Exhibit 10.2
AMENDED AND RESTATED
REPURCHASE AGREEMENT GOVERNING
PURCHASES AND SALES OF MORTGAGE LOANS
Dated as of April 1, 1998
Between:
NationsBank, N.A., as Buyer
and
Capital Lease Funding, L.P., as Seller
RECITALS
WHEREAS, the parties hereto entered into that certain Repurchase Agreement
Governing Purchases and Sales of Mortgage Loans dated as of July 19, 1996, as
amended by that certain First Amendment dated as of March 1, 1997 (the "ORIGINAL
AGREEMENT"); and
WHEREAS, the parties hereto have agreed to amend and restate the Original
Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, the Original Agreement is hereby amended and restated in
its entirety to read as follows:
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in which
Capital Lease Funding, L.P. ("SELLER") agrees to transfer to NationsBank,
N.A. ("BUYER") Mortgage Loans against the transfer of funds by Buyer, with
a simultaneous agreement by Seller to purchase from Buyer such Mortgage
Loans at a date certain not later than one (1) year after the date of
transfer or on demand, as specified in the Confirmation, against the
transfer of funds by Seller. Each such transaction shall be referred to
herein as a "TRANSACTION" and shall be governed by this Agreement and the
related Confirmation, unless otherwise agreed in writing.
2. DEFINITIONS
"ACT OF INSOLVENCY" means, with respect to any party, and its Affiliates,
(i) the filing of a petition, commencing or authorizing the commencement of
any case or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar law
relating to the protection of creditors, or suffering any such petition or
proceeding to be commenced by another which is consented to or not timely
contested by such party or Affiliate or results in entry of an order for
relief; (ii) seeking the appointment of a receiver, trustee, custodian or
similar official for such party or an Affiliate or any substantial part of
the property of either; (iii) the appointment of a receiver, conservator,
or manager for such party or an Affiliate by any governmental agency or
authority having the jurisdiction to do so; (iv) the making or offering by
such party or an Affiliate of a composition with its creditors or a general
assignment for the benefit of creditors; (v) the admission by such party,
or an Affiliate, of such party's, or such Affiliate's, inability to pay its
debts or discharge its obligations as they become due or mature; or (vi)
any governmental authority or agency or any person, agency or entity acting
or purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or control
of, all or any substantial part of the property of such party or of any of
its Affiliates, or shall have taken any action to displace the management
of such party or of any of its Affiliates or to curtail its authority in
the conduct of the business of such party or of any of its Affiliates.
"ADDITIONAL FUNDS" means cash provided by Seller to Buyer or its designee
pursuant to Section 4(a).
"ADJUSTED PURCHASE PRICE" means, with respect to any Purchased Mortgage
Loan, the original Purchase Price of the Purchased Mortgage Loan less the
sum of (i) all the amounts actually received by the Buyer pursuant to
Section 4(a) and (ii) any principal payments made by the Mortgagor thereof
and received by the Buyer pursuant to Section 5(a).
"AFFILIATE" means an affiliate of a party as such term is defined in the
United States Bankruptcy Code in effect from time to time; PROVIDED,
HOWEVER, as applied to the Seller such term shall not include any entity
that would otherwise be included based solely on its relationship with a
general partner of the Seller.
"AGGREGATE OUTSTANDING AMOUNT" means the amount equal to the sum of each
Adjusted Purchase Price.
"AGREEMENT" means this Amended and Restated Repurchase Agreement Governing
Purchases and Sales of Mortgage Loans, as amended from time to time.
"AVERAGE AGGREGATE OUTSTANDING AMOUNT" means, with respect to any
applicable time period, the average Aggregate Outstanding Amount during
such period.
"BUSINESS DAY" means a day other than (i) a Saturday or Sunday, or (ii) a
day in which the New York Stock Exchange, the Buyer, or the Custodian is
authorized or obligated by law or executive order to be closed.
"BUYER" has the meaning specified in Section 1.
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"COLLATERAL" has the meaning specified in Section 6.
"COLLATERAL DEFICIT" has the meaning specified in Section 4(a).
"COMMERCIAL MORTGAGE LOAN" means a loan secured by a Mortgage on Mortgaged
Property and related loan documents that is generally characterized as
commercial in nature and which is zoned for commercial use, such as an
office building, a shopping center, a warehouse, an
office/warehouse/showroom combination building, a hotel, a mobile home
park, or other property zoned for commercial use.
"CONFIRMATION" has the meaning specified in Section 3(a).
"CREDIT MARKET VALUE" has the meaning specified in Section 4(b).
"CUSTODIAN" means LaSalle National Bank, as custodian under the Custodial
Agreement.
"CUSTODIAL AGREEMENT" means that custodial agreement, dated as of July 19,
1996, by and among Buyer, Seller and LaSalle National Bank, as custodian.
"CUSTODIAL DELIVERY" means the form executed by Seller in order to deliver
the Mortgage File to Buyer or its designee (including the Custodian)
pursuant to Section 7(c), a form of which is attached hereto as EXHIBIT II.
"ENVIRONMENTAL LAW" means any present or future federal, state or local
law, statute, rule, regulation or ordinance, and any judicial or
administrative order or judgment thereunder, pertaining to health and
safety, industrial hygiene, Hazardous Substances, underground or
above-ground tanks or the environment, pollution or contamination.
"EURODOLLAR RATE" means a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = Interbank Offered Rate
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1 - Eurodollar Reserve Percentage
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest rate
of Eurodollar Loans is determined), whether or not Buyer has any
Eurocurrency liabilities subject to such reserve requirement at that time.
The Aggregate Outstanding Amount shall be deemed to constitute a
Eurocurrency
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liability and as such shall be deemed subject to reserve requirements
without benefits of credits for proration, exceptions or offsets that may
be available from time to time to the Buyer. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"EVENT OF DEFAULT" has the meaning specified in Section 12.
"HAZARDOUS SUBSTANCE" means any material, liquid, gas or other substance
that is:
(a) included within the definition of "hazardous substances," "hazardous
materials," "toxic substances," or "solid waste" in or pursuant to any
Environmental Law, or subject to regulation under any Environmental Law;
(b) listed in the United States Department of Transportation Optional
Hazardous Materials Table, 49 C.F.R. Section 172.101, as enacted as of the
date hereof or as hereafter amended, or in the United States Environmental
Protection Agency List of Hazardous Substances and Reportable Quantities,
40 C.F.R. Part 302, as enacted as of the date hereof or as hereafter
amended; or
(c) explosive, radioactive, asbestos, radon, a polychlorinated biphenyl,
urea formaldehyde foam insulation, oil or a petroleum product or similar
product.
"INITIAL PUBLIC OFFERING" means an underwritten public offering of the
common stock of the Seller pursuant to an effective registration statement
filed with the United States Securities and Exchange Commission in
accordance with the Securities Act of 1933, as amended.
"INTERBANK OFFERED RATE" means with respect to any Interest Period the
average (rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest determined by the Buyer (each such determination
to be conclusive and binding) as of two Business days prior to the first
day of such Interest Period, as the effective rate at which deposits in
immediately available funds in U.S. dollars are being, have been, or would
be offered or quoted by the Buyer to major banks in the applicable
interbank market for Eurodollar deposits at any time during the Business
Day which is the second Business Day immediately preceding the first day of
such Interest Period, for a term of one month and in the amount of the sum
of the Adjusted Purchase Prices for all Purchased Mortgage Loans with such
Interest Period. If no such offers or quotes are generally available for
such amount, then the Buyer shall be entitled to determine the Eurodollar
Rate by estimating in its reasonable judgment the per annum rate (as
described above) that would be applicable if such quote or offers were
generally available.
"INTEREST PERIOD" means, with respect to a Purchased Mortgage Loan, a one
month period commencing on the first (1st) day of the calendar month in
which the Purchase Date occurs and ending at the close of business on the
last day of such calendar month and each subsequent one month period
thereafter; PROVIDED, HOWEVER, with respect to the first
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Interest Period related to a Purchased Mortgage Loan, unless the Purchase Date
is the first day of the month, the Interest Period shall be deemed to have begun
on the first day of the calendar month for purposes of determining the
applicable Interbank Offered Rate only; PROVIDED, FURTHER, that any Purchased
Mortgage Loan outstanding on the date hereof shall have its current Interest
Period end on the last day of April 1, 1998, and the first day of its next
Interest Period shall begin on May 1, 1998.
"LEASE ENHANCEMENT POLICY" means any lease enhancement insurance policy issued
by National Fire & Marine Insurance Company (or any replacement insurer approved
by the Buyer) in favor of the Seller.
"MAXIMUM AGGREGATE OUTSTANDING AMOUNT" means (i) from the date hereof until
September 1, 1998 (or such later date to which the Buyer, in its sole
discretion, may agree), $550,000,000; and (ii) from September 1, 1998 (or such
later date to which the Buyer, in its sole discretion, may agree) until the date
on which this Agreement terminates, $350,000,000.
"MORTGAGE" means a mortgage, deed of trust, deed to secure debt or other
instrument, creating a valid and enforceable first or second lien on or first or
second priority ownership interest in an estate in fee simple in real property
and the improvements thereon, securing a mortgage note or similar evidence of
indebtedness.
"MORTGAGE FILE" means all documents and other materials specified as the
"Mortgage File" in Section 7(c), together with any additional documents and
information required to be delivered to Buyer or its designee (including the
Custodian) pursuant to this Agreement.
"MORTGAGE LOAN" means (a) non-securitized Commercial Mortgage Loans relating to
Mortgage Properties which are owned in fee simple and are single tenant,
long-term lease occupied and (b) such other types of (i) non-securitized whole
loans or (ii) participation interests in Commercial Mortgage Loans originated by
Seller and which otherwise satisfy the requirements of clause (a), in each case
as may be agreed upon by the parties hereto from time to time.
"MORTGAGE LOAN SCHEDULE" means a schedule of Mortgage Loans attached to each
Trust Receipt, Confirmation and Custodial Delivery.
"MORTGAGE NOTE" means, with respect to each Mortgage Loan, a note or other
evidence of indebtedness of a Mortgagor secured by a Mortgage.
"MORTGAGED PROPERTY" means the real property, improvements, personalty and other
property described in and subject to a Mortgage or otherwise securing repayment
of the debt evidenced by a Mortgage Note.
"MORTGAGEE" means the record holder of a Mortgage Note secured by a Mortgage.
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"MORTGAGOR" means the obligor under a Mortgage Note and the grantor of the
related Mortgage.
"PERIODIC PAYMENT" has the meaning specified in Section 5(b).
"PRICE DIFFERENTIAL" means with respect to any Transaction hereunder as of any
date, the aggregate amount obtained by daily application of the applicable
Pricing Rate for such Transaction to the Adjusted Purchase Price for such
Transaction on a three hundred sixty (360) day per year basis for the actual
number of days in an Interest Period during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the Repurchase Date (reduced by any amount of such Price Differential previously
paid by Seller to Buyer with respect to such Transaction).
"PRICING RATE" means (i) prior to the date on which the Seller consummates an
Initial Public Offering in an amount not less than $75,000,000, the Eurodollar
Rate plus 1.00%; and (ii) on and after the date on which the Seller consummates
an Initial Public Offering in an amount not less than $75,000,000, the
Eurodollar Rate plus 0.85%.
"PRIME RATE" means, for any day, the rate of interest published by THE WALL
STREET JOURNAL, northeast edition, as the "prime rate."
"PURCHASE DATE" means, with respect to any Transaction, the date on which a
Purchased Mortgage Loan is transferred by Seller to Buyer or its designee
(including the Custodian) as specified in the Funding Certificate.
"PURCHASE PRICE" means on each Purchase Date, the price at which Purchased
Mortgage Loans are transferred by Seller to Buyer or its designee (including the
Custodian) as specified in the Confirmation and in accordance with Section 3(b).
"PURCHASE PRICE GRID" has the meaning specified in Section 3(b).
"PURCHASE RATE" has the meaning specified in Section 3(b).
"PURCHASED MORTGAGE LOANS" means the Mortgage Loans sold by Seller to Buyer in a
Transaction and not yet repurchased by Seller in accordance with the terms
hereof.
"REMITTANCE" means, with respect to any Mortgage Loan at any time, any principal
thereof then payable and all interest, dividends or other distributions payable
thereon.
"REPURCHASE DATE" means, with respect to any Transaction, the date on which
Seller is to repurchase any Purchased Mortgage Loan related to such Transaction
from Buyer, which date shall be the earliest to occur of (a) (i) if set forth in
the related Confirmation, December 31 of the year in which the Buyer purchased
the Mortgage Loan (unless such day is not a Business Day, in which case the
Repurchase Date shall be the Business Day
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preceding December 31) and (ii) if not set forth in the Confirmation, shall be
upon demand of the Buyer, (b) such earlier date as may be required pursuant to
the terms of this Agreement and (c) such earlier date as the Seller may request
in writing to the Buyer.
"REPURCHASE PRICE" means the price at which a Purchased Mortgage Loan is to be
transferred from Buyer or its designee (including the Custodian) to Seller upon
termination of a Transaction, which will be, in each case (including
Transactions terminable upon demand), equal to the sum of the related Adjusted
Purchase Price and the related Price Differential as of the date of such
determination.
"SECURITIZATION" means any securitization by the Seller of a pool or pools of
Mortgage Loans.
"SELLER" has the meaning specified in Section 1.
"SERVICER" has the meaning specified in Section 23.
"SERVICING AGREEMENT" means the Amended and Restated Interim Servicing
Agreement, dated as of July 19, 1996, among the Seller, Midland Loan Services,
L.P., LaSalle National Bank and ABN AMRO Bank N.V., or any successor agreement
thereto.
"TRANSACTION" has the meaning specified in Section 1.
"TRUST RECEIPT" means a trust receipt issued by Custodian to Buyer confirming
the Custodian's possession of certain Mortgage Loan Files which are the property
of and held by Custodian for the benefit of Buyer or the registered holder
thereof.
"UNUSED AVERAGE BALANCE" means, with respect to any Unused Fee Payment Date, an
amount equal to (i) the average Maximum Aggregate Outstanding Amount during the
Unused Fee Period MINUS (ii) the average Aggregate Outstanding Amount during the
Unused Fee Period.
"UNUSED FEE" means a fee payable to Buyer by Seller on the Unused Fee Payment
Date, in an amount equal to the product of (i) the Unused Average Balance and
(ii) the Unused Fee Percentage.
"UNUSED FEE PAYMENT DATE" means (i) any date on which Seller consummates a
Securitization and (ii) on October 1 and April 1 of each year (excluding April
1, 1998) unless Seller has consummated a Securitization in the six month period
preceding such date.
"UNUSED FEE PERCENTAGE" means, with respect to any Unused Fee Payment Date, an
amount equal to: (i) if the Average Aggregate Outstanding Amount is less than
or equal to 50% of the average Maximum Aggregate Outstanding Amount for the
Unused Fee Period, 0.25% per annum on a three hundred sixty (360) day year basis
for the actual number of days during the Unused Fee Period; (ii) if the Average
Aggregate Outstanding Amount is greater than 50% and less than or equal to 75%
of the average Maximum Aggregate Outstanding Amount for the Unused Fee Period,
0.15% per annum on a three hundred sixty (360) day year basis for the actual
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number of days during the Unused Fee Period; and (iii) if the Average
Aggregate Outstanding Amount is greater than 75% of the average Maximum
Aggregate Outstanding Amount for the Unused Fee Period, 0.10% per annum on
a three hundred sixty (360) day year basis for the actual number of days
during the Unused Fee Period.
"UNUSED FEE PERIOD" means (i) with respect to the initial Unused Fee
Payment Date, the period commencing on (and including) the date hereof and
ending on (but excluding) the initial Unused Fee Payment Date, and (ii)
with respect to each subsequent Unused Fee Payment Date, the period
commencing on (and including) the date of the last Unused Fee Payment Date
and ending on (but excluding) such subsequent Unused Fee Payment Date.
3. INITIATION; CONFIRMATION; TERMINATION
(a) An agreement to enter into a Transaction may be entered into orally or
in writing at the initiation of Buyer after receipt of a request of sale
from the Seller, which request shall be in the form of a proposed
Confirmation. If Buyer agrees to the proposed sale, then Seller shall
confirm the terms of the Transaction by issuing a written confirmation in
the form of EXHIBIT I attached hereto (a "CONFIRMATION") to Buyer promptly.
Such Confirmation shall describe the Purchased Mortgage Loans, identify
Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase
Price, (iii) the Repurchase Date, unless the Transaction is to be
terminable on demand by Buyer, (iv) the Purchase Rate applicable to the
Transaction, (v) the rating of the lessee or such Mortgaged Property, (vi)
whether the lease is a bond, triple net/ground or double net lease and
(vii) may contain additional terms or conditions not inconsistent with this
Agreement. After a Transaction has been agreed to by Buyer and after
receipt of the Confirmation, Buyer shall sign the Confirmation and return a
copy to Seller.
(b) The Purchase Price for a Mortgage Loan shall be calculated in
accordance with the applicable purchase rate (the "PURCHASE RATE")
determined in accordance with the purchase price grid (the "PURCHASE PRICE
GRID") and based upon the information provided in the Confirmation and the
related footnotes attached hereto as Schedule A; PROVIDED, HOWEVER, that
the Purchase Price Grid may be revised and replaced at any time in the
Buyer's sole discretion. The Purchase Price for triple and double net
lease related Mortgage Loans shall include the cost of any insurance policy
related to such Mortgage Loan, including, without limitation, any casualty
and condemnation policy. Without limiting the foregoing, the Purchase
Price for a Mortgage Loan shall include the cost of any Lease Enhancement
Policy related to such Mortgage Loan.
(c) Any Confirmation by Buyer shall be deemed to have been received by
Seller on the date actually received by Seller.
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(d) Upon execution by Buyer of a Confirmation, such Confirmation, together
with this Agreement, shall be conclusive evidence of the terms of the
Transaction covered thereby.
(e) Notwithstanding any provision to the contrary contained herein or in a
Confirmation, the Buyer may require the Seller to immediately repurchase
any Mortgage Loan, in accordance with Section 3(f), after review by the
Buyer and its counsel of the Mortgage File and related documentation,
including, but not limited to, any related hedge agreement or instrument
and the discovery of any non-conformity that Buyer determines could have an
adverse affect on the Buyer's interest between (a) any item required to be
included in the Mortgage File and any related documentation and (b) (i) the
representations and warranties set forth in Exhibit V, (ii) the
underwriting standards of the Seller agreed to by the Buyer, (iii) the
terms of the Confirmation, (iv) the Seller's hedging policy as agreed to by
the Buyer and (v) the terms of this Agreement (each such Mortgage Loan, a
"NON-CONFORMING LOAN"). The Buyer and its counsel shall complete such
review within 5 Business Days after receipt of all Mortgage File items.
Upon notice to the Seller of a Non-Conforming Loan, Buyer may, in its sole
discretion, defer Seller's obligation to repurchase such Mortgage Loan and
allow Seller an opportunity to cure such non-conformity; PROVIDED, HOWEVER,
that Buyer shall continue to have the right to require the Seller to
repurchase such Non-Conforming Loan if such cure is not accomplished in a
timely and satisfactory manner as determined in Buyer's sole discretion.
(f) In the case of Transactions terminable upon demand by the Buyer or in
the case of the repurchase of Non-Conforming Loans, such demand for
repurchase shall be made by Buyer by telephone or otherwise, no later than
10:00 a.m. New York City time on the Business Day prior to the day on which
the Buyer desires such repurchase to take place. Unless the Repurchase
Date is expressly stated in the Confirmation, each Transaction shall be
terminable upon demand by the Buyer.
(g) In the case of Transactions with a specified Repurchase Date set forth
in the related Confirmation, such Repurchase Date may be extended in the
Buyer's sole discretion at the written request of the Seller. Such notice
shall be delivered to Buyer not more than 60 days prior to such specified
Repurchase Date. Buyer shall notify Seller of Buyer's determination
whether to extend the Repurchase Date within 30 days prior to such
specified Repurchase Date. Buyer reserves the right to agree to any such
extension at any time prior to such specified Repurchase Date.
(h) On the Repurchase Date, termination of the Transaction will be
effected by transfer to Seller or its designee of the Purchased Mortgage
Loans against the simultaneous transfer of the Repurchase Price to an
account of Buyer. Buyer or its designee (including the Custodian) shall
return the Mortgage Files to Seller within three Business Days of the
receipt of the Repurchase Price by the Buyer. Provided, however, that the
Mortgage Files will be returned to Seller simultaneously with receipt by
Buyer of
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the Repurchase Price provided Seller gives Buyer at least three Business
Days prior written notice of its desire for a simultaneous transfer.
(i) The Aggregate Outstanding Amount shall at no time exceed the Maximum
Aggregate Outstanding Amount.
4. COLLATERAL AMOUNT MAINTENANCE
(a) If at any time the Credit Market Value of any Purchased Mortgage Loan
is less than the Adjusted Purchase Price for such Mortgage Loan (a
"COLLATERAL DEFICIT"), then Buyer may, by notice to Seller, require Seller
to transfer to Buyer or its designee (including the Custodian) cash
("ADDITIONAL FUNDS") so that the cash and Credit Market Value of the
Purchased Mortgage Loan, will thereupon equal or exceed the Adjusted
Purchase Price for such Mortgage Loan; PROVIDED, HOWEVER, that any such
Collateral Deficit will be offset to the extent there exists any Collateral
Excess with respect to any other Purchased Mortgage Loan held by the Buyer.
"COLLATERAL EXCESS" shall mean, with respect to any Purchased Mortgage
Loan, the amount, if any, by which the Credit Market Value exceeds the
Adjusted Purchase Price of such Purchased Mortgage Loan.
(b) The "Credit Market Value" of a Purchased Mortgage Loan shall be
determined by the Buyer in its sole discretion and shall be based on
factors such as, and not limited to, (1) a change in the debt rating of a
tenant of a lease related to such Purchased Mortgage Loan, (2) defaults in
a Purchased Mortgage Loan or (3) other supplemental adjustments deemed
necessary or prudent by the Buyer; PROVIDED, HOWEVER, that such
determination shall not be based on fluctuations in interest rates. Each
such determination shall be conclusive evidence of the Credit Market Value.
(c) Notice required pursuant to subsection (a) above may be given by any
means of telecopier or telegraphic transmission. A notice for the payment
in respect of a Collateral Deficit received before 5:00 p.m. New York City
time on a Business Day, must be met not later than 5:00 p.m. New York City
time on the fifteenth day following the Business Day on which the notice
was given. Any notice given on a Business Day after 5:00 p.m. New York
City time shall be deemed received on the following Business Day. The
failure, of Buyer, on any one or more occasions, to exercise its rights
under subsection (a) of this Section shall not change or alter the terms
and conditions to which this Agreement is subject or limit the right of
Buyer to do so at a later date. Buyer and Seller agree that a failure or
delay to exercise Buyer's rights under subsection (a) of this Section shall
not limit Buyer's rights under this Agreement or otherwise existing by law
or in any way create additional rights for the Seller.
5. REMITTANCE PAYMENTS
(a) In the event that a particular Transaction's term extends over a
Remittance payment date under the Purchased Mortgage Loans subject to that
Transaction, such Remittance shall be the property of Buyer and shall be
paid to the Buyer immediately
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upon receipt thereof. Notwithstanding the foregoing, Buyer agrees that the
Servicer shall remit to Seller an amount equal to the excess of any
interest received from the Mortgagor with respect to a Purchased Mortgage
Loan over the Periodic Payment due and owing to the Buyer.
(b) Notwithstanding that Buyer and Seller intend that the Transactions
hereunder be sales to Buyer of the Purchased Mortgage Loans, Buyer shall be
entitled to receive from Seller (i) the accreted value of the Price
Differential (each such payment, a "PERIODIC PAYMENT") in accordance with
the terms of Section 8.02 of the Servicing Agreement, but in any case no
less frequently than on a monthly basis, and (ii) the Unused Fee.
(c) On September 1, 1998, Seller shall take such actions as are necessary,
including, without limitation, the repurchase of a sufficient amount of
Purchased Mortgage Loans, to ensure that the Aggregate Outstanding Amount
does not exceed the Maximum Aggregate Outstanding Amount; PROVIDED,
HOWEVER, that if Buyer in its sole discretion has granted a written
extension of the date on which Seller is required to consummate a
Securitization as provided in Section 11(f) hereof, such extension shall be
deemed automatically to extend the date set forth in the definition of
Maximum Aggregate Outstanding Amount and in this Section 5(c) to such later
date UNLESS such written extension expressly provides to the contrary.
6. SECURITY INTEREST
Buyer and Seller intend that the Transactions hereunder be sales to Buyer
of the Purchased Mortgage Loans and not loans from Buyer to Seller secured by
the Purchased Mortgage Loans. However, in order to preserve Buyer's rights
under this Agreement in the event that a court or other forum recharacterizes
any one or more of the Transactions hereunder as loans and as security for the
performance by Seller of all of Seller's obligations to Buyer under this
Agreement and the Transactions entered into pursuant to this Agreement, Seller
grants Buyer a first priority security interest in the Purchased Mortgage Loans,
Mortgage Files, Servicing Agreements, servicing records, any assignments of
rents and leases, insurance relating to the Mortgage Loans (including, but not
limited to, any insurance policies covering casualty and condemnation losses,
any title insurance policies and any Lease Enhancement Policies), Remittances,
hedging agreements or instruments related to the Mortgage Loans, custodial
accounts and escrow accounts relating to the Mortgage Loans and any other
contract rights, general intangibles and other assets relating to the Mortgage
Loans or any interest in the Mortgage Loans, the servicing of the Mortgage
Loans, and securities backed by or representing an interest in such Mortgage
Loans and all products and proceeds of the foregoing (collectively, the
"COLLATERAL").
7. PAYMENT, TRANSFER AND CUSTODY
(a) Unless otherwise mutually agreed in writing, all transfers of funds
hereunder shall be in immediately available funds.
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(b) The Seller shall deliver to the Buyer a written funding certificate in
the form of EXHIBIT IV attached hereto (a "FUNDING CERTIFICATE") one
Business Day before the intended Purchase Date. On the Purchase Date for
each Transaction, ownership of the Purchased Mortgage Loans and related
Collateral shall be transferred to Buyer or its designee (including the
Custodian) against the simultaneous transfer of the Purchase Price as
directed by Buyer. Seller, simultaneously with the delivery to Buyer or
its designee (including the Custodian) of the Purchased Mortgage Loans
relating to each Transaction, hereby sells, transfers, conveys and assigns
to Buyer or its designee (including the Custodian) without recourse, but
subject to the terms of this Agreement, all the right, title and interest
of Seller in and to the Purchased Mortgage Loans together with all right,
title and interest in and to the proceeds of any related insurance
policies, assignments of rents and leases and hedging agreements and
instruments.
(c) In connection with such sale, transfer, conveyance and assignment,
Seller shall deliver or cause to be delivered and released to Buyer or its
designee (including the Custodian), within two Business Days after the
related Purchase Date, the following documents (the "MORTGAGE FILE"),
pertaining to each of the Purchased Mortgage Loans identified in the
Custodial Delivery delivered therewith:
(i) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of ____________,
without recourse" and signed in the name of the last
endorsee (the "LAST ENDORSEE") by an authorized officer (in
the event that the Mortgage Loan was acquired by the Last
Endorsee in a merger, the signature must be in the following
form: "[the Last Endorsee], successor by merger to [name of
predecessor]"; in the event that the Mortgage Loan was
acquired or originated while doing business under another
name, the signature must be in the following form: "[insert
name of the Last Endorsee], formerly known as [previous
name]";
(ii) the original of any guarantee executed in connection with the
Mortgage Note (if any);
(iii) the recorded original of the Mortgage, or in the event such
original has not yet been received from the applicable
recording office, a duplicate original of the Mortgage
certified by an officer of the Seller as a true and correct
copy of the Mortgage delivered for recording;
(iv) the recorded original of all assumption, modification,
consolidation or extension agreements with respect to the
Mortgage (if any), or in the event such original has not yet
been received from the applicable recording office, duplicate
originals of all assumption, modification, consolidation or
extension agreements with respect to the Mortgage (if any)
certified by an officer of the Seller as a true and correct
copy thereof delivered for recording;
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(v) the original Assignment of Mortgage in blank for each Mortgage
Loan, in form and substance acceptable for recording and
signed in the name of the Last Endorsee (in the event that the
Mortgage Loan was acquired by the Last Endorsee in a merger,
the signature must be in the following form: "[insert name of
the last Endorsee], successor by merger to [name of
predecessor]"; in the event that the Mortgage Loan was
acquired or originated while doing business under another
name, the signature must be in the following form: "[insert
name of the Last Endorsee], formerly known as [previous
name]";
(vi) duplicate originals of all intervening assignments of mortgage
(if any);
(vii) a duplicate original of the assignment of leases and rents (if
any);
(viii) the original assignment of assignment of leases and rents (if
any), from Seller in blank, in form and substance acceptable
for recording;
(ix) originals of the file stamped and/or recorded UCC-1 Financing
Statements or in the event such original has not yet been
received from the applicable recording office, duplicate
originals of such UCC-1 Financing Statements certified by an
officer of the Seller as a true and correct copy thereof
delivered for recording;
(x) the original assignments of the UCC-1 Financing Statements in
blank, in form and substance acceptable for filing;
(xi) the original mortgagee title insurance policy, or if the
original mortgagee title insurance policy has not been issued,
the pro forma policy, the preliminary title report, binder or
commitment to insure;
(xii) a duplicate original of any security agreement, chattel
mortgage or equivalent document executed in connection with
the Mortgage;
(xiii) with respect to a Mortgage that does not allow the Mortgagor
to self-insure, original binders and copies of related
insurance policies with original insurance polices or
certified copies thereof to be delivered within forty-five
days of the related Purchase Date and with respect to all
other Mortgages, original binders with respect to any
insurance policies;
(xiv) binders with respect to any insurance policies or similar
agreements insuring against losses resulting from any failure
by a lessee of the Mortgaged Property to make any payment to
the Mortgagor as a result of a casualty or condemnation or
otherwise;
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(xv) duplicate originals of any hedging agreement, instrument or
confirmation as it relates to the Transaction;
(xvi) an original assignment to the Buyer of any such hedging
agreement or instrument in form and substance acceptable to
the Buyer unless previously delivered pursuant to this
Agreement;
(xvii) any other documents, instruments or papers relating to the
Mortgage Loans delivered by or on behalf of mortgagor; and
(xviii) an original of any Lease Enhancement Policy.
(d) With respect to each Purchased Mortgage Loan delivered by Seller to
Buyer or its designee (including the Custodian), Seller shall execute
irrevocable letters of instructions to the Servicer, substantially in the
form of EXHIBIT III attached hereto.
(e) Buyer may deposit the Mortgage Files representing the Purchased
Mortgage Loans, or direct that the Mortgage Files be deposited directly,
with a designee acting in the capacity of bailee for Buyer. If the
Mortgage Files are delivered to Buyer or its designee, Buyer or its
designee shall during the term of this Agreement exercise reasonable and
prudent care in the maintenance thereof. If the Mortgage Loan Files are
delivered to Custodian, the Mortgage Files shall be maintained in
accordance with the Custodial Agreement. Seller understands and agrees
that the Custodian shall have no responsibility to Seller, including
without limitation any responsibility to keep Seller informed of any
changes in the status of such Mortgage Files or in Buyer's instructions
with respect thereto, except as explicitly set forth in the Custodial
Agreement.
8. HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOANS
Title to each Purchased Mortgage Loan, and related Collateral shall pass to
Buyer immediately upon payment of the Purchase Price therefor and Buyer shall
have free and unrestricted use of all Purchased Mortgage Loans and related
Collateral. Nothing in this Agreement shall preclude Buyer from engaging in
repurchase transactions with the Purchased Mortgage Loans and related Collateral
or otherwise pledging, repledging, hypothecating, or rehypothecating the
Purchased Mortgage Loans and related Collateral. Nothing contained in this
Agreement shall obligate Buyer to segregate any Purchased Mortgage Loans
delivered to Buyer by Seller.
9. REPRESENTATIONS
(a) The Seller represents and warrants to the Buyer that (i) it is duly
authorized to execute and deliver this Agreement, to enter into the
Transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance; (ii) it will engage in such Transactions as
principal (or, if agreed in writing in advance of any Transaction by the
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Buyer, as agent for a disclosed principal); (iii) the person signing this
Agreement on its behalf is duly authorized to do so (on its behalf or on
behalf of any such disclosed principal); (iv) no approval, consent or
authorization of the Transactions contemplated by this Agreement from any
federal, state, or local regulatory authority having jurisdiction over it
is required or, if required, such approval, consent or authorization has
been obtained; (v) the execution, delivery, and performance of this
Agreement and the Transactions hereunder will not violate any law,
regulation, order, judgment, decree, ordinance, charter, by-law, or rule
applicable to it or its property or constitute a default (or an event
which, with notice or lapse of time, or both would constitute a default)
under or result in a breach of, any agreement or other instrument by which
it is bound or by which any of its assets are affected; (vi) it has
received approval and authorization to enter into this Agreement and each
and every Transaction actually entered into hereunder pursuant to its
internal policies and procedures; and (vii) neither this Agreement nor any
Transaction pursuant hereto are entered into in contemplation of insolvency
or with intent to hinder, delay or defraud any creditor.
(b) Seller represents and warrants to Buyer that as of the Purchase Date
for the purchase of any Purchased Mortgage Loans by Buyer from Seller and
as of the date of this Agreement and any Transaction hereunder and at all
times while this Agreement and any Transaction thereunder is in full force
and effect:
(i) 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 Seller transacts
business and in any state where any Mortgaged Property is
located if the laws of such state require licensing or
qualification in order to conduct business of the type
conducted by Seller.
(ii) NO LITIGATION. There is no action, suit, proceeding,
investigation, or arbitration pending or threatened against
Seller 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 this Agreement or the Purchased Mortgage Loans or
any action taken or to be taken in connection with the
obligations of Seller contemplated herein.
(iii) NO BROKER. Except as disclosed in writing to the Buyer,
Seller has not dealt with any broker, investment banker,
agent, or other person, except for Buyer, who may be entitled
to any commission or compensation in connection with the sale
of Purchased Mortgage Loans pursuant to this Agreement. In
the case of any such disclosed broker, investment banker,
agent or other person, Seller has paid all amounts owed to or
earned by such person and such person has no claim for the
payment of any further amounts.
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(iv) GOOD TITLE TO COLLATERAL. Purchased Mortgage Loans shall be
free and clear of any lien, encumbrance or impediment to
transfer, and Seller represents and warrants the foregoing to
Buyer and represents and warrants that it has good, valid and
marketable title or right to sell and transfer such Purchased
Mortgage Loans to Buyer.
(v) DELIVERY OF MORTGAGE FILES. The Mortgage Files (including,
without limitation, the Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be
delivered under this Agreement with respect to the Mortgage
Loans) will be delivered by the Seller to the Custodian within
two Business Days after the related Purchase Date. Seller or
its designee is in possession of a complete, true and accurate
Mortgage File, except for such documents the originals of
which have been delivered to the Custodian.
(vi) SELECTION PROCESS. The Purchased Mortgage Loans were selected
from among the outstanding Mortgage Loans in Seller's
portfolio as to which the representations and warranties set
forth in this Agreement could be made and such selection was
not made in a manner so as to affect adversely the interests
of Buyer.
(vii) OTHER REPRESENTATIONS. The other representations and
warranties, if any, set forth in the related Confirmation are
true and correct.
(c) Seller represents and warrants to Buyer that each Mortgage Loan sold
hereunder and each pool of Mortgage Loans sold in a Transaction hereunder,
as of the related Purchase Date conform to the representations and
warranties set forth in EXHIBIT V attached hereto.
(d) On the Purchase Date for any Transaction, Seller shall be deemed to
have made all the foregoing representations with respect to itself as of
such Purchase Date.
10. NEGATIVE COVENANTS OF SELLER
On and as of the date of this Agreement and each Purchase Date and until
this Agreement is no longer in force with respect to any Transaction, Seller
covenants that it will not:
(a) take any action which would directly or indirectly impair or adversely
affect Buyer's title to or the value of the Purchased Mortgage Loans; or
(b) pledge, assign, convey, grant, bargain, sell, set over, deliver or
otherwise transfer any interest in the Purchased Mortgage Loans to any
person not a party to this Agreement, nor will Seller create, incur or
permit to exist any lien, encumbrance or security interest in or on the
Purchased Mortgage Loans except as described in Section 6 of this
Agreement.
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11. AFFIRMATIVE COVENANTS OF SELLER
(a) Seller shall provide Buyer with copies of such documentation as Buyer
may reasonably request evidencing the truthfulness of the representations
set forth in Section 9, including but not limited to a copy of Seller's
partnership agreement and such other documents authorizing Seller to engage
in this Agreement and the Transactions contemplated by this Agreement.
(b) Seller shall, at Buyer's request, take all action reasonably necessary
to ensure that Buyer will have a first priority security interest in the
Purchased Mortgage Loans and related Collateral, including, among other
things, the execution of such UCC financing statements as Buyer may
reasonably request.
(c) Seller covenants that it will not create, incur or permit to exist any
lien, encumbrance or security interest in or on any of the Collateral
without the prior express written consent of Buyer.
(d) Seller shall maintain a hedging program with respect to the Purchased
Mortgage Loans which shall be satisfactory to the Buyer and subject to the
Buyer's review and revision on a daily basis. If Buyer shall determine in
its sole discretion that Seller's hedging program is unsatisfactory with
respect to a particular Purchased Mortgage Loan or with respect to all
Purchased Mortgage Loans as a whole, the Seller shall adjust its hedging
program within one Business Day of notice from the Buyer.
(e) The Seller shall provide Buyer with monthly compliance letters in such
form and containing such information as the Buyer shall require including,
but limited to, current status of Purchased Mortgage Loans and debt ratings
of tenants under leases related to Purchased Mortgage Loans.
(f) Seller shall deliver to Buyer no later than April 10, 1998, an opinion
of counsel to Seller in form and substance satisfactory to Buyer.
(g) Seller shall use its best efforts to consummate a Securitization on or
before September 1, 1998 (or such later date to which Buyer, in its sole
discretion, may agree).
12. EVENTS OF DEFAULT
If any of the following events (each an "EVENT OF DEFAULT") occur, Buyer
shall have the rights set forth in Section 13, as applicable:
(a) Seller fails to (i) deliver any Mortgage File within two Business Days
after the Purchase Date for the related Mortgage Loan, (ii) deliver
Additional Funds in the amount or by the time required by Section 4 or
(iii) repurchase any Mortgage Loan on the related Repurchase Date,
PROVIDED, HOWEVER, that with respect to a Mortgage Loan that is to be
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repurchased on demand, as set forth herein, such repurchase shall be made
within 15 days after receipt by it of written notice from Buyer;
(b) Seller fails to comply with any of the provisions of
Sections 3, 4 or 5;
(c) Seller fails to adjust its hedging program within one Business Day of
notice from Buyer pursuant to Section 11(d);
(d) Seller fails to satisfy or perform any other material obligation or
covenant under this Agreement;
(e) any change in the Servicer or the terms of the Servicing Agreement
without the prior written approval of the Buyer;
(f) an Act of Insolvency occurs with respect to Seller or Servicer;
(g) any representation made by Seller shall have been incorrect or untrue
in any material respect when made or repeated or deemed to have been made
or repeated;
(h) Seller dissolves, merges or consolidates with another entity unless it
is the surviving party; or sells, transfers, or otherwise disposes of a
material portion of its business or assets;
(i) this Agreement shall for any reason cease to create a valid, first
priority security interest in any of the Purchased Mortgage Loans or other
Collateral purported to be covered hereby; or
(j) any default by the Seller occurs under the Amended and Restated
Promissory Note and Security Agreement dated April 1, 1998 by and between
the Buyer and the Seller or under the Fifth Amended and Restated Promissory
Note dated April 1, 1998 by and between the Buyer and the Seller.
13. REMEDIES
If an Event of Default occurs, the following rights and remedies are
available to Buyer:
(i) At the option of Buyer, exercised by written notice to Seller
(which option shall be deemed to have been exercised, even if
no notice is given, immediately upon the occurrence of an Act
of Insolvency), the Repurchase Date for each Transaction
hereunder shall be deemed immediately to occur.
(ii) If Buyer exercises or is deemed to have exercised the option
referred to in subsection (i) of this Section:
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(A) Seller's obligations hereunder to (I) repurchase all
Purchased Mortgage Loans in such Transactions at their
respective Repurchase Prices and (II) pay the aggregate
accreted Price Differentials shall thereupon become
immediately due and payable; and
(B) to the extent permitted by applicable law, the
Repurchase Price with respect to each such Transaction
shall be increased by the aggregate amount obtained by
daily application of, on a three hundred sixty (360)
day per year basis for the actual number of days during
the period from and including the date of the exercise
or deemed exercise of such option to but excluding the
date of payment of the Repurchase Price as so
increased, (x) the greater of the Prime Rate or the
Pricing Rate for each such Transaction to (y) the
Repurchase Price for such Transaction as of the
Repurchase Date as deemed pursuant to subsection (i) of
this Section.
(iii) After delivery to the Seller of any required notice and the
expiration of any applicable cure period, Buyer may (A)
immediately sell, without notice or demand of any kind, at one
or more public or private sales and at such price or prices as
Buyer may reasonably deem satisfactory, any or all Purchased
Mortgage Loans and related Collateral and all related
Collateral subject to a Transaction hereunder or (B) in its
sole discretion elect, in lieu of selling all or a portion of
such Purchased Mortgage Loans, to give Seller credit for such
Purchased Mortgage Loans in an amount equal to the Credit
Market Value of the Purchased Mortgage Loans against the
aggregate unpaid Repurchase Price and any other amounts owing
by Seller hereunder.
(iv) The parties recognize that it may not be possible to purchase
or sell all of the Purchased Mortgage Loans on a particular
Business Day, or in a transaction with the same purchaser, or
in the same manner because the market for such Purchased
Mortgage Loans may not be liquid. In view of the nature of
the Purchased Mortgage Loans, parties agree that liquidation
of a Transaction or underlying Purchased Mortgage Loans and
related Collateral does not require a public purchase or sale
and that any good faith private purchase or sale shall be
deemed to have been made in a commercially reasonable manner.
Accordingly, Buyer may elect, in its sole discretion, the time
and manner of liquidating any Purchased Mortgage Loan and
nothing contained herein shall (A) obligate Buyer to liquidate
any Purchased Mortgage Loan on the occurrence of an Event of
Default or to liquidate all Purchased Mortgage Loans in the
same manner or on the same Business Day or (B) constitute a
waiver of any right or remedy of Buyer.
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(v) Buyer shall, without regard to the adequacy of the security
for Seller's obligations under this Agreement, be entitled to
the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and
protect, collect, manage, liquidate, and sell the Collateral
or any portion thereof, and collect the payments due with
respect to the Collateral or any portion thereof.
(vi) Seller shall be liable to Buyer for the amount of all
expenses, including reasonable legal or other expenses
incurred by Buyer in connection with or as a consequence of an
Event of Default. Seller shall be liable, with respect to
each Purchased Mortgage Loan, for the positive difference, if
any, between the Repurchase Price of any Purchased Mortgage
Loan and the actual net sale proceeds reviewed by Buyer after
selling any Purchased Mortgage Loan pursuant to this Section
13 and interest shall accrue thereon from the date of such
sale at a rate per annum equal to the Prime Rate plus 5%.
(vii) Buyer shall have all the rights and remedies provided herein,
provided by applicable federal, state, foreign, and local laws
(including, without limitation, the rights and remedies of a
secured party under the Uniform Commercial Code of the State
of New York, to the extent that the Uniform Commercial Code is
applicable in equity, and under any other agreement between
Buyer and Seller).
(viii) Buyer may exercise one or more of the remedies available to
Buyer immediately upon the occurrence of an Event of Default
and, except to the extent provided in subsections (i) and
(iii) of this Section, at any time thereafter without notice
to Seller. All rights and remedies arising under this
Agreement as amended from time to time hereunder are
cumulative and not exclusive of any other rights or remedies
which Buyer may have.
14. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered into this Agreement and
will enter into each Transaction hereunder in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business and
contractual relationship and that each has been entered into in consideration of
the other Transactions. Accordingly, the Seller agrees (i) to perform all of
its obligations in respect of each Transaction hereunder, and that a default in
the performance of any such obligations shall constitute a default by it in
respect of all Transactions hereunder, (ii) that the Buyer shall be entitled to
set off claims and apply property held by the Buyer in respect of any
Transaction against obligations owing to it in respect of any other Transactions
hereunder and (iii) that payments, deliveries, and other transfers made by the
Seller in respect of any Transaction shall be deemed to have been made in
consideration of payments, deliveries, and other transfers in respect of any
other Transactions hereunder, and the obligations
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to make any such payments, deliveries, and other transfers may be applied
against each other and netted.
15. NOTICES AND OTHER COMMUNICATIONS
Unless another address is specified in writing by the respective party to
whom any written notice or other communication is to be given hereunder, all
such notices or communications shall be in writing or confirmed in writing and
delivered at the respective addresses set forth in the Confirmation.
16. ENTIRE AGREEMENT; SEVERABILITY
This Agreement together with the applicable Confirmation constitutes the
entire understanding between Buyer and Seller with respect to the subject matter
it covers and shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions involving
Purchased Mortgage loans. By acceptance of this Agreement, Buyer and Seller
acknowledge that they have not made, and are not relying upon, any statements,
representations, promises or undertakings not contained in this Agreement. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.
17. ASSIGNMENT
The rights and obligations of the parties under any Agreement and under any
Transaction shall not be assigned by either party without the prior written
consent of the other party. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Nothing in this Agreement express
or implied, shall give to any person, other than the parties to this Agreement
and their successors hereunder, any benefit or any legal or equitable right,
power, remedy or claim under this Agreement.
18. TERMINATION
This Agreement shall have a term of two years from the date hereof;
PROVIDED, HOWEVER, that this Agreement may be terminated by either party upon
giving of 120 days prior written notice to the other, except that this Agreement
shall, notwithstanding such notice, remain applicable to any Transaction then
outstanding. Notwithstanding any such termination or the occurrence of an Event
of Default, all of the representations, warranties and covenants hereunder shall
continue and survive.
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19. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
20. CONSENT TO JURISDICTION
The parties irrevocably agree to submit to the personal jurisdiction of the
United States District Court for the Southern District of New York, the parties
irrevocably waiving any objection thereto. If, for any reason, federal
jurisdiction is not available, and only if federal jurisdiction is not
available, the parties irrevocably agree to submit to the personal jurisdiction
of the Supreme Court of the State of New York, the parties irrevocably waiving
any objection thereto.
21. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by the Buyer shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto. Any such waiver or modification shall be effective only in the
specific instance and for the specific purpose for which it was given.
22. INTENT
The parties understand and intend that this Agreement and each Transaction
hereunder constitute a "securities contract" as that term is defined in Section
741 of Title II of the United States Code, as amended; provided, however, that
if Seller is an "insured depository institution" as that term is defined in
Section 1813(a) of Title 12 of the United States Code, as amended, the parties
understand and intend that this Agreement and each Transaction hereunder
constitute a "qualified financial contract" as that term is defined in Section
1821 of Title 12 of the United States Code, as amended.
23. SERVICING
(a) Seller covenants to maintain or cause the servicing of the Purchased
Mortgage Loans to be maintained in conformity with accepted servicing
practices in the industry and in a manner at least equal in quality to the
servicing Seller provides to mortgage loans which it owns. All servicing
fees and compensation with respect to the servicing of the Purchased
Mortgage Loans shall be customary, reasonable and consistent with industry
practice.
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(b) The Seller represents and warrants that the Purchased Mortgage Loans
are serviced by Midland Loan Services L.P., a third party servicer (the
"SERVICER"). Seller (i) shall provide a copy of the Servicing Agreement to
Buyer; and (ii) hereby irrevocably assigns to Buyer and Buyer's successors
and assigns all right, title, interest and the benefits of the Servicing
Agreement with respect to the Purchased Mortgage Loans.
24. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that in the case of
Transactions in which one of the parties is an "insured depository institution"
as that term is defined in Section 1831(a) of Title 12 of the United States
Code, as amended, funds held by the financial institution pursuant to a
Transaction hereunder are not a deposit and therefore are not insured by the
Federal Deposit Insurance Corporation, the Savings Association Insurance Fund or
the Bank Insurance Fund, as applicable.
25. NETTING
If Buyer and Seller are "financial institutions" as now or hereinafter
defined in Section 4402 of Title 12 of the United States Code ("SECTION 4402")
and any rules or regulations promulgated thereunder:
(a) All amounts to be paid or advanced by one party to or on behalf of the
other under this Agreement or any Transaction hereunder shall be deemed to
be "payment obligations" and all amounts to be received by or on behalf of
one party from the other under this Agreement or any Transaction hereunder
shall be deemed to be "payment entitlements" within the meaning of Section
4402, and this Agreement shall be deemed to be a "netting contract" as
defined in Section 4402.
(b) The payment obligations and the payment entitlements of the parties
hereto pursuant to this Agreement and any Transaction hereunder shall be
netted as follows. In the event that either party (the "DEFAULTING PARTY")
shall fail to honor any payment obligation under this Agreement or any
Transaction hereunder, the other party (the "NONDEFAULTING PARTY") shall be
entitled to reduce the amount of any payment to be made by the
Nondefaulting Party to the Defaulting Party by the amount of the payment
obligation that the Defaulting Party failed to honor.
26. MISCELLANEOUS
(a) Seller agrees to pay to NationsBanc Xxxxxxxxxx Securities LLC on the
date hereof (i) an origination fee in the amount of $50,000.00 and (ii) all
reasonable costs and expenses of Buyer in connection with the negotiation,
preparation, execution and delivery of this Agreement and any related
documents, including without limitation, the reasonable fees and expenses
of counsel to Buyer.
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(b) Time is of the essence under this agreement and all Transactions and
all references to a time shall mean New York time in effect on the date of
the action unless otherwise expressly stated in this Agreement.
(c) Buyer shall be authorized to accept orders and take any other action
affecting any accounts of Seller in response to instructions given in
writing or orally by telephone or otherwise by any person with apparent
authority to act on behalf of Seller, and Seller shall indemnify Buyer,
defend, and hold Buyer harmless from and against any and all liabilities,
losses, damages, costs, and expenses of any nature arising out of or in
connection with any action taken by Buyer in response to such instructions
received or reasonably believed to have been received from Seller.
(d) If there is any conflict between the terms of this Agreement or any
Transaction entered into hereunder and the Custodial Agreement, this
Agreement shall prevail.
(e) If there is any conflict between the terms of a Confirmation or a
corrected Confirmation issued by Buyer and this Agreement, the Confirmation
shall prevail.
(f) This Agreement 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.
(g) The headings in this Agreement are for convenience of reference only
and shall not affect the interpretation or construction of this Agreement.
[Signatures to Follow]
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date set forth above.
NATIONSBANK, N.A.
By:
----------------------------
Name
Title
CAPITAL LEASE FUNDING, L.P.
By: CLF HOLDINGS, INC.
By:
----------------------------
Name
Title
EXHIBITS AND SCHEDULES
EXHIBIT I Form of Confirmation
EXHIBIT II Form of Custodial Delivery
EXHIBIT III Form of Letter of Instruction to
Servicer
EXHIBIT IV Form of Funding Certificate
EXHIBIT V Representations and Warranties Regarding
Mortgage Loans
SCHEDULE A Purchase Price Grid
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EXHIBIT I
Form of Confirmation Letter
[Date]
[see attached]
I-1
EXHIBIT II
Form of Custodial Delivery
On this _______ day of ____________, 19___, Capital Lease Funding, L.P.
(the "Seller") under that certain Amended and Restated Repurchase Agreement
Governing Purchases and Sales of Mortgage Loans, dated as of April 1, 1998 (the
"Repurchase Agreement") between Seller and NationsBank, N.A. (the "Buyer"), does
hereby deliver to [Buyer][Buyer's designee] LaSalle National Bank ("Custodian"),
as custodian under that certain Custodial Agreement, dated as of July 19, 1996,
[between Buyer and Custodian][among Buyer, Seller and Custodian], the Mortgage
Files with respect to the Mortgage Loans to be purchased by Buyer on __________
pursuant to the Repurchase Agreement, which Mortgage Loans are listed on the
Mortgage Loan Schedule attached hereto [and which Mortgage Loans shall be
subject to the terms of the Custodial Agreement on the date hereof].
[With respect to the Mortgage Files delivered hereby, for the purposes of
issuing the Initial Trust Receipt, the Custodian shall review the Mortgage Files
to ascertain delivery of the documents listed in Annex A attached to the
Custodial Agreement. Custodian shall deliver the Final Trust Receipt within
____ days of the Purchase Date.]
[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.
CAPITAL LEASE FUNDING, L.P.
By: CLF HOLDINGS, INC.
By:
-----------------------------
Name
Title
II-1
EXHIBIT III
Letter of Instructions to Servicer
[Servicer]
Ladies/Gentlemen:
On __________ __, 199__, ("Seller"), sold to [Buyer] ["Buyer"] all of
Seller's right, title and interest in and to the mortgage loans identified on
Appendix A attached to this letter and made a part hereof (the "Mortgage Loans")
pursuant to that certain Amended and Restated Repurchase Agreement Governing
Purchases and Sales of Mortgage Loans dated as of April 1, 1998 between Buyer
and Seller.
Accordingly, Seller hereby unconditionally and irrevocably instructs you to
pay to Buyer, pursuant to the terms of our existing servicing arrangements, any
and all monies received by you on or after __________ __, 199__ which would
have been payable from time to time by you to Seller on account of or otherwise
in connection with the Mortgage Loans, including without limitation any, and all
principal, interest, partial prepayments, prepayments in full, penalties,
advance payments, or expenses; provided, however, that you shall remit to Seller
an amount equal to the excess of any interest received over the applicable
Periodic Payment due and owing to the Buyer as specified by the Buyer; provided,
further, that any such monies representing scheduled payments of principal of or
interest on such Mortgage Loans due prior to ________, ___, 199__ shall be paid
to Seller. All such monies shall be paid by you to the order of Buyer in the
manner and on the date such monies would have been payable to Seller, as
follows:
[Bank]
ABA # ________ for the account of [Buyer]
Acct. #_______
Attn: ________/re: [Seller]
Very truly yours,
CAPITAL LEASE FUNDING, L.P.
By: CLF HOLDINGS, INC.
By:
-----------------------------
Name
Title
III-1
EXHIBIT IV
Form of Funding Certificate
[Date]
[see attached]
IV-1
EXHIBIT V
Representations and Warranties
Regarding Mortgage Loans
Seller represents and warrants to the Buyer that, with respect to each
Mortgage Loan sold hereunder and with respect to each pool of Mortgage Loans
sold in a Transaction hereunder, as of the related Purchase Date:
(a) MORTGAGE LOANS AS DESCRIBED. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) PAYMENTS CURRENT. All payments required to be made up to the Purchase
Date for each Mortgage Loan under the terms of the Mortgage Note have been made
and credited. No payment required under the Mortgage Loan has been delinquent
at any time since the date the Mortgage Loan was originated;
(c) NO OUTSTANDING CHARGES. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable.
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is greater, to the day which precedes by
one month the due date of the first installment of principal and interest;
(d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note and
mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of Buyer, and which has been delivered to Buyer or its designee
(including the Custodian). No mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, which assumption agreement is
included in the Mortgage File delivered to Buyer or its designee (including the
Custodian) and the terms of which are reflected in the Mortgage Loan Schedule;
(e) NO DEFENSES. The Mortgage Loan is not subject to any right of
rescission, set-off, abatement, diminution, counterclaim or defense, including
without limitation the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable, in
whole or in part, or subject to any right of rescission, set-off, abatement,
diminution, counterclaim or defense, including without limitation the defense of
usury, and no such right of rescission, set-off, abatement, diminution,
counterclaim or defense has been asserted with respect thereto;
V-1
(f) INSURANCE POLICIES IN EFFECT. The fire and casualty insurance policy
covering the Mortgaged Property (1) affords (and will afford) sufficient
insurance against fire and such other risks as are usually insured against in
the broad form of extended coverage insurance from time to time available, as
well as insurance against flood hazards if the Mortgaged Property is an area
identified by the Federal Emergency Management Agency as having special flood
hazards; (2) is a standard policy of insurance for the locale where the
Mortgaged Property is located, is in full force and effect, and the amount of
the insurance is in the amount of the full insurable value of the Mortgaged
Property on a replacement cost basis or the unpaid balance of the Mortgage
Loans, whichever is less; (3) names (and will name) the present owner of the
Mortgaged Property as the insured; and (4) contains a standard mortgagee loss
payable clause in favor of Seller;
(g) COMPLIANCE WITH APPLICABLE LAWS. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with, and Seller shall maintain in its possession, available for
Buyer's inspection, and shall deliver to Buyer upon demand, evidence of
compliance with all such requirements;
(h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission;
(i) VALID FIRST LIEN. The Mortgage is a valid, subsisting and enforceable
first lien on the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (i) referred to
or otherwise considered in the appraisal made for the originator of
the Mortgage Loan or (ii) which do not adversely affect the appraised
value of the Mortgaged Property set forth in such appraisal; and
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the
V-2
Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property.
The Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a Mortgage, deed of trust, deed to secured debt or other
security instrument creating a lien subordinate to the lien of the Mortgage;
(j) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the Mortgage
are genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms (subject to applicable
bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally and general principals of equity). All parties to the Mortgage Note
and the Mortgage had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note
and the Mortgage have been duly and properly executed by such parties;
(k) FULL DISBURSEMENT OF PROCEEDS. The proceeds of the Mortgage Loan have
been fully disbursed and there is no requirement for future advances thereunder,
and any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is
not entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(l) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA lender's
title insurance policy, insuring Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2) and
(3) of paragraph (i) above and, with respect to adjustable rate Mortgage Loans,
against any loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage providing for adjustment to the
mortgage interest rate and monthly payment. Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
the lender's title insurance policy, and no prior holder of the mortgage,
including Seller, has done, by act or omission, anything that would impair the
coverage of such lender's title insurance policy;
(m) NO DEFAULTS. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and, to the best
of Seller's knowledge, no event which, with the passage of time or with notice
and the expiration of any grace or cure period, other than the failure to make,
prior to expiration of the applicable grace period, the monthly payment due
immediately prior to the related Purchase Date if such Purchase Date occurs
prior to the expiration of such grace period, would constitute a default,
breach, violation or event of acceleration, and neither Seller nor its
predecessors have waived any default, breach, violation or event of
acceleration;
V-3
(n) NO MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and, to the best of
Seller's knowledge, no rights are outstanding that under the law, could give
rise to such liens) affecting the mortgaged property which are or may be liens
prior to or equal or coordinate with, the lien of the Mortgage;
(o) LOCATION OF IMPROVEMENTS: NO ENCROACHMENTS: ZONING COMPLIANCE. All
improvements which were considered in determining the appraised value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvements located on or being part
of the Mortgaged Property are in violation of any applicable zoning law or
regulation;
(p) REMEDIES. The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure;
(q) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
executed and delivered in connection therewith;
(r) DEEDS OF TRUST. In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the deed of trust,
and no fees or expenses are or will become payable by Buyer to the trustee under
the deed of trust, except in connection with a trustee's sale after default by
the mortgagor;
(s) ACCEPTABLE INVESTMENT. Seller has no knowledge of any circumstances
or conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor or the Mortgagor's credit standing that can reasonably be expected to
cause private institutional investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;
(t) TRANSFER OF MORTGAGE LOANS. The assignment of mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(u) DUE ON SALE. The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;
V-4
(v) NO FRAUD. Neither the Seller nor any of its officers, employees or
agents has participated in or condoned any fraud in connection with the
origination, underwriting or servicing of the Mortgage Loan, and in originating
and underwriting the Mortgage Loan, to the best knowledge of the Seller, no
fraud was committed against it;
(w) MORTGAGOR'S FINANCIAL CONDITION. To the best knowledge of the Seller,
the credit reports relating to, and the financial statements of, the related
Mortgagor and its Affiliates, if any, furnished to the Seller in connection with
the Mortgage Loan, correctly reflect the financial condition of the Mortgagor
and its Affiliates, if any, in all material respects;
(x) SOLVENCY. To the best knowledge of the Seller, neither the related
Mortgagor, the manager of the related Mortgaged Property not any Affiliate of
either of them, is currently a party to any bankruptcy, reorganization,
insolvency or comparable proceeding;
(y) APPRAISAL. All requirements and conditions set forth in each
appraisal contained in the related Mortgage File as the basis for the valuation
made in such appraisal have been satisfied or arrangements have been made to
satisfy such requirements and conditions in accordance with the Seller's
underwriting guidelines;
(z) HAZARDOUS SUBSTANCES. The Seller has reviewed the hazardous substance
report contained in the related Mortgage File, the representations of the
Mortgagor in the documents in the Mortgage File and the tenant estoppel letter,
if any, and has made such other reasonable investigation, including, without
limitation, inquiry of the Mortgagor, as would be undertaken by a prudent
institutional lender underwriting and originating the Mortgage Loan for its own
portfolio, and such documents and investigation do not indicate that any of the
following statements are untrue: (A) the Mortgaged Property is not now and has
never been used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce, process or in any manner deal with
Hazardous Substances, (B) no Hazardous Substances have ever been installed in,
placed on, or in any manner dealt with on the Mortgaged Property, and (C) no
owner of the Mortgaged Property or any tenant, subtenant, occupant, prior
tenant, prior subtenant, prior occupant or other Person has received any notice
or advice from any governmental agency or any of the foregoing Persons with
regard to Hazardous Substances on, from or affecting the Mortgaged Property.
Based on the Seller's actual knowledge of the related Mortgaged Property, the
related Mortgagor and its use of the Mortgaged Property and the geographic area
where such Mortgaged Property is located, the Seller has no reason or cause to
believe that the hazardous substance report is incorrect;
(aa) MORTGAGE NOTE. When the Mortgage Note is delivered to the Buyer or
its designee, it will be the only promissory note evidencing the related
Mortgage Loan that has been manually signed by the Mortgagor;
(bb) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding pending or
threatened for the total or partial condemnation of the mortgaged property and
the mortgaged property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other
V-5
casualty so as to affect adversely the value of the mortgaged property as
security for the Mortgage Loan or the use for which the premises were intended;
and
(cc) ENVIRONMENTAL MATTERS. A third party unaffiliated with Seller has
conducted a "Phase I" environmental assessment of the mortgaged property within
the past six (6) months and has concluded that, the mortgaged property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation.
V-6
SCHEDULE A
PURCHASE PRICE GRID
BOND RATING(1)
OR EQUIVALENT BOND NET(2) TRIPLE NET/GROUND(3) DOUBLE NET(4)
AAA/AAA 100% 99% 97%
(Min. Spread)(5) (1.07%) (1.12%) (1.18%)
AA/AA 100% 98% 97%
(Min. Spread) (1.08%) (1.13%) (1.19%)
A/A 98% 96% 94%
(Min. Spread) (1.11%) (1.17%) (1.25%)
BBB/BAA 92% 91% 90%
(Min. Spread) (1.25%) (1.40%) (1.55%)
BBB/BA(6) 86% 85% 84%
BB/BA(6) 86% 85% 84%
B/B(7) 0% 0% 0%
BELOW(7) 0% 0% 0%
(1) For the purposes hereof, "Bond Rating" shall mean the long term
unsecured debt rating given by Standard & Poor's, a division of The XxXxxx-Xxxx
Companies ("S & P"), Fitch IBCA, Inc., Duff and Xxxxxx, Inc. or the equivalent
by Xxxxx'x Investors Service, Inc. ("Moody's").
In the absence of Bond Ratings, NAIC 1 will be purchased at BBB/Baa levels.
NAIC 2 will be purchased at BBB/Ba levels.
In the absence of Bond Ratings, short-term debt ratings of A-1+ by S & P
will be purchased in accordance with AA/AA levels. Short-term debt ratings of
A-1 by S & P or Prime-1 by Moody's will be purchased in accordance with A/A
levels. Short-term debt ratings of A-2/A-3 by S & P or Prime 2/Prime-3 by
Moody's will be purchased in accordance with BBB/Baa levels. Any short-term
debt rating below these levels will be considered in the Buyer's sole
discretion.
All plus or minus aspects of Lease ratings will be ignored. Any split
rating will default to the lower of the ratings.
(2) "Bond Net" leases refers to those leases that contain no landlord
obligations and no capacity for tenant to cancel lease without a make-whole
payment by tenant to landlord.
(3) "Triple Net" and "Ground" leases refer to those leases that contain no
landlord obligations other than restoration at condemnation and casualty and
which provide the tenant with cancellation or rent abatement rights in
connection with such events.
(4) "Double Net" leases refers to those leases that contain certain
on-going obligations of the landlord related to structural and maintenance items
and provide the tenant with cancellation or rent abatement rights associated
with landlord's failure to perform its obligations.
(5) "Minimum Spread" reflects the minimum spread over the WAL Treasury
Security for a particular initial mortgage loan. In the Buyer's sole
discretion, any Mortgage Loan inside these quoted spreads will lead to a lower
Purchase Rate.
(6) The sum of each Adjusted Purchase Price paid for a Mortgage Loan
related to tenants rated at these levels shall not at any time exceed 20% of the
Aggregate Outstanding Amount. The Minimum Spread applicable to these levels
shall be as approved by Buyer in its sole discretion.
(7) These levels are included in order to calculate margin levels in the
event of a downgrade of a tenant related to a Mortgaged Property and will not be
acceptable for the initial purchase of a Mortgage Loan.
A-1
