Common use of Management of REO Assets Clause in Contracts

Management of REO Assets. (a) If, in the reasonable business judgment of the Borrower, it becomes necessary to convert any Loan into an REO Asset in accordance with the Management Agreement, the Borrower shall transfer and assign such Loan (or the portion thereof owned by the Borrower) to a Portfolio Subsidiary using a contribution agreement reasonably acceptable to the Administrative Agent. Any equity interests of the Portfolio Subsidiary acquired by the Borrower shall immediately become a part of the Collateral Portfolio and be subject to the grant of a security interest under Section 2.12 and, if certificated, shall be promptly delivered to the Collateral Custodian, each undated and duly Indorsed in blank. The Portfolio Subsidiary shall be formed and operated pursuant to organizational documents reasonably acceptable to the Administrative Agent. After execution thereof, the Borrower shall prevent the Portfolio Subsidiary from agreeing to any amendment or other modification of the Portfolio Subsidiary organizational documents without first obtaining the written consent of the Administrative Agent. The Borrower shall manage each Portfolio Subsidiary (i) in accordance with Applicable Law, (ii) with reasonable care and diligence, (iii) in accordance with the applicable Portfolio Subsidiary’s organizational documents and (iv) with a view toward maximizing Recoveries on the applicable REO Asset (collectively, the “REO Management Standard”). The Borrower will cause all “Distributable Cash” (or any comparable definition set forth in the Portfolio Subsidiary’s organizational documents) to be deposited into the Collection Account within two (2) Business Days of receipt thereof. (b) In the event that title to any Underlying Collateral is acquired on behalf of a Portfolio Subsidiary for the benefit of its equity owners in foreclosure, by deed in lieu of foreclosure or upon abandonment or reclamation from bankruptcy, the deed or certificate of sale shall be taken in the name of such Portfolio Subsidiary. The Borrower shall use commercially reasonable efforts to cause each REO Asset to be managed, conserved, protected and operated solely for the purpose of its prompt disposition and sale. (c) Notwithstanding any provision to the contrary contained in this Agreement, the Borrower shall not (nor shall permit the Portfolio Subsidiary to) obtain title to any Underlying Collateral as a result of or in lieu of foreclosure or otherwise, obtain title to any direct or indirect partnership interest in any Obligor pledged pursuant to a pledge agreement and thereby be the beneficial owner of Underlying Collateral, have a receiver of rents appointed with respect to, and shall not otherwise acquire possession of, or take any other action with respect to, any Underlying Collateral if, as a result of any such action, the Portfolio Subsidiary would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of, such Underlying Collateral within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable state or local Environmental Law, unless the Borrower has previously determined in accordance with the REO Management Standard, based on an updated Phase I environmental assessment report generally prepared in accordance with the ASTM Phase I Environmental Site Assessment Standard E 1527-05, as may be amended or, with respect to residential property, a property inspection and title report, that: (i) such Underlying Collateral is in compliance in all material respects with applicable Environmental Laws; and (ii) there are no circumstances present at such Underlying Collateral relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation would reasonably be expected to be required by the owner, occupier or operator of the Underlying Collateral under applicable federal, state or local law or regulation. In the event that the Phase I or other environmental assessment first obtained by the Borrower with respect to Underlying Collateral indicates that such Underlying Collateral may not be in compliance with applicable Environmental Laws or that hazardous materials may be present but does not definitively establish such fact, the Borrower shall immediately sell or substitute the related Loan in accordance with Section 2.07.

Management of REO Assets. (a) If, in the reasonable business judgment of the Borrower, it becomes necessary to convert any Loan into an REO Asset in accordance with the Management Agreement, the Borrower shall transfer and assign such Loan (or the portion thereof owned by the Borrower) to a Portfolio Subsidiary using a contribution agreement reasonably acceptable to the Administrative Agent. Any equity interests of the Portfolio Subsidiary acquired by the Borrower shall immediately become a part of the Collateral Portfolio and be subject to the grant of a security interest under Section 2.12 and, if certificated, shall be promptly delivered to the Collateral Custodian, each undated and duly Indorsed in blank. The Portfolio Subsidiary shall be formed and operated pursuant to organizational documents reasonably acceptable to the Administrative Agent. After execution thereof, the Borrower shall prevent the Portfolio Subsidiary from agreeing to any amendment or other modification of the Portfolio Subsidiary organizational documents without first obtaining the written consent of the Administrative Agent. The Borrower shall manage each Portfolio Subsidiary (i) in accordance with Applicable Law, (ii) with reasonable care and diligence, (iii) in accordance with the applicable Portfolio Subsidiary’s organizational documents and (iv) with a view toward maximizing Recoveries on the applicable REO Asset (collectively, the “REO Management Standard”). The Borrower will cause all “Distributable Cash” (or any comparable definition set forth in the Portfolio Subsidiary’s organizational documents) to be deposited into the Collection Account within two (2) Business Days of receipt thereof. (b) In the event that title to any Underlying Collateral is acquired on behalf of a Portfolio Subsidiary for the benefit of its equity owners in foreclosure, by deed in lieu of foreclosure or upon abandonment or reclamation from bankruptcy, the deed or certificate of sale shall be taken in the name of such Portfolio Subsidiary. The Borrower shall use commercially reasonable efforts to cause each REO Asset to be managed, conserved, protected and operated solely for the purpose of its prompt disposition and sale. (c) Notwithstanding any provision to the contrary contained in this Agreement, the Borrower shall not (nor shall permit the Portfolio Subsidiary to) obtain title to any Underlying Collateral as a result of or in lieu of foreclosure or otherwise, obtain title to any direct or indirect partnership interest in any Obligor pledged pursuant to a pledge agreement and thereby be the beneficial owner of Underlying Collateral, have a receiver of rents appointed with respect to, and shall not otherwise acquire possession of, or take any other action with respect to, any Underlying Collateral if, as a result of any such action, the Portfolio Subsidiary would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of, such Underlying Collateral within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable state or local Environmental Law, unless the Borrower has previously determined in accordance with the REO Management Standard, based on an updated Phase I environmental assessment report generally prepared in accordance with the ASTM Phase I Environmental Site Assessment Standard E 1527-05, as may be amended or, with respect to residential property, a property inspection and title report, that: (i) such Underlying Collateral is in compliance in all material respects with applicable Environmental Laws; and (ii) there are no circumstances present at such Underlying Collateral relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation would reasonably be expected to be required by the owner, occupier or operator of the Underlying Collateral under applicable federal, state or local law or regulation. In the event that the Phase I or other environmental assessment first obtained by the Borrower with respect to Underlying Collateral indicates that such Underlying Collateral may not be in compliance with applicable Environmental Laws or that hazardous materials may be present but does not definitively establish such fact, the Borrower shall immediately sell or substitute the related Loan in accordance with Section 2.07.

Management of REO Assets. (a) If, in the reasonable business judgment of the Borrower, it becomes necessary to convert any Loan into an REO Asset in accordance with the Management Agreement, the Borrower shall transfer and assign such Loan (or the portion thereof owned by the Borrower) to a Portfolio Subsidiary using a contribution agreement reasonably acceptable to the Administrative Agent. Any equity interests of the Portfolio Subsidiary acquired by the Borrower shall immediately become a part of the Collateral Portfolio and be subject to the grant of a security interest under Section 2.12 and, if certificated, shall be promptly delivered to the Collateral Custodian, each undated and duly Indorsed in blank. The Portfolio Subsidiary shall be formed and operated pursuant to organizational documents reasonably acceptable to the Administrative Agent. After execution thereof, the Borrower shall prevent the Portfolio Subsidiary from agreeing to any amendment or other modification of the Portfolio Subsidiary organizational documents without first obtaining the written consent of the Administrative Agent. The Borrower shall manage each Portfolio Subsidiary (i) in accordance with Applicable Law, (ii) with reasonable care and diligence, (iii) in accordance with the applicable Portfolio Subsidiary’s organizational documents and (iv) with a view toward maximizing Recoveries on the applicable REO Asset (collectively, the “REO Management Standard”). The Borrower will cause all “Distributable Cash” (or any comparable definition set forth in the Portfolio Subsidiary’s organizational documents) to be deposited into the Collection Account within two (2) Business Days of receipt thereof. (b) In the event that title to any Underlying Collateral is acquired on behalf of a Portfolio Subsidiary for the benefit of its equity owners in foreclosure, by deed in lieu of foreclosure or upon abandonment or reclamation from bankruptcy, the deed or certificate of sale shall be taken in the name of such Portfolio Subsidiary. The Borrower shall use commercially reasonable efforts to cause each REO Asset to be managed, conserved, protected and operated solely for the purpose of its prompt disposition and sale. (c) Notwithstanding any provision to the contrary contained in this Agreement, the Borrower shall not (nor shall permit the Portfolio Subsidiary to) obtain title to any Underlying Collateral as a result of or in lieu of foreclosure or otherwise, obtain title to any direct or indirect partnership interest in any Obligor pledged pursuant to a pledge agreement and thereby be the beneficial owner of Underlying Collateral, have a receiver of rents appointed with respect to, and shall not otherwise acquire possession of, or take any other action with respect to, any Underlying Collateral if, as a result of any such action, the Portfolio Subsidiary would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of, such Underlying Collateral within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable state or local Environmental Law, unless the Borrower has previously determined in accordance with the REO Management Standard, based on an updated Phase I environmental assessment report generally prepared in accordance with the ASTM Phase I Environmental Site Assessment Standard E 1527-05, as may be amended or, with respect to residential property, a property inspection and title report, that: (i) such Underlying Collateral is in compliance in all material respects with applicable Environmental Laws; and (ii) there are no circumstances present at such Underlying Collateral relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation would reasonably be expected to be required by the owner, occupier or operator of the Underlying Collateral under applicable federal, state or local law or regulation. In the event that the Phase I or other environmental assessment first obtained by the Borrower with respect to Underlying Collateral indicates that such Underlying Collateral may not be in compliance with applicable Environmental Laws or that hazardous materials may be present but does not definitively establish such fact, the Borrower shall immediately sell or substitute the related Loan in accordance with Section 2.07.