Exhibit 10.3
Execution Copy
ANNEX I TO
MASTER REPURCHASE AGREEMENT
SUPPLEMENTAL TERMS AND CONDITIONS
DATED AS OF JULY 20, 2007
BETWEEN
ANTHRACITE CAPITAL BOFA FUNDING LLC, AS SELLER,
BANK OF AMERICA, N.A., AS BUYER,
BANC OF AMERICA MORTGAGE CAPITAL CORPORATION, AS BUYER
AND
BANK OF AMERICA, N.A., AS BUYER AGENT
TABLE OF CONTENTS
Page
1 OTHER APPLICABLE ANNEXES...................................................1
2 ADDITIONAL AND SUBSTITUTE DEFINITIONS......................................1
3 INITIATION; CONFIRMATION; TERMINATION; FEES...............................20
4 MARGIN MAINTENANCE........................................................26
5 INCOME PAYMENTS AND PRINCIPAL PAYMENTS....................................27
6 SECURITY INTEREST.........................................................29
7 PAYMENT, TRANSFER AND CUSTODY.............................................30
8 SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED
SECURITIES................................................................38
9 SUBSTITUTION..............................................................39
10 REPRESENTATIONS...........................................................39
11 NEGATIVE COVENANTS OF SELLER..............................................43
12 AFFIRMATIVE COVENANTS OF SELLER...........................................44
13 SINGLE-PURPOSE ENTITY.....................................................47
14 EVENTS OF DEFAULT; REMEDIES...............................................50
15 RECORDING OF COMMUNICATIONS...............................................56
16 NOTICES AND OTHER COMMUNICATIONS..........................................57
17 NON-ASSIGNABILITY.........................................................57
18 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.............................58
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19 NO RELIANCE...............................................................59
20 INDEMNITY.................................................................60
21 DUE DILIGENCE.............................................................61
22 SERVICING.................................................................61
23 MISCELLANEOUS.............................................................62
EXHIBITS AND SCHEDULES
SCHEDULE I-A Original Purchase Percentages and Applicable Spreads
EXHIBIT I Form of Confirmation
EXHIBIT II Authorized Representatives of Seller
EXHIBIT III Form of Aggregate Collateral Report
EXHIBIT IV Form of Custodial Delivery
EXHIBIT V Form of Power of Attorney
EXHIBIT VI Representations and Warranties Regarding
Individual Purchased Loans
EXHIBIT VII Purchased Loan Information
EXHIBIT VIII Advance Procedure
EXHIBIT IX Form of Redirection Letter
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ANNEX I TO
MASTER REPURCHASE AGREEMENT
Supplemental Terms and Conditions
This Annex I forms a part of the Master Repurchase Agreement dated as
of July 20, 2007 (the "Agreement"), between ANTHRACITE CAPITAL BOFA FUNDING LLC,
a limited liability company organized under the laws of the State of Delaware,
as seller (the "Seller"), BANK OF AMERICA, N.A. ("BANA"), BANC OF AMERICA
MORTGAGE CAPITAL CORPORATION ("BAMCC") (BANA and BAMCC, individually and/or
collectively, as the context may require, each a "Buyer" or collectively,
"Buyers"), and BANK OF AMERICA, N.A., as agent for the Buyers (in such capacity,
the "Buyer Agent"). Capitalized terms used in this Annex I without definition
shall have the respective meanings assigned to such terms in the Agreement. This
Annex I is intended to supplement the Agreement and shall, wherever possible, be
interpreted so as to be consistent with the Agreement; however, in the event of
any conflict or inconsistency between the provisions of this Annex I, on the one
hand, and the provisions of the Agreement, on the other, the provisions of this
Annex I shall govern and control. All references in the Agreement to "the
Agreement" shall be deemed to mean and refer to the Agreement, as supplemented
and modified by this Annex I or as otherwise modified after the date hereof.
1. OTHER APPLICABLE ANNEXES
In addition to this Annex I, the following Annexes and any Schedules
thereto shall form a part of the Agreement and shall be applicable thereunder:
Annex II - Names and Addresses for Communications Between Parties.
2. ADDITIONAL AND SUBSTITUTE DEFINITIONS
The following capitalized terms shall have the respective meanings set
forth below. Any such terms defined below which are also defined in the
Agreement shall have the respective meanings set forth below, in lieu of the
meanings for such terms set forth in the Agreement.
"Accelerated Termination Date" shall have the meaning specified in
Section 14.2.1 of this Annex I.
"Acceptable Appraisal" shall mean, with respect to a Purchased Loan or
a loan which Seller proposes to become a Purchased Loan, an appraisal (a)
acceptable to the Buyer Agent by an MAI appraiser and dated within twelve (12)
months of the Purchase Date for such Purchased Loan and (b) satisfying either
(i) the requirements of the "Uniform Standards of Professional Appraisal
Practice" as adopted by the Appraisal Standards Board of the Appraisal
Foundation, or (ii) the requirements of Title XI of FIRREA and the regulations
promulgated thereunder (as the foregoing is amended, modified, restated,
replaced, waived, substituted, supplemented or extended from time to time), as
in effect on the date of such appraisal.
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"Accepted Servicing Practices" shall mean with respect to any Purchased
Loan, those mortgage servicing practices of prudent mortgage loan servicers
which service mortgage or other commercial loans of the same type as such
Purchased Loan in the jurisdiction where the related Mortgaged Property is
located.
"Account Bank" shall mean Wells Fargo Bank, N.A. or any successor
Account Bank comparably rated and qualified and appointed by the Buyer Agent
with the prior written consent of Seller (which consent shall not be
unreasonably withheld or delayed).
"Additional Payment" shall have the meaning specified in Section 3.13
of this Annex I.
"Affiliate" shall mean, when used with respect to any specified Person,
any other Person directly or indirectly controlling, controlled by, or under
common control with, such Person. "Control" shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise and "controlling" and "controlled" shall have meanings
correlative thereto; provided that, any Person which owns directly or indirectly
25% or more of the securities having ordinary voting power for the election of
directors or other governing body of a corporation or 25% or more of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to control such corporation
or other Person; provided, further, that with respect to Seller, no Person shall
be deemed an Affiliate of Seller due to such Person's having BlackRock Financial
Management, Inc. as such Person's manager.
"Agreement" shall have the meaning specified in the introductory
paragraph of this Annex I.
"Allocable Purchase Price" shall mean, with respect to each multifamily
or commercial property relating to a Purchased Loan secured, directly or
indirectly, by three (3) or more related multifamily or commercial properties,
an amount equal to the lesser of (i) $15,000,000 and (ii) the portion of the
Purchase Price (calculated without giving effect to the provisos in the
definition thereof) of such Purchased Loan that is allocable to such multifamily
or commercial property based upon the relative market values as of the related
Purchase Date, as determined by the Buyer Agent in the exercise of its good
faith business judgment, of the multifamily or commercial properties relating to
such Purchased Loan.
"Alternative Rate" shall have the meaning specified in Section 3.7 of
this Annex I.
"Alternative Rate Transaction" shall mean, with respect to any Pricing
Rate Period, any Transaction with respect to which the Pricing Rate for such
Pricing Rate Period is determined with reference to the Alternative Rate.
"Applicable Spread" shall mean, with respect to a Transaction involving
Purchased Securities in any Rating Category and/or Purchased Loans in any Loan
Type Grouping (unless otherwise agreed by a Buyer and Seller in connection with
a particular Transaction, as evidenced by the related Confirmation):
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(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-A attached to this Annex I as being the
"Applicable Spread" for Purchased Securities in such Rating Category or
Purchased Loans, in such Loan Type Grouping, and
(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 300 basis points (3.0%).
"Approved Assignee" shall mean any Person satisfying the minimum
capital, net worth and/or similar measures of financial wherewithal required to
qualify as a permitted transferee of the Purchased Assets pursuant to the terms
of the Purchased Loan Documents, the Securitization Documents and applicable
securities laws.
"Asset Deficit Cure Amount" shall mean, with respect to any Purchased
Asset as of any date, the amount (expressed in Dollars) obtained by dividing (i)
the Repurchase Price of such Purchased Asset as of such date by (ii) the
"Original Purchase Percentage" for the Rating Category for such Purchased
Security or Loan Type Grouping for such Purchased Loan.
"Assignment of Leases" shall mean, with respect to any Purchased Loan,
any assignment of leases, rents and profits or equivalent instrument, whether
contained in the related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Purchased Loan.
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related property is located to reflect the assignment and pledge of the
Mortgage.
"B Notes" shall mean loans secured by junior participation interests in
or junior notes in performing commercial mortgage loans secured by first liens
in multifamily or commercial properties.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978,
as amended from time to time.
"BOA Indebtedness" shall mean the aggregate indebtedness of the Seller
hereunder and under any other arrangement between the Seller or an Affiliate of
the Seller on the one hand and the Buyers or an Affiliate of the Buyers on the
other hand.
"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 or the State of Minnesota are authorized or obligated by law or executive
order to be closed. When used with
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respect to a Reset Date, a "Business Day" shall mean a day on which banks in
London, England are closed for interbank or foreign exchange transactions.
"Buyer" or "Buyers" shall have the meaning specified in the
introductory paragraph of this Annex I.
"Buyer Agent" shall have the meaning specified in the introductory
paragraph of this Annex I.
"Buyer Parties" shall mean the Buyers and the Buyer Agent.
"Buyer's Asset Margin Amount" shall mean, with respect to any Purchased
Asset as of any date, the amount (expressed in Dollars) obtained by dividing (i)
the Repurchase Price of such Purchased Asset as of such date by (ii) the number
(expressed as a decimal) obtained by dividing (A) the Original Purchase
Percentage of such Purchased Asset (expressed as a decimal) by (B) 0.90.
"Buyer's Maximum Purchase Price" shall mean, with respect to any
Purchased Securities in a particular rating Category or any Purchased Loans in a
particular Loan Type Grouping, an amount (expressed in Dollars) equal to the
product obtained by multiplying (i) the Market Value of such Purchased Asset on
the applicable Purchase Date by (ii) the "Original Purchase Percentage" for such
rating Category or such Loan Type Grouping, as set forth in Schedule I-A
attached to this Annex I (or, if applicable, as determined in accordance with
the penultimate sentence of the definition of "Purchase Price").
"Buyer's Portfolio Margin Amount" shall mean, with respect to all
Purchased Assets of all Buyers as of any date, the amount (expressed in Dollars)
obtained by dividing (i) the aggregate Repurchase Price of all Purchased Assets
of all Buyers as of such date by (ii) the number (expressed as a decimal)
obtained by dividing (A) the weighted average Original Purchase Percentage of
such Purchased Assets (expressed as a decimal and weighted on the basis of the
Market Values of such Purchased Assets as of their respective Purchase Dates) by
(B) 0.95.
"Cash" shall mean cash on deposit in the Cash Management Account or in
any other account maintained by the Seller with any depository institution.
"Cash Management Account" shall mean a segregated account, in the name
of the Buyer Agent, established at the Account Bank.
"CF Sweep Event" shall mean, with respect to any Purchased Asset as of
any date, a determination by the Buyer Agent that the ratio of (i) the
Repurchase Price of such Purchased Asset as of such date to (ii) the Market
Value of such Purchased Asset as of such date, is equal to, or greater than,
1.05:1.00 but less than 1.10:1.00.
"Change of Control" shall mean the occurrence and continuation of any
event pursuant to which BlackRock Financial Management, Inc. shall cease to act
as the external manager of the Sponsor with exclusive responsibility for the
Sponsor's investment decision-making.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" has the meaning given to that term in Section 6.2 of this
Annex I.
"Collection Period" shall mean, with respect to each Remittance Date,
the period beginning on but excluding the Cut-off Date relating to the
immediately preceding Remittance Date and continuing to and including the
Cut-off Date relating to such Remittance Date.
"Concentration Limits" shall mean any limitations on borrower/borrower
principal, asset classes, property types, tenants, geography and other
categories related to the Eligible Loans and Eligible Securities which may be
established by the Buyer Agent, from time to time, in its reasonable business
judgment; provided, that such "Concentration Limits" shall not be applied in
respect of assets previously included as Eligible Loans and Eligible Securities.
"Confirmation" shall have the meaning specified in Section 3.2 of this
Annex I.
"Contingent Purchase Price" shall have the meaning specified in Section
3.13 of this Annex I.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of
July 20, 2007, by and among the Custodian, Seller and the Buyer Agent.
"Custodial Delivery" shall mean the form executed by Seller in order to
deliver the Purchased Loan Schedule and the Purchased Loan File to the Buyer
Agent or its designee (including the Custodian) pursuant to Section 7, a form of
which is attached hereto as Exhibit IV.
"Custodian" shall mean Wells Fargo Bank, N.A. or any successor
Custodian comparably rated and qualified and appointed by the Buyer Agent with
the prior written consent of Seller (which consent shall not be unreasonably
withheld or delayed).
"Cut-off Date" shall mean the second Business Day preceding each
Remittance Date.
"Default" shall mean any event which, with the giving of notice, the
passage of time, or both, would constitute an Event of Default.
"Diligence Materials" shall mean the Preliminary Due Diligence Package,
together with the Supplemental Due Diligence List.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Draft Appraisal" shall mean a draft appraisal which is acceptable to
the Buyer Agent and contains a substantially complete opinion of value by an MAI
appraiser.
"Early Termination Date" shall have the meaning specified in Section
3.4 of this Annex I.
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"Eligibility Criteria" shall mean:
(i) in the case of all Eligible Loans, satisfaction of
applicable requirements issued by the Rating Agencies for inclusion in
offerings of collateralized debt obligations (including, but not
limited to, applicable intercreditor or participation agreements);
(ii) in the case of Eligible Securities or Eligible Loans
other than Eligible Bridge Loans or Eligible Development Loans, the
Purchase Price paid by the applicable Buyer for any such individual
Purchased Asset shall not exceed $50,000,000 unless otherwise agreed to
by the Buyer Agent in its sole discretion;
(iii) in the case of Eligible Bridge Loans and Eligible
Development Loans, (A) the Purchase Price paid by the applicable Buyer
for any individual Purchased Asset that are Eligible Bridge Loans or
Eligible Development Loans shall not exceed $30,000,000; and (B) the
aggregate Purchase Price with respect to Purchased Assets that are
Eligible Bridge Loans or Eligible Development Loans shall not exceed
50% of the Facility Amount (provided that (x) the total Purchase Price
with respect to Purchased Assets that are Eligible Bridge Loans shall
not exceed $75,000,000 and (y) the total Purchase Price with respect to
Purchased Assets that are Eligible Development Loans shall not exceed
$75,000,000) in each case unless otherwise agreed to by the Buyer Agent
in its good faith business judgment;
(iv) the Seller has valid title to such Eligible Loan or
Eligible Security and such Eligible Loan or Eligible Security is not
subject to any adverse claim or lien, other than Liens permitted
pursuant to this Agreement;
(v) the Eligible Loans are secured directly or indirectly by,
or the payments are derived from, properties, including, but not
limited to, multifamily, retail, office, warehouse, or hospitality
properties located in the United States of America (or any other
property type acceptable to the Buyer Agent in its sole discretion) but
excluding in all cases condo conversion projects and operating
businesses, including, without limitation, restaurants, convenience
stores and gas stations;
(vi) there is no breach of any Concentration Limit; and
(vii) the Buyer Agent has not deemed such Eligible Loan or
Eligible Security to be otherwise ineligible in its sole discretion.
"Eligible B Notes" shall mean B Notes as to which the LTV determined by
the Buyer Agent for the Mortgaged Property from which payments on such B Note
are derived or securing indirectly such B Note (including for purposes of this
calculation, such B Note and any loan senior to such B Note and secured directly
or indirectly by the related Mortgaged Property and excluding any more junior
loan or participation) does not exceed 90%.
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"Eligible Bridge Loan" shall mean a performing First Mortgage Loan, B
Note, or Mezzanine Loan that is otherwise an Eligible Loan except that the
underlying Mortgaged Property is not stabilized or is otherwise considered to be
in a transitional state, as determined by the Buyer Agent in its good faith
business judgment; provided that (x) the aggregate amount of committed debt and
equity financing for each Bridge Loan is sufficient to finance 100% of the
completion of the improvements to the related underlying Mortgaged Property or
(y) adequate net operating income, interest reserves or guaranties to ensure
payment of all indebtedness (when due and payable) related to the underlying
Mortgaged Property, in each case as determined by the Buyer Agent in its good
faith business judgment.
"Eligible Development Loan" shall mean a performing First Mortgage
Loan, B Note, or Mezzanine Loan that provides for periodic advances for
construction improvements on the underlying Mortgage Property and, in respect of
which, the underlying Mortgaged Property has received all necessary entitlements
and approvals from the applicable Governmental Authority to develop the
underlying Mortgage Property (as determined by the Buyer Agent in its good faith
business judgment) and construct improvements thereon in a manner consistent
with the applicable Seller's representations to the applicable Buyer and the
Buyer Agent regarding such construction.
"Eligible First Mortgage Loan" shall mean a First Mortgage Loan as to
which the LTV determined by the Buyer Agent for the Mortgaged Property securing
such First Mortgage Loan (including for purposes of this calculation, such First
Mortgage Loan and any loan secured by a first lien on the related Mortgaged
Property and excluding any more junior loan) does not exceed 90%.
"Eligible Investment-Grade CMBS Securities" shall mean performing
commercial mortgage-backed securities that (A) have a rating of "BBB-" (or its
equivalent) or higher from any Rating Agency and (B) are denominated in Dollars.
"Eligible Loans" shall mean any of the following types of performing
loans, which performing loans conform in all material respects to the applicable
representations and warranties set forth in Exhibit VI attached hereto (except
as otherwise agreed by the Buyer Agent):
(i) Eligible Mezzanine Loans;
(ii) Eligible First Mortgage Loans;
(iii) Eligible Bridge Loans;
(iv) Eligible B Notes;
(v) Eligible Development Loans; and
(vi) Eligible Other Investment;
provided, that the Eligible Loans shall at all times be subject to the
applicable Eligibility Criteria.
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"Eligible Mezzanine Loan" shall mean a Mezzanine Loan as to which the
LTV determined by the Buyer Agent for the Mortgaged Property from which payments
on such Mezzanine Loan are derived (including for purposes of this calculation,
such Mezzanine Loan and any loan senior to such Mezzanine Loan and secured
directly or indirectly by the related Mortgaged Property and excluding any more
junior loan or participation) does not exceed 90%.
"Eligible Non-Investment Grade CMBS Securities" shall mean performing
commercial mortgage-backed securities that either (i) have a rating of "BB+" (or
its equivalent) or below from any Rating Agency or (ii) are unrated securities,
which securities are acceptable to the Buyer Agent in the exercise of its sole
discretion exercised in good faith.
"Eligible Other Investment" shall mean any performing real estate
structured finance product (including, without limitation, REIT debt
securities), which (i) does not otherwise conform to the definition of Eligible
Investment Grade CMBS Securities, Eligible Non-Investment Grade CMBS Securities,
Eligible B Notes, Eligible Mezzanine Loans, Eligible Development Loans, Eligible
Bridge Loans or Eligible First Mortgage Loans; and (ii) satisfies such other
criteria as may be established by the Buyer Agent in its sole discretion.
"Eligible Securities" shall mean Eligible Investment Grade CMBS
Securities, Eligible Non-Investment Grade CMBS Securities or Eligible Other
Investment; provided, that all Eligible Securities shall at all times be subject
to the applicable Eligibility Criteria.
"Environmental Report" shall have the meaning specified in paragraph 12
of Exhibit VI.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated thereunder.
Section references to ERISA are to ERISA, as in effect at the date of this
Agreement and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which Seller is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(l1) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code, of which Seller is
a member.
"Event of Default" shall have the meaning specified in Section 14 of
this Annex I.
"Facility Amount" shall mean $200,000,000.
"Filings" shall have the meaning specified in Section 6.3 of this Annex
I.
"First Mortgage Loans" shall mean performing loans secured by first
liens in multifamily or commercial properties.
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"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.
"Guaranty" shall mean the Guaranty, dated as of the date hereof, from
the Sponsor to the Buyer Agent, for the benefit of the Buyer, of full and timely
payment of all amounts due under this Agreement to the Buyer Parties.
"Hedging Agreements" shall mean, with respect to any or all of the
Purchased Assets, any futures options contract or any interest rate swap, cap or
collar agreement or similar derivative instruments providing for protection
against fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies, entered into by
Seller.
"Indemnified Amounts" and "Indemnified Parties" shall have the meaning
specified in Section 20 of this Annex I.
"Insured Closing Letter and Escrow Instructions" shall mean a letter
addressed to Seller and the Buyer Agent from the Settlement Agent for each Table
Funded Purchased Loan and related escrow instructions, which letter and
instructions shall be in form and substance acceptable to the Buyer Agent and
Seller.
"LIBO Rate" shall mean, with respect to any Pricing Rate Period
pertaining to a LIBOR 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
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1 - Reserve Requirement
"LIBOR" shall mean the rate per annum calculated as set forth below:
(i) on each Reset Date, LIBOR for the next Pricing Rate
Period, unless otherwise requested in accordance with paragraph (ii)
below, will be with respect to each day during such Pricing Rate Period
the rate per annum for deposits in Dollars for a one-month period which
appears on Reuters LIBOR01 Page (or any successor page) as of 11:00
a.m., London time, on such date;
(ii) upon written request to the Buyer Agent not less than two
(2) Business Days prior to a Reset Date, Seller may request that the
Buyer Agent determine LIBOR based upon the rate for deposits in Dollars
for a one-month, two-month, or three-month period which appears on
Reuters LIBOR01 Page (or any successor page) as of 11:00 a.m., London
time, on such date; provided, however, that not more than five (5)
LIBOR Transactions shall be subject to LIBOR rates for a two-month or
three-month period at any time and that the
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aggregate Purchase Price of all Purchased Assets subject to each such
LIBOR Transaction is not less than $5,000,000; or
(iii) on any Reset Date on which no such rate appears on
Reuters LIBOR01 Page (or any successor page) as described above, LIBOR
for the next Pricing Rate Period will be determined on the basis of the
rate per annum at which deposits in Dollars are offered by the Buyer
Agent's London Branch at approximately 11:00 a.m., London time, on such
date to prime banks in the London interbank market for a one-month,
two-month or three-month period, as applicable.
All percentages resulting from any calculations or determinations
referred to in this definition will be rounded upwards, if necessary, to the
nearest multiple of 1/100th of 1% and all Dollar amounts used in or resulting
from such calculations will be rounded to the nearest cent (with one-half cent
or more being rounded upward).
"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.
"Loan Type Grouping" shall mean, with respect to the Eligible Loans,
any of the types of Eligible Loans listed in Schedule I-A attached to this Annex
I.
"LTV" shall mean the ratio of total loan to appraised value (based upon
an Acceptable Appraisal, if available, or, if unavailable, a Draft Appraisal)
for the Mortgaged Property securing directly or indirectly an Eligible Loan or
from which the payments on such Eligible Loan are derived.
"Margin Notice Deadline" shall mean 11:00 a.m. (New York City time).
"Market Value" shall mean, with respect to any Purchased Assets as of
the related Purchase Date, the market value for such Purchased Assets on such
date, denominated in Dollars, as determined by the Buyer Agent in the exercise
of its good faith business judgment and, with respect to any Purchased Assets as
of any relevant date after the related Purchase Date, the market value for such
Purchased Assets on such date, as determined by the Buyer Agent in its sole
discretion using methodology and parameters determined in its sole discretion
(including, in each case, the positive or negative value of any Hedging
Agreements pledged with such Purchased Assets, determined by the Buyer Agent on
the basis of the economic terms thereof as set forth in the related hedge
documentation provided by Seller). The Market Value of all Purchased Assets
shall be determined by the Buyer Agent on each Business Day during the term of
the Agreement. Without limiting the foregoing, the Market Value may be
determined to be zero for any Purchased Asset that is, after its Purchase Date,
determined not to be an Eligible Loan or Eligible Security (except with respect
to representations and warranties the noncompliance with which was disclosed to
the Buyer Agent as of the related Purchase Date).
"Material Adverse Change" shall mean a material adverse change, as
determined by the Buyer Agent in its sole discretion exercised in good faith, on
any of the property,
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business, operations or financial condition of Sponsor and its consolidated
Subsidiaries, taken as a whole.
"Mezzanine Loans" shall mean performing mezzanine loans secured by
pledges of all or partial equity ownership interests in entities that directly
or indirectly own multifamily or commercial properties (or participation
interests in such performing mezzanine loans).
"Mezzanine Note" shall mean a note or other evidence of indebtedness of
the owner or owners of all equity or ownership interests in an underlying real
property owner secured by a pledge of such ownership interests.
"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 lien on or an ownership
interest in an estate in fee simple or leasehold estate in real property and the
improvements thereon, securing a mortgage note or similar evidence of
indebtedness.
"Mortgage Note" shall mean a note or other evidence of indebtedness of
a Mortgagor secured by a Mortgage.
"Mortgaged Property" shall mean the real property securing repayment of
the debt evidenced by a Mortgage Note.
"Mortgagor" shall mean the obligor on a Mortgage Note and the grantor
of the related Mortgage.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Seller or any ERISA Affiliate and which is covered by Title
IV of ERISA.
"New Asset" shall mean an Eligible Loan or Eligible Security that
Seller proposes to be included as a Purchased Asset.
"Original Purchase Percentage" shall mean, with respect to any
Transaction as of any day, the "Original Purchase Percentage" specified for the
applicable Rating Category or Loan Type Grouping in Schedule I-A attached to
this Annex I (or otherwise determined in accordance with the definition of
"Purchase Price").
"Originated Loan" shall mean any Eligible Loan whose Purchased Loan
Documents were prepared by Seller, Sponsor or an Affiliate controlled by the
Sponsor.
"Permitted Purchased Loan Modification" shall mean any modification of
a Purchased Loan, other than a modification which (1) amends or modifies the
interest rate, principal amount, maturity date or any other financial or
economic term (including, but not limited to, the amortization schedule) of a
Purchased Loan, (2) extends any payment date for the payment of such principal
or interest, (3) amends, modifies or waives any cash management or reserve
account requirements of a Purchased Loan, (4) releases or subordinates any
portion of
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the collateral securing such Purchased Loan, (5) waives any foreclosure rights
with respect to any portion of the collateral securing such Purchased Loan, (6)
releases or modifies any guarantee or (7) modifies the terms of any provisions
applicable to casualty or condemnation proceeds.
"Person" shall mean an individual, corporation, limited liability
company, business trust, partnership, joint tenant or tenant-in-common, trust,
unincorporated organization, or other entity, or a federal, state or local
government or any agency or political subdivision thereof.
"Plan" shall mean an employee benefit or other plan established or
maintained by Seller or any ERISA Affiliate during the five-year period ended
prior to the date of this Agreement or to which Seller or any ERISA Affiliate
makes, is obligated to make or has, within the five-year period ended prior to
the date of this Agreement, been required to make contributions and which is
covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code,
other than a Multiemployer Plan.
"Portfolio Deficit Cure Amount" shall mean, with respect to all
Purchased Assets as of any date, the amount (expressed in Dollars) obtained by
dividing (i) the aggregate Repurchase Price of all Purchased Assets as of such
date by (ii) a number, expressed as a percentage, obtained by (A) taking the
weighted average Original Purchase Percentage of such Purchased Assets
(expressed as a decimal and weighted on the basis of the respective Repurchase
Prices of such Purchased Assets) and (B) multiplying the result by 100.
"Pre-Existing Loan" shall mean any Eligible Loan and is not an
Originated Loan.
"Preliminary Due Diligence Package" shall mean with respect to any New
Assets, 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 Assets to be provided by Seller to the
Buyer Agent pursuant to this Agreement:
With respect to each Eligible Loan:
(i) an Acceptable Appraisal, if available, or, if unavailable,
a Draft Appraisal;
(ii) the Purchased Loan Information;
(iii) current rent roll, if applicable;
(iv) financial statements of the related property-owning
entity, certified by such entity, for the past two (2) years, to the
extent available to Seller, and separate financial or other reporting
statements with respect to each property owned by such entity and
relating to such Eligible Loan, to the extent prepared by such entity
and available to Seller;
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(v) trailing 12-month unaudited income statement of the
related property-owning entity, to the extent available to Seller, and
income statements with respect to each property owned by such entity
and relating to such Eligible Loan, to the extent prepared by such
entity and available to Seller;
(vi) cash flow pro-forma, plus historical information, if
available;
(vii) current operating budget of the related property-owning
entity, if available, and a separate operating budget with respect to
each property owned by such entity and relating to such Eligible Loan,
if available;
(viii) description of the Mortgaged Property and the ownership
structure of the borrower and the sponsor (including, without
limitation, the board of directors, if applicable) and financial
statements of the borrower and the sponsor;
(ix) indicative debt service coverage ratios; (x) indicative
loan-to-value ratio; (xi) term sheet outlining the transaction
generally; (xii) Seller's relationship with the Mortgagor, if any;
(xiii) with respect to any New Assets that are Pre-Existing
Loans, a list that specifically and expressly identifies any Purchased
Loan Documents that relate to such New Assets but are not in Seller's
possession;
(xiv) any exceptions to the representations and warranties set
forth in Exhibit VI to the Agreement; (xv) confirmation that such
Eligible Loan has been approved by Seller's credit committee, to the
extent applicable;
(xvi) if such Purchased Loan is serviced by a sub-servicer
engaged by Seller, the identity of such sub-servicer; and
(xvii) such other information as may be reasonably requested
in writing by the Buyer Agent in respect of a particular Eligible Loan;
provided, that the Buyer Agent and Seller agree to negotiate in good faith to
produce a listing of key terms that the Buyer Agent and Seller consider standard
for intercreditor agreements and participation agreements relating to commercial
loans of the type of the Eligible Loans (such terms, the "Standard Terms") and
upon such agreement, Seller shall include with the Preliminary Due Diligence
Package for each future New Asset that is an Eligible Loan a summary of any
material deviations from the Standard Terms, to the extent applicable to such
New Asset; provided, further, that the Buyer Agent acknowledges and agrees that
each such summary shall be used solely for the Buyer Agent's ease of reference
in its own independent review of the underlying loan documentation and that
Seller makes no representation or warranty whatsoever
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as to the accuracy or completeness of any such summary (and, for the avoidance
of doubt, in no event shall such summary be considered to be Specified Data).
With respect to each Eligible Security:
(i) collateral summary books which include, to the extent
provided to Seller, the following:
(A) loan detail and asset description,
(B) map, photo,
(C) rent roll,
(D) operating information, and
(E) appraisal, environmental, engineering summary;
(ii) Seller's underwriting materials and analysis, which
includes the executive summary, all loss scenarios and the asset
summaries for the twenty (20) largest loans used in Seller's roll-up
meetings;
(iii) loan data disk;
(iv) materials furnished to the Rating Agencies in connection
with the issuance of the Eligible Securities, to the extent provided to
Seller;
(v) Securitization Documents;
(vi) the remittance report for the most recent period in
Seller's possession; (vii) quarterly remittance reports in Seller's
possession; (viii) accounting reports delivered with respect to the
Eligible Security in Seller's possession; (ix) legal opinions delivered
with respect to the Eligible Security in Seller's possession;
(x) a copy of the executed trade ticket (including evidence of
the Dollar price paid and purchase spread over Treasuries or other
relevant benchmark for such Eligible Security) and any adjustments to
the purchase price not reflected in such trade ticket; and
(xi) such other information as may be reasonably requested in
writing by the Buyer Agent in respect of a particular Eligible
Security.
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"Price Differential" shall mean, with respect to any Transaction as of
any date, the aggregate amount obtained by daily application of the Pricing Rate
for such Transaction to the Repurchase Price for such Transaction on a
360-day-per-year basis for the actual number of days during the period
commencing on (and including) the Purchase Date for such Transaction and ending
on (but excluding) the date of determination (reduced by any amount of such
Price Differential previously paid by Seller to the Buyer Agent, for the account
of the applicable Buyer with respect to such Transaction).
"Pricing Rate" shall mean, for any Pricing Rate Period, with respect to
a Transaction involving Purchased Securities in any Rating Category and/or
Purchased Loans in any Loan Type Grouping on Schedule I-A of this Annex I, an
annual rate equal to the LIBO Rate for the Pricing Rate Period plus the relevant
Applicable Spread for such Transaction, subject to adjustment and/or conversion
as provided in Sections 3.7 and 3.8.
"Pricing Rate Period" shall mean, (a) in the case of the first Pricing
Rate Period with respect to any Transaction, the period commencing on and
including the Purchase Date for such Transaction and ending on and excluding the
following Reset Date, and (b) in the case of any subsequent Pricing Rate Period,
the period commencing on and including such Reset Date and ending on and
excluding the following Reset Date; provided, however, that in no event shall
any Pricing Rate Period end subsequent to the Termination Date.
"Principal Payment" shall mean, with respect to any Purchased Assets,
any payment or prepayment of principal received by the Account Bank in respect
thereof.
"Purchase Date" shall mean the date on which Purchased Assets are to be
sold by Seller to a Buyer hereunder.
"Purchase Price" shall mean, with respect to any Purchased Assets, (i)
initially the price at which such Purchased Assets are transferred by Seller to
the applicable Buyer on the applicable Purchase Date and (ii) thereafter, such
price increased by the amount of any cash transferred by the applicable Buyer to
Seller pursuant to Section 4.1 hereof. The Purchase Price as of any Purchase
Date for any Purchased Securities in a particular Rating Category or any
Purchased Loans in a particular Loan Type Grouping shall be an amount (expressed
in Dollars) equal to the product obtained by multiplying (i) the Market Value of
such Purchased Assets by (ii) the "Original Purchase Percentage" for such Rating
Category or such Loan Type Grouping, as set forth in Schedule I-A attached to
this Annex I; provided, that (x) in the case of a Purchased Loan secured,
directly or indirectly, by fewer than three (3) related multifamily or
commercial properties, the Purchase Price thereof shall not exceed 20% of the
Facility Amount and (y) in the case of a Purchased Loan secured, directly or
indirectly, by three (3) or more related multifamily or commercial properties,
the Purchase Price thereof shall not exceed the sum of the Allocable Purchase
Prices for the related multifamily or commercial properties, unless in either
case, the applicable Buyer shall have agreed in its sole discretion to pay a
higher Purchase Price; provided, further, that in the event that the Purchase
Price which would otherwise apply to any Purchased Asset is reduced on account
of the immediately preceding proviso, the "Original Purchase Percentage" for
such Purchased Asset shall be the Purchase Price for such Purchased Asset
expressed as a percentage of its Market Value as of the related Purchase Date.
The applicable Buyer and Seller may agree that the Purchase Price set forth in a
Confirmation shall be an
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amount greater than the amount otherwise determined pursuant to this definition
and, in such event, such greater amount (expressed as a percentage of the Market
Value of the related Purchased Asset as of the related Purchase Date) shall be
deemed to be the "Original Purchase Percentage" for purposes of the Agreement.
Subject to Seller's rights under Section 3.13 of this Annex I, Seller may
request that the Purchase Price set forth in a Confirmation be an amount less
than the amount otherwise determined pursuant to this definition and, in such
event, such lesser amount (expressed as a percentage of the Market Value of the
related Purchased Asset as of the related Purchase Date) shall be deemed to be
the "Original Purchase Percentage" for purposes of the calculation of the Target
Price but not for any other purpose under the Agreement.
"Purchased Assets" shall mean, collectively, the Purchased Securities
and the Purchased Loans.
"Purchased Loan Documents" shall mean, with respect to a Purchased
Loan, the documents comprising the Purchased Loan File for such Purchased Loan.
"Purchased Loan File" shall mean the documents specified as the
"Purchased Loan File" in Section 7.5 together with any additional documents and
information required to be delivered to the Buyer Agent or its designee
(including the Custodian) pursuant to this Agreement.
"Purchased Loan Information" shall mean, with respect to each Purchased
Loan, the information set forth in Exhibit VII attached hereto.
"Purchased Loan Schedule" shall mean a schedule of Purchased Loans
attached to each Trust Receipt and Custodial Delivery containing information
substantially similar to the Purchased Loan Information.
"Purchased Loans" shall mean (i) with respect to any Transaction, the
Eligible Loans sold by Seller to the applicable Buyer in such Transaction until
such Eligible Loans are repurchased pursuant to this Agreement and (ii) with
respect to the Transactions in general, all Eligible Loans sold by Seller to the
Buyers until such Eligible Loans are repurchased pursuant to this Agreement.
"Purchased Securities" shall mean, (i) with respect to any Transaction,
the Eligible Securities sold by Seller to the applicable Buyer in such
Transaction until such Eligible Securities are repurchased pursuant to this
Agreement, and (ii) with respect to the Transactions in general, all Eligible
Securities sold by Seller to the Buyers until such Eligible Securities are
repurchased pursuant to this Agreement. Whenever Purchased Securities are rated
by more than one Rating Agency and a split rating applies to such Purchased
Securities (i.e., one Rating Agency rates such Purchased Securities at a lower
rating level than the other of such Rating Agencies), then for all purposes of
this Agreement where a rating is to be selected (including, without limitation,
in the determination of any percentages pursuant to Schedule I-A of this Annex
I), the lower of the ratings shall apply.
"Rating Agency" shall mean any of Fitch Inc., Moody's and Standard &
Poor's.
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"Rating Category" shall mean any of the rating categories listed in
Schedule I-A attached to this Annex I.
"REIT" shall mean a Person qualifying for treatment as a "real estate
investment trust" under the Code.
"Relevant System" shall mean (i) The Account Bank Trust Company in New
York, New York, or (ii) such other clearing organization or book-entry system as
is designated in writing by the Buyer Agent.
"Remittance Date" shall mean the fifteenth (15th) calendar day of each
month, or the next succeeding Business Day, if such calendar day shall not be a
Business Day.
"Repurchase Date" shall mean, when used in the Agreement, the
"Termination Date" as defined in this Annex I.
"Repurchase Price" shall mean, with respect to any Purchased Assets as
of any date, the price at which such Purchased Assets are to be transferred from
the applicable Buyer to Seller upon termination of the related Transaction in
whole or in part; such price will be determined in each case as the sum of the
Purchase Price of such Purchased Assets (including, for the avoidance of doubt,
any Contingent Purchase Price actually paid by the applicable Buyer in respect
of such Purchased Assets pursuant to Section 3.13 of this Annex I) and the Price
Differential with respect to such Purchased Assets as of the date of such
determination, minus all Income and cash actually received by the applicable
Buyer or the Buyer Agent (for the account of the applicable Buyer), as
applicable, in respect of such Transaction pursuant to Sections 4.1, 5.2, 5.3,
5.4 and 5.5 of this Annex I.
"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 Buyers.
"Reset Date" shall mean the fifteenth (15th) calendar day of each
month, or the next succeeding Business Day, if such calendar day shall not be a
Business Day.
"Reuters LIBOR01 Page" shall mean the display page currently so
designated on the Reuters Money 3000 xtra service, or any successor service (or
such other page as may replace that page on that service for the purpose of
displaying comparable rates or prices).
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"Securitization Documents" shall mean, with respect to any Eligible
Securities, any pooling and servicing agreements, special servicing agreements
or other agreements governing the issuance and administration of such Eligible
Securities and any offering document used in the distribution and sale of such
Eligible Securities (including, without limitation, the preliminary and final
private placement memorandum, prospectus and/or offering memorandum).
"Servicer" shall mean any sub-servicer engaged by Seller in respect of
the Purchased Loans, which sub-servicer shall, except in the case of Sponsor and
Midland Loan Services, Inc., have been approved by the Buyer Agent in its sole
discretion.
"Servicing Agreement" has the meaning specified in Section 22.2 of this
Annex I.
"Servicing Records" has the meaning specified in Section 22.2 of this
Annex I.
"Settlement Agent" shall mean, with respect to any Transaction
involving Table Funded Purchased Loans, an entity satisfactory to the Buyer
Agent in its reasonable discretion (which may be a title company, escrow company
or attorney in accordance with local law and practice in the jurisdiction where
the related Table Funded Purchased Loan is being originated), to which the
Purchase Price is to be wired by the applicable Buyer at the request of Seller.
"Single-Purpose Entity" shall mean a Person, other than an individual,
which is formed or organized solely for the purpose of holding, directly and
subject to this Agreement, the Purchased Assets, does not engage in any business
unrelated to the Purchased Assets and the financing thereof, does not have any
assets other than cash and the Purchased Assets (or assets which are proposed to
become Purchased Assets), or any indebtedness other than as permitted by the
Agreement, has its own separate books and records and its own accounts, in each
case which are separate and apart from the books and records and accounts of any
other Person, and holds itself out as being a Person and separate and apart from
any other Person. If the foregoing entity is a limited partnership or limited
liability company, (i) its partnership agreement or limited liability company
agreement (as applicable) shall provide that the partnership or limited
liability company shall dissolve upon the withdrawal or dissolution of the last
remaining general partner or managing member, but the partnership or limited
liability company will not be dissolved if the remaining partners or members,
within ninety (90) days, by majority vote elect to continue the partnership or
limited liability company and appoint a new general partner or new managing
member, and (ii) the partnership agreement or limited liability company
agreement (as applicable) must provide that the dissolution and winding up or
bankruptcy or insolvency filing of such partnership or limited liability company
shall require the unanimous consent of all members (including the board of
directors of such members).
"Specified Data" shall mean each certificate, document or financial or
similar statement furnished to the Buyer Agent by or on behalf of Seller or
Sponsor that provides information (other than summary information based upon
documents available to the Buyer Agent) relating to Seller, Sponsor or the
Purchased Assets (i) as required by the terms of the Agreement or the Guaranty
(e.g., financial statements of Sponsor or Seller and compliance certificates of
Sponsor with respect to the financial covenants contained in Section 5 of the
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Guaranty) or (ii) in response to a specific request from the Buyer for such
information as contemplated by the Agreement or the Guaranty, as the case may
be.
"Specified Event of Default" shall mean (i) any Event of Default set
forth in Section 14.1.1 which occurred as a result of a failure to pay Price
Differential and/or Repurchase Price or (ii) any Event of Default set forth in
Section 14.1.3 or 14.1.12.
"Sponsor" shall mean Anthracite Capital, Inc., a Maryland corporation.
"Supplemental Due Diligence List" shall mean, with respect to any New
Assets, information or deliveries concerning the New Assets that the Buyer Agent
shall reasonably request in addition to the Preliminary Due Diligence Package.
"Survey" shall mean a certified ALTA/ACSM (or applicable state
standards for the state in which the Mortgaged Property is located) survey of a
Mortgaged Property prepared by a registered independent surveyor and in form and
content satisfactory to the Buyer Agent and the company issuing the Title Policy
for such Mortgaged Property.
"Table Funded Purchased Loan" shall mean a Purchased Loan which is sold
to a Buyer simultaneously with the origination or acquisition thereof, which
origination or acquisition is financed with the Purchase Price, pursuant to
Seller's request, paid directly to the Settlement Agent for disbursement in
connection with such origination or acquisition. A Purchased Loan shall cease to
be a Table Funded Purchased Loan after the Custodian has delivered a Trust
Receipt to the Buyer Agent certifying its receipt of the Purchased Loan File
therefor.
"Target Price" shall mean, with respect to any Purchased Assets as of
any date, the amount (expressed in Dollars) obtained by multiplying (i) the
Market Value of such Purchased Assets as of such date by (ii) the "Original
Purchase Percentage" for the Rating Category applicable to such Purchased
Securities or the Loan Type Grouping applicable to such Purchased Loans.
"Termination Date" shall mean September 18, 2009.
"Title Policy" shall have the meaning specified in paragraph 8 of the
first paragraph of Exhibit VI.
"Transaction Conditions Precedent" shall have the meaning specified in
Section 3.2 of this Annex I.
"Transaction Documents" shall mean, collectively, the Agreement, this
Annex I, any other applicable Annexes to the Agreement, the Guaranty, the
Custodial Agreement and all Confirmations executed pursuant to the Agreement and
this Annex I in connection with specific Transactions.
"Trust Receipt" shall mean a trust receipt issued by Custodian to the
Buyer Agent confirming the Custodian's possession of certain Purchased Loan
Files which are the property of and held by Custodian for the benefit of the
Buyer Agent, for the benefit of the applicable Buyer (or any other holder of
such trust receipt).
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"Trustee" shall mean, with respect to any Eligible Securities, the
trustee under the Securitization Documents applicable to such Eligible
Securities.
"UCC" shall have the meaning specified in Section 6.3 of this Annex I.
"Underwriting Guidelines" shall mean any underwriting guidelines (and
any amendments thereto) from time to time adopted by Sponsor or Seller.
"Underwriting Issues" shall mean, with respect to any New Asset, 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) including but not
limited to, to the extent of Seller's knowledge, whether any of the Purchased
Assets were rejected for inclusion in, or repurchased from, any securitization
transaction, warehouse loan facility or a repurchase transaction (due to the
breach of a representation and warranty), or a material defect in loan
documentation or closing deliveries (such as any absence of any material
Purchased Loan Document(s)), to a reasonable institutional mortgage buyer in
determining whether to originate or acquire the New Asset in question.
"Unfunded Margin Amount" shall mean, in respect of any Eligible Loan or
Eligible Security on any date of determination, the positive difference, if any,
between (i) the Market Value in respect of such Eligible Asset and (ii) the
Purchase Price.
"Unused Facility Amount" shall mean, as of any date of determination,
the Facility Amount minus the aggregate outstanding Repurchase Price of all
Transactions as of such date of determination.
"Unused Fee" shall have the meaning specified in Section 3.6 of this
Annex I.
"Unused Fee Rate" shall mean a rate per annum equal to (i) 0.10% during
the first 120 calendar days after the initial Purchase Date and (ii) at any time
thereafter (A) 0.10% in the event the daily weighted average Unused Facility
Amount is less than 100% of the Facility Amount but greater than or equal to 50%
of the Facility Amount and (B) 0.15% in the event the daily weighted average
Unused Facility Amount is less than 50% of the Facility Amount.
3. INITIATION; CONFIRMATION; TERMINATION; FEES
The provisions of Paragraph 3 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 3:
3.1 Subject to the terms and conditions set forth in the Agreement
(including, without limitation, the "Transaction Conditions Precedent" specified
in Section 3.2 of this Annex I), each Buyer shall from time to time enter into
Transactions with Seller on any Business Day from and including the date of the
Agreement, but excluding the Termination Date, and pursuant to any such
Transaction, Seller shall be entitled to sell, repurchase and re-sell any assets
in accordance with this Agreement. An agreement to enter into a Transaction
shall be made in writing at the initiation of Seller as provided below;
provided, however, that the aggregate Repurchase Price (excluding the Price
Differential with respect to the Purchased Assets as of the
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date of determination) for all Transactions for all Buyers shall not exceed the
Facility Amount; provided, further, that, notwithstanding anything contained
herein to the contrary, BANA is not required to enter into any Transaction where
the asset(s) to be purchased is, or includes, an Eligible Non-Investment Grade
CMBS Security originally issued by Bank of America, N.A. or an Affiliate thereof
and, for the avoidance of doubt, BAMCC may enter into such Transactions subject
to the terms and conditions hereof. Seller shall give the Buyer Agent written
notice of each proposed Transaction and the Buyer Agent shall inform Seller of
its determination with respect to any assets proposed to be sold to the
applicable Buyer by Seller solely in accordance with Exhibit VIII attached
hereto. The Buyer Agent shall have the right to review all Eligible Loans and
Eligible Securities proposed to be sold to the applicable Buyer in any
Transaction and to conduct its own due diligence investigation of such Eligible
Loans and Eligible Securities as the Buyer Agent reasonably determines. The
Buyer Agent shall be entitled to make a determination, in the exercise of its
good faith business judgment, that it shall not purchase any or all of the
assets proposed to be sold to the applicable Buyer by Seller. On the Purchase
Date for the Transaction which shall be not less than three (3) Business Days
following the approval of an Eligible Loan or an Eligible Security by the Buyer
Agent in accordance with Exhibit VIII hereto, the Purchased Assets shall be
transferred to Buyer or its agent against the transfer of the Purchase Price to
an account of Seller.
3.2 Upon agreeing to enter into a Transaction hereunder, provided each
of the Transaction Conditions Precedent (as hereinafter defined) shall have been
satisfied (or waived by the Buyer Agent), the applicable Buyer shall promptly
(and in any event within five (5) Business Days) deliver to Seller a written
confirmation in the form of Exhibit I attached hereto of each Transaction (a
"Confirmation"). Unless otherwise agreed by the parties, the applicable Buyer
shall deliver a separate Confirmation with respect to each Purchased Asset which
is the subject of a Transaction. Such Confirmation shall describe the Purchased
Securities (including CUSIP number, if any) and/or Purchased Loans, shall
identify the applicable Buyer and Seller, and shall set forth:
3.2.1 the Purchase Date;
3.2.2 the Purchase Price for such Purchased Assets;
3.2.3 the Termination Date;
3.2.4 the Pricing Rate applicable to the Transaction
(including the Applicable Spread); and
3.2.5 any additional terms or conditions not
inconsistent with the Agreement. With respect to any
Transaction, the Pricing Rate shall be determined initially on
the Purchase Date applicable to such Transaction, and shall be
reset on each Reset Date for the related Pricing Rate Period.
The Buyer Agent shall determine in accordance with the terms
of this Agreement the Pricing Rate on each Reset Date for the
related Pricing Rate Period and notify Seller and Custodian of
such rate for such period on the Reset Date. For purposes of
this Section 3.2, the "Transaction Conditions Precedent" shall
be deemed to have been satisfied with respect to any proposed
Transaction if:
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A. no Default or Event of Default under the Agreement shall
have occurred and be continuing as of the Purchase Date for such
proposed Transaction;
B. the representations and warranties made by Seller in each
of the Transaction Documents shall be true and correct in all material
respects as of the Purchase Date for such Transaction;
C. The Buyer Agent shall have (i) determined, in accordance
with the applicable provisions of Section 3.1 of this Annex I, that the
assets proposed to be sold to the applicable Buyer by Seller in such
Transaction are Eligible Securities and/or Eligible Loans, (ii)
completed all legal due diligence in respect of such Eligible
Securities and/or Eligible Loans and (iii) obtained internal credit
approval for the inclusion of such Eligible Securities and/or Eligible
Loans as Purchased Assets in a Transaction; and
D. the Buyer Agent shall have received the Guaranty executed
by the Sponsor.
3.3 Each Confirmation, together with the Agreement, including this
Annex I, shall be conclusive evidence of the terms of the Transaction(s) covered
thereby unless objected to in writing by Seller no more than two (2) Business
Days after the date such Confirmation is received by Seller. An objection sent
by Seller with respect to any Confirmation must state specifically that the
writing is an objection, must specify the provision(s) of such Confirmation
being objected to by Seller, must set forth such provision(s) in the manner that
Seller believes such provisions should be stated, and must be received by the
applicable Buyer no more than two (2) Business Days after such Confirmation is
received by Seller.
3.4 No Transaction shall be terminable on demand by a Buyer (other than
upon the occurrence and during the continuance of an Event of Default by
Seller). Seller shall be entitled to terminate a Transaction in whole or in part
on demand and repurchase all or a portion of the Purchased Assets subject to a
Transaction on any Business Day prior to the Termination Date (an "Early
Termination Date"); provided, however, that: 3.4.1 Seller repurchases on such
Early Termination Date, all or the portion of the Purchased Assets subject to
such Transaction which Seller has elected to repurchase;
3.4.2 Seller notifies the Buyer Agent in writing of
its intent to terminate such Transaction and repurchase such
Purchased Assets no later than five (5) Business Days prior to
such Early Termination Date; and
3.4.3 on such Early Termination Date, Seller pays to
the Buyer Agent, for the account of the applicable Buyer, an
amount equal to the sum of the Repurchase Price for such
Transaction (or, in the case of a termination of a Transaction
in part an amount acceptable to the Buyer Agent in its sole
discretion, but not more than such Repurchase Price), and any
other amounts payable under this Agreement (including,
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without limitation, Section 3.9 of this Annex I) with respect
to such Transaction against transfer to Seller or its agent of
such Purchased Assets.
Such notice shall set forth the Early Termination Date and shall
identify with particularity the Purchased Assets to be repurchased on such Early
Termination Date.
3.5 On the Termination Date, termination of the applicable Transactions
will be effected by transfer to Seller or its agent of the Purchased Assets and
any Income in respect thereof received by the Buyer Agent, for the account of
the applicable Buyer (and not previously credited or transferred to, or applied
to the obligations of, Seller pursuant to Section 5 of this Annex I) against the
simultaneous transfer of the Repurchase Price to an account of the Buyer Agent
for the benefit of the Buyers as specified by the Buyer Agent.
3.6 Seller shall pay to the Buyer Agent, for the account of the Buyers,
a fee in an amount equal to 1/4 percent (0.25%) of the Facility Amount on or
prior to the initial Purchase Date. In addition, Seller shall pay to the Buyer
Agent, for the account of the Buyers, an unused fee in Dollars (an "Unused Fee")
in an amount equal to the Unused Fee Rate, which Unused Fee shall be payable
quarterly in arrears during the term of this Agreement on the first Remittance
Date occurring after receipt by Seller of the applicable invoice therefor.
3.7 If prior to the first day of any Pricing Rate Period with respect
to any Transaction, (i) the Buyer Agent shall have determined (which
determination shall be conclusive and binding upon Seller) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBO Rate for such Pricing Rate Period, or (ii)
the LIBO Rate determined or to be determined for such Pricing Rate Period will
not adequately and fairly reflect the cost to the Buyer Agent (as determined and
certified by the Buyer Agent) of making or maintaining Transactions during such
Pricing Rate Period, the Buyer Agent shall give facsimile or telephonic notice
thereof to Seller as soon as practicable thereafter. If such notice is given,
the Pricing Rate with respect to such Transaction for such Pricing Rate Period,
and for any subsequent Pricing Rate Periods until such notice has been withdrawn
by the Buyer Agent, shall be a per annum rate (the "Alternative Rate") equal to
a rate determined based on an index approximating the behavior of LIBOR as
reasonably determined by the Buyer Agent (which may be the Prime Rate).
3.8 Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for a Buyer to effect Transactions as
contemplated by the Transaction Documents, (a) the commitment of such Buyer
hereunder to enter into new Transactions and to continue Transactions as such
shall forthwith be canceled, and (b) the Transactions then outstanding shall be
converted automatically to Alternative Rate Transactions on the last day of the
then-current Pricing Rate Period or within such earlier period as may be
required by law. If any such conversion of a Transaction occurs on a day which
is not the last day of the then-current Pricing Rate Period with respect to such
Transaction, Seller shall pay to the Buyer Agent, for the account of the Buyers,
such amounts, if any, as may be required pursuant to Section 3.9 of this Annex
I.
3.9 Upon demand by the Buyer Agent, Seller shall indemnify the Buyer
Parties and hold the Buyer Parties harmless from any net loss or expense (not to
include any lost
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profit or opportunity) (including, without limitation, reasonable attorneys'
fees and disbursements of external counsel) which the Buyer Parties may sustain
or incur as a consequence of (i) default by Seller in selling Eligible
Securities or Eligible Loans after Seller has notified a Buyer or the Buyer
Agent of a proposed Transaction and the applicable Buyer has agreed to purchase
such Eligible Securities or Eligible Loans in accordance with the provisions of
the Agreement (including also, but not limited to, a default by Seller in
selling Eligible Securities and Eligible Loans on the Purchase Date as set forth
in an irrevocable notice in accordance with Section 3.1 hereto), (ii) any
payment of the Repurchase Price on any day other than a Remittance Date or (iii)
default by Seller in terminating any Transaction after Seller has given a notice
in accordance with Section 3.4 of a termination of a Transaction (in each case
of (i)-(iii) above, including, without limitation, any such loss or expense in
the nature of a breakage cost attributable thereto arising from the reemployment
of funds obtained by the applicable Buyer and/or the Buyer Agent to maintain
Transactions hereunder or from fees payable to terminate the deposits from which
such funds were obtained). As a condition to Seller's liability under this
paragraph, the Buyer Agent shall promptly deliver to Seller a certificate as to
such costs, losses, damages and expenses, setting forth the calculations
therefor and including any available supporting documentation, which certificate
shall be conclusive and binding on Seller in the absence of manifest error.
3.10 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 any Buyer Party with any directive from any central bank or other
Governmental Authority having jurisdiction over any Buyer Party made subsequent
to the date hereof:
3.10.1 shall subject any Buyer Party 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 any Buyer Party in respect thereof (except for changes in the rate
of tax on any Buyer Party's overall net income);
3.10.2 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 any Buyer Party which is not
otherwise included in the determination of the LIBO Rate hereunder; or
3.10.3 shall impose on any Buyer Party any other condition;
and the result of any of the foregoing is to increase the cost to any Buyer
Party, by an amount which the Buyer Agent deems 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 the Buyer Agent, for the account of the Buyers, upon
its demand, any additional amounts necessary to compensate the Buyer Parties for
such increased cost or reduced amount receivable. If the Buyer Parties becomes
entitled to claim any additional amounts pursuant to this Section 3.10, it shall
promptly notify Seller of the event by reason of which it has become so
entitled. As a condition to Seller's liability under this paragraph, the Buyer
Agent shall promptly deliver to Seller a certificate as to the calculation of
any additional amounts payable pursuant to this subsection and including any
available
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supporting documentation, which certificate shall be conclusive and binding upon
Seller in the absence of manifest error. This covenant shall survive the
termination of the Agreement and this Annex I and the repurchase by Seller of
any or all of the Purchased Assets.
3.11 If the Buyer Agent 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 a Buyer Party or any
corporation controlling a Buyer Party with any directive regarding capital
adequacy from any Governmental Authority made subsequent to the date hereof does
or shall have the effect of reducing the rate of return on any Buyer Party's or
such corporation's capital as a consequence of its obligations hereunder to a
level below that which such Buyer Party or such corporation could have achieved
but for such adoption, change or compliance by an amount which is deemed by the
Buyer Agent to be material, then from time to time, after submission by the
Buyer Agent to Seller of a written request therefore, Seller shall pay to the
Buyer Agent, for the account of the Buyers, such additional amount or amounts as
will compensate such Buyer Party for such reduction. As a condition to Seller's
liability under this paragraph, the Buyer Agent shall promptly deliver to Seller
a certificate as to the calculation of any additional amounts payable pursuant
to this subsection and including any available supporting documentation, which
certificate shall be conclusive and binding upon Seller in the absence of
manifest error. This covenant shall survive the termination of the Agreement and
this Annex I and the repurchase by Seller of any or all of the Purchased Assets.
3.12 Without prejudice to any other rights which Seller may have under
the Agreement, upon any tender by Seller of payment of the aggregate Repurchase
Price for all Purchased Assets and all other amounts due and payable to the
Buyer Parties under the Agreement, all of Buyers' right, title and interest in
such Purchased Assets shall be deemed transferred to Seller, and the Buyer
Parties shall deliver, or cause the delivery of, such Purchased Assets to
Seller.
3.13 If Seller shall have (i) received a Purchase Price for any
Purchased Asset less than the Buyer's Maximum Purchase Price for such Purchased
Asset, pursuant to the last sentence of the definition of "Purchase Price" or
(ii) terminated a Transaction in part, pursuant to Section 3.4 of this Annex I,
in either case, such that, as of any date of determination, the outstanding
Repurchase Price for any Purchased Asset is less than the Purchase Price
(determined without regard to the last sentence of the definition thereof) that
would be payable in respect of such Purchased Asset if such date of
determination were the Purchase Date thereof (such difference, the "Contingent
Purchase Price"), then Seller may, by written notice to the applicable Buyer or
the Buyer Agent on such date of determination, request payment of all or any
portion of such Contingent Purchase Price (any such payment, an "Additional
Payment"). So long as no Event of Default, CF Sweep Event, Asset Margin Deficit
and/or Portfolio Margin Deficit shall have occurred and be continuing, Buyer
shall pay such Additional Payment requested by Seller by the close of business
on the second Business Day after such notice is given if such notice is given
after 11:00 a.m. (New York time) on a Business Day. Any such Additional Payment
shall be evident by an amended and restated Confirmation for the affected
Purchased Asset.
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4. MARGIN MAINTENANCE
4.1 Paragraphs 4(a), 4(b), 4(c) and 4(d) of the Agreement are hereby
modified in their entirety to read as follows:
"(a) If at any time, the Market Value of any of the
Purchased Assets shall be less than Buyer's Asset Margin
Amount for such Purchased Assets (an "Asset Margin Deficit"),
then the Buyer Agent may by notice to Seller require Seller to
transfer to the Buyer Agent, for the account of the Buyers,
cash so that the sum obtained by adding the Market Value of
such Purchased Assets plus such cash shall equal or exceed the
Asset Deficit Cure Amount for such Purchased Assets as of the
same date. If at any time, after giving effect to any amounts
payable pursuant to the immediately preceding sentence, the
aggregate Market Value of all of the Purchased Assets shall be
less than Buyer's Portfolio Margin Amount (a "Portfolio Margin
Deficit"), then the Buyer Agent may by notice to Seller
require Seller to transfer to the Buyer Agent, for the account
of the Buyers, cash so that the sum obtained by adding the
Market Value of all Purchased Assets plus such cash shall
equal or exceed the Portfolio Deficit Cure Amount as of the
same date. Seller's failure to cure any Asset Margin Deficit
or Portfolio Margin Deficit as required by the two preceding
sentences shall constitute an Event of Default under the
Transaction Documents and shall entitle the Buyer Parties to
exercise their remedies under Section 14 of Annex I
(including, without limitation, the liquidation remedy
provided for in Section 14.2.5 of Annex I).
(b) [Reserved].
(c) If any notice is given by the Buyer Agent under
Paragraph 4(a) of the Agreement on any Business Day, the
Seller shall transfer the cash by no later than the close of
business in the relevant market on the second Business Day
following such notice (or, if such notice given after the
Margin Notice Deadline, no later than the close of business in
the relevant market on the third Business Day following such
notice). Notice required pursuant to Paragraph 4(a) of the
Agreement may be given by any means of facsimile transmission
and shall be delivered in accordance with the terms of the
Agreement. The failure of any Buyer Party on any one or more
occasions, to exercise its rights under Paragraph 4(a) of the
Agreement shall not change or alter the terms and conditions
to which the Agreement is subject or limit the right of such
Buyer Party to do so at a later date. Seller agrees that any
failure or delay by any Buyer Party to exercise its rights
under Paragraph 4(a) of the Agreement shall not limit any
Buyer Party's rights under the Agreement or otherwise existing
by law or in any way create additional rights for Seller.
(d) Any cash transferred to the Buyer Agent, for the
account of the Buyers, pursuant to Paragraph 4(a) of the
Agreement on account of an Asset Margin Deficit with respect
to any Purchased Assets shall be applied to reduce the
Repurchase Price for such Purchased Assets under the relevant
Transaction. Any cash transferred to the Buyer Agent, for the
account of the Buyers, pursuant to
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Paragraph 4(a) of the Agreement on account of a Portfolio Margin
Deficit shall be applied to reduce the Repurchase Price for such
Purchased Assets as may be designated by the Buyer Agent in its sole
discretion.
4.2 Paragraphs 4.1(e) and 4(f) of the Agreement are hereby deleted in
their respective entireties.
5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS
The provisions of Paragraph 5 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 5:
5.1 The Cash Management Account shall be established at the Account
Bank concurrently with the execution and delivery of the Agreement and this
Annex I by Seller and the Buyer Agent. The Buyer Agent, for the benefit of the
Buyers, shall have sole dominion and control over the Cash Management Account.
Seller shall cause all Income in respect of the Purchased Assets and any
payments in respect of associated Hedging Agreements to be deposited directly
into the Cash Management Account. Such Income shall be remitted by the Account
Bank in accordance with the applicable provisions of Sections 5.2, 5.3, 5.4, 5.5
and 5.6 of this Annex I.
5.2 With respect to Purchased Loans, Seller shall deliver to each
Mortgagor, issuer of a participation, borrower under a Purchased Loan or other
applicable party making payments on a Purchased Loan an irrevocable redirection
letter in the form attached as Exhibit IX to this Agreement instructing the
Mortgagor, issuer of a participation, borrower or other applicable party to pay
all Income under the related Purchased Loan to the Cash Management Account and
shall provide to the Buyer Agent proof of such delivery. If a Mortgagor, issuer
of a participation, borrower or other applicable party forwards any Income with
respect to a Purchased Loan to Seller rather than directly to the Cash
Management Account, Seller shall (i) deliver an additional irrevocable direction
letter to the applicable Mortgagor, issuer of a participation, borrower or other
applicable party and make other commercially reasonable efforts to cause such
Mortgagor, issuer of a participation, borrower or other applicable party to
forward such amounts directly to the Cash Management Account and (ii) within one
Business Day deposit in the Cash Management Account any such amounts.
5.3 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 Account Bank in respect of the Purchased Assets and the associated
Hedging Agreements (other than Principal Payments) during each Collection Period
shall be applied by the Account Bank on the related Remittance Date as follows:
5.3.1 first, to remit escrow payments then due, if any, under
the terms of the Purchased Assets, to the extent required to be paid by
Seller;
5.3.2 second, to remit any unpaid servicing fees then due to
any Servicers, to the extent required to be paid by Seller;
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5.3.3 third, to remit to the Buyer Agent, for the account of
the Buyers, an amount equal to the Price Differential which has accrued
and is outstanding as of such Remittance Date;
5.3.4 fourth, to remit payments then due under the Hedging
Agreements, if any; and 5.3.5 fifth, to remit to Seller the remainder,
if any.
5.4 So long as no Event of Default or CF Sweep Event with respect to
any Purchased Asset shall have occurred and be continuing, any Principal Payment
received by the Account Bank in respect of any of the Purchased Assets during
each Collection Period shall be applied by the Account Bank on the related
Remittance Date in the following order of priority:
5.4.1 first, to make a payment to the Buyer Agent, for the
account of the Buyers, on account of the Repurchase Price of the
Purchased Assets, in respect of which such Principal Payment has been
received, until the Repurchase Price for such Purchased Assets has been
reduced to the Target Price for such Purchased Assets as of the date of
such payment (as determined by the Buyer Agent after giving effect to
such Principal Payment); and
5.4.2 second, to remit to Seller the remainder of such
Principal Payment.
5.5 If a CF Sweep Event with respect to any Purchased Asset shall have
occurred and be continuing, all Income received by the Account Bank in respect
of the Purchased Assets and the associated Hedging Agreements shall be applied
by the Account Bank on the Business Day next following the Business Day on which
such funds are deposited in the Cash Management Account as follows:
5.5.1 first, to remit to the Buyer Agent, for the account of
the Buyers, an amount equal to the Price Differential which has accrued
and is outstanding in respect of all of the Purchased Assets as of such
Business Day;
5.5.2 second, to make a payment to the Buyer Agent, for the
account of the Buyers, on account of the Repurchase Price of the
Purchased Assets in respect of which the CF Sweep Event occurred, until
the Repurchase Price for such Purchased Assets has been reduced to the
Target Price for such Purchased Assets as of the date of such payment
(as determined by the Buyer Agent after giving effect to such
remittance), each such payment to be allocated in the Buyer Agent's
sole discretion among those Purchased Assets with respect to which such
CF Sweep Event is continuing; and
5.5.3 third, to remit to Seller the remainder.
5.6 If an Event of Default shall have occurred and be continuing, all
Income received by the Account Bank in respect of the Purchased Assets and the
associated Hedging Agreements shall be applied by the Account Bank on the
Business Day next following the Business Day on which such funds are deposited
in the Cash Management Account as follows:
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5.6.1 first, to remit to the Buyer Agent, for the account of
the Buyers, an amount equal to the Price Differential which has accrued
and is outstanding in respect of all of the Purchased Assets as of such
Business Day;
5.6.2 second, to make a payment to the Buyer Agent, for the
account of the Buyers, on account of any other amounts (other than
Repurchase Price) due and payable to the Buyer Agent, for the account
of the Buyers, under the Agreement;
5.6.3 third, to make a payment to the Buyer Agent, for the
account of the Buyers, on account of the Repurchase Price of all
Purchased Assets until the Repurchase Price for all of the Purchased
Assets has been reduced to zero, each such payment to be allocated in
the Buyer Agent's sole discretion among those Purchased Assets with
respect to which the Repurchase Price has not been reduced to zero; and
5.6.4 fourth, to remit to Seller the remainder.
6. SECURITY INTEREST
The provisions of Paragraph 6 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 6:
6.1 Each Buyer and Seller intend that all Transactions hereunder be
sales to the applicable Buyer of the Purchased Assets and not loans from such
Buyer to Seller secured by the Purchased Assets. However, in the event any such
Transaction is deemed to be a loan, Seller hereby pledges all of its right,
title, and interest in, to and under and grants a first priority lien on, and
security interest in, all of the following property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located to
the Buyer Agent, for the benefit of the Buyers, to secure the payment and
performance of all other amounts or obligations owing to the Buyer Parties
pursuant to this Agreement and the related documents described herein:
(a) the Purchased Securities purchased pursuant to
the Agreement and all "securities accounts" created in
connection therewith (as defined in Section 8-501(a) of the
UCC) to which any or all of such Purchased Securities are
credited;
(b) the Purchased Loans purchased pursuant to the
Agreement, Servicing Agreements in connection with this
Agreement, Servicing Records in connection with the Agreement,
insurance relating to such Purchased Loans, and collection and
escrow accounts relating to such Purchased Loans;
(c) all "general intangibles," "accounts" and
"chattel paper" as defined in the UCC relating to or
constituting any and all of the foregoing; and
(d) 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.
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6.2 In addition, irrespective of whether any Transaction is deemed to
be a loan, Seller hereby pledges all of its right, title, and interest in, to
and under and grants a first priority lien on, and security interest in, all of
the following property, whether now owned or hereafter acquired, now existing or
hereafter created and wherever located (collectively, together with any and all
collateral granted to the Buyer Agent, for the benefit of the Buyers, pursuant
to Section 6.1 above, the "Collateral") to the Buyer Agent, for the benefit of
the Buyers, to secure the payment and performance of all other amounts or
obligations owing to the Buyer Parties pursuant to this Agreement and the
related documents described herein:
(a) the Cash Management Account created in connection
with the Agreement and all monies from time to time on deposit
in such Cash Management Account;
(b) the Hedging Agreements, if any;
(c) all "general intangibles," "accounts" and
"chattel paper" as defined in the UCC relating to or
constituting any and all of the foregoing; and
(d) 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.
6.3 The Buyer Agent's security interest in the Collateral shall
terminate only upon termination of Seller's obligations under the Agreement and
the documents delivered in connection herewith and therewith. For purposes of
the grant of the security interest pursuant to this Section 6, the Agreement
shall be deemed to constitute a security agreement under the New York Uniform
Commercial Code (the "UCC"). The Buyer Agent 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 and Seller shall have all of the rights and
may exercise all of the remedies of a debtor under the UCC and the other laws of
the State of New York. In furtherance of the foregoing, (a) Seller, at its 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-1 financing statements and continuation statements (collectively,
the "Filings"), and shall forward copies of such Filings to the Buyer Agent upon
completion thereof, (b) Seller shall from time to time take such further actions
as may be reasonably requested by the Buyer Agent 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 the Buyer
Agent hereunder) and (c) Seller hereby authorizes the Buyer Agent, at its
option, to file any such Filings, including, without limitation, a UCC-1
financing statement describing the collateral as "all assets" of the Seller.
7. PAYMENT, TRANSFER AND CUSTODY
The provisions of Paragraph 7 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 7:
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7.1 On the Purchase Date for each Transaction, ownership of the
Purchased Assets shall be transferred to the applicable 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.
7.2 On or prior to the applicable Purchase Date, Seller shall deliver
the related Purchased Securities reregistered in the name of the applicable
Buyer or other designee of such Buyer in accordance with the Custodial Agreement
(or, subject to the approval of Buyer, together with documentation sufficient to
permit the reregistration of the Purchased Securities by the applicable Buyer in
the name of such Buyer or other designee of such Buyer) and the applicable Buyer
or its other designee shall have all rights of conversions, exchange,
subscription and any other rights, privileges and options pertaining to such
Purchased Securities as the owner thereof, and in connection therewith, the
right to deposit and deliver any and all of such Purchased Securities with any
committee, depositary transfer, agent, register or other designated agency upon
such terms and conditions as such Buyer or the Buyer Agent on behalf of such
Buyer may determine. The Purchased Securities shall be held by the applicable
Buyer or its designee, as exclusive bailee and agent for such Buyer, either
directly or through the facilities of a Relevant System, as "securities
intermediary" (as defined in Section 8-102(a)(14) of the UCC and 31 C.F.R.
Section 357.2) and credited to the "securities account" (as defined in Section
8-501(a) of the UCC) of such Buyer. The applicable Buyer, as "entitlement
holder" (as defined in Section 8-102(a)(7) of the UCC) with respect to such
Purchased Securities, shall be entitled to receive all cash dividends and
distributions paid in respect thereof. Any such dividends or distributions with
respect to such Purchased Securities received by Seller shall be promptly
remitted to the Cash Management Account.
7.3 With respect to the Purchased Securities that shall be delivered or
held in uncertificated form and the ownership of which is registered on books
maintained by the issuer thereof or its transfer agent, Seller shall cause the
registration of such security or other item of investment property in the name
of the applicable Buyer or its designee, and at the request of the Buyer Agent,
shall take such other and further steps, and shall execute and deliver such
documents or instruments necessary in the opinion of the Buyer Agent, to effect
a legally valid transfer to the applicable Buyer hereunder. With respect to such
Purchased Securities that shall be delivered or held in definitive, certificated
form, Seller shall deliver to the Buyer Agent or its designee (which shall be
the Custodian initially) the original of the relevant certificate registered in
the name of the applicable Buyer or its designee (or, subject to the approval of
the Buyer Agent, together with documentation sufficient to permit the
reregistration of the Purchased Securities by the Buyer Agent in the name of the
applicable Buyer or other designee of the applicable Buyer). Unless otherwise
instructed by the Buyer Agent, any delivery of a security or other item of
investment property in definitive, certificated form shall be made to the
Custodian. With respect to such Purchased Securities that shall be delivered
through a Relevant System in book-entry form and credited to or otherwise held
in a securities account, Seller shall take such actions necessary to provide
instruction to the relevant financial institution or other entity, which
instruction shall be sufficient if complied with, to register the transfer of
such Purchased Securities from Seller to the applicable Buyer or its designee.
In connection with any account to which such Purchased Securities are credited
or otherwise held, Seller shall execute and deliver such other and further
documents or instruments necessary, in the opinion of the Buyer Agent, to effect
a legally valid transfer to the applicable Buyer hereunder. Any account to which
such
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Purchased Securities are credited or otherwise held shall be designated in
accordance with the Custodial Agreement or such variation thereon as the Buyer
Agent may direct. Any delivery of such Purchased Security in accordance with
this paragraph, or any other method acceptable to the Buyer Agent, shall be
sufficient to cause the applicable Buyer to be the "entitlement holder" (as
defined in Section 8-102(a)(7) of the UCC) with respect to such Purchased
Securities and, if the Transaction is recharacterized as a secured financing, to
have a perfected first-priority security interest therein. No Purchased
Securities, whether certificated or uncertificated, shall remain in the name, or
possession, of Seller or any of its agents or in any securities account in the
name of Seller or any of its agents.
7.4 As a condition to each Buyer's purchase of any Purchased
Securities,
7.4.1 Seller shall deliver to the Buyer Agent on or prior to
the Purchase Date with respect to such Purchased Securities:
A. copies of the executed Securitization
Documents governing such Purchased Securities, and
the offering documents related to such Purchased
Securities, each certified by Seller as a true,
correct and complete copy of the original document
delivered to Seller, and any ancillary documents
required to be delivered to holders of the Purchased
Securities under such Securitization Documents;
B. one or more officer's certificates with
respect to the completeness of the documents
delivered as may be reasonably requested by the Buyer
Agent;
C. an instruction letter from Seller to the
Trustee under such Securitization Documents,
instructing the Trustee to remit all sums required to
be remitted to the holder of such Purchased
Securities under such Securitization Documents to the
Account Bank or as otherwise directed in a written
notice signed by Seller and the Buyer Agent;
D. copies of all distribution statements, if
any, delivered to Seller pursuant to such
Securitization Documents during the three-month
period immediately preceding such Purchase Date;
E. a copy of the trade ticket or other
transaction confirmation pursuant to which Seller
acquired such Purchased Securities;
F. a true and correct copy of the executed
irrevocable redirection letter in the form attached
hereto as Exhibit IX; and
G. any other documents or instruments
necessary in the opinion of the Buyer Agent to
consummate the sale of such Purchased Securities to
the applicable Buyer or, if such Transaction is
recharacterized as a secured financing, to create and
perfect in favor of the Buyer Agent, for the benefit
of the Buyers, a valid perfected first-priority
security interest in such Purchased Securities.
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7.4.2 Seller shall take the requisite steps with respect to
delivery and/or registration of such Purchased Securities as described
more fully in Section 7.3 of this Annex I.
7.5 On or before each Purchase Date with respect to each Purchased
Loan, Seller shall deliver or cause to be delivered to the Buyer Agent or its
designee the Custodial Delivery in the form attached hereto as Exhibit IV. On or
before each Purchase Date, with respect to each Table Funded Purchased Loan,
Seller shall cause the Settlement Agent to deliver to the Custodian by facsimile
the related Mortgage Note, the Insured Closing Letter and Escrow Instructions,
and a Settlement Agent trust receipt issued thereunder. In connection with each
sale, transfer, conveyance and assignment of a Purchased Loan, on or prior to
each Purchase Date with respect to such Purchased Loan (other than a Table
Funded Purchased Loan) or by not later than 12:00 p.m. (New York time) on the
third Business Day following the applicable Purchase Date with respect to each
Table Funded Purchased Loan, Seller shall deliver or cause to be delivered and
released to the Custodian the following documents (collectively, the "Purchased
Loan File"), pertaining to each of the Purchased Loans identified in the
Custodial Delivery delivered therewith:
7.5.1 With respect to each Purchased Loan which is an Eligible
First Mortgage Loan:
A. the original Mortgage Note bearing all
intervening endorsements, endorsed "Pay to the order
of without recourse" and signed in the name of the
last endorsee (the "Last Endorsee") by an authorized
Person (in the event that the Mortgage Loan was
acquired by the Last Endorsee in a merger, the
signature must be in the following form: "[Last
Endorsee], successor by merger to [name of
predecessor]"; in the event that the Purchased Loan
was acquired or originated by the Last Endorsee while
doing business under another name, the signature must
be in the following form: "[Last Endorsee], formerly
known as [previous name]");
B. the original of any loan agreement,
guarantee, indemnity or cash management agreement
executed in connection with the Mortgage Note (if
any);
C. 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 Mortgaged
Property is located;
D. 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 Mortgaged Property is located;
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E. the original Assignment of Mortgage in
blank for each Purchased Loan, in form and substance
acceptable for recording and signed in the name of
the Last Endorsee (in the event that the Purchased
Loan was acquired by the Last Endorsee in a merger,
the signature must be in the following form: "[Last
Endorsee], successor by merger to [name of
predecessor]"; in the event that the Purchased Loan
was acquired or originated while doing business under
another name, the signature must be in the following
form: "[Last Endorsee], formerly known as [previous
name]");
F. 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 Mortgaged
Property is located;
G. 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;
H. the original of any security agreement,
chattel mortgage or equivalent document executed in
connection with the Purchased Loan;
I. 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 that has been
submitted for recordation in the appropriate
governmental recording office of the jurisdiction
where the Mortgaged Property is located;
J. the originals of all intervening
assignments of assignment of leases and rents, if
any, or copies thereof, with evidence of recording
thereon;
K. a copy of the UCC-1 financing statements,
certified as true and correct by Seller, and all
necessary UCC-3 continuation statements with evidence
of filing thereon or copies thereof certified by
Seller to have been sent for filing, and UCC-3
assignments executed by Seller in blank, which UCC-3
assignments shall be in form and substance acceptable
for filing;
L. a true and correct copy of the executed
irrevocable redirection letter in the form attached
hereto as Exhibit IX;
M. an environmental indemnity agreement (if
any); N. an omnibus assignment in blank (if any);
O. a disbursement letter from the Mortgagor
to the original mortgagee (if any); P. the
Mortgagor's certificate or title affidavit (if any);
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Q. a survey of the Mortgaged Property (if
any) as accepted by the title company for issuance of
the Title Policy;
R. a copy of the Mortgagor's opinion of
counsel (if any); S. an assignment of permits,
contracts and agreements (if any);
T. all original letters of credit and
originals or certified copies of any interest rate
cap or swap agreements relating to such Purchased
Loan;
U. in respect of any Purchased Loan as to
which the Mortgaged Property or underlying real
property, as applicable, consists of a leasehold
interest, the ground lease, memorandum of ground
lease and ground lessor consent and/or estoppel;
V. the original of any participation
agreement, intercreditor agreement and/or servicing
agreement executed in connection with the Purchased
Loan;
W. all other documents and instruments
evidencing, guaranteeing, insuring or otherwise
constituting or modifying such Purchased Loan, or
otherwise executed or delivered in connection with
such Purchased Loan, including all documents
establishing or implementing any lockbox pursuant to
which Seller is entitled to receive any payments from
cash flow of the underlying real property; and
X. such other documents, agreements or
instruments as shall be reasonably requested by the
Buyer Agent.
7.5.2 With respect to each Purchased Loan which is an Eligible
Mezzanine Loan (other than an Eligible Mezzanine Loan represented by a
participation interest in a performing mezzanine loan) or an Eligible B
Note (other than an Eligible B Note represented by a junior
participation interest):
A. the original Mezzanine Note signed in
connection with the Purchased Loan bearing all
intervening endorsements, endorsed "Pay to the order
of ________ without recourse" and signed in the name
of the Last Endorsee by an authorized Person (in the
event that the Mezzanine Note was acquired by the
Last Endorsee in a merger, the signature must be in
the following form: "[Last Endorsee], successor by
merger to [name of predecessor]"; in the event that
the Purchased Loan was acquired or originated by the
Last Endorsee while doing
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business under another name, the signature must be in
the following form: "[Last Endorsee], formerly known
as [previous name]");
B. the original of the loan agreement and
the guarantee, if any, executed in connection with
the Purchased Loan;
C. the original intercreditor or loan
coordination agreement, if any, executed in
connection with the Purchased Loan;
D. the original security agreement executed
in connection with the Purchased Loan;
E. copies of all documents relating to the
formation and organization of the borrower of such
Purchased Loan, together with all consents and
resolutions delivered in connection with such
borrower's obtaining the Purchased Loan;
F. all other documents and instruments
evidencing, guaranteeing, insuring or otherwise
constituting or modifying or otherwise affecting such
Purchased Loan, or otherwise executed or delivered in
connection with, or otherwise relating to, such
Purchased Loan, including all documents establishing
or implementing any lockbox pursuant to which Seller
is entitled to receive any payments from cash flow of
the underlying real property;
G. the assignment of Purchased Loan
sufficient to transfer to the applicable Buyer all of
Seller's rights, title and interest in and to the
Purchased Loan;
H. a copy of the borrower's opinion of
counsel (if any);
I. a copy of the UCC-1 financing statements,
certified as true and correct by Seller, and all
necessary UCC-3 continuation statements with evidence
of filing thereon or copies thereof certified by
Seller to have been sent for filing, and UCC-3
assignments executed by Seller in blank, which UCC-3
assignments shall be in form and substance acceptable
for filing;
J. a true and correct copy of the executed
irrevocable redirection letter in the form attached
hereto as Exhibit IX;
K. the original certificates representing
the pledged equity interests (if any);
L. stock powers relating to each pledged
equity interest, executed in blank, if an original
stock certificate is provided;
M. assignment of any management agreements,
agreements among equity interest holders or other
material contracts;
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N. if no original stock certificate is
provided, evidence (which may be an officer's
certificate confirming such circumstances) that the
pledged ownership interests have been transferred to,
or otherwise made subject to a first priority
security interest in favor of, Seller;
O. the original environmental indemnity
agreement, if any;
P. all original letters of credit and
originals or certified copies of any interest rate
cap or swap agreements, if any; and
Q. such other documents, agreements or
instruments as shall be reasonably requested by the
Buyer Agent.
7.5.3 With respect to each Purchased Loan which is an Eligible
B Note represented by a junior participation interest or an Eligible
Mezzanine Loan represented by a participation interest in a performing
mezzanine loan:
A. originals or copies of all of the
applicable documents described above with respect to
a Purchased Loan which is an Eligible First Mortgage
Loan or an Eligible Development Loan;
B. the original of any participation
agreement, intercreditor agreement and/or servicing
agreement executed in connection with the Purchased
Loan; and
C. the assignment of Purchased Loan
sufficient to transfer to the applicable Buyer all of
Seller's preferred equity rights, title and interest
in and to the Purchased Loan.
7.5.4 With respect to each Purchased Loan which is an Eligible
Development Loan or an Eligible Bridge Loan, such documents listed in
Section 7.5.1, 7.5.2 or 7.5.3, as applicable, and with respect to each
Purchased Loan which is an Eligible Development Loan, a construction
file containing all material plans and specifications, all contracts
(including the general contract, the architect's contract, all material
sub-contracts and all change orders), all borrower progress reports and
all other material documents, in each case, contained in the related
loan file.
From time to time, Seller shall forward to the Custodian additional
original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Purchased Loan approved in
accordance with the terms of the Agreement, and upon receipt of any such other
documents, the Custodian shall hold such other documents as the Buyer Agent
shall request from time to time. With respect to any documents which have been
delivered or are being delivered to recording offices for recording and have not
been returned to Seller in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, Seller shall deliver to
the Buyer Agent a true copy thereof with an officer's certificate certifying
that such copy is a true, correct and complete copy of the original, which has
been transmitted for recordation. Seller shall deliver such original documents
to the Custodian promptly when they are received. With respect to all of the
Purchased Loans
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delivered by Seller to the Buyer Agent for the benefit of the Buyers 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 the Buyer Agent its attorney-in-fact with full power upon the
occurrence and during the continuance of an Event of Default to (i) complete and
record the Assignment of Mortgage, (ii) complete the endorsement of the Mortgage
Note or Mezzanine Note and (iii) take such other steps as may be necessary or
desirable to enforce Buyer's and the Buyer Agent's rights against such Purchased
Loans and the related Purchased Loan Files and the Servicing Records. The Buyer
Agent shall deposit the Purchased Loan Files representing the Purchased Loans,
or direct that the Purchased Loan Files be deposited directly, with the
Custodian. The Purchased Loan Files shall be maintained in accordance with the
Custodial Agreement. Any Purchased Loan Files not delivered to the Buyer Agent
or its designee (including the Custodian) are and shall be held in trust by
Seller or its designee for the benefit of the applicable Buyer as the owner
thereof. Seller or its designee shall maintain a copy of the Purchased Loan File
and the originals of the Purchased Loan File not delivered to the Buyer Agent or
its designee. The possession of the Purchased Loan File by Seller or its
designee is at the will of the applicable Buyer for the sole purpose of
servicing the related Purchased Loan, 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 Loan to the applicable Buyer. Seller or its designee
(including the Custodian) shall release its custody of the Purchased Loan File
only in accordance with written instructions from the Buyer Agent, unless such
release is required as incidental to the servicing of the Purchased Loans or is
in connection with a repurchase of any Purchased Loan by Seller.
7.6 Unless an Event of Default on the part of Seller shall have
occurred and be continuing, the applicable Buyer shall exercise all voting and
corporate rights with respect to the Purchased Securities in accordance with
Seller's written instructions; provided, however, that such Buyer shall not be
required to follow Seller's instructions concerning any vote or corporate right
if doing so would, in such Buyer's business judgment, impair the Purchased
Securities or be inconsistent with or result in any violation of any provision
of the Transaction Documents. Upon the occurrence and during the continuation of
an Event of Default on the part of Seller, such Buyer shall be entitled to
exercise all voting and corporate rights with respect to the Purchased
Securities without regard to Seller's instructions (including, but not limited
to, if an Act of Insolvency shall occur with respect to Seller or the Sponsor,
to the extent Seller controls or is entitled to control selection of the special
servicer, such Buyer may transfer such special servicing to an entity
satisfactory to such Buyer or the Buyer Agent).
8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED SECURITIES
The provisions of Paragraph 8 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 8:
8.1 Title to all Purchased Assets shall pass to the applicable Buyer on
the applicable Purchase Date, and such Buyer shall have free and unrestricted
use of all Purchased Assets. Nothing in the Agreement or any other Transaction
Document shall preclude the applicable Buyer from engaging in repurchase
transactions with the Purchased Assets or
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otherwise selling, transferring, pledging, repledging, hypothecating, or
rehypothecating the Purchased Assets, but no such transaction shall relieve such
Buyer of its obligations under Section 17 or such Buyer's obligations to
transfer the Purchased Assets to Seller pursuant to Section 3 or 14 of this
Annex I or of such Buyer's obligation to credit or pay Income to, or apply
Income to the obligations of, Seller pursuant to Section 5 hereof.
8.2 Nothing contained in the Agreement or any other Transaction
Document shall obligate the applicable Buyer to segregate any Purchased Asset
delivered to such Buyer or the Buyer Agent by Seller. Notwithstanding anything
to the contrary in the Agreement or any other Transaction Document, no Purchased
Asset shall remain in the custody of Seller or an Affiliate of Seller.
9. SUBSTITUTION
Paragraph 9 of the Agreement ("Substitution") is hereby deleted in its
entirety and replaced by the following:
In the case of any Transaction for which the Termination Date is other
than the Business Day immediately following the Purchase Date and with respect
to which Seller does not have any existing right to substitute substantially the
same Eligible Loans or Eligible Securities for the related Purchased Assets,
Seller shall have the right, subject to the proviso to this sentence, upon
notice to the Buyer Agent, which notice shall be given at or prior to 11:00 a.m.
(New York time) on such Business Day, to substitute substantially the same
Eligible Loans or Eligible Securities, as applicable, for any Purchased Asset;
provided, however, that the Buyer Agent may elect, by the close of business on
the Business Day notice is received, or by the close of the next Business Day if
notice is given after 11:00 a.m. (New York time) on such day, not to accept such
substitution. Any failure by the Buyer Agent to respond to such notice shall be
deemed to be an election by the Buyer Agent not to accept such substitution. In
the event such substitution is accepted by the Buyer Agent, such substitution
shall be made by Seller's transfer to the Buyer Agent of such other Eligible
Loans or Eligible Securities and the Buyer Agent's transfer to Seller of such
Purchased Assets and after substitution, the substituted Eligible Loans or
Eligible Securities shall be deemed to be Purchased Assets. In the event the
Buyer Agent elects (or is deemed to elect) not to accept such substitution, the
Buyer Agent, on behalf of the applicable Buyer, shall offer Seller the right to
terminate the Transaction.
10. REPRESENTATIONS
10.1 In addition to the representations and warranties appearing in
Paragraph 10 of the Agreement, Seller represents and warrants to the Buyer
Parties that as of the Purchase Date for the purchase of any Purchased Assets by
any Buyer from Seller and any Transaction thereunder and as of the date of the
Agreement and at all times while the Agreement and any Transaction thereunder is
in full force and effect:
10.1.1 Organization. Seller is duly organized, validly
existing and in good standing under the laws and regulations of the
state of Seller's organization 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 to the
extent that
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the failure to be so qualified could not reasonably be expected to have
a material adverse effect on the validity of the Transaction Documents
or the Purchased Assets. 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 the Agreement and
the other Transaction Documents.
10.1.2 Due Execution; Enforceability. The Transaction
Documents have been 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.
10.1.3 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 limited liability company agreement 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,
to the extent that such default, conflict or breach would have a
material adverse effect upon Seller's ability to perform its
obligations hereunder. Seller has all necessary licenses, permits and
other consents from Governmental Authorities necessary to acquire, own
and sell the Purchased Assets and for the performance of its
obligations under the Transaction Documents.
10.1.4 Litigation; Requirements of Law. 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,
which may result in any material adverse change in the business,
operations, financial condition, properties, or assets of Seller, or
which may have an adverse effect on the validity of the Transaction
Documents or the Purchased Assets or any material action taken or to be
taken in connection with the obligations of Seller under any of the
Transaction Documents. Seller is in compliance in all material respects
with all Requirements of Law. 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.
10.1.5 No Broker. Seller has not dealt with any broker,
investment banker, agent, or other Person (other than the Buyer Parties
or an Affiliate of the Buyer Parties) who may be entitled to any
commission or compensation in connection with the sale of Purchased
Assets pursuant to any of the Transaction Documents.
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10.1.6 Good Title to Purchased Assets. Immediately prior to
the purchase of any Purchased Assets by a 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
Section 8-102(a)(1) of the UCC), and Seller is the record and
beneficial owner of and has good and marketable title to and the right
to sell and transfer such Purchased Assets to the applicable Buyer and,
upon transfer of such Purchased Assets to the Buyer Agent, for the
benefit of the applicable Buyer, such 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 the Agreement are effective to create in
favor of the Buyer Agent, for the benefit of the applicable Buyer, a
valid security interest in all rights, title and interest of Seller in,
to and under the Purchased Assets and the Buyer Agent, for the benefit
of the applicable Buyer, shall have a valid, perfected first priority
security interest in the Purchased Assets (and without limitation on
the foregoing, the applicable Buyer, as entitlement holder, shall have
a "security entitlement" to the Purchased Securities).
10.1.7 No Default. No Default or Event of Default exists under
or with respect to the Transaction Documents.
10.1.8 Representations in Securitization Documents. All of the
Purchased Securities have been validly issued and are fully paid and
nonassessable and not subject to preemptive rights and have been
offered, issued and sold in compliance with all Requirements of Law.
The Securitization Documents are genuine, in full force and effect and
the legal, valid and binding obligation of the parties thereto,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, and other limitations on creditors' rights generally and to
equitable principles. Seller has not waived the performance of any
action or any default, breach or violation resulting from action or
inaction under a Securitization Document and has not been made aware of
any such waiver. Except as disclosed to the Buyer Agent in writing,
there is no default, breach, violation or event of acceleration
existing under a Securitization Document and no event has occurred
which, with the passage of time or giving of notice or both and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration thereunder. Each Purchased
Security is freely assignable and the related Securitization Documents
permit Seller to sell, assign or pledge such Purchased Security.
10.1.9 Representations and Warranties Regarding Purchased
Loans; Delivery of Purchased Loan File. Seller represents and warrants
to the Buyer Parties that each Purchased Loan sold hereunder and each
pool of Purchased Loans sold in a Transaction hereunder, as of each
Purchase Date for a Transaction, conform in all material respects to
the applicable representations and warranties set forth in Exhibit VI
attached hereto, except as disclosed to the Buyer Agent in writing. It
is understood and agreed that the representations and warranties set
forth in Exhibit VI hereto, if any, shall survive delivery of the
respective Purchased Loan File to the Buyer Agent or its designee
(including the Custodian) to the extent permitted by applicable law.
With respect to each Purchased Loan, the Mortgage Note or Mezzanine
Note, the Mortgage (if any), the Assignment of Mortgage (if any) and
any other documents required to be delivered under
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this Agreement and the Custodial Agreement for such Purchased Loan have
been delivered to the Buyer Agent or the Custodian on its behalf.
Except as otherwise disclosed to the Buyer Agent, Seller or its
designee is in possession of a complete, true and accurate Purchased
Loan File with respect to each Purchased Loan, except for such
documents the originals of which have been delivered to the Custodian.
10.1.10 Adequate Capitalization; No Fraudulent Transfer.
Seller has, as of such Purchase Date, adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations. Seller
is generally able to pay, and as of the date hereof is paying, its
debts as they come due. Seller has not become, nor 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.
10.1.11 Consents. No consent, approval or other action of, or
filing by Seller with, any Governmental Authority or any other Person
is required to authorize, or is otherwise required in connection with,
the execution, delivery and performance of any of the Transaction
Documents by Seller (other than consents, approvals and filings that
have been obtained or made, as applicable). 10.1.12 Members. Seller
does not have any members other than the Sponsor.
10.1.13 Organizational Documents. Seller has delivered to the
Buyer Agent certified copies of its certificate of formation and
limited liability company agreement, together with all amendments
thereto.
10.1.14 No Encumbrances. Except as a result of entering into
the Agreement, 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 or to pay any dividend.
10.1.15 Federal Regulations. Seller is not (i) an "investment
company," or a company "controlled by an investment company," within
the meaning of the Investment Company Act of 1940, as amended, or (ii)
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.
10.1.16 Taxes. Seller has filed or caused to be filed all tax
returns which to the knowledge of Seller would be delinquent if they
had not been filed on or before the date hereof and has paid all taxes
shown to be due and payable on or before the date
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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 such
taxes as are being appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate
reserves have been provided in accordance with GAAP; no tax liens have
been filed against any of Seller's assets and, to Seller's knowledge,
no claims are being asserted with respect to any such taxes, fees or
other charges.
10.1.17 ERISA. Seller does not have any Plans or any ERISA
Affiliates and makes no contributions to any Plans or any Multiemployer
Plans.
10.1.18 Judgments/Bankruptcy. Except as disclosed in writing
to the Buyer Agent, there are no judgments against Seller unsatisfied
of record or docketed in any court located in the United States of
America and no Act of Insolvency has ever occurred with respect to
Seller.
10.1.19 Specified Data. All Specified Data concerning Seller,
Sponsor and the Purchased Assets that has been delivered by or on
behalf of Seller to the Buyer Agent under or in connection with the
Agreement or by or on behalf of Sponsor to the Buyer Agent under or in
connection with the Guaranty is true, complete and correct in all
material respects as of the date of delivery (or if stated to have been
prepared as of an earlier date, as of such earlier date).
10.1.20 Location of Seller. On the date of the Agreement,
Seller's principal place of business is located at c/o BlackRock
Financial Management, Inc., 40 East 52nd Street, New York, New York
10022. Seller's jurisdiction of organization is the State of Delaware.
The location where Seller keeps its books and records, including all
computer tapes and records relating to the Purchased Assets, is its
principal place of business.
10.2 On the Purchase Date for any Transaction, Seller shall be deemed
to have made all of the representations set forth in Section 10.1 of this Annex
I as of such Purchase Date.
11. NEGATIVE COVENANTS OF SELLER
On and as of the date hereof and each Purchase Date and until the
Agreement and this Annex I are no longer in force with respect to any
Transaction, a Material Adverse Change shall not have occurred and Seller shall
not without the prior written consent of the Buyer Agent:
11.1 take any action which would directly or indirectly impair or
adversely affect the applicable Buyer's title to the Purchased Assets;
11.2 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 the
Buyer Parties, or engage in repurchase transactions or similar transactions with
respect to the Purchased Assets (or any of them) with any Person other than
Buyer so long as such Purchased Assets are subject to the Agreement;
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11.3 create, incur or permit to exist any lien, encumbrance or security
interest in or on any of the Purchased Assets subject to the security interest
granted by Seller pursuant to Section 6 of this Annex I, except as described in
Section 6 of this Annex I;
11.4 modify or terminate any of the organizational documents of Seller;
11.5 consent or assent to any amendment or supplement to, or
termination of, any Securitization Document, any note, loan agreement, mortgage
or guaranty relating to the Purchased Loans or other material agreement or
instrument relating to the Purchased Assets other than in accordance with
Section 7.6 or a Permitted Purchased Loan Modification; provided, that the Buyer
Agent agrees to not unreasonably withhold, delay or condition a written request
from Seller to consent to an amendment to a Purchased Loan, to use its best
efforts to respond to any such written request within five (5) Business Days and
to respond to any such written request in any event within seven (7) Business
Days;
11.6 admit any additional members in Seller, or permit the sole member
in Seller to assign or transfer all or any portion of its member interest in
Seller;
11.7 at any time during which an Event of Default on the part of Seller
has occurred and is continuing, vote or take any action to permit any rights
afforded to a holder of the Purchased Securities under the related
Securitization Documents; or 11.8 after the occurrence and during the
continuation of any Default or Event of Default, make any distribution, payment
on account of, or set apart assets for, a sinking or other analogous fund for
the purchase, redemption, defeasance, retirement or other acquisition of any
equity or ownership interest of Seller, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Seller.
12. AFFIRMATIVE COVENANTS OF SELLER
12.1 Seller shall promptly notify the Buyer Agent of any material
adverse change in respect of any of the property, business, operations or
financial condition of Sponsor and its consolidated Subsidiaries, taken as a
whole; provided, however, that nothing in this Section 12 shall relieve Seller
of its obligations under the Agreement.
12.2 Seller shall provide the Buyer Agent with copies of such documents
as the Buyer Agent may reasonably request evidencing the truthfulness of the
representations set forth in Section 10.
12.3 Seller (i) shall defend the right, title and interest of the
applicable Buyer in and to the Purchased Assets against, and take such other
action as is necessary to remove, the Liens, security interests, claims and
demands of all Persons (other than security interests by or through the Buyer
Agent for the benefit of the Buyers), and (ii) shall, at the Buyer Agent's
reasonable request, take all action necessary to ensure that the Buyer Agent
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.
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12.4 Seller shall notify the Buyer Agent and the Account Bank 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.
12.5 If an Act of Insolvency occurs with respect to Seller or Sponsor,
Seller shall permit the applicable Buyer and the Buyer Agent to transfer
servicing and/or special servicing with respect to all mortgage loans underlying
the Purchased Securities to an entity satisfactory to the Buyer Agent, to the
extent Seller controls or is entitled to control the selection of the servicer
and/or special servicer, as the case may be.
12.6 Seller shall promptly (and in any event not later than two (2)
Business Days following receipt) deliver to the Buyer Agent (i) any notice of
the occurrence of an event of default, notice of condemnation, casualty or
environmental contamination with respect to or report received by or required to
be delivered by Seller pursuant to the Securitization Documents, (ii) any notice
of transfer of servicing under the Securitization Documents, (iii) any notice of
termination or other unwind of any Hedging Agreement and (iv) any other
information with respect to the Purchased Assets as may be reasonably requested
by the Buyer Agent from time to time to the extent such information is in
Seller's possession or can be obtained by Seller at a reasonable cost.
12.7 Seller will permit the Buyer Agent or its designated
representative to inspect Seller's records with respect to the Purchased Assets
and the conduct and operation of its business related thereto upon reasonable
prior written notice from the Buyer Agent 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 the Buyer Parties and Seller. The Buyer Agent shall act in a
commercially reasonable manner in requesting and conducting any inspection
relating to the conduct and operation of Seller's business.
12.8 If Seller shall at any time become entitled to receive or shall
receive any rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for the Purchased Securities, or otherwise in respect
thereof, Seller shall accept the same as the applicable Buyer's agent, hold the
same in trust for such Buyer and deliver the same forthwith to such Buyer in the
exact form received, duly endorsed by Seller to such Buyer, if required,
together with an undated bond or other securities power covering such
certificate duly executed in blank to be held by such 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 Securities shall be
received by Seller, Seller shall, until such money or property is paid or
delivered to the Buyer Agent, for the account of the Buyers, hold such money or
property in trust for Buyer Agent, for the benefit of Buyers, segregated from
other funds of Seller, as additional collateral security for the Transactions.
12.9 At any time from time to time upon prior written request of the
Buyer Agent, at the sole expense of Seller, Seller will promptly and duly
execute and deliver such further instruments and documents and take such further
actions as the Buyer Agent may reasonably request for the purposes of obtaining
or preserving the full benefits of the Agreement including the first priority
security interest granted hereunder and of the rights and powers herein
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granted (including, among other things, filing such UCC financing statements as
the Buyer Agent may reasonably request). If any amount payable under or in
connection with any of the Purchased Assets shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be promptly delivered to the Buyer Agent, duly endorsed in a
manner satisfactory to the Buyer Agent, to be held as a Purchased Asset under
the related Transaction pursuant to the Agreement, and the documents delivered
in connection herewith.
12.10 Seller shall provide the Buyer Agent with the following financial
and reporting information:
12.10.1 within ten (10) days after the last day of each month,
(i) a listing of all Purchased Assets and (ii) such financial
statements, rent rolls and other information for each Purchased Asset,
to the extent the underlying borrower or obligor under such Purchased
Asset is obligated to provide such information to Seller;
12.10.2 within forty-five (45) days after the last day of the
first three fiscal quarters in any fiscal year, Sponsor's unaudited
consolidated statement of income and statements of changes in cash flow
for such quarter and balance sheet as of the end of such quarter, in
each case presented fairly in accordance with GAAP and certified as
being true and correct by an officer's certificate;
12.10.3 within ninety (90) days after the last day of its
fiscal year, Sponsor's audited consolidated statement of income and
statement of changes in cash flow for such year and balance sheet as of
the end of such year, in each case presented fairly in accordance with
GAAP, and accompanied, in all cases, by an unqualified report of a
nationally recognized independent certified public accounting firm;
12.10.4 within forty-five (45) days after the last day of the
first three fiscal quarters in any fiscal year, an unaudited statement
of Seller's income and expenses for such quarter and assets and
liabilities as of the end of such quarter;
12.10.5 within ninety (90) days after the last day of its
fiscal year, an unaudited statement of Seller's income and expenses for
such year and assets and liabilities as of the end of such year;
12.10.6 within forty-five (45) days after the last day of each
calendar quarter in any fiscal year, an officer's certificate from
Seller addressed to the Buyer Agent certifying that, as of such
calendar month, (i) Seller is in compliance with all of the terms,
conditions and requirements of the Agreement, and (ii) no Event of
Default exists;
12.10.7 promptly following the implementation of any
Underwriting Guidelines, a true and correct copy of such Underwriting
Guidelines;
12.10.8 within forty-five (45) days after the last day of each
calendar quarter, a report describing Seller's hedging activities in
reasonable detail; and
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12.10.9 within twenty (20) days after each month's end, a
monthly reporting package containing all information set forth on
Exhibit III attached hereto.
12.11 Seller shall at all times comply in all material respects with
all laws, ordinances, rules and regulations of any federal, state, municipal or
other public authority having jurisdiction over Seller or any of its assets and
Seller shall do or cause to be done all things reasonably necessary to preserve
and maintain in full force and effect its legal existence, and all licenses
material to its business.
12.12 Seller shall at all times keep proper books of records and
accounts in which full, true and correct entries shall be made of its
transactions in accordance with GAAP and set aside on its books from its
earnings for each fiscal year all such proper reserves in accordance with GAAP.
12.13 Seller shall observe, perform and satisfy all the material terms,
provisions, covenants and conditions required to be observed, performed or
satisfied by it, and shall pay when due all costs, fees and expenses required to
be paid by it, under the Transaction Documents. Seller shall pay and discharge
all taxes, levies, liens and other charges on its assets and on the Purchased
Assets that, in each case, in any manner would create any lien or charge upon
the Purchased Assets, except for any such taxes as are being appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided in accordance with GAAP.
12.14 Seller shall advise the Buyer Agent in writing of any change in
Seller's name or jurisdiction of organization and of any change in the places
where the books and records pertaining to the Purchased Assets are held not less
than fifteen (15) Business Days prior to taking any such action.
12.15 Seller will maintain records with respect to the Purchased Assets
and the conduct and operation of its business with no less a degree of prudence
than if the Purchased Assets were held by Seller for its own account and will
furnish the Buyer Agent, upon request by the Buyer Agent or its designated
representative, with reasonable information reasonably obtainable by Seller with
respect to the Purchased Assets and the conduct and operation of its business.
12.16 Seller shall provide the Buyer Agent with operating statements,
the occupancy status and other property level information within Seller's
possession, with respect to the Mortgaged Properties, and similar reports within
Seller's possession, in each case, as reasonably requested by the Buyer Agent.
13. SINGLE-PURPOSE ENTITY
Seller hereby represents and warrants to the Buyer Parties, and
covenants with the Buyer Parties, that as of the date hereof and so long as any
of the Transaction Documents shall remain in effect:
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13.1 It is and intends to remain solvent and it has paid and will pay
its debts and liabilities (including employment and overhead expenses) from its
own assets as the same shall become due.
13.2 It has complied and will comply with the provisions of its
certificate of formation and its limited liability company agreement.
13.3 It has done or caused to be done and will do all things necessary
to observe limited liability company formalities and to preserve its existence.
13.4 It has maintained and will maintain all of its books, records,
financial statements and bank accounts separate from those of its Affiliates,
its members and any other Person, and it will file its own tax returns (except
to the extent that it is a tax-disregarded entity not required to file tax
returns under applicable law and its assets will not be included on any
financial statement of any of its Affiliates); provided, however, that it may
permit its assets to be included in a consolidated financial statement of its
Affiliate; provided that (i) appropriate notation shall be made on such
consolidated financial statements to indicate the separateness of it from such
Affiliate and to indicate that its assets and credit are not available to
satisfy the debts and other obligations of such Affiliate or any other Person
and (ii) such assets shall also be listed on its own separate balance sheet.
13.5 It has been, is and will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate), shall correct any known misunderstanding regarding
its status as a separate entity, shall conduct business in its own name, shall
not identify itself or any of its Affiliates as a division or part of the other,
shall maintain and utilize separate stationery, invoices and checks bearing its
own name, and shall pay to any Affiliate that incurs costs for office space and
administrative services that it uses, the amount of such costs allocable to its
use of such office space and administrative services.
13.6 It has not owned and will not own any property or any other assets
other than the Purchased Assets, cash and its interest under any associated
Hedging Agreements.
13.7 It has not engaged and will not engage in any business other than
the acquisition, ownership, financing and disposition of Purchased Assets in
accordance with the applicable provisions of the Transaction Documents.
13.8 Other than capital contributions and distributions permitted under
its organizational documents and the Transaction Documents, and transactions
otherwise contemplated by the Transaction Documents, it has not entered into,
and will not enter into any transaction, contract or agreement with any of its
Affiliates, except upon terms and conditions commercially reasonable and
substantially similar to those that would be available on an arm's-length basis
with Persons other than such Affiliate.
13.9 It has not incurred and will not incur any indebtedness or
obligation, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than, to the extent permitted
under the Transaction Documents, (i) obligations under the Transaction Documents
and (ii) unsecured trade payables, in an aggregate amount not
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to exceed $1,000,000 at any one time outstanding, incurred in the ordinary
course of acquiring, owning, financing and disposing of Purchased Assets;
provided, however, that any such trade payables incurred by Seller shall be paid
within thirty (30) days of the date incurred.
13.10 It has not made and will not make any loans or advances to any
other Person, and shall not acquire obligations or securities of any member or
any Affiliate of any member (other than in connection with the acquisition of
the Purchased Assets) or any other Person.
13.11 It will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.
13.12 Neither it nor its sole member will seek its dissolution,
liquidation or winding up, in whole or in part, or suffer any Change of Control,
consolidation or merger with respect to Seller or the Sponsor.
13.13 It will not commingle its funds or other assets with those of any
of its Affiliates or any other Person.
13.14 It has maintained and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any of its Affiliates or any other Person.
13.15 It has not held and will not hold itself out to be responsible
for the debts or obligations of any other Person.
13.16 Seller shall not permit its sole member to take any of the
following actions with respect to Seller: (i) dissolve or liquidate, in whole or
in part; (ii) consolidate or merge with or into any other entity or convey or
transfer all or substantially all of its properties and assets to any entity;
(iii) institute any proceeding to be adjudicated as bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against it,
or file a petition or answer or consent seeking reorganization or relief under
the Bankruptcy Code or consent to the filing of any such petition or to the
appointment of a receiver, rehabilitator, conservator, liquidator, assignee,
trustee or sequestrator (or other similar official) of such member or Seller or
of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, or make an assignment for the benefit of creditors,
or admit in writing its inability to pay its debts generally as they become due,
or take any action in furtherance of any of the foregoing; (iv) amend the
certificate of formation or limited liability company agreement of Seller; (v)
enter into any transaction with an Affiliate not in the ordinary course of
Seller's business; or (vi) withdraw as the sole member of Seller.
13.17 It has no liabilities, contingent or otherwise, other than those
normal and incidental to the acquisition, ownership, financing and disposition
of Purchased Assets.
13.18 It has conducted and shall conduct its business consistent with
the requirements of being a Single-Purpose Entity.
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13.19 It shall maintain a sufficient number of employees in light of
its contemplated business operations, provided that such number may be zero.
13.20 It shall not pledge its assets to secure the obligations of any
other Person, other than the Buyer Agent, for the benefit of the Buyers.
13.21 It shall not guarantee or become obligated for the debts of any
other Person.
13.22 It shall not form, acquire or hold any subsidiary, or own any
equity interest in any other entity except interests that are part of the
Purchased Assets (or assets which are proposed to become Purchased Assets) or
that are acquired in any foreclosure on, or other realization of collateral
from, any of the Purchased Assets that is a mezzanine loan.
14. EVENTS OF DEFAULT; REMEDIES
Paragraph 11 of the Agreement is hereby modified in its entirety as set
forth in this Section 14 of this Annex I.
14.1 After the occurrence and during the continuance of an Event of
Default on the part of Seller, Seller hereby appoints the Buyer Agent as
attorney-in-fact of Seller for the purpose of carrying out the provisions of the
Agreement and taking any action and executing or endorsing any instruments that
the Buyer Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Each of the following shall constitute an "Event of Default"
hereunder:
14.1.1 Payment Failure. (i) Failure of Buyer or the Buyer
Agent to receive on any Remittance Date the accreted value of the Price
Differential (less any amount of such Price Differential previously
paid by Seller to Buyer or the Buyer Agent, for the account of the
Buyers) (including, without limitation, in the event the Income paid or
distributed on or in respect of the Purchased Assets is insufficient to
make such payment and Seller does not make such payment or cause such
payment to be made) (except that such failure shall not be an Event of
Default by Seller if sufficient Income, other than Principal Payments,
is on deposit in the Cash Management Account and the Account Bank fails
to remit such funds to the Buyer Agent, for the account of the Buyers)
or (ii) failure of Seller to make any other payment owing to any Buyer
Party which has become due, whether by acceleration or otherwise under
the terms of this Agreement which failure is not remedied within the
applicable period (in the case of a failure pursuant to Paragraph 4) or
five (5) Business Days (in the case of any other such failure).
14.1.2 Assignment. Assignment or purported assignment by
Seller of the Agreement or any of its rights hereunder, without
obtaining the prior written consent of the Buyer Agent.
14.1.3 Breach of Financial Covenant. A breach by Sponsor of
any of the financial covenants contained in Section 5 of the Guaranty.
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14.1.4 Breach of Other Representation. Any representation or
warranty made or deemed made by the Seller herein or the Sponsor in the
Guaranty shall prove to have been incorrect in any material respect on
or as of the date made or deemed made (other than the representations
and warranties set forth in Section 10.1.8, 10.1.9 or 10.1.19 (in the
case of Section 10.1.19, with respect to the affected Purchased Assets
only), which shall not be considered an Event of Default but shall be
considered solely for the purpose of determining whether such Purchased
Asset is an Eligible Loan or Eligible Security, as applicable, unless
Seller shall have made any such representation with knowledge that it
was materially incorrect or untrue at the time made).
14.1.5 Breach of Agreement. A breach by Seller in the
observance or performance of any agreement contained in (i) Section
12.1, 12.2, 12.6, 12.7, 12.10, 12.14, 12.16 or 13 of this Annex I,
which breach shall continue unremedied for a period of five (5)
Business Days following the earlier of (A) the date on which Seller
obtains actual knowledge of such breach and (B) the date on which the
Buyer Agent notifies Seller in writing of such breach, (ii) Section 11
(other than in respect of the introductory clause to Section 11
relating to the occurrence of a material adverse change), or Section
12.4 of this Annex I, or (iii) the introductory clause to Section 11
relating to the occurrence of a material adverse change and such
material adverse change is not remedied within forty-five (45) days
following the earlier of (A) the date on which Seller obtains actual
knowledge of any material adverse change in respect of any of the
property, business, operations or financial condition of the Sponsor
and its consolidated subsidiaries, taken as a whole, and (B) the date
on which the Buyer Agent notifies Seller in writing of a Material
Adverse Change.
14.1.6 Change of Control. The occurrence of a Change of
Control.
14.1.7 Failure to Transfer. Buyer Agent, for the benefit of
the Buyers, fails to receive any Purchased Assets on the applicable
Purchase Date in accordance with the terms of the Custodial Agreement
and such failure remains uncured for two (2) Business Days after the
later of (i) the date on which the related Purchase Price was released
to Seller and (ii) the date on which the Buyer Agent notifies Seller in
writing of such failure.
14.1.8 Judgment. (i) A final judgment by any competent court,
administrative tribunal, or other body having jurisdiction in the
United States of America for the payment of money shall have been
rendered against Seller in an amount in excess of $1,000,000 that
remains undischarged or unpaid for a period of thirty (30) days, during
which period execution of such judgment is not effectively stayed by
bonding over or other means acceptable to the Buyer Agent or (ii) a
final judgment by any competent court, administrative tribunal, or
other body having jurisdiction in the United States of America for the
payment of money shall have been rendered against Sponsor in an amount
in excess of (A) $5,000,000, if the net worth of Sponsor is less than
$250,000,000 or (B) $10,000,000, if the net worth of Sponsor is greater
than or equal to $250,000,000.
14.1.9 Government Action. Any Governmental Authority or any
person, agency or entity acting under governmental authority shall have
taken any action
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to condemn, seize or appropriate, or to assume custody or control of,
all or any substantial part of the property of Seller or Sponsor, or
shall have taken any actionto displace the management of Seller or
Sponsor or to curtail its authority in any material respect in the
conduct of the business of Seller or Sponsor, or shall take any action
in the nature of enforcement to remove, limit or restrict the approval
of Seller or Sponsor thereof as an issuer, the Buyer Parties or a
seller/servicer of Purchased Assets or securities backed thereby, and
such action provided for in this paragraph shall not have been
discontinued or stayed within thirty (30) days.
14.1.10 Security Interest. Either (i) in the case of any
Transaction that is properly characterized as a sale of the related
Purchased Asset to the applicable Buyer, the Transaction Documents
shall for any reason not cause, or shall cease to cause, such Buyer to
be the owner free of any adverse claim of such Purchased Asset or (ii)
in the case of any Transaction that is recharacterized as a secured
financing of the related Purchased Asset by the applicable Buyer, the
Transaction Documents shall for any reason cease to create a valid
first priority security interest in favor of the Buyer Agent, for the
benefit of the Buyers, in such Purchased Asset.
14.1.11 Financial Statements. Any audited annual financial
statements of Seller or Sponsor or the notes thereto or other opinions
or conclusions stated therein shall be qualified or limited by
reference to the status of Seller or Sponsor, as applicable, as a
"going concern" or a reference of similar import.
14.1.12 Insolvency. An Act of Insolvency shall have occurred
with respect to Seller or Sponsor.
14.1.13 Inability to Perform. An officer of Seller or Sponsor
shall admit its inability to, or its intention not to, perform any of
the obligations of Seller or Sponsor, as the case may be, hereunder or
under any other Transaction Documents.
14.1.14 REIT Status. Sponsor shall have failed to maintain its
status as a REIT.
14.1.15 Other Breach. A breach by Seller in the observance or
performance of any other agreement contained in the Agreement, other
than as specifically otherwise referred to in this definition of "Event
of Default," and such breach is not remedied within thirty (30) days
following the earlier of (i) the date on which Seller obtains actual
knowledge of such breach and (ii) the date on which the Buyer Agent
notifies Seller in writing of such breach; provided, that as long as
Seller is diligently attempting to cure such breach, such cure period
shall be extended by an additional period as may be required to cure
such breach but in no event by more than thirty (30) additional days.
14.1.16 Cross Default. Sponsor shall have defaulted or failed
to perform under (i) any BOA Indebtedness or (ii) any note, indenture,
loan agreement, guaranty, swap agreement or any other contract,
agreement or transaction to which it is a party, which default (A)
involves the failure to pay a matured obligation in excess of
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(I) $5,000,000, if the net worth of Sponsor is less than $250,000,000
or (II) $10,000,000, if the net worth of Sponsor is greater than or
equal to $250,000,000 or (B) permits the acceleration of the maturity
of obligations by any other party to or beneficiary of such note,
indenture, loan agreement, guaranty, swap agreement or other contract
agreement or transaction, or Sponsor shall breach any covenant or
condition, shall fail to perform, admits its inability to perform or
states its intention not to perform its obligations under any
Transaction or in respect of any repurchase agreement, reverse
repurchase agreement, securities contract or derivative transaction
with any party; provided, however, that any such default, failure to
perform or breach shall not constitute an Event of Default if Sponsor
cures such default, failure to perform or breach, as the case may be,
within the grace period, if any, provided under the applicable
agreement.
14.1.17 Financial Statements. Any audited annual financial
statements of Sponsor (or the notes thereto or other opinions or
conclusions stated therein) shall be qualified or limited by reference
to the status of Sponsor as a "going concern" or a reference of similar
import.
14.1.18 Servicer. A failure by the Servicer to comply with the
provisions of Section 22.5(i) and such failure has not been remedied
within 5 Business Days and such Servicer has not been replaced by a
substitute servicer reasonably acceptable to the Buyer Agent within 20
Business Days after the expiration of such cure period.
An Event of Default with respect to Seller shall be deemed to be
continuing unless expressly waived by the Buyer Agent in writing or cured. 14.2
If an Event of Default shall occur and be continuing, the following rights and
remedies shall be available to the Buyer Parties:
14.2.1 Acceleration. The Buyer Agent may, at its option, upon
written notice to Seller, accelerate the Termination Date for each
Transaction hereunder, if such Termination Date has not already
occurred (except that, in the event that the Purchase Date for any
Transaction has not yet occurred as of the date of such acceleration,
such Transaction shall be deemed immediately canceled); provided, that
upon the occurrence of an Act of Insolvency of Seller or Sponsor, such
acceleration shall occur automatically without the requirement of
notice to Seller or any other action by the Buyer Agent. The date on
which such option is exercised or such acceleration occurs
automatically being referred to hereinafter as the "Accelerated
Termination Date".
14.2.2 Actions Upon Acceleration. If the Buyer Agent exercises
the option referred to in Section 14.2.1 above (or acceleration occurs
automatically as set forth in Section 14.2.1), (i) Seller's obligations
in such Transactions to repurchase all Purchased Assets, at the
Repurchase Price therefor on the Accelerated Termination Date, shall
thereupon become immediately due and payable and (ii) all Income paid
after such acceleration shall be retained by the Buyer Agent, for the
benefit of the Buyers, and applied to the Repurchase Prices hereunder
and all other obligations of Seller hereunder in the manner the Buyer
Agent deems appropriate in its sole discretion.
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14.2.3 Possession. The Buyer Agent, for the benefit of the
Buyers, also shall have the right to obtain physical possession, and to
continue an action to obtain physical possession, of any and all
records and files of Seller relating to the Purchased Assets and all
documents relating to the Purchased Assets (including, without
limitation, any legal, credit or servicing files relating to the
Purchased Assets) which are then or may thereafter come into the
possession of Seller or any Servicer.
14.2.4 Collections. The Buyer Agent shall have the right to
direct all Servicers then servicing any Purchased Assets to remit all
collections thereon to the Buyer Agent, for the benefit of the Buyers,
and if any payments are received by Seller, Seller shall not commingle
the amounts received with other funds of Seller and shall promptly pay
them over to the Buyer Agent, for the benefit of the Buyers. The Buyer
Agent shall also have the right to terminate any one or all of the
Servicers then servicing any Purchased Assets with or without cause.
14.2.5 Liquidation. The Buyer Agent shall deliver to Seller
notice of its intention to liquidate the Purchased Assets and other
Collateral at least five (5) Business Days prior to selling or
otherwise liquidating any such Purchased Assets and other Collateral.
Thereafter, subject to the other terms of this Agreement and applicable
law, the Buyer Agent shall have the right to sell immediately and/or
liquidate all or any portion of the Purchased Assets and/or all other
Collateral. Such disposition of Purchased Assets and/or all other
Collateral may be, at the Buyer Agent's option, on either a
servicing-released or a servicing-retained basis. The Buyer Agent may
specifically disclaim or modify any warranties of title or the like
relating to the Purchased Assets and/or other Collateral. The foregoing
procedure for disposition of the Purchased Assets and liquidation of
the Collateral shall not be considered to adversely affect the
commercial reasonableness of any sale thereof. The Buyer Agent shall be
entitled to place the Purchased Assets in one or more pools for
issuance of securities at the then prevailing price for such securities
and to sell such securities for such prevailing price in the open
market; provided that the aggregate purchase price of the assets
included in such pools shall be allocated among such assets (including
such Purchased Assets) and appropriate credit given against the
outstanding Repurchase Price of such Purchased Assets, in each case, in
accordance with the methodology then customarily employed in the
relevant market for similar asset pools. The Buyer Agent, for the
benefit of the Buyers, shall also be entitled to sell any or all of
such Purchased Assets individually for the prevailing price. Seller
shall have the right to bid in connection with any sale of Purchased
Assets or otherwise purchase such Purchased Assets or securities in any
sale contemplated by the foregoing in accordance with any procedures
established therefor by the Buyer Agent. The Buyer Agent agrees to
recognize, to the extent Seller's bid or offer complies in all respects
with the procedures and requirements imposed by the Buyer Agent in the
conduct of such sale, Seller's bid or offer; provided that the same is
in excess of the bid or offer of any third party.
14.2.6 Application of Proceeds. The Buyer Agent shall apply
any proceeds from the liquidation of the Purchased Assets and other
Collateral to the Repurchase Prices hereunder and all other obligations
of Seller hereunder in the manner the Buyer Agent deems appropriate in
its sole discretion.
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14.2.7 Private Sale. The parties recognize that it may not be
possible to sell all of the Purchased Assets on a particular Business
Day, or in a transaction with the same purchaser, or in the same
manner, because the market for such Purchased Assets may not be liquid.
In view of the nature of the Purchased Assets, the parties agree that,
upon five (5) Business Days' prior written notice to Seller and
Sponsor, liquidation of the Purchased Assets does not require a public
purchase or sale and that a good faith private purchase or sale shall
be deemed to have been made in a commercially reasonable manner.
14.2.8 Costs. Seller shall be liable to the Buyer Parties for
(i) the amount of all legal expenses of external counsel and other
expenses, in each case, actually incurred by the Buyer Parties in
connection with or as a consequence of an Event of Default, including,
without limitation, all costs and expenses of the Buyer Parties in
connection with the enforcement of this Agreement directly in
connection with or as a result of an Event of Default, whether in
action, suit or litigation or bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally, and further
including, without limitation, the fees and expenses of external
counsel incurred directly in connection with or as a result of an Event
of Default, (ii) damages in an amount equal to the cost of terminating
any Hedging Agreements in connection with or as a result of an Event of
Default and (iii) any other loss, damage, cost or expense directly
arising or resulting from the occurrence of an Event of Default.
14.2.9 Interest. To the extent permitted by applicable law,
upon the occurrence and during the continuation of an Event of Default,
Seller shall be liable to the Buyer Parties for interest on any amounts
owing by Seller hereunder (other than Repurchase Price) from the date
Seller becomes liable for such amounts hereunder until such amounts are
paid in full or otherwise satisfied in full by the exercise of the
Buyer Parties' rights hereunder. Interest payable by Seller under this
paragraph shall be calculated at a rate equal to the greater of (x)
LIBOR or (y) 3%.
14.2.10 Further Remedies. The Buyer Parties shall have, in
addition to their rights and remedies under the Transaction Documents,
all of the rights and remedies provided by applicable federal, state,
foreign, and local laws (including, without limitation, if the
Transactions are recharacterized as secured financings, the rights and
remedies of a secured party under the UCC of the State of New York, to
the extent that the UCC is applicable, and the right to offset any
mutual debt and claim), in equity, and under any other agreement
between any Buyer Party, Seller and Sponsor. Without limiting the
generality of the foregoing, the Buyer Agent shall be entitled to set
off the proceeds of the liquidation of the Purchased Assets against all
of Seller's and/or Sponsor's obligations to the Buyer Parties, only if
such obligations are then due, without prejudice to the Buyer Parties'
right to recover any deficiency. The Buyer Agent agrees promptly to
notify Seller after any such setoff and application made by the Buyer
Agent; provided that the failure to give such notice shall not affect
the validity of such setoff and application.
14.2.11 Remedies Cumulative; Waiver. Subject to the notice and
grace periods set forth herein, each party to this Agreement may
exercise any or all of the
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remedies available to such party immediately upon the occurrence of an
Event of Default and at any time during the continuance thereof. Except
as expressly provided herein, all rights and remedies arising under the
Transaction Documents, as amended from time to time, are cumulative and
not exclusive of any other rights or remedies which each party to the
Agreement may have. No modification, amendment, extension, discharge,
termination or waiver of any provision of the Agreement or of any other
Transaction Document, nor consent to any departure by any party to the
Agreement therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is
sought, and then such waiver or consent shall be effective only in the
specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on any
party to the Agreement which is not required to be given under the
terms of the Agreement, shall entitle such party to any other or future
notice or demand in the same, similar or other circumstances. Neither
any failure nor any delay on the part of any party to the Agreement in
insisting upon strict performance of any term, condition, covenant or
agreement, or exercising any right, power, remedy or privilege
hereunder, or under any other Transaction Document shall operate as or
constitute a waiver thereof, nor shall a single or partial exercise
thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way
of limitation, by purchasing any Purchased Asset under the Agreement on
any Purchase Date, the Buyer Parties shall not be deemed to have waived
any right to assert any Default, Event of Default or breach by Seller
of any term, condition, covenant, representation or warranty under the
Agreement or any Transaction Document, notwithstanding that such
Default, Event of Default or breach may have arisen prior to such
Purchase Date.
14.2.12 Nonjudicial Remedies. The Buyer Parties may enforce
their rights and remedies hereunder without prior judicial process or
hearing, and Seller hereby expressly waives any defenses Seller might
otherwise have to require the Buyer Parties to enforce their rights by
judicial process. Seller also waives any defense Seller might otherwise
have arising from the use of nonjudicial process, disposition of any or
all of the Purchased Assets, or from any other election of remedies.
Seller recognizes that nonjudicial remedies are consistent with the
usages of the trade, are responsive to commercial necessity and are the
result of a bargain at arm's-length.
14.2.13 Appointment of Receiver. Upon the occurrence and
during the continuance of an Event of Default, the Buyer Parties shall
be entitled, without notice, to the appointment of a receiver by any
court having jurisdiction to take possession of and protect, collect,
manage, liquidate and sell the Purchased Assets and any other
Collateral or any portion thereof, collect the payments due with
respect to the Purchased Assets and any other Collateral or any portion
thereof and take any other actions that the Buyer Parties are
authorized to take hereunder. Seller shall pay all costs and expenses
incurred by the Buyer Parties in connection with the appointment and
activities of such receiver.
15. RECORDING OF COMMUNICATIONS
EACH OF THE BUYER PARTIES AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE
OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE
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MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES AND THOSE OF THE
OTHER PARTY WITH RESPECT TO TRANSACTIONS. EACH OF THE BUYER PARTIES AND SELLER
HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH TAPE RECORDINGS IN ANY COURT,
ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES THAT A DULY AUTHENTICATED
TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO BE A WRITING CONCLUSIVELY
EVIDENCING THE PARTIES' AGREEMENT. 16. NOTICES AND OTHER COMMUNICATIONS
The provisions of Paragraph 13 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 16:
All notices, consents, approvals and requests required or permitted
hereunder shall be given in writing and shall be effective for all purposes if
hand delivered or sent by (a) hand delivery, with proof of attempted delivery,
(b) certified or registered United States mail, postage prepaid, (c) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, or (d) by facsimile (with transmission
confirmation); provided that such faxed notice must also be delivered by one of
the means set forth in (a), (b) or (c) above, to the address specified in Annex
II hereto or at such other address and person as shall be designated from time
to time by any party hereto, as the case may be, in a written notice to the
other parties hereto in the manner provided for in this Section. A copy of all
notices, consents, approvals and requests directed to Seller (other than
Confirmations) shall be delivered concurrently to the following: Latham &
Watkins LLP, 885 Third Ave., New York, New York 10022, Attn: David Stewart
(028354-0040), Facsimile Number: (212) 751-4864. A notice shall be deemed to
have been given: (i) in the case of hand delivery, at the time of delivery, (ii)
in the case of registered or certified mail, when delivered or the first
attempted delivery on a Business Day, (iii) in the case of expedited prepaid
delivery, upon the first attempted delivery on a Business Day, or (iv) in the
case of facsimile, upon receipt of transmission confirmation; provided that such
faxed notice was also delivered as required in this Section. A party receiving a
notice which does not comply with the technical requirements for notice under
this Section may elect to waive any deficiencies and treat the notice as having
been properly given.
17. NON-ASSIGNABILITY
The provisions of Paragraph 15 of the Agreement are hereby modified and
superseded in their respective entireties by the following provisions of this
Section 17:
17.1 The rights and obligations of the parties under the Transaction
Documents and under any Transaction shall not be assigned by either party
without the prior written consent of the other party; provided, that the Buyer
Parties shall be permitted to assign such rights and obligations (x) without the
consent of Seller in the case of an assignment by a Buyer Party to (i) any
Approved Assignee which is a direct or indirect subsidiary of Bank of America
Corporation, (ii) any Approved Assignee which is a financial institution (it
being understood that for the purposes of this Section 17.1, any insurance
company, bank, mutual fund or other similar entity shall be deemed a financial
institution hereunder) and (iii) any other Approved Assignee
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during the continuance of a Specified Event of Default, in each case with
written notification to Seller within a reasonable time thereafter and (y) with
the consent of Seller (which shall not be unreasonably withheld), in the case of
an assignment by a Buyer Party to any Approved Assignee which is a non-financial
institution engaged in the business of purchasing B notes and/or mezzanine
loans. In the event of any such assignment by a Buyer Party, such Buyer Party
shall cause its assignee to execute and deliver to Seller such documents as
Seller shall consider reasonably necessary to effect fully such assignment
and/or to confirm the status of such assignee as an Approved Assignee.
17.2 The Buyer Parties shall be entitled to issue one or more
participation interests with respect to any or all of the Transactions with
written notification to Seller within a reasonable time thereafter; provided,
however, that (i) such participation interests may not represent in the
aggregate more than 75% of the aggregate Repurchase Price of all Transactions,
(ii) the Buyer Agent shall act as exclusive agent for all participants in any
dealings with Seller in connection with all Transactions, (iii) Seller shall not
be obligated to deal directly with any party other than the Buyer Agent in
connection with any Transactions, or to pay or reimburse the Buyer Agent or any
other Person for any fees, costs, expenses or other amounts that would not have
been incurred had no participation interests in the related Transactions been
issued, (iv) the Buyer Agent shall maintain unilateral control over all
discretionary determinations to be made by it hereunder, including without
limitation, determinations as to eligibility and purchase of Eligible Loans and
Eligible Securities, the Market Value thereof, the granting of waivers of
noncompliance with the terms of the Transaction Documents, the granting of
extensions of the Termination Date and/or increases in the Facility Amount and
the exercise of rights and remedies upon the occurrence and during the
continuation of an Event of Default and (v) at any time prior to the occurrence
and continuance of a Specified Event of Default, no Buyer Party shall sell
(unless consented to by the Seller (such consent not to be unreasonably
withheld)), any participation to any non-financial institutions engaged in the
business of purchasing B notes and/or mezzanine loans (it being understood that
for the purposes of this Section 17.2, any insurance company, bank or mutual
fund shall be deemed a financial institution hereunder).
17.3 Subject to the foregoing, the Transaction Documents and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Nothing in the Transaction
Documents, express or implied, shall give to any Person, other than the parties
to the Transaction Documents and their respective successors, any benefit or any
legal or equitable right, power, remedy or claim under the Transaction
Documents.
18. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
18.1 Each party irrevocably and unconditionally (i) submits to the
nonexclusive jurisdiction of any United States Federal or New York State court
sitting in Manhattan, and any appellate court from any such court, solely for
the purpose of any suit, action or proceeding brought to enforce its obligations
under the Agreement or relating in any way to the Agreement or any Transaction
under the Agreement and (ii) waives, to the fullest extent it may effectively do
so, any defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court and any right of jurisdiction on account of its
place of residence or domicile.
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18.2 To the extent that either party has or hereafter may acquire any
immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from setoff or any legal process (whether
service or notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) with respect to itself or any
of its property, such party hereby irrevocably waives and agrees not to plead or
claim such immunity in respect of any action brought to enforce its obligations
under the Agreement or relating in any way to the Agreement or any Transaction
under the Agreement.
18.3 The parties hereby irrevocably waive, to the fullest extent they
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding and irrevocably consent to the service of any
summons and complaint and any other process by the mailing of copies of such
process to them at their respective address specified herein. The parties hereby
agree that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Section 18 shall affect the right
of the Buyer Parties to serve legal process in any other manner permitted by law
or affect the right of the Buyer Parties to bring any action or proceeding
against Seller or its property in the courts of other jurisdictions.
18.4 EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THE AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
19. NO RELIANCE
Each of the Buyer Parties and Seller hereby acknowledges, represents
and warrants to the other that, in connection with the negotiation of, the
entering into, and the performance under, the Transaction Documents and each
Transaction thereunder:
19.1 It is not relying (for purposes of making any investment decision
or otherwise) upon any advice, counsel or representations (whether written or
oral) of the other party to the Transaction Documents, other than the
representations expressly set forth in the Transaction Documents.
19.2 It has consulted with its own legal, regulatory, tax, business,
investment, financial and accounting advisors to the extent that it has deemed
necessary, and it has made its own investment, hedging and trading decisions
(including decisions regarding the suitability of any Transaction) based upon
its own judgment and upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the other party.
19.3 It is a sophisticated and informed Person that has a full
understanding of all the terms, conditions and risks (economic and otherwise) of
the Transaction Documents and each Transaction thereunder and is capable of
assuming and willing to assume (financially and otherwise) those risks.
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19.4 It is entering into the Transaction Documents and each Transaction
thereunder for the purposes of managing its borrowings or investments or hedging
its underlying assets or liabilities and not for purposes of speculation.
19.5 It is not acting as a fiduciary or financial, investment or
commodity trading advisor for the other party and has not given the other party
(directly or indirectly through any other Person) any assurance, guaranty or
representation whatsoever as to the merits (either legal, regulatory, tax,
business, investment, financial accounting or otherwise) of the Transaction
Documents or any Transaction thereunder.
20. INDEMNITY
Seller hereby agrees to indemnify the Buyer Parties, any Buyer Party's
designee and each of its officers, directors, employees and agents ("Indemnified
Parties") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, taxes (including stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Purchased Assets or in connection with any of the
transactions contemplated by the Agreement and the documents delivered in
connection herewith, other than income taxes of the Buyer Parties), fees, costs,
expenses (including reasonable attorneys' fees and disbursements actually
incurred to external counsel) or disbursements (all of the foregoing,
collectively "Indemnified Amounts") which may at any time (including, without
limitation, such time as the Agreement shall no longer be in effect and the
Transactions shall have been repaid in full) be imposed on or asserted against
any Indemnified Party in any way whatsoever arising out of or in connection
with, or relating to, the Agreement or any Transactions thereunder or any action
taken or omitted to be taken by any Indemnified Party under or in connection
with any of the foregoing; provided, that Seller shall not be liable for
Indemnified Amounts (i) resulting from the gross negligence or willful
misconduct of any Indemnified Party or (ii) attributable to a Buyer's ownership
of any Purchased Loan following enforcement of its rights under the Agreement
with respect thereto (unless and to the extent such liability relates to an
event, circumstance or condition which occurred prior to the enforcement of such
rights). Without limiting the generality of the foregoing, Seller agrees to hold
the Buyer Parties harmless from and indemnify the Buyer Parties against all
Indemnified Amounts with respect to all Purchased Loans relating to or arising
out of any violation or alleged violation of any environmental law, rule or
regulation or any consumer credit laws, including without limitation ERISA, the
Truth in Lending Act and/or the Real Estate Settlement Procedures Act, that, in
each case, results from anything other than the Buyer Parties' gross negligence
or willful misconduct. In any suit, proceeding or action brought by the Buyer
Parties in connection with any Purchased Loan for any sum owing thereunder, or
to enforce any provisions of any Purchased Loan, Seller will save, indemnify and
hold the Buyer Parties harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or reduction
or liability whatsoever of the account debtor or obligor thereunder, arising out
of a breach by Seller of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
account debtor or obligor or its successors from Seller. Seller also agrees to
reimburse the Buyer Parties as and when billed by the Buyer Agent for all the
Buyer Parties' costs and expenses incurred in connection with the Buyer Agent's
due diligence reviews with respect to the Purchased Assets (including, without
limitation, those incurred pursuant to Section 21) and the enforcement or the
preservation of the Buyer Parties' rights under the
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Agreement or any Transaction
contemplated hereby, including without limitation the fees and disbursements of
its external counsel. Seller hereby acknowledges that the obligation of Seller
hereunder is a recourse obligation of Seller.
21. DUE DILIGENCE
Seller acknowledges that the Buyer Parties has the right to perform
continuing due diligence reviews with respect to the Purchased Assets, for
purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or otherwise, and Seller agrees that upon
reasonable prior written notice to Seller, the Buyer Agent or its authorized
representatives will be permitted during normal business hours to examine,
inspect, and make copies and extracts of, the Purchased Loan Files, Servicing
Records and any and all documents, records, agreements, instruments or
information relating to such Purchased Assets in the possession or under the
control of Seller, any other servicer or subservicer and/or the Custodian.
Seller also shall make available to the Buyer Agent a knowledgeable financial or
accounting officer for the purpose of answering questions respecting the
Purchased Loan Files and the Purchased Assets. Without limiting the generality
of the foregoing, Seller acknowledges that the Buyer Parties may enter into
Transactions with Seller based solely upon the information provided by Seller to
the Buyer Agent and the representations, warranties and covenants contained
herein, and that the Buyer Agent, at its option, has the right at any time to
conduct a partial or complete due diligence review on some or all of the
Purchased Assets. A Buyer may underwrite such Purchased Loans itself or engage a
third-party underwriter to perform such underwriting. Seller agrees to
reasonably cooperate with the Buyer Parties and any third-party underwriter in
connection with such underwriting, including, but not limited to, providing the
Buyer Parties and any third-party underwriter with access to any and all
documents, records, agreements, instruments or information relating to such
Purchased Assets in the possession, or under the control, of Seller. Seller
further agrees that Seller shall reimburse the Buyer Parties for any and all
out-of-pocket costs and expenses reasonably incurred by the Buyer Parties in
connection with the Buyer Parties' activities pursuant to this Section 21.
22. SERVICING
22.1 Notwithstanding the purchase and sale of the Purchased Loans
hereby, Seller, Sponsor or any of their respective designees shall continue to
service the Purchased Loans for the benefit of Buyers and, if a Buyer shall
exercise its rights to pledge or hypothecate the Purchased Loans prior to the
Termination Date pursuant to Section 8, such Buyer's assigns; provided, however,
that the obligations of Seller or Sponsor or such designee to service any of the
Purchased Loans shall cease, at Seller's option, upon the payment by Seller to
the Buyer Agent, for the benefit of the Buyers, of the Repurchase Price
therefor. Seller shall service or cause the Servicer to service the Purchased
Loans in accordance with Accepted Servicing Practices.
22.2 Seller agrees that the Buyer Agent, for the benefit of the Buyers,
is the owner of all servicing records, including but not limited to any and all
servicing agreements (the "Servicing Agreements"), files, documents, records,
data bases, computer tapes, copies of computer tapes, proof of insurance
coverage, insurance policies, appraisals, other closing documentation, payment
history records, and any other records relating to or evidencing the
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servicing of Purchased Loans (the "Servicing Records") so long as the Purchased
Loans are subject to the Agreement. Seller grants the Buyer Agent, for the
benefit of the Buyers, a security interest in all servicing fees and rights
relating to the Purchased Loans and all Servicing Records to secure the
obligation of Seller or its designee to service in conformity with this Section
and any other obligation of Seller to the Buyer Parties. Seller covenants to
safeguard such Servicing Records and to deliver them promptly to the Buyer Agent
or its designee (including the Custodian) at the Buyer Agent's request.
22.3 Upon the occurrence and continuance of an Event of Default, the
Buyer Agent may, in its sole discretion, (i) sell its right to the Purchased
Loans on a servicing released basis or (ii) terminate Seller or any Servicer of
the Purchased Loans with or without cause, in each case without payment of any
termination fee.
22.4 If the Purchased Loans are serviced by a Servicer, Seller shall
irrevocably assign all rights, title and interest in the Servicing Agreements in
the Purchased Loans to the Buyer Agent, for the benefit of the Buyers.
22.5 Seller shall cause each Servicer engaged by Seller to execute a
letter agreement in form and substance acceptable to the Buyer Agent pursuant to
which such Servicer (i) agrees to deposit all Income in respect of the Purchased
Loans serviced by it directly into the Cash Management Account and (ii)
acknowledges each Buyer's and Buyer Agent's rights under Section 22.2, Section
22.3 and Section 22.4 of this Annex I.
23. MISCELLANEOUS
23.1 Time is of the essence under the Transaction Documents and all
Transactions thereunder and all references to a time shall mean New York time in
effect on the date of the action unless otherwise expressly stated in the
Transaction Documents.
23.2 All rights, remedies and powers of the Buyer Parties and Seller
hereunder and in connection herewith are irrevocable and cumulative, and not
alternative or exclusive, and shall be in addition to all other rights, remedies
and powers of the Buyer Parties or Seller, as applicable, whether under law,
equity or agreement. In addition to the rights and remedies granted to it in the
Agreement, the Buyer Agent shall have all rights and remedies of a secured party
under the UCC and Seller shall have all rights and remedies of a debtor under
the UCC.
23.3 The Transaction Documents may be executed in counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
23.4 The headings in the Transaction Documents are for convenience of
reference only and shall not affect the interpretation or construction of the
Transaction Documents.
23.5 Without limiting the rights and remedies of the Buyer Parties
under the Transaction Documents, Seller shall pay the Buyer Parties' reasonable
out-of-pocket costs and expenses, including reasonable fees actually incurred
and expenses of accountants, external attorneys and advisors, incurred in
connection with the preparation, negotiation, execution and
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consummation of, and any amendment, supplement or modification to, the
Transaction Documents and the Transactions thereunder. Seller agrees to pay the
Buyer Agent, for the account of the Buyers, on demand all costs and expenses
(including expenses actually incurred to external counsel for legal services of
every kind) of any subsequent enforcement of any of the provisions hereof, or of
the performance by any Buyer Party of any obligations of Seller in respect of
the Purchased Securities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Purchased Assets and for the custody, care or preservation of the Purchased
Assets (including insurance costs) and defending or asserting rights and claims
of any Buyer Party in respect thereof, by litigation or otherwise. In addition,
Seller agrees to pay the Buyer Agent, for the account of the Buyers, on demand
all reasonable costs and expenses (including reasonable expenses for legal
services actually incurred to external counsel) incurred in connection with the
maintenance of the Cash Management Account and registering the Purchased
Securities in the name of the applicable Buyer or its nominee. All such expenses
shall be recourse obligations of Seller to the Buyer Agent, for the benefit of
the Buyers, under the Agreement.
23.6 Each provision of the Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Agreement shall be prohibited by or be invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of the Agreement.
23.7 The parties acknowledge and agree that although they intend to
treat each Transaction as a sale of the Purchased Assets, in the event that such
sale shall be recharacterized as a secured financing, this Annex I shall also
serve as a security agreement with respect to the Buyer Agent's rights in the
Collateral. In order to secure and to provide for the prompt and unconditional
repayment of the Repurchase Price and the performance of its obligations under
the Agreement, Seller hereby pledges to the Buyer Agent, for the benefit of the
Buyers, and hereby grants to the Buyer Agent, for the benefit of the Buyers, a
first priority security interest in all of its rights in the Purchased Assets.
Seller hereby covenants to duly execute any Form UCC-1 financing statements as
reasonably required by the Buyer Agent in order to perfect its security interest
created hereby in such rights and obligations granted above, it being agreed
that Seller shall pay any and all fees required to file such financing
statements.
23.8 The Agreement contains a final and complete integration of all
prior expressions by the parties with respect to the subject matter hereof and
thereof and shall constitute the entire agreement among the parties with respect
to such subject matter, superseding all prior oral or written understandings.
23.9 The parties understand that the Agreement is a legally binding
agreement that may affect such party's rights. Each party represents to the
other that it has received legal advice from counsel of its choice regarding the
meaning and legal significance of the Agreement and that it is satisfied with
its legal counsel and the advice received from it.
23.10 Should any provision of the Agreement require judicial
interpretation, it is agreed that a court interpreting or construing the same
shall not apply a presumption that the terms hereof shall be more strictly
construed against any Person by reason of the rule of
-63-
construction that a document is to be construed more strictly against the Person
who itself or through its agent prepared the same, it being agreed that all
parties have participated in the preparation of the Agreement.
23.11 The parties recognize that each Transaction is a "securities
contract" as that term is defined in Section 741 of Title 11 of the United
States Code, as amended.
23.12 Each Buyer Party's duty with respect to the custody, safekeeping
and physical preservation of any Purchased Assets in its possession shall be to
deal with such Purchased Assets in the same manner as such Buyer Party deals
with similar property for its own account. Neither the Buyer Parties nor any of
their affiliates, directors, officers or employees shall be liable for failure
to demand, collect or realize upon all or any part of the Purchased Assets or
for any delay in doing so, and except as otherwise expressly provided in the
Agreement, no such Person shall be under any obligation to sell or otherwise
dispose of any Purchased Assets upon the request of Seller or otherwise. All
authorizations and agencies contained herein with respect to the Purchased
Assets are irrevocable and are powers coupled with an interest.
23.13 In addition to any rights and remedies of the Buyer Parties
provided by the Agreement and by applicable law, the Buyer Agent shall have the
right, without prior notice to Seller, any such notice being expressly waived by
Seller to the extent permitted by applicable law, upon any amount becoming due
and payable by Seller hereunder (whether at the Termination Date, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final) in any currency, and any other credits, indebtedness or claims in any
currency, in each case, whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by a Buyer Party or any
Affiliate thereof to or for the credit or the account of Seller. If any such
obligation is unascertained, the Buyer Agent shall account to Seller when the
obligation is ascertained. The Buyer Agent agrees promptly to notify Seller
after any such set off and application made by the Buyer Agent; provided, that
the failure to give such notice shall not affect the validity of such set off
and application.
[SIGNATURE PAGE FOLLOWS]
-64-
IN WITNESS WHEREOF, the parties have executed this Annex I as of the
20th day of July, 2007.
BUYERS:
BANK OF AMERICA, N.A.
By: /s/ Peter Cookson
-----------------------------------------
Name: Peter Cookson
Title: Managing Director
BANC OF AMERICA MORTGAGE
CAPITAL CORPORATION
By: /s/ Peter Cookson
-----------------------------------------
Name: Peter Cookson
Title: Managing Director
BUYER AGENT:
BANK OF AMERICA, N.A.
By: /s/ Peter Cookson
-----------------------------------------
Name: Peter Cookson
Title: Managing Director
SELLER:
ANTHRACITE CAPITAL BOFA FUNDING
LLC, a Delaware limited liability company
By: Anthracite Capital, Inc., a Maryland
corporation, its sole member
By: /s/ Richard Shea
-----------------------------------------
Name: Richard Shea
Title:
EXHIBITS AND SCHEDULES
SCHEDULE I-A Original Purchase Percentages and Applicable Spreads
EXHIBIT I Form of Confirmation
EXHIBIT II Authorized Representatives of Seller
EXHIBIT III Form of Aggregate Collateral Report
EXHIBIT IV Form of Custodial Delivery
EXHIBIT V Form of Power of Attorney
EXHIBIT VI Representations and Warranties Regarding
Individual Purchased Loans
EXHIBIT VII Purchased Loan Information
EXHIBIT VIII Advance Procedure
EXHIBIT IX Form of Redirection Letter
SCHEDULE I-A
Original Purchase Percentages and Applicable Spreads
Stabilized Properties Bridge Loans and
Development Loans
Rating
Collateral Category / Original Original
Type Grouping LTV Purchase Applicable Purchase Applicable
(as applicable) Percentage Spread Percentage Spread
- ------------------------ ------------------ ------------- ------------ -------------- -------------
Investment Grade BBB+ or better 90% 30 bps N/A N/A
CMBS Securities BBB 90% 35 bps N/A N/A
BBB- 90% 40 bps N/A N/A
- ------------------------ ------------------ ------------- ------------ -------------- -------------
Non-Investment BB+ 85% 65 bps N/A N/A
Grade CMBS
Securities B+ 75% 95 bps N/A N/A
B 75% 95 bps N/A N/A
B- 70% 95 bps N/A N/A
Unrated 55% 175 bps N/A N/A
- ------------------------ ------------------ ------------- ------------ -------------- -------------
Whole Loans <65% 95% 50 bps 85% 70 bps
-
<70% 95% 60 bps 85% 80 bps
-
<75% 90% 70 bps 80% 90 bps
-
<80% 85% 80 bps 75% 100 bps
-
<85% 80% 100 bps 70% 120 bps
-
<90% 75% 110 bps 65% 130 bps
-
- ------------------------ ------------------ ------------- ------------ -------------- -------------
B Notes/ <65% 90% 70 bps 80% 90 bps
Mezzanine Loans -
<70% 85% 80 bps 75% 100 bps
-
<75% 80% 85 bps 70% 115 bps
-
<80% 80% 100 bps 70% 130 bps
-
<85% 70% 130 bps 60% 150 bps
-
<90% 65% 170 bps 55% 190 bps
-
- ------------------------ ------------------ ------------- ------------ -------------- -------------
Schedule I-A-1
EXHIBIT I
FORM OF CONFIRMATION
ANTHRACITE CAPITAL BOFA FUNDING LLC
Ladies and Gentlemen:
[Bank of America, N.A.] [Banc of America Mortgage Capital Corporation]
is pleased to deliver our written CONFIRMATION of our agreement to enter into
the Transaction pursuant to which Bank of America, N.A. shall purchase from you
the Purchased Assets identified in Annex I, pursuant to the Master Repurchase
Agreement between BANK OF AMERICA, N.A., ("BANA"), BANC OF AMERICA MORTGAGE
CAPITAL CORPORATION ("BAMCC") (BANA and BAMCC, individually and/or collectively,
as the context may require, each a "Buyer" or collectively, "Buyers"), BANK OF
AMERICA, N.A., as buyer agent (the "Buyer Agent") and ANTHRACITE CAPITAL BOFA
FUNDING LLC ("Seller"), dated as of July 20, 2007 (the "Agreement"); capitalized
terms used herein without definition have the meanings given in the Agreement),
as follows below and on the attached Schedule 1:
Exhibit I-1
[Bank of America, N.A.]
[Banc of America
Buyer: Mortgage Capital Corporation]
Purchase Date: __________, 20__
Purchased Assets:
Aggregate Principal Amount of
Purchased Assets (Original/Current):
Percentage Class Purchased: _________%
Market Value: $
Original Purchase Percentage: _________%
Buyer's Maximum Purchase Price: $
Purchase Price: $
Contingent Purchase Price
(i.e., additional payment available): $
Pricing Rate: [one][two][three]- month LIBOR
plus ___%
CF Sweep Purchase Percentage: _________%
Governing Agreements / Trustee: As identified on attached
Schedule 1
Name and address for communications: Buyer: [Bank of America, N.A.]
[Banc of America Mortgage Capital
Corporation]
Mail Code: NC1-027-22-04
Hearst Tower
214 North Tryon Street
Charlotte, NC 28255
Attention: Tina Fotopolous
Telephone: (704) 387-9937
Facsimile: (704) 386-1094
Seller: ANTHRACITE CAPITAL
BOFA FUNDING LLC
c/o BlackRock Financial
Management, Inc.
40 East 52nd Street
New York, NY 10022
Attention: Mr. Richard Shea
Telephone: (212) 754-5579
Facsimile: (212) 754-8758
[BANK OF AMERICA, N.A.] [BANC OF
AMERICA MORTGAGE CAPITAL
CORPORATION]
Exhibit I-2
By:
-------------------------------
Name:
Title:
AGREED AND ACKNOWLEDGED:
ANTHRACITE CAPITAL BOFA FUNDING LLC,
a Delaware limited liability company
By: Anthracite Capital, Inc.,
a Maryland corporation, its sole member
By:
-------------------------------
Name:
Title:
Exhibit I-3
Schedule 1 to Confirmation Statement
Purchased Securities:
Aggregate Principal Amount (Original/Current):
CUSIP NO.:
Securitization Documents (including Master
Servicer, Special Servicer and Trustee):
- -------------------------------------------------------------------------------
Purchased Loans:
Aggregate Principal Amount (Original/Current):
Purchased Loan Documents:
Schedule 1-1
Summary of Purchased Assets
Purchased Asset: ______
Seller Buyer's Original Buyer's Spread LIBOR
Class, Outstanding Owned Market Rating, Purchase Purchase over Reset
if any Balance Face Value if any Percentage Price LIBOR Period
- ------------------------------------------------------------------------------------------------
Schedule 1-2
EXHIBIT II
AUTHORIZED REPRESENTATIVES OF SELLER
Name Specimen Signature
- ---------------------- ---------------------
Christopher A. Milner Chief Executive Officer ________________________
Richard Shea President and Chief ________________________
Operating Officer
James J. Lillis Chief Financial Officer ________________________
and Treasurer
Exhibit II-1
EXHIBIT III
MONTHLY REPORTING PACKAGE
FORM OF AGGREGATE COLLATERAL REPORT
AGGREGATE COLLATERAL REPORT INFORMATION
FOR EACH PURCHASED SECURITY
Purchased Security Information (By Rating Category):
Issuer, Series and Class
Beginning Balance
Pass-Through Rate
Principal Distribution Amount
Interest Distribution Amount
Total Distribution
Principal Losses
Interest Shortfalls/Recoveries
Ending Certificate Balance
Available credit support, in %, available to Purchased Security*
Additional Underlying Trust Expenses
Rating
CUSIP No.
Deal Name Description
Payment Date
Trustee, Master Servicer, Special Servicer
Special Servicing Report
Details
Mortgage Loan Information:
Aggregate Outstanding Balance
Realized Losses per Asset for Underlying Trust for the Prior Month
Cumulative Realized Losses per Asset
Dollar Amount and Percentage of Aggregate Pool Balance of:
Purchased Loans 30-59 days delinquent
Purchased Loans 60-89 days delinquent
Purchased Loans 90 or more days delinquent
Purchased Loans in Foreclosure
REO - Listing of Assets
Number of loans at start and end of the month
Outstanding principal balance at start and end of the month
Repayments - Listing of Assets
Foreclosures - Listing of Assets
Bankruptcies - Listing of Assets
Current weighted average maturity
Current weighted average coupon (Based on Pay Rate)
Escrow balances held by primary servicer, if available
* Only to the extent provided in Purchased Security distribution date
statements.
Exhibit III-1
EXHIBIT IV
FORM OF CUSTODIAL DELIVERY
On this ______ of ________, 20__, ANTHRACITE CAPITAL BOFA FUNDING LLC
("Seller"), as Seller under that certain Master Repurchase Agreement, dated as
of July 20, 2007 (the "Repurchase Agreement") between Seller, BANK OF AMERICA,
N.A. ("BANA"), BANC OF AMERICA MORTGAGE CAPITAL CORPORATION ("BAMCC") (BANA AND
BAMCC, individually and/or collectively, as the context may require, each a
"Buyer" or collectively, "Buyers") and BANK OF AMERICA, N .A., as buyer agent
(the "Buyer Agent"), does hereby deliver to WELLS FARGO BANK, N.A.
("Custodian"), as custodian under that certain Custodial Agreement, dated as of
July 20, 2007, among the Buyer Agent, Seller and Custodian, the Purchased Loan
Files with respect to the Purchased Loans to be purchased by [Bank of America,
N.A.] [Banc of America Mortgage Capital Corporation], as Buyer, pursuant to the
Repurchase Agreement, which Purchased Loans are listed on the Purchased Loan
Schedule attached hereto and which Purchased Loans shall be subject to the terms
of the Custodial Agreement on the date hereof.
With respect to the Purchased Loan Files delivered hereby, for the
purposes of issuing the Trust Receipt, Custodian shall review the Purchased Loan
Files to ascertain delivery of the documents listed in Section 3(g) to the
Custodial Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Custodial Agreement.
IN WITNESS WHEREOF, Seller has caused its name to be signed hereto by
its officer thereunto duly authorized as of the day and year first above
written.
ANTHRACITE CAPITAL BOFA FUNDING
LLC, a Delaware limited liability company
By: Anthracite Capital, Inc., a Maryland
corporation, its sole member
By:
-------------------------------------------
Name:
Title:
Exhibit IV-1
EXHIBIT V
FORM OF POWER OF ATTORNEY
Know All Men by These Presents, that ANTHRACITE CAPITAL BOFA FUNDING
LLC ("Seller"), does hereby appoint BANK OF AMERICA, N.A. ("Buyer Agent"), its
attorney-in-fact to act in Seller's name, place and stead in any way which
Seller could do with respect to (i) the completion of the endorsements of the
Mortgage Notes and the Assignments of Mortgages and the Mezzanine Notes, (ii)
the recordation of the Assignments of Mortgages and (iii) the enforcement of
Seller's rights under the Purchased Loans purchased by BANK OF AMERICA, N.A.
and/or BANC OF AMERICA MORTGAGE CAPITAL CORPORATION (individually, a "Buyer" and
collectively, as the context may require, each a "Buyer" or collectively, the
"Buyers") pursuant to the Master Repurchase Agreement dated as of July 20, 2007
between Seller, Buyer Agent and Buyers and to take such other steps as may be
necessary or desirable to enforce the Buyer Agent's or Buyer's rights against
such Purchased Loans, the related Purchased Loan Files and the Servicing Records
to the extent that Seller is permitted by law to act through an agent.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT
ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT
MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE
INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE
OR SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY,
AND SELLER ON ITS OWN BEHALF AND ON BEHALF OF SELLER'S ASSIGNS, HEREBY AGREES TO
INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL
CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY
HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be
executed this 17th day of July, 2007.
ANTHRACITE CAPITAL BOFA FUNDING
LLC, a Delaware limited liability company
By: Anthracite Capital, Inc., a Maryland
corporation, its sole member
By:
-------------------------------------------
Name:
Title:
Exhibit V-1
EXHIBIT VI
REPRESENTATIONS AND WARRANTIES REGARDING EACH INDIVIDUAL PURCHASED LOAN WHICH IS
AN ELIGIBLE FIRST MORTGAGE LOAN OR AN ELIGIBLE DEVELOPMENT LOAN
- --------------------------------------------------------------------------------
With respect to each Purchased Loan which is an Eligible First Mortgage
Loan or an Eligible Development Loan, Seller represents and warrants on each
Purchase Date as follows, other than as set forth on the exception report
provided to the Buyer Agent in accordance with the Agreement.
1.Purchased Loan Schedule and Purchased Loan Information. The
information set forth in the Purchased Loan Schedule and the Purchased Loan
Information is complete, true and correct in all material respects as of the
date thereof.
2. Ownership of Purchased Loans. Immediately prior to the transfer to
Buyers of the Purchased Loans, Seller had good title to, and was the sole owner
of, each Purchased Loan. Seller has full right, power and authority to transfer
and assign each of the Purchased Loans to or at the direction of the Buyer Agent
and has validly and effectively conveyed (or caused to be conveyed) to the
applicable Buyer or its designee all of Seller's legal and beneficial interest
in and to the Purchased Loans free and clear of any and all pledges, liens,
charges, security interests and/or other encumbrances. The sale of the Purchased
Loans to any Buyer or its designee does not require Seller to obtain any
governmental or regulatory approval or consent that has not been obtained.
3. Payment Record. The Purchased Loan is performing and no scheduled
payment of principal and interest under any Purchased Loan was 30 days or more
past due as of the Purchase Date without giving effect to any applicable grace
period, and no Purchased Loan was 30 days or more delinquent in the twelve-month
period immediately preceding the Purchase Date.
4. Lien; Valid Assignment. The Mortgage related to and delivered in
connection with each Purchased Loan constitutes a valid enforceable lien upon
the related Mortgaged Property, prior to all other liens and encumbrances
(except as may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally, and by
general principles of equity), except for
(a) the lien for current real estate taxes and assessments not
yet due and payable;
(b) covenants, conditions and restrictions, rights-of-way,
easements and other matters for Mortgagor's benefit and/or are insured
by the related lender's title insurance policy; and
(c) other matters to which like properties are commonly
subject, none of which matters referred to in clauses (b) or (c)
interferes with the security intended to be provided by such Mortgage
or materially interferes with the marketability or current use
Exhibit VI-1
of the Mortgaged Property or the current ability of the Mortgaged
Property to generate operating income sufficient to service the
Purchased Loan debt (the foregoing items (a) through (c) being herein
referred to as the "Permitted Encumbrances"). The related assignment of
such Mortgage executed and delivered in favor of the applicable Buyer
is in recordable form and constitutes a legal, valid and binding
assignment, sufficient to convey to the assignee named therein all of
the assignor's right, title and interest in, to and under such
Mortgage. Such Mortgage, together with any separate security
agreements, chattel mortgages or equivalent instruments that are
included in the Purchased Loan File, establishes and creates a valid
and enforceable (except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, and by general
principles of equity), security interest in favor of the holder thereof
in all of the related Mortgagor's personal property used in, and
reasonably necessary to operate the related Mortgaged Property. A
Uniform Commercial Code financing statement has been filed and/or
recorded in all places necessary to perfect a valid security interest
in such personal property, and such security interest is a first or
second priority security interest, subject to any prior purchase money
security interest in such personal property and any personal property
leases applicable to such personal property. Notwithstanding the
foregoing, no representation is made as to the perfection of any
security interest in rents or other personal property to the extent
that possession or control of such items or actions other than the
filing of Uniform Commercial Code financing statements are required in
order to effect such perfection.
5. Assignment of Leases and Rents. The Assignment of Leases set forth
in the Mortgage (or in a separate instrument) and related to and delivered in
connection with each Purchased Loan establishes and creates a valid, subsisting
and (except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally, and by general principles of equity), enforceable perfected
lien and security interest in the related Mortgagor's interest in all leases,
subleases, licenses or other agreements pursuant to which any person is entitled
to occupy, use or possess all or any portion of the real property subject to the
related Mortgage, and each assignor thereunder has the full right to assign the
same. The related assignment of any Assignment of Leases, not included in a
Mortgage, executed and delivered in favor of the applicable Buyer is in
recordable form and constitutes a legal, valid and binding assignment,
sufficient to convey to the assignee named therein all of the assignor's right,
title and interest in, to and under such Assignment of Leases.
6. Mortgage Status; Waivers and Modifications. No Mortgage or Mortgage
Note has been satisfied, canceled, rescinded or subordinated in whole or in
part, and the related Mortgaged Property has not been released from the lien of
such Mortgage, in whole or in material part, nor has any instrument been
executed that would affect any such satisfaction, cancellation, subordination,
rescission or release except for any partial reconveyances of portions of the
real property that are unimproved except by paving or landscaping and do not
materially adversely affect the value of the property. None of the terms of any
Mortgage Note, Mortgage or Assignment of Leases has been impaired, waived,
altered or modified in any material respect, except by written instruments, all
of which are included in the related Purchased Loan File.
Exhibit VI-2
7. Condition of Property; Condemnation. Except as set forth in an
engineering report prepared in connection with the origination or acquisition of
the related Purchased Loan and included in the related Purchased Loan File, each
Mortgaged Property is free and clear of any damage that would materially and
adversely affect its value as security for the related Purchased Loan (normal
wear and tear excepted), except to the extent reserves have been established to
cover the costs to remediate such damages. Seller has received no notice of any
pending or threatened proceeding for the condemnation of all or any material
portion of any Mortgaged Property. As of the date of the origination or
acquisition of each Purchased Loan, all of the material improvements on the
related Mortgaged Property which were considered in determining the appraised
value of the Mortgaged Property lay wholly within the boundaries and building
restriction lines of such property, except for encroachments that are insured
against by the lender's title insurance policy referred to herein or that do not
materially and adversely affect the value or marketability of such Mortgaged
Property, and no improvements on adjoining properties materially encroached upon
such Mortgaged Property so as to materially and adversely affect the value or
marketability of such Mortgaged Property, except those encroachments that are
insured against by the Title Policy referred to herein.
8. Title Insurance. Each Mortgaged Property is covered by an American
Land Title Association (or an equivalent form thereof as adopted in the
applicable jurisdiction) lender's title insurance policy (or, if a title policy
meeting the foregoing description has not yet been issued, is evidenced by a
commitment for title insurance "marked up" at the closing of such Purchased Loan
and there is a binding and enforceable commitment of the applicable title
insurance company to issue the policy described in such commitment without any
conditions to such issuance) (the "Title Policy") in the original principal
amount of the related Purchased Loan after all advances of principal. Each Title
Policy insures that the related Mortgage is a valid first priority lien subject
only to Permitted Encumbrances (or an escrow letter or a marked up title
insurance commitment on which the required premium has been paid exists which
evidences that such Title Policy will be issued). Each Title Policy (or, if it
has yet to be issued, the coverage to be provided thereby) is in full force and
effect, all premiums thereon have been paid and no claims have been made
thereunder. No holder of the related Mortgage has done, by act or omission,
anything that would impair the coverage under such Title Policy. Immediately
following the transfer and assignment of the related Purchased Loan to the
applicable Buyer, such Title Policy (or, if it has yet to be issued, the
coverage to be provided thereby) will inure to the benefit of the applicable
Buyer without the consent of or notice to the insurer.
9. No Holdbacks. Except as set forth on the Purchased Loan Schedule,
the proceeds of each Purchased Loan have been fully disbursed and there is no
obligation for future advances with respect thereto. With respect to each
Purchased Loan, any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any funds escrowed for such
purpose that were to have been complied with on or before the Purchase Date have
been complied with, or any such funds so escrowed have not been released.
10. Mortgage Provisions. The Mortgage Note or Mortgage for each
Purchased Loan contains customary and enforceable provisions such as would be
expected to render the rights and remedies of the holder thereof adequate for
the practical realization against the related Mortgaged Property of the
principal benefits of the security intended to be provided thereby.
Exhibit VI-3
11. Buyer under Deed of Trust. If any Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage.
12. Environmental Conditions. An environmental site assessment (or an
update of a previous assessment) was performed with respect to each Mortgaged
Property in connection with the origination or acquisition of the related
Purchased Loan, a report of each such assessment (an "Environmental Report") has
been delivered to the Buyer Agent and a copy has been included as part of the
related Purchased Loan File, and there is no adverse environmental condition or
circumstance affecting any Mortgaged Property that was not disclosed in such
report. Each related Mortgagor is now in compliance, and each Mortgage requires
the related Mortgagor to comply (and to cause the related Mortgaged Property to
comply), with all applicable federal, state and local environmental laws and
regulations ("Environmental Laws"). Where such Environmental Report disclosed
the existence of a material and adverse environmental condition or circumstance
affecting any Mortgaged Property, (i) a party not related to the Mortgagor was
identified as the responsible party for such condition or circumstance, (ii) the
related Mortgagor was required either to provide additional security and/or to
obtain an operations and maintenance plan or (iii) the related Mortgagor
provided evidence that applicable federal, state or local governmental
authorities would not take any action, or require the taking of any action, in
respect of such condition or circumstance. The related Purchased Loan Documents
contain provisions pursuant to which the related borrower or a principal of such
borrower has agreed to indemnify the mortgagee for damages resulting from
violations of any applicable Environmental Laws.
13. Loan Document Status. Each Mortgage Note, Mortgage and any other
agreement that evidences or secures a Purchased Loan and that was executed by or
on behalf of the related Mortgagor is the legal, valid and binding obligation of
the maker thereof (subject to any nonrecourse provisions contained in any of the
foregoing agreements), enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally, and by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), and any applicable state
antideficiency or market value limit deficiency legislation. Seller has not
received any written notice of any and there are no valid defenses,
counterclaims or rights of offset or rescission available to the related
Mortgagor with respect to such Mortgage Note, Mortgage or other agreements.
14. Insurance. Each Mortgaged Property is required pursuant to the
related Mortgage to be and is insured by (a) a fire and extended perils
insurance policy issued by an insurer meeting the requirements of such Purchased
Loan providing coverage against loss or damage sustained by reason of fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike, civil
commotion, aircraft, vehicles and smoke, and, to the extent required as of the
date of origination by the originator of such Purchased Loan consistent with its
normal commercial mortgage lending practices, against other risks insured
against by persons operating like properties in the locality of the Mortgaged
Property in an amount not less than the lesser of the principal balance of the
related Purchased Loan and the replacement cost (not allowing for depreciation)
of the Mortgaged Property, and not less than the amount necessary to avoid the
operation of any coinsurance provisions with respect to the Mortgaged Property;
(b) a business
Exhibit VI-4
interruption or rental loss insurance policy, in an amount at least equal to six
months of operations of the Mortgaged Property (other than manufactured housing
communities); (c) a flood insurance policy (if any portion of the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency as having special flood hazards); and (d) a comprehensive general
liability insurance policy in amounts as are generally required by commercial
mortgage lenders, and in any event not less than $1 million per occurrence. Such
insurance policy contains a standard mortgagee clause that names the mortgagee
as an additional insured and that requires at least thirty (30) days' (in the
case of termination or cancellation other than for nonpayment of premiums) and
at least ten (10) days' (in the case of termination or cancellation for
nonpayment of premiums) prior notice to the holder of the Mortgage, and no such
notice has been received, including any notice of nonpayment of premiums, that
has not been cured. Each Mortgage obligates the related Mortgagor to maintain
all such insurance and, upon such Mortgagor's failure to do so, authorizes the
holder of the Mortgage to maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from such Mortgagor. Other than as
set forth in paragraph 17(h) hereof, each Mortgage provides that casualty
insurance proceeds will be applied either to the restoration or repair of the
related Mortgaged Property or to the reduction or defeasance of the principal
amount of the Purchased Loan.
15. Taxes and Assessments. There are no delinquent or unpaid taxes or
assessments (including assessments payable in future installments), or other
outstanding charges affecting any Mortgaged Property which are or may become a
lien of priority higher than the lien of the related Mortgage. For purposes of
this representation and warranty, real property taxes and assessments shall not
be considered unpaid until the date on which interest and/or penalties would be
first payable thereon.
16. Mortgagor Bankruptcy. No Mortgagor and, to Seller's knowledge, no
tenant leasing space at the related Mortgaged Property that constitutes more
than 25% of the gross leased space at such Mortgaged Property is a debtor in any
state or federal bankruptcy or insolvency proceeding.
17. Leasehold Estate. Each Mortgaged Property consists of the related
Mortgagor's fee simple estate in real estate or, if the related Purchased Loan
is secured in whole or in part by the interest of a Mortgagor as a lessee under
a ground lease of a Mortgaged Property (a "Ground Lease"), by the related
Mortgagor's interest in the Ground Lease but not by the related fee interest in
such Mortgaged Property (the "Fee Interest"). With respect to any Purchased Loan
secured by a Ground Lease but not by the related Fee Interest:
(a) such Ground Lease or a memorandum thereof has been duly
recorded; such Ground Lease (or the related estoppel letter or lender
protection agreement between Seller and related lessor) permits the
current use of the Mortgaged Property and permits the interest of the
lessee thereunder to be encumbered by the related Mortgage and does not
restrict the use of the related Mortgaged Property by such lessee, its
successors or assigns in a manner that would adversely affect the
security provided by the related Mortgage by limiting in any way its
current use; and there has been no material change in the payment terms
of such Ground Lease since the origination or acquisition of the
Exhibit VI-5
related Purchased Loan, with the exception of changes reflected in
written instruments that are a part of the related Purchased Loan File;
(b) the lessee's interest in such Ground Lease is not subject
to any liens or encumbrances superior to, or of equal priority with,
the related Mortgage, other than Permitted Encumbrances;
(c) the Mortgagor's interest in such Ground Lease is
assignable to the applicable Buyer and its successors and assigns upon
notice to, but without the consent of, the lessor thereunder (or, if
such consent is required, it has been obtained prior to the Purchase
Date) and, in the event that it is so assigned, is further assignable
by such Buyer and its successors and assigns upon notice to, but
without the need to obtain the consent of, such lessor;
(d) such Ground Lease is in full force and effect, and no
event of default has occurred that has not been cured, nor has any
event of default (regardless of cure) occurred during the previous
one-year period. Seller has received no notice that an event of default
has occurred thereunder, and, to Seller's knowledge, there exists no
condition that, but for the passage of time or the giving of notice, or
both, would result in an event of default under the terms of such
Ground Lease;
(e) such Ground Lease, or an estoppel letter or other
agreement, (i) requires the lessor under such Ground Lease to give
notice of any default by the lessee to the mortgagee, provided that the
mortgagee has provided the lessor with notice of its lien in accordance
with the provisions of such Ground Lease to the extent such Ground
Lease requires such notice, and (ii) further provides that no notice of
termination given under such Ground Lease (including rejection of such
Ground Lease in a bankruptcy proceeding) is effective against the
holder of the Mortgage unless a copy of such notice has been delivered
to such holder and the lessor has offered to enter into a new lease
with such holder on terms that do not materially vary from the economic
terms of the Ground Lease;
(f) a mortgagee is permitted a reasonable opportunity
(including, where necessary, sufficient time to gain possession of the
interest of the lessee under such Ground Lease) to cure any default
under such Ground Lease, which is curable after the receipt of notice
of any such default, before the lessor thereunder may terminate such
Ground Lease;
(g) such Ground Lease has an original term (including any
extension options set forth therein that can be exercised by the
mortgagee if the mortgagee acquires the lessee's rights under such
Ground Lease) which extends not less than twenty (20) years beyond the
stated maturity date of the related Purchased Loan;
(h) under the terms of such Ground Lease and the related
Mortgage, taken together, any related insurance proceeds or
condemnation award other than in respect of a total loss will be
applied either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee or a designee appointed
by it having the right to
Exhibit VI-6
hold and disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling another party to hold
and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender for conduit
programs), or to the payment or defeasance of the outstanding principal
balance of the Purchased Loan together with any accrued interest
thereon;
(i) such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by
prudent commercial mortgage lenders;
(j) such Ground Lease provides, or the lessor has otherwise
agreed, that such Ground Lease may not be amended or modified in any
manner materially adverse to the interest of the mortgagee without the
prior written consent of the mortgagee under such Purchased Loan; and
(k) the lessor is required to enter into a new lease with the
mortgagee upon termination of the Ground Lease in the event of a
rejection of the Ground Lease in bankruptcy.
18. Escrow Deposits. All escrow deposits relating to each Purchased
Loan that are, as of the Purchase Date, required to be deposited with Seller or
its agent have been so deposited.
19. LTV Ratio. The gross proceeds of each Purchased Loan to the related
Mortgagor at origination did not exceed the noncontingent principal amount of
the Purchased Loan and either: (a) such Purchased Loan is secured by an interest
in real property having a fair market value (i) at the date the Purchased Loan
was originated at least equal to 80 percent of the original principal balance of
the Purchased Loan or (ii) at the Purchase Date at least equal to 80 percent of
the principal balance of the Purchased Loan on such date; provided that for
purposes hereof, the fair market value of the real property interest must first
be reduced by (x) the amount of any lien on the real property interest that is
senior to the Purchased Loan and (y) a proportionate amount of any lien that is
in parity with the Purchased Loan (unless such other lien secures a Purchased
Loan that is cross-collateralized with such Purchased Loan, in which event the
computation described in clauses (a)(i) and (a)(ii) of this paragraph 19 shall
be made on a pro rata basis in accordance with the fair market values of the
Mortgaged Properties securing such cross-collateralized Purchased Loans); or (b)
substantially all the proceeds of such Purchased Loan were used to acquire,
improve or protect the real property which served as the only security for such
Purchased Loan (other than a recourse feature or other third-party credit
enhancement within the meaning of Treasury Regulations Section
1.860G-2(a)(1)(ii)).
20. Advancement of Funds by Seller. Seller has not and no other holder
of a Purchased Loan has advanced funds or induced, solicited or received any
advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by such
Purchased Loan.
21. No Mechanics' Liens. As of the date of the Mortgage, and to the
actual knowledge of Seller as of the Purchase Date, each Mortgaged Property is
free and clear of any
Exhibit VI-7
and all mechanics' and materialmen's liens that are prior or equal to the lien
of the related Mortgage, and no rights are outstanding that under law could give
rise to any such lien that would be prior or equal to the lien of the related
Mortgage except, in each case, for liens insured against by the Title Policy
referred to herein or otherwise bonded.
22. Compliance With Usury Laws. Each Purchased Loan complied with, or
is exempt from, all applicable usury laws in effect at its date of origination.
23. Cross-collateralization; Cross-default. No Purchased Loan is
cross-collateralized or cross-defaulted with any loan other than one or more
other Purchased Loans, unless either (a) the effect of such
cross-collateralization or cross-default provision is being terminated
simultaneously herewith or (b) such Purchased Loan is subject to a standstill
and release agreement reasonably acceptable to the Buyer Agent which prohibits
any action against the borrower under the Purchased Loan and against the
Mortgaged Property by the holder of such other loan and requires release of any
such cross-collateralization at the request of the Buyer Agent upon the
occurrence and during the continuation of an Event of Default if Seller shall
have failed to repurchase such Purchased Loan pursuant to the terms of the
Agreement.
24. Releases of Mortgaged Property. No Mortgage Note or Mortgage
requires the mortgagee to release all or any material portion of the related
Mortgaged Property from the lien of the related Mortgage except upon payment in
full of all amounts due under the related Purchased Loan; provided, that the
mortgagee may be required to grant releases of portions of the related Mortgaged
Properties if (a) release is conditioned upon the satisfaction of certain legal
and underwriting requirements or the payment of a release price, (b) the portion
of the Mortgaged Property permitted to be released was not considered by Seller
to be material in the underwriting of the Purchased Loan or (c) a total or
partial defeasance is effected in respect of such Purchased Loan. No Purchased
Loan permits the release or substitution of collateral if such release or
substitution (i) would create a "significant modification" of such Purchased
Loan within the meaning of Treas. Reg. ss. 1.1001 3 or (ii) would cause such
Purchased Loan not to be a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code (without regard to clause (A)(i) or (A)(ii) thereof).
25. No Equity Participation or Contingent Interest. Except as disclosed
to the Buyer Agent, no Purchased Loan contains any equity participation by the
lender or provides for negative amortization or for any contingent or additional
interest in the form of participation in the cash flow of the related Mortgaged
Property.
26. No Material Default. There exists no material default, breach or
event of acceleration under the documents evidencing or securing the Purchased
Loan; provided, however, that this representation and warranty does not address
or otherwise cover any default, breach or event of acceleration that
specifically pertains to any matter otherwise covered by any other
representation and warranty made by Seller in any of paragraphs 3, 7, 12, 14, 15
and 17 of this Exhibit VI. Seller has not waived any material event of default,
material default or material breach under the Purchased Loan Documents occurring
within the past twelve (12) months.
27. Local Law Compliance. To Seller's actual knowledge, based solely
upon opinions of counsel and/or other due diligence customarily performed by
Seller, the
Exhibit VI-8
improvements located on or forming part of the related Mortgaged Property comply
with applicable zoning laws and ordinances, or constitute legal nonconforming
uses or structures or, if any such improvement does not so comply, such
noncompliance does not materially and adversely affect the value of the related
Mortgaged Property.
28. Junior Liens. None of the Purchased Loans permits the related
Mortgaged Property to be encumbered by any lien junior to or of equal priority
with the lien of the related Mortgage without the prior written consent of the
holder thereof. None of the Mortgaged Properties is encumbered by any lien
junior to the lien of the related Mortgage. Each Purchased Loan contains a "due
on sale" clause that provides for the acceleration of the payment of the unpaid
principal balance of the Purchased Loan if, without the prior written consent of
the holder of the Purchased Loan, the related Mortgaged Property is transferred
or sold.
29. Actions Concerning Purchased Loans. To the actual knowledge of
Seller, there are no actions, suits or proceedings pending or threatened before
any court, administrative agency or arbitrator concerning any Purchased Loan or
related Mortgagor or Mortgaged Property that might materially and adversely
affect the value of the Mortgaged Property as security for the Purchased Loan.
30. Servicing. The servicing and collection practices used by Seller
have been in all material respects legal, proper and prudent and have met
customary industry standards for servicing of commercial loans similar to the
Purchased Loans in question.
31. Licenses and Permits. To Seller's knowledge, as of the date of
origination of the Purchased Loan, the related Mortgagor was in possession of
all material licenses, permits and franchises required by applicable law for the
ownership and operation of the related Mortgaged Property as it was then
operated.
32. Assisted Living Facility Regulation. If any Mortgaged Property is
operated as an assisted living facility, (a) the related Mortgagor and operator,
if different, is in compliance in all material respects with all federal and
state laws applicable to the use and operation of the related Mortgaged Property
and (b) if the operator of the Mortgaged Property participates in Medicare or
Medicaid programs, the facility is in compliance in all material respects with
the requirements for participation in such programs.
33. Nonrecourse Exceptions. The Purchased Loan Documents for each
Purchased Loan provide that such Purchased Loan constitutes the nonrecourse
obligations of the related obligor thereon except that either (i) such provision
does not apply in the case of fraud, misappropriation of awards, rents and
proceeds by the Mortgagor and other similar carve-outs that are customary or
(ii) such documents provide that the Mortgagor shall be liable to the holder of
the Purchased Loan for losses incurred as a result of fraud by the Mortgagor.
34. Single-Purpose Entity. The Mortgagor on each Purchased Loan with an
outstanding principal balance in excess of $10,000,000, was, as of the
origination of the Purchased Loan, a Single-Purpose Entity. For this purpose, a
"Single-Purpose Entity" shall mean an entity, other than an individual, whose
organizational documents provide substantially to the effect that it was formed
or organized solely for the purpose of owning and operating one
Exhibit VI-9
or more Mortgaged Properties securing the Purchased Loans and prohibit it from
engaging in any business unrelated to such Mortgaged Property or Properties, and
whose organizational documents further provide, or which entity represented in
the related Purchased Loan documents, substantially to the effect that it does
not have any assets other than those related to its interest in and operation of
such Mortgaged Property or Properties, or any indebtedness other than as
permitted by the related Mortgage or the other related Purchased Loan documents,
that it has its own books and records and accounts separate and apart from any
other person, and that it holds itself out as a legal entity, separate and apart
from any other person.
Each borrower of a Purchased Loan in excess of $10,000,000 is an entity
which has represented in connection with the origination of the Purchased Loan,
or whose organizational documents as of the date of origination of the Purchased
Loan; provided that so long as the Purchased Loan is outstanding it will have at
least one independent director, manager or executive committee member.
35. Separate Tax Parcels. Each Mortgaged Property constitutes one or
more complete separate tax lots or is subject to an endorsement under the
related title insurance policy.
36. Operating or Financial Statement. The related Purchased Loan
Documents require the related borrower to furnish to the mortgagee at least
annually an operating statement with respect to the related Mortgaged Property.
37. Purchased Loan Modifications. Any Purchased Loan that was
"significantly modified" prior to the Purchase Date so as to result in a taxable
exchange under Section 1001 of the Code either (a) was modified as a result of
the default or reasonably foreseeable default of such Purchased Loan or (b)
satisfies the provisions of either clause (a)(i) of paragraph 19 (substituting
the date of the last such modification for the date the Purchased Loan was
originated) or clause (a)(ii) of paragraph 19, including the proviso thereto.
38. Inspections. Seller (or if Seller is not the originator, the
originator of the Purchased Loan) has inspected or caused to be inspected each
Mortgaged Property in connection with the origination of the related Purchased
Loan.
39. Defeasance. Each Purchased Loan containing provisions for
defeasance of mortgage collateral either (i) requires the prior written consent
of, and compliance with the conditions set by, the holder of the Purchased Loan,
or (ii) requires that (A) defeasance may not occur prior to the time permitted
by applicable "real estate mortgage investment conduit" rules and regulations
(if applicable), (B) the replacement collateral consists of U.S. governmental
securities in an amount sufficient to make all scheduled payments under the
Mortgage Note when due, (C) independent public accountants certify that the
collateral is sufficient to make such payments, (D) counsel provide an opinion
that the Buyer Agent, for the benefit of the Buyers, has a perfected security
interest in such collateral prior to any other claim or interest, and (E) all
costs and expenses arising from the defeasance of the mortgage collateral shall
be borne by the borrower.
40. Fraud. No fraudulent acts were committed by Seller in connection
with its acquisition or origination of such Purchased Loan, nor, to Seller's
knowledge, were any
Exhibit VI-10
fraudulent acts committed by any Person in connection with the origination of
such Purchased Loan.
41. Other Agreements. Except as included in the related Purchased Loan
File, Seller is not a party to any document, instrument or agreement, and there
is no document, that by its terms modifies or affects the rights and obligations
of any holder of such Purchased Loan and Seller has not consented to any
material change or waiver to any term or provision of any such document,
instrument or agreement and no such change or waiver exists.
REPRESENTATIONS AND WARRANTIES REGARDING EACH INDIVIDUAL PURCHASED LOAN WHICH IS
AN ELIGIBLE DEVELOPMENT LOAN OR AN ELIGIBLE BRIDGE LOAN
- --------------------------------------------------------------------------------
With respect to each Purchased Loan which is an Eligible Development
Loan or an Eligible Bridge Loan, Seller represents and warrants on each Purchase
Date as follows, other than as set forth on the exception report provided to the
Buyer Agent in accordance with the Agreement.
1. Corresponding Representations. Seller makes the representations and
warranties corresponding to Eligible Mezzanine Loans, Eligible First Mortgage
Loans, or Eligible B Notes, as applicable, mutatis mutandis.
2. Eligible Development Loans. With respect to each Purchased Loan
which is an Eligible Development Loan, Seller additionally represents and
warrants on each Purchase Date as follows, other than as set forth on the
exception report provided to the Buyer Agent in accordance with the Agreement:
(a) The Purchased Loan is a performing commercial real estate
loan owned by the Seller and the proceeds of which are applied to
finance the acquisition of the underlying real property and the initial
construction of improvements thereon and as to which scheduled
construction and occupancy is scheduled to occur on or before 30 days
prior to the Termination Date.
(b) The related borrower under the Purchased Loan has
furnished to Seller performance bonds and/or labor and material payment
bonds meeting the requirements of the related loan documents, with
respect to the general contractor of the related construction project
and each subcontractor whose subcontract amount exceeds $100,000, and
such bonds are in full force and effect.
(c) Seller has delivered to the Buyer Agent a construction
file containing all material plans and specifications, all contracts
(including the general contract, the architect's contract, all material
sub-contracts and all change orders), all borrower progress reports and
all other material documents, in each case, contained in the related
loan file.
(d) All requests made by the related borrower under the
Purchased Loan for additional funding under the Purchased Loan, if any,
that have been properly presented to
Exhibit VI-11
Seller and that were required to be advanced through the applicable
Purchase Date have been advanced in accordance with the terms of the
Purchased Loan documents.
(e) The Purchased Loan documents for such Purchased Loan are
non-recourse to the related borrower subject to customary carve-outs
required by lenders comparable to Seller for comparable loans.
REPRESENTATIONS AND WARRANTIES REGARDING EACH INDIVIDUAL PURCHASED LOAN WHICH IS
AN ELIGIBLE MEZZANINE LOAN
- --------------------------------------------------------------------------------
With respect to each Purchased Loan which is an Eligible Mezzanine
Loan, Seller represents and warrants on each Purchase Date (i) that each
representation or warranty set forth in any other section of this Exhibit VI
which pertains to the underlying Mortgaged Property related to such Purchased
Loan is true and correct in all respects and (ii) as follows, in each case,
other than as set forth on the exception report provided to the Buyer Agent in
accordance with the Agreement:
1. Purchased Loan Information. The information set forth in the
Purchased Loan Schedule is complete, true and correct in all material respects.
2. No Default or Dispute Under Purchased Loan Documents. To Seller's
actual knowledge, there exists no material default, breach or event of
acceleration (and no event which, with the passage of time or the giving of
notice, or both, would constitute any of the foregoing) under the documents
evidencing or securing the Purchased Loan, in any such case to the extent the
same materially and adversely affects the value of the Purchased Loan and the
related underlying real property.
3. No Offsets, Defenses or Counterclaims. There is no valid offset,
defense or counterclaim to such Purchased Loan.
4. Equity Pledges. With respect to each Purchased Loan which is an
Eligible Mezzanine Loan only, the pledge of ownership interests securing such
Purchased Loan encumbers 100% of the direct or indirect equity or ownership
interests in the underlying real property owner (so that, except for the equity
interests pledged to Seller, there are no direct or indirect equity or ownership
interests in underlying real property owner or in any constituent entity) and
has been fully perfected as a first priority lien in favor of Seller as
mezzanine lender.
5. Lockbox. The lockbox administrator, if any, is not an Affiliate of
Seller.
6. Enforceability. The Purchased Loan Documents have been duly and
properly executed by Seller, and each is the legal, valid and binding obligation
of the parties thereto, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law). The
Purchased Loan is not usurious. Seller has fully and validly perfected all
security interests created or intended to be created pursuant to the Purchased
Loan Documents.
Exhibit VI-12
7. Waivers and Modifications. The terms of the related Purchased Loan
Documents have not been impaired, waived, altered or modified in any material
respect (other than by a written instrument which is included in the related
Purchased Loan File).
8. Valid Assignment. The assignment of Purchased Loan constitutes the
legal, valid and binding assignment of such Purchased Loan from Seller to or for
the benefit of the applicable Buyer. No consent or approval by any third party
is required for any such assignment of such Purchased Loan, for such Buyer's (or
Buyer's Agent, as applicable) exercise of any rights or remedies under the
assignment of Purchased Loan, or for such Buyer's (or Buyer's Agent, as
applicable) sale or other disposition of such Purchased Loan if such Buyer
acquires title thereto, other than consents and approvals which have been
obtained. No third party (including underlying real property owner and
underlying real property mortgagee) holds any "right of first refusal," "right
of first negotiation," "right of first offer," purchase option, or other similar
rights of any kind on account of the occurrence of any of the foregoing. No
other impediment exists to any such transfer.
9. Certain Representations and Warranties. To Seller's actual
knowledge, all representations and warranties in the Purchased Loan Documents
and in the underlying real property mortgage documents are true and correct in
all material respects.
10. Parties Authorized. To the extent required under applicable law as
of the Purchase Date, each party to the Purchased Loan Documents was authorized
to do business in the jurisdiction in which the related underlying real property
is located at all times when it held the Purchased Loan to the extent necessary
to ensure the validity and enforceability of such Purchased Loan.
11. No Advances of Funds. No party to the Purchased Loan Documents has
advanced funds on account of any default under the Purchased Loan or under the
underlying real property mortgage documents.
12. Servicing. The servicing and collection practices used by Seller
for the Purchased Loan have complied with applicable law in all material
respects and are consistent with those employed by prudent servicers of
comparable loans.
13. No Assignment. Seller has not effectuated any transfer, sale,
assignment, hypothecation, or other conveyance of any of its rights and
obligations under any Purchased Loan Document, except in connection with the
Agreement.
14. No Bankruptcy. To Seller's actual knowledge, none of the following
parties is a debtor in any state or federal bankruptcy or insolvency proceeding:
Seller; underlying real property owner; or underlying real property mortgagee.
REPRESENTATIONS AND WARRANTIES REGARDING EACH INDIVIDUAL PURCHASED LOAN WHICH IS
AN ELIGIBLE B NOTE
- --------------------------------------------------------------------------------
With respect to each Purchased Loan which is an Eligible B Note, Seller
represents and warrants on each Purchase Date (i) that each representation or
warranty set forth in any other section of this Exhibit VI which pertains to the
underlying Mortgaged Property
Exhibit VI-13
related to such Purchased Loan is true and correct in all respects and (ii) as
follows, in each case, other than as set forth on the exception report provided
to the Buyer Agent in accordance with the Agreement:
1. Purchased Loan Information. The information set forth in the
Purchased Loan Schedule is complete, true and correct in all material respects.
2. No Default or Dispute Under Purchased Loan Documents. There exists
no material default, breach or event of acceleration (and no event which, with
the passage of time or the giving of notice, or both, would constitute any of
the foregoing) under the documents evidencing or securing the Purchased Loan, in
any such case to the extent the same materially and adversely affects the value
of the Purchased Loan and the related underlying real property.
3. No Offsets, Defenses or Counterclaims. There is no valid offset,
defense or counterclaim to such Purchased Loan.
4. Lockbox. The lockbox administrator, if any, is not an Affiliate of
Seller.
5. Enforceability. The Purchased Loan Documents have been duly and
properly executed by Seller, and each is the legal, valid and binding obligation
of the parties thereto, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law). The
Purchased Loan is not usurious. Seller has fully and validly perfected all
security interests created or intended to be created pursuant to the Purchased
Loan Documents.
6. Waivers and Modifications. The terms of the related Purchased Loan
Documents have not been impaired, waived, altered or modified in any material
respect (other than by a written instrument which is included in the related
Purchased Loan File).
7. Valid Assignment. The assignment of Purchased Loan constitutes the
legal, valid and binding assignment of such Purchased Loan from Seller to or for
the benefit of the applicable Buyer. No consent or approval by any third party
is required for any such assignment of such Purchased Loan, for such Buyer's (or
the Buyer Agent, as applicable) exercise of any rights or remedies under the
assignment of Purchased Loan, or for such Buyer's (or the Buyer Agent, as
applicable) sale or other disposition of such Purchased Loan if such Buyer
acquires title thereto, other than consents and approvals which have been
obtained. No third party (including underlying real property owner and
underlying real property mortgagee) holds any "right of first refusal," "right
of first negotiation," "right of first offer," purchase option, or other similar
rights of any kind on account of the occurrence of any of the foregoing. No
other material impediment exists to any such transfer.
8. Certain Representations and Warranties. All representations and
warranties in the Purchased Loan Documents and in the underlying documents for
the performing commercial mortgage loan secured by a first lien on a multifamily
or commercial property to which such Purchased Loan relates are true and correct
in all material respects.
Exhibit VI-14
9. Parties Authorized. To the extent required under applicable law as
of the Purchase Date, each party to the Purchased Loan Documents was authorized
to do business in the jurisdiction in which the related underlying real property
is located at all times when it held the Purchased Loan to the extent necessary
to ensure the validity and enforceability of such Purchased Loan.
10. No Advances of Funds. No party to the Purchased Loan Documents has
advanced funds on account of any default under the Purchased Loan or under the
underlying real property mortgage documents.
11. Servicing. The servicing and collection practices used by Seller
for the Purchased Loan have complied with applicable law in all material
respects and are consistent with those employed by prudent servicers of
comparable loans.
12. No Assignment. Seller has not effectuated any transfer, sale,
assignment, hypothecation, or other conveyance of any of its rights and
obligations under any Purchased Loan Document, except in connection with the
Agreement.
13. No Bankruptcy. To Seller's actual knowledge, none of the following
parties is a debtor in any state or federal bankruptcy or insolvency proceeding:
Seller; underlying real property owner; or underlying real property mortgagee.
Exhibit VI-15
EXHIBIT VII
PURCHASED LOAN INFORMATION
- --------------------------------------------------------------------------------
Loan ID #:
Borrower Name:
Borrower Address:
Borrower City:
Borrower State:
Borrower Zip Code:
Recourse?
Guaranteed?
Related Borrower Name(s):
Original Principal Balance:
Note Date:
Loan Date:
Loan Type (e.g., fixed/a.r.m.):
Current Principal Balance:
Current Interest Rate (per annum):
Paid to date:
Annual P&I:
Next Payment due date:
Index (complete whether fixed or a.r.m.):
Gross Spread/Margin (complete whether fixed or a.r.m.):
Life Cap:
Life Floor:
Periodic Cap:
Periodic Floor:
Rounding Factor:
Lookback (in days):
Interest Calculation Method (e.g., Actual/360):
Interest rate adjustment frequency:
P&I payment frequency:
First P&I payment due:
First interest rate adjustment date:
First payment adjustment date:
Next interest rate adjustment date:
Next payment adjustment date:
Conversion Date:
Converted Interest Rate Index:
Converted Interest Rate Spread:
Maturity date:
Loan term:
Amortization term:
Hyper-Amortization Flag:
Exhibit VII-1
PURCHASED LOAN INFORMATION
- --------------------------------------------------------------------------------
Hyper-Amortization Term:
Hyper-Amortization Rate Increase:
Balloon Amount:
Balloon LTV:
Prepayment Penalty Flag:
Prepayment Penalty Text:
Lockout Period:
Lien Position:
Fee/Leasehold:
Ground Lease Expiration Date:
Property Name:
Property Address:
Property City:
Property Zip Code:
Property Type (General):
Property Type (Specific):
Cross-collateralized (Yes/No)*:
Property Size:
Year built:
Year renovated:
Actual Average Occupancy:
Occupancy Rent Roll Date:
Underwritten Average Occupancy:
Largest Tenant:
Largest Tenant SF:
Largest Tenant Lease Expiration:
2nd Largest Tenant:
2nd Largest Tenant SF:
2nd Largest Tenant Lease Expiration:
3rd Largest Tenant:
3rd Largest Tenant SF:
3rd Largest Tenant Lease Expiration:
Underwritten Average Rental Rate/ADR:
Underwritten Vacancy:
Underwritten Other Income:
Underwritten Total Revenues:
Underwritten Replacement Reserves:
Underwritten Management Fees:
Underwritten Franchise Fees:
Underwritten Total Expenses:
Underwritten Leasing Commissions:
* If yes, give property information on each property covered and in
aggregate as appropriate. Loan ID.
Exhibit VII-2
PURCHASED LOAN INFORMATION
- --------------------------------------------------------------------------------
Underwritten Tenant Improvement Costs:
Underwritten NOI:
Underwritten NCF:
Underwritten Debt Service Constant:
Underwritten DSCR at NOI:
Underwritten DSCR at NCF:
Underwritten NOI Period End Date:
Hotel Franchise:
Hotel Franchise Expiration Date:
Appraiser Name: (if Applicable)
Appraised Value: (if Applicable)
Appraisal Date: (if Applicable)
Appraisal Cap Rate: (if Applicable)
Appraisal Discount Rate: (if Applicable)
Underwritten LTV:
Environmental Report Preparer:
Environmental Report Date:
Environmental Report Issues:
Architectural and Engineering Report Preparer:
Architectural and Engineering Report Date:
Deferred Maintenance Amount:
Ongoing Replacement Reserve Requirement per A&E Report:
Immediate Repairs Escrow % (e.g., 125%):
Replacement Reserve Annual Deposit:
Replacement Reserve Balance:
Tenant Improvement/Leasing Commission Annual Deposits:
Tenant Improvement/Leasing Commission Balance:
Taxes paid through date:
Monthly Tax Escrow:
Tax Escrow Balance:
Insurance paid through date:
Monthly Insurance Escrow:
Insurance Escrow Balance:
Reserve/Escrow Balance as of Date:
Probable Maximum Loss %:
Covered by Earthquake Insurance (Yes/No):
Number of times 30 days late in last 12 months:
Number of times 60 days late in last 12 months:
Number of times 90 days late in last 12 months:
Servicing Fee:
Notes:
Exhibit VII-3
EXHIBIT VIII
ADVANCE PROCEDURE
Final Approval of New Assets Which Are Eligible Securities/Preliminary
Approval of New Assets Which Are Eligible Loans.
(a) Seller may, from time to time, submit to the Buyer Agent a
Preliminary Due Diligence Package for the Buyer Agent's review and
approval in order to enter into a Transaction with respect to any New
Asset that Seller proposes to be included as a Purchased Asset under
the Agreement.
(b) Upon the Buyer Agent's receipt of a complete Preliminary
Due Diligence Package, the Buyer Agent, within two (2) Business Days,
shall have the right to request, in the Buyer Agent's good faith
business judgment, additional diligence materials and deliveries that
the Buyer Agent shall specify on a Supplemental Due Diligence List.
Upon the Buyer Agent's receipt of all of the Diligence Materials or the
Buyer Agent's waiver thereof, the Buyer Agent, within three (3)
Business Days (in the case of an Eligible Security) or five (5)
Business Days and following receipt of internal credit approval, shall
either (i) notify Seller of the Purchase Price and the Market Value for
the New Asset or (ii) deny, in the Buyer Agent's good faith business
judgment, Seller's request for a Transaction. The Buyer Agent's failure
to respond to Seller within three (3) or five (5) Business Days, as
applicable, shall be deemed to be a denial of Seller's request for an
Advance, unless the Buyer Agent and Seller have agreed otherwise in
writing.
Final Approval of New Assets Which Are Eligible Loans. Upon the Buyer
Agent's notification to Seller of the Purchase Price and the Market Value for
any New Asset which is an Eligible Loan, Seller shall, if Seller desires to
enter into a Transaction with respect to such New Asset, satisfy the conditions
set forth below (in addition to satisfying the Transaction Conditions Precedent
to obtaining each advance) as a condition precedent to the Buyer Agent's
approval of such New Asset as a Purchased Asset, all in a manner reasonably
satisfactory to the Buyer Agent and pursuant to documentation reasonably
satisfactory to the Buyer Agent:
(a) Delivery of Purchased Loan Documents. Seller shall deliver
to the Buyer Agent: (i) with respect to any New Asset that is a
Preexisting Loan, each of the Purchased Loan Documents, except
Purchased Loan Documents that Seller expressly and specifically
disclosed in Seller's Preliminary Due Diligence Package were not in
Seller's possession; and (ii) with respect to any New Asset that is an
Originated Loan, each of the Purchased Loan Documents.
(b) Environmental and Engineering. The Buyer Agent shall have
received a "Phase 1" (and, if necessary, "Phase 2") environmental
report, an asbestos survey, if applicable, and an engineering report,
each in form reasonably satisfactory to the Buyer Agent, by an engineer
or environmental consultant reasonably approved by the Buyer Agent.
Exhibit VIII-1
(c) Appraisal. The Buyer Agent shall have received either an
Acceptable Appraisal or a Draft Appraisal. If the Buyer Agent receives
only a Draft Appraisal prior to entering into a Transaction, Seller
shall deliver an Acceptable Appraisal on or before thirty (30) days
after the Purchase Date.
(d) Insurance. The Buyer Agent shall have received
certificates or other evidence of insurance demonstrating insurance
coverage in respect of the Mortgaged Property of types, in amounts,
with insurers and otherwise in compliance with the terms, provisions
and conditions set forth in the Purchased Loan Documents. Such
certificates or other evidence shall indicate that Seller will be named
as an additional insured as its interest may appear and shall contain a
loss payee endorsement in favor of such additional insured with respect
to the policies required to be maintained under the Purchased Loan
Documents.
(e) Survey. The Buyer Agent shall have received all surveys of
the Mortgaged Property that are in Seller's possession.
(f) Lien Search Reports. The Buyer Agent or the Buyer Agent's
counsel shall have received, as reasonably requested by the Buyer
Agent, satisfactory reports of UCC, tax lien, judgment and litigation
searches and title updates conducted by search firms and/or title
companies acceptable to the Buyer Agent with respect to the Eligible
Loan, Mortgaged Property, Seller and Mortgagor, such searches to be
conducted in each location the Buyer Agent shall reasonably designate.
(g) Opinions of Counsel. The Buyer Agent shall have received
copies of all legal opinions in Seller's possession with respect to the
Eligible Loan which shall be in form and substance reasonably
satisfactory to the Buyer Agent.
(h) Additional Real Estate Matters. Seller shall have
delivered to the Buyer Agent to the extent in Seller's possession such
other real estate related certificates and documentation as may have
been requested by the Buyer Agent, such as: (i) certificates of
occupancy issued by the appropriate Governmental Authority and either
letters certifying that the Mortgaged Property is in compliance with
all applicable zoning laws issued by the appropriate Governmental
Authority or evidence that the related Title Policy includes a zoning
endorsement and (ii) abstracts of all leases in effect at the Mortgaged
Property and estoppel certificates, in form and substance acceptable to
the Buyer Agent, from any ground lessor and from any tenant that
occupies 7.5% or more of the rentable space at the Mortgaged Property,
and in any event from tenants whose occupancies aggregate not less than
70% of the occupied rentable square footage at the Mortgaged Property.
(i) Other Documents. The Buyer Agent shall have received such
other documents as the Buyer Agent or its counsel shall reasonably deem
necessary.
Within three (3) Business Days of Seller's satisfaction of all of the
conditions enumerated in clauses (a) through (i) above, the Buyer Agent shall
either (i) if the Purchased Loan Documents with respect to a New Asset are not
reasonably satisfactory in form and
Exhibit VIII-2
substance to the Buyer Agent, notify Seller that the Buyer Agent has not
approved such New Asset as a Purchased Asset or (ii) notify Seller that the
Buyer Agent has approved the New Asset as a Purchased Asset. The Buyer Agent's
failure to respond to Seller within three (3) Business Days shall be deemed to
be a denial of Seller's request that the Buyer Agent approve the New Asset,
unless the Buyer Agent and Seller have agreed otherwise in writing.
Exhibit VIII-3
EXHIBIT IX
FORM OF REDIRECTION LETTER
[Letterhead of Seller]
______ __, 20__
[Borrower Name]
[Address]
Re: [__________]
To Whom It May Concern:
ANTHRACITE CAPITAL BOFA FUNDING LLC has transferred all of its interest
in the Loan to [Bank of America, N.A. ("Bank of America")] [Banc of America
Mortgage Capital Corporation ("BAMCC")], and, accordingly, [Bank of America]
[BAMCC] is now your lender with regard to the Loan. All notices, demands and
requests to be given to the lender under the documents evidencing, securing
and/or governing the Loan shall be sent to the following address (until such
address for notice is changed in accordance with the Loan documents):
[Bank of America, N.A.] [Banc of America
Mortgage Capital Corporation]
Mail Code: NC1-027-19-01
Hearst Tower
214 North Tryon Street
Charlotte, NC 28555
Attention: Christopher Young, Vice President, Portfolio Management
with a copy to:
ANTHRACITE CAPITAL BOFA FUNDING LLC
c/o BlackRock Financial Management, Inc.
40 East 52nd Street
New York, New York 10022
Attention: Mr. Richard Shea
All payments to be made to Bank of America under the Loan shall be made
by wire transfer in accordance with the following instructions:
Wells Fargo Bank, N.A.
ABA 121-000-248
Account #: 53165200
Account name: Anthracite-Bank of America US Facility Warehouse
Exhibit IX-1
Please feel free to call Richard Shea at (212) 754-5579 should you have
any questions or concerns. Thank you.
ANTHRACITE CAPITAL BOFA FUNDING
LLC, a Delaware limited liability company
By: Anthracite Capital, Inc., a Maryland
corporation, its sole member
By:
-------------------------------------------
Name:
Title:
Exhibit IX-2