TABLE OF CONTENTS

		Page
ARTICLE 1.	APPLICABILITY	1
ARTICLE 2.	DEFINITIONS	1
ARTICLE 3.	INITIATION; CONFIRMATION; TERMINATION; FEES; REDUCTION OF FACILITY AMOUNT	21
ARTICLE 4.	MARGIN MAINTENANCE	30
ARTICLE 5.	INCOME PAYMENTS AND PRINCIPAL PAYMENTS	31
ARTICLE 6.	SECURITY INTEREST	34
ARTICLE 7.	PAYMENT, TRANSFER AND CUSTODY	36
ARTICLE 8.	SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS	43
ARTICLE 9.	RESERVED	43
ARTICLE 10.	REPRESENTATIONS AND WARRANTIES	43
ARTICLE 11.	NEGATIVE COVENANTS OF SELLER	51
ARTICLE 12.	AFFIRMATIVE COVENANTS OF SELLER	52
ARTICLE 13	EVENTS OF DEFAULT; REMEDIES	56
ARTICLE 14.	SINGLE AGREEMENT	61
ARTICLE 15.	RECORDING OF COMMUNICATIONS	61
ARTICLE 16.	NOTICES AND OTHER COMMUNICATIONS	62
ARTICLE 17.	ENTIRE AGREEMENT; SEVERABILITY	62

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ARTICLE 18.	NON-ASSIGNABILITY	62
ARTICLE 19.	GOVERNING LAW	63
ARTICLE 20.	NO WAIVERS, ETC	63
ARTICLE 21.	USE OF EMPLOYEE PLAN ASSETS	63
ARTICLE 22.	INTENT	64
ARTICLE 23.	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	65
ARTICLE 24.	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	65
ARTICLE 25.	NO RELIANCE	66
ARTICLE 26.	INDEMNITY	67
ARTICLE 27.	DUE DILIGENCE	68
ARTICLE 28.	SERVICING	68
ARTICLE 29.	MISCELLANEOUS	69

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ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Advance Rates and Applicable Pricing Rates
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III	Monthly Reporting Package
EXHIBIT IV	Form of Custodial Delivery
EXHIBIT V	Form of Power of Attorney
EXHIBIT VI	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VII	Asset Information
EXHIBIT VIII	Advance Procedure
EXHIBIT IX	Excluded Transferees
EXHIBIT X	Form of Bailee Letter
EXHIBIT XI	[Reserved]
EXHIBIT XII	Form of Margin Deficit Notice
EXHIBIT XIII	UCC Filing Jurisdictions
EXHIBIT XIV	[Reserved]
EXHIBIT XV	Additional Eligible Collateral
EXHIBIT XVI	Form of Servicer Notice
EXHIBIT XVII	Form of Release Letter
EXHIBIT XVIII	[Reserved]
EXHIBIT XIX	Covenant Compliance Certificate
EXHIBIT XX	Control Agreement
EXHIBIT XXI	Form of Custodial Agreement

 

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MASTER REPURCHASE AGREEMENT

MASTER REPURCHASE AGREEMENT, dated as of November 1, 2006, by and among CAPITAL TRUST, INC., a Maryland corporation (the “ Seller ” with respect to the Eligible Assets that it sells to Buyer) and JPMORGAN CHASE BANK, N.A., a banking association organized under the laws of the United States (the “ Buyer ”).

ARTICLE 1.
APPLICABILITY

From time to time the parties hereto may enter into transactions in which Seller and Buyer agree to the transfer from Seller to Buyer all of its rights, title and interest to certain Eligible Assets (as defined herein) or other assets and, in each case, the other related Purchased Items (as defined herein) (collectively, the “ Assets ”) against the transfer of funds by Buyer to Seller, with a simultaneous agreement by Buyer to transfer back to Seller such Assets at a date certain or on demand, against the transfer of funds by Seller to Buyer.  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.  Each individual transfer of an Eligible Asset shall constitute a distinct Transaction.

ARTICLE 2.
DEFINITIONS

“ Accelerated Repurchase Date ” shall have the meaning specified in Article 13(b)(i) of this Agreement.

“ Accepted Servicing Practices ” shall mean with respect to any applicable Purchased Asset, those mortgage servicing practices of prudent mortgage lending institutions that service mortgage and/or mezzanine loans of the same type as such Purchased Asset in the state where the related underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

“ Acceptable Attorney ” means an attorney-at-law that has delivered at Seller’s request a Bailee Letter, with the exception of an attorney whom Buyer has notified Seller is not satisfactory to Buyer.

“ Act of Insolvency ” shall mean, with respect to any Person, (i) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief; (ii) the seeking or consenting to the appointment of a receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (iv) the making of a general assignment for the benefit of

 

creditors; (v) the admission by such Person of its inability to pay its debts or discharge its obligations as they become due or mature; or (vi) that any Governmental Authority or agency or any person, agency or entity acting or purporting to act under Governmental Authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person.

“ Additional Eligible Collateral ” shall mean any of the items indicated on Exhibit XV hereto.

“ Advance Rate ” shall mean, with respect to each Transaction and any Pricing Rate Period, the initial Advance Rate selected by Seller for such Transaction as shown in the related Confirmation, unless otherwise agreed to by Buyer and Seller,.

“ Affiliate ” shall mean, when used with respect to any specified Person, (i) 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, or (ii) any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

“ Affiliated Hedge Counterparty ” shall mean JPMorgan Chase Bank, N.A., or any Affiliate thereof, in its capacity as a party to any Hedging Transaction with Seller.

“ Agreement ” shall mean this Master Repurchase Agreement, dated as of November 1, 2006 by and among Capital Trust, Inc. and JPMorgan Chase Bank, N.A., as such agreement may be modified or supplemented from time to time.

“ Alternative Rate ” shall have the meaning specified in Article 3(h) 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 a Purchased Asset in any Asset Type Grouping:

(i)       so long as no Event of Default 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 attached to this Agreement as being the “Applicable Spread” for Purchased Assets in such Asset Type Grouping for the applicable loan-to-value ratio shown on Schedule I or Rating Agency ratings, as applicable, or such lower rate as may be determined by Buyer in its sole discretion, in the event that the Advance Rate applicable to any Purchased Asset is less than the related Maximum Advance Rate, in each case as determined by the Buyer on each Pricing Rate Determination Date in accordance with Article 3(d) , and

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(ii)      after the occurrence and during the continuance of an Event of Default, the applicable incremental per annum rate described in clause (i) of this definition, plus 400 basis points (4.0%).

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

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

“ Assets ” shall have the meaning specified in Article 1 .

“ B-Note ” means the original promissory note, if any, that was executed and delivered in connection with the subordinate portion of a Senior Mortgage Loan.

“ Bailee Letter ” means a letter from an Acceptable Attorney or from a Title Company, in the form attached to this Agreement as Exhibit X , wherein such Acceptable Attorney or Title Company in possession of a Purchased Asset File (i) acknowledges receipt of such Purchased Asset File, (ii) confirms that such Acceptable Attorney, Title Company, or other Person acceptable to Buyer is holding the same as bailee of Buyer under such letter and (iii) agrees that such Acceptable Attorney or Title Company 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.

“ Bankruptcy Code ” shall mean The United States Bankruptcy Code of 1978, as amended from time to time.

“ 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 are authorized or obligated by law or executive order to be closed.  Notwithstanding the foregoing sentence, when used with respect to the determination of LIBOR, “Business Day” shall only be a day on which commercial banks are open for international business (including dealings in U.S. Dollar deposits) in London, England.

“ Buyer ” shall mean JPMorgan Chase Bank, N.A., or any successor.

“ Buyer’s Margin Amount ” shall mean with respect to any Transaction and any Purchased Asset on any date, the Maximum Advance Rate available for such Purchased Asset, multiplied by the Market Value of such Purchased Asset as of the date of determination.

“ Capitalized Lease Obligations ” shall mean obligations under a lease that are required to be capitalized for financial reporting purposes in accordance with GAAP.  The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on the balance sheet prepared in accordance with GAAP of the applicable Person as of the applicable date.

“ Cash Management Account ” shall mean a segregated interest bearing account, in the name of Buyer, established at the Depository pursuant to the Control Agreement.

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“ CF Sweep Event ” shall mean a determination by Buyer, in accordance with Article 4 of this Agreement, that a Margin Deficit exists.

“ Closing Date ” shall mean November 1, 2006.

“ CMBS ” shall mean p ass-through certificates representing beneficial ownership interests in one or more first lien mortgage loans secured by commercial and/or multifamily properties , regardless of rating.

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

“ Collateral ” shall have the meaning specified in Article 6 of this Agreement.

“ 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 Article 3(b) of this Agreement.

“ Control Agreement ” shall mean that certain Depository Agreement, dated as of the date hereof, among Buyer, Seller and the Depository, in the form attached hereto as Exhibit XX .

“ Covenant Compliance Certificate ” shall have the meaning specified in Article 3(b)(ix) hereof.

“ CRE CDO ” shall mean commercial real estate collateralized debt obligations.

“ Custodial Agreement ” shall mean the Custodial Agreement, dated as of the date hereof, by and among the Custodian, Seller and Buyer, the form of which is attached hereto as Exhibit XXI .

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

“ Custodian ” shall mean LaSalle Bank, National Association, or any successor Custodian appointed by Buyer with the consent of Seller.

“ 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.

“ Defaulted Mortgage Asset ” shall mean any loan (a) that is sixty (60) days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents, (b) as to which an Act of Insolvency shall have occurred with respect

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to the Borrower or (c) as to which a material non-monetary event of default shall have occurred under any document included in the Purchased Asset File for such Purchased Asset.

“ Delinquent Mortgage Asset ” shall mean a loan that is thirty (30) or more days, but less than sixty (60) days, delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents.

“ Depository ” shall mean PNC Bank, National Association, or any successor Depository appointed by Buyer with the prior written consent of Seller (such consent to 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 acceptable to Buyer.

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

“ EBITDA ” shall mean, for any period, the sum, without duplication, for such period of (a) Net Income of Seller for such period, (b) the sum of provisions for such period for income taxes, interest expense, and depreciation and amortization expense used in determining such Net Income, (c) amounts deducted in accordance with GAAP in respect of other non cash expenses in determining such Net Income and (d) the amount of any aggregate net loss (or minus the amount of any gain) during such period arising from the sale, exchange or other disposition of capital assets (determined in accordance with GAAP) by Seller, excluding any reporting implications of Financial Interpretations No. 45 and 46 and FASB 150.

“ EBITDA to Fixed Charge Ratio ” shall mean, determined as of any date of determination, the ratio of (x) EBITDA during the twelve (12) month period ending on the date of determination to (y) the Fixed Charges due and owing during the twelve (12) month period ending on the date of determination.

“ Eligible Assets ” shall mean any of the following types of assets or loans (i) that are acceptable to Buyer in its sole and absolute discretion, exercised in good faith (ii) with respect to which there is not a Material Breach with respect to the representations and warranties set forth in this Agreement (including the exhibits hereto) and (iii) that are secured directly or indirectly by a property that is a multifamily, retail, office, warehouse and hospitality property (or any other property type acceptable to Buyer in its sole discretion, exercised in good faith) and is located in the United States of America, its territories or possessions (or elsewhere, in the sole discretion of Buyer):

(i)           Senior Mortgage Loans;

 

(ii)          B-Notes/Junior Interests;

 

(iii)         Mezzanine Loans;

 

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(iv)    CMBS;

(v)     CRE CDO rated BB-/Ba3 or higher, or, if issued by Seller or an Affiliate of Seller, rated BBB/Baa3 or higher;

(vi)    any Additional Eligible Collateral transferred to Buyer in connection with a Margin Deficit; and

(vii)   any other asset types or classifications that are mutually acceptable to Buyer and Seller, subject to mutual agreement on all necessary and appropriate modifications to this Agreement and each of the Transaction Documents, as determined by Buyer in its sole and absolute discretion.

Notwithstanding anything to the contrary contained in this Agreement, the following shall not be Eligible Assets for purposes of this Agreement: (i) Non-performing loans; (ii) loans that are Defaulted Mortgage Assets or Delinquent Mortgage Assets; or (iii) assets secured directly or indirectly by loans described in the preceding clauses (i) or (ii), other than CMBS or CRE CDO.

“ Eligible Loans ” shall mean any Senior Mortgage Loans, B-Notes/Junior Interests or Mezzanine Loans that are also Eligible Assets.

“ 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 and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq .; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq . and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq .; and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“ Environmental Site Assessment ” shall have the meaning specified in paragraph 30 of the section of Exhibit VI dealing with Eligible Loans.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.  Article 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 Article 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Article 302(c)(11) of ERISA and Article 412(c)(11) of the Code and the lien created under Article 302(f) of ERISA and

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Article 412(n) of the Code, described in Article 414(m) or (o) of the Code of which Seller is a member.

“ Event of Default ” shall have the meaning specified in Article 13 of this Agreement.

“ Extension Period ” shall have the meaning specified in Article 3(l) of this Agreement.

“ Extension Structuring Fee ” shall have the meaning set forth in Article 3(l) of this Agreement.

“ Facility Amount ” shall mean $250,000,000, or such lesser amount as determined by Seller in accordance with Article 3(m) .

“ Federal Funds Rate ” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by Buyer from three federal funds brokers of recognized standing selected by it.

“ Filings ” shall have the meaning specified in Article 6(d) of this Agreement.

“ Financing Lease ” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

“ Fixed Charges ” shall mean, for any period, the sum, without duplication, of (a) Interest Expense, (b) provisions for cash income taxes made and (c) scheduled payments made on account of principal on Indebtedness.

“ Foreclosed Loan ” shall mean an Eligible Loan with respect to which the Underlying Mortgaged Property has been foreclosed upon by Seller or, in the case of Junior Interest, by the Servicer of the Underlying Mortgage Loan.

“ 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 (including any supra-national bodies such as the  European Union or the European Central Bank).

“ Hedge-Required Asset ” shall mean any Eligible Asset that is a fixed rate Eligible Asset.

“ Hedging Transactions ” shall mean, with respect to any or all of the Purchased Assets, 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

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agreement or similar arrangements providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, entered into by any Affiliated Hedge Counterparty or Qualified Hedge Counterparty with Seller, either generally or under specific contingencies that is required by Buyer, or otherwise pursuant to this Agreement, to hedge a Hedge-Required Asset, or that Seller has elected to pledge or transfer to Buyer pursuant to this Agreement.

“ Income ” shall mean, with respect to any Purchased Asset at any time, (x) any collections of principal, interest, dividends, receipts or other distributions or collections, (y) all net sale proceeds received by Seller or any Affiliate of Seller in connection with a sale or liquidation of such Purchased Asset and (z) all payments actually received by Buyer on account of Hedging Transactions.

“ Indebtedness ” shall mean, for any Person,  (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a lien on the property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (f) Indebtedness of others guaranteed by such Person; (g) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (h) Indebtedness of general partnerships of which such Person is secondarily or contingently liable (other than by endorsement of instruments in the course of collection), whether by reason of any agreement to acquire such indebtedness to supply or advance sums or otherwise; (i) Capitalized Lease Obligations of such Person; (j) all net liabilities or obligations under any interest rate, interest rate swap, interest rate cap, interest rate floor, interest rate collar, or other hedging instrument or agreement; and (k) all obligations of such Person under Finance Leases.

“ Indemnified Amounts ” and “ Indemnified Parties ” shall have the meaning specified in Article 26 of this Agreement.

“ Internal Revenue Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ Interest Expense ” shall mean, for any period, the total of all interest expense with respect to all outstanding Indebtedness including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under all Hedge Transactions with respect to interest rates to the extent such net costs are allocable to such period in accordance with GAAP.

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“ Junior Certificate ” shall mean the original participation certificate, if any, that was executed and delivered in connection with a Junior Interest that is a junior participation.

“ Junior Interest ” shall mean a performing junior participation interest in a stabilized or transitional senior commercial, multifamily fixed or floating rate mortgage loan secured by a first lien on multifamily and commercial properties or a subordinate portion of a Senior Mortgage Loan evidenced by a Junior Certificate.

“ Leverage ” shall mean, for any Person, the aggregate amount of indebtedness for money borrowed (included purchase money mortgage loans) outstanding at any time, both secured and unsecured.

“ 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 that appears on 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 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.

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.

“ Lien ” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing),

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and the filing of any financing statement under the UCC or comparable law of any jurisdiction in respect of any of the foregoing.

“ Margin Deadline ” has the meaning specified in Article 4(a) .

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

“ Market Value ” shall mean, with respect to any Purchased Asset as of any relevant date, the market value for such Purchased Asset on such date as determined by Buyer in its sole and absolute discretion, exercised in good faith.  The Market Value shall, at Buyer’s option, be deemed to be zero with respect to each Purchased Asset (i) in respect of which there is a Material Breach of a representation and warranty set forth in Article 10(b)(x)(D) of this Agreement that has not been cured by Seller, if a cure is permitted in accordance with the terms of this Agreement, or such Material Breach is waived in writing by Buyer (assuming that each representation and warranty is made or remade as of each date that the Market Value is determined), (ii) subject to Article 7(c) , in respect of which the complete Purchased Asset File has not been delivered to the Custodian in accordance with the terms of the Custodial Agreement, (iii) that has been released from the possession of the Custodian under the Custodial Agreement to Seller for a period in excess of twenty (20) calendar days, (iv) upon the occurrence of any Act of Insolvency with respect to any co-participant or any other Person having an interest in such Purchased Asset or any related Underlying Mortgaged Property that is senior to, or pari passu with, in right of payment or priority the rights of Buyer in such Purchased Asset, and (v) that is determined by Buyer not to be an Eligible Asset.

The Market Value of each Purchased Asset may be determined by Buyer, in its sole discretion, on each Business Day during the term of this Agreement.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the financial condition or prospects of Seller, (b) the ability of Seller to perform its obligations under any of the Transaction Documents, (c) the validity or enforceability of any of the Transaction Documents, or (d) the rights and remedies of Buyer under any of the Transaction Documents.

“ Material Breach ” shall mean, with respect to any Purchased Asset, a breach of a representation or warranty applicable to such Purchased Asset that results in a determination by Buyer in its sole and absolute discretion, exercised in good faith, that the Market Value of the related Purchased Asset has decreased by an amount greater than 25% of its then current Market Value as a result of the existence of such breach.

“ Materials of Environmental Concern ” shall mean any toxic mold, any petroleum (including, without limitation, crude oil or any fraction thereof) or petroleum products (including, without limitation, gasoline) or any hazardous or toxic substances, materials or wastes, defined as such in or regulated under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, and urea-formaldehyde insulation.

“ Maturity Date ” shall mean November 1, 2007, or such later date as may be in effect pursuant to Article 3(l) hereof.  Notwithstanding anything to the contrary in Article 3(l) hereof, the Maturity Date shall not be any date beyond November 1, 2009.

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“ Maximum Advance Rate ” shall mean, with respect to each Purchased Asset, the “Advance Rate” specified for the applicable Asset Type Grouping in Schedule I attached to this Agreement for the applicable loan-to-value ratio shown in Schedule I or Rating Agency rating, as applicable, or as otherwise agreed to by Seller and Buyer, as determined by Buyer in the Confirmation.

“ Mezzanine Loan ” shall mean a performing loan (or a participation therein) primarily secured by a pledge of full or partial equity ownership interests in one or more entities that own directly or indirectly multifamily or commercial properties that serve as collateral for Senior Mortgage Loans.

“ Mezzanine Note ” shall mean the original promissory note that was executed and delivered in connection with a particular Mezzanine Loan.

“ Minimum Transfer Amount ” shall mean, with respect to Seller, $250,000; provided , however , that if a Default or an Event of Default has occurred and is continuing hereunder, the Minimum Transfer Amount shall be U.S. $0.

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

“ 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, including any A-Note, B-Note or Junior Certificate that is a Purchased Asset.

“ Mortgagor ” shall mean the obligor on a Mortgage Note and the grantor of the related Mortgage, or the obligor on a Mezzanine Note or Junior Interest.

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

“ Net Assets ” shall mean, for any Person, total assets (other than intangibles) at cost, before deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities.

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

“ Net Operating Income ” shall mean, with respect to any Underlying Mortgaged Property, for any period, the actual net operating income (including, but not limited to, any net income from Hedging Transactions) calculated in accordance with customary Commercial Mortgage Securities Association (CMSA) criteria for commercial mortgaged properties.

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

“ Originated Asset ” shall mean any Eligible Asset originated by a Seller.

“ Permitted Liens ” shall have the meaning specified in Article 11(e) hereof.

“ Person ” shall mean an individual, corporation, limited liability company, business trust, partnership, joint tenant or tenant-in-common, trust, joint stock company, joint venture, unincorporated organization, or any other entity of whatever nature, or a Governmental Authority.

“ 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 Article 302 of ERISA or Article 412 of the Code, other than a Multiemployer Plan.

“ Plan Party ” shall have the meaning set forth in Article 21(a) of this Agreement.

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

“ Preliminary Due Diligence Package ” shall mean with respect to any New Asset, a summary memorandum outlining the proposed transaction, including 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 Buyer and Buyer’s counsel pursuant to this Agreement:

(i)       With respect to each Eligible Asset that consists of an Eligible Loan:

(i)       the Asset Information and, if available, maps and photos;

(ii)      Seller’s internal credit memoranda used for approval and underwriting;

(iii)     current rent roll and roll over schedule, if applicable;

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

(v)     copies of appraisal, environmental, engineering and any other third-party reports provided that, if same are not available to Seller at the time of Seller’s submission of the Preliminary Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(vi)    description of the underlying real estate directly or indirectly securing or supporting such Purchased Asset and the ownership structure of the

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borrower and the sponsor (including, without limitation, the board of directors, if applicable) and, to the extent that real property does not secure such Eligible Loan, the related collateral securing such Eligible Loan, if any;

(vii)   indicative debt service coverage ratios;

(viii)  indicative loan-to-value ratio;

(ix)     term sheet outlining the transaction generally;

(x)      Seller’s relationship with the Mortgagor, if any, and Mortgagor’s financial statements; and

(xi)     with respect to any New Asset that is a Pre-Existing Asset, a list that specifically and expressly identifies any Purchased Asset Documents that relate to such New Asset but are not in Seller’s possession;

(xii)    analyses and/or reports with respect to such other matters concerning the New Asset as Buyer may approve in its sole discretion;

(xiii)   documents evidencing such New Asset, or current drafts thereof, including, without limitation, underlying debt and security documents, guaranties, the underlying borrower’s organizational documents, warrant agreements, and loan and collateral pledge agreements, as applicable, provided that, if same are not available to Seller at the time of Seller’s submission of the Preliminary Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(xiv)   in the case of Subordinate Eligible Assets, all information described in this definition that would otherwise be provided for the Underlying Mortgage Loan if it were an Eligible Asset, and in addition, all documentation evidencing such Subordinate Eligible Asset; and

(xv)    any exceptions to the representations and warranties set forth in Exhibit VI to this Agreement.

(ii)      With respect to each Eligible Asset that consists of CMBS:

(i)       the related prospectus or offering circular;

(ii)      all structural and collateral term sheets and all other computational or other similar materials provided to Seller in connection with its acquisition of such CMBS;

(iii)     all distribution date statements issued in respect thereof during the immediately preceding 12 months (or, if less, since the date such CMBS was issued);

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(iv)    all monthly CMSA reporting packages issued in respect of such CMBS during the immediately preceding 12 months (or, if less, since the date such CMBS was issued);

(v)     all Rating Agency pre-sale reports;

(vi)    all asset summaries and any other due diligence materials, including, without limitation, reports prepared by third parties, provided to Seller in connection with its acquisition of such CMBS; and

(vii)   the related pooling and servicing agreement.

With respect to each Eligible Asset that consists of an CRE CDO:

(i)       the related prospectus or offering circular;

(ii)      all remittance statements or other reports issued in respect thereof during the immediately preceding 12 months (or, if less, since the date such CRE CDO was issued);

(iii)     any information or reports provided to Seller in connection with its acquisition or ownership of the CRE CDO asset;

(iv)    the related indenture;

(v)     the most recent annual and quarterly 1934 Act reports filed with respect to the related issuer, if applicable;

(vi)    all structural and collateral term sheets and all other computational or other similar materials provided to Seller in connection with its acquisition of such CRE CDO asset;

(vii)   all distribution date statements issued in respect thereof during the immediately preceding 12 months (or, if less, since the date such CRE CDO was issued);

(viii)  all monthly CMSA reporting packages issued in respect of such CRE CDO during the immediately preceding 12 months (or, if less, since the date such CRE CDO was issued);

(ix)     all Rating Agency pre-sale reports; and

(x)      all asset summaries and any other due diligence materials, including, without limitation, reports prepared by third parties, provided to Seller in connection with its acquisition of such CRE CDO.

“ Pre-Purchase Due Diligence ” shall have the meaning set forth in Article 3(b)(i) hereof.

 

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“ Pre-Purchase Legal Fees ”  shall mean all of the reasonable and necessary out of pocket legal fees, costs and expenses incurred by Buyer in connection with the Pre-Purchase Due Diligence associated with Buyer’s decision as to whether or not to enter into a particular Transaction.

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

“ Pricing Rate ” shall mean, for any Pricing Rate Period, an annual rate equal to the sum of (i) the LIBO Rate and (ii) the relevant Applicable Spread, in each case, for the applicable Pricing Rate Period for the related Purchased Asset. The Pricing Rate shall be subject to adjustment and/or conversion as provided in the Transaction Documents.

“ 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, with respect to any Transaction (a) in the case of the first Pricing Rate Period, 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; provided , however , that in no event shall any Pricing Rate Period for a Purchased Asset end subsequent to the Repurchase Date for such Purchased Asset.

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

“ Purchase Date ” shall mean, with respect to any Purchased Asset, the date on which Buyer purchases such Purchased Asset from Seller hereunder.

“ 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, adjusted after the Purchase Date as set forth below.  The Purchase Price as of the 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 (or the par amount of such Purchased Asset, if lower than Market Value) by (ii) the “Advance Rate” for such Purchased Asset, as set forth in Schedule I attached to this Agreement; provided , that notwithstanding the foregoing, Seller may request that the Purchase Price set forth in a Confirmation be determined by applying a percentage lower than the Advance Rate set forth in Schedule I attached to this Agreement and, in such event, such lower percentage shall be deemed the “Advance Rate” for purposes of this Agreement.  The Purchase Price of any Purchased Asset shall be (x) increased at Seller’s request

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by any additional amount advanced by Buyer to Seller with respect to such Purchased Asset and (y) decreased by (i) the portion of any Principal Payments on such Purchased Asset that are applied pursuant to Article 5 hereof to reduce such Purchase Price and (ii) any other amounts paid to Buyer by Seller to reduce such Purchase Price.

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

“ Purchased Asset File ” shall mean the documents specified as the “Purchased Asset File” in Article 7(b) , together with any additional documents and information required to be delivered to Buyer or its designee (including the Custodian) pursuant to this Agreement; provided that to the extent that Buyer waives, including pursuant to Article 7(c) , receipt of any document in connection with the purchase of an Eligible Asset (but not if Buyer merely agrees to accept delivery of such document after the Purchase Date), such document shall not be a required component of the Purchased Asset File until such time as the Buyer determines in good faith that such document is necessary or appropriate for the servicing of the applicable Purchased Asset.

“ Purchased Asset ” shall mean (i) with respect to any Transaction, the Eligible Asset sold by Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Assets sold by Seller to Buyer and any Additional Eligible Collateral delivered by Seller to Buyer pursuant to Article 4(a) of this Agreement (other than Eligible Assets or Additional Eligible Collateral that have been repurchased by Seller).

“ Purchased Asset Schedule ” shall mean a schedule of Purchased Assets attached to each Trust Receipt and Custodial Delivery containing information substantially similar to the Asset Information.

“ Purchased Items ” shall have the meaning specified in Article 6(a) of this Agreement.

“ Qualified Hedge Counterparty ” shall mean, with respect to any Hedging Transaction, any entity, other than an Affiliated Hedge Counterparty, that (a) qualifies as an “eligible contract participant” as such term is defined in the Commodity Exchange Act (as amended by the Commodity Futures Modernization Act of 2000), (b) the long-term debt of which is rated no less than “A+” by Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies, and “A1” by Moody’s Investor Services, Inc and (c) is reasonably acceptable to Buyer; provided , that with respect to clause (c), if Buyer has approved an entity as a counterparty, it may not thereafter deem such counterparty unacceptable with respect to any previously outstanding Transaction unless clause (a) or clause (b) applies.

“ 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.

“ 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 Deutsche Bank AG.  If any such Reference Bank should be unwilling or unable to act as such or if Buyer shall terminate the appointment of any such Reference Bank or if any of the Reference Banks should be removed from the Reuters Monitor

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Money Rates Service or in any other way fail to meet the qualifications of a Reference Bank, Buyer, in its sole discretion exercised in good faith, may designate alternative banks meeting the criteria specified in clauses (i) and (ii) above.

“ Release Letter ” shall mean a letter substantially in the form of Exhibit XVII hereto (or such other form as may be acceptable to Buyer).

“ 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 Buyer.

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

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

“ REO Property ” shall mean real property acquired by Seller, including a mortgaged property acquired through foreclosure of an Eligible Asset or by deed in lieu of such foreclosure.

“ Repurchase Date ” means the earliest to occur of (i) the Termination Date, (ii) the date set forth in the applicable Confirmation, or (iii) the Accelerated Repurchase Date.

“ Repurchase Price ” shall mean, with respect to any Eligible Asset as of any Repurchase Date or any date on which the Repurchase Price is required to be determined hereunder, the price at which such Eligible Asset is to be transferred from Buyer to Seller; such price will be determined in each case as the sum of the (i) Purchase Price of such Eligible Asset, (ii) the accrued but unpaid Price Differential with respect to such Eligible Asset as of the date of such determination (other than, with respect to calculations in connection with the determination of a Margin Deficit, accrued but unpaid Price Differential for the current Pricing Rate Period), (iii) any other amounts due and owing to Buyer and its Affiliates pursuant to the terms of this Agreement as of such date, (iv) any amounts that would be payable to (a positive amount) a Qualified Hedge Counterparty under any related Hedging Transaction, if such Hedging Transaction were terminated on the date of determination; and (v) any amounts that would be payable to (a positive amount) or by (a negative amount) an Affiliated Hedge Counterparty under any related Hedging Transaction, if such Hedging Transaction were terminated on the date of determination; provided , that with respect to any determination of Repurchase Price that is made in connection with the actual repurchase by Seller of any Purchased Asset (and not in connection with any calculation of Margin Deficit or other determination that is made during the course of a Transaction and that is not related to such a repurchase), (x) the Repurchase Price for such Purchased Asset shall take into account amounts payable to (a positive amount) or by (a negative amount) an Affiliated Hedge Counterparty under any related Hedging Transaction only (i) as long as no Default or Event of Default shall have occurred and be continuing, (ii) to the extent such amounts are actually then due and payable under the related Hedging Transaction with an Affiliated Hedge Counterparty and (iii) to the extent that Seller shall have provided the applicable Affiliated Hedge Counterparty with written instructions that any amounts payable to

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Seller by such Affiliated Hedge Counterparty under the related Hedging Transaction shall instead be paid by such Affiliated Hedge Counterparty directly to Buyer and (y) no amounts relating to a Hedging Transaction with a Qualified Hedge Counterparty shall be taken into account.

“ Requested Exceptions Report ” shall have the meaning assigned thereto in Article 3(b)(vi) .

“ 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 Buyer.

“ Responsible Officer ” shall mean any executive officer of Seller.

“ Seller ” shall mean the entity identified as “Seller” in the Recitals hereto and (ii) such other seller as may be approved by Buyer from time to time.

“ Senior Mortgage Loans ”  shall mean performing senior commercial or multifamily fixed or floating rate mortgage loans, A-notes or senior or pari passu participation interests in those mortgage loans, in each case secured by first liens on multifamily or commercial properties.

“ Servicer ” shall mean Midland Loan Services, Inc.

“ Servicer Notice ” shall mean a notice substantially in the form of Exhibit XVI hereto, as amended, supplemented or otherwise modified from time to time.

“ Servicing Agreement ” shall have the meaning specified in Article 28(b) .

“ Servicing Records ” shall have the meaning specified in Article 28(b) .

“ Structuring Fee ” shall have the meaning specified in Article 3(a)(xi) of this Agreement.

“ Subordinate Eligible Assets ” shall mean Eligible Assets described in items (ii) and (iii) of the definition of Eligible Assets.

“ Subsidiary ” shall mean, as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,

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partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Seller.

“ Supplemental Due Diligence List ” shall mean, with respect to any New Asset, information or deliveries concerning the New Asset that Buyer shall request in addition to the Preliminary Due Diligence Package, including, without limitation, a credit approval memorandum representing the final terms of the underlying transaction, a final loan-to-value ratio computation and a final debt service coverage ratio computation for such proposed New Asset.

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

“ 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 then-applicable Maximum Advance Rate for such Purchased Asset.

“ Telerate Page 3750 ” shall mean the display page currently so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices).

“ Termination Date ” means, with respect to any Transaction, the earlier of (a) 364 days from the date of such Transaction, or if such Transaction is extended, the date to which it is extended; (b) any Early Repurchase Date for such Transaction; (c) the Maturity Date, or (d) the date of the occurrence of an Event of Default.

“ Termination Date Extension Conditions ” shall have the meaning specified in Article 3(f) of this Agreement.

“ Title Company ” shall mean a nationally-recognized title insurance company acceptable to Buyer.

“ Title Policy ” shall have the meaning specified in paragraph 9 of the section of Exhibit VI dealing with Eligible Loans.

“ 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

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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 Non-Securitized 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 (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.

“ Transaction ” shall mean a Transaction, as specified in Article 1 of this Agreement.

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

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

“ UCC ” shall have the meaning specified in Article 6(d) of this Agreement.

“ Underlying Mortgage Loan ” shall mean, with respect to any B-Note, Junior Interest, Mezzanine Loan, CMBS or CRE CDO, a mortgage loan made in respect of the related Underlying Mortgaged Property.

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

(a)           a Senior Mortgage Loan, the Mortgaged Property securing such Senior Mortgage Loan, as appropriate;

(b)           a Junior Interest, the Mortgaged Property securing such Junior Interest, or the Mortgaged Property securing the Mortgage Loan in which such Junior Interest represents a junior participation, as applicable;

(c)           a Mezzanine Loan, the Mortgaged Property that is owned by the Person the equity of which is pledged as collateral security for such Mezzanine Loan;

(d)           a CMBS, the Mortgaged Property securing the mortgage loans related to such security;

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(e)           a CRE CDO, the Mortgaged Property securing the mortgage loans related to such security.

“ Underwriting Issues ” shall mean, with respect to any Purchased 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 Asset Document(s)), to a reasonable institutional mortgage buyer in determining whether to originate or acquire the Purchased Asset in question.

All references to articles, schedules and exhibits are to articles, schedules and exhibits in or to this Agreement unless otherwise specified.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles.  References to “good faith” in this Agreement shall mean “good faith” as defined in Section 1-201(19) of the UCC as in effect in the State of New York as of the date of the Agreement.

ARTICLE 3.
INITIATION; CONFIRMATION; TERMINATION; FEES; REDUCTION OF
FACILITY AMOUNT

Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller payment of an amount equal to all fees and expenses payable hereunder, and all of the following documents, each of which shall be satisfactory in form and substance to Buyer and its counsel:

(a)           The following Transaction Documents, as well as certain other documents, delivered to Buyer:

(i)            this Agreement, duly completed and executed by each of the parties hereto;

(ii)           a Custodial Agreement, duly executed and delivered by each of the parties thereto;

(iii)          a Control Agreement, duly completed and executed by each of the parties thereto;

(iv)          any and all consents and waivers applicable to Seller or to the Purchased Assets;

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(v)           UCC Financing Statements for filing in each of the UCC Filing Jurisdictions described on Exhibit XIII hereto, each naming Seller as “Debtor” and Buyer as “Secured Party” and describing as “Collateral” all of the items set forth in the definition of Collateral and Purchased Items in this Agreement, together with any other documents necessary or requested by Buyer to perfect the security interests granted by Seller in favor of Buyer under this Agreement or any other Transaction Document;

(vi)          any documents relating to any Hedging Transactions;

(vii)         an opinion or opinions of outside counsel to Seller, reasonably acceptable to Buyer;

(viii)        good standing certificates and certified copies of the charters and by-laws (or equivalent documents) of Seller and of all corporate or other authority for Seller with respect to the execution, delivery and performance of the Transaction Documents and each other document to be delivered by Seller from time to time in connection herewith (and Buyer may conclusively rely on such certificate until it receives notice in writing from Seller to the contrary);

(ix)           with respect to any Eligible Asset to be purchased hereunder on the related Purchase Date that is not serviced by Seller, Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a Servicer Notice, fully executed by Seller and Servicer;

(x)            Buyer shall have received payment from Seller of an amount equal to the amount of actual costs and expenses, including, without limitation, the reasonable fees and expenses of counsel to Buyer, incurred by Buyer in connection with the development, preparation and execution of this Agreement, the other Transaction Documents and any other documents prepared in connection herewith or therewith;

(xi)           Buyer shall have received payment from Seller, as consideration for Buyer’s agreement to enter into this Agreement, an up-front structuring fee in an amount equal [****] (calculated as [****] basis points [****] multiplied by the Facility Amount), such amount to be paid to Buyer in U.S. Dollars, in immediately available funds, without deduction, set-off or counterclaim (the “ Structuring Fee ”); and

(xii)          all such other and further documents, documentation and legal opinions as Buyer in its discretion shall reasonably require.

(b)           Buyer’s agreement to enter into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect to the consummation thereof and the intended use of the proceeds of the sale:

 

**** 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.

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(i)            The sum of (A) the unpaid Repurchase Price for all prior outstanding Transactions, (B) the requested Purchase Price for the pending Transaction and (C) all available and unfunded Advances under all prior outstanding Transactions shall not exceed an amount equal to the Facility Amount.

(ii)           Seller shall give Buyer written notice of each Transaction (including the initial Transaction), together with a signed, written confirmation in the form of Exhibit I attached hereto prior to each Transaction (a “ Confirmation ”).  Each Confirmation shall describe the Purchased Assets, shall identify Buyer and Seller, shall be executed by both Buyer and Seller ( provided that , in instances where funds are being wired to an account other than 230-254-632 at JPMorgan Chase Bank, N.A., the Confirmation shall be signed by two (2) authorized signatories of Seller); provided , however , that Buyer shall not be liable to Seller if it inadvertently acts on a Confirmation that has not been signed by two (2) such authorized signatories, and shall set forth:

(A)          the Purchase Date;

(B)           the Purchase Price for the Purchased Asset included in the Transaction;

(C)           the Repurchase Date;

(D)          any additional terms or conditions not inconsistent with this Agreement; and

(E)           the requested Advance Rate and the related Maximum Advance Rate.

(iii)          Buyer shall have the right to review the Eligible Assets Seller proposes to sell to Buyer in any Transaction and to conduct its own due diligence investigation of such Eligible Assets as Buyer determines (“ Pre-Purchase Due Diligence ”).  Buyer shall be entitled to make a determination, in the exercise of its sole discretion, that, in the case of a Transaction, it shall or shall not purchase any or all of the assets proposed to be sold to Buyer by Seller.  On the Purchase Date for the Transaction that shall be not less than one (1) Business Day following the final approval of an Eligible Asset by Buyer in accordance with Exhibit VIII hereto, the Purchased Assets shall be transferred to Buyer or the Custodian against the transfer of the Purchase Price to an account of Seller.  Buyer shall inform Seller of its determination with respect to any such proposed Transaction solely in accordance with Exhibit VIII attached hereto.  Upon the approval by Buyer of a particular proposed Transaction, Buyer shall deliver to Seller a signed copy of the related Confirmation described in clause (i) above, on or before the scheduled date of the underlying proposed Transaction. Prior to the approval of each proposed Transaction by Buyer:

(A)          Buyer shall have (i) determined, in its sole and absolute discretion, that the asset proposed to be sold to Buyer by Seller in such Transaction is an Eligible Asset and (ii) obtained internal credit approval, to be granted or denied in Buyer’s sole and absolute discretion, for the inclusion of such Eligible Asset as a

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Purchased Asset in a Transaction, without regard for any prior credit decisions by Buyer or any Affiliate of Buyer, and with the understanding that Buyer shall have the absolute right to change any or all of its internal underwriting criteria at any time, without notice of any kind to Seller;

(B)           Buyer shall have determined the Pricing Rate applicable to the Transaction (including the Applicable Spread) in accordance with Schedule I hereto or as otherwise agreed by Buyer and Seller;

(C)           no Default or Event of Default shall have occurred and be continuing under this Agreement or any other Transaction Document and no event shall have occurred which has, or would reasonably be expected to have, a Material Adverse Effect;

(D)          Seller shall have delivered to Buyer a list of all exceptions to the representations and warranties relating to the Purchased Asset and any other eligibility criteria for such Purchased Asset (the “ Requested Exceptions Report ”);

(E)           Buyer shall have waived all exceptions in the Requested Exceptions Report;

(F)           both immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof,  (i)  the representations and warranties made by Seller in Article 10, as applicable, (other than the representations and warranties set forth in Article 10(b)(x)(D) shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date) and  (ii) no Material Breach shall have occurred and be continuing with respect to the representations and warranties set forth in Article 10(b)(x)(D);

(G)           subject to Buyer’s right to perform one or more due diligence reviews pursuant to Article 27 , Buyer shall have completed its due diligence review of the Purchased Asset File, and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as Buyer in its sole discretion deems appropriate to review and such review shall be satisfactory to Buyer in its sole discretion and Buyer has consented in writing to the Eligible Asset becoming a Purchased Asset; provided , that if Buyer’s diligence review of the Purchased Asset File requires the delivery of a mortgage file or the equivalent, Seller shall have the benefit of such delayed delivery provisions as are customary in pooling and servicing agreements (e.g., while a promissory note (or analogous document directly evidencing the obligation) must be delivered as a condition of closing, an ancillary document or estoppels may be delivered within a reasonable time frame thereafter);

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(H)          with respect to any Eligible Asset to be purchased hereunder on the related Purchase Date which is not serviced by Seller or an Affiliate thereof, Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a Servicer Notice, fully executed by Seller and Servicer;

(I)            Seller shall have paid to Buyer all legal fees and expenses and the reasonable costs and expenses incurred by Buyer in connection with the entering into of any Transaction hereunder, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of any Transaction hereunder, which amounts, at Buyer’s option, may be withheld from the sale proceeds of any Transaction hereunder;

(J)            Buyer shall have determined, in its sole and absolute discretion, that no Margin Deficit shall exist, either immediately prior to or after giving effect to the requested Transaction;

(K)          Buyer shall have received from Custodian on each Purchase Date an Asset Schedule and Exception Report (as defined in the Custodial Agreement) with respect to each Purchased Asset, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day;

(L)           Buyer shall have received from Seller a Release Letter covering each Eligible Asset to be sold to Buyer;

(M)         Buyer shall not have reasonably determined that the introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions;

(N)          the Repurchase Date for such Transaction is not later than the Maturity Date;

(O)          Seller shall have taken such other action as Buyer shall have reasonably requested in order to transfer the Purchased Assets pursuant to this Agreement and to perfect all security interests granted under this Agreement or any other Transaction Document in favor of Buyer with respect to the Purchased Assets;

(P)           with respect to any Eligible Asset to be purchased hereunder, if such Eligible Asset was acquired by Seller, Seller shall have disclosed to Buyer the acquisition cost of such Eligible Asset (including therein reasonable supporting documentation required by Buyer, if any);

 

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(Q)          Buyer shall have received all such other and further documents, documentation and legal opinions (including, without limitation, opinions regarding the perfection of Buyer’s security interests) as Buyer in its reasonable discretion shall reasonably require;

(R)           Buyer shall have received a copy of any documents relating to any Hedging Transaction, and Seller shall have pledged and assigned to Buyer, pursuant to Article 6 hereunder, all of Seller’s rights under each Hedging Transaction included within a Purchased Asset, if any;

(S)           no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by Seller, however denominated, shall have occurred and be continuing under any Hedging Transaction; and

(T)           the counterparty to Seller in any Hedging Transaction shall be an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and, in the case of a Qualified Hedge Counterparty, in the event that such counterparty no longer qualifies as a Qualified Hedging Counterparty, then, at the election of Buyer, Seller shall ensure that such counterparty posts Additional Eligible Collateral in an amount satisfactory to Buyer under all its Hedging Transactions with Seller, or Seller shall immediately terminate the Hedging Transactions with such counterparty and enter into new Hedging Transactions with a Qualified Hedge Counterparty.

(c)           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 the Pricing Rate Determination Date for all of the next succeeding Pricing Rate Periods for such Transaction.  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 taking into account any changes in the applicable loan-to-value ratio shown on Schedule I or Rating Agency ratings, as applicable, determined to be applicable to such Transaction in the Buyer’s sole and absolute discretion, exercised in good faith, and notify Seller of such rate for such period each such Pricing Rate Determination Date; provided , however , that the Buyer shall have no affirmative obligation to determine whether there has been any change in the related terms or quality of the Purchased Asset to cause any change in the related loan-to-value ratio or Rating Agency ratings.

(d)           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, other than with respect to the Advance Rate or the applicable Price Differential set forth in the related Confirmation, this Agreement shall prevail.

(e)           Buyer shall not be permitted to terminate a Transaction on demand unless an Event of Default has occurred and is continuing.

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(f)            Seller shall be entitled to terminate a Transaction on demand and repurchase the Purchased Asset 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 Assets no later than one (1) Business Day prior to such Early Repurchase Date,

(ii)           on such Early Repurchase Date, Seller pays to Buyer an amount equal to the sum of the Repurchase Price for the applicable Purchased Asset and any other amounts payable under this Agreement (including, without limitation, Article 3(i) of this Agreement) with respect to such Purchased Asset against transfer to Seller or its agent of such Purchased Assets and any related Hedging Transactions;

(iii)          on such Early Repurchase Date, in addition to the amounts set forth in subclause (ii) above, Seller pays to Buyer, on account of a Purchased Asset then subject to a Transaction, an amount sufficient to reduce the Purchase Price for such Purchased Asset to an amount equal to the Target Price for such Purchased Asset.

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

(g)           On the Termination Date for any Transaction, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Assets being repurchased and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Article 5 of this Agreement) against the simultaneous transfer of the Repurchase Price to an account of Buyer.  Notwithstanding the foregoing, provided that all of the extension conditions listed in clauses (i) through (iv) of this Article 3(g) (collectively, the “ Termination Date Extension Conditions ”) shall have been satisfied, Seller may request to extend such Termination Date by no more than 364 days from the date of such extension request by giving written notice to Buyer of such request.  Any failure by Buyer to deliver to Seller an objection in writing within thirty (30) days of such request shall be deemed to be Buyer’s consent to extend such Termination Date.  Notwithstanding the foregoing, in no event shall the Termination Date be extended beyond the Maturity Date.  For purposes of the preceding sentence, the Termination Date Extension Conditions shall be deemed to have been satisfied if:

(i)            Seller shall have given Buyer written notice, not less than thirty (30) days prior but no more than one hundred and eighty (180) days prior to the originally scheduled Termination Date, of Seller’s desire to extend the Termination Date; provided, that if Seller fails to give such notice, Seller shall be deemed to have notified Buyer of its desire to extend the Termination Date;

(ii)           no Material Adverse Effect, Margin Deficit, Default or Event of Default under this Agreement shall have occurred and be continuing as of the date notice is given under subclause (i) above or as of the originally scheduled Termination Date and no “Termination Event,” “Event of Default” or “Potential Event of Default” or any similar

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event by Seller, however denominated, shall have occurred and be continuing under any Hedging Transaction;

(iii)          all representations and warranties (other than the representations or warranties set forth in Article 10(b)(x)(D) ) shall be true, correct, complete and accurate in all material respects and there are no Material Breaches of the representations or warranties set forth in Article 10(b)(x)(D) ); and

(iv)          on the originally scheduled Termination Date, Seller pays to Buyer, on account of each Purchased Asset, an amount sufficient to reduce the Repurchase Price for each Purchased Asset to an amount equal to the applicable Advance Rate used to calculate the Purchase Price of such Purchased Asset multiplied by the Market Value for each such Purchased Asset then subject to a Transaction.

(h)           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 Buyer (as determined and certified by Buyer) of making or maintaining Transactions during such Pricing Rate Period, 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 Buyer, shall be a per annum rate equal to the Federal Funds Rate plus the Applicable Spread (the “ Alternative Rate ”).

(i)            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 Buyer to enter into or maintain Transactions as contemplated by the Transaction Documents, (a) the commitment of 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.

(j)            Upon demand by Buyer, Seller shall indemnify Buyer and hold Buyer harmless from any loss, cost or expense (including, without limitation, attorneys’ fees and disbursements) that Buyer may sustain or incur as a consequence of (i) Buyer’s enforcement of the terms of any of the Transaction Documents, (ii) any actions taken to perfect or continue any lien created under any Transaction Documents, and/or (iii) Buyer entering into any of the Transaction Documents or owning any asset that is the subject of any of the Transaction Documents.  A certificate as to such costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly by Buyer to Seller and shall be prima facie evidence of the information set forth therein.

(k)           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 Buyer

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with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority having jurisdiction over Buyer made subsequent to the date hereof:

(i)            shall subject Buyer to any tax of any kind whatsoever with respect to the Transaction Documents, any Purchased Asset or any Transaction, or change the basis of taxation of payments to Buyer in respect thereof (except for income taxes and any changes in the rate of tax on 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 Buyer that is not otherwise included in the determination of the LIBO Rate hereunder; or

(iii)          shall impose on Buyer any other condition;

and the result of any of the foregoing is to increase the cost to Buyer, by an amount that 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 Buyer, upon its demand, any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable.  If Buyer becomes entitled to claim any additional amounts pursuant to this Article 3(k) , it shall, within ten (10) Business Days of such event, notify Seller of the event by reason of which it has become so entitled.  Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by 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 Assets.

(l)            If 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 compliance by Buyer or any corporation controlling 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 Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer, in the exercise of its reasonable business judgment, to be material, then from time to time, after submission by Buyer to Seller of a written request therefor, Seller shall pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction.  Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by 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 Assets.

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(m)          Upon written request of Seller delivered to Buyer at least forty-five (45 ) days, but in no event earlier than one-hundred and twenty (120) days, prior to the then current Maturity Date, and so long as no Margin Deficit, Default or Event of Default and no event which has a Material Adverse Effect shall have occurred and be continuing on the then current Maturity Date, Buyer may in its sole discretion agree to extend the Maturity Date, for a period not to exceed 364 additional days (the “ Extension Period ”) by giving notice to Seller of such extension and of the new Maturity Date determined by Buyer; provided, that any failure by Buyer to deliver such notice of extension to Seller within thirty (30) days from the date first received by Buyer shall be deemed to be Buyer’s determination not to extend the Maturity Date.  In no event shall the Maturity Date be extended for more than two (2) Extension Periods.  Notwithstanding any other provision of this Article 3(m) or otherwise herein, neither Buyer nor any of its Affiliates shall be under any obligation to extend the original Maturity Date, as the same may have been extended pursuant to this Article 3(m) hereof, or increase the Facility Amount.  In addition, no such Maturity Date extension shall take effect unless and until Buyer shall have received payment from Seller, as consideration for Buyer’s agreement to extend the then-current Maturity Date, of an extension structuring fee in an amount equal to sixteen and one-half (16.5) basis points (0.165%) multiplied by the then-current Facility Amount (the “ Extension Structuring Fee ”), such amount to be paid to Buyer in U.S. Dollars, in immediately available funds, without deduction, set-off or counterclaim.

(n)           The Facility Amount may be permanently reduced from time to time at the election of Seller by an amount (the “ Reduction Amount ”) determined by Seller upon thirty (30) days advance written notice to the Buyer; provided , that (i) any such reduction shall be in increments of $50,000,000, (ii) no Default or Event of Default shall have occurred, be continuing, or exist immediately after giving effect to any such reduction, and (iii) no Margin Deficit shall exist before or immediately after giving effect to any such reduction (and to any payments made contemporaneously therewith).  In the event of such a reduction, Buyer shall promptly remit to Seller an amount equal to the product of (x) the Structuring Fee and/or the Extension Structuring Fee, as appropriate, (y) the ratio of (A) the number of days remaining until the immediately succeeding Maturity Date over (B) 364, and (z) the Reduction Amount.

ARTICLE 4.
MARGIN MAINTENANCE

(a)           If at any time the Buyer’s Margin Amount for all Purchased Assets is less than the Repurchase Price for all Purchased Assets (a “ Margin Deficit ”), then Buyer may by notice to Seller in the form of Exhibit XII (a “ Margin Deficit Notice ”) require Seller to, at Seller’s option, no later than three (3) Business Days following the receipt of a Margin Deficit Notice (the “ Margin Deadline ”) to the extent such Margin Deficit equals or exceeds the Minimum Transfer Amount, (i) transfer to Buyer for no additional consideration (by transfer to Buyer or its designee (including the Custodian) Additional Eligible Collateral, (ii) repurchase some or all of the Purchased Assets at their respective Repurchase Prices, (iii) make a payment (subject to the requirements with respect to termination set forth in Article 3 hereof) in reduction of the Purchase Price, or (iv) choose any combination of the foregoing, such that, after giving effect to such transfers, repurchases and payments, Buyer’s Margin Amount for each Purchased Asset,

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considered individually, shall be equal to or greater than the Repurchase Price for such Purchased Asset.

(b)           The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date.  Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

ARTICLE 5.
INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)           The Cash Management Account shall be established at the Depository pursuant to the Control Agreement concurrently with the execution and delivery of this Agreement by Seller and Buyer.  Buyer shall have sole dominion and control over the Cash Management Account, which shall be subject to the Control Agreement.  All Income in respect of the Purchased Assets and any payments made to Seller 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 Articles 5(b) , 5(c) , 5(d) , 5(e) , 5(f) , and 5(g) of this Agreement.

(b)           With respect to Purchased Assets, each Mortgagor, issuer of a participation, servicer and trustee with respect to the Purchased Asset or borrower under a Purchased Asset shall have previously received from Seller an irrevocable direction letter, instructing, as applicable, the Mortgagor, issuer of a participation, servicer or trustee with respect to the Purchased Asset or borrower to pay all amounts payable under the related Purchased Asset to Servicer pursuant to the Servicing Agreement, for immediate deposit by Servicer into the Cash Management Account pursuant to the Servicing Agreement.  If a Mortgagor, issuer of a participation, servicer or trustee with respect to the Purchased Asset or borrower forwards any Income with respect to a Purchased Asset to Seller or any Affiliate of Seller rather than directly to Servicer, Seller shall, or shall cause such Affiliate to, (i) deliver an additional irrevocable direction letter to the applicable Mortgagor, issuer of a participation, servicer or trustee with respect to the Purchased Asset or borrower and make other best efforts to cause such Mortgagor, issuer of a participation, servicer or trustee with respect to the Purchased Asset or borrower to forward such amounts directly to Servicer and (ii) immediately deposit in the Cash Management Account any such amounts.

(c)           So long as no Event of Default or CF Sweep Event with respect to any Purchased Asset shall have occurred and be continuing, all Income received by the Depository in respect of the Purchased Assets (other than scheduled or unscheduled Principal Payments and net sale proceeds) and the associated Hedging Transactions during each Collection Period shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i)            first , pro rata, (i) to Buyer, an amount equal to the Price Differential that has accrued and is outstanding as of such Remittance Date and (ii) to any Affiliated Hedge Counterparty, any amount then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to a Purchased Asset;

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(ii)           second , to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(iii)          third , to Seller, the remainder, if any.

(d)           So long as no Event of Default or CF Sweep Event shall have occurred and be continuing, any unscheduled Principal Payments and any Principal Payment due on the maturity date of a Purchased Asset 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 in the following order of priority:

(i)            first , pro rata, to Buyer, until the Purchase Price for such Purchased Asset has been reduced to the Target Price for such Purchased Asset as of the date of such payment (as determined by Buyer after giving effect to such Principal Payment and application of net sales proceeds, if applicable) and, solely with respect to any Hedging Transaction with an Affiliated Hedge Counterparty related to such Purchased Asset, an amount equal to any accrued and unpaid breakage costs under such Hedging Transaction related to such Purchased Asset;

(ii)           second , to Buyer, until the related Purchase Price for any other Purchased Asset as to which the Repurchase Price exceeds the Target Price (for this purpose, making such payment in the order of those Purchased Assets with the largest to smallest excess of Repurchase Price over Target Price), until the aggregate Repurchase Price for all of such Purchased Assets has been reduced to the aggregate Target Price for all of the Purchased Assets, respectively as of the date of such payment (as determined by Buyer after giving effect to such Principal Payment and application of net sale proceeds, if applicable);

(iii)          third , to make payment to Buyer of any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(iv)          fourth , to Seller, the remainder of such Principal Payments or net sale proceeds, if applicable.

(e)           So long as no Event of Default or CF Sweep Event shall have occurred and be continuing, any scheduled Principal Payments and any net sale proceeds in excess of the related Repurchase Price in respect of any Purchased Assets that is a portion of the Income received by the Depository during each Collection Period shall be applied by the Depository on the Remittance Date in the following order of priority:

(i)            first , pro rata, to Buyer, until the Purchase Price for such Purchased Asset has been reduced to the Target Price for such Purchased Asset as of the date of such payment (as determined by Buyer after giving effect to such Principal Payment and application of net sales proceeds, if applicable) and, solely with respect to any Hedging Transaction with an Affiliated Hedge Counterparty related to such Purchased Asset, an amount equal to any accrued and unpaid breakage costs under such Hedging Transaction related to such Purchased Asset;

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(ii)           second , to Buyer, until the related Purchase Price for any other Purchased Asset as to which the Repurchase Price exceeds the Target Price (for this purpose, making such payment in the order of those Purchased Assets with the largest to smallest excess of Repurchase Price over Target Price), until the aggregate Repurchase Price for all of such Purchased Assets has been reduced to the aggregate Target Price for all of the Purchased Assets, respectively as of the date of such payment (as determined by Buyer after giving effect to such Principal Payment and application of net sale proceeds, if applicable);

(iii)          third , to make payment to Buyer of any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(iv)          fourth , to Seller, the remainder of such Principal Payments or net sale proceeds, if applicable.

(f)            If Buyer shall have determined that a CF Sweep Event shall have occurred, but no Event of Default shall have occurred and be continuing, all Income (excluding Principal Payments and any net sale proceeds in excess of the related Repurchase Price) received by the Depository in respect of the Purchased Assets and the associated Hedging Transactions shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i)            first , pro rata, (i) to Buyer, an amount equal to the Price Differential that has accrued and is outstanding in respect of all of the Purchased Assets as of such Business Day and (ii) to any Affiliated Hedge Counterparty, any amounts then due and payable to such Affiliated Hedge Counterparty under any Hedging Transaction related to such Purchased Asset;

(ii)           second , to Buyer, an amount equal to the Repurchase Price of each Purchased Asset until the Repurchase Price for such Purchased Asset has been reduced to the Target Price for such Purchased Asset as of the date of such payment (as determined by Buyer after giving effect to such Principal Payment and application of net sale proceeds, if any);

(iii)          third , to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(iv)          fourth , to Seller, any remainder.

(g)           Upon the occurrence and continuance of a CF Sweep Event, but no Event of Default shall have occurred and be continuing, all Principal Payments and any net sale proceeds in excess of the related Repurchase Price received by the Depository in respect of the Purchased Assets and the associated Hedging Transactions shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i)            first , pro rata, to Buyer, an amount equal to the Price Differential that has accreted and is outstanding in respect of all of the Purchased Assets as of such Business Day and any amounts then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to such Purchased Asset;

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(ii)           second , to Buyer, on account of the Repurchase Price of each Purchased Asset until the Repurchase Price for such Purchased Asset has been reduced to the Target Price for such Purchased Asset as of the date of such payment (as determined by Buyer after giving effect to such Principal Payment and application of net sale proceeds, if any);

(iii)          third , to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(iv)          fourth , to remit to Seller any remainder.

(h)           If an Event of Default 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 in the following order of priority:

(i)            first , pro rata, (i) to Buyer, an amount equal to the Price Differential that has accrued and is outstanding in respect of all of the Purchased Assets as of such Business Day and (ii) to any Affiliated Hedge Counterparty, any amounts then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to such Purchased Asset;

(ii)           second , to Buyer on account of the Repurchase Price of the Purchased Assets until the Repurchase Price for all of the Purchased Assets has been reduced to zero;

(iii)          third , to Buyer , an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(iv)          fourth , to remit to Seller any remainder.

ARTICLE 6.
SECURITY INTEREST

(a)           Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets.  However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum re-characterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s obligations to Buyer under the Transaction Documents and the Transactions entered into hereunder, or in the event that a transfer of a Purchased Asset is otherwise ineffective to effect an outright transfer of such Purchased Asset to Buyer, Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items (as defined below) to Buyer to secure the payment of the Repurchase Price on all Transactions to which it is a party and all other amounts owing by it to Buyer hereunder, including, without limitation, amounts owing pursuant to Article 26 , and under the other Transaction Documents, including any obligations of Seller under any Hedging Transaction entered into with any Affiliated Hedge Counterparty (including, without limitation,

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all amounts anticipated to be paid to Buyer by an Affiliated Hedge Counterparty as provided for in the definition of Repurchase Price) (collectively, the “ Repurchase Obligations ”).  Seller agrees to mark its computer records and tapes to evidence the interests granted to Buyer hereunder.  All of Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “ Purchased Items ”:

(i)            the Purchased Assets and all “securities accounts” (as defined in Article 8-501(a) of the UCC) to which any or all of the Purchased Assets are credited;

(ii)           any and all Additional Eligible Collateral transferred to Buyer in accordance with Article 4(a) ;

(iii)          the Purchased Asset Documents, Servicing Agreements, Servicing Records, insurance relating to the Purchased Assets, and collection and escrow accounts and letters of credit relating to the Purchased Assets;

(iv)          all “general intangibles”, “accounts”, “chattel paper”, “investment property”, “instruments” and “deposit accounts”, each as defined in the UCC, relating to or constituting any and all of the foregoing; and

(v)           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.

(b)           Without limiting Article 6(a) hereto, to secure payment of the Repurchase Obligations owing to Buyer, Seller hereby grants to Buyer a security interest in all of Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, hereinafter referred to as the “ Collateral ”:

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

(ii)           the Purchased Items;

(iii)          any and all Additional Eligible Collateral transferred to Buyer in accordance with Article 4(a) ;

(iv)          any and all replacements, substitutions, distributions on, income relating to or proceeds of any and all of the foregoing; and

(v)           Seller’s right under each Hedging Transaction, if any, relating to the Purchased Assets to secure the Repurchase Obligations.

(c)           Buyer agrees to act as agent for and on behalf of the Affiliated Hedge Counterparties with respect to the security interest granted hereby to secure the obligations owing to the Affiliated Hedge Counterparties under any Hedging Transactions, including,

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without limitation, with respect to the Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to the Custodial Agreement.

(d)           Buyer’s security interest in the Collateral and Purchased Items shall terminate only upon termination of Seller’s obligations under this Agreement, all Hedging Transactions and the documents delivered in connection herewith and therewith.  Upon such termination, Buyer shall deliver to Seller such UCC termination statements and other release documents as may be commercially reasonable and return the Purchased Assets to Seller and reconvey the Purchased Items to Seller and release its security interest in the Collateral.  For purposes of the grant of the security interest pursuant to this Article 6 , this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “ UCC ”).  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) Buyer, at Seller’s sole cost and expense, shall cause to be filed in such locations as may be 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 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).

ARTICLE 7.
PAYMENT, TRANSFER AND CUSTODY

(a)           On the Purchase Date for each Transaction, ownership of the Purchased Asset shall be transferred to Buyer or its designee (including the Custodian) against the simultaneous transfer of the Purchase Price to an account of Seller specified in the Confirmation relating to such Transaction.

(b)           On or before each Purchase Date, Seller shall deliver or cause to be delivered to Buyer or its designee the Custodial Delivery in the form attached hereto as Exhibit IV , provided , that notwithstanding the foregoing, upon request of Seller, Buyer in its sole but good faith discretion may elect to permit Seller to make such delivery by not later than the third (3rd) Business Day after the related Purchase Date, so long as Seller causes an Acceptable Attorney, Title Company or other Person acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or prior to such Purchase Date.  Subject to Article 7(c) , in connection with each sale, transfer, conveyance and assignment of a Purchased Asset, on or prior to each Purchase Date with respect to such Purchased Asset, Seller shall deliver or cause to be delivered and released to the Custodian the following original documents (collectively, the “ Purchased Asset File ”), pertaining to each of the Purchased Assets identified in the Custodial Delivery delivered therewith, together with any other documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion:

With respect to each Purchased Asset that is a Senior Mortgage Loan (to the extent that Seller is the holder of the senior participation and is the custodian of the related loan documents):

 

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(i)                                      The original Mortgage Note (and if applicable, one or more allonges) 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 Asset 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 Asset 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 of any guarantee executed in connection with the Mortgage Note (if any).

(iii)                                The original Mortgage with evidence of recording thereon, or a copy thereof together with an officer’s certificate of Seller certifying that such represents a true and correct copy of the original and that such original has been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

(iv)                               The originals of all assumption, modification, consolidation or extension agreements with evidence of recording thereon, or copies thereof together with an officer’s certificate of Seller certifying that such represent true and correct copies of the originals and that such originals have each been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

(v)                                  The original Assignment of Mortgage in blank for each Purchased Asset, in form and substance acceptable for recording and otherwise acceptable to Buyer and signed in the name of the Last Endorsee (in the event that the Purchased Asset 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 Asset 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)                               The originals of all intervening assignments of mortgage with evidence of recording thereon, or copies thereof together with an officer’s certificate of Seller certifying that such represent true and correct copies of the originals and that such originals have each been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

(vii)                            The original 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.

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

(ix)                                 The original assignment of leases and rents, if any, with evidence of recording thereon, or a copy thereof together with an officer’s certificate of Seller, certifying that such copy represents a true and correct copy of the original and that such original has been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

(x)                                    The originals of all intervening assignments of assignment of leases and rents, if any, or copies thereof, with evidence of recording thereon.

(xi)                                 A copy of the UCC financing statements, certified as true and correct by Seller, and all necessary UCC continuation statements with evidence of filing thereon or copies thereof certified by Seller that such financing statements have been sent for filing, and UCC assignments, 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).

(xvi)                          A survey of the underlying real estate directly or indirectly securing or supporting such Purchased Asset (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 Asset that is a Mezzanine Loan:

(i)                                      The original Mezzanine Note (and if applicable, one or more allonges) signed in connection with the Purchased Asset 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 Asset 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]”).

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(ii)                                   The original of the loan agreement and the guarantee, if any, executed in connection with the Purchased Asset.

(iii)                                The original intercreditor or loan coordination agreement, if any, executed in connection with the Purchased Asset.

(iv)                               The original security agreement executed in connection with the Purchased Asset.

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

(vi)                               All other documents and instruments evidencing, guaranteeing, insuring or otherwise constituting or modifying or otherwise affecting such Purchased Asset, or otherwise executed or delivered in connection with, or otherwise relating to, such Purchased Asset, 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 Asset sufficient to transfer to Buyer all of Seller’s rights, title and interest in and to the Purchased Asset.

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

(ix)                                 A copy of the UCC financing statements, certified as true and correct by Seller, and all necessary UCC continuation statements with evidence of filing thereon or copies thereof certified by Seller that such financing statements have been sent for filing, and UCC assignments, 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 (or their equivalent) relating to each pledged equity interest, executed in blank, if an original stock certificate (or its equivalent) is provided.

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

(xiii)                           If no original stock certificate (or its equivalent) 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, Seller.

With respect to each Purchased Asset that is a Junior Interest:

(i)                                      with respect to a B-Note, the original Mortgage Note and guarantee, if any, described in the second paragraph of this Article 7(b) , and with respect to a B-Note

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or a junior participation interest, to the extent applicable, a copy of all of the documents described in clauses (iii), (iv), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii) and (xviii) of the second paragraph of this Article 7(b) with respect to a Purchased Asset;

(ii)                                   with respect to a junior participation, the original participation certificate, if any, together with the original of any participation agreement, intercreditor agreement and/or servicing agreement executed in connection with the Purchased Asset; and

(iii)                                the assignment of Purchased Asset, in blank, sufficient to transfer to Buyer all of Seller’s rights, title and interest in and to the Purchased Asset.

With respect to each Purchased Asset that is a CMBS:

(i)                                      With respect to (A) any CMBS that is in physical form, the original certificate, bond or other physical form of such CMBS, which shall (1) be endorsed (either on the face thereof or pursuant to a separate allonge) by the most recent endorsee prior to Seller, without recourse, to the order of Seller and further reflect a complete, unbroken chain of endorsement from the originator to Seller and (2) be accompanied by a separate allonge pursuant to which Seller has endorsed such certificate, without recourse, in blank, or, (B) with respect to any CMBS registered with DTC, evidence of re-registration to the securities intermediary in Buyer’s name, denoting same with a “repo” code;

(ii)                                   to the extent in Seller’s possession or reasonably obtainable by Seller, true and correct copies of the pooling and servicing agreement or indenture and all other material documents (including, without limitation, opinions of counsel) or agreements related to the creation or issuance of the CMBS or otherwise affecting the rights (including, without limitation, the security interests) of any holder thereof;

(iii)                                to the extent in Seller’s possession, as applicable, true and correct copies of any assignment, assumption, modification, consolidation or extension made prior to the Purchase Date in respect of any document or agreement referred to in clause (ii) above, in each case, if the document or agreement being assigned, assumed, modified, consolidated or extended is recordable, with evidence of recording thereon (unless the particular item has not been returned from the applicable recording office);

(iv)                               as applicable, an original assignment of each agreement referred to in clause (iii) above, in recordable form if the agreement being assigned is a recordable document, executed in blank by Seller;

(v)                                  with respect to any CMBS that is in physical form, a blank endorsement which, when properly completed and delivered, is sufficient to cause Buyer to become the registered holder of the CMBS; and

(vi)                               any other documents that Buyer may reasonably request Seller to deliver to Custodian from time to time with respect to any CMBS.

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With respect to each Purchased Asset that is a CRE CDO:

(i)                                      With respect to any (A) CRE CDO that is in physical form, the original certificate, bond or other physical form of such CRE CDO, which shall (1) be endorsed (either on the face thereof or pursuant to a separate allonge) by the most recent endorsee prior to Seller, without recourse, to the order of Seller and further reflect a complete, unbroken chain of endorsement from the originator to Seller and (2) be accompanied by a separate allonge pursuant to which Seller has endorsed such certificate, without recourse, in blank, or, (B) with respect to any CRE CDO registered with DTC, evidence of re-registration to the securities intermediary in Buyer’s name denoting same with a “repo” code;

(ii)                                   to the extent in Seller’s possession or obtainable by Seller, true and correct copies of the indenture and all other material documents (including, without limitation, opinions of counsel) or agreements related to the creation or issuance of the CRE CDO or otherwise affecting the rights (including, without limitation, the security interests) of any holder thereof;

(iii)                                to the extent in Seller’s possession, as applicable, true and correct copies of any assignment, assumption, modification, consolidation or extension made prior to the Purchase Date in respect of any document or agreement referred to in clause (ii) above, in each case, if the document or agreement being assigned, assumed, modified, consolidated or extended is recordable, with evidence of recording thereon (unless the particular item has not been returned from the applicable recording office);

(iv)                               as applicable, an original assignment of each agreement referred to in clause (iii) above, in recordable form if the agreement being assigned is a recordable document, executed in blank by Seller;

(v)                                  with respect to any CRE CDO that is in physical form, a blank endorsement which, when properly completed and delivered, is sufficient to cause Buyer to become the registered holder of the CRE CDO; and

(vi)                               any other documents that Buyer may reasonably request Seller to deliver to Custodian from time to time with respect to any CRE CDO.

With respect to each Purchased Asset that is of the type described in clause (viii) of the definition of Eligible Asset:  any of the documentation referred to above in this Article 7(b) or other documentation with respect to such Eligible Asset that is determined by Buyer to be necessary to effectuate the sale, transfer, conveyance and assignment of such Eligible Asset.

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 Asset 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 Buyer shall request from time to time.  With respect to any documents that 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

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shall deliver to 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 Assets delivered by Seller to 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 Buyer its attorney-in-fact with full power to (i) complete and record each Assignment of Mortgage, (ii) complete the endorsement of each Mortgage Note or Mezzanine Note, (iii) take any action (including exercising voting and/or consent rights) with respect to CMBS, Junior Interests, or intercreditor or participation agreements, and (iv) take such other steps as may be necessary or desirable to enforce Buyer’s rights against, under or with respect to such Purchased Assets and the related Purchased Asset Files and the Servicing Records.  Buyer shall deposit the Purchased Asset Files representing the Purchased Assets, or direct that the Purchased Asset Files be deposited directly, with the Custodian.  The Purchased Asset Files shall be maintained in accordance with the Custodial Agreement.  Any Purchased Asset Files not delivered to Buyer or its designee (including the Custodian) are and shall be held in trust by Seller or its designee for the benefit of Buyer as the owner thereof.  Seller or its designee shall maintain a copy of the Purchased Asset File and the originals of the Purchased Asset File not delivered to Buyer or its designee.  The possession of the Purchased Asset File by Seller or its designee is at the will of Buyer for the sole purpose of servicing the related Purchased Asset, and such retention and possession by 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 Asset to Buyer.  Seller or its designee (including the Custodian) shall release its custody of the Purchased Asset File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Assets, is in connection with a repurchase of any Purchased Asset by Seller or as otherwise required by law.

(c)                                   Unless an Event of Default shall have occurred and be continuing, Seller shall exercise all voting and corporate rights with respect to the Purchased Assets in accordance with Seller’s written instructions; provided , however , that Seller shall provide Buyer with prior written notice of each such action that may have a material adverse effect on any Purchased Asset.  Upon the occurrence and during the continuation of an Event of Default, Buyer shall be entitled to exercise all voting and corporate rights with respect to the Purchased Assets without regard to Seller’s instructions (including, but not limited to, if an Act of Insolvency shall occur with respect to Seller, to the extent Seller controls or is entitled to control selection of any servicer, Buyer may transfer any or all of such servicing to an entity satisfactory to Buyer).

(d)                                  Notwithstanding the provisions of Article 7(b) above requiring the execution of the Custodial Delivery and corresponding delivery of the Purchased Asset File to the Custodian on or prior to the related Purchase Date, with respect to each Transaction involving a Purchased Asset that is identified in the related Confirmation as a “Table Funded” Transaction, Seller shall, in lieu of effectuating the delivery of all or a portion of the Purchased Asset File on or prior to the related Purchase Date, (i) deliver to the Custodian by facsimile on or before the related Purchase Date for the Transaction (A) the promissory note(s), original stock certificate or participation certificate in favor of Seller evidencing the making of the Purchased Asset, with Seller’s endorsement of such instrument to Buyer, (B) such other components of the Purchased

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Asset File as Buyer may require on a case by case basis with respect to the particular Transaction, and (C) evidence satisfactory to Buyer that all documents necessary to perfect Seller’s (and, by means of assignment to Buyer on the Purchase Date, Buyer’s) interest in the Collateral for the Purchased Asset, and (ii) not later than the third (3rd) Business Day following the Purchase Date, deliver to Buyer the Custodial Delivery and to the Custodian the entire Purchased Asset File.

ARTICLE 8.

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

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

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

ARTICLE 9.

RESERVED

ARTICLE 10.

REPRESENTATIONS AND WARRANTIES

(a)                                   Each of Buyer and Seller represent and warrant 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, Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.

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(b)                                  In addition to the representations and warranties in subsection (a) above, Seller represents and warrants to Buyer as of the date of this Agreement and will be deemed to represent and warrant to Buyer as of the Purchase Date for the purchase of any Purchased Assets by Buyer from Seller and any Transaction thereunder and covenants that at all times while this Agreement and any Transaction thereunder is in effect, unless otherwise stated herein:

(i)                                      Organization .  Seller is duly organized, 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, except where failure to so qualify could not be reasonably likely to have a Material Adverse Effect.  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 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)                                Ability to Perform .  Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Transaction Documents applicable to it to which it is a party.

(iv)                               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.

(v)                                  Litigation; Requirements of Law .  As of the date hereof and as of the Purchase Date for any Transaction hereunder, there is no action, suit, proceeding, investigation, or arbitration pending or, to the best knowledge of Seller, threatened against Seller or any of its assets, nor is there any action, suit, proceeding, investigation, or arbitration pending or threatened against Seller that may result in any Material

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Adverse Effect.  Seller is in compliance in all material respects with all Requirements of Law.  Seller is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

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

(vii)                            Good Title to Purchased Assets .  Immediately prior to the purchase of any Purchased Assets by Buyer from Seller, such Purchased Assets are free and clear of any lien, encumbrance or impediment to transfer (including any “ adverse claim ” as defined in Article 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 Assets to Buyer and, upon transfer of such Purchased Assets to Buyer, Buyer shall be the owner of such Purchased Assets free of any adverse claim.  In the event the related Transaction is recharacterized as a secured financing of the Purchased Assets, the provisions of this Agreement are effective to create in favor of the Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Purchased Assets and the Buyer shall have a valid, perfected first priority security interest in the Purchased Assets (and without limitation on the foregoing, the Buyer, as entitlement holder, shall have a “security entitlement” to the Purchased Assets).

(viii)                         No Decline in Market Value; No Defaults .  No Event of Default has occurred or exists under or with respect to the Transaction Documents and Seller is not aware of any post-Transaction facts or circumstances that are reasonably likely to cause or have caused the Market Value of any Purchased Asset to decline in value.

(ix)                                 Authorized Representatives .  The duly authorized representatives of Seller are listed on, and true signatures of such authorized representatives are set forth on, Exhibit II attached to this Agreement.

(x)                                    Representations and Warranties Regarding Purchased Assets; Delivery of Purchased Asset File .

(A)                               As of the date hereof, Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Asset to any other Person, and immediately prior to the sale of such Purchased Asset to Buyer, Seller was the sole owner of such Purchased Asset and had good and marketable title thereto, free and clear of all liens, in each case except for (1) liens to be released simultaneously with the sale to Buyer hereunder and (2) liens granted by Seller in favor of the counterparty to any Hedging Transaction, solely to the extent such liens are expressly subordinate to the rights and interests of Buyer hereunder.

(B)                                 The provisions of this Agreement and the related Confirmation are effective to either constitute a sale of Purchased Items to Buyer or to create in

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favor of Buyer a legal, valid and enforceable security interest in all right, title and interest of Seller in, to and under the Purchased Items.

(C)                                 Upon receipt by the Custodian of each Mortgage Note, Mezzanine Loan note, B-Note or Junior Interest certificate, endorsed in blank by a duly authorized officer of Seller, either a purchase shall have been completed by Buyer of such Mezzanine Loan note, B-Note or Junior Interest certificate, as applicable, or Buyer shall have a valid and fully perfected first priority security interest in all right, title and interest of Seller in the Purchased Items described therein.

(D)                                Each of the representations and warranties made in respect of the Purchased Assets pursuant to Exhibit VI are true, complete and correct, except to the extent disclosed in a Requested Exceptions Report.

(E)                                  Upon the filing of financing statements on Form UCC-1 naming Buyer as “ Secured Party ”, Seller as “ Debtor ” and describing the Purchased Items, in the jurisdiction and recording office listed on Exhibit XIII attached hereto, the security interests granted hereunder in that portion of the Purchased Items which can be perfected by filing under the Uniform Commercial Code will constitute fully perfected security interests under the Uniform Commercial Code in all right, title and interest of Seller in, to and under such Purchased Items.

(F)                                  Upon execution and delivery of the Control Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, the “investment property” and all “deposit accounts” (each as defined in the Uniform Commercial Code) comprising Purchased Items or any after-acquired property related to such Purchased Items.  Except to the extent disclosed in a Requested Exceptions Report, Seller or its designee is in possession of a complete, true and accurate Purchased Asset File with respect to each Purchased Asset, except for such documents the originals of which have been delivered to the Custodian.

(xi)                                 Adequate Capitalization; No Fraudulent Transfer .  Seller has, as of such Purchase Date, adequate capital for the normal obligations 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.

(xii)                              No Conflicts or Consents .  Neither the execution and delivery of this Agreement and the other Transaction Documents by Seller, nor the consummation of any of the transactions by it herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof, will contravene or conflict with or result in the creation or imposition of (or the obligation to create or impose) any

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lien upon any of the property or assets of Seller pursuant to the terms of any indenture, mortgage, deed of trust, or other agreement or instrument to which Seller is a party or by which Seller may be bound, or to which Seller may be subject, other than liens created pursuant to the Transaction Documents.  No consent, approval, authorization, or order of any third party is required in connection with the execution and delivery by Seller of the Transaction Documents to which it is a party or to consummate the transactions contemplated hereby or thereby which has not already been obtained.

(xiii)                           Governmental Approvals .  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (i)  the execution, delivery and performance of any Transaction Document to which Seller is or will be a party, (ii) the legality, validity, binding effect or enforceability of any such Transaction Document against Seller or (iii) the consummation of the transactions contemplated by this Agreement (other than the filing of certain financing statements in respect of certain security interests).

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

(xv)                             No Encumbrances .  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 Assets, (ii) no agreements on the part of Seller to issue, sell or distribute the Purchased Assets, and (iii) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or any interest therein.

(xvi)                          Federal Regulations .  Seller is not required to register as an “investment company,” or a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended.  Seller is not 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.

(xvii)                       Taxes .  Seller has filed or caused to be filed all tax returns that, 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 (A) 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 or (B) are de minimis in amount; no tax liens have been filed against any of Seller’s assets and, no claims are being asserted with respect to any such taxes, fees or other charges.

(xviii)                    Judgments/Bankruptcy .  Except as disclosed in writing to Buyer, there are no judgments against Seller unsatisfied of record or docketed in any court located in the

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United States of America and no Act of Insolvency has ever occurred with respect to Seller.

(xix)                            Solvency .  Neither the Transaction Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller’s creditors.  The transfer of the Purchased Assets subject hereto and the obligation to repurchase such Purchased Assets is not undertaken with the intent to hinder, delay or defraud any of Seller’s creditors.  As of the Repurchase Date, Seller is not insolvent within the meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and the transfer and sale of the Purchased Assets pursuant hereto and the obligation to repurchase such Purchased Asset (i) will not cause the liabilities of Seller to exceed the assets of Seller, (ii) will not result in Seller having unreasonably small capital, and (iii) will not result in debts that would be beyond Seller’s ability to pay as the same mature.  No petition in bankruptcy has been filed against Seller in the last ten (10) years, and Seller has not in the last ten (10) years made an assignment for the benefit of creditors or taken advantage of any debtors relief laws.  Seller has only entered into agreements on terms that would be considered arm’s length and otherwise on terms consistent with other similar agreements with other similarly situated entities.

(xx)                               Use of Proceeds; Margin Regulations .  All proceeds of each Transaction shall be used by Seller for purposes permitted under Seller’s governing documents, provided that no part of the proceeds of any Transaction will be used by Seller to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.  Neither the entering into of any Transaction nor the use of any proceeds thereof will violate, or be inconsistent with, any provision of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

(xxi)                            Full and Accurate Disclosure .  No information contained in the Transaction Documents, or any written statement furnished by or on behalf of Seller pursuant to the terms of the Transaction Documents, contains any untrue statement of a material fact or 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.

(xxii)                         Financial Information .  All financial data concerning Seller and the Purchased Assets that has been delivered by or on behalf of Seller to Buyer is true, complete and correct in all material respects.  All financial data concerning Seller has been prepared fairly in accordance with GAAP.  All financial data concerning the Purchased Assets has been prepared in accordance with standard industry practices.  Since the delivery of such data, except as otherwise disclosed in writing to Buyer, there has been no change in the financial position of Seller or the Purchased Assets, or in the results of operations of Seller, which change is reasonably likely to have in a Material Adverse Effect on Seller.

(xxiii)                      Hedging Transactions .  To the actual knowledge of Seller, as of the Purchase Date for any Purchased Asset that is subject to a Hedging Transaction, each such Hedging Transaction is in full force and effect in accordance with its terms, each

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counterparty thereto is an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event, however denominated, has occurred and is continuing with respect thereto.

(xxiv)                     Servicing Agreements .  Seller has delivered to Buyer all Servicing Agreements pertaining to the Purchased Assets and to the actual knowledge of Seller, as of the date of this Agreement and as of the Purchase Date for the purchase of any Purchased Assets subject to a Servicing Agreement, each such Servicing Agreement is in full force and effect in accordance with its terms and no default or event of default exists thereunder.

(xxv)                        No Reliance .  Seller has made its own independent decisions to enter into the Transaction Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary.  Seller is not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

(xxvi)                     Patriot Act .  Seller is in compliance, in all material respects, with the (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of any Transaction will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(xxvii)                    Environmental Matters .

(a)                                   No properties owned or leased by Seller and no properties formerly owned or leased by Seller, its predecessors, or any former Subsidiaries or predecessors thereof (the “ Properties ”), contain, or have previously contained, any Materials of Environmental Concern in amounts or concentrations which constitute or constituted a violation of, or reasonably could be expected to give rise to liability under, Environmental Laws;

(b)                                  Seller is in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Laws which reasonably would be expected to interfere with the continued operations of Seller;

(c)                                   Seller has not received any notice of violation, alleged violation, non-compliance, liability or potential liability under any Environmental

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Law, nor does Seller have knowledge that any such notice will be received or is being threatened;

(d)                                  Materials of Environmental Concern have not been transported or disposed by Seller in violation of, or in a manner or to a location which reasonably would be expected to give rise to liability under, any applicable Environmental Law, nor has Seller generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that reasonably would be expected to give rise to liability under, any applicable Environmental Law;

(e)                                   No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of Seller, threatened, under any Environmental Law which Seller is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements arising out of judicial proceedings or governmental or administrative actions, outstanding under any Environmental Law to which Seller is a party;

(f)                                     There has been no release or threat of release of Materials of Environmental Concern in violation of or in amounts or in a manner that reasonably would be expected to give rise to liability under any Environmental Law for which Seller may become liable; and

(g)                                  Each of the representations and warranties set forth in the preceding clauses (A) through (F) is true and correct with respect to each parcel of real property owned or operated by Seller.

(xxviii)               Insider .  Seller is not an “executive officer,” “director,” or “person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10% of any class of voting securities” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations promulgated pursuant thereto) of Buyer, of a bank holding company of which Buyer is a Subsidiary, or of any Subsidiary, of a bank holding company of which Buyer is a Subsidiary, of any bank at which Buyer maintains a correspondent account or of any lender which maintains a correspondent account with Buyer

(xxix)                       Office of Foreign Assets Control .  Seller is not a person (i) whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) who engages in any dealings or transactions prohibited by Section 2 of such executive order, or to the best of Seller’s knowledge,  is otherwise associated with any such person in any manner in violation of Section 2 of such executive order, or (iii) on the current list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

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(xxx)        Notice Address; Jurisdiction of Organization .  On the date of this Agreement, Seller’s address for notices is as specified on Annex I.  Seller’s jurisdiction of organization is Maryland.  The location where Seller keeps its books and records, including all computer tapes and records relating to the Collateral and Purchased Items, is its notice address.  Seller may change its address for notices and for the location of its books and records by giving Buyer written notice of such change.

ARTICLE 11.
NEGATIVE COVENANTS OF SELLER

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

(a)           take any action that would directly or indirectly impair or adversely affect Buyer’s title to the Purchased Assets;

(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 Assets (or any of them) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Assets (or any of them) with any Person other than Buyer;

(c)           modify in any material adverse respect any Servicing Agreements;

(d)           create, incur or permit to exist any lien, encumbrance or security interest in or on any of the Purchased Assets, the other Collateral or Purchased Items, other than the security interest granted by Seller pursuant to Article 6 of this Agreement;

(e)           enter into any transaction of merger or consolidation or amalgamation, that is likely to have a material adverse effect on the creditworthiness or financial condition of Seller, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution), sell all or substantially all of its assets without the consent of Buyer in its sole and absolute discretion;

(f)            consent or assent to any material amendment or supplement to, or termination of, any note, loan agreement, mortgage or guarantee relating to the Purchased Assets or other material agreement or instrument relating to the Purchased Assets other than in accordance with Article 28;

(g)           acquire or maintain any right or interest in any Purchased Asset or Underlying Mortgaged Property that is senior to or pari passu with the rights and interests of Buyer therein under this Agreement and the other Transaction Documents unless such right or interest becomes a Purchased Asset hereunder ;

(h)           use any part of the proceeds of any Transaction hereunder for any purpose which violates, or would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System;

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(i)            permit Seller’s EBITDA to Fixed Charge Ratio as of the last day of any fiscal quarter to be less than 1.20:1;

(j)            permit Seller’s ratio of Total Indebtedness to Tangible Net Worth at any time to be greater than 10.00:1.00;

(k)           permit Seller’s ratio of Total Non-Securitized  Indebtedness to Tangible Net Worth at any time to be greater than 5.00:1.00; or

(l)            enter into any Hedging Transaction with respect to any Purchased Asset with any entity that is not an Affiliated Hedging Counterparty or a Qualified Hedging Counterparty.

ARTICLE 12.
AFFIRMATIVE COVENANTS OF SELLER

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

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

(c)           Seller (1) shall defend the right, title and interest of Buyer in and to the Collateral and Purchased Items 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 Buyer) and (2) shall, at Buyer’s reasonable request, take all action necessary to ensure that Buyer will have a first priority security interest in the Purchased Assets subject to any of the Transactions in the event such Transactions are recharacterized as secured financings.

(d)           Seller shall notify 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)           Seller shall cause the special servicer rating of the special servicer with respect to all mortgage loans underlying Purchased Assets other than Seller itself to be no lower than “average” by Standard & Poor’s Ratings Group to the extent Seller controls or is entitled to control the selection of the special servicer.  In the event the special servicer rating with respect to any Person acting as special servicer for any mortgage loans underlying Purchased Assets other than Seller itself shall be below “average” by Standard & Poor’s Rating Group, or if an Act of Insolvency occurs with respect to Seller, Buyer shall be entitled to transfer special servicing with respect to all Purchased Assets to an entity satisfactory to Buyer, to the extent Seller controls or is entitled to control the selection of the special servicer.

(f)            Seller shall promptly (and in any event not later than two (2) Business Days following receipt) deliver to Buyer (i) any notice of the occurrence of an event of default under or report received by Seller pursuant to the Purchased Asset Documents; (ii) any notice of

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transfer of servicing under the Purchased Asset Documents and (iii) any other information with respect to the Purchased Assets that may be requested by Buyer from time to time.

(g)           Seller will permit Buyer or its designated representative to inspect Seller’s records with respect to the Collateral and the Purchased Items and the conduct and operation of its business related thereto upon reasonable prior written notice from Buyer or its designated representative, at such reasonable times and with reasonable frequency, and to make copies of extracts of any and all thereof, subject to the terms of any confidentiality agreement between Buyer and Seller.  Buyer shall act in a commercially reasonable manner in requesting and conducting any inspection relating to the conduct and operation of Seller’s business.

(h)           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 a Purchased Asset, or otherwise in respect thereof, Seller shall accept the same as Buyer’s agent, hold the same in trust for Buyer and deliver the same forthwith to Buyer in the exact form received, duly endorsed by Seller to Buyer, if required, together with an undated bond power covering such certificate duly executed in blank to be held by Buyer hereunder as additional collateral security for the Transactions.  If any sums of money or property so paid or distributed in respect of the Purchased Assets shall be received by Seller, Seller shall, until such money or property is paid or delivered to Buyer, hold such money or property in trust for Buyer, segregated from other funds of Seller, as additional collateral security for the Transactions.

(i)            At any time from time to time upon the reasonable request of 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 Buyer may 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 Buyer may request).  If any amount payable under or in connection with any of the Collateral or Purchased Items 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 Buyer, duly endorsed in a manner satisfactory to Buyer, to be itself held as a Purchased Item and/or Collateral, as applicable, pursuant to this Agreement, and the documents delivered in connection herewith.

(j)            Seller shall provide, or to cause to be provided, to Buyer the following financial and reporting information:

(i)            Within sixty (60) days after the last day of each of the first three fiscal quarters in any fiscal year, consolidated unaudited financial statements of Seller presented fairly in accordance with GAAP including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter, and certified as being true and correct by an officer’s certificate;

(ii)           Promptly after the end of each month, to the extent provided by the applicable servicer, with respect to Eligible Assets that are Eligible Loans, any and all certified financial statements and rent rolls received from an applicable Eligible Loan borrower;

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(iii)          Within one-hundred and twenty (120) days after the last day of its fiscal year, Seller’s consolidated audited financial statements, prepared by a nationally recognized independent certified public accounting firm and presented fairly in accordance with GAAP including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter in a similar manner as presented in the AICPA Audit and Accounting Guide, “Audits of Investment Companies”, and (y) the audited statements of income and statements of changes in cash flow for such year and balance sheets as of the end of such year of Seller accompanied by an unqualified report of the nationally recognized independent certified public accounting firm that prepared them;

(iv)          Promptly after receipt of same, but, in any event, within 20 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 Assets that is in the possession of Seller including, without limitation, rent rolls and income statements for the immediately preceding quarter and, when available, for the preceding year;

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

(vi)          Within fifteen (15) days after the last day of each month, a certificate substantially in the form attached hereto as Exhibit XIX to this Agreement (the “ Covenant Compliance Certificate ”), from a Responsible Officer of Seller, delivered no later than one Business Day prior to the date of such Transaction, (i) stating that as of the date of such certificate, Seller is not aware of any facts, or pending developments, that have caused, or may in the future cause, the Market Value of any Purchased Asset to decline at any time within the reasonably foreseeable future; (ii) stating that, as of the date of such certificate and since the date of the certificate most recently delivered pursuant to Article 12(j) , Seller has observed or performed all of its covenants and other agreements in all material respects, and satisfied in all material respects, every condition, contained in this Agreement and the related documents to be observed, performed or satisfied by it; (iii) stating that as of the date of such certificate such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; (iv) sta