be distributed as provided in clause SECOND
of subsection (a) above.

 

10.           Information
from Lenders. Each of the Lenders hereby agrees, promptly upon request by
the Collateral Agent, to provide to the Collateral Agent in writing such
information regarding the Obligations held by such Lender as may be reasonably
required by the Collateral Agent at any time to determine such Lender’s Pro
Rata Share or to calculate distributions to such Lender from the Collateral
Account. Each Lender shall notify the Collateral Agent in writing promptly
following the repayment in full of all Obligations owing to such Lender.

 

11.           Limitation
on Collateral Agent’s Duties in Respect of Collateral. Other than the
Collateral Agent’s duties set forth in this Agreement and the Collateral
Documents as to the custody of Collateral and the proceeds thereof received by
the Collateral Agent hereunder and thereunder and the accounting to the
Company, the Credit Parties, and the Lenders therefor, the Collateral Agent
shall have no duty to the Company, the Credit Parties, or the Lenders with
respect to any Collateral in its possession or control or in the possession or
control of its agent or nominee, any income thereon, or the preservation of
rights against prior parties or any other rights pertaining thereto.

 

12.           Lender
Credit Decision. Each Lender acknowledges that it has, independently and
without reliance upon the Collateral Agent or any other Lender and based on the
financial information provided by the Company and the Credit Parties and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Collateral Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
Collateral Documents.

 

13.           Exculpation.
Neither the Collateral Agent nor any of its directors, officers, affiliates,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (i) any statement, warranty or representation made by
the Company or any Credit Party in connection with any Collateral Document or
Guaranty; (ii) the performance or observance of any of the covenants or agreements
of the Company, or any Credit Party under any Collateral Document or Guaranty;
(iii)  the satisfaction or observance of
any condition or covenant specified in any of the Lender Documents; (iv) the
existence or possible existence of any default under any of the Lender
Documents or any Actionable Default;  (v)
the validity, enforceability, effectiveness or genuineness of any Collateral
Document, Guaranty or any other instrument or writing furnished in connection
herewith; (vi) the validity, perfection or priority of any security interest or
lien created under any Collateral Document; or (vii) the financial condition of
the Company or any of the Credit Parties.

 

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14.           Employment
of Agents and Counsel. The Collateral Agent may execute any of its duties
as the Collateral Agent hereunder and under any Collateral Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Collateral Agent shall be entitled to
advice of counsel concerning the contractual arrangement between the Collateral
Agent and the Lenders and all matters pertaining to the Collateral Agent’s
duties hereunder and under the Collateral Documents.

 

15.           Reliance
on Documents and Counsel. The Collateral Agent shall be entitled to rely
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Collateral Agent, which
may be employees of the Collateral Agent.

 

16.           Collateral
Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse
and indemnify the Collateral Agent ratably in proportion to their respective
Pro Rata Shares as of the date of the occurrence of the event as to which such
reimbursement or indemnification is being made (i) for any amounts not
reimbursed by the Company, or any Credit Party, under its Collateral Documents
or Guaranty, as applicable, (ii) for any other expenses incurred by the
Collateral Agent, on behalf of the Lenders, in connection with the preservation
or protection of the Collateral or the validity, perfection or priority of the
Collateral Agent’s interest therein or the enforcement of the Collateral
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Collateral Agent in any way relating to or arising out of the
Collateral Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent any of the foregoing is found by
a court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of the Collateral Agent. The agreements in this Section
16 shall survive the repayment of the Obligations and the termination of
the other provisions of this Agreement.

 

17.           Rights
as a Lender. Notwithstanding that JPMCB is acting as the Collateral Agent
hereunder, JPMCB in its individual capacity shall have the same rights and powers
hereunder as any Lender and may exercise the same as though it were not the
Collateral Agent, and the term “Lender” or “Lenders” shall include JPMCB in its
individual capacity.

 

18.           Successor
Collateral Agent. The Collateral Agent may resign at any time by giving not
less than thirty days’ prior written notice thereof to the Lenders, the
Company, and the Credit Parties, and the Collateral Agent may be removed at any
time with or without cause by written notice received by the Collateral Agent
from the Requisite Lenders. Upon any such resignation or removal, the Requisite
Lenders shall have the right to appoint, on behalf of the Lenders, a successor
Collateral Agent. If no successor Collateral Agent shall have been so appointed
by the Requisite Lenders and shall have accepted such appointment within thirty
days after the retiring Collateral Agent’s giving notice of resignation, then
the retiring Collateral Agent may appoint, on behalf of the Lenders, a
successor Collateral Agent. Upon the acceptance

 

10

 

of any appointment as the Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder and under the Collateral
Documents. No resignation or removal of the Collateral Agent shall become
effective until a replacement Collateral Agent shall have been selected as
provided herein and shall have assumed in writing the obligations of the
Collateral Agent hereunder and under the Collateral Documents. Any replacement
Collateral Agent shall be a bank, trust company, or insurance company having
capital, surplus, and undivided profits of at least $250,000,000. After any
retiring Collateral Agent’s resignation hereunder as Collateral Agent, the
provisions of this Agreement shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Collateral Agent hereunder and under the Collateral Documents.

 

19.           Partial
Release. If the Collateral Agent receives written notice from the Agent and
the Company that the lien on any Collateral granted pursuant to any Collateral
Document is required to be released pursuant to a transaction permitted by the
terms of the Bank Credit Agreement, the Note Agreement and the Eligible
Additional Senior Secured Documents, the Collateral Agent shall promptly
release such Collateral in accordance with the directions of the Agent and the
Company.

 

20.           Release
and Termination. All of the Collateral shall be released and this Agreement
shall be terminated on the earlier of:

 

(a)           the
date on which (i) the Collateral Agent shall have received from each of the
Lenders written notice that all Obligations owing to such Lender have been paid
in full and (ii) all Agent’s Expenses shall have been paid in full; or

 

(b)           the
date on which (i) the Collateral Agent shall have received written notice from
the Agent directing the Collateral Agent to release the Collateral and stating
that the Banks have consented to such release under the terms of the Bank
Credit Agreement, and (ii) all Agent’s Expenses shall have been paid in full.

 

21.           Amendments
and Waivers of Collateral Documents. The Collateral Agent shall not execute
or deliver any amendment or waiver with respect to any Collateral Document
except at the direction or with the consent of the Requisite Lenders.

 

22.           Notices
With Respect to Lender Documents. Each of the Agent and each Noteholder and
each Additional Holder by its acceptance of any Lender Document agrees to use
its best efforts to give to the other (a) copies of any notice of the
occurrence or existence of any default in payment of the Obligations sent to
the Company and/or any Credit Party, simultaneously with the sending of such
notice to the Company and/or such Credit Party, and (b) notice of any
acceleration of the Loans, the Notes or any Eligible Additional Senior Secured
Indebtedness, promptly upon such acceleration, but the failure to give any of
the foregoing notices shall not affect the validity of such notice of default
or such acceleration or create a cause of action against or cause a forfeiture
of any rights of the party failing to give such notice or create any claim or
right on behalf of any third party. Each Lender shall use commercially
reasonable efforts to deliver notice to the Collateral Agent, for prompt
dissemination to all 

 

11

 

Lenders, of the occurrence of any Default or Event of Default under any
Lender Document to which such Lender is a party within five Business days after
such Lender shall have actual knowledge thereof; provided that no Lender nor
the Collateral Agent shall incur any liability for failure to give such notice.

 

23.           No
Other Security. Neither the Agent nor any Lender shall take or receive a
security interest in or lien upon any of the property or assets of the Company
or any Credit Party as security for the Obligations other than pursuant to this
Agreement and the Collateral Documents or as security for any other obligations
of the Company or any of the Credit Parties other than the Obligations. Neither
the Agent nor any Lender shall take or receive any guaranty for the benefit of
any obligations of the Company or its Subsidiaries other than the Guaranties.

 

24.           Accounting;
Invalidated Payments. (a) The Agent and each Lender agrees to render an
accounting to any of the others of the outstanding amounts of the Obligations,
of receipts of payments from the Company, any Subsidiary of the Company and any
Credit Party and of other items relevant to the provisions of this Agreement
upon the reasonable request from one of the others as soon as reasonably
practicable after such request.

 

(b) To the extent that any payment received by any
Lender pursuant to a distribution under Section 9(a) hereof is
subsequently invalidated, declared fraudulent or preferential, set aside or
required to be paid to a trustee, receiver, or any other party under any
bankruptcy act, state or federal law, common law or equitable cause, then each
other Lender that received a payment pursuant to such distribution shall
purchase from the Lender whose payment was invalidated (the “Affected Lender”), at such time as the Affected Lender is
required to return or repay such payment, an undivided participation interest
in the Affected Lender’s Obligations in an amount such that after such purchase
the amount of such distribution (after deduction of the invalidated payment)
shall have been shared ratably among the Lenders as contemplated by Section
9(a) hereof.

 

25.           Continuing
Agreement. This Agreement shall in all respects be a continuing, absolute,
unconditional and irrevocable agreement, and shall remain in full force and
effect until terminated in accordance with Section 20. Without limiting
the generality of the foregoing, this Agreement shall survive the commencement
of any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar proceeding
involving the Company, a Subsidiary of the Company or a Credit Party. The Agent
and each Lender agrees that this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in
part) of any of the Obligations pursuant to any distribution hereunder is
rescinded or must otherwise be restored by the Agent or any Lender, upon the
insolvency, bankruptcy or reorganization of the Company, a Subsidiary of the
Company or a Credit Party or otherwise, as though such payment had not been
made.

 

26.           Representations
and Warranties. Each of the parties hereto severally represents and
warrants to the other parties hereto that it has full corporate power, and has
taken all action necessary, to execute and deliver this Agreement and to
fulfill its obligations hereunder, and that no governmental or other
authorizations are required in connection herewith, and that this Agreement
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency, reorganization,

 

12

 

moratorium, regulatory and similar laws of general application and by
general principles of equity.

 

27.           Binding
Effect. This Agreement shall be binding upon, and inure to the benefit of
and be enforceable by, the Collateral Agent, the Lenders and each of their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing sentence, if any Lender assigns or otherwise transfers (in
whole or in part) to any other person or entity the Obligations to such Lender
under the Bank Credit Agreement, the Note Agreement or any Eligible Additional
Senior Secured Document such other person or entity shall thereupon become
vested with all rights and benefits, and become subject to all the obligations,
in respect thereof granted to or imposed upon such Lender under this Agreement.

 

28.           No
Reliance by Company. Except for rights under Sections 19 and 20,
none of the Company, any Subsidiary of the Company, or any other Credit Party
shall have any rights under this Agreement or be entitled, in any manner
whatsoever, to rely upon or enforce, or to raise as a defense, the provisions
of this Agreement or the failure of the Collateral Agent, the Agent or any
Lender to comply with such provisions.

 

29.           Other
Proceedings. Nothing contained herein shall limit or restrict the independent
right of the Agent or any Lender to initiate an action or actions in any
bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar proceeding in its individual
capacity and to appear or to be heard on any matter before the bankruptcy or
other applicable court in any such proceeding, including, without limitation,
with respect to any questions concerning the post-petition usage of collateral
and post-petition financing arrangement; provided that neither the Agent
nor any Lender shall contest the validity or enforceability of or seek to
avoid, have declared fraudulent or have set aside any of the Obligations.

 

30.           Amendments
and Waivers. No amendment to or waiver of any provision of this Agreement,
nor consent to any departure by any Lender, the Agent or the Collateral Agent
herefrom, shall in any event be effective unless the same shall be in writing
and signed by each Noteholder, each Additional Holder, the Agent, on behalf of
the Banks, and the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No consent of the Company or a Credit Party shall be required for any
such amendment, waiver or departure unless it relates to a provision of this
Agreement expressly binding upon the Company or such Credit Party.

 

31.           Notices. All notices and other
communications provided to any party under this Agreement shall be in writing
or by facsimile and addressed, delivered or transmitted to such party at its
address or facsimile number set forth (a) in the case of the Agent, the
Collateral Agent and each of the Banks, on Annex I hereto, (b) in the
case of the Noteholders, on Annex II hereto, (c) in the case of any Additional
Holder, as set forth in the Eligible Additional Senior Secured Documents to
which it is a party, (d) in the case of the Company or any Credit Party, on Annex
III hereto, or (e) in any case, at such other address or facsimile number
as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by prepaid courier service, shall be deemed given when
received; and notice, if transmitted by facsimile, shall be deemed given

 

13

 

when transmitted if actually received, and the burden of proving
receipt shall be on the transmitting party. So long as no default shall have
occurred and be continuing under the Bank Credit Agreement, the Note Agreement
or any Eligible Additional Senior Secured Document, each of the Agent and each
Noteholder and each Additional Holder by its acceptance of any Lender Document
agrees to use its best efforts to send to the Company a copy of any notice such
party gives to the other under this Agreement, but the failure to send such
copy to the Company shall not affect the validity of such notice or create a
cause of action against or cause a forfeiture of any rights of the party failing
to send such copy or create any claim or right on behalf of the Company or any
of its Subsidiaries or any Credit Party.

 

32.           No
Waiver. No failure or delay on the part of any Lender, the Agent or the
Collateral Agent in exercising any power or right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

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

 

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

 

35.           GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 5-1401 OF THE GENERAL
OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. THIS AGREEMENT
CONSTITUTES THE ENTIRE UNDERSTANDING BETWEEN THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS, WRITTEN OR ORAL,
WITH RESPECT THERETO.

 

36.           Counterparts.
This Agreement may be separately executed and delivered in counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to constitute one and the same Agreement.
Facsimile transmission of the signature of any party hereto shall be effective
as an original signature.

 

37.           Headings.
Section headings used in this Agreement are for convenience only and shall not
affect the construction of this Agreement.

 

The remainder of
this page is intentionally blank.

 

14

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers.

 

	
   

  	
  JPMORGAN CHASE
  BANK, N.A., as Agent for 

  itself and on behalf of the Banks, and as Collateral 

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Sabir A.
  Hashmy

  	
   

  
	
   

  	
  Name: 

  	
   Sabir A. Hashmy

  	
   

  
	
   

  	
  Title: 

  	
   Vice President

  	
   

  
								

 

Signature Page to
Intercreditor Agreement

 

S-1

 

	
   

  	
  METROPOLITAN
  LIFE INSURANCE 

  COMPANY

  
	
   

  	
   

  
	
   

  	
  METLIFE
  INSURANCE COMPANY OF 

  CONNECTICUT,

  
	
   

  	
  by
  Metropolitan Life Insurance Company,

  
	
   

  	
  its
  investment manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Judith A. Gulotta

  	
   

  
	
   

  	
  Name:  Judith A. Gulotta

  
	
   

  	
  Title:  Director

  

 

Signature Page to
Intercreditor Agreement

 

S-2

 

	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE 

  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Ahmed

  	
   

  
	
   

  	
  Name:  Mark A. Ahmed

  
	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  
	
   

  	
  C.M.
  LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Ahmed

  	
   

  
	
   

  	
  Name:  Mark A. Ahmed

  
	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  
	
   

  	
  MML
  BAY STATE LIFE INSURANCE 

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Ahmed

  	
   

  
	
   

  	
  Name:  Mark A. Ahmed

  
	
   

  	
  Title:  Managing Director

  
					

 

Signature Page to
Intercreditor Agreement

 

S-3

 

	
   

  	
  PACIFIC
  LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Violet Osterberg

  	
   

  
	
   

  	
  Name:  Violet Osterberg

  
	
   

  	
  Title:  Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cathy Schwartz

  	
   

  
	
   

  	
  Name:  Cathy Schwartz

  
	
   

  	
  Title:  Assistant Secretary

  

 

Signature Page to
Intercreditor Agreement

 

S-4

 

	
   

  	
  SUN
  LIFE INSURANCE AND ANNUITY 

  COMPANY OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ann C. King

  	
   

  
	
   

  	
  Name:  Ann C. King

  
	
   

  	
  Title:  Authorized Signer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Monahan

  	
   

  
	
   

  	
  Name:  Timothy J. Monahan

  
	
   

  	
  Title:  Authorized Signer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUN
  LIFE ASSURANCE COMPANY OF 

  CANADA (U.S.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ann C. King

  	
   

  
	
   

  	
  Name:  Ann C. King

  
	
   

  	
  Title:  Assistant Vice President and Senior Counsel

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Monahan

  	
   

  
	
   

  	
  Name:  Timothy J. Monahan

  
	
   

  	
  Title:  Senior Managing Director

  

 

Signature Page to
Intercreditor Agreement

 

S-5

 

	
  Acknowledged by:

  
	
   

  
	
  UNITED
  STATIONERS SUPPLY CO.

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Brian S.
  Cooper

  	
   

  
	
  Name: 

  	
   Brian S. Cooper

  	
   

  
	
  Title: 

  	
    Senior
  Vice President, Treasurer and
   Assistant Secretary

  	
   

  
	
   

  
	
   

  
	
  UNITED
  STATIONERS INC.

  
	
   

  
	
   

  
	
  By: 

  	
   /s/ Brian S. Cooper

  	
   

  
	
  Name: 

  	
   Brian S. Cooper

  	
   

  
	
  Title: 

  	
     Senior Vice President and Treasurer

  	
   

  
							

 

Signature Page to 

Intercreditor Agreement

 

 

ANNEX I

 

NOTICE FOR THE BANKS:

 

JPMorgan Chase Bank,
N.A., as Administrative Agent

1 Chase Plaza

Chicago, Illinois 60670

Attention: Nathan Bloch

Facsimile: 312-325-3239

Telephone:  312-325-3094

 

 

ANNEX II

 

NOTEHOLDERS:  The following are the “Noteholders”:

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  METROPOLITAN
  LIFE INSURANCE COMPANY

  	
  $65,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (1)

  	
  All
  scheduled payments of principal and interest by wire transfer of immediately
  available funds to:

  	 

					

 

	
  Bank
  Name:

  	
  JPMorgan
  Chase Bank

  
	
  ABA
  Routing #:

  	
   

  	
  021-000-021

  
	
  Account
  No.:

  	
  002-2-410591

  
	
  Account
  Name:

  	
   

  	
  Metropolitan
  Life Insurance Company

  
	
  Ref:
  

  	
  United
  Stationers, Inc. Floating Rate Secured Senior Note, Series 2007-A due
  10-15-14

  
				

 

	
   

  	
  with sufficient
  information to identify the source and application of such funds, including
  issuer, PPN#, interest rate, maturity and whether payment is of principal,
  interest, make whole amount or otherwise.

  
	
   

  	
   

  
	
   

  	
  For all payments other than scheduled payments of
  principal and interest, the Company shall seek instructions from the holder,
  and in the absence of instructions to the contrary, will make such payments
  to the account and in the manner set forth above.

  
	
   

  	
   

  
	
  (2)

  	
  Metropolitan Life
  Insurance Company

  
	
   

  	
  Investments,
  Private Placements

  
	
   

  	
  P.O.
  Box 1902

  
	
   

  	
  10
  Park Avenue

  
	
   

  	
  Morristown,
  New Jersey 07962-1902

  
	
   

  	
  Attention:
  Director

  
	
   

  	
  Facsimile (973)
  355-4250

  
	
   

  	
   

  
	
   

  	
  With a copy OTHER
  than with respect to deliveries of financial statements to:

  
	
   

  	
   

  
	
   

  	
  Metropolitan
  Life Insurance Company

  
	
   

  	
  P.O.
  Box 1902

  

 

 

	
   

  	
  10 Park Avenue

  
	
   

  	
  Morristown, New Jersey 07962-1902

  
	
   

  	
  Attention: Chief Counsel-Securities Investments
  (PRIV)

  
	
   

  	
  Facsimile (973) 355-4338

  
	
   

  	
   

  
	
  (3)

  	
  E-mail address for Electronic
  Delivery:

  
	
   

  
	
   

  	
  jdickson@metlife.com

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  
	
   

  	
  Metropolitan Life Insurance Company

  
	
   

  	
  Securities Investments, Law Department

  
	
   

  	
  P.O. Box 1902

  
	
   

  	
  10 Park Avenue

  
	
   

  	
  Morristown, New Jersey 07962-1902

  
	
   

  	
  Attention: Jane J. Dickson, Esq.

  
	
   

  
	
  (6)

  	
  In addition, please
  send one complete set of closing documents with original signatures; two
  bound sets of conformed copies of the principal documents; and 1 CD-ROM of
  the closing documents to:

  
	
   

  	
   

  
	
   

  	
  Metropolitan Life
  Insurance Company

  
	
   

  	
  Attention: Jane J.
  Dickson, Esq.

  
	
   

  	
  10 Park Avenue/P.O. Box
  1902

  
	
   

  	
  Morristown, New Jersey
  07962

  
	
   

  	
   

  
	
   

  	
  AND

  
	
   

  	
   

  
	
   

  	
  One CD_ROM to:

  
	
   

  	
   

  
	
   

  	
  MetLife

  
	
   

  	
  Attention: Mary
  Phillips

  
	
   

  	
  18210 Crane Nest Drive

  
	
   

  	
  Tampa, Florida
  33647-2748

  
	
   

  	
  (813) 983-4564

  
	
   

  	
   

  
	
  (7)

  	
  Tax ID: 13-5581829

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  METLIFE
  INSURANCE COMPANY OF CONNECTICUT

  	
  $10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (1)

  	
  All
  scheduled payments of principal and interest by wire transfer of immediately
  available funds to:

  

 

	
  Bank Name:

  	
  US Bank Trust

  
	
  ABA Routing #:

  	
   

  	
  091000022

  
	
  Account No.:

  	
  180121167365

  
	
  OBI SEI Acct:

  	
  123186-010

  
	
  Account Name:

  	
   

  	
  MetLife - Compass S/A

  
	
  Ref:
  

  	
  United
  Stationers, Inc. Floating Rate Secured Senior Note, Series 2007-A due 10-15-14

  
				

 

with sufficient information to identify the source and application of
such funds, including issuer, PPN#, interest rate, maturity and whether payment
is of principal, interest, make whole amount or otherwise.

 

For all payments
other than scheduled payments of principal and interest, the Company shall seek
instructions from the holder, and in the absence of instructions to the
contrary, will make such payments to the account and in the manner set forth
above.

 

 

	
  (2)

  	
   

  	
  MetLife
  Insurance Company of Connecticut

  
	
   

  	
   

  	
  c/o
  Metropolitan Life Insurance Company

  
	
   

  	
   

  	
  Investments,
  Private Placements

  
	
   

  	
   

  	
  P.O.
  Box 1902

  
	
   

  	
   

  	
  10
  Park Avenue

  
	
   

  	
   

  	
  Morristown,
  New Jersey 07962-1902

  
	
   

  	
   

  	
  Attention:
  Director

  
	
   

  	
   

  	
  Facsimile (973)
  355-4250

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy OTHER
  than with respect to deliveries of financial statements to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MetLife
  Insurance Company of Connecticut

  
	
   

  	
   

  	
  Metropolitan
  Life Insurance Company

  
	
   

  	
   

  	
  P.O.
  Box 1902

  
	
   

  	
   

  	
  10
  Park Avenue

  
	
   

  	
   

  	
  Morristown,
  New Jersey 07962-1902

  
	
   

  	
   

  	
  Attention:
  Chief Counsel-Securities Investments (PRIV)

  
	
   

  	
   

  	
  Facsimile
  (973) 355-4338

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  E-mail address for
  Electronic Delivery:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  jdickson@metlife.com

  
	
   

  	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MetLife
  Insurance Company of Connecticut

  
	
   

  	
   

  	
  c/o
  Metropolitan Life Insurance Company

  
	
   

  	
   

  	
  Securities
  Investments, Law Department

  
	
   

  	
   

  	
  P.O.
  Box 1902

  
	
   

  	
   

  	
  10
  Park Avenue

  
	
   

  	
   

  	
  Morristown,
  New Jersey 07962-1902

  
	
   

  	
   

  	
  Attention:
  Jane J. Dickson, Esq.

  
	
   

  	
   

  	
   

  
	
  (6)

  	
  Tax ID: 06-0566090

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE INSURANCE COMPANY

  	
  $11,100,000

  	
   

  

 

 

	
  (1) 

  	
  All payments on
  account of the Note shall be made by crediting in the form of bank wire
  transfer of Federal or other immediately

  available funds,
  (identifying each payment as [insert name of issuer
  and description of Note] interest and principal), to:

  
	
   

  	
   

  
	
   

  	
  Citibank, N.A.

  
	
   

  	
  New York, NY

  
	
   

  	
  ABA No.
  021000089

  
	
   

  	
  For MassMutual
  Unified Traditional

  
	
   

  	
  Acct. Name:
  MassMutual BA 0033 TRAD Private ELBX

  
	
   

  	
  Account No.
  30566056

  
	
   

  	
  Re: Description
  of security, cusip, principal and interest split

  
	
   

  	
   

  
	
   

  	
  With telephone
  advice of payment to the Securities Custody and Collection Department of
  Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention:
  Securities Custody and

  
	
   

  	
  Collection
  Department

  

 

 

	
  (3)

  	
  All other
  communications:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Securities
  Investment Division

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for
  Electronic Delivery:

  
	
   

  	
   

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 04-1590850

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE INSURANCE COMPANY

  	
  $3,900,000

  	
   

  

 

 

	
  (1) 

  	
  All payments on
  account of the Note shall be made by crediting in the form of bank wire
  transfer of Federal or other immediately available funds, (identifying each
  payment as [insert name of issuer and description of
  Note] interest and principal), to:

  
	
   

  	
   

  
	
   

  	
  Citibank, N.A.

  
	
   

  	
  New York, NY

  
	
   

  	
  ABA No.
  021000089

  
	
   

  	
  For MassMutual
  IFM Non-Traditional

  
	
   

  	
  Account No.
  30510589

  
	
   

  	
  Re: Description
  of security, cusip, principal and interest split

  
	
   

  	
   

  
	
   

  	
  With telephone
  advice of payment to the Securities Custody and Collection Department of
  Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention:
  Securities Custody and

  
	
   

  	
  Collection
  Department

  

 

 

	
  (3)

  	
  All other
  communications:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Securities
  Investment Division

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for
  Electronic Delivery: 

  
	
   

  	
  pmanseau@babsoncapital.com,
  with a hard copy to follow to:

  
	
   

  	
   

  
	
   

  	
  Babson Capital Management LLC

  
	
   

  	
  1500 Main Street — Suite 2200

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield,
  MA 01115-5189

  
	
   

  	
  Attn:
  Securities Investment Division

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Babson Capital
  Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Christine
  Peaslee

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 04-1590850

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE INSURANCE COMPANY

  	
   

  	
  $3,800,000

  	
   

  

 

 

	
  (1) 

  	
  All payments on
  account of the Note shall be made by crediting in the form of bank wire
  transfer of Federal or other immediately available funds, (identifying each
  payment as [insert name of issuer and description of
  Note] interest and principal), to:

  
	
   

  	
   

  
	
   

  	
  Citibank, N.A.

  
	
   

  	
  New York, NY

  
	
   

  	
  ABA No.
  021000089

  
	
   

  	
  For MassMutual
  Pension Management

  
	
   

  	
  Account No.
  30510538

  
	
   

  	
  Re: Description
  of security, cusip, principal and interest split

  
	
   

  	
   

  
	
   

  	
  With telephone
  advice of payment to the Securities Custody and Collection Department of
  Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention:
  Securities Custody and

  
	
   

  	
  Collection
  Department

  

 

 

	
  (3)

  	
  All other
  communications:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Securities
  Investment Division

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for
  Electronic Delivery: 

  
	
   

  	
  pmanseau@babsoncapital.com,
  with a hard copy to follow to:

  
	
   

  	
   

  
	
   

  	
  Babson Capital Management LLC

  
	
   

  	
  1500 Main Street — Suite 2200

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield,
  MA 01115-5189

  
	
   

  	
  Attn:
  Securities Investment Division

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Babson Capital
  Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Christine
  Peaslee

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 04-1590850

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE INSURANCE COMPANY

  	
   

  	
  $3,500,000

  	
   

  

 

 

	
  (1) 

  	
  All payments on
  account of the Note shall be made by crediting in the form of bank wire
  transfer of Federal or other immediately available funds, (identifying each
  payment as [insert name of issuer and description of
  Note] interest and principal), to:

  
	
   

  	
   

  
	
   

  	
  Citibank, N.A.

  
	
   

  	
  New York, NY

  
	
   

  	
  ABA No.
  021000089

  
	
   

  	
  For MassMutual
  Spot Priced Contract

  
	
   

  	
  Account No.
  30510597

  
	
   

  	
  Re: Description
  of security, cusip, principal and interest split

  
	
   

  	
   

  
	
   

  	
  With telephone
  advice of payment to the Securities Custody and Collection Department of
  Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention:
  Securities Custody and

  
	
   

  	
  Collection
  Department

  

 

 

	
  (3)

  	
  All other
  communications:

  
	
   

  	
   

  
	
   

  	
  Massachusetts Mutual
  Life Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Securities
  Investment Division

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for
  Electronic Delivery: 

  
	
   

  	
  pmanseau@babsoncapital.com,
  with a hard copy to follow to:

  
	
   

  	
   

  
	
   

  	
  Babson Capital Management LLC

  
	
   

  	
  1500 Main Street — Suite 2200

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield,
  MA 01115-5189

  
	
   

  	
  Attn:
  Securities Investment Division

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Babson Capital
  Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Christine
  Peaslee

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 04-1590850

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.M.
  LIFE INSURANCE COMPANY

  	
   

  	
  $1,900,000

  	
   

  

 

 

	
  (1) 

  	
  All payments on
  account of the Note shall be made by crediting in the form of bank wire
  transfer of Federal or other immediately available funds, (identifying each
  payment as [insert name of issuer and description of
  Note] interest and principal), to:

  
	
   

  	
   

  
	
   

  	
  Citibank, N.A.

  
	
   

  	
  New York, NY

  
	
   

  	
  ABA No.
  021000089

  
	
   

  	
  For CM Life
  Segment 43 - Universal Life

  
	
   

  	
  Account No.
  30510546

  
	
   

  	
  Re: Description
  of security, cusip, principal and interest split

  
	
   

  	
   

  
	
   

  	
  With telephone
  advice of payment to the Securities Custody and Collection Department of
  Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  
	
   

  	
   

  
	
   

  	
  C.M. Life Insurance
  Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention:
  Securities Custody and

  
	
   

  	
  Collection
  Department

  

 

 

	
  (3)

  	
  All other
  communications:

  
	
   

  	
   

  
	
   

  	
  C.M. Life Insurance
  Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Securities
  Investment Division

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for Electronic
  Delivery: 

  
	
   

  	
  pmanseau@babsoncapital.com,
  with a hard copy to follow to:

  
	
   

  	
   

  
	
   

  	
  Babson Capital Management LLC

  
	
   

  	
  1500 Main Street — Suite 2200

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield,
  MA 01115-5189

  
	
   

  	
  Attn:
  Securities Investment Division

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Babson Capital
  Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Christine
  Peaslee

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 06-1041383

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MML
  BAY STATE LIFE INSURANCE COMPANY

  	
   

  	
  $800,000

  	
   

  

 

 

	
  (1) 

  	
  All payments on
  account of the Note shall be made by crediting in the form of bank wire
  transfer of Federal or other immediately available funds, (identifying each
  payment as [insert name of issuer and description of
  Note] interest and principal), to:

  
	
   

  	
   

  
	
   

  	
  Citibank, N.A.

  
	
   

  	
  New York, NY
  10043

  
	
   

  	
  ABA No.
  021000089

  
	
   

  	
  For MML Bay
  State

  
	
   

  	
  Account No.
  30510677

  
	
   

  	
  Re: Description
  of security, cusip, principal and interest split

  
	
   

  	
   

  
	
   

  	
  With telephone
  advice of payment to the Securities Custody and Collection Department of
  Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  
	
   

  	
   

  
	
   

  	
  MML Bay State Life
  Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention:
  Securities Custody and

  
	
   

  	
  Collection
  Department

  

 

 

	
  (3)

  	
  All other
  communications:

  
	
   

  	
   

  
	
   

  	
  MML Bay State Life
  Insurance Company

  
	
   

  	
  c/o Babson
  Capital Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Securities
  Investment Division

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for
  Electronic Delivery: 

  
	
   

  	
  pmanseau@babsoncapital.com,
  with a hard copy to follow to:

  
	
   

  	
   

  
	
   

  	
  Babson Capital Management LLC

  
	
   

  	
  1500 Main Street — Suite 2200

  
	
   

  	
  PO Box 15189

  
	
   

  	
  Springfield,
  MA 01115-5189

  
	
   

  	
  Attn:
  Securities Investment Division

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Babson Capital
  Management LLC

  
	
   

  	
  1500 Main
  Street, Suite 800

  
	
   

  	
  Springfield, MA
  01115-5189

  
	
   

  	
  Attention: Christine
  Peaslee

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 43-0581430

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  LIFE INSURANCE COMPANY

  	
   

  	
  $5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
  $1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Register
  notes in name of: Mac & Co.

  	
   

  	
   

  	
   

  

 

 

	
  (1)

  	
  All payments by wire transfer of immediately
  available funds to:

  
	
   

  	
   

  
	
   

  	
  Mellon
  Trust of New England

  
	
   

  	
  ABA#
  0110-0123-4

  
	
   

  	
  DDA
  125261

  
	
   

  	
  Attn:
  MBS Income CC: 1253

  
	
   

  	
  A/C Name: Pacific Life General
  Account/PLCF1810132

  
	
   

  	
  Regarding:  Security Description & PPN

  
	
   

  	
   

  
	
  (2)

  	
  All notices of payments and written confirmations of
  such wire transfers:

  
	
   

  	
   

  
	
   

  	
  Mellon
  Trust

  
	
   

  	
  Attn:
  Pacific Life Accounting Team

  
	
   

  	
  Three
  Mellon Bank Center

  
	
   

  	
  AIM
  # 153-3610

  
	
   

  	
  Pittsburgh,
  PA 15259

  
	
   

  	
  FAX#
  412-236-7259

  
	
   

  	
   

  
	
   

  	
  And

  
	
   

  	
   

  
	
   

  	
  Pacific
  Life Insurance Company

  
	
   

  	
  Attn:
  Securities Administration — Cash Team

  
	
   

  	
  700
  Newport Center Drive

  
	
   

  	
  Newport
  Beach, CA 92660-6397

  
	
   

  	
  FAX#
  949-640-4013

  

 

 

	
  (3)

  	
  All other communications:

  
	
   

  	
   

  
	
   

  	
  Pacific
  Life Insurance Company

  
	
   

  	
  Attn:
  Securities Department

  
	
   

  	
  700
  Newport Center Drive

  
	
   

  	
  Newport
  Beach, CA 92660-6397

  
	
   

  	
  FAX#
  949-219-5406

  
	
   

  	
   

  
	
  (4)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Mellon
  Securities Trust Company

  
	
   

  	
  120
  Broadway, 13th Floor

  
	
   

  	
  New
  York, NY 10271

  
	
   

  	
  Attn:
  Robert Ferraro 212.374.1918

  
	
   

  	
  A/C
  Name: Pacific Life General Acct

  
	
   

  	
  A/C
  #: PLCF1810132

  
	
   

  	
   

  
	
  (5)

  	
  E-mail address for
  Electronic Delivery:

  
	
   

  	
   

  
	
  (6)

  	
  Taxpayer I.D. Number: 95-1079000

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUN
  LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

  	
  $5,000,000

  	
   

  

 

 

	
  (1)

  	
  All
  payments by wire or intrabank transfer of immediately available funds to:

  
	
   

  	
   

  
	
   

  	
  Mellon
  Bank of New England

  
	
   

  	
  ABA
  # 011001234 / BOS SAFE DEP

  
	
   

  	
  DDA:
  125261

  
	
   

  	
  Attention:
  MBS Income CC 1253

  
	
   

  	
  Account
  Name: Sun Life New York - MVA Account

  
	
   

  	
  Account
  No.: KBLF00050002

  
	
   

  	
  RE:
  [description of security]

  
	
   

  	
  Tax
  identification number: 04-2845273

  
	
   

  	
   

  
	
   

  	
  with sufficient
  information (including issuer, PPN number, interest rate, maturity and
  whether payment is of principal, premium, or interest) to identify the source
  and application of such funds.

  
	
   

  	
   

  
	
  (2)

  	
  All notices of
  payments, written confirmations of such wire transfers and audit
  confirmations:

  
	
   

  	
   

  
	
   

  	
  Sun
  Life Assurance Company of Canada

  
	
   

  	
  Attn:
  Private Placements

  
	
   

  	
  Location
  code: 302D36

  
	
   

  	
  227
  King Street South

  
	
   

  	
  Waterloo,
  ON, Canada N2J4C5

  
	
   

  	
   

  
	
  (3)

  	
  All other
  communications, including notices of non-routine payments:

  
	
   

  	
   

  
	
   

  	
  One
  Sun Life Executive Park

  
	
   

  	
  Wellesley
  Hills, MA 02481

  
	
   

  	
  Attention:
  Investment Division/Private Fixed Income, SC 1303

  
	
   

  	
   

  
	
  (4)

  	
  E-mail address for
  Electronic Delivery:

  

 

 

	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Sun
  Capital Advisers LLC

  
	
   

  	
  SC
  1303

  
	
   

  	
  One
  Sun Life Executive Park

  
	
   

  	
  Wellesley
  Hills, MA 02481

  
	
   

  	
  Attention:
  Linda R. Guillette

  
	
   

  	
   

  
	
  (6)

  	
  Two
  original sets of closing documents and two conformed copies to:

  
	
   

  	
   

  
	
   

  	
  Robert
  Veno, Associate Director

  
	
   

  	
  Sun
  Capital Advisers LLC

  
	
   

  	
  One
  Sun Life Executive Park, SC 1303

  
	
   

  	
  Wellesley
  Hills, MA 02481

  
	
   

  	
  Telephone:
  (781) 446-1027

  
	
   

  	
   

  
	
   

  	
  Ann
  C. King, Senior Counsel

  
	
   

  	
  Sun
  Capital Advisers LLC

  
	
   

  	
  One
  Sun Life Executive Park, SC 1335

  
	
   

  	
  Wellesley
  Hills, MA 02481

  
	
   

  	
  Telephone:
  (781) 446-1996

  
	
   

  	
   

  
	
  (7)

  	
  Tax ID: 04-2845273

  

 

 

	
   

  	
  NAME
  AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL AMOUNT OF

  	
   

  
	
   

  	
   

  	
   

  	
  SERIES 2007-A NOTES TO BE 

  PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUN
  LIFE ASSURANCE COMPANY OF CANADA (U.S.)

  	
   

  	
  $10,000,000

  	
   

  

 

 

	
  (1)

  	
  All
  payments by wire or intrabank transfer of immediately available funds to:

  
	
   

  	
   

  
	
   

  	
  Mellon
  Bank of New England

  
	
   

  	
  ABA
  # 011001234 / BOS SAFE DEP

  
	
   

  	
  DDA:
  125261

  
	
   

  	
  Attention:
  MBS Income CC 1253

  
	
   

  	
  Account
  Name: Sun US — MVA Private Placements

  
	
   

  	
  Account
  No.: KEYF00020002

  
	
   

  	
  RE:
  [description of security]

  
	
   

  	
  Tax
  identification number: 04-2845273

  
	
   

  	
   

  
	
   

  	
  with sufficient
  information (including issuer, PPN number, interest rate, maturity and
  whether payment is of principal, premium, or interest) to identify the source
  and application of such funds.

  
	
   

  	
   

  
	
  (2)

  	
  All notices of
  payments, written confirmations of such wire transfers and audit
  confirmations:

  
	
   

  	
   

  
	
   

  	
  Sun
  Life Assurance Company of Canada

  
	
   

  	
  Attn:
  Private Placements

  
	
   

  	
  Location
  code: 302D36

  
	
   

  	
  227
  King Street South

  
	
   

  	
  Waterloo,
  ON, Canada N2J4C5

  
	
   

  	
   

  
	
  (3)

  	
  All other
  communications, including notices of non-routine payments:

  
	
   

  	
   

  
	
   

  	
  One
  Sun Life Executive Park

  
	
   

  	
  Wellesley
  Hills, MA 02481

  
	
   

  	
  Attention:
  Investment Division/Private Fixed Income, SC 1303

  

 

 

	
  (4)

  	
  E-mail address for
  Electronic Delivery:

  
	
   

  	
   

  
	
   

  	
   

  
	
  (5)

  	
  Address for delivery of
  Notes:

  
	
   

  	
   

  
	
   

  	
  Sun
  Capital Advisers LLC

  
	
   

  	
  SC
  1303

  
	
   

  	
  One
  Sun Life Executive Park

  
	
   

  	
  Wellesley
  Hills, MA 02481

  
	
   

  	
  Attention:
  Linda R. Guillette

  
	
   

  	
   

  
	
  (6)

  	
  Tax ID: 04-2845273

  

 

 

ANNEX III

 

CREDIT PARTIES: The
following are “Credit Parties”:

 

UNITED STATIONERS SUPPLY
CO.

UNITED STATIONERS INC.

LAGASSE, INC.

UNITED STATIONERS
TECHNOLOGY SERVICES LLC

UNITED STATIONERS
FINANCIAL SERVICES LLC

 

 

NOTICE INFORMATION:  Any notice or other information required to
be delivered hereunder to the Company and/or any Credit Party shall be
delivered to the following:

 

UNITED STATIONERS INC.

One Parkway N. Blvd.,
Suite 100

Deerfield, IL 60015

Attention:  

Facsimile:  

Telephone:Exhibit 10.1

 

 

$250,000,000

MASTER REPURCHASE AGREEMENT

Dated as of July 30, 2007

between

 

CAPITAL TRUST, INC.

 

as Seller,

and

CITIGROUP GLOBAL MARKETS INC.

as Securities Buyer

and

CITIGROUP FINANCIAL PRODUCTS INC.

as Loan Buyer

 

 

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
  Page

  
	
  1.

  	
  APPLICABILITY

  	
  4

  
	
  2.

  	
  DEFINITIONS

  	
  4

  
	
  3.

  	
  INITIATION; CONFIRMATION; TERMINATION; FEES

  	
  19

  
	
  4.

  	
  MARGIN MAINTENANCE

  	
  24

  
	
  5.

  	
  INCOME PAYMENTS AND PRINCIPAL PAYMENTS

  	
  25

  
	
  6.

  	
  SECURITY INTEREST

  	
  27

  
	
  7.

  	
  PAYMENT, TRANSFER AND CUSTODY

  	
  29

  
	
  8.

  	
  SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED
  LOANS AND PURCHASED SECURITIES

  	
  36

  
	
  9.

  	
  [INTENTIONALLY OMITTED]

  	
  36

  
	
  10.

  	
  REPRESENTATIONS

  	
  36

  
	
  11.

  	
  NEGATIVE COVENANTS OF SELLER

  	
  41

  
	
  12.

  	
  AFFIRMATIVE COVENANTS OF SELLER

  	
  42

  
	
  13.

  	
  [INTENTIONALLY OMITTED]

  	
  45

  
	
  14.

  	
  EVENTS OF DEFAULT; REMEDIES

  	
  45

  
	
  15.

  	
  SINGLE AGREEMENT

  	
  51

  
	
  16.

  	
  RECORDING OF COMMUNICATIONS

  	
  51

  
	
  17.

  	
  NOTICES AND OTHER COMMUNICATIONS

  	
  51

  
	
  18.

  	
  ENTIRE AGREEMENT; SEVERABILITY

  	
  52

  
	
  19.

  	
  NON-ASSIGNABILITY

  	
  52

  
	
  20.

  	
  GOVERNING LAW

  	
  52

  
	
  21.

  	
  NO WAIVERS, ETC.

  	
  53

  
	
  22.

  	
  USE OF EMPLOYEE PLAN ASSETS

  	
  53

  
	
  23.

  	
  INTENT

  	
  53

  
	
  24.

  	
  DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

  	
  54

  
	
  25.

  	
  CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

  	
  54

  
	
  26.

  	
  NO RELIANCE

  	
  55

  
	
  27.

  	
  INDEMNITY

  	
  56

  
	
  28.

  	
  DUE DILIGENCE

  	
  57

  
	
  29.

  	
  SERVICING

  	
  58

  
	
  30.

  	
  MISCELLANEOUS

  	
  58

  

 

2

 

ANNEXES, EXHIBITS AND
SCHEDULES

	
  ANNEX I

  	
  Names and Addresses for Communications between
  Parties

  
	
   

  	
   

  
	
  SCHEDULE I-A

  	
  Purchase Percentages and Applicable Spreads

  
	
   

  	
   

  
	
  EXHIBIT I

  	
  Form of Confirmation

  
	
   

  	
   

  
	
  EXHIBIT II 

  	
  Authorized Representatives of Seller 

  
	
   

  	
   

  
	
  EXHIBIT III

  	
  Form of Redirection Letter

  
	
   

  	
   

  
	
  EXHIBIT IV

  	
  Form of Custodial Delivery

  
	
   

  	
   

  
	
  EXHIBIT V

  	
  Form of Power of Attorney

  
	
   

  	
   

  
	
  EXHIBIT VI 

  	
  Representations and Warranties Regarding Individual
  Purchased Loans and Purchased Securities 

  
	
   

  	
   

  
	
  EXHIBIT VII 

  	
  Asset Information 

  
	
   

  	
   

  
	
  EXHIBIT VIII

  	
  Purchase Procedure

  

 

3

 

MASTER REPURCHASE AGREEMENT, dated as of July 30,
2007, by and among CAPITAL TRUST, INC., a Maryland corporation (the “Seller”) and
CITIGROUP GLOBAL MARKETS, INC., a Delaware corporation (the “Securities
Buyer”), and CITIGROUP FINANCIAL PRODUCTS INC., a Delaware corporation (the
“Loan Buyer”; each of Loan Buyer and Securities Buyer, a “Buyer”
and collectively, the “Buyers”).

1.             APPLICABILITY

From time to time the parties hereto may enter into
transactions in which the Seller agrees to transfer to the applicable Buyer
loans and/or participations, securities or other assets against the transfer of
funds by such Buyer, with a simultaneous agreement by such Buyer to transfer to
Seller such loans and/or participations, securities and other 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, including any supplemental terms or conditions
contained in any exhibits identified herein as applicable hereunder.

2.             DEFINITIONS

“Acceptable Attorney” means any attorney-at-law
to which the Seller or the Custodian, as applicable, has sent an Attorney
Bailee Letter, except for an attorney whom a Buyer has notified the Custodian
and the Seller is not reasonably satisfactory to such Buyer; provided,
that Paul, Hastings, Janofsky & Walker, LLP shall be an Acceptable
Attorney.

“Accepted Servicing Practices” shall mean with
respect to any Purchased Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans and/or mezzanine
lending institutions which service mezzanine loans, as applicable, of the same
type as such Purchased Loan in the jurisdiction where the related Mortgaged
Property is located.

“Accelerated Repurchase Date” shall have the
meaning specified in Section 14(b)(i) of this Agreement.

“Act of Insolvency” shall mean with respect to
any party, (i) the commencement by such party as debtor of any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
moratorium, dissolution, delinquency or similar law, or such party seeking the
appointment or election of a receiver, conservator, trustee, custodian or
similar official for such party or any substantial part of its property, or the
convening of any meeting of creditors for purposes of commencing any such case
or proceeding or seeking such an appointment or election, (ii) the commencement
of any such case or proceeding against such party, or another seeking such an
appointment or election, or the filing against a party of an application for a
protective decree under the provisions of the Securities Investor Protection
Act of 1970, which (A) is consented to or not timely contested by such party,
(B) results in the entry of an order for relief, such an appointment or
election, the issuance of such a protective decree or the entry of an order
having a similar effect, or (C) is not dismissed within 21 days, (iii) the
making by such party of a general assignment for the benefit of creditors, or
(iv) the admission in writing by such party of such party’s inability to pay
such party’s debts as they become due.

 

 

“Affiliate” shall mean, when used with respect
to any specified Person, any other Person directly or indirectly controlling,
controlled by, or under common control with, such Person.  Control shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise and “controlling” and “controlled” shall have meanings correlative
thereto.

“Agreement” shall mean this Master Repurchase
Agreement, dated as of July 30, 2007, by and between Capital Trust, Inc. and
Citigroup Financial Products Inc. and Citigroup Global Markets Inc., as such
agreement may be modified or supplemented from time to time.

“Alternative Rate” shall have the meaning
specified in Section 3(g) of this Agreement.

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

“Applicable Spread”
shall mean, with respect to a Transaction involving Purchased Securities and/or
Purchased Loans in any Asset Type Grouping:

(i)            so long as no Event
of Default (other than with respect to a Buyer) shall have occurred and be
continuing, the incremental per annum rate (expressed as a number of “basis
points”, each basis point being equivalent to 1/100 of 1%) specified in
Schedule I-A attached to this Agreement as being the “Applicable Spread” for
Purchased Loans in such Asset Type Grouping and Leverage Category (it being
understood and agreed that with respect to a Purchased Loan (e.g. a B Note or
Mezzanine Loan) which spans two or more Leverage Categories with respect to
first and last Dollar LTVs, the Applicable Spread shall be determined based on
the weighted average “Applicable Spread” for such Purchased Loan (i.e. be
determined in proportion to the respective products of a Purchased Loan’s
balance and the applicable Purchase Percentage in each Leverage Category)), or
Purchased Securities in such Asset Type Grouping and Rating Category or another
“Applicable Spread” set forth in the Confirmation, and

(ii)           after the
occurrence and during the continuance of an Event of Default (other than with
respect to a Buyer), the applicable incremental per annum rate described in
clause (i) of this definition, plus [****].

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

“Asset Information” shall mean, with respect to
each Purchased Loan, the information set forth in Exhibit VII attached hereto.

“Asset Type Grouping” shall mean, with respect
to the Eligible Loans, any of the types of Eligible Loans listed in Schedule
I-A attached to this Agreement.

 

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. 
Material filed separately with the Securities and Exchange Commission.

 

2

 

“Assignment of Leases” shall mean, with respect
to any Mortgage, an assignment of leases thereunder, notice of transfer or
equivalent instrument in recordable form, sufficient under

the laws of the jurisdiction wherein the Mortgaged
Property is located to reflect the assignment of leases.

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

“Attorney’s Bailee Letter” means a letter from
an Acceptable Attorney, in form and substance acceptable to the applicable Buyer,
wherein such Acceptable Attorney in possession of a Purchased Loan File (i)
acknowledges receipt of such Purchased Loan File, (ii) confirms that such
Acceptable Attorney is holding the same as bailee of the applicable Buyer under
such letter and (iii) agrees that such Acceptable Attorney shall deliver
such Purchased Asset File to the Custodian by not later than the third (3rd)
Business Day following the Purchase Date for the related Purchased Asset.

“Availability Period” shall mean the period
commencing on the date of this Agreement and ending 364 days after the date of
this Agreement; provided, that, upon request by the Seller made no
greater than thirty (30) days prior to the last day of the Availability Period
in each succeeding year, the Buyers shall within ten (10) Business Days notify
the Seller in writing whether or not the Availability Period has been extended
for a new Availability Period commencing on the day on which the current
Availability Period ends and ending 364 days after such date in the succeeding
year.

“B Note” has the meaning given to such term in
clause (ii) of the definition of Eligible Loan.

“Business Day” shall mean a day other than (i)
a Saturday or Sunday, or (ii) a day in which the New York Stock Exchange or
banks in the State of New York, the State of Illinois, or the Cayman Islands
are authorized or obligated by law or executive order to be closed.

“Buyer” shall mean either Citigroup Financial
Products Inc. or Citigroup Global Markets Inc., as applicable, or any
successor.

“Buyers” shall mean both of Citigroup Financial
Products Inc. and Citigroup Global Markets Inc., or any successor.

“Buyer’s Margin Amount” shall mean, with
respect to the Transactions as of any date, the sum of the amounts, calculated
separately with respect to each Purchased Asset, obtained by application of the
Buyer’s Margin Percentage for such Purchased Asset to the Repurchase Price
(excluding accrued Price Differential) for such Purchased Asset as of such
date.

“Buyer’s Margin Percentage” shall mean, with
respect to any Transaction as of any date, the reciprocal of the “Purchase
Percentage” specified for the applicable Asset Type Grouping and, in the case
of an Eligible Loan, Leverage Category or, in the case of an Eligible Security,

 

3

 

Rating Category, as set
forth in Schedule I-A attached to this Agreement (i.e., the percentage that
when multiplied by the applicable percentage set forth in Schedule I-A under
the heading “Purchase Percentage” equals 1.00). 
The Buyer’s Margin Percentage for each of the applicable percentages set
forth in Schedule I-A is set forth below:

	
  Margin Maintenance Percentage

  Set Forth on Schedule I-A

  	
   

  	
  Buyer’s Margin Percentage

  
	
  50%

  	
   

  	
  200.0000%

  
	
  55%

  	
   

  	
  181.8181%

  
	
  60%

  	
   

  	
  166.6666%

  
	
  65%

  	
   

  	
  153.8462%

  
	
  70%

  	
   

  	
  142.8571%

  
	
  75%

  	
   

  	
  133.3333%

  
	
  80%

  	
   

  	
  125.0000%

  
	
  85%

  	
   

  	
  117.6471%

  
	
  90%

  	
   

  	
  111.1111%

  
	
  95%

  	
   

  	
  105.2632%

  

 

With respect to a
Purchased Loan (e.g., a B Note or Mezzanine Loan) which spans two or more
Leverage Categories with respect to first and last Dollar LTVs, the Buyer’s
Margin Percentage shall be determined based on the weighted average Buyer’s
Margin Percentage for such Purchased Loan (i.e. be determined in proportion to
the respective balance in each Leverage Category).

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

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

“Cash Management Account” shall mean a
segregated interest bearing account, in the name of both Buyers, established at
the Depository.

“Change of Control”
shall mean either of the following events have occurred:

(i)                                     a majority of the members of the board of
directors of Seller changes during any twelve (12) month period after the date
hereof; or

 

4

 

(ii)                                  a merger, consolidation or other
transaction in which a Person which is not an Affiliate acquires in excess of
50% of the voting common equity of Seller.

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

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

“Custodial Agreement” shall mean the Custodial
Agreement, dated as of July 30, 2007, by and among the Custodian, the Seller
and the Buyers.

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

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

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

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

“Deficit Cure Amount” shall mean, with respect
to the Purchased Assets as of any date, the sum of the amounts (expressed in
dollars), calculated separately with respect to each Purchased Asset, obtained
by dividing (i) the Repurchase Price (excluding accrued Price Differential) of
such Purchased Asset as of such date by (ii) the Purchase Percentage for such
Purchased Asset, as set forth in Schedule I-A attached to this Agreement.

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

“Diligence Materials” shall mean the Preliminary
Due Diligence Package together with the Supplemental Due Diligence List.

“Draft Appraisal” shall mean a short form
appraisal, “letter opinion of value,” or any other form of draft appraisal
reasonably acceptable to the Loan Buyer.

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

“EBITDA” shall mean,
for each fiscal quarter, with respect to Seller and its consolidated
Subsidiaries, an amount equal to (a) Net Income for such period (excluding the
effect of any extraordinary gains or losses resulting from the sale of property
or non-cash gains or losses

 

5

 

outside
the ordinary course of business) plus (b), without duplication, an
amount which, in the determination of Net Income for such period, has been
deducted for (i) interest expense for such period, (ii) total federal, state,
foreign or other income or franchise taxes for such period, and (iii) all
depreciation and amortization for such period, all as determined with respect
to any consolidated subsidiary in accordance with the methodology specified in
the definition of Net Income, plus (c) any nonrecurring fees and
expenses incurred on or prior to the date of the execution and delivery of the
Agreement, excluding (d) any non-cash reserve activity and (e) income
related to participation interests which are classified as sold on the
liabilities side of Seller’s balance sheet.

“Eligible Loans” shall mean any of the
following types of loans, which loans are acceptable to the Loan Buyer in the
good faith exercise of its sole discretion and are secured directly or
indirectly by a property that is a multifamily, retail, office, industrial and
hospitality property (or any other commercial property type acceptable to the
Loan Buyer) and is located in the United States of America, its territories or
possessions or in any other location acceptable to the Buyer in its sole
discretion:

(i)                                     performing mortgage loans (including
senior interests and pari passu participation interests in mortgage loans)
secured by first liens on multifamily, retail, office, industrial, senior
living, healthcare or hospitality properties or any other commercial property
type acceptable to the Loan Buyer (referred to on Schedule I-A as the “First
Mortgage” Asset Type Grouping);

(ii)                                  junior participation interests in or
subordinate notes from performing whole mortgage loans secured by first liens
on multifamily, retail, office, industrial, senior living, healthcare or
hospitality properties or any other commercial property type acceptable to the
Loan Buyer (referred to on Schedule I-A as the “B-Note” Asset Type Grouping);

(iii)                               performing mezzanine loans (or
participation interests in mezzanine loans) secured by pledges of the entire
(or such lesser percentage as the Loan Buyer may agree to) equity ownership
interests in entities that directly or indirectly through one or more
intervening subsidiaries own multifamily, retail, office, industrial, senior
living, healthcare or hospitality properties or any other commercial property
type acceptable to the Loan Buyer (referred to on Schedule I-A as the “Mezzanine
Loan” Asset Type Grouping); and

(iv)                              any other loan (including Preferred
Equity) which does not conform to
the criteria set forth in clauses (i)–(iii) above and the Loan Buyer elects in
the good faith exercise of its sole discretion to purchase; provided, however,
that non-performing loans shall not be Eligible Loans for purposes of this
Agreement.

“Eligible Securities” shall mean commercial
mortgage backed securities that (a) have a rating of B+ or higher from Standard
& Poor’s Ratings Services, a Division of The McGraw-Hill Companies,
Inc. or Fitch, Inc. and/or B1 or higher from Moody’s Investors Services, Inc.
and (b) are otherwise acceptable to the Securities Buyer in its sole
discretion; provided, however, that

 

6

 

with respect to any
commercial mortgage backed securities which are rated by more than one Rating
Agency, the lowest rating shall apply.

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

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

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

“Event of Default” shall have the meaning
specified in Section 14 of this Agreement.

“Extension Fee” shall mean the fee, payable on
the last day of the final Availability Period hereunder, equal to the product
of (x) [****] multiplied by (y) the aggregate Repurchase Price for the
outstanding Transactions for which the Seller has exercised its right to extend
the Repurchase Date (as described in the definition of “Repurchase Date”).

“Facility Amount” shall mean $250,000,000. Notwithstanding
the foregoing, the Seller shall have the unilteral right at any time to notify
the Buyers in writing that the Facility Amount is being reduced below
$250,000,000.

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

“First Mortgage” has the meaning given to such
term in clause (i) of the definition of Eligible Loan.

 

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with
the Securities and Exchange Commission.

 

7

“Funding Fee” shall mean, with respect to each
Transaction, the fee equal to the product of (x) [****] multiplied by (y) the
related Purchase Price (or funds transferred to Seller as Margin Excess, if
applicable), which shall be due and payable pursuant to Section 3(f) of this
Agreement.  Notwithstanding anything in
this Agreement to the contrary, the maximum amount of Funding Fees which the
Buyer shall be entitled to receive under this Agreement shall equal [****] (i.e.
once the Buyer shall have received an aggregate amount of Funding Fees equal to
such amount, then from and after such date, no additional Funding Fees shall be
due and payable on any Purchase Date).

“Fixed Charge Ratio”
shall mean, with respect to any period, the ratio of (a) EBITDA for such period
to (b) the sum of (i) interest expense (excluding interest expense attributable
to participation interests which are classified as sold on the liabilities side
of Seller’s balance sheet) and (ii) preferred dividends (specifically excluding
any convertible trust preferred dividends) paid by Seller during such period.

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

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

“Ground Lease” shall mean a ground lease
containing the following terms and conditions: (a) a remaining term (exclusive
of any unexercised extension options) of the greater of the remaining
amortization term of the Purchased Loan plus ten years or, if there is no amortization
term in the underlying Purchased Loan, 40 years; (b) the right of the lessee to
mortgage and encumber its interest in the leased property without the consent
of the lessor or with such consent given; (c) the obligation of the lessor to
give the holder of any mortgage lien on such leased property written notice of
any defaults on the part of the lessee and agreement of such lessor that such
lease will not be terminated until such holder has had a reasonable opportunity
to cure or complete foreclosures, and fails to do so; (d) reasonable
transferability of the lessee’s interest under such lease, including ability to
sublease; and (e) such other rights customarily required by mortgagees making a
loan secured by the interest of the holder of the leasehold estate demised
pursuant to a ground lease.

“Hedging Transactions” shall mean, with respect
to any or all of the Purchased Loans, any short sale of U.S. Treasury
Securities or mortgage-related securities, futures contract (including
Eurodollar futures) or options contract or any interest rate swap, cap or
collar agreement or similar arrangements providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, entered into by Seller with
Buyer or an Affiliate of Buyer or one or more other counterparties reasonably
acceptable to the Buyer.

 

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. 
Material filed separately with the Securities and Exchange Commission.

 

8

 

 “Income”
shall mean, with respect to any Purchased Asset at any time, the sum of (x) any
principal thereof and all interest, dividends or other distributions thereon
and (y) all net sale proceeds received by Seller or any Affiliate of Seller in
connection with a sale of such Purchased Asset.

“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 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
agreements or like arrangements; (g) Indebtedness of others guaranteed by such
Person; (h) all obligations of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person; and
(i) Indebtedness of general partnerships of which such Person is a general
partner.

“Indemnified Amounts” and “Indemnified
Parties” shall have the meaning specified in Section 27 of this Agreement.

“ISDA Master Agreement” shall mean any ISDA
Master Agreement (including respective schedules, annexes and confirmations)
executed by the Seller and Buyer or an Affiliate of the Buyer in connection
with a Hedging Transaction.

“Leverage Category” shall mean any of the
categories, based on the applicable LTV Range, designated as “Less than 50%,” “50.01%
to 55.00%,” “55.01% to 60.00%,” “60.01% to 65.00,” “65.01 to 70.00%,” “70.01%
to 75.00%,” “75.01% to 80.00%,” “80.01% to 85.00%” and “85.01% to 90.00%,”
listed in Schedule I-A attached to this Agreement.

“LIBOR” shall mean
the rate per annum calculated as set forth below:

(i)                                     On each Pricing Rate Determination Date,
LIBOR for the next Pricing Rate Period will be the rate for deposits in United
States dollars for a one-month period which appears on Dow Jones Market Service
(formerly Telerate) Page 3750 as of 11:00 a.m., London time, on such date; or

(ii)                                  On any Pricing Rate Determination Date on
which no such rate appears on Dow Jones Market Service (formerly Telerate) Page
3750 as described above, LIBOR for the next Pricing Rate Period will be
determined on the basis of the arithmetic mean of the rates at which deposits
in United States dollars are offered by the Reference Banks at approximately
11:00 a.m., London time, on such date to prime banks in the London interbank
market for a one-month period.

 

9

 

All percentages resulting from any calculations or
determinations referred to in this definition will be rounded upwards, if
necessary, to the nearest multiple of 1/100 of 1% and all U.S. dollar amounts
used in or resulting from such calculations will be rounded to the nearest cent
(with one-half cent or more being rounding upwards).

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

	
   

  	
  LIBOR

  	
   

  
	
   

  	
  1 – Reserve Requirement

  	
   

  

 

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

“LTV” and “LTV Range” shall have the
respective meanings given to such terms in Schedule I-A attached hereto.

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

“Margin Excess” shall have the meaning
specified in Section 4(b) hereof.

“Margin Notice Deadline” shall mean 10:00 a.m.
(New York City time).

“Market Value” shall mean (A) with respect to
any Purchased Security as of any relevant date, the market value for such
Purchased Security on such date, as determined by Securities Buyer in its good
faith business judgment or (B) with respect to any Purchased Loan as of any relevant
date, the lesser of (x) the market value for such Purchased Loan on such date,
as determined by Loan Buyer in its good faith business judgment and (y) 100% of
the outstanding principal balance of such Purchased Loan

“Mezzanine Asset,” “Mezzanine Borrower”
and “Mezzanine Collateral” shall have the respective meanings specified
in Exhibit VI.

“Mezzanine Loan” has the meaning given to such
term in clause (iii) of the definition of Eligible Loan.

“Mezzanine Loan Documents” shall have the
meaning specified in Exhibit VI.

“Mezzanine Note” shall mean a note or other
evidence of indebtedness of the direct or indirect owner or owners of all (or
such lesser percentage as the Loan Buyer may agree to) equity or ownership
interests in an underlying real property owner secured by a pledge of such
ownership interests.

“Moody’s” shall mean Moody’s Investor Service,
Inc.

 

10

 

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

“Mortgage Note” shall mean a note or other
evidence of indebtedness of a Mortgagor secured by a Mortgage.

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

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

“Mortgagor” shall mean the obligor on a
Mortgage Note and the grantor of the related Mortgage.

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

“Net Income” shall
mean, for any period, the consolidated net income for such period of Seller as
reported in Seller’s public financial statements prepared in accordance with
GAAP.

“New Asset” shall mean an Eligible Loan or
Eligible Security that Seller proposes to be included as a Purchased Asset.

“Originated Asset” shall mean any Eligible Loan
whose Purchased Loan Documents were prepared by Seller.

“Permitted Purchased Loan Modification” shall
mean any modification or amendment of a Purchased Loan which is not a
Significant Purchased Loan Modification.

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

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

“PML” shall have the meaning specified in
Exhibit VI.

“Pre-Existing Asset” shall mean any Eligible
Loan that is not an Originated Asset.

 

11

 

“Preferred Equity” shall mean a performing
current pay preferred equity position (with a put or synthetic maturity date
structure replicating a debt instrument) representing the entire equity
ownership interest in entities that own income producing commercial real
estate.

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

With respect to each Eligible Loan:

(i)                                     all material documents which Seller has
in its possession that relate to such New Asset, which material documents
shall, as a general guideline, contain information consistent with the Asset
Information;

(ii)                                  current rent roll, if applicable;

(iii)                               cash flow pro-forma, plus historical
information, if available;

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

(v)                                 indicative debt service coverage ratios;

(vi)                              indicative loan-to-value ratio;

(vii)                           term sheet outlining the transaction
generally;

(viii)                        Seller’s relationship with the Mortgagor,
if any; and

(ix)                                with respect to any New Asset that is
Pre-Existing Asset, a complete description of the legal structure and
documentation thereof; and

(x)                                   any exceptions to the representations and
warranties set forth in Exhibit VI to this Agreement as may be contained in an
internal memorandum or offering document prepared by a third party.

With respect to each
Eligible Security:

(i)            to the extent in the possession of the
Seller, the following:

(A)          term sheet

(B)           pre-sale report

 

12

 

(C)           private placement
memorandum, offering memorandum, preliminary prospectus, final prospectus or
similar documentation;

(ii)           loan data disk;

(iii)          materials furnished
to the Rating Agencies in connection with the issuance of the Eligible
Securities, to the extent provided to Seller;

(iv)          Securitization
Documents;

(v)           remittance report
for most recent period in Seller’s possession;

(vi)          quarterly remittance
reports in Seller’s possession;

(vii)         accounting reports
delivered with respect to the Eligible Security in Seller’s possession; and

(viii)        legal opinions
delivered with respect to the Eligible Security in Seller’s possession.

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

“Pricing Rate” shall mean, for any Pricing Rate
Period, an annual rate equal to the LIBO Rate for such Pricing Rate Period plus
the relevant Applicable Spread for such Transaction and shall be subject to
adjustment and/or conversion as provided in Sections 3(g) and 3(h) of this
Agreement.

“Pricing Rate Determination Date” shall mean
with respect to any Pricing Rate Period with respect to any Transaction, the
second (2nd) Business Day preceding the first day of such Pricing Rate Period.

“Pricing Rate Period” shall mean, (a) in the
case of the first Pricing Rate Period with respect to any Transaction, the
period commencing on and including the Purchase Date for such Transaction and
ending on and excluding the following Remittance Date, and (b) in the case of
any subsequent Pricing Rate Period, the period commencing on and including such
Remittance Date and ending on and excluding the following Remittance Date.

“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).

“Principal Payment” shall mean, with respect to
any Purchased Loan or Purchased Security, any payment or prepayment of
principal received by the Depository in respect thereof.

 

13

 

“Purchase Date” shall mean any date on which
Purchased Loans or Purchased Securities are to be transferred by Seller to the
applicable Buyer.

“Purchase Percentage” shall mean, with respect
to any Transaction as of any day, the “Purchase Percentage” specified for the
applicable Asset Type Grouping and, in the case of an Eligible Loan, Leverage
Category or, in the case of an Eligible Security, Rating Category, as set forth
in Schedule I-A attached to this Agreement or another amount agreed upon by the
applicable Buyer and Seller.  With
respect to a Purchased Loan (e.g., a B-Note or Mezzanine Loan) which spans two
or more Leverage Categories with respect to first and last Dollar LTVs, the
Purchase Price shall be determined based on the weighted average Purchase
Percentage for such Purchased Loan (i.e. be determined in proportion to the
respective balance in each Leverage Category).

“Purchase Price” shall mean, with respect to
any Purchased Asset, the price at which such Purchased Asset is transferred by
Seller to Buyer on the applicable Purchase Date.  The Purchase Price as of any Purchase Date
for any Purchased Asset shall be an amount (expressed in dollars) equal to the
product obtained by multiplying (i) the Market Value of such Purchased Asset by
(ii) the “Purchase Percentage” for such Purchased Asset, as set forth in
Schedule I-A attached to this Agreement; provided, that notwithstanding
the foregoing, the Seller may request that the Purchase Price set forth in a
Confirmation be determined by applying a percentage lower than the Purchase
Percentage set forth in Schedule I-A attached to this Agreement (and in
such event the Seller shall have the right from time to time thereafter to
request that the Buyer increase the related Purchase Price in a new Transaction
subject only to the satisfaction of clauses (A), (C) and (E) of the definition
of Transaction Conditions Precedent).

“Purchased Asset” shall mean the Purchased
Securities and/or the Purchased Loans.

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

“Purchased Loan Documents” shall mean, with
respect to a Purchased Loan, the documents comprising the Purchased Loan File
for such Purchased Loan.

“Purchased Loans” shall mean (i) with respect
to any Transaction, the Eligible Loans sold by Seller to Buyer in such
Transaction and (ii) with respect to the Transactions in general, all Eligible
Loans sold by Seller to Buyer and any additional assets delivered by Seller to
Buyer pursuant to Section 4(a) of this Agreement.

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

“Purchased Securities” shall mean, (i) with
respect to any Transaction, the Eligible Securities sold by Seller to Buyer in
such Transaction, and (ii) with respect to the Transactions in general, all
Eligible Securities sold by Seller to Buyer and any additional collateral
delivered by Seller to Buyer pursuant to Section 4(a) of this Agreement.

 

14

 

“Rating Agency” shall mean any of Fitch Inc.,
Moody’s Investor Services, Inc. and Standard & Poor’s Ratings Group, a division
of The McGraw-Hill Companies.

“Rating Category” shall mean any of the
categories, based on the applicable rating, designated as “unrated,” “B-,” “B,”
“B+,” “BB-,” “BB,” “BB+,” “BBB-,” “BBB,” listed in Schedule I-A attached
to this Agreement.

“Recourse Debt to Equity
Ratio” shall mean the ratio of Total Recourse Indebtedness to Tangible Net
Worth.

“Reference Banks” shall mean banks each of
which shall (i) be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market and (ii) have an established
place of business in London.  Initially,
the Reference Banks shall be JPMorgan Chase Bank, Barclays Bank, Plc and
Citibank, N.A.  If any such Reference
Bank should be unwilling or unable to act as such or if the applicable Buyer
shall terminate the appointment of any such Reference Bank or if any of the
Reference Banks should be removed from the Reuters Monitor Money Rates Service
or in any other way fail to meet the qualifications of a Reference Bank, the
applicable Buyer in the exercise of its good faith business judgment may
designate alternative banks meeting the criteria specified in clauses (i) and
(ii) above.

“Relevant System” shall mean (a) The Depository
Trust Company in New York, New York, or (b) such other clearing organization or
book-entry system as is designated in writing by the Buyer.

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

“Remittance Date” shall mean the twentieth
(20th) calendar day of each month, or the next succeeding Business Day, if such
calendar day shall not be a Business Day, or such other day as is mutually
agreed to by Seller and the applicable Buyer.

“Replacement Asset” shall have the meaning
specified in Section 14(b)(ii) of this Agreement.

“Repurchase Date” shall mean, with respect to
each Transaction, the [twentieth (20th)] day of each calendar month
or if such day is not a Business Day, the immediately succeeding Business Day; provided,
that notwithstanding the foregoing, so long as no Event of Default on the part
of the Seller has occurred and is continuing, the aforementioned Repurchase
Date shall be automatically extended and recur on the [twentieth (20th)]
day (or if such day is not a Business Day, the immediately succeeding Business
Day) in each succeeding calendar month; provided  further, that in
the event the Availability Period is not extended as described in the proviso
to the definition of “Availability Period,” then (x) the Seller shall have
the one time right exercisable at or prior to the end of the then-current
Availability Period to notify the applicable Buyer in writing that it is
extending the Repurchase Date with respect to any or all outstanding
Transactions to the second (2nd) anniversary of the end of the then
current Availability Period subject to payment of the Extension Fee set forth
in Section 3(f) or (y) if the Seller does not deliver the extension notice
pursuant to the immediately preceding clause (x), the Repurchase Date shall be
accelerated and shall occur on the last day of the Availability Period.

 

15

 

“Repurchase Price” shall mean, with respect to
any Purchased Securities or Purchased Loans as of any date, the price at which
such Purchased Securities or Purchased Loans are to be transferred from the
applicable Buyer to Seller upon termination of the related Transaction; such
price will be determined in each case as the sum of the Purchase Price of such
Purchased Securities or Purchased Loans and the accrued but unpaid Price
Differential with respect to such Purchased Securities or Purchased Loans as of
the date of such determination, minus all Income and cash actually received by
the applicable Buyer in respect of such Transaction pursuant to Sections 4(a),
4(d), 5(c), 5(d) and 5(e) of this Agreement all as shall be notified by the
applicable Buyer to the Custodian in writing or electronic transmission.

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

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

“Reset Date” shall mean, with respect to any
Pricing Rate Period, the second Business Day preceding the first day of such
Pricing Rate Period with respect to any Transaction.

“Securities Buyer” shall mean Citigroup Global
Markets Inc., or any successor.

“Securitization Document” shall mean, with
respect to any Eligible Securities, any pooling and servicing agreement or
other agreement governing the issuance and administration of such Eligible
Securities.

“Seller” shall mean Capital Trust, Inc., a
Maryland corporation.

“Servicing Agreement” shall have the meaning
specified in Section 29(b).

“Servicing Records” shall have the meaning
specified in Section 29(b).

“Significant Purchased
Loan Modification” means any modification or amendment of a Purchased Loan
which

(i)            reduces
the principal amount of the Purchased Loan in question other than (1) with
respect to a dollar-for-dollar principal payment or (2) reductions of
principal to the extent of deferred, accrued or capitalized interest added to
principal which additional amount was not taken into account by Loan Buyer in
determining the related Purchase Price,

 

16

 

(ii)           increases
the principal amount of a Purchased Loan other than increases which are derived
from accrual or capitalization of deferred interest which is added to principal
or protective advances,

(iii)          modifies
the regularly scheduled payments of principal and non-contingent interest of
the Purchased Loan in question,

(iv)          changes
the frequency of scheduled payments of principal and interest in respect of a
Purchased Loan,

(v)           subordinates
the lien priority of the Purchased Loan in question or the payment priority of
the Purchased Loan in question other than subordinations required under the
then existing terms and conditions of the Purchased Loan in question (provided,
however, the foregoing shall not preclude the execution and delivery of
subordination, nondisturbance and attornment agreements with tenants,
subordination to tenant leases, easements, plats of subdivision and condominium
declarations and similar instruments which in the commercially reasonable
judgment of the Seller do not materially adversely affect the rights and
interest of the holder of the Purchased Loan in question),

(vi)          releases
any asset for the Purchased Loan in question other than releases required under
the then existing Purchased Loan documents or releases in connection with
eminent domain or under threat of eminent domain,

(vii)         waives,
amends or modifies any cash management or reserve account requirements of the
Purchased Loan other than changes required under the then existing Purchased
Loan documentation, or

(viii)        waives
any due-on-sale or due-on-encumbrance provisions of the Purchased Loan in question
other than waivers required to be given under the then existing Purchased Loan
documents, or

(ix)           with
respect to Preferred Equity only, modifies or amends in any material respect
the organizational agreement or other document that creates and establishes the
rights and remedies of the Preferred Equity.

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

 

17

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

“Tangible Net Worth”
shall mean, as of any date of determination, (a) all amounts which would
be included under capital (it being agreed that any convertible trust preferred
securities and any unfunded commitments or capital which can be drawn will be
included as capital) on the balance sheet of Seller at such date, determined in
accordance with GAAP as of such date, less (b)(i) amounts owing to
Seller from Affiliates and (ii) intangible assets of the Seller as of such
date.

“Target Price” shall mean, with respect to any
Purchased Asset as of any date, the amount (expressed in dollars) obtained by
multiplying (i) the Market Value of such Purchased Asset as of such date by
(ii) the Purchase Percentage for such Purchased Asset, as set forth in Schedule
I-A attached to this Agreement.

“Title Exceptions” shall have the meaning
specified in Exhibit VI.

“Total Debt to Equity
Ratio” shall mean the ratio of Total Indebtedness to Tangible Net Worth.

“Total Indebtedness” shall mean, for any
period, the aggregate Indebtedness of Seller and its consolidated Subsidiaries
during such period (including, without limitation, off-balance sheet
Indebtedness), less the amount of any nonspecific balance sheet reserves maintained
in accordance with GAAP, provided that the calculation of Total Indebtedness
will exclude (i) amounts of liabilities resulting from the sale of
participation interests classified as participations sold on the liabilities
side of Seller’s balance sheet, (ii) liabilities resulting from consolidation
of debt associated with securitizations where Seller has no recourse obligation
for the debt and which debt was not issued by Seller or its Subsidiaries and
(iii) liabilities resulting from the consolidation of vehicles managed by
Seller or a Subsidiary of Seller where Seller has less than a 50% equity
interest.

“Total Recourse Indebtedness” shall mean, for
any period, the aggregate Indebtedness of Seller and its consolidated
Subsidiaries during such period (including, without limitation, off-balance
sheet Indebtedness), less the amount of any nonspecific balance sheet reserves
maintained in accordance with GAAP, provided that the calculation of Total
Indebtedness will exclude (i) amounts of liabilities resulting from the sale of
participation interests classified as participations sold on the liabilities
side of Seller’s balance sheet, (ii) liabilities resulting from consolidation
of debt incurred by wholly owned Subsidiaries of the Seller where Seller has no
recourse obligation for the debt and (iii) liabilities resulting from the
consolidation of vehicles managed by Seller or a Subsidiary of the Seller where
Seller has less than a 50% equity interest.

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

 

18

 

“Transaction Documents” shall mean,
collectively, this Agreement, any applicable Annexes to this Agreement, the
Custodial Agreement and all Confirmations executed pursuant to this Agreement
in connection with specific Transactions.

“Trustee” shall mean, with respect to any
Eligible Securities, the trustee under the Securitization Document applicable
to such Eligible Securities for each Transaction.

“Trust Receipt” shall mean a trust receipt
issued by Custodian to the applicable Buyer confirming the Custodian’s
possession of certain Purchased Loan Files which are the property of and held
by Custodian for the benefit of the applicable Buyer (or any other holder of
such trust receipt) or a bailment arrangement with counsel or other third party
acceptable to the applicable Buyer in its sole discretion.

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

“UCC-9 Policy” and “Underlying Property
Owner” shall have the meanings specified in Exhibit VI.

“Underlying Mortgaged
Property” shall mean, in the case of any:

(a)                                  B Note, the Mortgaged Property securing
such B Note (if the B Note is a debt instrument), or the Mortgaged Property
securing the Mortgage Loan in which such B Note represents a junior
participation (if the B Note is a participation interest); or

(b)                                 Mezzanine Loan, the Mortgaged Property
that is owned by the Person the Capital Stock of which is pledged as security
for such Mezzanine Loan; or

(c)                                  Preferred Equity, Mortgaged Property that
is owned by the entity whose equity ownership interest is represented by such
Preferred Equity.

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

3.             INITIATION; CONFIRMATION; TERMINATION; FEES

(a)           Subject
to the terms and conditions set forth in this Agreement (including, without
limitation, the “Transaction Conditions Precedent” specified in Section 3(b) of
this Agreement), an agreement to enter into a Transaction shall be made in
writing at the initiation of Seller as provided below; provided, however,
that (i) the aggregate Repurchase Price (excluding accrued Price
Differential with respect to the Purchased Securities and Purchased Loans as of
the date of determination) for all Transactions shall not exceed the Facility
Amount and (ii) the Buyers shall not have any obligation to enter into
Transactions with the Seller after the end of the Availability

 

19

 

Period.  Seller
shall give the applicable Buyer written notice of each proposed Transaction and
the applicable Buyer shall inform Seller of its determination with respect to
any assets proposed to be sold to the applicable Buyer by Seller solely in
accordance with Exhibit VIII attached hereto. 
The applicable Buyer shall have the right to review all Eligible Loans
and Eligible Securities proposed to be sold to such Buyer in any Transaction
and to conduct its own due diligence investigation of such Eligible Loans and
Eligible Securities as such Buyer reasonably determines.  Each Buyer shall be entitled to make a
determination, in the exercise of its good faith sole discretion, that it shall
or shall not purchase any or all of the assets proposed to be sold to such
Buyer by Seller.  Notwithstanding the
foregoing, Seller shall not initiate, and Securities Buyer shall not have any
obligation to enter into, any Transaction with respect to Eligible Securities
rated below investment grade by any Rating Agency, if the aggregate outstanding
Repurchase Price of all Purchased Securities rated below investment grade would
exceed 20% of the Facility Amount.

(b)           Upon
agreeing to enter into a Transaction hereunder, provided each of the
Transaction Conditions Precedent (as hereinafter defined) shall have been
satisfied (or waived by the applicable Buyer), Seller shall promptly deliver to
the applicable Buyer a written confirmation in the form of Exhibit I
attached hereto of each Transaction or such other form as may be provided by
Buyers from time to time (a “Confirmation”).  Such Confirmation shall describe the
Purchased Securities (including CUSIP number, if any) and/or Purchased Loans,
shall identify the applicable Buyer and Seller, and shall set forth:

(i)                                     the Purchase Date,

(ii)                                  the Purchase Price for such Purchased
Securities and/or Purchased Loans,

(iii)                               the Repurchase Date,

(iv)                              the Pricing Rate applicable to the
Transaction (including the Applicable Spread) and

(v)                                 any additional terms or conditions not
inconsistent with this Agreement.

With respect to any Transaction, the Pricing Rate
shall be determined initially on the Pricing Rate Determination Date applicable
to the first Pricing Rate Period for such Transaction, and shall be reset on
each Reset Date for the next succeeding Pricing Rate Period for such
Transaction. The applicable Buyer or its agent shall determine in accordance
with the terms of this Agreement the Pricing Rate on each Pricing Rate
Determination Date for the related Pricing Rate Period and notify Seller of
such rate for such period on the Reset Date. 
For purposes of this Section 3(b), the “Transaction Conditions
Precedent” shall be deemed to have been satisfied with respect to any proposed
Transaction if:

(A)                              no Default or Event of Default (in each
case, other than with respect to a Buyer) under this Agreement shall have
occurred and be continuing as of the Purchase Date for such proposed
Transaction;

 

20

 

(B)                                Seller shall have demonstrated to the
reasonable satisfaction of the applicable Buyer in writing the acquisition cost
of such Purchased Asset (including therein reasonable supporting documentation
required by the applicable Buyer, if any);

(C)                                the representations and warranties made
by Seller in any of the Transaction Documents shall be true and correct in all
material respects as of the Purchase Date for such Transaction (except to the
extent such representations and warranties are made as of a particular date);

(D)                               the applicable Buyer shall have (A)
determined, in accordance with the applicable provisions of Section 3(a) of
this Agreement, that the assets proposed to be sold to the applicable Buyer by
Seller in such Transaction are Eligible Securities and/or Eligible Loans and
(B) approved the inclusion of such Eligible Loan as a Purchased Loan in a
Transaction;

(E)                                 Seller and Buyer shall have executed the
related Confirmation; and

(F)                                 Seller shall have paid to Buyer the
Funding Fee, if any, due and payable (which amount, upon the agreement of Buyer
and Seller, may be held back from funds remitted to Seller by Buyer).

(c)           Each
Confirmation, together with this Agreement, shall be conclusive evidence of the
terms of the Transaction(s) covered thereby. 
In the event of any conflict between the terms of such Confirmation and
the terms of this Agreement, the Confirmation shall prevail.

(d)           No
Transaction shall be terminable on demand by a Buyer (other than upon the
occurrence and during the continuance of an Event of Default by Seller).  Seller shall be entitled to terminate a
Transaction on demand, in whole or in part, and repurchase any or all of the
Purchased Securities and/or Purchased Loans subject to a Transaction on any
Business Day prior to the Repurchase Date (an “Early Repurchase Date”); provided,
however, that:

(i)                                     Seller notifies Buyer in writing of its
intent to terminate such Transaction and repurchase such Purchased Securities
and/or Purchased Loans no later than two (2) Business Days (or such shorter
period of time as Buyer may consent to, such consent not to be unreasonably
withheld, delayed or conditioned) prior to such Early Repurchase Date, and

(ii)                                  on such Early Repurchase Date Seller pays
to the applicable Buyer an amount equal to the sum of the Repurchase Price for
such Transaction and any other amounts payable under this Agreement (including,
without limitation, Section 3(i) of this Agreement) with respect to such
Transaction against transfer to the Seller or its agent of such Purchased
Securities and/or Purchased Loans.

 

21

 

Such notice shall set forth the Early Repurchase Date
and shall identify with particularity the Purchased Securities and/or Purchased
Loans to be repurchased on such Early Repurchase Date.

(e)           On
the Repurchase Date, termination of the Transactions will be effected by
transfer to Seller or its agent of the Purchased Securities and Purchased Loans
and any Income in respect thereof received by the applicable Buyer (and not
previously credited or transferred to, or applied to the obligations of, Seller
pursuant to Section 5 of this Agreement) against the simultaneous transfer of
the Repurchase Price to an account of the applicable Buyer.

(f)            On
each Purchase Date and on each date on which funds representing Margin Excess
are transferred by Buyer to Seller, Seller shall pay to Buyer the related
Funding Fee, if any.  Seller shall pay to
Buyer a non-refundable Extension Fee on the date on which the Seller delivers
to the Buyer the extension notice contemplated in the second proviso to the
definition of “Repurchase Date” if Seller elects to extend the Repurchase Date
to the second anniversary of the end of the then current Availability Period
pursuant to the definition of “Repurchase Date”.

(g)           If
prior to the first day of any Pricing Rate Period with respect to any
Transaction, (i) Buyer shall have determined in the exercise of its reasonable
business judgment (which determination shall be conclusive and binding upon
Seller) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBO Rate for
such Pricing Rate Period, or (ii) the LIBO Rate determined or to be determined
for such Pricing Rate Period will not adequately and fairly reflect the cost to
the applicable Buyer (as determined and certified by such Buyer) of making or
maintaining Transactions during such Pricing Rate Period, the applicable Buyer
shall give telecopy or telephonic notice thereof to Seller as soon as
practicable thereafter.  If such notice
is given, the Pricing Rate with respect to such Transaction for such Pricing
Rate Period, and for any subsequent Pricing Rate Periods until such notice has
been withdrawn by the applicable Buyer, shall be a per annum rate equal to the
Prime Rate (the “Alternative Rate”).

(h)           Notwithstanding
any other provision herein, if the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof shall make it unlawful
for a Buyer to effect Transactions as contemplated by the Transaction
Documents, (a) the commitment of such Buyer hereunder to enter into new
Transactions and to continue Transactions as such shall forthwith be canceled,
and (b) the Transactions then outstanding shall be converted automatically to
Alternative Rate Transactions on the last day of the then current Pricing Rate
Period or within such earlier period as may be required by law.  If any such conversion of a Transaction
occurs on a day which is not the last day of the then current Pricing Rate
Period with respect to such Transaction, Seller shall pay to the applicable
Buyer such amounts, if any, as may be required pursuant to Section 3(i) of this
Agreement.

(i)            Upon
demand by a Buyer, Seller shall indemnify such Buyer and hold such Buyer
harmless from any net actual, out-of-pocket loss or expense (not to include any
lost profit or opportunity) (including, without limitation, actual reasonable
attorneys’ fees and disbursements) which such Buyer may sustain or incur as a
consequence of (i) default by the Seller in terminating any Transaction after
the Seller has given a notice in accordance with Section 3(d) of a termination
of a Transaction, (ii) any payment of the Repurchase Price on any day other
than a Remittance Date or the Repurchase Date (including, without limitation,
any such actual,

 

22

 

out-of-pocket loss or expense arising from the
reemployment of funds obtained by such Buyer to maintain Transactions hereunder
or from customary and reasonable fees payable to terminate the deposits from
which such funds were obtained) or (iii) a default by Seller in selling
Eligible Loans or Eligible Securities after Seller has notified such Buyer of a
proposed Transaction and such Buyer has agreed to purchase such Eligible Loans
or Eligible Securities in accordance with the provisions of this
Agreement.  A certificate as to such
actual costs, losses, damages and expenses, setting forth the calculations
therefor shall be submitted promptly by the applicable Buyer to Seller and
shall be prima facie evidence of the information set forth therein.

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

(i)                                     shall subject such Buyer to any tax of
any kind whatsoever with respect to the Transaction Documents, any Purchased
Security or Purchased Loan or any Transaction, or change the basis of taxation
of payments to such Buyer in respect thereof (except for income taxes and any
changes in the rate of tax on such Buyer’s overall net income);

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

(iii)                               shall impose on a Buyer any other
condition;

and the result of any of the foregoing is to increase
the cost to such Buyer, by an amount which such Buyer deems, in the exercise of
its reasonable business judgment, to be material, of entering into, continuing
or maintaining Transactions or to reduce any amount receivable under the
Transaction Documents in respect thereof, then, in any such case, Seller shall
promptly pay such Buyer, upon its demand, any additional amounts necessary to
compensate Buyer for such increased cost or reduced amount receivable.  If a Buyer becomes entitled to claim any
additional amounts pursuant to this Section 3(j), it shall, within ten (10)
Business Days of such event, notify Seller of the event by reason of which it
has become so entitled except that Seller shall not be liable for any additional
amounts under this Section 3(j) with respect to any period more than 90 days
prior to the date that Seller receives notice thereof from a Buyer.  Such notification as to the calculation of
any additional amounts payable pursuant to this subsection shall be submitted
by the applicable Buyer to Seller and shall be prima facie evidence of such
additional amounts.  This covenant shall
survive the termination of this Agreement and the repurchase by Seller of any
or all of the Purchased Securities and Purchased Loans.

(k)           If
a Buyer shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or

 

23

 

compliance by such Buyer or any corporation
controlling such Buyer with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof does or shall have the effect of reducing the
rate of return on such Buyer’s or such corporation’s capital as a consequence
of its obligations hereunder to a level below that which such Buyer or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Buyer’s or such corporation’s policies with
respect to capital adequacy) by an amount deemed by such Buyer, in the exercise
of its reasonable business judgment, to be material, then from time to time,
after submission by such Buyer to Seller of a written request therefor, Seller
shall pay to such Buyer such additional amount or amounts as will compensate
such Buyer for such reduction.  Such
notification as to the calculation of any additional amounts payable pursuant
to this subsection shall be submitted by such Buyer to Seller and shall be
prima facie evidence of such additional amounts.  This covenant shall survive the termination
of this Agreement and the repurchase by Seller of any or all of the Purchased
Securities and Purchased Loans.

(l)            If
any of the events described in Section 3(g), Section 3(h), Section 3(j) or
Section 3(k) result in Buyer’s election to use the Alternative Rate or Buyer’s
request for additional amounts, then Seller shall have the option to notify
Buyer in writing of its intent to terminate the Transactions and repurchase the
Purchased Loans and Purchased Securities no later than one (1) Business Day
after notice is given to Buyer in accordance with Section 3(l).  The election by Seller to terminate the
Transactions in accordance with this Section 3(l) shall not relieve Seller for
liability with respect to any additional amounts or increased costs actually
incurred by Buyer prior to the actual repurchase of the Purchased Loans and
Purchased Securities.

(m)          Seller
shall have the right, from time to time, to notify Buyer that Seller intends on
transferring cash to Buyer for the purpose of reducing the Repurchase Price on,
but not terminating, a Transaction for a Purchased Security or Purchased Loan
on any date before the Repurchase Date (and, in such event, the Seller shall
have the right from time to time thereafter to request that the Buyer increase
the related Purchase Price as Margin Excess in a new Transaction).  If any notice is given by Seller under
Section 3(m) of this Agreement at or prior to 3:00 p.m. (New York City time),
then the Seller may transfer cash as provided above on the next following
Business Day after the giving of such notice. 
If any notice is given by Seller under Section 3(m) of this Agreement
after 3:00 p.m. (New York City time), then the Seller may transfer cash as
provided above on the second following Business Day after the giving of such
notice.

4.             MARGIN MAINTENANCE

(a)           If
at any time, the Market Value of all of the Purchased Securities or all of the
Purchased Loans in the aggregate shall be less than the Buyer’s Margin Amount
for all of the Purchased Securities or all of the Purchased Loans in the
aggregate (a “Margin Deficit”), then the applicable Buyer may by notice
to Seller (which notice shall set forth in reasonable detail such Buyer’s
calculation of such Margin Deficit) require Seller to transfer to such Buyer
(A) cash or (B) additional assets acceptable to such Buyer in its sole and
absolute discretion, so that the sum obtained by adding the Market Value of all
of the Purchased Securities or all of the Purchased Loans in the aggregate plus
such cash and additional assets shall equal or exceed the

 

24

 

Deficit Cure Amount for all of the Purchased
Securities or all of the Purchased Loans as of the same date.

(b)           If
at any time the Market Value of any Purchased Asset multiplied by the Purchase
Percentage for such Purchased Asset shall be greater than the Repurchase Price
(excluding Price Differential) for the Transaction relating to such Purchased
Asset (a “Margin Excess”) then the Seller may by notice to Buyer require
Buyer to transfer to Seller cash in an amount up to the Margin Excess; provided,
that any such transfer of cash (1) shall not be in an amount less than
$500,000, (2) shall be deemed a new Transaction for purposes of this
Agreement with a new Purchase Date and be evidenced by amended and restated
Confirmations, (3) shall not be available to Seller if an Event of Default on
the part of Seller has occurred and is continuing and (4) shall be subject to
payment of the Funding Fee, if any (other than in the circumstance where the
Seller has reduced the Repurchase Price pursuant to Section 3(m) of this
Agreement and such transfer of cash represents a re-advance of amounts for
which a Funding Fee was previously paid).

(c)           If
any notice is given by a Buyer under Section 4(a) of this Agreement on any
Business Day at or prior to the Margin Notice Deadline, the Seller shall
transfer cash or additional assets as provided in Section 4(a) by no later than
the next following Business Day after the giving of such notice.  If any notice is given by a Buyer under
Section 4(a) of this Agreement on any Business Day after the Margin Notice
Deadline, the Seller shall transfer cash or additional assets as provided in
Section 4(a) by no later than the second following Business Day after the
giving of such notice.  If any notice is
given by Seller under Section 4(b) of this Agreement prior to the close of
business on any Business Day, the Buyer shall transfer cash as provided in
Section 4(b) no later than the close of business in the relevant market on the
following Business Day.  Notice required
pursuant to Section 4(a) or 4(b) of this Agreement may be given by any means of
telecopier or telegraphic transmission and shall be delivered in accordance
with the terms of this Agreement.  The
failure of a Buyer or Seller, on any one or more occasions, to exercise its
rights under Section 4(a) or 4(b) of this Agreement shall not change or alter
the terms and conditions to which this Agreement is subject or limit the right
of a Buyer or Seller to do so at a later date. 
Each Buyer and Seller agree that any failure or delay by a Buyer or
Seller to exercise its rights under Section 4(a) or 4(b) of this Agreement
shall not limit such party’s rights under this Agreement or otherwise existing
by law or in any way create additional rights for such party.

(d)           Any
cash transferred to a Buyer pursuant to Section 4(a) of this Agreement with
respect to any Purchased Securities or any Purchased Loans shall be attributed
to the Repurchase Price of such Purchased Security or Purchased Loan,
respectively, for which there was a Margin Deficit.  The amount of any cash transferred by Buyer
pursuant to Section 4(b) of this Agreement with respect to any Purchased
Security or Purchased Loan, respectively, shall increase the Repurchase Price
of the relevant Transaction by such amount.

5.             INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)           The
Cash Management Account shall be established at the Depository concurrently
with the execution and delivery of this Agreement by Seller and the
Buyers.  The Buyers shall have sole
dominion and control over the Cash Management Account.  All Income in

 

25

 

respect of the Purchased Assets and any payments in
respect of associated Hedging Transactions, as well as any interest received
from the reinvestment of such Income, shall be deposited directly into the Cash
Management Account and shall be remitted by the Depository in accordance with
the applicable provisions of Sections 5(b), 5(c), 5(d), 5(e) and 14(b)(i) of
this Agreement.

(b)           With
respect to each Purchased Loan, Seller shall deliver to each Mortgagor, issuer
of a participation or borrower under a Purchased Loan an irrevocable direction
letter in the form attached as Exhibit III to this Agreement instructing the
Mortgagor, issuer of a participation or borrower to pay all amounts payable
under the related Purchased Loan to the Cash Management Account and shall
provide to Loan Buyer proof of such delivery. 
If a Mortgagor, issuer of a participation or borrower forwards any
Income with respect to a Purchased Loan to Seller rather than directly to the
Cash Management Account, Seller shall (i) deliver an additional irrevocable
direction letter to the applicable Mortgagor, issuer of a participation or
borrower and make other commercially reasonable efforts to cause such
Mortgagor, issuer of a participation or borrower to forward such amounts
directly to the Cash Management Account and (ii) immediately deposit in the
Cash Management Account any such amounts.

(c)           So
long as no Event of Default (other than with respect to a Buyer) shall have
occurred and be continuing, all Income received by the Depository in respect of
the Purchased Assets (other than Principal Payments) during each Collection
Period shall be remitted on a daily basis to the Seller.  On each Remittance Date, Seller shall pay to
the Buyers an amount equal to the Price Differential which has accrued and is
unpaid as of such Remittance Date.

(d)           So
long as no Event of Default (other than with respect to a Buyer) shall have
occurred and be continuing, any Principal Payment (other than a Principal
Payment representing a scheduled amortization payment) received by the
Depository with respect to a Purchased Loan or Purchased Security shall be
applied by not later than the Business Day following the Business Day on which
such Principal Payment is received by the Depository to make a payment to the
related Buyer on account of the Repurchase Price of the Purchased Securities or
Purchased Loans in respect of which such Principal Payment has been received,
until the Repurchase Price for such Purchased Securities or Purchased Loans has
been reduced to the Target Price (or to zero in the case of any Principal
Payments in full) for such Purchased Securities or Purchased Loans,
respectively as of the date of such payment (as determined by such Buyer in its
good faith business judgment after giving effect to such Principal
Payment).  In addition to such
application of the Principal Payment, Seller shall pay to the Buyers an amount
equal to the Price Differential which has accrued and is unpaid with respect to
the amount of such Principal Payment on the Business Day on which such
Principal Payment is applied as described above.  So long as no Event of Default (other than
with respect to a Buyer) shall have occurred and be continuing, any Principal
Payment representing a scheduled amortization payment which is a portion of the
Income received by the Depository during each Collection Period shall be
applied by the Depository on the related Remittance Date in the following order
of priority:

(i)                                     first, to make a payment to the related Buyer
on account of the Repurchase Price of the Purchased Securities or Purchased
Loans in respect of which such Principal Payment has been received, until the
Repurchase Price for such Purchased Securities or Purchased Loans has been
reduced to the Target Price (or to zero in the case of any Principal Payments
in full) for

 

26

 

such Purchased Securities or Purchased Loans,
respectively as of the date of such payment (as determined by such Buyer in its
good faith business judgment after giving effect to such Principal Payment);

(ii)                                  second, to make a payment on account of the
Repurchase Price of any other Purchased Securities or Purchased Loans of the
related Buyer as to which the Repurchase Price exceeds the Target Price (for
this purpose, making such payment in the order of those Purchased Securities or
Purchased Loans with the largest to smallest excess of Repurchase Price over
Target Price), until the aggregate Repurchase Price for all of such Purchased
Securities or Purchased Loans has been reduced to the aggregate Target Price
for all of the Purchased Securities or Purchased Loans, respectively as of the
date of such payment (as determined by such Buyer in its good faith business
judgment after giving effect to such Principal Payment) and application of net
sale proceeds; and

(iii)                               third, to remit to Seller the remainder of
such Principal Payment or net sale proceeds.

(e)           If
an Event of Default (other than with respect to a Buyer) shall have occurred
and be continuing, all Income received by the Depository in respect of the
Purchased Assets and the associated Hedging Transactions shall be applied by
the Depository on the Business Day next following the Business Day on which
such funds are deposited in the Cash Management Account as follows:

(i)                                     first, to remit to the applicable Buyer an
amount equal to the Price Differential which has accrued and is outstanding in
respect of either all of the Purchased Loans or all of the Purchased Securities
as of such Business Day;

(ii)                                  second, to make a payment to applicable Buyer
on account of the Repurchase Price of the Purchased Loans or Purchased
Securities until the Repurchase Price for all of the Purchased Loans or
Purchased Securities has been reduced to zero; and

(iii)                               third, to remit to Seller the remainder.

6.             SECURITY INTEREST

The Buyers and Seller intend that all Transactions
hereunder be sales to the applicable Buyer of the Purchased Securities and
Purchased Loans and not loans from a Buyer to Seller secured by the Purchased
Securities and Purchased Loans.  However,
in the event any such Transaction with respect to a Purchased Loan is deemed to
be a loan, Seller hereby pledges all of its right, title, and interest in, to
and under and grants a first priority lien on, and security interest in, all of
the following property, whether now owned or hereafter acquired, now existing
or hereafter created and wherever located (collectively, the “Assets”)
to the Loan Buyer, and on a subordinated basis to the Securities Buyer, to secure
the payment and performance of all other

 

27

 

amounts or obligations
owing to the Loan Buyer, and on a subordinated basis to the Securities Buyer,
pursuant to this Agreement and the related documents described herein:

(a)           the
Purchased Loans, Servicing Agreements, Servicing Records, insurance relating to
the Purchased Loans, and collection and escrow accounts relating to the
Purchased Loans;

(b)           the
Hedging Transactions entered into with respect to the Purchased Loans;

(c)           the
Cash Management Account and all monies from time to time on deposit in the Cash
Management Account;

(d)           all
“general intangibles”, “accounts” and “chattel paper” as defined in the UCC
relating to or constituting any and all of the foregoing; and

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

In the event any such Transaction with respect to a
Purchased Security is deemed to be a loan, Seller hereby pledges all of its
right, title, and interest in, to and under and grants a first priority lien
on, and security interest in, all of the following property, whether now owned
or hereafter acquired, now existing or hereafter created and wherever located
(also, collectively, the “Assets”) to the Securities Buyer, and on a
subordinated basis to the Loan Buyer, to secure the payment and performance of
all amounts or obligations owing to the Securities Buyer, and on a subordinated
basis to the Loan Buyer, pursuant to this Agreement and the related documents
described herein:

(a)           the
Purchased Securities;

(b)           the
Hedging Transactions entered into with respect to the Purchased Securities;

(c)           the
Cash Management Account and all financial assets (including without limitation
all security entitlements with respect to all financial assets) from time to
time on deposit in or credited to the Cash Management Account;

(d)           all
“general intangibles”, “accounts” and “chattel paper” as defined in the UCC
relating to or constituting any and all of the foregoing; and

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

The Buyers’ security interest in the Assets shall
terminate only upon termination of the Seller’s obligations under this Agreement
and the documents delivered in connection herewith and therewith.  Upon such termination, each Buyer shall
deliver to Seller such UCC termination statements and other release documents
as may be commercially reasonable and to return the Purchased Assets to
Seller.  For purposes of the grant of the
security interest pursuant to Section

 

28

 

6 of this Agreement, this
Agreement shall be deemed to constitute a security agreement under the New York
Uniform Commercial Code (the “UCC”). 
Each Buyer shall have all of the rights and may exercise all of the
remedies of a secured creditor under the UCC and the other laws of the State of
New York.  In furtherance of the
foregoing, (a) each Buyer, at Seller’s sole cost and expense, shall cause to be
filed in such locations as may be reasonably necessary to perfect and maintain
perfection and priority of the security interest granted hereby, UCC financing
statements and continuation statements (collectively, the “Filings”),
and shall forward copies of such Filings to Seller upon completion thereof, and
(b) Seller shall from time to time take such further actions as may be
reasonably requested by Buyer to maintain and continue the perfection and
priority of the security interest granted hereby (including marking its records
and files to evidence the interests granted to Buyer hereunder).

7.             PAYMENT, TRANSFER AND CUSTODY

(a)           On
the Purchase Date for each Transaction, ownership of the Purchased Securities
and/or Purchased Loans shall be transferred to Buyer or its designee (including
the Custodian) against the simultaneous transfer of the Purchase Price to an
account specified by Seller relating to such Transaction and indicated on the
Confirmation; provided, that if such account is not:

Bank:

City/State:

ABA:

Account Name:

Account #:

Attention:

then such Confirmation shall require the signature of
two (2) Authorized Representatives (as set forth on Exhibit II hereto) of the
Seller.

(b)           On
or prior to the applicable Purchase Date, Seller shall deliver the related
Purchased Securities (and in the case of the Purchased Securities that
are traded through The Depository Trust Company, registered in the name of the
Custodian) and all
necessary documentation to the Custodian in accordance with the Custodial
Agreement so that, upon the occurrence and continuation of an Event of Default,
the Securities Buyer may, without any further action of Seller, re-register
such Purchased Securities in the name of the Securities Buyer and have all
rights of conversions, exchange, subscription and any other rights, privileges
and options pertaining to such Purchased Securities as the owner thereof, and
in connection therewith, the right to deposit and deliver any and all of the
Purchased Securities with any committee, depositary transfer, agent, register
or other designated agency upon such terms and conditions as the Securities
Buyer may reasonably determine.  The
Purchased Securities shall be held by the Custodian as exclusive bailee and
agent for the Securities Buyer, either directly or through the facilities of a
Relevant System, as “securities intermediary” (as defined in Section 8-102(a)(14)
of the UCC and 31 C.F.R. Section 357.2) and credited to the “securities
account” (as defined in Section 8-501(a) of the UCC) of Securities
Buyer.  The Securities Buyer, as “entitlement
holder” (as defined in Section 8-102(a)(7) of the UCC) with respect
to the Purchased Securities, shall be entitled to receive all cash dividends
and distributions paid in respect thereof.

 

29

(c)           With
respect to Purchased Securities that shall be delivered or held in
uncertificated form and the ownership of which is registered on books
maintained by the issuer thereof or its transfer agent, Seller shall execute
and deliver such documents or instruments, in each case in blank, necessary so
that such Purchased Securities are able to be legally and validly transferred
to Securities Buyer without any further action of Seller upon the occurrence
and continuation of an Event of Default. 
With respect to Purchased Securities that shall be delivered or held in
definitive, certificated form, Seller shall deliver to the Custodian the
original of the relevant certificate along with all other documentation so that
such Purchased Securities may be registered in the name of Securities Buyer
without any further action of Seller upon the occurrence and continuation of an
Event of Default.  With respect to
Purchased Securities that shall be delivered through a Relevant System in book
entry form and credited to or otherwise held in a securities account, Seller
shall take such actions necessary to provide instruction to the relevant
financial institution or other entity, which instruction shall be sufficient if
complied with to register the transfer of Purchased Securities from Seller to
Securities Buyer or its designee.  Any
delivery of a Purchased Security in accordance with this paragraph, or any
other method acceptable to Securities Buyer, shall be sufficient to cause
Securities Buyer to be the “entitlement holder” (as defined in Section 8-102(a)(7)
of the UCC) with respect to the Purchased Securities and, if the Transaction is
recharacterized as a secured financing, to have a perfected first priority
security interest therein.  No Purchased
Securities, whether certificated or uncertificated, shall remain in the name,
or possession, of Seller or any of its agents or in any securities account in
the name of Seller or any of its agents.

(d)           Except
to the extent waived by the applicable Buyer in its sole discretion, as a
condition to the Buyer’s purchase of any Purchased Securities or Purchased
Loans, as applicable, Seller shall deliver to the applicable Buyer on or prior
to the Purchase Date:

With respect to each
Security, to the extent reasonably available to Seller:

(i)                                     copies of the executed Securitization
Document governing such Purchased Securities, and the offering documents
related to such Purchased Securities, each certified by Seller as a true,
correct and complete copy of the original document delivered to Seller, and any
ancillary documents required to be delivered to holders of the Purchased
Securities under such Securitization Document;

(ii)                                  one or more officer’s certificates with
respect to the completeness of the documents delivered as may be reasonably requested
by Securities Buyer,

(iii)                               an instruction letter from Seller to the
Trustee under such Securitization Document, instructing the Trustee to remit
all sums required to be remitted to the holder of such Purchased Securities
under such Securitization Document to the Depository or as otherwise directed
in a written notice signed by Seller and Securities Buyer,

(iv)                              copies of all distribution statements, if
any, delivered to Seller pursuant to such Securitization Document during the
three-month period immediately preceding such Purchase Date, and

 

30

 

(v)                                 any other documents or instruments
necessary in the reasonable opinion of Securities Buyer to consummate the sale
of such Purchased Securities to Buyer or, if such Transaction is
recharacterized as a secured financing, to create and perfect in favor of
Securities Buyer a valid perfected first priority security interest in such
Purchased Securities.

(e)           On
or before each Purchase Date, Seller shall deliver or cause to be delivered to
the applicable Buyer or its designee the Custodial Delivery in the form
attached hereto as Exhibit IV; provided, that notwithstanding the foregoing,
upon request of the Seller, the applicable Buyer in its sole discretion may elect
to permit the Seller to make such delivery by not later than the third (3rd) Business Day after the related Purchase Date, so
long as the Seller causes an Acceptable Attorney to deliver to the applicable
Buyer and the Custodian an Attorney’s Bailee Letter on or prior to such
Purchase Date.  In connection with each
sale, transfer, conveyance and assignment of a Purchased Loan, on or prior to
each Purchase Date with respect to such Purchased Loan, the Seller shall deliver
or cause to be delivered and released to the Custodian the following documents
(collectively, the “Purchased Loan File”) pertaining to each of the Purchased
Loans identified in the Custodial Delivery delivered therewith; provided, that
Seller shall deliver a certificate of an Authorized Representative of Seller
certifying that any copies of documents delivered represent true and correct
copies of the originals of such documents:

With respect to each
Purchased Loan secured directly by a Mortgage (other than a B Note or Mezzanine
Loan as set forth in clauses (ii) and (iii), respectively, of the definition of
Eligible Loan):

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

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

(iii)                               An original or copy of the Mortgage with
evidence of recordation, or submission for recordation, from the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.

(iv)                              Originals or copies of all assumption,
modification, consolidation or extension agreements with evidence of
recordation, or submission for recordation, from the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located.

 

31

 

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

(vi)                              Originals or copies of all intervening
assignments of mortgage with evidence of recordation, or submission for
recordation, from the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located.

(vii)                           An original or copy of the attorney’s
opinion of title and abstract of title or the original mortgagee title
insurance policy, or if the original mortgagee title insurance policy has not
been issued, the irrevocable marked commitment to issue the same.

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

(ix)                                An original or copy of the assignment of
leases and rents, if any, with evidence of recordation, or submission for
recordation, from the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located.

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

(xi)                                A copy of the UCC financing statements
and all necessary UCC continuation statements with evidence of filing or
submission for filing thereon, and UCC assignments prepared by Seller in blank,
which UCC assignments shall be in form and substance acceptable for filing.

(xii)                             An environmental indemnity agreement (if
any).

(xiii)                          An omnibus assignment in blank (if any).

(xiv)                         A disbursement letter from the Mortgagor
to the original mortgagee (if any).

(xv)                            Mortgagor’s certificate or title
affidavit (if any).

 

32

 

(xvi)                         A survey of the Mortgaged Property (if
any) as accepted by the title company for issuance of the Title Policy.

(xvii)                      A copy of the Mortgagor’s opinion of
counsel (if any).

(xviii)                   An assignment of permits, contracts and agreements (if
any).

With respect to each
Purchased Loan which is a mezzanine loan secured by a pledge of the entire (or
such lesser amount as Loan Buyer may agree to) direct or indirect equity
ownership interest of Seller in an entity that owns a multifamily or commercial
property:

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

(ii)                                  An original or copy of the mezzanine loan
agreement and the guarantee, if any, executed in connection with the Purchased
Loan.

(iii)                               An original or copy of the intercreditor
or loan coordination agreement, if any, executed in connection with the
Purchased Loan.

(iv)                              An original or copy of the security
agreement executed in connection with the Purchased Loan.

(v)                                 Copies of all documents relating to the
formation and organization of the borrower of such Purchased Loan, together
with all consents and resolutions delivered in connection with such borrower’s
obtaining the Purchased Loan.

(vi)                              All other documents and instruments
evidencing, guaranteeing, insuring or otherwise constituting or modifying or
otherwise affecting such Purchased Loan, or otherwise executed or delivered in
connection with, or otherwise relating to, such Purchased Loan, including all
documents establishing or implementing any lockbox pursuant to which Seller is
entitled to receive any payments from cash flow of the underlying real
property.

(vii)                           The assignment of Purchased Loan
sufficient to transfer to Buyer all of Seller’s rights, title and interest in
and to the Purchased Loan.

(viii)                        A copy of the borrower’s opinion of
counsel (if any).

 

33

 

(ix)                                A copy of the UCC financing statements
and all necessary UCC continuation statements with evidence of filing or
submission for filing thereon, and UCC assignments prepared by Seller in blank,
which UCC assignments shall be in form and substance acceptable for filing.

(x)                                   The original certificates representing
the pledged equity interests (if any).

(xi)                                Stock powers relating to each pledged
equity interest, executed in blank, if an original stock certificate is
provided.

(xii)                             Assignment of any management agreements,
agreements among equity interest holders or other material contracts.

(xiii)                          If no original stock certificate is
provided, evidence (which may be an officer’s certificate confirming such
circumstances) that the pledged ownership interests have been transferred to,
or otherwise made subject to a first priority security interest in favor of,
the Seller.

With respect to each
Purchased Loan which is a junior participation interest in or a subordinate
note from a commercial mortgage loan secured by a first or second lien on a
multifamily or commercial property or a mezzanine loan:

(i)                                     the original or a copy of all of the
documents described above with respect to a Purchased Loan secured by a
Mortgage or which is a mezzanine loan as applicable (in the case of such
Purchased Loan which is in a second lien position, then for both the first lien
position and the second lien position);

(ii)                                  if such Purchased Loan is a participation
interest, an original participation certificate bearing all intervening endorsements,
endorsed “Pay to the order of ______ without recourse” and signed in the name
of the Last Endorsee by an authorized Person;

(iii)                               an original or copy of any participation
agreement and an original or copy of any intercreditor agreement, co-lender
agreement and/or servicing agreement executed in connection with the Purchased
Loan; and

(iv)                              the omnibus assignment of Purchased Loan
sufficient to transfer to Loan Buyer all of Seller’s rights, title and interest
in and to the Purchased Loan.

With respect to each Purchased Loan which is of the
type described in clause (iv) of the definition of Eligible Loan:  any of the documentation referred to above in
this Section 7(e) of this Agreement which is determined by Loan Buyer to be
reasonably necessary to effectuate the sale, transfer, conveyance and
assignment of such Purchased Loan.

In addition, with respect to each Purchased Loan, the
Seller shall deliver an instruction letter from the Seller to either the
Mortgagor or the borrower under such Purchased Loan or the servicer with
respect to such Purchased Loan, instructing the Mortgagor, the borrower or the
servicer, as applicable, to remit all sums required to be remitted to the
holder of such Purchased

 

34

 

Loan under the loan
documents to the Depository for deposit in the Cash Management Account or as
otherwise directed in a written notice signed by Seller and Loan Buyer.

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

(f)            Unless
an Event of Default (other than with respect to a Buyer) shall have occurred
and be continuing, with respect to Purchased Securities that shall be delivered
through a Relevant System in book entry form and credited to or otherwise held
in a securities account, the Securities Buyer shall exercise all rights with
respect to such Purchased Securities in accordance with Seller’s written
instructions.  Unless an Event of Default
(other than with respect to a Buyer) shall have occurred and be continuing,
Seller shall be entitled to exercise all rights with respect to Purchased
Assets (other than the Purchased Securities referred to in the immediately
preceding sentence), subject in all cases to the terms and conditions of this
Agreement.  Upon the occurrence and
during the continuation of an Event of Default (other than with respect to a 

 

35

 

Buyer), Buyers shall be entitled to exercise all
rights with respect to the Purchased Assets without regard to Seller’s
instructions.

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

(a)           Title
to all Purchased Securities and Purchased Loans shall pass to the applicable
Buyer on the applicable Purchase Date, and Buyer shall have free and
unrestricted use of all Purchased Securities and Purchased Loans, subject to
the terms and conditions of this Agreement. 
Nothing in this Agreement or any other Transaction Document shall
preclude the applicable Buyer from engaging in repurchase transactions with the
Purchased Securities and Purchased Loans or otherwise selling, transferring,
pledging, repledging, hypothecating, or rehypothecating the Purchased
Securities and Purchased Loans, but no such transaction shall relieve the
applicable Buyer of its obligations to transfer the Purchased Securities and/or
Purchased Loans to Seller pursuant to Sections 3 or 11 of this Agreement or of
the applicable Buyer’s obligation to credit or pay Income to, or apply Income
to the obligations of, Seller pursuant to Section 5 hereof.

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

9.             [INTENTIONALLY OMITTED]

10.          REPRESENTATIONS

(a)           Each
of Buyer and Seller represents and warrants to the other that (i) it is duly
authorized to execute and deliver this Agreement, to enter into Transactions
contemplated hereunder and to perform its obligations hereunder and has taken
all necessary action to authorize such execution, delivery and performance,
(ii) it will engage in such Transactions as principal (or, if agreed in
writing, in the form of an annex hereto or otherwise, in advance of any
Transaction by the other party hereto, as agent for a disclosed principal),
(iii) the person signing this Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such disclosed principal), (iv) it has
obtained all authorizations of any governmental body required in connection
with this Agreement and the Transactions hereunder and such authorizations are
in full force and effect and (v) the execution, delivery and performance of
this Agreement and the Transactions hereunder will not violate any law,
ordinance or rule applicable to it or its organizational documents or any
agreement by which it is bound or by which any of its assets are affected.  On the Purchase Date for any Transaction, the
related Buyer and Seller shall each be deemed to repeat all the foregoing
representations made by it.

(b)           In
addition to the representations and warranties in subsection (a) above, Seller
represents and warrants to each Buyer that as of the Purchase Date for the
purchase of any Purchased Securities or Purchased Loans by a Buyer from Seller
and any Transaction thereunder

 

36

 

and as of the date of this Agreement and at all times
while this Agreement and any Transaction thereunder is in full force and
effect:

(i)                                     Organization. 
Seller is duly incorporated, validly existing and in good standing under
the laws and regulations of the state of Seller’s incorporation and is duly
licensed, qualified, and in good standing in every state where such licensing
or qualification is necessary for the transaction of Seller’s business.  Seller has the power to own and hold the
assets it purports to own and hold, and to carry on its business as now being
conducted and proposed to be conducted, and Seller has the power to execute,
deliver, and perform its obligations under this Agreement and the other
Transaction Documents.

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

(iii)                               Non-Contravention. 
Neither the execution and delivery of the Transaction Documents, nor
consummation by Seller of the transactions contemplated by the Transaction
Documents (or any of them), nor compliance by Seller with the terms, conditions
and provisions of the Transaction Documents (or any of them) will conflict with
or result in a breach of any of the terms, conditions or provisions of (i) the
organizational documents of Seller, (ii) any contractual obligation to which
Seller is now a party or the rights under which have been assigned to Seller or
the obligations under which have been assumed by Seller or to which the assets
of Seller are subject or constitute a default thereunder, or result thereunder
in the creation or imposition of any lien upon any of the assets of Seller,
other than pursuant to the Transaction Documents, (iii) any judgment or order,
writ, injunction, decree or demand of any court applicable to Seller, or (iv)
any applicable Requirement of Law, in the case of clauses (ii)-(iv) above, to
the extent that such conflict or breach would have a material adverse effect
upon Seller’s ability to perform its obligations hereunder.  Seller has all necessary licenses, permits
and other consents from Governmental Authorities necessary to acquire, own and
sell the Purchased Assets and for the performance of its obligations under the
Transaction Documents.

(iv)                              Litigation; Requirements of Law. 
There is no action, suit, proceeding, investigation, or arbitration
pending or, to the best knowledge of Seller, threatened against Seller, the
Sponsor or any of their respective assets, nor is there any action, suit,
proceeding, investigation, or arbitration pending or threatened against the
Sponsor which may result in any material adverse change in the business,
operations, financial condition, properties, or assets of Seller or the
Sponsor, or which may have an adverse effect on

 

37

 

the validity of the Transaction Documents or the
Purchased Assets or any action taken or to be taken in connection with the
obligations of Seller under any of the Transaction Documents.  Seller is in compliance in all material
respects with all Requirements of Law. 
Neither Seller nor the Sponsor is in default in any material respect
with respect to any judgment, order, writ, injunction, decree, rule or
regulation of any arbitrator or Governmental Authority.

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

(vi)                              Good Title.  Immediately
prior to the purchase of any Purchased Securities or Purchased Loans by the
applicable Buyer from Seller, such Purchased Securities and Purchased Loans are
free and clear of any lien, encumbrance or impediment to transfer (including
any “adverse claim” as defined in Section 8-102(a)(1) of the UCC), and Seller
is the record and beneficial owner of and has good and marketable title to and
the right to sell and transfer such Purchased Securities and Purchased Loans to
the applicable Buyer and, upon transfer of such Purchased Securities and
Purchased Loans to the applicable Buyer, such Buyer shall be the owner of such
Purchased Securities and Purchased Loans free of any adverse claim, subject to
the rights of Seller pursuant to the terms of this Agreement.  In the event the related Transaction is
recharacterized as a secured financing of the Purchased Securities or Purchased
Loans, the provisions of this Agreement are effective to create in favor of the
applicable Buyer a valid security interest in all rights, title and interest of
the Seller in, to and under the Assets and the Buyer shall have a valid,
perfected first priority security interest in the Purchased Securities or
Purchased Loans.

(vii)                           No Default.  No Default or
Event of Default (in each case, other than with respect to a Buyer) exists
under or with respect to the Transaction Documents.

(viii)                        Representations and Warranties Regarding
Purchased Securities.  Seller represents and warrants to Securities
Buyer that each Purchased Security sold hereunder (other than a Purchased
Security issued or underwritten by an Affiliate of Securities Buyer), as of
each Purchase Date for a Transaction, conform to the applicable representations
and warranties set forth in Exhibit VI attached hereto in all material
respects, except as disclosed to Securities Buyer in writing; provided, that
notwithstanding the foregoing, with respect to any Purchased Security which
Seller acquired from Securities Buyer or its Affiliates, Seller shall not be
required to make such representations and warranties set forth in Exhibit 

 

38

 

VI and, in lieu thereof, shall be deemed to provide
the representations that Securities Buyer or its Affiliates in turn provided to
Seller.

(ix)                                Representations and Warranties Regarding
Purchased Loans; Delivery of Purchased Loan File.  Seller
represents and warrants to Loan Buyer that each Purchased Loan sold hereunder
and each pool of Purchased Loans sold in a Transaction hereunder, as of each
Purchase Date for a Transaction conform to the applicable representations and
warranties set forth in Exhibit VI attached hereto in all material respects,
except as disclosed to Loan Buyer in writing; provided, that
notwithstanding the foregoing, with respect to any Purchased Loan which Seller
acquired from Loan Buyer or its Affiliates, Seller shall not be required to
make such representations and warranties set forth in Exhibit VI and, in lieu
thereof, shall be deemed to provide the representations that Loan Buyer or its
Affiliates in turn provided to Seller. 
It is understood and agreed that the representations and warranties set
forth in Exhibit VI hereto, if any, shall survive delivery of the respective
Purchased Loan File to Loan Buyer or its designee (including the Custodian) to
the extent permitted by applicable law. 
With respect to each Purchased Loan, the Mortgage Note or Mezzanine
Note, the Mortgage (if any), the Assignment of Mortgage (if any) and any other
documents required to be delivered under this Agreement and the Custodial
Agreement for such Purchased Loan have been delivered to Loan Buyer or the
Custodian on its behalf.  Seller or its
designee is in possession of a complete, true and accurate Purchased Loan File
with respect to each Purchased Loan, except for such documents the originals of
which have been delivered to the Custodian and except for exceptions as have
been disclosed to Buyer.

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

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

(xii)                             [INTENTIONALLY OMITTED]

 

39

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

(xiv)                         No Encumbrances. 
Subject to the terms of this Agreement, and except as disclosed to Buyer,
there are (i) no outstanding rights, options, warrants or agreements on the
part of Seller for a purchase, sale or issuance, in connection with the
Purchased Loans and (ii) no agreements on the part of the Seller to issue, sell
or distribute the Purchased Securities and Purchased Loans.

(xv)                            Federal Regulations. 
Seller is not required to register as (A) an “investment company,” or a
company “controlled by an investment company,” within the meaning of the
Investment Company Act of 1940, as amended, or (B) a “holding company,” or a “subsidiary
company of a holding company,” or an “affiliate” of either a “holding company”
or a “subsidiary company of a holding company,” as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended.

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

(xvii)                      ERISA.  Seller does
not have any Plans or any ERISA Affiliates and makes no contributions to any
Plans or any Multiemployer Plans.

(xviii)                   Judgments/Bankruptcy. 
There are no judgments against Seller or the Sponsor unsatisfied of
record or docketed in any court located in the United States of America and no
Act of Insolvency has ever occurred with respect to Seller or the Sponsor.

(xix)                           Full and Accurate Disclosure. 
No information contained in the Transaction Documents, or any written
statement furnished by Seller pursuant to the terms of the Transaction
Documents, contains any untrue statement of a material fact or, to Seller’s
actual knowledge, omits to state a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made.

 

40

 

(xx)                              Financial Information. 
All financial data concerning Seller that has been delivered by or on
behalf of Seller to Buyer is true, complete and correct in all material
respects and has been prepared in accordance with GAAP.  To Seller’s knowledge, all financial data
concerning the Purchased Securities and Purchased Loans that has been delivered
by or on behalf of Seller to each Buyer is true, complete and correct in all
material respects. Since the delivery of such data, except as otherwise
disclosed in writing to each Buyer, there has been no change in the financial
position of Seller or in the operations of the Seller or, to Seller’s
knowledge, the financial position of the Purchased Securities and Purchased
Loans, which change is reasonably likely to have in a material adverse effect
on Seller.

(xxi)                           Notice Address; Jurisdiction of
Organization.  On the date of this Agreement, the Seller’s
address for notices is located at c/o 410 Park Avenue, 14th Floor,
New York, New York  10022.  Seller’s jurisdiction of organization is
Maryland.  The location where the Seller
keeps its books and records, including all computer tapes and records relating
to the Assets, is its notice address.

(c)           On
the Purchase Date for any Transaction and on any date on which the Repurchase
Date for any Transaction is automatically extended as described in the definition
of “Repurchase Date”, Seller shall be deemed to have made all of the
representations set forth in Section 10(b) of this Agreement as of such date.

11.          NEGATIVE COVENANTS OF SELLER

On and as of the date hereof and each Purchase Date
and until this Agreement are no longer in force with respect to any
Transaction, Seller shall not without the prior written consent of the
applicable Buyer:

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

(b)           transfer,
assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose
of, or pledge or hypothecate, directly or indirectly, any interest in the
Purchased Securities or Purchased Loans (or any of them) to any Person other
than such Buyer, or engage in repurchase transactions or similar transactions
with respect to the Purchased Securities or Purchased Loans (or any of them)
with any Person other than such Buyer;

(c)           [intentionally
omitted];

(d)           create,
incur or permit to exist any lien, encumbrance or security interest in or on
the Purchased Securities or the Purchased Loans, except as described in Section
6 of this Agreement;

(e)           create,
incur or permit to exist any lien, encumbrance or security interest in or on
any of the other Assets subject to the security interest granted by Seller
pursuant to Section 6 of this Agreement;

 

41

 

(f)            [intentionally
omitted];

(g)           consent
or assent to any amendment or supplement to, or termination of, any
Securitization Document, any note, loan agreement, mortgage or guaranty
relating to the Purchased Loans or other material agreement or instrument
relating to the Purchased Securities or the Purchased Loans other than Permitted
Purchased Loan Modifications;

(h)           permit
a majority of the members of the board of directors of the Seller to change
during any twelve month period after the date hereof; or

(i)            after
the occurrence and during the continuation of any Event of Default (in each
case, other than with respect to Buyer), make any distribution, payment on
account of, or set apart assets for, a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of any equity
or ownership interest of Seller, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Seller, in each case, in
excess of the minimum amounts required to be distributed by Seller in order to
enable Seller to maintain its status as a real estate investment trust.

12.          AFFIRMATIVE COVENANTS OF SELLER

(a)           Seller
shall promptly notify each Buyer of any material adverse change in its business
operations and/or financial condition; provided, however, that
nothing in this Section 12 shall relieve Seller of its obligations under this
Agreement.

(b)           Seller
shall provide each Buyer with copies of such documents as such Buyer may
reasonably request evidencing the truthfulness of the representations set forth
in Section 10.

(c)           Seller
(1) shall defend the right, title and interest of each Buyer in and to the
Assets against, and take such other action as is necessary to remove, the
Liens, security interests, claims and demands of all Persons (other than
security interests by or through a Buyer) and (2) shall, at such Buyer’s
reasonable request, take all action necessary to ensure that such Buyer will
have a first priority security interest in the Purchased Securities and
Purchased Loans subject to any of the Transactions in the event such
Transactions are recharacterized as secured financings.

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

(e)           [Intentionally
Omitted].

(f)            [Intentionally
Omitted].

(g)           Seller
shall promptly (and in any event not later than two (2) Business Days following
receipt) deliver to the applicable Buyer (i) any written notice of the
occurrence of an event of default received by Seller pursuant to the
Securitization Documents or Purchased Loan Documents; (ii) any notice of
transfer of servicing under the Securitization Documents and (iii)

 

42

 

any other information with respect to the Purchased
Assets as may be reasonably requested by the applicable Buyer from time to
time.

(h)           Seller
will permit the applicable Buyer or its designated representative to inspect
Seller’s records with respect to the Assets and the conduct and operation of
its business related thereto upon reasonable prior written notice from such
Buyer or its designated representative, at such reasonable times and with
reasonable frequency (but not more than two times during any twelve consecutive
month period so long as an Event of Default has not occurred and is not
continuing), and to make copies of extracts of any and all thereof.  Buyer shall act in a commercially reasonable
manner in requesting and conducting any inspection relating to the conduct and
operation of Seller’s business.

(i)            If
Seller shall at any time become entitled to receive or shall receive any
rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for the Purchased Securities, or otherwise in respect thereof, Seller
shall accept the same as Securities Buyer’s agent, hold the same in trust for
Securities Buyer and deliver the same forthwith to Securities Buyer in the
exact form received, duly endorsed by Seller to Securities Buyer, if required,
together with an undated bond power covering such certificate duly executed in
blank to be held by Securities Buyer hereunder as additional asset security for
the Transactions.  If any sums of money
or property so paid or distributed in respect of the Purchased Securities shall
be received by Seller, Seller shall, until such money or property is paid or
delivered to Securities Buyer, hold such money or property in trust for
Securities Buyer, segregated from other funds of Seller, as additional asset
security for the Transactions.

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

(k)           Seller shall provide each Buyer with
the following financial and reporting information:

(i)                                     Within 60 days after the last day of each
of the first three fiscal quarters in any fiscal year, Seller’s unaudited
consolidated balance sheets as of the end of such quarter, in each case
certified as being true and correct by an officer’s certificate;

(ii)                                  Within 120 days after the last day of its
fiscal year, Seller’s audited consolidated statements of income and statements
of changes in cash flow for such year and balance sheets as of the end of such
year, in each case

 

43

 

presented fairly in accordance with GAAP, and
accompanied, in all cases, by an unqualified report of a nationally recognized
independent certified public accounting firm consented to by Buyer in its
reasonable discretion;

(iii)                               Within 60 days after the last day of each
calendar quarter in any fiscal year, any and all property level financial
information with respect to the Purchased Loans that is in the possession of
the Seller or an Affiliate, including, without limitation, rent rolls and
income statements; and

(iv)                              Within 60 days after the last day of each
calendar quarter in any fiscal year, an officer’s certificate from the Seller
addressed to each Buyer certifying that, as of such calendar month, (x) Seller
is in compliance in all material respects with all of the terms, conditions and
requirements of this Agreement, and (y) no Event of Default (other than with
respect to a Buyer) exists.

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

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

(n)           Seller
shall observe, perform and satisfy all the terms, provisions, covenants and
conditions required to be observed, performed or satisfied by it, and shall pay
when due all costs, fees and expenses required to be paid by it, under the
Transaction Documents.  Seller shall pay
and discharge all taxes, levies, liens and other charges on its assets and on
the Assets that, in each case, in any manner would create any lien or charge
upon the Assets, except for any such taxes as are being appropriately contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided in all material respects in
accordance with GAAP.

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

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

 

44

 

13.          [INTENTIONALLY OMITTED]

14.          EVENTS OF DEFAULT; REMEDIES

(a)           After
the occurrence and during the continuance of an Event of Default (other than
with respect to Buyer), Seller hereby appoints Buyer as attorney-in-fact of
Seller for the purpose of carrying out the provisions of this Agreement and
taking any action and executing or endorsing any instruments that Buyer may
deem necessary or advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is irrevocable and coupled with an
interest.  Each of the following clauses
(i) through (xvii) shall be deemed an “Event of Default” hereunder:

(i)                                     Seller fails to repurchase Purchased
Assets upon the applicable Repurchase Date;

(ii)                                  Seller fails to comply with Section 4
hereof;

(iii)                               Seller fails, after two (2) Business Days’
notice, to comply with Section 5 hereof;

(iv)                              an Act of Insolvency occurs with respect
to Seller;

(v)                                 Seller shall admit in writing to the
Buyer its inability to, or its intention not to, perform any of its obligations
hereunder;

(vi)                              either (A) the Transaction Documents
shall for any reason not cause, or shall cease to cause, Buyer to be the owner
free of any adverse claim of any of the Purchased Assets (other than Seller’s
right to repurchase the Purchased Assets under this Agreement), or (B) if a
Transaction is recharacterized as a secured financing, the Transaction
Documents with respect to any Transaction shall for any reason cease to create
a valid first priority security interest in favor of a Buyer in any of the
Purchased Assets;

(vii)                           in the event that the Buyer or any of its
Affiliates is a party to an ISDA Master Agreement with Seller and an event
occurs which would constitute (a) an Event of Default (other than with respect
to Buyer) or (b) a Termination Event or an Additional Termination Event
(and, in the case of this clause (b), Seller has failed to meet its obligation
to pay the Early Termination Amount, if any, pursuant to the terms of Section 6
of such ISDA Master Agreement) under any Transaction between Seller and the
Buyer or any of its Affiliates, regardless of whether such Transaction is in
effect on the date of such occurrence (capitalized terms used in this paragraph
(vii) shall have the respective meanings ascribed to them in the ISDA Master
Agreement (including respective Schedules and Confirmations) between Seller and
the Buyer and/or any of its Affiliates);

 

45

 

(viii)                        failure of a Buyer to receive on any
Remittance Date the accreted value of the Price Differential (less any amount
of such Price Differential previously paid by Seller to such Buyer) (including,
without limitation, in the event the Income paid or distributed on or in
respect of the Purchased Securities and Purchased Loans is insufficient to make
such payment and the Seller does not make such payment or cause such payment to
be made) (except that such failure shall not be an Event of Default by Seller
if sufficient Income, other than Principal Payments, is on deposit in the Cash
Management Account and the Depository fails to remit such funds to such Buyer);

(ix)                                failure of the Seller to make any other
payment owing to a Buyer which has become due, whether by acceleration or
otherwise under the terms of this Agreement which failure is not remedied
within the applicable period (in the case of a failure pursuant to Section 4)
or five (5) Business Days after notice from Buyer to Seller (in the case of any
other such failure);

(x)                                   any governmental, regulatory, or
self-regulatory authority shall have removed, restricted, suspended or
terminated the rights, privileges, or operations of Seller which has a material
adverse effect on the financial condition or business operations of Seller;

(xi)                                a Change of Control shall have occurred;

(xii)                             any representation made by Seller or a
Buyer shall have been incorrect or untrue in any material respect when made or
repeated or deemed to have been made or repeated (other than the
representations and warranties set forth in Section 10(b)(viii), (ix) or (xx) (in
the case of (xx), with respect to the affected Purchased Assets only) made by
the Seller, which shall not be considered an Event of Default if incorrect or
untrue in any material respect, and shall only be used for purposes of marking
such Purchased Asset to market, unless the Seller shall have made any such
representation with actual knowledge that it was materially incorrect or untrue
at the time made);

(xiii)                          the Seller shall fail to observe any of
the following financial covenants as of the end of any fiscal quarter:

(A)                              a Fixed Charge Ratio of at least 1.2:1;

(B)                                a Recourse Debt to Equity Ratio of less
than 5:1;

(C)                                a Total Debt to Equity Ratio of less than
10:1;

(D)                               a Minimum Net Worth of at least
$375,000,000.

(xiv)                         a final judgment by any competent court
in the United States of America for the payment of money in an amount greater
than $5,000,000 shall have

 

46

 

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

(xv)                            Seller shall have defaulted or failed to
perform under any note, indenture, loan agreement, guaranty, swap agreement or
any other contract, agreement or transaction to which it is a party, which
default (A) involves the failure to pay a monetary obligation in excess of
$5,000,000, or (B) permits the acceleration of the maturity of obligations
in excess of $5,000,000 by any other party to or beneficiary of such note,
indenture, loan agreement, guaranty, swap agreement or other contract agreement
or transaction; provided, however, that any such default, failure
to perform or breach shall not constitute an Event of Default if Seller cures
such default, failure to perform or breach, as the case may be, within the
grace period, if any, provided under the applicable agreement; or

(xvi)                         Seller shall have defaulted or failed to
perform under any note, indenture, loan agreement, guaranty, swap agreement or
any other contract, agreement or transaction to which it is a party with an
Affiliate of a Buyer that results in the acceleration of such note, indenture,
loan agreement, guaranty, swap agreement, contract, agreement or transaction;
or

(xvii)                      if Seller or Buyer shall breach or fail
to perform any of the terms, covenants, obligations or conditions of this
Agreement, other than as specifically otherwise referred to in this definition
of “Event of Default”, and such breach or failure to perform is not remedied
within thirty (30) days after notice thereof to Seller or Buyer from the
applicable party or its successors or assigns.

(b)           If
an Event of Default shall occur and be continuing with respect to Seller, the
following rights and remedies shall be available to each Buyer:

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

(ii)                                  If Buyer exercises or is deemed to have
exercised the option referred to in Section 14(b)(i) of this Agreement:

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

 

47

 

(B)                                to the extent permitted by applicable
law, the Repurchase Price with respect to each Transaction (determined as of
the Accelerated Repurchase Date) shall be increased by the aggregate amount
obtained by daily application of, on a 360 day per year basis for the actual
number of days during the period from and including the Accelerated Repurchase
Date to but excluding the date of payment of the Repurchase Price (as so
increased), (x) the Pricing Rate for such Transaction multiplied by (y) the
Repurchase Price for such Transaction (decreased by (I) any amounts actually
remitted to Buyer by the Depository or Seller from time to time pursuant to
Section 5 of this Agreement and applied to such Repurchase Price, and (II) any
amounts applied to the Repurchase Price pursuant to Section 14(b)(iii) of this
Agreement); and (C) the Custodian shall, upon the request of a Buyer, deliver
to such Buyer all instruments, certificates and other documents then held by
the Custodian relating to the Purchased Securities and Purchased Loans.

(iii)                               Upon the occurrence of an Event of
Default with respect to Seller, each Buyer may (A) immediately sell, at a
public or private sale in a commercially reasonable manner and at such price or
prices as the applicable Buyer may reasonably deem satisfactory any or all of
the Purchased Securities and Purchased Loans or (B) in its sole discretion
elect, in lieu of selling all or a portion of such Purchased Securities and
Purchased Loans, to give Seller credit for such Purchased Securities and
Purchased Loans in an amount equal to the Market Value of such Purchased
Securities and Purchased Loans against the aggregate unpaid Repurchase Price for
such Purchased Securities and Purchased Loans and any other amounts owing by
Seller under the Transaction Documents. 
The proceeds of any disposition of any Purchased Securities or Purchased
Loans effected pursuant to this Section 14(b)(iii) shall be applied, (v) first, to the actual out-of-pocket costs and expenses
reasonably incurred by Buyer in connection with Seller’s default; (w) second, to actual out-of-pocket costs of cover and/or
Hedging Transactions, if any; (x) third, to the
Repurchase Price; (y) fourth, to any
other outstanding obligation of Seller to the related Buyer or its Affiliates
pursuant to the Transaction Documents; and (z) fifth,
to return any excess to Seller.  For the
purposes of subclause (y) immediately above, “Affiliates” shall not include any
entity that controls or is under common control with Citigroup Global Markets
Inc., but may include Citigroup Global Markets Inc. and any entity controlled
by it.

(iv)                              The parties recognize that it may not be
possible to purchase or sell all of the Purchased Securities and Purchased
Loans on a particular Business Day, or in a transaction with the same
purchaser, or in the same manner because the market for such Purchased
Securities and Purchased Loans may not be liquid.  In view of the nature of the Purchased
Securities and Purchased Loans, the parties agree that liquidation of a
Transaction or the

 

48

 

Purchased Securities and Purchased Loans 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, each Buyer may
elect, in its sole discretion, the time and manner of liquidating any Purchased
Securities and Purchased Loans, and nothing contained herein shall (A) obligate
Buyer to liquidate any Purchased Securities and Purchased Loans on the
occurrence and during the continuance of an Event of Default or to liquidate
all of the Purchased Securities and Purchased Loans in the same manner or on
the same Business Day or (B) constitute a waiver of any right or remedy of each
Buyer.

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

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

(vii)                           Subject to the notice and grace periods
set forth herein, each Buyer may exercise any or all of the remedies available
to such Buyer immediately upon the occurrence of an Event of Default (other
than with respect to Buyer) and at any time during the continuance thereof.  All rights and remedies arising under the
Transaction Documents, as amended from time to time, are cumulative and not
exclusive of any other rights or remedies which each Buyer may have.

(viii)                        Each Buyer may enforce its rights and
remedies hereunder without prior judicial process or hearing, and Seller hereby
expressly waives any defenses Seller might otherwise have to require each Buyer
to enforce its rights by judicial process. 
Seller also waives any defense Seller might otherwise have arising from
the use of nonjudicial process, disposition of

 

49

 

any or all of the Purchased Securities and Purchased
Loans, or from any other election of remedies. 
Seller recognizes that nonjudicial remedies are consistent with the
usages of the trade, are responsive to commercial necessity and are the result
of a bargain at arm’s length.

(ix)                                Upon the designation of any Accelerated
Repurchase Date, each Buyer may, without prior notice to the Seller, set off
any sum or obligation (whether or not arising under this Agreement, whether
matured or unmatured, whether or not contingent and irrespective of the
currency, place of payment or booking office of the sum or obligation) owed by
Seller to such Buyer or any Affiliate of such Buyer against any sum or
obligation (whether or not arising under this Agreement, whether matured or
unmatured, whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by such Buyer or any
Affiliate of such Buyer to Seller.  Each
Buyer will give notice to the other party of any set off effected under this
Section 14(b)(ix).  If a sum or
obligation is unascertained, each Buyer may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the relevant
party accounting to the other when the obligation is ascertained.  Nothing in this Section 14(b)(ix) shall be
effective to create a charge or other security interest.  This Section 14(b)(ix) shall be without
prejudice and in addition to any right of set-off, combination of accounts,
lien or other rights to which any party is at any time otherwise entitled
(whether by operation of law, contract or otherwise).

(c)           If an Event of Default occurs and is
continuing with respect to a Buyer, the following rights and remedies shall be
available to Seller:

(i)                                     Upon tender by Seller of payment of the
aggregate Repurchase Price for all Purchased Securities and Purchased Loans,
the applicable Buyer’s right, title and interest in such Purchased Securities
and Purchased Loans shall be deemed transferred to Seller, and the applicable
Buyer shall deliver such Purchased Securities and Purchased Loans to Seller at
the applicable Buyer’s expense.

(ii)                                  If Seller exercises the option referred
to in Section 14(b)(i) hereof and the applicable Buyer fails to deliver any
Purchased Securities or Purchased Loans to Seller, after three (3) Business
Days’ notice to such Buyer, Seller may (A) purchase securities or loans, as
applicable (“Replacement Assets”), that are in as similar an amount and
interest rate as is reasonably practicable and in the same Rating Category as
such Purchased Securities or the same Asset Type Grouping as such Purchased
Loans or (B) in its sole discretion elect, in lieu of purchasing Replacement
Assets, to be deemed to have purchased Replacement Assets at a price therefor
equal to the Market Value of such Purchased Securities or Purchased Loans as of
such date.

 

50

(iii)                               The applicable Buyer shall be liable to
Seller for any excess of the price paid (or deemed paid) by Seller for
Replacement Assets therefor over the Repurchase Price for the Purchased
Securities and Purchased Loans replaced thereby.

15.          SINGLE AGREEMENT

Each Buyer and Seller 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, each of Buyer and Seller 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, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction
against obligations owing to them in respect of any other Transactions hereunder
and (iii) that payments, deliveries and other transfers made by either of them
in respect of any Transaction shall be deemed to have been made in
consideration of payments, deliveries and other transfers in respect of any
other Transactions hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and netted.

16.          RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT
NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE
RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE
OTHER PARTY WITH RESPECT TO TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO
RECORD COMMUNICATIONS SHALL BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE
ON THE TRADING FLOOR OF THE APPLICABLE PARTY. 
EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH
TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES
THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED
TO BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.

17.          NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all
notices, consents, approvals and requests required or permitted hereunder shall
be given in writing and shall be effective for all purposes if hand delivered
or sent by (a) hand delivery, with proof of attempted delivery, (b) certified
or registered United States mail, postage prepaid, (c) expedited prepaid
delivery service, either commercial or United States Postal Service, with proof
of attempted delivery, or (d) by telecopier (with answerback acknowledged)
provided that such telecopied notice must also be delivered by one of the means
set forth in (a), (b) or (c) above, to the address specified in Annex I hereto
or at such other address and person as shall be designated from time to time by
any party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided

 

51

 

for in this Section.  A notice shall be deemed to have been given:
(a) in the case of hand delivery, at the time of delivery, (b) in the case of
registered or certified mail, when delivered or the first attempted delivery on
a Business Day, (c) in the case of expedited prepaid delivery upon the first
attempted delivery on a Business Day, or (d) in the case of telecopier, upon
receipt of answerback confirmation, provided that such telecopied notice was
also delivered as required in this Section.  A party receiving a notice which does not
comply with the technical requirements for notice under this Section may elect
to waive any deficiencies and treat the notice as having been properly given.

18.          ENTIRE AGREEMENT; SEVERABILITY

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

19.          NON-ASSIGNABILITY

(a)           The
rights and obligations of the Seller under the Transaction Documents and under
any Transaction shall not be assigned by the Seller without the prior written
consent of each Buyer.

(b)           Each
Buyer shall be entitled to assign its rights and obligations under the
Transaction Documents and/or under any Transaction to any other Person or issue
one or more participation interests with respect to any or all of the
Transactions and, in connection therewith, may bifurcate or allocate (i.e.
senior/subordinate) amounts due to Buyer with five (5) days notice to Seller;
provided, however, that (i) such Buyer (x) shall act as exclusive agent for all
assignees and participants in any dealings with Seller in connection with such
Transactions and (y) shall be solely responsible for all determinations of
whether an Eligible Loan or Eligible Security is approved for inclusion in a
Transaction and of the Market Value of each Purchased Asset from time to time
and (ii) Seller shall not be obligated to deal directly with any party
other than such Buyer in connection with such Transactions, or, with respect to
participations, or to pay or reimburse such Buyer for any costs that would not
have been incurred by such Buyer had no participation interests in such
Transactions been issued.

(c)           Subject
to the foregoing, the Transaction Documents and any Transactions shall be
binding upon and shall inure to the benefit of the parties and their respective
successors and assigns.  Nothing in the
Transaction Documents, express or implied, shall give to any Person, other than
the parties to the Transaction Documents and their respective successors, any
benefit or any legal or equitable right, power, remedy or claim under the
Transaction Documents.

20.          GOVERNING LAW

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

 

52

 

21.          NO WAIVERS, ETC.

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

22.          USE OF EMPLOYEE PLAN ASSETS

(a)           If
assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974 (“ERISA”) are intended to be used
by either party hereto (the “Plan Party”) in a Transaction, the Plan
Party shall so notify the other party prior to the Transaction.  The Plan Party shall represent in writing to
the other party that the Transaction does not constitute a prohibited
transaction under ERISA or is otherwise exempt therefrom, and the other party
may proceed in reliance thereon but shall not be required so to proceed.

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

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

23.          INTENT

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

(b)           It
is understood that either party’s right to liquidate Purchased Securities
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Section 11 hereof is a contractual right to
liquidate such Transaction as described in Sections 555 and 559 of Title 11 of
the United States Code, as amended.

(c)           The
parties agree and acknowledge that if a party hereto is an “insured depository
institution,” as such term is defined in the Federal Deposit Insurance Act, as
amended (“FDIA”), then each Transaction hereunder is a “qualified
financial contract,” as that term is defined in

 

53

 

FDIA and any rules, orders or policy statements
thereunder (except insofar as the type of assets subject to such Transaction
would render such definition inapplicable).

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

24.          DISCLOSURE RELATING TO CERTAIN FEDERAL
PROTECTIONS

The parties acknowledge
that they have been advised that:

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

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

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

25.          CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL

(a)           Each
party irrevocably and unconditionally (i) submits to the non-exclusive
jurisdiction of any United States Federal or New York State court sitting in
Manhattan, and any appellate court from any such court, solely for the purpose
of any suit, action or proceeding brought to enforce its obligations under this
Agreement or relating in any way to this Agreement or any Transaction under
this Agreement and (ii) waives, to the fullest extent it may effectively do so,
any defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court and any right of jurisdiction on account of its
place of residence or domicile.

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

 

54

 

(c)           The
parties hereby irrevocably waive, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of such action or
proceeding and irrevocably consent to the service of any summons and complaint
and any other process by the mailing of copies of such process to them at their
respective address specified herein.  The
parties hereby agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Section 25 shall affect the
right of the Buyers to serve legal process in any other manner permitted by law
or affect the right of the Buyers to bring any action or proceeding against the
Seller or its property in the courts of other jurisdictions.

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

26.          NO RELIANCE

Each of the Buyers and Seller hereby acknowledges,
represents and warrants to the other that, in connection with the negotiation
of, the entering into, and the performance under, the Transaction Documents and
each Transaction thereunder:

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

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

(c)           It
is a sophisticated and informed Person that has a full understanding of all the
terms, conditions and risks (economic and otherwise) of the Transaction
Documents and each Transaction thereunder and is capable of assuming and
willing to assume (financially and otherwise) those risks;

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

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

 

55

 

27.          INDEMNITY

(a)           The
Seller hereby agrees to indemnify each Buyer, each Buyer’s designees and each
of their officers, directors, employees and agents (“Indemnified Parties”)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, taxes (including stamp, excise, sales or
other taxes which may be payable or determined to be payable with respect to
any of the Assets or in connection with any of the transactions contemplated by
this Agreement and the documents delivered in connection herewith, other than
income taxes of each Buyer), fees, costs, expenses (including reasonable
attorneys fees and disbursements) or disbursements (all of the foregoing,
collectively “Indemnified Amounts”) which may at any time (including,
without limitation, such time as this Agreement shall no longer be in effect
and the Transactions shall have been repaid in full) be imposed on or asserted
against any Indemnified Party in any way whatsoever on an actual, out-of-pocket
basis arising out of or in connection with, or relating to, this Agreement or
any Transactions thereunder or any action taken or omitted to be taken by any
Indemnified Party under or in connection with any of the foregoing; provided,
that Seller shall not be liable for Indemnified Amounts resulting from the
gross negligence or willful misconduct of any Indemnified Party.  Without limiting the generality of the
foregoing, Seller agrees to hold each Buyer harmless from and indemnify each
Buyer against all Indemnified Amounts with respect to all Purchased Loans
relating to or arising out of any violation or alleged violation of any
environmental law, rule or regulation or any consumer credit laws, including
without limitation ERISA, the Truth in Lending Act and/or the Real Estate
Settlement Procedures Act, that, in each case, results from anything other than
Buyers’ gross negligence or willful misconduct. 
In any suit, proceeding or action brought by Buyer in connection with
any Purchased Loan for any sum owing thereunder, or to enforce any provisions
of any Purchased Loan, Seller will save, indemnify and hold such Buyer harmless
from and against all expense (including reasonable attorneys’ fees), loss or
damage suffered by reason of any defense, set-off, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a breach by Seller of any obligation thereunder or arising out
of any other agreement, indebtedness or liability at any time owing to or in
favor of such account debtor or obligor or its successors from Seller.  Seller also agrees to reimburse each Buyer as
and when billed by such Buyer for (A) all of the Buyer’s actual costs and
out-of-pocket expenses incurred in connection (x) with Buyer’s due diligence
reviews (provided, Seller approves third party costs and expenses) and (y)
document preparation including reasonable attorney’s fees (up to $[****] per
Purchased Asset other than Purchased Assets which are “table-funded”, which
maximum shall be $[****] per Purchased Asset in each case unless otherwise
agreed to by Seller) with respect to the Purchased Assets (including, without
limitation, those incurred pursuant to Section 28) and (B) the enforcement or
the preservation of each Buyer’s rights under this Agreement or any Transaction
contemplated hereby, including without limitation the reasonable fees and
disbursements of its counsel.  Seller
agrees to pay each Buyer on demand all reasonable actual out-of-pocket costs
and expenses (including reasonable expenses for legal services of every kind)
of any subsequent enforcement of any of the provisions hereof, or of the
performance by the Buyers of any obligations of Seller in respect of the
Purchased Loans and Purchased Securities, or any actual or attempted sale, or

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. 
Material filed separately with the Securities and Exchange Commission.

 

56

 

(b)           any
exchange, enforcement, collection, compromise or settlement in respect of any
of the Purchased Assets and for the custody, care or preservation of the
Purchased Assets (including insurance costs) and defending or asserting rights
and claims of Buyer in respect thereof, by litigation or otherwise.  Seller hereby acknowledges that, the
obligation of Seller hereunder is a recourse obligation of Seller.

(c)           Without
limiting the rights and remedies of the Buyers under the Transaction Documents,
Seller shall pay each Buyer’s reasonable actual out-of-pocket costs and
expenses, including reasonable fees and expenses of accountants, attorneys and
advisors, incurred in connection with the preparation, negotiation, execution
and consummation of, and any amendment, supplement or modification to, the Transaction
Documents and the Transactions thereunder. 
In addition, Seller agrees to pay each Buyer on demand all reasonable
actual, out-of-pocket costs and expenses (including reasonable
expenses for legal services) incurred in connection with the maintenance of the
Cash Management Account and registering the Assets in the name of the
applicable Buyer or its nominee.  All
such expenses shall be recourse obligations of Seller to each Buyer under this
Agreement.

28.          DUE DILIGENCE

                Seller acknowledges that, at
reasonable times and upon reasonable prior notice to Seller, each Buyer has the
right to perform continuing due diligence reviews with respect to the Purchased
Securities and the Purchased Loans, for purposes of verifying compliance with
the representations, warranties and specifications made hereunder, or
otherwise, and Seller agrees that upon reasonable prior notice to Seller, the
applicable Buyer or its authorized representatives will be permitted during
normal business hours to examine, inspect, and make copies and extracts of, the
Purchased Loan Files, Servicing Records and any and all documents, records,
agreements, instruments or information relating to such Purchased Securities
and Purchased Loans in the possession or under the control of Seller, any other
servicer or subservicer and/or the Custodian. 
Seller also shall make available to each Buyer a knowledgeable financial
or accounting officer for the purpose of answering questions respecting the
Purchased Loan Files and the Purchased Securities and Purchased Loans.  Without limiting the generality of the
foregoing, Seller acknowledges that each Buyer may enter into Transactions with
the Seller based solely upon the information provided by Seller to such Buyer
and the representations, warranties and covenants contained herein, and that
each Buyer, at its option, has the right at any time to conduct a partial or
complete due diligence review on some or all of the Purchased Securities and
Purchased Loans.  Each Buyer may
underwrite such Purchased Loans itself or engage a third party underwriter to
perform such underwriting.  Seller agrees
to reasonably cooperate with each Buyer and any third party underwriter
reasonably acceptable to Seller in connection with such underwriting,
including, but not limited to, providing such Buyer and any third party
underwriter with access to any and all documents, records, agreements,
instruments or information relating to such Purchased Securities and Purchased
Loans in the possession, or under the control, of Seller.  Seller further agrees that Seller shall
reimburse Buyer, as set forth in and subject to the limits on liability
contained in, Section 27, for any and all actual costs and expenses reasonably
incurred by Buyer in connection with Buyer’s activities pursuant to this
Section 28.

 

57

 

29.          SERVICING

(a)           Notwithstanding
the purchase and sale of the Purchased Loans hereby, Seller, Midland Loan
Services, Inc. or any other third party servicer rated at least “above average”
or otherwise approved by the Loan Buyer shall continue to service the Purchased
Loans for the benefit of Loan Buyer and, if Loan Buyer shall exercise its
rights to pledge or hypothecate the Purchased Loans prior to the Repurchase
Date pursuant to Section 8, Loan Buyer’s assigns; provided, however,
that the obligations of Seller to service any of the Purchased Loans shall
cease, at Seller’s option, upon the payment by Seller to Loan Buyer of the
Repurchase Price therefor.  Seller shall
service or cause the servicer to service the Purchased Loans in accordance with
Accepted Servicing Practices approved by Loan Buyer in the exercise of its
reasonable business judgment and maintained by other prudent mortgage lenders
with respect to mortgage loans or mezzanine loans, as applicable, similar to
the Purchased Loans.

(b)           Seller
agrees that the applicable Buyer is the owner of all servicing records,
including but not limited to any and all servicing agreements (the “Servicing
Agreements”), files, documents, records, data bases, computer tapes, copies
of computer tapes, proof of insurance coverage, insurance policies, appraisals,
other closing documentation, payment history records, and any other records
relating to or evidencing the servicing of Purchased Loans (the “Servicing
Records”) so long as the Purchased Loans are subject to this
Agreement.  Seller grants the applicable
Buyer a security interest in all servicing fees and rights relating to the
Purchased Loans and all Servicing Records to secure the obligation of the
Seller or its designee to service in conformity with this Section and any other
obligation of Seller to such Buyer. 
Seller covenants to safeguard such Servicing Records and to deliver them
promptly to the applicable Buyer or its designee (including the Custodian) at
such Buyer’s request.

(c)           Upon
the occurrence and during the continuance of an Event of Default (other than
with respect to Buyer), each Buyer may, in its sole discretion, (i) sell its
right to the Purchased Loans on a servicing released basis or (ii) terminate
the Seller or any sub-servicer of the Purchased Loans with or without cause, in
each case without payment of any termination fee.

(d)           Seller
shall not employ sub-servicers to service the Purchased Loans without the prior
written approval of Buyer.  If the
Purchased Loans are serviced by a sub-servicer, Seller shall irrevocably assign
all rights, title and interest in the Servicing Agreements in the Purchased
Loans to Buyer.

(e)           Seller
shall cause any sub-servicers engaged by Seller to execute a letter agreement
with the Loan Buyer acknowledging Loan Buyer’s security interest and agreeing
that it shall deposit all Income with respect to the Purchased Loans in the
Cash Management Account.

(f)            The
payment of servicing fees shall be subordinate to payment of amounts
outstanding under any Transaction and this Agreement.

30.          MISCELLANEOUS

(a)           All
rights, remedies and powers of each Buyer hereunder and in connection herewith
are irrevocable and cumulative, and not alternative or exclusive, and shall be
in addition

 

58

 

to all other rights, remedies and powers of each Buyer
whether under law, equity or agreement. 
In addition to the rights and remedies granted to it in this Agreement,
to the extent this Agreement is determined to create a security interest, each
Buyer shall have all rights and remedies of a secured party under the UCC.

(b)           The
Transaction Documents may be executed in counterparts, each of which so
executed shall be deemed to be an original, but all of such counterparts shall
together constitute but one and the same instrument.

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

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

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

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

(g)           Should
any provision of this Agreement require judicial interpretation, it is agreed
that a court interpreting or construing the same shall not apply a presumption
that the terms hereof shall be more strictly construed against any Person by
reason of the rule of construction that a document is to be construed more
strictly against the Person who itself or through its agent prepared the same,
it being agreed that all parties have participated in the preparation of this
Agreement.

(h)           The
parties recognize that each Transaction is a “securities contract” as that term
is defined in Section 741 of Title 11 of the United States Code, as amended.

 

59

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day first written above.

	
   

  	
  LOAN BUYER:

  
	
   

  	
   

  
	
   

  	
  CITIGROUP
  FINANCIAL PRODUCTS INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard B.
  Schlenger

  
	
   

  	
   

  	
  Name: Richard B.
  Schlenger

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  SECURITIES
  BUYER:

  
	
   

  	
   

  
	
   

  	
  CITIGROUP
  GLOBAL MARKETS INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Vanderslice

  
	
   

  	
   

  	
  Name: Paul
  Vanderslice

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  CAPITAL
  TRUST, INC.,

  
	
   

  	
  a Maryland
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Geoffrey G.
  Jervis

  
	
   

  	
   

  	
  Name: Geoffrey
  G. Jervis

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  

 

 

60

ANNEXES, EXHIBITS AND SCHEDULES

	
  ANNEX I

  	
  Names and Addresses for Communications between
  Parties

  
	
  SCHEDULE I-A

  	
  Purchase Percentages and Applicable Spreads

  
	
  EXHIBIT I

  	
  Form of Confirmation

  
	
  EXHIBIT II

  	
  Authorized Representatives of Seller

  
	
  EXHIBIT III

  	
  Form of Re-Direction Letter

  
	
  EXHIBIT IV

  	
  Form of Custodial Delivery

  
	
  EXHIBIT V

  	
  Form of Power of Attorney

  
	
  EXHIBIT VI

  	
  Representations and Warranties Regarding Individual
  Purchased Loans

  
	
  EXHIBIT VII

  	
  Asset Information

  
	
  EXHIBIT VIII

  	
  Purchase Procedure

  

 

61

 

ANNEX I

Names and
Addresses for Communications Between Parties

Buyer:

Citigroup Financial Products Inc.

388 Greenwich Street

New York, NY  10013

Attention:  Richard Schlenger

Telephone:       (212) 816-7806

Facsimile:         (212) 816-8307

With copies to:

Sidley Austin  LLP

787 Seventh Avenue

New York, NY  10019

Attention:  Brian Krisberg, Esq.

Telephone:       (212) 839-8735

Facsimile:         (212) 839-5599

Seller:

Capital Trust, Inc.

410 Park Avenue, 14th Floor

New York, NY  10022

Attention:        Geoffrey G. Jervis

Telephone:       (212) 655-0247

Facsimile:         (212) 655-0044

With a copy to:

Paul Hastings Janofsky &Walker LLP

75 East 55th Street

New York, NY  10022

Attention:        Robert J. Grados, Esq.

Telephone:       (212) 318-6923

Facsimile:         (212) 230-7830

 

62

 

SCHEDULE
I-A

Purchase Percentages and
Applicable Spreads

ELIGIBLE LOANS:

	
  Asset
  Type Grouping

  	
   

  	
  Leverage
  Category(1)(2)

  	
   

  	
  Purchase
  Percentage

  	
   

  	
  Applicable
  Spread

  
	
  First
  Mortgage

  	
   

  	
  Greater than 7% NOI Yield & Less than 85% LTV(3)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  First
  Mortgage

  	
   

  	
  Less than 7% NOI Yield & Less than 80% LTV(3)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  Less than 50%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  50.01% to 55%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  55.01% to 60%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  60.01% to 65%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  65.01% to 70%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  70.01% to 75%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  75.01% to 80%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  80.01% to 85%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. 
Material filed separately with the Securities and Exchange Commission.

 

 

	
  B-Notes
  & Mezzanine Loans

  	
   

  	
  85.01% to 90%(4)

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  Preferred
  Equity & Other

  	
   

  	
  Case by case

  	
   

  	
  [****]

  	
   

  	
  [****]

  

 

ELIGIBLE SECURITIES (5):

	
  Asset
  Type Grouping

  	
   

  	
  Rating
  Category

  	
   

  	
  Purchase
  Percentages

  	
   

  	
  Applicable
  Spread

  
	
  CMBS

  	
   

  	
  BBB

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  BBB-

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  BB+

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  BB

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  BB-

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  B+

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  B

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  CMBS

  	
   

  	
  B-

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. 
Material filed separately with the Securities and Exchange Commission.

 

2

 

	
  CMBS

  	
   

  	
  Unrated

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
   

  	
   

  	
   

  	
   

  	
  [****]

  	
   

  	
  [****]

  

 

Footnotes

(1)          Leverage
Category is determined by Buyer based on LTV Range.

(2)          [****]

(3)          “LTV”
for purposes of the First Mortgages means the ratio of the unpaid principal
balance of the entire related mortgage loan to the value of the property
securing such mortgage loan as determined by Buyer in its sole discretion.

(4)          “LTV”
for purposes of the B-Notes and Mezzanine Loans means the ratio of the
aggregate indebtedness, including the Purchased Loan and indebtedness pari
passu or senior to it, secured directly or indirectly by the related property
(i.e. such B-Note or Mezzanine Loan and all other debt senior to such B-Note or
Mezzanine Loan ) to the value of the property securing directly or indirectly
such indebtedness as determined by Buyer in its sole discretion.

(5)          The
Purchase Percentages and Applicable Spreads set forth in the matrix above shall
apply to floating rate Purchased Securities. 
With respect to fixed rate Purchased Securities, Buyer shall determine
the applicable Purchase Percentage and Applicable Spread on a case by case
basis.

 

**** Material omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act of 1934. 
Material filed separately with the Securities and Exchange Commission.

 

3

EXHIBIT I

CONFIRMATION
STATEMENT

 

Ladies and Gentlemen:

Capital Trust, Inc., is pleased to deliver our written
CONFIRMATION of our agreement to enter
into the Transaction pursuant to which [Citigroup Global Markets Inc.]
[Citigroup Financial Products Inc.] shall purchase from Capital Trust, Inc. the
Purchased Assets identified in the Master Repurchase Agreement, dated as of
July 30, 2007 (the “Agreement”), between [Citigroup Global Markets Inc.]
[Citigroup Financial Products Inc.] (the “Buyer”) and Capital Trust,
Inc. (“Seller”) as follows below and on the attached Schedule 1.  Capitalized terms used herein without
definition have the meanings given in the Agreement.

	
  Buyer:

  	
   

  	
  [                                   ]

  
	
  Seller:

  	
   

  	
  Capital Trust, Inc.

  
	
  Purchase Date:

  	
   

  	
                 ,
  200   

  
	
  Purchased Assets:

  	
   

  	
  As identified on
  attached Schedule 1

  
	
  Aggregate Principal
  Amount of

  Purchased Assets:

  	
   

  	
   

  
	
  Purchase Price:

  	
   

  	
  $

  
	
  Previous Purchase
  Price:

  	
   

  	
  $

  
	
  Change in Purchase
  Price:

  	
   

  	
  $

  
	
  Requested Wire Amount:

  	
   

  	
  $

  
	
  Purchase Percentage:

  	
   

  	
  %

  
	
  Pricing Rate:

  	
   

  	
  one month LIBOR plus            %

  
	
  Buyer’s Margin
  Percentage:

  	
   

  	
   

  
	
  Capital Trust, Inc.
  Wire Instructions:

  	
   

  	
  Bank:

  City/State:

  ABA:

  Account Name:

  Account #:

  Attention:

  
	
  Name and address for

  communications:

  	
   

  	
  Buyer:            [Citigroup
  Global Markets Inc.]

  [Citigroup Financial Products Inc.]

  388 Greenwich Street

  New York, NY 10013

  Attention: Richard Schlenger

  Telephone: (212) 816-7806

  

 

 

	
   

  	
   

  	
  Facsimile: (212)
  816-8307

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seller:               Capital Trust, Inc.

  410 Park Avenue, 14th Floor

  New York, NY 10022

  Attention: Geoffrey G. Jervis

  Telephone: (212) 655-0247

  Facsimile: (212) 655-0044

  

 

	
   

  	
  CAPITAL
  TRUST, INC.,

  
	
   

  	
  a Maryland
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

AGREED AND ACKNOWLEDGED:

[CITIGROUP FINANCIAL PRODUCTS INC.,

a Delaware
corporation]

[CITIGROUP GLOBAL MARKETS INC.,

a Delaware
corporation]

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

2

 

Schedule
1 to Confirmation Statement

	
  Purchased
  Securities:

  
	
   

  
	
  Aggregate
  Principal Amount:

  
	
   

  
	
  CUSIP NO.:

  
	
   

  
	
  Securitization
  Document (including trustee):

  
	
   

  
	
   

  
	
   

  
	
  Purchased Loans:

  
	
   

  
	
  Aggregate
  Principal Amount:

  

 

3

 

EXHIBIT II

AUTHORIZED
REPRESENTATIVES OF SELLER

	
  Name

  	
   

  	
   

  	
  Specimen Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT III

FORM OF
RE-DIRECTION LETTER

[SELLER]

[LETTERHEAD]

REDIRECTION LETTER

AS OF [          ],
200[ ]

Ladies and Gentlemen:

Please refer to: (a) that certain [Loan Agreement],
dated [                  ],
200[ ], by and among
[                            ]
(the “Borrower”), as borrower, and [               ]
(the “Lender”), as lender; and (b) all documents securing or relating to
that certain $[              ]
loan made by the Lender to the Borrower on [           ],
200[ ] (the “Loan”).

You are advised as follows, effective as of the date
of this letter.

Assignment of the Loan. 
The Lender has entered into a Master Repurchase Agreement, dated as July
30, 2007 (as the same may be amended and/or restated from time to time, the “Repo
Agreement”), with Citigroup Financial Products Inc. (“Buyer”), [address], and
has assigned its rights and interests in the Loan (and all of its rights and
remedies in respect of the Loan) to Buyer. 
This assignment shall remain in effect unless and until Buyer has
notified Borrower otherwise in writing.

Direction of Funds.  In connection
with Lender’s obligations under the Repo Agreement, Lender hereby directs
Borrower to disburse, by wire transfer, any and all payments to be made under
or in respect of the Loan to the following account at LaSalle Bank for the
benefit of Buyer:

LaSalle Bank

ABA [                        ]

Account # [                          ]

FFC: [                 ]

Attn:       [BUYER] — 
                 Buyer’s Repurchase Account

Attn: [                           ]

This direction shall remain in effect unless and until
Buyer has notified Borrower otherwise in writing.

Modifications, Waivers, Etc. 
No modification, waiver, deferral, or release (in whole or in part) of
any party’s obligations in respect of the Loan, or of any asset for any
obligations in respect of the Loan, shall be effective without the prior
written consent of Buyer.

 

 

Please acknowledge your acceptance of the terms and
directions contained in this correspondence by executing a counterpart of this
correspondence and returning it to the undersigned.

[Signature Page Follows]

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CAPITAL
  TRUST, INC.,

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Date: [               ],
  200[ ]

  
	
   

  	
   

  
	
  Agreed and
  accepted this [ ]

  	
   

  
	
  day of [                 ],
  200[ ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [                                             ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
								

 

2

EXHIBIT IV

FORM OF CUSTODIAL
DELIVERY

On this               
of                 ,
200   , Capital Trust, Inc., as Seller under that certain Master
Repurchase Agreement, dated as of July 30, 2007 (the “Repurchase Agreement”)
between Citigroup Financial Products Inc. and Citigroup Global Markets Inc.
(together, “Buyer”) and Capital Trust, Inc., does hereby deliver to
LaSalle Bank National Association (“Custodian”), as custodian under that
certain Custodial Agreement, dated as of July 30, 2007 (the “Custodial Agreement”),
among Buyer, Custodian and Capital Trust, Inc., the Purchased Loan Files with
respect to the Purchased Loans to be purchased by Buyer pursuant to the
Repurchase Agreement, which Purchased Loans are listed on the Purchased Loan
Schedule attached hereto and which Purchased Loans shall be subject to the
terms of the Custodial Agreement on the date hereof.

With respect to the Purchased Loan Files delivered
hereby, for the purposes of issuing the Trust Receipt, the Custodian shall
review the Purchased Loan Files to ascertain delivery of the documents listed
in Section 3(g) to the Custodial Agreement.

Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Custodial Agreement.

IN WITNESS WHEREOF, the Seller has caused its name to
be signed hereto by its officer thereunto duly authorized as of the day and
year first above written.

	
   

  	
  CAPITAL TRUST, INC.,

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

EXHIBIT V

FORM OF POWER OF ATTORNEY

“Know All Men by These Presents, that Capital Trust,
Inc. (“Seller”), does hereby appoint Citigroup Financial Products Inc. (“Loan
Buyer”), and Citigroup Global Markets, Inc. (“Securities Buyer”,
each of Loan Buyer and Securities Buyer, a “Buyer’ and collectively, the
“Buyers”), its attorney-in-fact to act in Seller’s name, place and stead
in any way which Seller could do with respect to (i) the completion of the
endorsements of the Mortgage Notes and the Mezzanine Notes and the Assignments
of Mortgages, (ii) the recordation of the Assignments of Mortgages and (iii)
the enforcement of the Seller’s rights under the Purchased Loans purchased by
Buyer pursuant to the Master Repurchase Agreement dated as of July 30, 2007
(the “Repurchase Agreement”), between Buyers and Capital Trust, Inc.,
and to take such other steps as may be necessary or desirable to enforce Buyer’s
rights against such Purchased Loans, the related Purchased Loan Files and the
Servicing Records to the extent that Seller is permitted by law to act through
an agent.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER
HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OF FACSIMILE
OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF
SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR
KNOWLEDGE OR SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH
THIRD PARTY, AND SELLER ON ITS OWN BEHALF AND ON BEHALF OF SELLER’S ASSIGNS,
HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND
AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF
SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

IN WITNESS WHEREOF Seller has caused this Power of
Attorney to be executed as a deed this July    , 2007.

	
   

  	
  CAPITAL
  TRUST, INC.,

  
	
   

  	
  a Maryland
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

EXHIBIT VI

REPRESENTATIONS AND
WARRANTIES

RE:  PURCHASED LOANS CONSISTING OF FIRST
MORTGAGES

1.             The
First Mortgage is a performing mortgage loan secured by a first priority
security interest in a commercial or multifamily property.

2.             As
of the Purchase Date, such First Mortgage complies in all material respects
with, or is exempt from, all requirements of federal, state or local law
relating to such First Mortgage.

3.             Immediately
prior to the sale, transfer and assignment to Buyer thereof, Seller had good
and marketable title to, and was the sole owner and holder of, such First
Mortgage, and Seller is transferring such First Mortgage free and clear of any
and all liens, pledges, encumbrances, charges, security interests or any other
ownership interests of any nature encumbering such First Mortgage. Upon
consummation of the purchase contemplated to occur in respect of such First
Mortgage on the Purchase Date therefor, Seller will have validly and
effectively conveyed to Buyer all legal and beneficial interest in and to such
First Mortgage free and clear of any pledge, lien, encumbrance or security
interest.

4.             No
fraudulent acts were committed by Seller in connection with its acquisition or
origination of such First Mortgage nor were any fraudulent acts committed by
any Person in connection with the origination of such First Mortgage.

5.             All
information contained in the related Preliminary Due Diligence Package (or as
otherwise provided to Buyer) in respect of such First Mortgage is accurate and
complete in all material respects.

6.             Except
as included in the Preliminary Due Diligence Package or otherwise disclosed to
Buyer, Seller is not a party to any document, instrument or agreement, and
there is no document, that by its terms modifies or affects the rights and
obligations of any holder of such First Mortgage and Seller has not consented
to any material change or waiver to any term or provision of any such document,
instrument or agreement and no such change or waiver exists.

7.             Except
as included in the Preliminary Due Diligence Package or otherwise disclosed to
Buyer, such First Mortgage is presently outstanding, the proceeds thereof have
been fully and properly disbursed and, except for amounts held in escrow by
Seller, there is no requirement for any future advances thereunder.

8.             Seller
has full right, power and authority to sell and assign such First Mortgage and
such First Mortgage or any related Mortgage Note has not been cancelled,
satisfied or rescinded in whole or part nor has any instrument been executed
that would effect a cancellation, satisfaction or rescission thereof.

9.             Other
than consents and approvals obtained as of the related Purchase Date or those
already granted in the related Mortgage and/or Mortgage Note, no consent or
approval by any Person is required in connection with Seller’s sale and/or
Buyer’s acquisition of

 

 

such First Mortgage, for
Buyer’s exercise of any rights or remedies in respect of such First Mortgage or
for Buyer’s sale, pledge or other disposition of such First Mortgage. No third
party holds any “right of first refusal”, “right of first negotiation”, “right
of first offer”, purchase option, or other similar rights of any kind, and no
other impediment exists to any such transfer or exercise of rights or remedies.

10.           No
consent, approval, authorization or order of, or registration or filing with,
or notice to, any court or governmental agency or body having jurisdiction or
regulatory authority is required for any transfer or assignment by the holder
of such First Mortgage.

11.           Seller
has not received written notice of any outstanding liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind for which the holder of such First Mortgage is or may become
obligated.

12.           Seller
has not advanced funds, or knowingly received any advance of funds from a party
other than the Mortgagee relating to such First Mortgage, directly or
indirectly, for the payment of any amount required by such First Mortgage.

13.           Each
related Mortgage Note, Mortgage, Assignment of Leases (if a document separate
from the Mortgage) and other agreement executed by the related Mortgagor in
connection with such First Mortgage is legal, valid and binding obligation of
the related Mortgagor (subject to any non-recourse provisions therein and any
state anti-deficiency or market value limit deficiency legislation),
enforceable in accordance with its terms, except (i) that certain
provisions contained in such First Mortgage documents are or may be
unenforceable in whole or in part under applicable state or federal laws, but
neither the application of any such laws to any such provision nor the
inclusion of any such provisions renders any of the First Mortgage documents
invalid as a whole and such First Mortgage documents taken as a whole are
enforceable to the extent necessary and customary for the practical realization
of the rights and benefits afforded thereby and (ii) as such enforcement may be
limited by bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption, liquidation or other laws relating to or affecting the enforcement
of creditors’ rights generally, or by general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at law).
The related Mortgage Note and Mortgage contain no provision limiting the right
or ability of Seller to assign, transfer and convey the related First Mortgage
to any other Person, except, however, for customary intercreditor restrictions
limiting assignees to “Qualified Transferees”. With respect to any Mortgaged
Property that has tenants, there exists as either part of the Mortgage or as a
separate document, an assignment of leases.

14.           As
of the date of its origination, there was no valid offset, defense,
counterclaim, abatement or right to rescission with respect to any related
Mortgage Note, Mortgage or other agreements executed in connection therewith,
and, as of the Purchase Date, there is no valid offset, defense, counterclaim
or right to rescission with respect to any such Mortgage Note, Mortgage or
other agreements, except in each case, with respect to the enforceability of
any provisions requiring the payment of default interest, late fees, additional
interest, prepayment premiums or yield maintenance charges.

 

3

 

15.           Seller
has delivered to Buyer or its designee the original Mortgage Note(s) made in
respect of such First Mortgage, together with an original endorsement thereof
executed by Seller in blank.

16.           Each
related assignment of Mortgage and assignment of Assignment of Leases from
Seller in blank constitutes the legal, valid and binding first priority assignment
from Seller (assuming the insertion of the Buyer’s name), except as such
enforcement may be limited by bankruptcy, insolvency, receivership,
reorganization, moratorium, redemption, liquidation or other laws relating to
or affecting the enforcement of creditors’ rights generally, or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law). Each Mortgage and Assignment of Leases is
freely assignable.

17.           The
First Mortgage is secured by one or more Mortgages and each such Mortgage is a
valid and enforceable first lien on the related Mortgaged Property subject only
to the exceptions set forth in paragraph (13) above and the following title
exceptions (each such title exception, a “Title Exception”, and
collectively, the “Title Exceptions”): 
(a) the lien of current real property taxes, water charges, sewer
rents and assessments not yet due and payable, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public record,
none of which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor’s ability to pay
its obligations under the First Mortgage when they become due or materially and
adversely affects the value of the Mortgaged Property, (c) the exceptions
(general and specific) and exclusions set forth in the applicable policy
described in paragraph (21) below or appearing of record, none of which,
individually or in the aggregate, materially and adversely interferes with the
current use of the Mortgaged Property or the security intended to be provided
by such Mortgage or with the Mortgagor’s ability to pay its obligations under
the First Mortgage when they become due or materially and adversely affects the
value of the Mortgaged Property, (d) other matters to which like properties are
commonly subject, none of which, individually or in the aggregate, materially
and adversely interferes with the current use of the Mortgaged Property or the
security intended to be provided by such Mortgage or with the Mortgagor’s
ability to pay its obligations under the First Mortgage when they become due or
materially and adversely affects the value of the Mortgaged Property, (e) the
right of tenants (whether under ground leases, space leases or operating
leases) at the Mortgaged Property to remain following a foreclosure or similar
proceeding (provided that such tenants are performing under such leases)
and (f) if such First Mortgage is cross-collateralized with any other First
Mortgage, the lien of the Mortgage for such other First Mortgage, none of
which, individually or in the aggregate, materially and adversely interferes
with the current use of the Mortgaged Property or the security intended to be
provided by such Mortgage or with the Mortgagor’s ability to pay its
obligations under the First Mortgage when they become due or materially and
adversely affects the value of the Mortgaged Property. Except with respect to
cross-collateralized and cross-defaulted First Mortgages and as provided below,
there are no mortgage loans that are senior or pari passu with respect to the
related Mortgaged Property or such First Mortgage.

18.           UCC
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 security interest in all items of
personal property located on the Mortgaged Property that are owned by the
Mortgagor and either (i) are reasonably necessary

 

4

 

to operate the Mortgaged
Property or (ii) are (as indicated in the appraisal obtained in connection with
the origination of the related First Mortgage) material to the value of the
Mortgaged Property (other than any personal property subject to a purchase
money security interest or a sale and leaseback financing arrangement permitted
under the terms of such First Mortgage or any other personal property leases
applicable to such personal property), to the extent perfection may be effected
pursuant to applicable law by recording or filing, and the Mortgages, security
agreements, chattel Mortgages or equivalent documents related to and delivered
in connection with the related First Mortgage establish and create a valid and
enforceable lien and priority security interest on such items of personalty
except as such enforcement may be limited by bankruptcy, insolvency,
receivership, reorganization, moratorium, redemption, liquidation or other laws
relating to or affecting the enforcement of creditor’s rights generally, or by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law). Notwithstanding any of the
foregoing, no representation is made as to the perfection of any security
interest in rents or other personal property to the extent that possession or
control of such items or actions other than the filing of UCC Financing
Statements are required in order to effect such perfection.

19.           All
real estate taxes and governmental assessments, or installments thereof, which
would be a lien on the Mortgaged Property and that prior to the Purchase Date
have become delinquent in respect of the Mortgaged Property have been paid, or
an escrow of funds in an amount sufficient to cover such payments has been
established. For purposes of this representation and warranty, real estate
taxes and governmental assessments and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest
and/or penalties would first be payable thereon and (b) the date on which
enforcement action is entitled to be taken by the related taxing authority.

20.           As
of the Purchase Date, the related Mortgaged Property was free and clear of any
material damage (other than deferred maintenance) that would affect materially
and adversely the value of such Mortgaged Property as security for the First
Mortgage and there was no proceeding pending or, based solely upon the delivery
of written notice thereof from the appropriate condemning authority, threatened
for the total or partial condemnation of such Mortgaged Property.

21.           The
lien of each related Mortgage as a first priority lien in the original
principal amount of such First Mortgage after all advances of principal is
insured by an ALTA lender’s title insurance policy (or a binding commitment
therefor), or its equivalent as adopted in the applicable jurisdiction,
insuring Seller, its successors and assigns, subject only to the Title
Exceptions; the Mortgagee or its successors or assigns is the sole named
insured of such policy; such policy is assignable without consent of the
insurer and will inure to the benefit of the Buyer Mortgagee of record; such
title policy is in full force and effect upon the consummation of the
transactions contemplated by this Agreement; all premiums thereon have been
paid; no claims have been made under such policy and no circumstance exists
which would impair or diminish the coverage of such policy. The insurer issuing
such policy is either (x) a nationally-recognized title insurance company or
(y) qualified to do business in the jurisdiction in which the related Mortgaged
Property is located to the extent required; such policy contains no material
exclusions for, or affirmatively insures (except for any Mortgaged Property located
in a jurisdiction where

 

5

 

such insurance is not
available) (a) access to public road or (b) against any loss due to
encroachments of any material portion of the improvements thereon.

22.           As
of the date of its origination, all insurance coverage required under each
related Mortgage, which insurance covered such risks as were customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Mortgaged
Property in the jurisdiction in which such Mortgaged Property is located, and
with respect to a fire and extended perils insurance policy, is in an amount
(subject to a customary deductible) at least equal to the lesser of
(i) the replacement cost of improvements located on such Mortgaged
Property, or (ii) the outstanding principal balance of the First Mortgage,
and in any event, the amount necessary to prevent operation of any co-insurance
provisions; and, except if such Mortgaged Property is operated as a mobile home
park, is also covered by business interruption or rental loss insurance, in an
amount at least equal to 12 months of operations of the related Mortgaged
Property, all of which was in full force and effect with respect to the related
Mortgaged Property; and all insurance coverage required under each Mortgage,
which insurance covers such risks and is in such amounts as are customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Mortgaged
Property in the jurisdiction in which such Mortgaged Property is located, is in
full force and effect with respect to the related Mortgaged Property; all
premiums due and payable through the Purchase Date have been paid; and no
notice of termination or cancellation with respect to any such insurance policy
has been received by Seller; and except for certain amounts not greater than
amounts which would be considered prudent by an institutional commercial and/or
multifamily mortgage lender with respect to a similar First Mortgage and which
are set forth in the related Mortgage, any insurance proceeds in respect of a
casualty loss, will be applied either (i) to the repair or restoration of all
or part of the related Mortgaged Property or (ii) the reduction of the
outstanding principal balance of the First Mortgage, subject in either case to
requirements with respect to leases at the related Mortgaged Property and to
other exceptions customarily provided for by prudent institutional lenders for
similar loans. The Mortgaged Property is also covered by comprehensive general
liability insurance against claims for personal and bodily injury, death or
property damage occurring on, in or about the related Mortgaged Property, in an
amount customarily required by prudent institutional lenders. An architectural
or engineering consultant has performed an analysis of the Underlying Mortgaged
Properties located in seismic zone 3 or 4 in order to evaluate the structural
and seismic condition of such property, for the sole purpose of assessing the
probable maximum loss (“PML”) for the Mortgaged Property in the event of
an earthquake. In such instance, the PML was based on a 475 year lookback with
a 10% probability of exceedance in a 50 year period. If the resulting report
concluded that the PML would exceed 20% of the amount of the replacement costs
of the improvements, earthquake insurance on such Mortgaged Property was
obtained by an insurer rated at least A-:V by A.M. Best Company or “BBB-” (or
the equivalent) from S&P and Fitch or “Baa3” (or the equivalent) from Moody’s.
If the Mortgaged Property is located in Florida or within 25 miles of the coast
of Texas, Louisiana, Mississippi, Alabama, Georgia, North Carolina or South
Carolina such Mortgaged Property is insured by windstorm insurance in an amount
at least equal to the lesser of (i) the outstanding principal balance of such
First Mortgage and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Mortgaged
Property.  The insurance policies contain
a standard Mortgagee clause naming Seller, its successors and assigns as loss
payee, in the case of a property insurance policy, and additional insured in
the case of a 

 

6

 

liability insurance
policy and provide that they are not terminable without 30 days prior written
notice to the Mortgagee (or, with respect to non-payment, 10 days prior written
notice to the Mortgagee) or such lesser period as prescribed by applicable law.
Each Mortgage requires that the Mortgagor maintain insurance as described above
or permits the Mortgagee to require insurance as described above, and permits
the Mortgagee to purchase such insurance at the Mortgagor’s expense if
Mortgagor fails to do so.

23.           (a)
Other than payments due but not yet 30 days or more delinquent, there is no
material default, breach, violation or event of acceleration existing under the
related Mortgage or the related Mortgage Note, and no event has occurred (other
than payments due but not yet delinquent) which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration, provided, however,
that this representation and warranty does not address or otherwise cover any
default, breach, violation or event of acceleration that specifically pertains
to any matter otherwise covered by any other representation and warranty made
by Seller in any paragraph of this Exhibit VI and (b) Seller has not
waived any material default, breach, violation or event of acceleration under
such Mortgage or Mortgage Note and pursuant to the terms of the related
Mortgage or the related Mortgage Note and other documents in the related
Mortgage Loan documents no Person or party other than the holder of such
Mortgage Note may declare any event of default or accelerate the related
indebtedness under either of such Mortgage or Mortgage Note.

24.           As
of the Purchase Date, such First Mortgage is not, since origination, and has
not been, 30 days or more past due in respect of any scheduled payment.

25.           Each
related Mortgage does not provide for or permit, without the prior written
consent of the holder of the Mortgage Note, the related Mortgaged Property to
secure any other promissory note or obligation except as expressly described in
such Mortgage.

26.           Such
First Mortgage constitutes a “qualified mortgage” within the meaning of Section
860G(a)(3) of the Code (without regard to Treasury Regulations Sections
1.860G-2(a)(3) or 1.860G-2(f)(2)), is directly secured by a Mortgage on a
commercial property or a multifamily residential property, and either (1)
substantially all of the proceeds of such First Mortgage were used to acquire,
improve or protect the portion of such commercial or multifamily residential
property that consists of an interest in real property (within the meaning of
Treasury Regulations Sections 1.856-3(c) and 1.856-3(d)) and such interest in
real property was the only security for such First Mortgage as of the Testing
Date (as defined below), or (2) the fair market value of the interest in real
property which secures such First Mortgage was at least equal to 80% of the
principal amount of the First Mortgage (a) as of the Testing Date, or (b) as of
the Purchase Date. For purposes of the previous sentence, (1) the fair market
value of the referenced interest in real property shall first be reduced by (a)
the amount of any lien on such interest in real property that is senior to the
First Mortgage, and (b) a proportionate amount of any lien on such interest in
real property that is on a parity with the First Mortgage, and (2) the “Testing
Date” shall be the date on which the referenced First Mortgage was originated
unless (a) such First Mortgage was modified after the date of its origination
in a manner that would cause a “significant modification” of such First
Mortgage within the meaning of Treasury Regulations Section 1.1001-3(b), and
(b) such “significant modification” did not occur at a time

 

7

 

when such First Mortgage
was in default or when default with respect to such First Mortgage was
reasonably foreseeable. However, if the referenced First Mortgage has been
subjected to a “significant modification” after the date of its origination and
at a time when such First Mortgage was not in default or when default with
respect to such First Mortgage was not reasonably foreseeable, the Testing Date
shall be the date upon which the latest such “significant modification”
occurred.

27.           There
is no material and adverse environmental condition or circumstance affecting
the Mortgaged Property; there is no material violation of any applicable
Environmental Law with respect to the Mortgaged Property; neither Seller nor
the Underlying Property Owner has taken any actions which would cause the
Mortgaged Property not to be in compliance with all applicable Environmental
Laws; the Underlying Mortgage Loan documents require the borrower to comply
with all Environmental Laws; and each Mortgagor has agreed to indemnify the
Mortgagee for any losses resulting from any material, adverse environmental
condition or failure of the Mortgagor to abide by such Environmental Laws or
has provided environmental insurance.

28.           Each
related Mortgage and Assignment of Leases, together with applicable state law,
contains customary and enforceable provisions for comparable mortgaged
properties similarly situated such as to render the rights and remedies of the
holder thereof adequate for the practical realization against the Mortgaged
Property of the benefits of the security, including realization by judicial or,
if applicable, non judicial foreclosure, subject to the effects of bankruptcy,
insolvency, receivership, reorganization, moratorium, redemption, liquidation
or other laws relating to or affecting the enforcement of creditors’ rights
generally, or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).

29.           No
Mortgagor is a debtor in any state or federal bankruptcy or insolvency
proceeding.

30.           Such
First Mortgage is a First Mortgage and contains no equity participation by the
lender or shared appreciation feature and does not provide for any contingent
or additional interest in the form of participation in the cash flow of the
related Mortgaged Property.  Seller holds
no preferred equity interest.

31.           Subject
to certain exceptions, which are customarily acceptable to prudent commercial
and multifamily mortgage lending institutions lending on the security of property
comparable to the related Mortgaged Property, each related Mortgage or loan
agreement contains provisions for the acceleration of the payment of the unpaid
principal balance of such First Mortgage if, without complying with the
requirements of the Mortgage or loan agreement, (a) the related Mortgaged
Property, or any controlling interest in the related Mortgagor, is directly
transferred or sold (other than by reason of family and estate planning
transfers, transfers by devise, descent or operation of law upon the death of a
member, general partner or shareholder of the related borrower and transfers of
less than a controlling interest (as such term is defined in the related First
Mortgage documents) in a mortgagor, issuance of non-controlling new equity
interests, transfers among existing members, partners or shareholders in the
Mortgagor or an affiliate thereof, transfers among affiliated Mortgagors with
respect to First Mortgages which are

 

8

 

cross-collateralized or
cross-defaulted with other mortgage loans or multi-property First Mortgages or
transfers of a similar nature to the foregoing meeting the requirements of the
First Mortgage (such as pledges of ownership interests that do not result in a
change of control) or a substitution or release of collateral within the
parameters of paragraph (34) below), or (b) the related Mortgaged Property or
controlling interest in the borrower is encumbered in connection with
subordinate financing by a lien or security interest against the related
Mortgaged Property, other than any existing permitted additional debt. The
First Mortgage documents require the borrower to pay all reasonable costs
incurred by the Mortgagor with respect to any transfer, assumption or encumbrance
requiring lender’s approval.

32.           Except
as set forth in the related Mortgage Loan documents delivered to Buyer, the
terms of the related Mortgage Note(s) and Mortgage(s) have not been waived,
modified, altered, satisfied, impaired, canceled, subordinated or rescinded in
any manner which materially interferes with the security intended to be
provided by such Mortgage and no such waiver, modification, alteration,
satisfaction, impairment, cancellation, subordination or recission has occurred
since the date upon which the due diligence file related to the applicable
First Mortgage was delivered to Buyer or its designee.

33.           Each
related Mortgaged Property was inspected by or on behalf of the related
originator or an affiliate during the 12 month period prior to the related
origination date.

34.           Since
origination, no material portion of the related Mortgaged Property has been
released from the lien of the related Mortgage in any manner which materially
and adversely affects the value of the First Mortgage or materially interferes
with the security intended to be provided by such Mortgage, and, except with
respect to First Mortgages (a) which permit defeasance by means of substituting
for the Mortgaged Property (or, in the case of a First Mortgage secured by
multiple Underlying Mortgaged Properties, one or more of such Underlying
Mortgaged Properties) “government securities” as defined in the Investment
Company Act of 1940, as amended, sufficient to pay the First Mortgages (or
portions thereof) in accordance with its terms, (b) where a release of the
portion of the Mortgaged Property was contemplated at origination and such
portion was not considered material for purposes of Preliminary Due Diligence
the First Mortgage, (c) where release is conditional upon the satisfaction of
certain Preliminary Due Diligence and legal requirements and the payment of a
release price that represents adequate consideration for such Mortgaged
Property or the portion thereof that is being released, (d) which permit the
related Mortgagor to substitute a replacement property in compliance with REMIC
Provisions or (e) which permit the release(s) of unimproved out-parcels or
other portions of the Mortgaged Property that will not have a material adverse
effect on the underwritten value of the security for the First Mortgage or that
were not allocated to any value in the Preliminary Due Diligence during the
origination of the First Mortgage, the terms of the related Mortgage do not
provide for release of any portion of the Mortgaged Property from the lien of
the Mortgage except in consideration of payment in full therefor.

35.           There
are no material violations of any applicable zoning ordinances, building codes
or land laws applicable to the Mortgaged Property or the use and occupancy thereof
which (i) are not insured by an ALTA lender’s title insurance policy (or a
binding commitment therefor), or its equivalent as adopted in the applicable
jurisdiction, or a law and ordinance insurance policy or (ii) would have a
material adverse effect on the value, operation or

 

9

 

net operating income of
the Mortgaged Property. The First Mortgage documents require the Mortgaged
Property to comply with all applicable laws and ordinances.

36.           None
of the material improvements which were included for the purposes of
determining the appraised value of the related Mortgaged Property at the time
of the origination of the First Mortgage lies outside of the boundaries and
building restriction lines of such property (except Underlying Mortgaged
Properties which are legal non-conforming uses), to an extent which would have
a material adverse affect on the value of the Mortgaged Property or related
Mortgagor’s use and operation of such Mortgaged Property (unless affirmatively
covered by title insurance) and no improvements on adjoining properties
encroached upon such Mortgaged Property to any material and adverse extent
(unless affirmatively covered by title insurance).

37.           The
related Mortgagor has covenanted in its organizational documents and/or the
First Mortgage documents to own no significant asset other than the related
Underlying Mortgaged Properties, as applicable, and assets incidental to its
ownership and operation of such Underlying Mortgaged Properties, and to hold
itself out as being a legal entity, separate and apart from any other Person.

38.           No
advance of funds has been made other than pursuant to the loan documents,
directly or indirectly, by Seller to the Mortgagor and no funds have been
received from any Person other than the Mortgagor, for or on account of
payments due on the Mortgage Note or the Mortgage.

39.           As
of the Purchase Date, there was no pending action, suit or proceeding, or
governmental investigation of which Seller has received notice, against the
Mortgagor or the related Mortgaged Property the adverse outcome of which could
reasonably be expected to materially and adversely affect such Mortgagor’s
ability to pay principal, interest or any other amounts due under such First
Mortgage or the security intended to be provided by the First Mortgage
documents or the current use of the Mortgaged Property.

40.           As
of the Purchase Date, if the related Mortgage is a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has either been properly
designated and serving under such Mortgage or may be substituted in accordance
with the Mortgage and applicable law.

41.           The
First Mortgage and the interest (exclusive of any default interest, late
charges or prepayment premiums) contracted for complied as of the date of
origination with, or is exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury.

42.           Each
First Mortgage that is cross-collateralized is cross-collateralized only with
other First Mortgages sold pursuant to this Agreement.

43.           The
improvements located on the Mortgaged Property are either not located in a
federally designated special flood hazard area or, if so located, the Mortgagor
is required to maintain or the Mortgagee maintains, flood insurance with
respect to such improvements and such policy is in full force and effect in an
amount no less than the lesser of

 

10

 

(i) the original
principal balance of the First Mortgage, (ii) the value of such improvements on
the related Mortgaged Property located in such flood hazard area or
(iii) the maximum allowed under the related federal flood insurance
program.

44.           All
escrow deposits and payments required pursuant to the First Mortgage as of the
Purchase Date required to be deposited with Seller in accordance with the First
Mortgage documents have been so deposited, are in the possession, or under the
control, of Seller or its agent and there are no deficiencies in connection
therewith.

45.           As
of the Purchase Date, the related Mortgagor, the related lessee, franchisor or
operator was in possession of all material licenses, permits and authorizations
then required for use of the related Mortgaged Property by the related
Mortgagor. The First Mortgage documents require the borrower to maintain all
such licenses, permits and authorizations.

46.           The
origination (or acquisition, as the case may be), servicing and collection
practices used by Seller with respect to the First Mortgage have been in all
respects legal and have met customary industry standards for servicing of
commercial mortgage loans for conduit loan programs.

47.           Except
for Mortgagors under First Mortgages the Mortgaged Property with respect to
which includes a Ground Lease, the related Mortgagor (or its affiliate) has
title in the fee simple interest in each related Mortgaged Property.

48.           The
First Mortgage documents for such First Mortgage provide that such First
Mortgage is non-recourse to the related Mortgagor except that the related
Mortgagor and an additional guarantor accepts responsibility for any loss
incurred due to fraud on the part of the Mortgagor and/or other intentional
material misrepresentation. Furthermore, the First Mortgage documents for each
First Mortgage provide that the related Mortgagor and an additional guarantor
shall be liable to the lender for losses incurred due to the misapplication or
misappropriation of rents collected in advance or received by the related
Mortgagor after the occurrence of an event of default and not paid to the
Mortgagee or applied to the Mortgaged Property in the ordinary course of
business, misapplication or conversion by the Mortgagor of insurance proceeds
or condemnation awards or breach of the environmental covenants in the related
First Mortgage documents.

49.           Subject
to the exceptions set forth in paragraph (13) and upon possession of the
Mortgaged Property as required under applicable state law, any Assignment of
Leases set forth in the Mortgage or separate from the related Mortgage and
related to and delivered in connection with such First Mortgage establishes and
creates a valid, subsisting and enforceable lien and security interest in the
related Mortgagor’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.

50.           With
respect to such First Mortgage, any prepayment premium and yield maintenance
charge constitutes a “customary prepayment penalty” within the meaning of
Treasury Regulations Section 1.860G-1 (b)(2).

 

11

51.           If
such First Mortgage contains a provision for any defeasance of mortgage
collateral, such First Mortgage permits defeasance (1) no earlier than two
years after any securitization of such First Mortgage and (2) only with
substitute collateral constituting “government securities” within the meaning
of Treasury Regulations Section 1.860G-2(a)(8)(i) in an amount sufficient to
make all scheduled payments under the Mortgage Note. Such First Mortgage was
not originated with the intent to collateralize a REMIC offering with
obligations that are not real estate mortgages. In addition, if such Mortgage
contains such a defeasance provision, it provides (or otherwise contains
provisions pursuant to which the holder can require) that an opinion be
provided to the effect that such holder has a first priority perfected security
interest in the defeasance collateral. The related First Mortgage documents
permit the lender to charge all of its expenses associated with a defeasance to
the Mortgagor (including rating agencies’ fees, accounting fees and attorneys’
fees), and provide that the related Mortgagor must deliver (or otherwise, the
First Mortgage documents contain certain provisions pursuant to which the
lender can require) (a) an accountant’s certification as to the adequacy of the
defeasance collateral to make payments under the related First Mortgage for the
remainder of its term, (b) an opinion of counsel that the defeasance complies
with all applicable REMIC Provisions, and (c) assurances from each applicable Rating
Agency that the defeasance will not result in the withdrawal, downgrade or
qualification of the ratings assigned to any certificates backed by the related
First Mortgage. Notwithstanding the foregoing, some of the First Mortgage
documents may not affirmatively contain all such requirements, but such
requirements are effectively present in such documents due to the general
obligation to comply with the REMIC Provisions and/or deliver a REMIC opinion
of counsel.

52.           To
the extent required under applicable law as of the date of origination, and
necessary for the enforceability or collectability of the First Mortgage, the
originator of such First Mortgage was authorized to do business in the
jurisdiction in which the related Mortgaged Property is located at all times
when it originated and held the First Mortgage.

53.           Neither
Seller nor any affiliate thereof has any obligation to make any capital
contributions to the Mortgagor under the First Mortgage.

54.           The
related Mortgaged Property is not encumbered, and none of the First Mortgage
documents permits the related Mortgaged Property to be encumbered subsequent to
the Purchase Date without the prior written consent of the holder of such First
Mortgage, by any lien securing the payment of money junior to or of equal
priority with, or superior to, the lien of the related Mortgage (other than
Title Exceptions, taxes, assessments and contested mechanics and materialmens
liens that become payable after the Purchase Date of the related First
Mortgage).

55.           Each
related Mortgaged Property constitutes one or more complete separate tax lots
(or the related Mortgagor has covenanted to obtain separate tax lots and a
Person has indemnified the Mortgagee for any loss suffered in connection
therewith or an escrow of funds in an amount sufficient to pay taxes resulting
from a breach thereof has been established) or is subject to an endorsement
under the related title insurance policy.

56.           An
appraisal of the related Mortgaged Property was conducted in connection with
the origination of such First Mortgage; and such appraisal satisfied either (A)

 

12

 

the requirements of the “Uniform
Standards of Professional Appraisal Practice” as adopted by the Appraisal
Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI
of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in
either case as in effect on the date such First Mortgage was originated.

57.           The
related First Mortgage documents require the Mortgagor to provide the Mortgagee
with certain financial information at the times required under the related
First Mortgage documents.

58.           The
related Mortgaged Property is served by public utilities, water and sewer (or
septic facilities) and otherwise appropriate for the use in which the Mortgaged
Property is currently being utilized.

59.           With
respect to each related Mortgaged Property consisting of a Ground Lease, Seller
represents and warrants the following with respect to the related Ground Lease:

(i)            Such Ground Lease or a memorandum
thereof has been or will be duly recorded no later than 30 days after the
Purchase Date and such Ground Lease permits the
interest of the lessee thereunder to be encumbered by the related Mortgage or,
if consent of the lessor thereunder is required, it has been obtained prior to
the Purchase Date.

(ii)           Upon
the foreclosure of the First Mortgage (or acceptance of a deed in lieu
thereof), the Mortgagor’s interest in such Ground Lease is assignable to the
Mortgagee under the leasehold estate and its assigns without the consent of the
lessor thereunder (or, if any such consent is required, it has been obtained
prior to the Purchase Date).

(iii)          Such
Ground Lease may not be amended, modified, canceled or terminated without the
prior written consent of the Mortgagee and any such action without such consent
is not binding on the Mortgagee, its successors or assigns, except termination
or cancellation if (i) an event of default occurs under the Ground Lease,
(ii) notice thereof is provided to the Mortgagee and (iii) such default is
curable by the Mortgagee as provided in the Ground Lease but remains uncured
beyond the applicable cure period.

(iv)          Such
Ground Lease is in full force and effect, there is no material default under
such Ground Lease, and there is no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
material default under such Ground Lease.

(v)           The
Ground Lease or ancillary agreement between the lessor and the lessee requires
the lessor to give notice of any default by the lessee to the Mortgagee. The
Ground Lease or ancillary agreement further provides that no notice given is
effective against the Mortgagee unless a copy has been given to the Mortgagee
in a manner described in the Ground Lease or ancillary agreement.

 

13

 

(vi)          The
Ground Lease (i) is not subject to any liens or encumbrances superior to, or of
equal priority with, the Mortgage, subject, however, to only the Title
Exceptions or (ii) is subject to a subordination, non-disturbance and
attornment agreement to which the Mortgagee on the lessor’s fee interest in the
Mortgaged Property is subject.

(vii)         A
Mortgagee is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the lessee under the
Ground Lease) to cure any curable default under such Ground Lease before the
lessor thereunder may terminate such Ground Lease.

(viii)        Such
Ground Lease has an original term (together with any extension options, whether
or not currently exercised, set forth therein all of which can be exercised by
the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground
Lease) that extends not less than 20 years beyond the stated maturity date.

(ix)           Under
the terms of such Ground Lease, any estoppel or consent letter received by the
Mortgagee from the lessor, and the related Mortgage, taken together, any
related insurance proceeds or condemnation award (other than in respect of a
total or substantially total loss or taking) will be applied either to the
repair or restoration of all or part of the related Mortgaged Property, with
the Mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as repair or restoration progresses, or to the payment
or defeasance of the outstanding principal balance of the First Mortgage,
together with any accrued interest (except in cases where a different
allocation would not be viewed as commercially unreasonable by any commercial
mortgage lender, taking into account the relative duration of the Ground Lease
and the related Mortgage and the ratio of the market value of the related
Mortgaged Property to the outstanding principal balance of such First
Mortgage).

(x)            The
Ground Lease does not impose any restrictions on subletting that would be
viewed as commercially unreasonable by a prudent commercial lender.

(xi)           The
ground lessor under such Ground Lease is required to enter into a new lease
upon termination of the Ground Lease for any reason, including the rejection of
the Ground Lease in bankruptcy.

 

14

 

REPRESENTATIONS AND
WARRANTIES

RE:  PURCHASED LOANS CONSISTING OF B
NOTES

 

1.             The
B Note is (a) a junior participation interest in a First Mortgage or (b) a
“B-note” in an “A/B structure” in a First Mortgage.

2.             As
of the Purchase Date, such B Note complies in all material respects with, or is
exempt from, all requirements of federal, state or local law relating to such B
Note.

3.             Immediately
prior to the sale, transfer and assignment to Buyer thereof, Seller had good
and marketable title to, and was the sole owner and holder of, such B Note, and
Seller is transferring such B Note free and clear of any and all liens,
pledges, encumbrances, charges, security interests or any other ownership
interests of any nature encumbering such B Note. Upon consummation of the
purchase contemplated to occur in respect of such B Note on the Purchase Date therefor,
Seller will have validly and effectively conveyed to Buyer all legal and
beneficial interest in and to such B Note free and clear of any pledge, lien,
encumbrance or security interest.

4.             No
fraudulent acts were committed by Seller in connection with its acquisition or
origination of such B Note nor were any fraudulent acts committed by any Person
in connection with the origination of such B Note.

5.             All
information contained in the related Preliminary Due Diligence Package (or as
otherwise provided to Buyer) in respect of such B Note is accurate and complete
in all material respects.

6.             Except
as included in the Preliminary Due Diligence Package or otherwise disclosed to
Buyer, Seller is not a party to any document, instrument or agreement, and there
is no document, that by its terms modifies or affects the rights and
obligations of any holder of such B Note and Seller has not consented to any
material change or waiver to any term or provision of any such document,
instrument or agreement and no such change or waiver exists.

7.             Seller
has full right, power and authority to sell and assign such B Note and such B
Note or any related Mortgage Note has not been cancelled, satisfied or
rescinded in whole or part nor has any instrument been executed that would
effect a cancellation, satisfaction or rescission thereof.

8.             Other
than consents and approvals obtained as of the related Purchase Date or those
already granted in the related Mortgage and/or Mortgage Note, no consent or
approval by any Person is required in connection with Seller’s sale and/or
Buyer’s acquisition of such B Note, for Buyer’s exercise of any rights or
remedies in respect of such B Note or for Buyer’s sale, pledge or other
disposition of such B Note.  Except as
included in the Preliminary Due Diligence Package or otherwise disclosed to
Buyer, no third party holds any “right of first refusal”, “right of first
negotiation”, “right of first offer”, purchase option, or other similar rights
of any kind, and no other impediment exists to any such transfer or exercise of
rights or remedies.

 

15

 

9.             No
consent, approval, authorization or order of, or registration or filing with,
or notice to, any court or governmental agency or body having jurisdiction or
regulatory authority is required for any transfer or assignment by the holder
of such B Note.

10.           Seller
has delivered to Buyer or its designee the original promissory note,
certificate or other similar indicia of ownership of such B Note, however denominated,
together with an original assignment thereof, executed by Seller in blank, or,
with respect to a participation interest, reissued in Buyer’s name (or such
other name as designated by the Buyer).

11.           No
default or event of default has occurred under any agreement pertaining to any
lien or other interest that ranks pari passu with
or senior to the interests of the holder of such B Note in respect of the
related Mortgaged Property and there is no provision in any such agreement
which would provide for any increase in the principal amount of any such lien
or other interest.

12.           No
(i) monetary default, breach or violation exists with respect to any agreement
or other document governing or pertaining to such B Note, the related First
Mortgage or any other obligation of the Underlying Property Owner, (ii)
material non-monetary default, breach or violation exists with respect to such
B Note, the related First Mortgage or any other obligation of the Underlying
Property Owner, or (iii) event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration.

13.           Such
B Note has not been and shall not be deemed to be a Security within the meaning
of the Securities Act of 1933, as amended or the Securities Exchange Act of
1934, as amended.

14.           Each
related Underlying Mortgage Loan complies in all material respects with, or is
exempt from, all requirements of federal, state or local law relating to the
origination of such Underlying Mortgage Loan.

15.           Seller
has not received written notice of any outstanding liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind for which the holder of such B Note is or may become
obligated.

16.           Seller
has not advanced funds, or knowingly received any advance of funds from a party
other than the Mortgagee relating to such B Note, directly or indirectly, for
the payment of any amount required by such B Note.

17.           With
respect to each related Underlying Mortgage Loan, each related Mortgage Note,
Mortgage, Assignment of Leases (if a document separate from the Mortgage) and
other agreement executed by the related Mortgagor in connection with such
Underlying Mortgage Loan is legal, valid and binding obligation of the related
Mortgagor (subject to any non-recourse provisions therein and any state
anti-deficiency or market value limit deficiency legislation), enforceable in
accordance with its terms, except (i) that certain provisions contained in such
Underlying Mortgage Loan

 

16

 

documents are or may be
unenforceable in whole or in part under applicable state or federal laws, but
neither the application of any such laws to any such provision nor the
inclusion of any such provisions renders any of the Underlying Mortgage Loan
documents invalid as a whole and such Underlying Mortgage Loan documents taken
as a whole are enforceable to the extent necessary and customary for the practical
realization of the rights and benefits afforded thereby and (ii) as such
enforcement may be limited by bankruptcy, insolvency, receivership,
reorganization, moratorium, redemption, liquidation or other laws affecting the
enforcement of creditors’ rights generally, or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law). The related Mortgage Note and Mortgage contain no provision
limiting the right or ability of any holder thereof to assign, transfer and
convey all or any portion of the related Underlying Mortgage Loan or the
related B Note to any other Person, except, however, for customary
intercreditor restrictions limiting assignees to “Qualified Transferees”. With
respect to any Mortgaged Property that has tenants, there exists as either part
of the Mortgage or as a separate document, an assignment of leases.

18.           With
respect to the B Note and each related Underlying Mortgage Loan, as of the date
of its origination, there was no valid offset, defense, counterclaim, abatement
or right to rescission with respect to any related Mortgage Note, Mortgage or
other agreements executed in connection therewith, and, as of the Purchase Date
for the related Purchased Loan, there is no valid offset, defense, counterclaim
or right to rescission with respect to any such Mortgage Note, Mortgage or
other agreements, except in each case, with respect to the enforceability of
any provisions requiring the payment of default interest, late fees, additional
interest, prepayment premiums or yield maintenance charges.

19.           With
respect to the Underlying Mortgage Loan, each related Assignment of Mortgage
and assignment of Assignment of Leases from Seller in blank constitutes the
legal, valid and binding first priority assignment from Seller (assuming the
insertion of the Buyer’s name), except as such enforcement may be limited by
bankruptcy, insolvency, receivership, reorganization, moratorium, redemption,
liquidation or other laws relating to or affecting the enforcement of creditors’
rights generally, or by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law). Each
Mortgage and Assignment of Leases is freely assignable.

20.           The
Underlying Mortgage Loan is secured by one or more Mortgages and each such
Mortgage is a valid and enforceable first lien on the related Mortgaged
Property subject only to the exceptions set forth in paragraph (17) above and
the following title exceptions (each such title exception, a “Title
Exception”, and collectively, the “Title Exceptions”):  (a) the lien of current real property taxes,
water charges, sewer rents and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, none of which, individually or in the aggregate,
materially and adversely interferes with the current use of the Mortgaged
Property or the security intended to be provided by such Mortgage or with the
Mortgagor’s ability to pay its obligations under the Underlying Mortgage Loan
when they become due or materially and adversely affects the value of the
Mortgaged Property, (c) the exceptions (general and specific) and exclusions
set forth in the applicable policy described in paragraph (24) below or
appearing of record, none of which, individually or in the aggregate,
materially and adversely interferes with the current use of the Mortgaged
Property or the security intended to be provided by such Mortgage or with the Mortgagor’s
ability to pay its obligations under the Underlying Mortgage Loan when they
become due or materially and adversely affects the value of the Mortgaged Property,
(d) other matters to which

 

17

 

like properties are
commonly subject, none of which, individually or in the aggregate, materially
and adversely interferes with the current use of the Mortgaged Property or the
security intended to be provided by such Mortgage or with the Mortgagor’s
ability to pay its obligations under the Underlying Mortgage Loan when they
become due or materially and adversely affects the value of the Mortgaged
Property, (e) the right of tenants (whether under ground leases, space leases
or operating leases) at the Mortgaged Property to remain following a
foreclosure or similar proceeding (provided that such tenants are
performing under such leases) and (f) if such Underlying Mortgage Loan is
cross-collateralized with any other Underlying Mortgage Loan, the lien of the
Mortgage for such other Underlying Mortgage Loan, none of which, individually
or in the aggregate, materially and adversely interferes with the current use
of the Mortgaged Property or the security intended to be provided by such
Mortgage or with the Mortgagor’s ability to pay its obligations under the
Underlying Mortgage Loan when they become due or materially and adversely
affects the value of the Mortgaged Property. Except with respect to
cross-collateralized and cross-defaulted Underlying Mortgage Loans and as provided
below, there are no mortgage loans that are senior or pari passu
with respect to the related Mortgaged Property or such Underlying Mortgage
Loan.

21.           UCC
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 security interest in all items of
personal property located on each related Mortgaged Property that are owned by
the Mortgagor and either (i) are reasonably necessary to operate such Mortgaged
Property or (ii) are (as indicated in the appraisal obtained in connection with
the origination of the related Underlying Mortgage Loan) material to the value
of such Mortgaged Property (other than any personal property subject to a
purchase money security interest or a sale and leaseback financing arrangement
permitted under the terms of such Underlying Mortgage Loan or any other
personal property leases applicable to such personal property), to the extent
perfection may be effected pursuant to applicable law by recording or filing,
and the Mortgages, security agreements, chattel Mortgages or equivalent
documents related to and delivered in connection with the related Underlying
Mortgage Loan establish and create a valid and enforceable lien and priority
security interest on such items of personalty except as such enforcement may be
limited by bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption, liquidation or other laws affecting the enforcement of creditor’s
rights generally, or by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
Notwithstanding any of the foregoing, no representation is made as to the
perfection of any security interest in rents or other personal property to the
extent that possession or control of such items or actions other than the
filing of UCC Financing Statements are required in order to effect such
perfection.

22.           All
real estate taxes and governmental assessments, or installments thereof, which
would be a lien on any related Mortgaged Property and that prior to the
Purchase Date for the related Purchased Loan have become delinquent in respect
of such Mortgaged Property have been paid, or an escrow of funds in an amount
sufficient to cover such payments has been established. For purposes of this
representation and warranty, real estate taxes and governmental assessments and
installments thereof shall not be considered delinquent until the earlier of
(a) the date on which interest and/or penalties would first be payable thereon
and (b) the date on which enforcement action is entitled to be taken by the
related taxing authority.

 

18

 

23.           As
of the Purchase Date for the related Purchased Loan, each related Mortgaged
Property was free and clear of any material damage (other than deferred
maintenance) that would affect materially and adversely the value of such
Mortgaged Property as security for the related Underlying Mortgage Loan and
there was no proceeding pending or, based solely upon the delivery of written
notice thereof from the appropriate condemning authority, threatened for the
total or partial condemnation of such Mortgaged Property.

24.           With
respect to each related Underlying Mortgage Loan, the lien of each related
Mortgage as a first priority lien in the original principal amount of such
Underlying Mortgage Loan after all advances of principal is insured by an ALTA
lender’s title insurance policy (or a binding commitment therefor), or its
equivalent as adopted in the applicable jurisdiction, insuring the Mortgagee,
its successors and assigns, subject only to the Title Exceptions; the Mortgagee
or its successors or assigns is the sole named insured of such policy; such
policy is assignable without consent of the insurer and will inure to the
benefit of the trustee as Mortgagee of record; such title policy is in full
force and effect upon the consummation of the transactions contemplated by this
Agreement; all premiums thereon have been paid; no claims have been made under
such policy and no circumstance exists which would impair or diminish the
coverage of such policy. The insurer issuing such policy is either (x) a
nationally-recognized title insurance company or (y) qualified to do business
in the jurisdiction in which the related Mortgaged Property is located to the
extent required; such policy contains no material exclusions for, or
affirmatively insures (except for any Mortgaged Property located in a
jurisdiction where such insurance is not available) (a) access to public road
or (b) against any loss due to encroachments of any material portion of
the improvements thereon.

25.           With
respect to each related Underlying Mortgage Loan, as of the date of its
origination, all insurance coverage required under each related Mortgage, which
insurance covered such risks as were customarily acceptable to prudent
commercial and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property in the
jurisdiction in which such Mortgaged Property is located, and with respect to a
fire and extended perils insurance policy, is in an amount (subject to a
customary deductible) at least equal to the lesser of (i) the replacement cost
of improvements located on such Mortgaged Property, or (ii) the outstanding
principal balance of the Underlying Mortgage Loan, and in any event, the amount
necessary to prevent operation of any co-insurance provisions; and, except if such
Mortgaged Property is operated as a mobile home park, is also covered by
business interruption or rental loss insurance, in an amount at least equal to
12 months of operations of the related Mortgaged Property, all of which was in
full force and effect with respect to each related Mortgaged Property; and, as
of the Purchase Date for the related Purchased Loan, all insurance coverage
required under each Mortgage, which insurance covers such risks and is in such
amounts as are customarily acceptable to prudent commercial and multifamily
mortgage lending institutions lending on the security of property comparable to
the related Mortgaged Property in the jurisdiction in which such Mortgaged
Property is located, is in full force and effect with respect to each related
Mortgaged Property; all premiums due and payable through the Purchase Date for
the related Purchased Loan have been paid; and no notice of termination or
cancellation with respect to any such insurance policy has been received by
Seller; and except for certain amounts not greater than amounts which would be
considered prudent by an institutional commercial and/or multifamily mortgage
lender with respect to a similar mortgage loan and which are set forth in the
related Mortgage, any insurance proceeds in

 

19

 

respect of a casualty
loss, will be applied either (i) to the repair or restoration of all or part of
the related Mortgaged Property or (ii) the reduction of the outstanding
principal balance of the Underlying Mortgage Loan, subject in either case to
requirements with respect to leases at the related Mortgaged Property and to
other exceptions customarily provided for by prudent institutional lenders for
similar loans. The Mortgaged Property is also covered by comprehensive general
liability insurance against claims for personal and bodily injury, death or
property damage occurring on, in or about the related Mortgaged Property, in an
amount customarily required by prudent institutional lenders. An architectural
or engineering consultant has performed an analysis of the Underlying Mortgaged
Properties located in seismic zone 3 or 4 in order to evaluate the structural
and seismic condition of such property, for the sole purpose of assessing the
probable maximum loss (“PML”) for the Mortgaged Property in the event of
an earthquake. In such instance, the PML was based on a 475 year lookback with
a 10% probability of exceedance in a 50 year period. If the resulting report
concluded that the PML would exceed 20% of the amount of the replacement costs
of the improvements, earthquake insurance on such Mortgaged Property was
obtained by an insurer rated at least A-:V by A.M. Best Company or “BBB-” (or
the equivalent) from S&P and Fitch or “Baa3” (or the equivalent) from Moody’s.
If the Mortgaged Property is located in Florida or within 25 miles of the coast
of Texas, Louisiana, Mississippi, Alabama, Georgia, North Carolina or South
Carolina such Mortgaged Property is insured by windstorm insurance in an amount
at least equal to the lesser of (i) the outstanding principal balance of such
Underlying Mortgage Loan and (ii) 100% of the full insurable value, or 100% of
the replacement cost, of the improvements located on the related Mortgaged
Property.

26.           The
insurance policies contain a standard Mortgagee clause naming the Mortgagee,
its successors and assigns as loss payee, in the case of a property insurance
policy, and additional insured in the case of a liability insurance policy and
provide that they are not terminable without 30 days prior written notice to
the Mortgagee (or, with respect to non-payment, 10 days prior written notice to
the Mortgagee) or such lesser period as prescribed by applicable law. Each
Mortgage requires that the Mortgagor maintain insurance as described above or
permits the Mortgagee to require insurance as described above, and permits the
Mortgagee to purchase such insurance at the Mortgagor’s expense if Mortgagor
fails to do so.

27.           With
respect to any Underlying Mortgage Loan (a) other than payments due but not yet
30 days or more delinquent, there is no material default, breach, violation or
event of acceleration existing under the related Mortgage or the related
Mortgage Note, and no event has occurred (other than payments due but not yet
delinquent) which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, provided, however, that this
representation and warranty does not address or otherwise cover any default,
breach, violation or event of acceleration that specifically pertains to any
matter otherwise covered by any other representation and warranty made by
Seller in any paragraph of this Schedule (a) and (b) Seller has not
waived any material default, breach, violation or event of acceleration under
the related Mortgage or Mortgage Note and, pursuant to the terms of such
Mortgage or Mortgage Note and other Underlying Mortgage Loan documents, no
Person or party other than the holder of the related Mortgage Note may declare
any event of default or accelerate the related indebtedness under either of
such Mortgage or Mortgage Note.

 

20

 

28.           As
of the Purchase Date, the Underlying Mortgage Loan is not, since origination,
and has not been, 30 days or more past due in respect of any scheduled payment.

29.           Each
Mortgage related to the Underlying Mortgage Loan does not provide for or
permit, without the prior written consent of the holder of the Mortgage Note,
the related Mortgaged Property to secure any other promissory note or
obligation except as expressly described in such Mortgage.

30.           Each
related Underlying Mortgage Loan secured by commercial or multifamily
residential property constitutes a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code (without regard to Treasury Regulations Sections
1.860G-2(a)(3) or 1.860G-2(f)(2)), is directly secured by a Mortgage on such
commercial property or a multifamily residential property, and either (1)
substantially all of the proceeds of such Underlying Mortgage Loan were used to
acquire, improve or protect the portion of such commercial or multifamily
residential property that consists of an interest in real property (within the
meaning of Treasury Regulations Sections 1.856-3(c) and 1.856-3(d)) and such
interest in real property was the only security for such Underlying Mortgage
Loan as of the Testing Date (as defined below), or (2) the fair market value of
the interest in real property which secures such Underlying Mortgage Loan was
at least equal to 80% of the principal amount of the Underlying Mortgage Loan
(a) as of the Testing Date, or (b) as of the Purchase Date for the related
Purchased Loan. For purposes of the previous sentence, (1) the fair market
value of the referenced interest in real property shall first be reduced by (a)
the amount of any lien on such interest in real property that is senior to the
Underlying Mortgage Loan, and (b) a proportionate amount of any lien on such
interest in real property that is on a parity with the Underlying Mortgage
Loan, and (2) the “Testing Date” shall be the date on which the
referenced Underlying Mortgage Loan was originated unless (a) such Underlying
Mortgage Loan was modified after the date of its origination in a manner that
would cause a “significant modification” of such Underlying Mortgage Loan
within the meaning of Treasury Regulations Section 1.1001-3(b), and (b) such “significant
modification” did not occur at a time when such Underlying Mortgage Loan was in
default or when default with respect to such Underlying Mortgage Loan was
reasonably foreseeable. However, if the referenced Underlying Mortgage Loan has
been subjected to a “significant modification”, after the date of its
origination and at a time when such Underlying Mortgage Loan was not in default
or when default with respect to such Underlying Mortgage Loan was not
reasonably foreseeable, the Testing Date shall be the date upon which the
latest such “significant modification” occurred.

31.           There
is no material and adverse environmental condition or circumstance affecting
the Mortgaged Property; there is no material violation of any applicable
Environmental Law with respect to the Mortgaged Property; neither Seller nor
the Underlying Property Owner has taken any actions which would cause the
Mortgaged Property not to be in compliance with all applicable Environmental
Laws; the Underlying Mortgage Loan documents require the borrower to comply
with all Environmental Laws; and each Mortgagor has agreed to indemnify the
Mortgagee for any losses resulting from any material, adverse environmental
condition or failure of the Mortgagor to abide by such Environmental Laws or
has provided environmental insurance.

 

21

 

32.           With
respect to each related Underlying Mortgage Loan, each related Mortgage and
Assignment of Leases, together with applicable state law, contains customary
and enforceable provisions for comparable mortgaged properties similarly
situated such as to render the rights and remedies of the holder thereof
adequate for the practical realization against the Mortgaged Property of the
benefits of the security, including realization by judicial or, if applicable,
non judicial foreclosure, subject to the effects of bankruptcy, insolvency,
receivership, reorganization, moratorium, redemption, liquidation or other laws
relating to or affecting the enforcement of creditors’ rights generally, or by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).

33.           No
issuer of the Purchased Loan, no co-participant and no Mortgagor related to any
Underlying Mortgage Loan, is a debtor in any state or federal bankruptcy or
insolvency proceeding.

34.           Except
for the related Purchased Loan, each related Underlying Mortgage Loan is a
First Mortgage and contains no equity participation by the lender or shared
appreciation feature and does not provide for any contingent or additional
interest in the form of participation in the cash flow of the related Mortgaged
Property.

35.           With
respect to each related Underlying Mortgage Loan, subject to certain
exceptions, which are customarily acceptable to prudent commercial and
multifamily mortgage lending institutions lending on the security of property
comparable to the related Mortgaged Property, each related Mortgage or loan
agreement contains provisions for the acceleration of the payment of the unpaid
principal balance of such Underlying Mortgage Loan if, without complying with
the requirements of the Mortgage or loan agreement, (a) the related Mortgaged
Property, or any controlling interest in the related Mortgagor, is directly
transferred or sold (other than by reason of family and estate planning
transfers, transfers by devise, descent or operation of law upon the death of a
member, general partner or shareholder of the related borrower and transfers of
less than a controlling interest (as such term is defined in the related
Underlying Mortgage Loan documents) in a mortgagor, issuance of non-controlling
new equity interests, transfers among existing members, partners or
shareholders in the Mortgagor or an affiliate thereof, transfers among
affiliated Mortgagors with respect to Underlying Mortgage Loans which are
cross-collateralized or cross-defaulted with other mortgage loans or transfers
of a similar nature to the foregoing meeting the requirements of the Underlying
Mortgage Loan (such as pledges of ownership interests that do not result in a
change of control) or a substitution or release of collateral within the
parameters of paragraph (38) below), or (b) the related Mortgaged Property or
controlling interest in the borrower is encumbered in connection with
subordinate financing by a lien or security interest against the related
Mortgaged Property, other than any existing permitted additional debt. The
Underlying Mortgage Loan documents require the borrower to pay all reasonable
costs incurred by the Mortgagor with respect to any transfer, assumption or
encumbrance requiring lender’s approval.

36.           With
respect to each Purchased Loan and the related Underlying Mortgage Loan, except
as set forth in the related Mortgage Asset documents delivered to Buyer, the
terms of the related documents have not been waived, modified, altered,
satisfied, impaired, canceled, subordinated or rescinded in any manner which
materially interferes with the security intended to be provided by such
documents and no such waiver, modification, alteration, satisfaction, 

 

22

 

impairment, cancellation,
subordination or recission has occurred since the date upon which the due
diligence file related to the applicable Purchased Loan was delivered to Buyer
or its designee.

37.           Each
related Mortgaged Property was inspected by or on behalf of the related
originator or an affiliate during the 12 month period prior to the related
origination date.

38.           Since
origination, no material portion of any related Mortgaged Property has been
released from the lien of the related Mortgage in any manner which materially
and adversely affects the value of the Underlying Mortgage Loan or the
Purchased Loan or materially interferes with the security intended to be
provided by such Mortgage, and, except with respect to Underlying Mortgage
Loans (a) which permit defeasance by means of substituting for the Mortgaged
Property (or, in the case of an Underlying Mortgage Loan secured by multiple
Underlying Mortgaged Properties, one or more of such Underlying Mortgaged
Properties) “government securities” as defined in the Investment Company Act of
1940, as amended, sufficient to pay the Underlying Mortgage Loan (or portions
thereof) in accordance with its terms, (b) where a release of the portion of
the Mortgaged Property was contemplated at origination and such portion was not
considered material for purposes of Preliminary Due Diligence the Underlying
Mortgage Loan, (c) where release is conditional upon the satisfaction of
certain Preliminary Due Diligence and legal requirements and the payment of a
release price that represents adequate consideration for such Mortgaged
Property or the portion thereof that is being released, (d) which permit the
related Mortgagor to substitute a replacement property in compliance with REMIC
Provisions or (e) which permit the release(s) of unimproved out-parcels or
other portions of the Mortgaged Property that will not have a material adverse
effect on the underwritten value of the security for the Underlying Mortgage
Loan or that were not allocated to any value in the Preliminary Due Diligence
during the origination of the Underlying Mortgage Loan, the terms of the
related Mortgage do not provide for release of any portion of the Mortgaged
Property from the lien of the Mortgage except in consideration of payment in
full therefor.

39.           With
respect to each related Underlying Mortgage Loan, there are no material
violations of any applicable zoning ordinances, building codes and land laws
applicable to the Mortgaged Property or the use and occupancy thereof which (i)
are not insured by an ALTA lender’s title insurance policy (or a binding
commitment therefor), or its equivalent as adopted in the applicable
jurisdiction, or a law and ordinance insurance policy or (ii) would have a
material adverse effect on the value, operation or net operating income of the
Mortgaged Property. The Underlying Mortgage Loan documents require the
Mortgaged Property to comply with all applicable laws and ordinances.

40.           None
of the material improvements which were included for the purposes of
determining the appraised value of any related Mortgaged Property at the time
of the origination of the respective Underlying Mortgage Loan lies outside of
the boundaries and building restriction lines of such property (except
Underlying Mortgaged Properties which are legal non-conforming uses), to an
extent which would have a material adverse affect on the value of the Mortgaged
Property or related Mortgagor’s use and operation of such Mortgaged Property
(unless affirmatively covered by title insurance) and no improvements on
adjoining properties 

 

23

 

encroached upon such
Mortgaged Property to any material and adverse extent (unless affirmatively
covered by title insurance).

41.           The
related Mortgagor has covenanted in its respective organizational documents
and/or the underlying Mortgage Loan documents to own no significant asset other
than the related Underlying Mortgaged Properties, as applicable, and assets
incidental to its respective ownership and operation of such Underlying
Mortgaged Properties, and to hold itself out as being a legal entity, separate
and apart from any other Person.

42.           With
respect to each related Underlying Mortgage Loan, no advance of funds has been
made other than pursuant to the loan documents, directly or indirectly, by
Seller to the Mortgagor and no funds have been received from any Person other
than the Mortgagor, for or on account of payments due on the Mortgage Note or
the Mortgage related thereto.

43.           With
respect to each related Underlying Mortgage Loan, as of the Purchase Date for
the related Purchased Loan, there was no pending action, suit or proceeding, or
governmental investigation of which it has received notice, against the
Mortgagor or the related Mortgaged Property the adverse outcome of which could
reasonably be expected to materially and adversely affect such Mortgagor’s
ability to pay principal, interest or any other amounts due under such
Underlying Mortgage Loan or the security intended to be provided by the
Underlying Mortgage Loan documents or the current use of the Mortgaged
Property.

44.           With
respect to each related Underlying Mortgage Loan, if the related Mortgage is a
deed of trust, a trustee, duly qualified under applicable law to serve as such,
has either been properly designated and serving under such Mortgage or may be
substituted in accordance with the Mortgage and applicable law.

45.           With
respect to the Purchased Loan and each related Underlying Mortgage Loan, such
Underlying Mortgage Loan and the Purchased Loan and all interest thereon
(exclusive of any default interest, late charges or prepayment premiums)
contracted for complied as of the date of origination with, or is exempt from,
applicable state or federal laws, regulations and other requirements pertaining
to usury.

46.           Each
Underlying Mortgage Loan that is cross-collateralized is cross-collateralized
only with other Underlying Mortgage Loans sold pursuant to this Agreement.

47.           The
improvements located on the Mortgaged Property are either not located in a
federally designated special flood hazard area or, if so located, the Mortgagor
is required to maintain or the Mortgagee maintains, flood insurance with
respect to such improvements and such policy is in full force and effect in an
amount no less than the lesser of (i) the original principal balance of the
Underlying Mortgage Loan, (ii) the value of such improvements on the related
Mortgaged Property located in such flood hazard area or (iii) the maximum
allowed under the related federal flood insurance program.

48.           All
escrow deposits and payments required pursuant to the Underlying Mortgage Loan
as of the Purchase Date required to be deposited with Seller in accordance with
the Underlying Mortgage Loan documents have been so deposited, are in the
possession, or under the control, of Seller or its agent and there are no
deficiencies in connection therewith.

 

24

 

49.           With
respect to each related Underlying Mortgage Loan, as of the Purchase Date, the
related Mortgagor, the related lessee, franchisor or operator was in possession
of all material licenses, permits and authorizations then required for use of
the related Mortgaged Property by the related Mortgagor. The Underlying
Mortgage Loan documents require the borrower to maintain all such licenses,
permits and authorizations.

50.           With
respect to the B Note and each related Underlying Mortgage Loan, the
origination (or acquisition, as the case may be), servicing and collection
practices used by Seller with respect to such Underlying Mortgage Loan have
been in all respects legal and have met customary industry standards for
servicing of commercial mortgage loans for conduit loan programs.

51.           With
respect to each related Underlying Mortgage Loan, except for Mortgagors under
Underlying Mortgage Loans the Mortgaged Property with respect to which includes
a Ground Lease, the related Mortgagor (or its affiliate) has title in the fee
simple interest in each related Mortgaged Property.

52.           The
documents for each related Underlying Mortgage Loan provide that each such
Underlying Mortgage Loan is non-recourse to the related Mortgagor except that
the related Mortgagor and an additional guarantor accepts responsibility for
any loss uncured due to fraud on the part of the Mortgagor and/or other
intentional material misrepresentation. Furthermore, the documents for each
related Underlying Mortgage Loan provide that the related Mortgagor and an
additional guarantor shall be liable to the lender for losses incurred due to
the misapplication or misappropriation of rents collected in advance or
received by the related Mortgagor after the occurrence of an event of default
and not paid to the Mortgagee or applied to the Mortgaged Property in the
ordinary course of business, misapplication or conversion by the Mortgagor of
insurance proceeds or condemnation awards or breach of the environmental
covenants in the related Underlying Mortgage Loan documents.

53.           Subject
to the exceptions set forth in paragraph (17) and upon possession of the
Mortgaged Property as required under applicable state law, any Assignment of
Leases set forth in the Mortgage or separate from the related Mortgage and
related to and delivered in connection with each Underlying Mortgage Loan
establishes and creates a valid, subsisting and enforceable lien and security
interest in the related Mortgagor’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.

54.           With
respect to each related Underlying Mortgage Loan, any prepayment premium and
yield maintenance charge constitutes a “customary prepayment penalty” within
the meaning of Treasury Regulations Section 1.860G-1(b)(2).

55.           If
any related Underlying Mortgage Loan contains a provision for any defeasance of
mortgage collateral, such Underlying Mortgage Loan permits defeasance (1) no
earlier than two years after any securitization of the Underlying Mortgage Loan
or the B Note and (2) only with substitute collateral constituting “government
securities” within the meaning of Treasury Regulations Section
1.860G-2(a)(8)(i) in an amount sufficient to make all scheduled payments under
the Mortgage Note. No related Underlying Mortgage Loan was originated with 

 

25

 

the intent to
collateralize a REMIC offering with obligations that are not real estate
mortgages. In addition, if the Mortgage related to any such Underlying Mortgage
Loan contains such a defeasance provision, it provides (or otherwise contains
provisions pursuant to which the holder can require) that an opinion be
provided to the effect that such holder has a first priority perfected security
interest in the defeasance collateral. The related Underlying Mortgage Loan
documents permit the lender to charge all of its expenses associated with a
defeasance to the Mortgagor (including rating agencies’ fees, accounting fees
and attorneys’ fees), and provide that the related Mortgagor must deliver (or
otherwise, the Underlying Mortgage Loan documents contain certain provisions
pursuant to which the lender can require) (a) an accountant’s certification as
to the adequacy of the defeasance collateral to make payments under the related
Underlying Mortgage Loan for the remainder of its term, (b) an opinion of
counsel that the defeasance complies with all applicable REMIC Provisions, and
(c) assurances from each applicable Rating Agency that the defeasance will not
result in the withdrawal, downgrade or qualification of the ratings assigned to
any certificates backed by the related Underlying Mortgage Loan or the B Note.
Notwithstanding the foregoing, some of the Underlying Mortgage Loan documents
may not affirmatively contain all such requirements, but such requirements are
effectively present in such documents due to the general obligation to comply
with the REMIC Provisions and/or deliver a REMIC opinion of counsel.

56.           With
respect to each related Underlying Mortgage Loan, to the extent required under
applicable law as of the date of origination, and necessary for the
enforceability or collectability of such Underlying Mortgage Loan, the
originator of such Underlying Mortgage Loan was authorized to do business in
the jurisdiction in which the related Mortgaged Property is located at all
times when it originated and held the Underlying Mortgage Loan.

57.           Neither
Seller nor any affiliate thereof has any obligation to make any capital
contributions to the Mortgagor under any related Underlying Mortgage Loan.

58.           With
respect to each related Underlying Mortgage Loan, the related Mortgaged
Property is not encumbered, and none of the Underlying Mortgage Loan documents
permits the related Mortgaged Property to be encumbered subsequent to the
Purchase Date of the related Purchased Loan without the prior written consent
of the holder thereof, by any lien securing the payment of money junior to or
of equal priority with, or superior to, the lien of the related Mortgage (other
than Title Exceptions, taxes, assessments and contested mechanics and
materialmens liens that become payable after such Purchase Date).

59.           With
respect to each related Underlying Mortgage Loan, each related Mortgaged
Property constitutes one or more complete separate tax lots (or the related
Mortgagor has covenanted to obtain separate tax lots and a Person has
indemnified the Mortgagee for any loss suffered in connection therewith or an
escrow of funds in an amount sufficient to pay taxes resulting from a breach
thereof has been established) or is subject to an endorsement under the related
title insurance policy.

60.           With
respect to each related Underlying Mortgage Loan, an appraisal of the related
Mortgaged Property was conducted in connection with the origination of such
Underlying Mortgage Loan; and such appraisal satisfied either (A) the
requirements of the “Uniform Standards of Professional Appraisal Practice” as
adopted by the Appraisal Standards 

 

26

 

Board of the Appraisal
Foundation, or (B) the guidelines in Title XI of the Financial Institutions
Reform, Recovery and Enforcement Act or 1989, in either case as in effect on
the date such Underlying Mortgage Loan was originated.

61.           With
respect to each related Underlying Mortgage Loan, the related Underlying
Mortgage Loan documents require the Mortgagor to provide the Mortgagee with
certain financial information at the times required under such Underlying
Mortgage Loan documents.

62.           With
respect to each related Underlying Mortgage Loan, the related Mortgaged
Property is served by public utilities, water and sewer (or septic facilities)
and otherwise appropriate for the use in which the Mortgaged Property is
currently being utilized.

63.           With
respect to each related Mortgaged Property consisting of a Ground Lease, Seller
represents and warrants the following with respect to the related Ground Lease:

(i)            Such
Ground Lease or a memorandum thereof has been or will be duly recorded no later
than 30 days after the Purchase Date of the related Purchased Loan and such
Ground Lease permits the interest of the lessee thereunder to be encumbered by
the related Mortgage or, if consent of the lessor thereunder is required, it
has been obtained prior to the Purchase Date.

(ii)           Upon
the foreclosure of the Underlying Mortgage Loan (or acceptance of a deed in
lieu thereof), the Mortgagor’s interest in such Ground Lease is assignable to
the Mortgagee under the leasehold estate and its assigns without the consent of
the lessor thereunder (or, if any such consent is required, it has been
obtained prior to the Purchase Date).

(iii)          Such
Ground Lease may not be amended, modified, canceled or terminated without the
prior written consent of the Mortgagee and any such action without such consent
is not binding on the Mortgagee, its successors or assigns, except termination
or cancellation if (i) an event of default occurs under the Ground Lease, (ii)
notice thereof is provided to the Mortgagee and (iii) such default is curable
by the Mortgagee as provided in the Ground Lease but remains uncured beyond the
applicable cure period.

(iv)          Such
Ground Lease is in full force and effect, there is no material default under
such Ground Lease, and there is no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
material default under such Ground Lease.

(v)           The
Ground Lease or ancillary agreement between the lessor and the lessee requires
the lessor to give notice of any default by the lessee to the Mortgagee. The
Ground Lease or ancillary agreement further provides that no notice given is
effective against the Mortgagee unless a copy has been given to the Mortgagee
in a manner described in the Ground Lease or ancillary agreement.

 

27

 

(vi)          The
Ground Lease (i) is not subject to any liens or encumbrances superior to, or of
equal priority with, the Mortgage, subject, however, to only the Title
Exceptions or (ii) is subject to a subordination, non-disturbance and
attornment agreement to which the Mortgagee on the lessor’s fee interest in the
Mortgaged Property is subject.

(vii)         A
Mortgagee is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the lessee under the Ground
Lease) to cure any curable default under such Ground Lease before the lessor
thereunder may terminate such Ground Lease.

(viii)        Such
Ground Lease has an original term (together with any extension options, whether
or not currently exercised, set forth therein all of which can be exercised by
the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground
Lease) that extends not less than 20 years beyond the stated maturity date.

(ix)           Under
the terms of such Ground Lease, any estoppel or consent letter received by the
Mortgagee from the lessor, and the related Mortgage, taken together, any
related insurance proceeds or condemnation award (other than in respect of a
total or substantially total loss or taking) will be applied either to the repair
or restoration of all or part of the related Mortgaged Property, with the
Mortgagee or a trustee appointed by it having the right to hold and disburse
such proceeds as repair or restoration progresses, or to the payment or
defeasance of the outstanding principal balance of the Underlying Mortgage
Loan, together with any accrued interest (except in cases where a different
allocation would not be viewed as commercially unreasonable by any commercial
mortgage lender, taking into account the relative duration of the Ground Lease
and the related Mortgage and the ratio of the market value of the related
Mortgaged Property to the outstanding principal balance of such Underlying
Mortgage Loan).

(x)            The
Ground Lease does not impose any restrictions on subletting that would be
viewed as commercially unreasonable by a prudent commercial lender.

(xi)           The
ground lessor under such Ground Lease is required to enter into a new lease
upon termination of the Ground Lease for any reason, including the rejection of
the Ground Lease in bankruptcy.

 

28

 

REPRESENTATIONS
AND WARRANTIES

RE:  PURCHASED LOANS CONSISTING OF
MEZZANINE LOANS

 

1.             The
Mezzanine Loan is a performing mezzanine loan secured by a pledge of all (or
such lesser percentage as Buyer may agree to) of the Capital Stock of a
Mortgagor that owns income producing commercial real estate.

2.             As
of the Purchase Date, such Mezzanine Loan complies in all material respects
with, or is exempt from, all requirements of federal, state or local law
relating to such Mezzanine Loan.

3.             Immediately
prior to the sale, transfer and assignment to Buyer thereof, Seller had good
and marketable title to, and was the sole owner and holder of, such Mezzanine
Loan, and Seller is transferring such Mezzanine Loan free and clear of any and
all liens, pledges, encumbrances, charges, security interests or any other
ownership interests of any nature encumbering such Mezzanine Loan. Upon
consummation of the purchase contemplated to occur in respect of such Mezzanine
Loan on the Purchase Date therefor, Seller will have validly and effectively
conveyed to Buyer all legal and beneficial interest in and to such Mezzanine
Loan free and clear of any pledge, lien, encumbrance or security interest.

4.             No
fraudulent acts were committed by Seller in connection with its acquisition or
origination of such Mezzanine Loan nor were any fraudulent acts committed by
any Person in connection with the origination of such Mezzanine Loan.

5.             All
information contained in the related Preliminary Due Diligence Package (or as
otherwise provided to Buyer) in respect of such Mezzanine Loan is accurate and
complete in all material respects.

6.             Except
as included in the Preliminary Due Diligence Package, Seller is not a party to
any document, instrument or agreement, and there is no document, that by its
terms modifies or affects the rights and obligations of any holder of such
Mezzanine Loan and Seller has not consented to any material change or waiver to
any term or provision of any such document, instrument or agreement and no such
change or waiver exists.

7.             Except
as included in the Preliminary Due Diligence Package or otherwise disclosed to
Buyer, such Mezzanine Loan is presently outstanding, the proceeds thereof have
been fully and properly disbursed and, except for amounts held in escrow by
Seller, there is no requirement for any future advances thereunder.

8.             Seller
has full right, power and authority to sell and assign such Mezzanine Loan and
such Mezzanine Loan or any related Mezzanine Note has not been cancelled,
satisfied or rescinded in whole or part nor has any instrument been executed
that would effect a cancellation, satisfaction or rescission thereof.

 

29

 

9.             Other
than consents and approvals obtained as of the related Purchase Date or those
already granted in the documentation governing such Mezzanine Loan (the “Mezzanine
Loan Documents”), no consent or approval by any Person is required in
connection with Seller’s sale and/or Buyer’s acquisition of such Mezzanine
Loan, for Buyer’s exercise of any rights or remedies in respect of such
Mezzanine Loan or for Buyer’s sale, pledge or other disposition of such
Mezzanine Loan. No third party holds any “right of first refusal”, “right of
first negotiation”, “right of first offer”, purchase option, or other similar
rights of any kind, and no other impediment exists to any such transfer or
exercise of rights or remedies.

10.           The
Mezzanine Collateral is secured by a pledge of equity ownership interests in
the related borrower under the Underlying Mortgage Loan or a direct or indirect
owner of the related borrower and the security interest created thereby has
been fully perfected in favor of Seller as Mezzanine Lender.

11.           The
Underlying Property Owner has been duly organized and is validly existing and
in good standing under the laws of its jurisdiction of organization, with
requisite power and authority to own its assets and to transact the business in
which it is now engaged, the sole purpose of the Underlying Property Owner
under its organizational documents is to own, finance, sell or otherwise manage
the Properties and to engage in any and all activities related or incidental
thereto, and the Underlying Mortgaged Properties constitute the sole assets of
the Underlying Property Owner.

12.           The
Underlying Property Owner has good and marketable title to the Underlying
Mortgaged Property, no claims under the title policies insuring the Underlying
Property Owner’s title to the Properties have been made, and the Underlying
Property Owner has not received any written notice regarding any material
violation of any easement, restrictive covenant or similar instrument affecting
the Underlying Mortgaged Property.

13.           The
representations and warranties made by the borrower (the “Mezzanine Borrower”)
in the Mezzanine Loan Documents were true and correct in all material respects
as of the date such representations and warranties were stated to be true
therein, and there has been no adverse change with respect to the Mezzanine
Loan, the Mezzanine Borrower, the Underlying Mortgaged Property or the
Underlying Property Owner that would render any such representation or warranty
not true or correct in any material respect as of the Purchase Date.

14.           The
Mezzanine Loan Documents provide for the acceleration of the payment of the
unpaid principal balance of the Mezzanine Loan if (i) the related borrower
voluntarily transfers or encumbers all or any portion of any related Mezzanine
Collateral, or (ii) any direct or indirect interest in the related
borrower is voluntarily transferred or assigned, other than, in each case, as
permitted under the terms and conditions of the related loan documents.

15.           Pursuant
to the terms of the Mezzanine Loan Documents: 
(a) no material terms of any related Mortgage may be waived, canceled,
subordinated or modified in any material respect and no material portion of
such Mortgage or the Mortgaged Property may be released without the consent of
the holder of the Mezzanine Loan; (b) no material action may be taken by the
Underlying Property Owner with respect to the Underlying Mortgaged Property 

 

30

 

without the consent of
the holder of the Mezzanine Loan; (c) the holder of the Mezzanine Loan is
entitled to approve the budget of the Underlying Property Owner as it relates
to the Underlying Mortgaged Property; and (d) the holder of the Mezzanine Loan’s
consent is required prior to the Underlying Property Owner incurring any
additional indebtedness.

16.           There
is no (i) monetary default, breach or violation with respect to such Mezzanine
Loan, the Underlying Mortgage Loan or any other obligation of the owner of the
Underlying Mortgaged Property (the “Underlying Property Owner”), (ii)
material non-monetary default, breach or violation with respect to such
Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the
Underlying Property Owner or (iii) event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration.

17.           No
default or event of default has occurred under any agreement pertaining to any
lien or other interest that ranks pari passu with
or senior to the interests of the holder of such Mezzanine Loan or with respect
to any Underlying Mortgage Loan or other indebtedness in respect of the related
Underlying Mortgaged Property and there is no provision in any agreement
related to any such lien, interest or loan which would provide for any increase
in the principal amount of any such lien, other interest or loan.

18.           Seller’s
security interest in the Mezzanine Loan is covered by a UCC-9 insurance policy
(the “UCC-9 Policy”) in the maximum principal amount of the Mezzanine
Loan insuring that the related pledge is a valid first priority lien on the
collateral pledged in respect of such Mezzanine Loan (the “Mezzanine
Collateral”), subject only to the exceptions stated therein (or a pro forma
title policy or marked up title insurance commitment on which the required
premium has been paid exists which evidences that such UCC-9 Policy will be
issued), such UCC-9 Policy (or, if it has yet to be issued, the coverage to be
provided thereby) is in full force and effect, no material claims have been
made thereunder and no claims have been paid thereunder, Seller has not done,
by act or omission, anything that would materially impair the coverage under
the UCC-9 Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has
yet to be issued, the coverage to be provided thereby) will inure to the
benefit of Buyer without the consent of or notice to the insurer.

19.           The
Mezzanine Loan, and each party involved in the origination of the Mezzanine
Loan, complied as of the date of origination with, or was exempt from,
applicable state or federal laws, regulations and other requirements pertaining
to usury.

20.           Seller
has delivered to Buyer or its designee the original promissory note made in
respect of such Mezzanine Loan, together with an original assignment thereof
executed by Seller in blank.

21.           The
Seller has not received any written notice that the Mezzanine Loan may be
subject to reduction or disallowance for any reason, including without
limitation, any setoff, right of recoupment, defense, counterclaim or
impairment of any kind.

 

31

22.           The
Seller has no obligation to make loans to, make guarantees on behalf of, or
otherwise extend credit to, or make any of the foregoing for the benefit of,
the Mezzanine Borrower or any other person under or in connection with the
Mezzanine Loan.

23.           The
servicing and collection practices used by the servicer of the Mezzanine Loan,
and the origination practices of the related originator, have been in all
respects legal, proper and prudent and have met customary industry standards by
prudent institutional commercial mezzanine lenders and mezzanine loan servicers
except to the extent that, in connection with its origination, such standards
were modified as reflected in the documentation delivered to Buyer.

24.           If
applicable, the ground lessor consented to and acknowledged that (i) the
Mezzanine Loan is permitted / approved, (ii) any foreclosure of the Mezzanine
Loan and related change in ownership of the ground lessee will not require the
consent of the ground lessor or constitute a default under the ground lease,
(iii) copies of default notices would be sent to Mezzanine Lender and (iv) it
would accept cure from Mezzanine Lender on behalf of the ground lessee.

25.           To
the extent the Buyer was granted a security interest with respect to the
Mezzanine Loan, such interest (i) was given for due consideration, (ii) has
attached, (iii) is perfected, (iv) is a first priority lien, and (v) has been
appropriately assigned to the Buyer by the Underlying Property Owner.

26.           No
consent, approval, authorization or order of, or registration or filing with,
or notice to, any court or governmental agency or body having jurisdiction or
regulatory authority is required for any transfer or assignment by the holder
of such Mezzanine Loan.

27.           Seller
has not received written notice of any outstanding liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind for which the holder of such Mezzanine Loan is or may
become obligated.

28.           Seller
has not advanced funds, or knowingly received any advance of funds from a party
other than the borrower relating to such Mezzanine Loan, directly or
indirectly, for the payment of any amount required by such Mezzanine Loan.

29.           All
real estate taxes and governmental assessments, or installments thereof, which
would be a lien on any related Underlying Mortgaged Property and that prior to
the Purchase Date for the related Purchased Loan have become delinquent in
respect of such Underlying Mortgaged Property have been paid, or an escrow of
funds in an amount sufficient to cover such payments has been established. For
purposes of this representation and warranty, real estate taxes and
governmental assessments and installments thereof shall not be considered
delinquent until the earlier of (a) the date on which interest and/or penalties
would first be payable thereon and (b) the date on which enforcement action is
entitled to be taken by the related taxing authority.

30.           As
of the Purchase Date for the related Purchased Loan, each related Underlying
Mortgaged Property was free and clear of any material damage (other than
deferred

 

 

32

maintenance for which
escrows were established at origination) that would affect materially and
adversely the value of such Underlying Mortgaged Property as security for the
related Underlying Mortgage Loan and there was no proceeding pending or, based
solely upon the delivery of written notice thereof from the appropriate
condemning authority, threatened for the total or partial condemnation of such
Underlying Mortgaged Property.

31.           As
of the date of origination of the Mezzanine Loan, all insurance coverage
required under the Mezzanine Loan Documents and/or any Mortgage Loan related to
the Underlying Mortgaged Property, which insurance covered such risks as were
customarily acceptable to prudent commercial and multifamily mortgage lending
institutions lending on the security of property comparable to the related
Underlying Mortgaged Property in the jurisdiction in which such Underlying
Mortgaged Property is located, and with respect to a fire and extended perils
insurance policy, is in an amount (subject to a customary deductible) at least
equal to the lesser of (i) the replacement cost of improvements located on such
Underlying Mortgaged Property, or (ii) the outstanding principal balance of the
Underlying Mortgage Loan, and in any event, the amount necessary to prevent
operation of any co-insurance provisions; and, except if such Underlying
Mortgaged Property is operated as a mobile home park, is also covered by
business interruption or rental loss insurance, in an amount at least equal to
12 months of operations of the related Underlying Mortgaged Property, all of
which was in full force and effect with respect to each related Underlying
Mortgaged Property; and, as of the Purchase Date for the related Purchased
Loan, all insurance coverage required under the Mezzanine Loan Documents and/or
any Underlying Mortgage Loan related to the Underlying Mortgaged Property,
which insurance covers such risks and is in such amounts as are customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Underlying
Mortgaged Property in the jurisdiction in which such Underlying Mortgaged
Property is located, is in full force and effect with respect to each related
Underlying Mortgaged Property; all premiums due and payable through the
Purchase Date for the related Purchased Loan have been paid; and no notice of
termination or cancellation with respect to any such insurance policy has been
received by Seller; and except for certain amounts not greater than amounts
which would be considered prudent by an institutional commercial and/or multifamily
mortgage lender with respect to a similar mortgage loan and which are set forth
in the Mezzanine Loan Documents and/or any Underlying Mortgage Loan related to
the Underlying Mortgaged Property, any insurance proceeds in respect of a
casualty loss, will be applied either (i) to the repair or restoration of all
or part of the related Underlying Mortgaged Property or (ii) the reduction of
the outstanding principal balance of the Underlying Mortgage Loan, subject in
either case to requirements with respect to leases at the related Underlying
Mortgaged Property and to other exceptions customarily provided for by prudent
institutional lenders for similar loans. The Underlying Mortgaged Property is
also covered by comprehensive general liability insurance against claims for
personal and bodily injury, death or property damage occurring on, in or about
the related Underlying Mortgaged Property, in an amount customarily required by
prudent institutional lenders. An architectural or engineering consultant has
performed an analysis of the Underlying Mortgaged Properties located in seismic
zone 3 or 4 in order to evaluate the structural and seismic condition of such
property, for the sole purpose of assessing the probable maximum loss (“PML”)
for the Underlying Mortgaged Property in the event of an earthquake. In such
instance, the PML was based on a 475 year lookback with a 10% probability of
exceedance in a 50 year period. If the resulting report concluded that the PML
would exceed 20% of the amount of the replacement costs of the

 

33

 improvements, earthquake insurance on such
Underlying Mortgaged Property was obtained by an insurer rated at least A-:V by
A.M. Best Company or “BBB-” (or the equivalent) from S&P and Fitch or “Baa3”
(or the equivalent) from Moody’s. If the Underlying Mortgaged Property is
located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina such Underlying
Mortgaged Property is insured by windstorm insurance in an amount at least
equal to the lesser of (i) the outstanding principal balance of such Underlying
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Underlying
Mortgaged Property.

32.           The
insurance policies contain a standard Mortgagee clause naming the Mortgagee,
its successors and assigns as loss payee, in the case of a property insurance
policy, and additional insured in the case of a liability insurance policy and
provide that they are not terminable without 30 days prior written notice to
the Mortgagee (or, with respect to non-payment, 10 days prior written notice to
the Mortgagee) or such lesser period as prescribed by applicable law. Each
Mortgage requires that the Mortgagor maintain insurance as described above or
permits the Mortgagee to require insurance as described above, and permits the
Mortgagee to purchase such insurance at the Mortgagor’s expense if Mortgagor
fails to do so.

33.           There
is no material and adverse environmental condition or circumstance affecting
the Underlying Mortgaged Property; there is no material violation of any
applicable Environmental Law with respect to the Underlying Mortgaged Property;
neither Seller nor the Underlying Property Owner has taken any actions which
would cause the Underlying Mortgaged Property not to be in compliance with all
applicable Environmental Laws; the Underlying Mortgage Loan documents require
the borrower to comply with all Environmental Laws; and each Mortgagor has
agreed to indemnify the Mortgagee for any losses resulting from any material,
adverse environmental condition or failure of the Mortgagor to abide by such
Environmental Laws or has provided environmental insurance.

34.           No
borrower under the Mezzanine Loan nor any Mortgagor under any Underlying
Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency
proceeding.

35.           Each
related Underlying Mortgaged Property was inspected by or on behalf of the
related originator or an affiliate during the 12 month period prior to the
related origination date.

36.           There
are no material violations of any applicable zoning ordinances, building codes
and land laws applicable to the Underlying Mortgaged Property or the use and
occupancy thereof which (i) are not insured by an ALTA lender’s title insurance
policy (or a binding commitment therefor), or its equivalent as adopted in the
applicable jurisdiction, or a law and ordinance insurance policy or (ii) would
have a material adverse effect on the value, operation or net operating income
of the Underlying Mortgaged Property. The Mezzanine Loan Documents and the
Underlying Mortgage Loan documents require the Underlying Mortgaged Property to
comply with all applicable laws and ordinances.

 

 

34

37.           None
of the material improvements which were included for the purposes of
determining the appraised value of any related Underlying Mortgaged Property at
the time of the origination of the Mezzanine Loan or any related Underlying
Mortgage Loan lies outside of the boundaries and building restriction lines of
such property (except Underlying Mortgaged Properties which are legal
non-conforming uses), to an extent which would have a material adverse affect
on the value of the Underlying Mortgaged Property or the related Mortgagor’s
use and operation of such Underlying Mortgaged Property (unless affirmatively
covered by title insurance) and no improvements on adjoining properties
encroached upon such Underlying Mortgaged Property to any material and adverse
extent (unless affirmatively covered by title insurance).

38.           As
of the Purchase Date for the related Purchased Loan, there was no pending
action, suit or proceeding, or governmental investigation of which the Seller,
the Mezzanine Borrower or the Underlying Property Owner has received notice,
against the Mortgagor or the related Underlying Mortgaged Property the adverse
outcome of which could reasonably be expected to materially and adversely affect
the Mezzanine Loan or the Underlying Mortgage Loan.

39.           The
improvements located on the Underlying Mortgaged Property are either not
located in a federally designated special flood hazard area or, if so located,
the Mortgagor is required to maintain or the Mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full force
and effect in an amount no less than the lesser of (i) the original principal
balance of the Underlying Mortgage Loan, (ii) the value of such improvements on
the related Underlying Mortgaged Property located in such flood hazard area or
(iii) the maximum allowed under the related federal flood insurance program.

40.           Except
for Mortgagors under Underlying Mortgage Loans the Underlying Mortgaged Property
with respect to which includes a Ground Lease, the related Mortgagor (or its
affiliate) has title in the fee simple interest in each related Underlying
Mortgaged Property.

41.           The
related Underlying Mortgaged Property is not encumbered, and none of the
Mezzanine Loan Documents or any Underlying Mortgage Loan documents permits the
related Underlying Mortgaged Property to be encumbered subsequent to the
Purchase Date of the related Purchased Loan without the prior written consent
of the holder thereof, by any lien securing the payment of money junior to or
of equal priority with, or superior to, the lien of the related Mortgage (other
than Title Exceptions, taxes, assessments and contested mechanics and
materialmens liens that become payable after such Purchase Date).

42.           Each
related Underlying Mortgaged Property constitutes one or more complete separate
tax lots (or the related Mortgagor has covenanted to obtain separate tax lots
and a Person has indemnified the Mortgagee for any loss suffered in connection
therewith or an escrow of funds in an amount sufficient to pay taxes resulting
from a breach thereof has been established) or is subject to an endorsement
under the related title insurance policy.

43.           An
appraisal of the related Underlying Mortgaged Property was conducted in
connection with the origination of the Underlying Mortgage Loan; and such
appraisal satisfied either (A) the requirements of the “Uniform Standards of
Professional Appraisal Practice” as

 

 

35

adopted by the Appraisal
Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI
of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in
either case as in effect on the date such Underlying Mortgage Loan was
originated.

44.           The
related Underlying Mortgaged Property is served by public utilities, water and
sewer (or septic facilities) and otherwise appropriate for the use in which the
Underlying Mortgaged Property is currently being utilized.

45.           With respect to each related
Underlying Mortgaged Property consisting of a Ground Lease, Seller represents
and warrants the following with respect to the related Ground Lease:

(i)            Such
Ground Lease or a memorandum thereof has been or will be duly recorded no later
than 30 days after the Purchase Date of the related Purchased Loan and such
Ground Lease permits the interest of the lessee thereunder to be encumbered by
the related Mortgage or, if consent of the lessor thereunder is required, it
has been obtained prior to the Purchase Date.

(ii)           Upon
the foreclosure of the Underlying Mortgage Loan (or acceptance of a deed in
lieu thereof), the Mortgagor’s interest in such Ground Lease is assignable to
the Mortgagee under the leasehold estate and its assigns without the consent of
the lessor thereunder (or, if any such consent is required, it has been
obtained prior to the Purchase Date).

(iii)          Such
Ground Lease may not be amended, modified, canceled or terminated without the
prior written consent of the Mortgagee and any such action without such consent
is not binding on the Mortgagee, its successors or assigns, except termination
or cancellation if (i) an event of default occurs under the Ground Lease, (ii)
notice thereof is provided to the Mortgagee and (iii) such default is curable
by the Mortgagee as provided in the Ground Lease but remains uncured beyond the
applicable cure period.

(iv)          Such
Ground Lease is in full force and effect, there is no material default under
such Ground Lease, and there is no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
material default under such Ground Lease.

(v)           The
Ground Lease or ancillary agreement between the lessor and the lessee requires
the lessor to give notice of any default by the lessee to the Mortgagee. The
Ground Lease or ancillary agreement further provides that no notice given is
effective against the Mortgagee unless a copy has been given to the Mortgagee
in a manner described in the Ground Lease or ancillary agreement.

(vi)          The
Ground Lease (i) is not subject to any liens or encumbrances superior to, or of
equal priority with, the Mortgage, subject, however, to only the Title
Exceptions or (ii) is subject to a subordination, non-disturbance and attornment
agreement to which the Mortgagee on the lessor’s fee interest in the Mortgaged
Property is subject.

 

36

(vii)         A
Mortgagee is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the lessee under the
Ground Lease) to cure any curable default under such Ground Lease before the
lessor thereunder may terminate such Ground Lease.

(viii)        Such
Ground Lease has an original term (together with any extension options, whether
or not currently exercised, set forth therein all of which can be exercised by
the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground
Lease) that extends not less than 20 years beyond the stated maturity date.

(ix)           Under
the terms of such Ground Lease, any estoppel or consent letter received by the
Mortgagee from the lessor, and the related Mortgage, taken together, any
related insurance proceeds or condemnation award (other than in respect of a
total or substantially total loss or taking) will be applied either to the
repair or restoration of all or part of the related Underlying Mortgaged
Property, with the Mortgagee or a trustee appointed by it having the right to
hold and disburse such proceeds as repair or restoration progresses, or to the
payment or defeasance of the outstanding principal balance of the Underlying
Mortgage Loan, together with any accrued interest (except in cases where a
different allocation would not be viewed as commercially unreasonable by any
commercial mortgage lender, taking into account the relative duration of the
Ground Lease and the related Mortgage and the ratio of the market value of the
related Mortgaged Property to the outstanding principal balance of such
Underlying Mortgage Loan).

(x)            The
Ground Lease does not impose any restrictions on subletting that would be
viewed as commercially unreasonable by a prudent commercial lender.

(xi)           The
ground lessor under such Ground Lease is required to enter into a new lease
upon termination of the Ground Lease for any reason, including the rejection of
the Ground Lease in bankruptcy.

 

 

37

 

 

REPRESENTATIONS AND WARRANTIES 

RE: PURCHASED LOANS CONSISTING OF PREFERRED EQUITY

 

                                (a)           The
Preferred Equity consists of a performing current pay preferred equity position
(with a put or synthetic maturity date structure replicating a debt instrument)
representing the entire equity ownership interest in an entity that owns income
producing commercial real estate.

                                (b)           There
are no equity or other interests (whether debt or equity) that are senior in
priority or pari passu in right of payment with
respect to the Preferred Equity. The Underlying Mortgage Loan documents
prohibit the creation of class or series of equity whose rights and preferences
are senior or pari passu with the Preferred
Equity as to dividends, distributions, repurchase, redemption, payment upon
redemption, liquidation, winding up or dissolution or any other payments or
distributions or any kind or nature.

                                (c)           Immediately
prior to the sale, transfer and assignment to Buyer, Seller had good and
marketable title to, and was the sole owner of, such Preferred Equity, and
Seller is transferring such Preferred Equity free and clear of any interest or
claim of a third party and free and clear of all liens, pledges, encumbrances,
charges, security interests or any other ownership interests of any nature
encumbering such Preferred Equity.  Upon
consummation of the purchase contemplated to occur in respect of such Preferred
Equity on the Purchase Date therefor, Seller will have validly and effectively
conveyed to Buyer all legal and beneficial interest in and to such Preferred
Equity free and clear of any pledge, lien, encumbrance or security interest.

                                (d)           No
fraudulent acts were committed by Seller in connection with the acquisition or
origination of the Preferred Equity nor were any fraudulent acts committed by
any Person in connection with the origination of such Preferred Equity.

                                (e)           The
Preferred Equity represents the ownership levels set forth in the related
Preliminary Due Diligence Package (or as otherwise identified in writing to
Buyer); all other information contained in the related Preliminary Due
Diligence Package (or as otherwise identified in writing to Buyer) is accurate
and complete in all material respects.

                                (f)            Other
than the document(s) evidencing the Preferred Equity and other documentation
delivered to Buyer in respect of the Preferred Equity (collectively, the “Preferred
Equity Documents”), Seller is not a party to any document, instrument or
agreement, and there is no document of which Seller is aware, that by its terms
modifies or affects the rights and obligations of any holder of such Preferred
Equity and Seller has not consented to any material change or waiver to any
term or provision of any such document, instrument or agreement and no such
change or waiver exists.

                                (g)           Seller
has full right, power and authority to sell and assign such Preferred Equity
and such Preferred Equity has not been cancelled, satisfied, rescinded or
subordinated in whole or in part nor has any instrument been executed that
would effect a cancellation, satisfaction, rescission or subordination thereof;
the Preferred Equity represents an ownership interest in the Preferred Equity
Property Owner; the issuer of the Preferred Equity is the Preferred Equity
Property Owner.

 

 

38

                                (h)           No
consents or approval by any Person is required for Buyer to exercise any rights
or remedies under the Preferred Equity or for Buyer’s sale or other disposition
of such Preferred Equity if Buyer acquires title thereto, other than consents
and approvals which have been obtained; no third party (including the Preferred
Equity Property Owner) holds any statutory or contractual “right of first
refusal”, “right of first negotiation”, “right of first offer”, purchase
option, anti-dilution, co-sale or other similar rights of any kind, and no
other impediment exists to any such transfer or exercise of rights or remedies
with respect to the Preferred Equity or the Underlying Mortgaged Property.

                                (i)            Seller
will, by the Purchase Date, have obtained all approvals, authorizations,
consents, orders or other actions required under the Preferred Equity Documents
and required by any Person or Governmental Authority for the consummation of
the transactions contemplated in this Agreement.

                                (j)            To
the extent the Buyer was granted a security interest with respect to the
Preferred Equity, such interest (i) was given for due consideration, (ii) has
attached, (iii) is perfected, (iv) is a first priority Lien, and (v) has been
appropriately assigned to the Buyer by the Preferred Equity Property Owner.

                                (k)           All
of the Preferred Equity consists of limited liability company or partnership
interests that do not constitute a Security pursuant to Section 8-103(c) of the
UCC. None of the Preferred Equity (i) is dealt in or traded on a securities
exchange or in a securities market, (ii) by its terms expressly provides that
it is a Security governed by Article 8 of the UCC, (iii) is Investment
Property, (iv) is held in a Securities Account or (v) constitutes a Security or
a Financial Asset. None of the Underlying Mortgage Loan documents for the
Preferred Equity consists of Instruments. For purposes of this paragraph (11),
capitalized terms undefined in this Agreement have the meaning given to such
term in the UCC.

                                (l)            The
representations and warranties made by the Preferred Equity Property Owner in
the Preferred Equity Documents were true and correct in all material respects
as of the date such representations and warranties were stated to be true
therein, and there has been no adverse change with respect to the Preferred
Equity or the Underlying Mortgaged Property or the Preferred Equity Property
Owner that would render any such representation or warranty not true or correct
in any material respect as of the Purchase Date.

                                (m)          Seller
has transferred to Buyer the Preferred Equity and delivered true and correct
copies of the documents evidencing the Preferred Equity, and containing the
rights, duties, obligations, liabilities and remedies relative to the Preferred
Equity, to the Custodian.

                                (n)           Seller
has no obligation to make capital contributions to, loans to, make guarantees
on behalf of, or otherwise extend credit to, or make any of the foregoing for
the benefit of, the owner of the Underlying Mortgaged Property related to the
Preferred Equity (the “Preferred Equity Property Owner”) or any other
person under or in connection with the Preferred Equity. Other than the rights
of Buyer as set forth in this Agreement, there exist no options or rights to
purchase any interest in the Preferred Equity.

 

 

39

                                (o)           There
are no outstanding warrants, permitted stock option plans, registration rights
agreements or subscription agreements with respect to the Preferred Equity.

                                (p)           The
Preferred Equity is not convertible into any other interest.

                                (q)           Pursuant
to the terms of the Preferred Equity Documents: (a) no material terms of any
related Mortgage may be waived, canceled, subordinated or modified in any
material respect and no material portion of such Mortgage or the Underlying
Mortgaged Property may be released without the consent of the holder of the
Preferred Equity; (b) no material action may be taken by the Preferred Equity
Property Owner with respect to the Underlying Mortgaged Property without the
consent of the holder of the Preferred Equity; (c) the holder of the Preferred
Equity is entitled to approve the budget of the Preferred Equity Property Owner
as it relates to the Underlying Mortgaged Property; and (d) the holder of the
Preferred Equity’s consent is required prior to the Preferred Equity Property
Owner incurring any additional indebtedness.

                                (r)            The
Preferred Equity and the payments of yield (exclusive of any default interest,
late charges or prepayment premiums) provided for thereunder complied as of the
date of origination with, or is exempt from, applicable laws pertaining to
usury.

                                (s)           The
Preferred Equity is a certificated security in registered form, or is in
uncertificated form and (i) held through the facilities of The Depository Trust
Corporation in New York, New York, or (b) such other clearing organization or
book-entry system as is designated in writing by the Buyer, or (ii) registered
on the books of the issuer thereof.

                                (t)            Certain
balance sheets, financial statements, rent rolls, operating statements and
other financial documentation relating to the Preferred Equity Property Owner
and the Properties (collectively, the “Preferred Equity Financial Documents”)
have been made available to Buyer and such Preferred Equity Financial Documents
represent true and correct copies of documents delivered to Seller by the
Preferred Equity Property Owner; there has been no material adverse change to
the financial condition of the Underlying Mortgaged Property or the Preferred
Equity Property Owner since the date of the relevant Preferred Equity Financial
Document which would have a material adverse effect on the value of the
Preferred Equity; the Preferred Equity Property Owner currently does not have,
nor has it ever had, employment contracts, collective bargaining agreements or
any “employment benefit plan” as defined in the Employee Retirement Income
Security Act of 1974); and the Preferred Equity Property Owner does not have
any material liabilities (including guaranties and other contingent
liabilities) other than those reflected in the Preferred Equity Financial
Documents.

                                (u)           As
of the Purchase Date, (a) the Preferred Equity Property Owner complies (and at
the time of the origination of the Preferred Equity, complied) in all material
respects with all applicable federal, state and local statutes, laws, rules and
regulations, (b) the Preferred Equity Property Owner is not in default under
any order, writ, injunction, decree or demand of any governmental authority,
the violation of which would materially and adversely affect the condition
(financial or otherwise) or business of the Preferred Equity Property Owner and
(c) the Preferred Equity Property Owner is not a debtor in any state or federal
bankruptcy or insolvency proceedings.

 

 

40

                                (v)           The
Preferred Equity Documents contain the following terms and provisions:

                (i)            the
Preferred Equity holder is entitled to receive, among other amounts, monthly
payments of yield, repayment of its equity contribution and exit fees;

                (ii)          
after payment of debt service in connection with any first mortgage loan on the
Underlying Mortgaged Property and payment of approved operating expenses and
capital expenditures, preference is given to the Preferred Equity holder over
all other equity investors and all other Persons with respect to all dividends,
receipts, gains, payments, proceeds (including liquidation proceeds), profits,
payments in kind and other distributions, while losses and liabilities are
allocated to the Preferred Equity holder only after such losses and liabilities
have been allocated to other equity investors;

                (iii)         
upon a sale or refinance of the Underlying Mortgaged Property, the Preferred
Equity holder is entitled to receive distributions prior to all of the equity
holders to be applied to the full repayment of Preferred Equity holder’s equity
contribution, accrued yield and exit fees payable to the Preferred Equity
holder;

                (iv)         
the Preferred Equity holder has the right to inspect the books and records and
otherwise participate in the day-to-day affairs of the issuer of the Preferred
Equity (the “Preferred Equity Issuer”), and the Preferred Equity Issuer
has a continuing obligation to keep the books and records in proper order;

                (v)           financial
statements and budgets of the Preferred Equity Issuer are required to be
delivered to and approved by the Preferred Equity holder;

                (vi)         
the Preferred Equity Issuer is obligated to maintain insurance on the
Underlying Mortgaged Property, which insurance is subject to review and
approval of the Preferred Equity holder;

                (vii)        
the Preferred Equity Issuer has and is obligated to maintain officers and
directors liability insurance in commercially reasonable amounts during the
time the Preferred Equity is outstanding and the holder of the Preferred Equity
is an additional insured under such policies;

                (vi)         
the Preferred Equity holder has a right to receive all notices related to the
Preferred Equity Issuer, all material action or changes and the occurrence of
any event of default or potential event of default under the Underlying
Mortgage Loan documents, any Contractual Obligation, any first mortgage loan on
the Underlying Mortgaged Property and any other Indebtedness of the Preferred
Equity Issuer;

                (vii)        
the Preferred Equity holder has a right to receive copies of all filings with
and notices to or from Governmental Authorities and such other documents
related to the Preferred Equity Issuer and its business and affairs as the
Preferred Equity holder may reasonably request;

                (viii)       
subject to the rights of any lender under a first mortgage loan on the
Underlying Mortgaged Property, the Preferred Equity holder has the right to
approve of, the right to remove 

 

 

41

and the right to replace
property managers, and the fees paid to property managers are subordinate in
right of payment to amounts payable to the Preferred Equity holder;

                (ix)          
the Preferred Equity Issuer is obligated to pay all taxes and other impositions
in a timely manner, and, in the absence of timely payment of such amounts by
the Preferred Equity Issuer, the Preferred Equity holder, may, but is not
required to, pay such amounts;

                (x)            the
Preferred Equity holder has the right to participate in audits of the Preferred
Equity Issuer;

                (xi)           other
equity investors may not transfer their equity interest in the Preferred Equity
Issuer without the prior written consent of the Preferred Equity holder,

                (xii)         
the obligation to repay the amounts owed to the Preferred Equity holder has a
stated maturity date and the Preferred Equity holder has the right to extend
such maturity date, but if the maturity date is not extended, the Preferred
Equity Issuer or other equity investors are required to redeem the Preferred
Equity; in full plus the payment of accrued yield and exit fees;

                (xiii)        
the Underlying Mortgage Loan documents contain usual and customary events of
default (including, without limitation, (1) the failure to timely pay the
monthly preferred yield amounts, any exit fees and all other amounts owed to
the Preferred Equity holder, (2) the amendment of the Preferred Equity Issuer’s
Governing Documents without the Preferred Equity holder’s written consent, (3)
the failure to dismiss a petition for bankruptcy and (4) monetary and
non-monetary defaults under any first mortgage loan on the Underlying Mortgaged
Property) upon occurrence of which the holder of the Preferred Equity may
accelerate any indebtedness owed to it and exercise certain rights and
remedies, including, without limitation, (i) the Preferred Equity holder shall
automatically own a greater interest in the Preferred Equity Issuer, (ii) all
tenants shall be required to deposit monthly rent payments into a lockbox
account established for the benefit of the Preferred Equity holder, (iii) the
right to terminate and replace the Property Manager, (iv) application of all
excess cash flow (after payment of debt service on the first mortgage loan on
the Underlying Mortgaged Property, payment of approved operating expenses and
expenditures and payment of the monthly yield amount to the Preferred Equity
holder) to the amortization of the Preferred Equity, (v) the sale of the
Preferred Equity Issuer’s assets or refinancing of Indebtedness, (vi) sale of
property at public auction where the Preferred Equity holder may bid, (vii)
dissolution of the Preferred Equity Issuer, (viii) termination of agreements
between the Preferred Equity Issuer and third parties, (ix) obtaining specific
performance, (x) withholding amounts otherwise distributable to the other
equity holders, (xi) recovery of costs and expenses (including legal fees and
costs) incurred in enforcing rights and remedies, (xii) exercise rights of a
manager or controlling Person and/or (xiii) exercise any other right or remedy
provided for in the Underlying Mortgage Loan documents;

                (xvi)        the
Preferred Equity holder shall have the right to remove and replace any Person
managing or controlling the Preferred Equity Issuer;

                (xvii)      
the Underlying Mortgage Loan documents prohibit any merger, consolidation,
organic changes or other changes of control with respect to the Preferred
Equity Issuer without the prior written consent of the Preferred Equity holder;

 

42

 

                (xviii)      the
Underlying Mortgage Loan documents prohibit the filing of any bankruptcy,
liquidation, dissolution, receivership or winding up of the Preferred Equity
Issuer without the prior written consent of the Preferred Equity holder;

                (xix)         the
Underlying Mortgage Loan documents prohibit any material changes to the
Preferred Equity Issuer or its properties, assets, liabilities, obligations,
Indebtedness, rights, duties or Contractual Obligations without the prior
written consent of the Preferred Equity holder;

                (xx)          the
Preferred Equity Issuer may not sell, transfer, acquire, finance, lease or
encumber any asset or property, incur any Indebtedness or contingent
obligation, enter into any Contractual Obligation or make any loans or advances
to any existing or future equity investor in the Preferred Equity Issuer
without the prior written consent of the Preferred Equity holder,

                (xxi)         the
Underlying Mortgage Loan documents prohibit any amendment to the Governing
Documents of the Preferred Equity Issuer and all other Underlying Mortgage Loan
documents without the prior written consent of the Preferred Equity holder;

                (xxii)        the
Underlying Mortgage Loan documents prohibit additional equity investors without
consent of the Preferred Equity holder;

                (xxiii)       the
Preferred Equity Issuer may not engage in material improvements to or
renovations of the Underlying Mortgaged Property without the prior written
consent of the Preferred Equity holder;

                (xxiv)       with
respect to any first mortgage loan on the Underlying Mortgaged Property, the
Preferred Equity Issuer may not, without the prior written consent of the
Preferred Equity holder, permit (i) a prepayment on such loan, (ii) any
refinancing of such loan and/or (iii) any amendments to the loan documents for
such loan;

                (xxv)        the
Preferred Equity Issuer may not distribute non-cash property to any equity
investor in the Preferred Equity Issuer without the prior written consent of
the Preferred Equity holder;

                (xxvi)       the
Preferred Equity Issuer has covenanted in its Governing Documents and/or the
Underlying Mortgage Loan documents to own no significant asset other than the
Underlying Mortgaged Property, as applicable, and related assets incidental to
its ownership and operation of such Underlying Mortgaged Property, to hold itself
out as being a legal entity, separate and apart from any other Person and to
otherwise be a special purpose entity, and such provisions may not be changed
without the prior written consent of the Preferred Equity holder;

                (xxvii)     
the Governing Documents of the Preferred Equity Issuer do not include any
provision that by its terms expressly provides that it is a Security governed
by Article 8 of the UCC, and such a provision may not be changed or added
without the prior written consent of the Preferred Equity holder;

 

43

 

                (xxviii)     the
Preferred Equity holder is not obligated to make any additional capital or
other contributions beyond the contribution represented by the Preferred Equity
or, if such obligations exist, the Seller has retained such obligations as a
part of the Retained Interest; and 

                (xxix)       the
Underlying Mortgage Loan documents prohibit payment of any loan made to the
Preferred Equity Issuer by any other equity holder, guarantor or Affiliate of
the foregoing prior to the payment in full of the Preferred Equity.

                                32.           No
consent, approval, authorization or order of, or registration or filing with,
or notice to, any court or governmental agency or body having jurisdiction or
regulatory authority is required for any transfer or assignment by the holder
of such Preferred Equity.

                                33.           Seller
has not received written notice of any outstanding liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind for which the holder of such Preferred Equity is or may become
obligated.

                                34.           Seller
has not advanced funds, or knowingly received any advance of funds from a party
other than the issuer related to such Preferred Equity, directly or indirectly,
for the payment of any amount required by such Preferred Equity.

                                35.           All
real estate taxes and governmental assessments, or installments thereof, which
would be a lien on any related Underlying Mortgaged Property and that prior to
the Purchase Date for the related Purchased Asset have become delinquent in
respect of such Underlying Mortgaged Property have been paid, or an escrow of
funds in an amount sufficient to cover such payments has been established. For
purposes of this representation and warranty, real estate taxes and
governmental assessments and installments thereof shall not be considered
delinquent until the earlier of (a) the date on which interest and/or penalties
would first be payable thereon and (b) the date on which enforcement action is
entitled to be taken by the related taxing authority.

                                36.          
As of the Purchase Date for the related Purchased Asset, each related
Underlying Mortgaged Property was free and clear of any material damage (other
than deferred maintenance for which escrows were established at origination)
that would affect materially and adversely the value of such Underlying
Mortgaged Property as security for the related Underlying Mortgage Loan and
there was no proceeding pending or, based solely upon the delivery of written
notice thereof from the appropriate condemning authority, threatened for the
total or partial condemnation of such Underlying Mortgaged Property.

                                37.          
As of the date of its origination, all insurance coverage required under each
related Mortgage, which insurance covered such risks as were customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Underlying
Mortgaged Property in the jurisdiction in which such Underlying Mortgaged
Property is located, and with respect to a fire and extended perils insurance
policy, is in an amount (subject to a customary deductible) at least equal to
the lesser of (i) the replacement cost of improvements located on such
Underlying Mortgaged Property, or (ii) the outstanding principal balance of the
Underlying Mortgage Loan, and in any event, the 

 

44

 

amount necessary to
prevent operation of any co-insurance provisions; and, except if such
Underlying Mortgaged Property is operated as a mobile home park, is also
covered by business interruption or rental loss insurance, in an amount at
least equal to 12 months of operations of the related Underlying Mortgaged
Property, all of which was in full force and effect with respect to each
related Underlying Mortgaged Property; and, as of the Purchase Date for the
related Purchased Asset, all insurance coverage required under each Mortgage,
which insurance covers such risks and is in such amounts as are customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Underlying
Mortgaged Property in the jurisdiction in which such Underlying Mortgaged
Property is located, is in full force and effect with respect to each related
Underlying Mortgaged Property; all premiums due and payable through the
Purchase Date for the related Purchased Asset have been paid; and no notice of
termination or cancellation with respect to any such insurance policy has been
received by Seller, and except for certain amounts not greater than amounts
which would be considered prudent by an institutional commercial and/or
multifamily mortgage lender with respect to a similar mortgage loan and which
are set forth in the related Mortgage, any insurance proceeds in respect of a
casualty loss, will be applied either (i) to the repair or restoration of all
or part of the related Underlying Mortgaged Property or (ii) the reduction of
the outstanding principal balance of the Underlying Mortgage Loan, subject in
either case to requirements with respect to leases at the related Underlying
Mortgaged Property and to other exceptions customarily provided for by prudent
institutional lenders for similar loans. The Underlying Mortgaged Property is
also covered by comprehensive general liability insurance against claims for
personal and bodily injury, death or property damage occurring on, in or about
the related Underlying Mortgaged Property, in an amount customarily required by
prudent institutional lenders. An architectural or engineering consultant has
performed an analysis of the Underlying Mortgaged Properties located in seismic
zone 3 or 4 in order to evaluate the structural and seismic condition of such
property, for the sole purpose of assessing the probable maximum loss (“PML”)
for the Underlying Mortgaged Property in the event of an earthquake. In such
instance, the PML was based on a 475 year lookback with a 10% probability of exceedance
in a 50 year period. If the resulting report concluded that the PML would
exceed 20% of the amount of the replacement costs of the improvements,
earthquake insurance on such Underlying Mortgaged Property was obtained by an
insurer rated at least A-:V by A.M. Best Company or “BBB-” (or the equivalent)
from S&P and Fitch or “Baa3” (or the equivalent) from Moody’s. If the
Underlying Mortgaged Property is located in Florida or within 25 miles of the
coast of Texas, Louisiana, Mississippi, Alabama, Georgia, North Carolina or
South Carolina such Underlying Mortgaged Property is insured by windstorm
insurance in an amount at least equal to the lesser of (i) the outstanding
principal balance of such Underlying Mortgage Loan and (ii) 100% of the full
insurable value, or 100% of the replacement cost, of the improvements located
on the related Underlying Mortgaged Property.

                                38.           The
insurance policies contain a standard Mortgagee clause naming the Mortgagee,
its successors and assigns as loss payee, in the case of a property insurance
policy, and additional insured in the case of a liability insurance policy and
provide that they are not terminable without 30 days prior written notice to
the Mortgagee (or, with respect to non-payment, 10 days prior written notice to
the Mortgagee) or such lesser period as prescribed by applicable law. Each
Mortgage requires that the Mortgagor maintain insurance as described above or
permits the Mortgagee to require insurance as described above, and permits the
Mortgagee to purchase such insurance at the Mortgagor’s expense if Mortgagor
fails to do so. 

 

45

 

                                39.           There
is no material and adverse environmental condition or circumstance affecting
the Underlying Mortgaged Property; there is no material violation of any
applicable Environmental Law with respect to the Underlying Mortgaged Property;
neither Seller nor the Underlying Property Owner has taken any actions which
would cause the Underlying Mortgaged Property not to be in compliance with all
applicable Environmental Laws; the Underlying Mortgage Loan documents require
the borrower to comply with all Environmental Laws; and each Mortgagor has
agreed to indemnify the Mortgagee for any losses resulting from any material,
adverse environmental condition or failure of the Mortgagor to abide by such
Environmental Laws or has provided environmental insurance.

                                40.           Each
related Underlying Mortgaged Property was inspected by or on behalf of the
related originator or an affiliate during the 12 month period prior to the
related origination date.

                                41.           There
are no material violations of any applicable zoning ordinances, building codes
or land laws applicable to the Underlying Mortgaged Property or the use and
occupancy thereof which (i) are not insured by an ALTA lender’s title insurance
policy (or a binding commitment therefor), or its equivalent as adopted in the
applicable jurisdiction, or a law and ordinance insurance policy or (ii) would
have a material adverse effect on the value, operation or net operating income
of the Underlying Mortgaged Property. The Underlying Mortgage Loan documents
require the Underlying Mortgaged Property to comply with all applicable laws
and ordinances.

                                42.           None
of the material improvements which were included for the purposes of
determining the appraised value of any related Underlying Mortgaged Property at
the time of the origination of the respective Underlying Mortgage Loan lies
outside of the boundaries and building restriction lines of such property (except
Underlying Mortgaged Properties which are legal non-conforming uses), to an
extent which would have a material adverse affect on the value of the
Underlying Mortgaged Property or related Mortgagor’s use and operation of such
Underlying Mortgaged Property (unless affirmatively covered by title insurance)
and no improvements on adjoining properties encroached upon such Underlying
Mortgaged Property to any material and adverse extent (unless affirmatively
covered by title insurance).

                                43.           As
of the Purchase Date for the related Purchased Asset, there was no pending
action, suit or proceeding, or governmental investigation of which the Seller
or the Underlying Property Owner has received notice, against the Mortgagor or
the related Underlying Mortgaged Property the adverse outcome of which could
reasonably be expected to materially and adversely affect the Preferred Equity
or the Underlying Mortgage Loan.

                                44.           The
improvements located on the Underlying Mortgaged Property are either not
located in a federally designated special flood hazard area or, if so located,
the Mortgagor is required to maintain or the Mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full force
and effect in an amount no less than the lesser of (i) the original principal
balance of the Underlying Mortgage Loan, (ii) the value of such improvements on
the related Underlying Mortgaged Property located in such flood hazard area or
(iii) the maximum allowed under the related federal flood insurance program. 

 

46

 

                                45.           Except
for Mortgagors under Underlying Mortgage Loans the Underlying Mortgaged
Property with respect to which includes a Ground Lease, the related Mortgagor
(or its affiliate) has title in the fee simple interest in each related
Underlying Mortgaged Property.

                                46.           The
related Underlying Mortgaged Property is not encumbered, and none of the
Underlying Mortgage Loan documents permits the related Underlying Mortgaged
Property to be encumbered subsequent to the Purchase Date of the related
Purchased Asset without the prior written consent of the holder thereof, by any
lien securing the payment of money junior to or of equal priority with, or
superior to, the lien of the related Mortgage (other than Title Exceptions,
taxes, assessments and contested mechanics and materialmens liens that become
payable after such Purchase Date).

                                47.           Each
related Underlying Mortgaged Property constitutes one or more complete separate
tax lots (or the related Mortgagor has covenanted to obtain separate tax lots
and a Person has indemnified the Mortgagee for any loss suffered in connection
therewith or an escrow of funds in an amount sufficient to pay taxes resulting
from a breach thereof has been established) or is subject to an endorsement
under the related title insurance policy.

                                48.           An
appraisal of the related Underlying Mortgaged Property was conducted in
connection with the origination of such Underlying Mortgage Loan; and such
appraisal satisfied either (A) the requirements of the “Uniform Standards of
Professional Appraisal Practice” as adopted by the Appraisal Standards Board of
the Appraisal Foundation, or (B) the guidelines in Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act or 1989, in either case as in
effect on the date such Underlying Mortgage Loan was originated.

                                49.           The
related Underlying Mortgaged Property is served by public utilities, water and
sewer (or septic facilities) and otherwise appropriate for the use in which the
Underlying Mortgaged Property is currently being utilized.

                                (w)  With respect to each
related Underlying Mortgaged Property consisting of a Ground Lease, Seller
represents and warrants the following with respect to the related Ground Lease:

                (i)            Such
Ground Lease or a memorandum thereof has been or will be duly recorded no later
than 30 days after the Purchase Date of the related Purchased Asset and such
Ground Lease permits the interest of the lessee thereunder to be encumbered by
the related Mortgage or, if consent of the lessor thereunder is required, it
has been obtained prior to the Purchase Date.

                (ii)           Upon
the foreclosure of the Underlying Mortgage Loan (or acceptance of a deed in
lieu thereof), the Mortgagor’s interest in such Ground Lease is assignable to
the Mortgagee under the leasehold estate and its assigns without the consent of
the lessor thereunder (or, if any such consent is required, it has been
obtained prior to the Purchase Date).

                (iii)          Such
Ground Lease may not be amended, modified, canceled or terminated without the
prior written consent of the Mortgagee and any such action without such consent
is not binding on the Mortgagee, its successors or assigns, except termination
or cancellation if (i) an event of default occurs under the Ground Lease, (ii)
notice thereof is provided to the 

 

47

 

Mortgagee and (iii) such
default is curable by the Mortgagee as provided in the Ground Lease but remains
uncured beyond the applicable cure period.

                (iv)          Such
Ground Lease is in full force and effect, there is no material default under
such Ground Lease, and there is no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
material default under such Ground Lease.

                (v)           The
Ground Lease or ancillary agreement between the lessor and the lessee requires
the lessor to give notice of any default by the lessee to the Mortgagee. The
Ground Lease or ancillary agreement further provides that no notice given is
effective against the Mortgagee unless a copy has been given to the Mortgagee
in a manner described in the Ground Lease or ancillary agreement.

                (vi)          The
Ground Lease (i) is not subject to any liens or encumbrances superior to, or of
equal priority with, the Mortgage, subject, however, to only the Title
Exceptions or (ii) is subject to a subordination, non-disturbance and
attornment agreement to which the Mortgagee on the lessor’s fee interest in the
Underlying Mortgaged Property is subject.

                (vii)         A
Mortgagee is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the lessee under the
Ground Lease) to cure any curable default under such Ground Lease before the
lessor thereunder may terminate such Ground Lease.

                (viii)        Such
Ground Lease has an original term (together with any extension options, whether
or not currently exercised, set forth therein all of which can be exercised by
the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground
Lease) that extends not less than 20 years beyond the stated maturity date.

                (ix)           Under
the terms of such Ground Lease, any estoppel or consent letter received by the
Mortgagee from the lessor, and the related Mortgage, taken together, any
related insurance proceeds or condemnation award (other than in respect of a
total or substantially total loss or taking) will be applied either to the
repair or restoration of all or part of the related Underlying Mortgaged
Property, with the Mortgagee or a trustee appointed by it having the right to
hold and disburse such proceeds as repair or restoration progresses, or to the
payment or defeasance of the outstanding principal balance of the Underlying
Mortgage Loan, together with any accrued interest (except in cases where a
different allocation would not be viewed as commercially unreasonable by any
commercial mortgage lender, taking into account the relative duration of the
Ground Lease and the related Mortgage and the ratio of the market value of the
related Underlying Mortgaged Property to the outstanding principal balance of
such Underlying Mortgage Loan).

                (x)            The
Ground Lease does not impose any restrictions on subletting that would be
viewed as commercially unreasonable by a prudent commercial lender.

                (xi)           The
ground lessor under such Ground Lease is required to enter into a new lease
upon termination of the Ground Lease for any reason, including the rejection of
the Ground Lease in bankruptcy.

 

48

 

REPRESENTATIONS AND
WARRANTIES

RE:  PURCHASED SECURITIES

 

1.             The
Purchased Security consists of pass-through certificates representing
beneficial ownership interests in one or more REMICs consisting of one or more
first lien mortgage loans secured by commercial and/or multifamily properties.

2.             Immediately
prior to the sale, transfer and assignment to Buyer thereof, Seller had good
and marketable title to, and was the sole owner and holder of, such Purchased
Security, and Seller is transferring such Purchased Security free and clear of
any and all liens, pledges, encumbrances, charges, security interests or any
other ownership interests of any nature encumbering such Purchased Security.

3.             Seller
has full right, power and authority to sell and assign such Purchased Security
and such Purchased Security has not been cancelled, satisfied or rescinded in
whole or part nor has any instrument been executed that would effect a
cancellation, satisfaction or rescission thereof.

4.             Other
than consents and approvals obtained as of the related Purchase Date or those
already granted in the related documents governing such Purchased Security, no
consent or approval by any Person is required in connection with Buyer’s
acquisition of such Purchased Security, for Buyer’s exercise of any rights or
remedies in respect of such Purchased Security or for Buyer’s sale or other
disposition of such Purchased Security. No third party holds any “right of
first refusal”, “right of first negotiation”, “right of first offer”, purchase
option, or other similar rights of any kind, and no other impediment exists to
any such transfer or exercise of rights or remedies.

5.             Upon
consummation of the purchase contemplated to occur in respect of such Purchased
Security on the Purchase Date therefor, Seller will have validly and
effectively conveyed to Buyer all legal and beneficial interest in and to such
Purchased Security free and clear of any and all liens, pledges, encumbrances,
charges, security interests or any other ownership interests of any nature.

6.             The
Purchased Security is a certificated security in registered form, or is in
uncertificated form and held through the facilities of (a) The Depository Trust
Corporation in New York, New York, or (b) such other clearing organization or
book-entry system as is designated in writing by the Buyer.

7.             With
respect to any Purchased Security that is a certificated security, Seller has
delivered to Buyer or its designee such certificated security, along with any
and all certificates, assignments, bond powers executed in blank, necessary to
transfer such certificated security under the issuing documents of such
Purchased Security. 

 

49

 

8.             All
information contained in the related Preliminary Due Diligence Package (or as
otherwise provided to Buyer) in respect of such Purchased Security is accurate
and complete in all material respects.

9.             As
of the date of its issuance, such Purchased Security complied in all material
respects with, or was exempt from, all requirements of federal, state or local
law relating to the issuance thereof including, without limitation, any
registration requirements of the Securities Act of 1933, as amended.

10.           Except
as included in the Preliminary Due Diligence Package, there is no document that
by its terms modifies or affects the rights and obligations of the holder of
such Purchased Security, the terms of the related pooling and servicing
agreement or any other agreement relating to the Purchased Security, and, since
issuance, there has been no material change or waiver to any term or provision
of any such document, instrument or agreement.

11.           There
is no (i) monetary default, breach or violation exists with respect to any
pooling and servicing agreement or other document governing or pertaining to
such Purchased Security, (ii) material non-monetary default, breach or
violation exists with respect to any such agreement or other document or other
document governing or pertaining to such Purchased Security, or (iii) event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration under such documents and agreements.

12.           No
consent, approval, authorization or order of, or registration or filing with,
or notice to, any court or governmental agency or body having jurisdiction or
regulatory authority over Seller is required for any transfer or assignment of
such Purchased Security.

13.           Except
as including in the Preliminary Due Diligence Package, (i) no interest
shortfalls have occurred and no realized losses have been applied to any
Purchased Security or otherwise incurred with respect to any mortgage loan
related to such Purchased Security nor any class of Purchased Security issued
under the same governing documents as any Purchased Security, and (ii) the
Seller is not aware of any circumstances that could have a Material Adverse
Effect on the Purchased Security.

14.           There
are no circumstances or conditions with respect to the Purchased Security, the
Mortgaged Property or the related Mortgagor’s credit standing that can
reasonably be expected to cause private institutional investors to regard the
Purchased Security as an unacceptable investment or adversely affect the value
or marketability of the Purchased Security.

15.           Seller
has not received written notice of any outstanding liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind for which the holder of such Purchased Security is or
may become obligated.

16.           There
is no material inaccuracy in any servicer report or trustee report delivered to
it (and, in turn, delivered pursuant to the terms of this Agreement) in
connection with such Purchased Security. 

 

50

 

17.           No
servicer of the Purchased Security has made any advances, directly or
indirectly, with respect to the Purchased Security or to any mortgage loan
relating to such Purchased Security.

 

 

 

51

 

EXHIBIT VII

 

	
  ASSET INFORMATION

  
	
  Loan ID #:

  
	
  Borrower Name:

  
	
  Borrower
  Address:

  
	
  Borrower City:

  
	
  Borrower State:

  
	
  Borrower Zip
  Code:

  
	
  Recourse?

  
	
  Guaranteed?

  
	
  Related Borrower
  Name(s):

  
	
  Original
  Principal Balance:

  
	
  Note Date:

  
	
  Loan Date:

  
	
  Loan Type (e.g.
  fixed/arm):

  
	
  Current
  Principal Balance:

  
	
  Current Interest
  Rate (per annum):

  
	
  Paid to date:

  
	
  Annual P&I:

  
	
  Next Payment due
  date:

  
	
  Index (complete
  whether fixed or arm):

  
	
  Gross
  Spread/Margin (complete whether fixed or arm):

  
	
  Life Cap:

  
	
  Life Floor:

  
	
  Periodic Cap:

  
	
  Periodic Floor:

  
	
  Rounding Factor:

  
	
  Lookback (in
  days):

  
	
  Interest
  Calculation Method (e.g., Actual/360):

  
	
  Interest rate
  adjustment frequency:

  
	
  P&I payment
  frequency:

  
	
  First P&I
  payment due:

  
	
  First interest
  rate adjustment date:

  
	
  First payment
  adjustment date:

  
	
  Next interest
  rate adjustment date:

  
	
  Next payment
  adjustment date:

  
	
  Conversion Date:

  
	
  Converted
  Interest Rate Index:

  
	
  Converted
  Interest Rate Spread:

  
	
  Maturity date:

  
	
  Loan term:

  
	
  Amortization
  term:

  
	
  Hyper-Amortization
  Flag:

  
	
  Hyper-Amortization
  Term:

  
	
  Hyper-Amortization
  Rate Increase:

  

 

 

ASSET INFORMATION

 

	
  Balloon Amount:

  
	
  Balloon LTV:

  
	
  Prepayment
  Penalty Flag:

  
	
  Prepayment
  Penalty Text:

  
	
  Lockout Period:

  
	
  Lien Position:

  
	
  Fee/Leasehold:

  
	
  Ground Lease
  Expiration Date:

  
	
  CTL (Yes/No):

  
	
  CTL Rating
  (Moody’s):

  
	
  CTL Rating
  (Duff):

  
	
  CTL Rating
  (S&P):

  
	
  CTL Rating
  (Fitch):

  
	
  Lease Guarantor:

  
	
  CTL Lease Type
  (NNN, NN, Bondable):

  
	
  Property Name:

  
	
  Property
  Address:

  
	
  Property City:

  
	
  Property Zip
  Code:

  
	
  Property Type
  (General):

  
	
  Property Type
  (Specific):

  
	
  Cross-collateralized
  (Yes/No)(1) *:

  
	
  Property Size:

  
	
  Year built:

  
	
  Year renovated:

  
	
  Actual Average
  Occupancy:

  
	
  Occupancy Rent
  Roll Date:

  
	
  Underwritten
  Average Occupancy:

  
	
  Largest Tenant:

  
	
  Largest Tenant
  SF:

  
	
  Largest Tenant
  Lease Expiration:

  
	
  2nd Largest
  Tenant:

  
	
  2nd Largest
  Tenant SF:

  
	
  2nd Largest
  Tenant Lease Expiration:

  
	
  3rd Largest
  Tenant:

  
	
  3rd Largest
  Tenant SF:

  
	
  3rd Largest Tenant Lease Expiration:

  
	
  Underwritten
  Average Rental Rate/ADR:

  
	
  Underwritten
  Vacancy/Credit Loss:

  
	
  Underwritten
  Other Income:

  
	
  Underwritten Total
  Revenues:

  
	
  Underwritten
  Replacement Reserves:

  

 

(1)           If yes, give
property information on each property covered and in aggregate as
appropriate.  Loan ID’s should be denoted
with a suffix letter to signify loans/collateral.

 

 

2

 

ASSET INFORMATION

 

	
  Underwritten
  Management Fees:

  
	
  Underwritten
  Franchise Fees:

  
	
  Underwritten Total Expenses:

  
	
  Underwritten Leasing Commissions:

  
	
  Underwritten Tenant Improvement Costs:

  
	
  Underwritten NOI:

  
	
  Underwritten NCF:

  
	
  Underwritten Debt Service Constant:

  
	
  Underwritten DSCR at NOI:

  
	
  Underwritten DSCR at NCF:

  
	
  Underwritten NOI Period End Date:

  
	
  Hotel Franchise:

  
	
  Hotel Franchise Expiration Date:

  
	
  Appraiser Name:

  
	
  Appraised Value:

  
	
  Appraisal Date:

  
	
  Appraisal Cap Rate:

  
	
  Appraisal Discount Rate:

  
	
  Underwritten LTV:

  
	
  Environmental Report Preparer:

  
	
  Environmental Report Date:

  
	
  Environmental Report Issues:

  
	
  Architectural and Engineering Report Preparer:

  
	
  Architectural and Engineering Report Date:

  
	
  Deferred Maintenance Amount:

  
	
  Ongoing Replacement Reserve Requirement per A&E
  Report:

  
	
  Immediate Repairs Escrow % (e.g. 125%):

  
	
  Replacement Reserve Annual Deposit:

  
	
  Replacement Reserve Balance:

  
	
  Tenant Improvement/Leasing Commission Annual
  Deposits:

  
	
  Tenant Improvement/Leasing Commission Balance:

  
	
  Taxes paid through date:

  
	
  Monthly Tax Escrow:

  
	
  Tax Escrow Balance:

  
	
  Insurance paid through date:

  
	
  Monthly Insurance Escrow:

  
	
  Insurance Escrow Balance:

  
	
  Reserve/Escrow Balance as of Date:

  
	
  Probable Maximum Loss %:

  
	
  Covered by Earthquake Insurance (Yes/No):

  
	
  Number of times 30 days late in last 12 months:

  
	
  Number of times 60 days late in last 12 months:

  
	
  Number of times 90 days late in last 12 months:

  
	
  Servicing Fee:

  
	
  Notes:

  

 

3

 

EXHIBIT VIII

PURCHASE PROCEDURE

Preliminary Approval of New Asset Which is an Eligible
Loan.

(a)           Seller may, from time to time, submit
to the applicable Buyer a Preliminary Due Diligence Package for such Buyer’s
review and approval in order to enter into a Transaction with respect to any
New Asset that Seller proposes to be included as an Asset under the Agreement.

(b)           Upon the applicable Buyer’s receipt
of a complete Preliminary Due Diligence Package, such Buyer, within five (5)
Business Days, shall have the right to request, in such Buyer’s good faith
business judgment, additional diligence materials and deliveries that such
Buyer shall specify on a Supplemental Due Diligence List.  Upon such Buyer’s receipt of all of the
Diligence Materials or such Buyer’s waiver thereof, Buyer within ten (10)
Business Days and following receipt of internal credit approval, shall either
(i) notify Seller of the Purchase Price and the Market Value for the New Asset
or (ii) deny, in such Buyer’s sole and absolute discretion, Seller’s request
for a Transaction.  A Buyer’s failure to
respond to Seller within ten (10) Business Days, as applicable, shall be deemed
to be a denial of Seller’s request for a purchase, unless such Buyer and Seller
have agreed otherwise in writing.

Final Approval of New Asset which is an Eligible Loan. 
Upon a Buyer’s notification to Seller of the Purchase Price and the
Market Value for any New Asset which is an Eligible Loan, Seller shall, if
Seller desires to enter into a Transaction with respect to such New Asset,
satisfy the conditions set forth below (in addition to satisfying the
conditions precedent to obtaining each purchase, as set forth in Section 3(b)
of this Agreement) as a condition precedent to such Buyer’s approval of such
New Asset as an Asset, all in a manner reasonably satisfactory to such Buyer
and pursuant to documentation reasonably satisfactory to such Buyer:

(c)           Delivery of Purchased Loan
Documents.  Seller shall deliver to
the applicable Buyer: (i) with respect to a New Asset that is Pre-Existing
Asset, each of the Purchased Loan Documents, except Purchased Loan Documents
that Seller expressly and specifically disclosed in Seller’s Preliminary Due
Diligence Package were not in Seller’s possession; and (ii) with respect to New
Asset that is Originated Asset, each of the Purchased Loan Documents.

(d)           Environmental and Engineering.  The applicable Buyer shall have received a “Phase
1” (and, if necessary, “Phase 2”) environmental report, an asbestos survey, if
applicable, and an engineering report, each in form reasonably satisfactory to
such Buyer, by an engineer or environmental consultant reasonably approved by
such Buyer.

(e)           Appraisal.  The applicable Buyer shall have received
either an appraisal approved by such Buyer (or a Draft Appraisal), each by an
MAI appraiser.  If the applicable Buyer
receives only a Draft Appraisal prior to entering into a Transaction, 

 

Seller shall deliver an
appraisal approved by such Buyer by an MAI appraiser on or before thirty (30)
days after the Purchase Date.

(f)            Insurance.  The applicable Buyer shall have received
certificates or other evidence of insurance demonstrating insurance coverage in
respect of the Mortgaged Property of types, in amounts, with insurers and
otherwise in compliance with the terms, provisions and conditions set forth in
the Purchased Loan Documents.  Such
certificates or other evidence shall indicate that Seller will be named as an
additional insured as its interest may appear and shall contain a loss payee
endorsement in favor of such additional insured with respect to the policies
required to be maintained under the Purchased Loan Documents.

(g)           Survey.  The applicable Buyer shall have received all
surveys of the Mortgaged Property that are in Seller’s possession.

(h)           Lien Search Reports.  The applicable Buyer or such Buyer’s counsel
shall have received, as reasonably requested by Buyers, satisfactory reports of
UCC, tax lien, judgment and litigation searches and title updates conducted by
search firms and/or title companies acceptable to such Buyer with respect to
the Eligible Loan, Mortgaged Property, Seller and Mortgagor, such searches to
be conducted in each location such Buyer shall reasonably designate.

(i)            Opinions of Counsel.  The applicable Buyer shall have received
copies of all legal opinions in the Seller’s possession with respect to the
Eligible Loan which shall be in form and substance reasonably satisfactory to
such Buyer.

(j)            Additional Real Estate Matters.  Seller shall have delivered to the applicable
Buyer to the extent in Seller’s possession such other real estate related
certificates and documentation as may have been requested by such Buyer, such
as:  (i) certificates of occupancy issued
by the appropriate Governmental Authority and either letters certifying that
the Mortgaged Property is in compliance with all applicable zoning laws issued
by the appropriate Governmental Authority or evidence that the related Title
Policy includes a zoning endorsement and (ii) abstracts of all leases in effect
at the Mortgaged Property and estoppel certificates, in form and substance
acceptable to Buyer, from any ground lessor and from any tenant that occupies
7.5% or more of the rentable space at the Mortgaged Property, and in any event
from tenants whose occupancies aggregate not less than 70% of the occupied
rentable square footage at the Mortgaged Property.

(k)           Other Documents.  The applicable Buyer shall have received such
other documents as such Buyer or its counsel shall reasonably deem necessary.

Within five (5) Business Days of Seller’s satisfaction
of all of the conditions enumerated in clauses (a) through (i) above, the
applicable Buyer shall either (i) if the Purchased Loan Documents with respect
to a New Asset are not reasonably satisfactory in form and substance to the
applicable Buyer, notify Seller that such Buyer has not approved a New Asset as
an Asset or (ii) notify Seller that such Buyer has approved the New Asset as an
Asset.  The applicable 

 

2

 

Buyer’s failure to respond to Seller within two (2)
Business Days shall be deemed to be a denial of Seller’s request that such
Buyer approve the a New Asset, unless such Buyer and Seller have agreed
otherwise in writing.

 

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