Exhibit 10.2

 

 

ANNEX I to
AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
(GOLDMAN SACHS MORTGAGE COMPANY)

 

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TABLE OF CONTENTS

 

 

 

Page

 

1.

 

APPLICABILITY; OTHER APPLICABLE ANNEXES

 

1

 

2.

 

ADDITIONAL AND SUBSTITUTE DEFINITIONS

 

1

 

3.

 

INITIATION; CONFIRMATION; TERMINATION; FEES

 

19

 

4.

 

MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS

 

27

 

5.

 

INCOME PAYMENTS AND PRINCIPAL PAYMENTS

 

27

 

6.

 

CAUTIONARY SECURITY INTEREST

 

29

 

7.

 

PAYMENT, TRANSFER AND CUSTODY

 

30

 

8.

 

CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE PURCHASED LOANS

 

37

 

9.

 

RESERVED

 

37

 

10.

 

REPRESENTATIONS

 

37

 

11.

 

NEGATIVE COVENANTS OF SELLER

 

40

 

12.

 

AFFIRMATIVE COVENANTS OF SELLER

 

41

 

13.

 

SINGLE-PURPOSE ENTITY

 

45

 

14.

 

EVENTS OF DEFAULT; REMEDIES

 

46

 

15.

 

SINGLE AGREEMENT

 

50

 

16.

 

NOTICES AND OTHER COMMUNICATIONS

 

51

 

17.

 

NON-ASSIGNABILITY

 

51

 

18.

 

GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

 

52

 

19.

 

NO RELIANCE; DISCLAIMERS

 

52

 

20.

 

INDEMNITY AND EXPENSES

 

54

 

21.

 

DUE DILIGENCE

 

55

 

22.

 

SERVICING

 

55

 

23.

 

TREATMENT FOR TAX PURPOSES

 

56

 

24.

 

INTENT

 

56

 

25.

 

MISCELLANEOUS

 

57

 

 

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SCHEDULE 1

 

Purchase Percentages and Applicable Spreads

 

1-1

 

SCHEDULE 2

 

Purchased Loan Information

 

2-1

 

EXHIBITS

 

 

 

 

 

EXHIBIT I

 

Form of Confirmation

 

 

 

EXHIBIT II

 

Authorized Representatives of Seller

 

 

 

EXHIBIT III

 

Form of Custodial Delivery Certificate

 

 

 

EXHIBIT IV-1

 

Form of Power of Attorney to Buyer

 

 

 

EXHIBIT IV-2

 

Form of Power of Attorney to Seller

 

 

 

EXHIBIT V

 

Representations and Warranties Regarding Purchased Loans

 

 

 

EXHIBIT VI

 

Form of Blocked Account Agreement

 

 

 

EXHIBIT VII

 

Form of Bailee Agreement

 

 

 

 

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Supplemental Terms and Conditions

This Annex I forms a part of the Amended and Restated Master Repurchase
Agreement dated as of October 13, 2006 between Gramercy Warehouse Funding II LLC
and GKK Trading Warehouse II LLC, each as seller, and Goldman Sachs Mortgage
Company, as buyer (together with Annex I, the “Agreement”) and amends and
restates that certain Master Repurchase Agreement dated January 3, 2005 between
Gramercy Warehouse Funding II LLC and Buyer (as such agreement may have been
amended from time to time, the “Original Agreement”).  Capitalized terms used in
this Annex I without definition shall have the respective meanings assigned to
such terms in the Agreement.  This Annex I is intended to supplement the
Agreement and shall, wherever possible, be interpreted so as to be consistent
with the Agreement; however, in the event of any conflict or inconsistency
between the provisions of this Annex I, on the one hand, and the provisions of
the Agreement, on the other, the provisions of this Annex I shall govern and
control.  All references in the Agreement and in this Annex I to “the Agreement”
shall be deemed to mean and refer to the Agreement, as supplemented and modified
by this Annex I or as otherwise modified after the date hereof.

1.                                      APPLICABILITY; OTHER APPLICABLE ANNEXES

(a)           Paragraph 1 of the Agreement (“Applicability”) is hereby deleted
and replaced with the following:

From time to time the parties hereto may enter into transactions in which Seller
agrees to transfer to Buyer one or more Eligible Loans against the transfer of
funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller
such Eligible Loans at a date certain (or such earlier date, in accordance with
the terms hereof), against the transfer of funds by Seller.  Each such
transaction shall be referred to herein as a “Transaction” and, unless otherwise
agreed in writing, shall be governed by the Agreement, including any
supplemental terms or conditions contained in this Annex I and in any other
annexes identified herein or therein as applicable hereunder.

(b)           In addition to this Annex I and the Schedules hereto, the
following Annexes and any Schedules thereto shall form a part of the Agreement
and shall be applicable thereunder:

Annex II — Names and Addresses for Communications Between Parties.

2.                                      ADDITIONAL AND SUBSTITUTE DEFINITIONS

(a)           The following capitalized terms in Paragraph 2 of the Agreement
(“Definitions”) are hereby deleted in their entirety:

(i)            “Additional Purchased Securities”;

(ii)           “Buyer’s Margin Amount”;

(iii)          “Buyer’s Margin Percentage”;

(iv)          “Margin Notice Deadline”;

(v)           “Prime Rate”;

(vi)          “Seller’s Margin Amount”; and

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(vii)         “Seller’s Margin Percentage”.

(b)           The following capitalized terms shall have the respective meanings
set forth below, in lieu of the meanings for such terms set forth in Paragraph 2
of the Agreement (“Definitions”):

“Act of Insolvency” shall mean, with respect to any party, (i) the commencement
by such party as debtor of any case or proceeding under any bankruptcy,
insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or
similar law, or such party seeking the appointment or election of a receiver,
conservator, trustee, custodian or similar official for such party or any
substantial part of its property, or the convening of any meeting of creditors
for purposes of commencing any such case or proceeding or seeking such an
appointment or election, (ii) the making by such party of a general assignment
for the benefit of creditors, or (iii) the admission in writing by such party of
such party’s inability to pay such party’s debts as they become due.

“Confirmation” shall have the meaning specified in Section 3(d) of this Annex I.

“Income” shall mean, with respect to any Purchased Loan at any time, any payment
or other cash distribution thereon of principal, interest, dividends, fees,
reimbursements or proceeds or other cash distributions thereon (including
casualty or condemnation proceeds).

“Margin Deficit” shall have the meaning specified in Section 4(a) of this Annex
I.

“Margin Excess” shall have the meaning specified in Section 4(b) of this Annex
I.

“Market Value” shall mean, with respect to any Purchased Loan as of any relevant
date, the lesser of (x) market value of such Purchased Loan on such date, as
determined by Buyer in its good faith but sole discretion, and (y) the par
amount of such Purchased Loan.

For purposes of Buyer’s determination, (i) the Market Value may be determined by
reference to an Appraisal, discounted cash flow analysis or other method (which
method shall be selected by Buyer in good faith), (ii) any amounts or claims
secured by related Eligible Property or Properties ranking senior to or pari
passu with the lien of the Purchased Loan may be deducted from the Market Value
of the Purchased Loan, (iii) the Market Value of any Defaulted Loan or
Delinquent Loan shall be zero (unless Buyer otherwise specifies), (iv) Buyer may
consider the representations and warranties set forth in Exhibit V (including a
breach thereof), and exceptions thereto in its determination of the Market Value
of the Purchased Loans and (iv) for the avoidance of doubt, Buyer may reduce
Market Value for any actual or potential risks (including risk of delay) posed
by any liens or claims on the related Eligible Property or Properties.  Seller
shall cooperate in good faith with Buyer in its in good faith determination of
the market value of each item of underlying collateral (including, without
limitation, providing all information and documentation in the possession of
Seller regarding such item of underlying collateral or otherwise required by
Buyer).

“Pricing Rate” shall mean, for any Purchased Loan and any Pricing Rate Period,
an annual rate equal to the LIBOR Rate for such Pricing Rate Period plus the
Applicable Spread for the applicable Loan Type and shall be subject to
adjustment and/or conversion as provided in Sections 3(j), 3(k) and 3(s) of this
Annex I.  The Pricing Rate shall be computed on the basis of a 360-day year and
the actual number of days elapsed.

“Purchase Price” shall mean, with respect to any Purchased Loan the price at
which such Purchased Loan is transferred by Seller to Buyer on the applicable
Purchase Date.  The Purchase Price as of any Purchase Date for any Purchased
Loan of a particular Loan Type shall be an amount (expressed in

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dollars) equal to the product obtained by multiplying (i) the Market Value of
such Purchased Loan by (ii) the Purchase Percentage for the related Loan Type.

“Purchase Date” shall mean, with respect to any Purchased Loan, the date on
which such Purchased Loan is transferred by Seller to Buyer.

“Purchased Securities” shall mean, the “Purchased Securities” as defined in the
Securities Repurchase Agreement.

“Repurchase Date” with respect to any Purchased Loan shall mean the Facility
Termination Date or such earlier date specified in the related Confirmation, or
if applicable, the related Early Repurchase Date or Accelerated Repurchase Date.

“Repurchase Price” shall mean, with respect to any Purchased Loan as of any
date, the price at which such Purchased Loan is to be transferred from Buyer to
Seller upon termination of the related Transaction; in each case, such price
shall equal the sum of the Purchase Price of such Purchased Loan and the accrued
Price Differential with respect to such Purchased Loan as of the date of such
determination, minus all Income and cash actually received by Buyer in respect
of such Transaction and applied towards the Repurchase Price and/or Price
Differential pursuant to this Annex I.

(c)           In addition to the terms defined in Paragraph 2 of the Agreement 
(“Definitions”) not otherwise deleted pursuant to Section 2(a) of this Annex I
and the terms defined in Section 2(b) of this Annex I, the following capitalized
terms shall have the respective meanings set forth below:

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

“Accepted Servicing Practices” shall mean with respect to any Purchased Loan, in
conformity with those accepted and prudent servicing practices in the industry
for loans of the same type and in a manner at least equal in quality to the
servicing the applicable servicer provides for assets similar to such Purchased
Loans that it owns.

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

“Aggregate Repurchase Price” shall mean, as of any date of determination, the
aggregate Repurchase Price (excluding any accrued and unpaid Price Differential)
of all Transactions outstanding as of such date.

“Agreement” shall have the meaning specified in the introductory paragraph of
this Annex I.

“Alternative Rate” shall have the meaning specified in Section 3(k) of this
Annex I.

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

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“Applicable Spread” shall mean, (i) with respect to a Purchased Loan, so long as
no Event of Default shall have occurred and be continuing, the per annum rate
specified in Schedule 1 attached hereto as being the “Applicable Spread” for the
Purchased Loans in such Loan Type, and (ii) in each case, after the occurrence
and during the continuance of an Event of Default, the applicable per annum rate
described in clause (i) of this definition, plus 400 basis points (4.0%).

“Appraisal” shall mean an appraisal of any Eligible Property prepared by a
licensed appraiser approved by Buyer in its reasonable discretion, in accordance
with the Uniform Standards of Professional Appraisal Practice of the Appraisal
Foundation, in compliance with the requirements of Title 11 of the Financial
Institution Reform, Recovery and Enforcement Act and utilizing customary
valuation methods such as the income, sales/market or cost approaches, as any of
the same may be updated by recertification from time to time by the appraiser
performing such Appraisal.

“Asset Base” shall mean, as of any date of determination, the aggregate Asset
Base Components of all Purchased Loans transferred by the Seller to the Buyer
hereunder as of such date.

“Asset Base Component” shall mean, as of any date of determination, with respect
to each Purchased Loan, the product of its Market Value multiplied by the
Purchase Percentage applicable to such Purchased Loan as of such date.

“Assignment of Leases” shall mean, with respect to any Purchased Loan which is a
mortgage loan, any assignment of leases, rents and profits or equivalent
instrument, whether contained in the related Mortgage or executed separately,
assigning to the holder or holders of such Mortgage all of the related
Mortgagor’s interest in the leases, rents and profits derived from the
ownership, operation, leasing or disposition of all or a portion of the related
Mortgaged Property as security for repayment of such Purchased Loan.

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

“Bailee” shall mean such third party as Buyer and Seller shall mutually approve
in their sole discretion.

“Bailee Agreement” shall mean the Bailee Agreement among Seller, Buyer and
Bailee in the form of Exhibit VII hereto.

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

 “Blocked Account” shall have the meaning specified in Section 5 of this Annex
I.

“Blocked Account Agreement” shall mean the Blocked Account Agreement, in the
form attached hereto as Exhibit VI (or such other form as shall have been
approved by Buyer, such approval not to be unreasonably withheld, delayed or
conditioned), executed by Buyer, Seller and the Depository Bank (and any
amendment thereto or any successor thereto or replacement thereof executed by
Buyer, Seller and the Depository Bank).

“Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a
day on which the New York Stock Exchange, the Federal Reserve Bank of New York
or the Custodian is authorized or obligated by law or executive order to be
closed.

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“Buyer” shall mean Goldman Sachs Mortgage Company, and any successor or assign.

“Capital Lease Obligations” shall mean, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of the Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

“Change of Control” shall mean the occurrence of any of the following with
respect to any Person:

(i)            a Transfer of all or substantially all of such Person’s assets
(excluding any such Transfer in connection with any securitization transaction
involving, or the sale of,  Repurchased Loans or Repurchased Securities or other
assets of Seller used in other repurchase or other similar transactions in the
ordinary course of such Person’s business); or

(ii)           a merger, consolidation or other transaction in which more than
50% of the voting common equity of such Person or the surviving entity
immediately after such merger, consolidation or such other transaction is not
owned, directly or indirectly, by persons who were, directly or indirectly,
equityholders of such Person immediately prior thereto; or

(iii)          a majority of the members of the board of directors of such
Person changes during any twelve (12) month period after the date hereof.

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

“Costs” shall mean, with respect to any Purchased Loan, all out-of-pocket
obligations, costs, fees, indemnities and expenses in respect of such Purchased
Loan actually incurred by Buyer.

“Custodial Agreement” shall mean the Custodial Agreement entered into by and
among Custodian, Seller and Buyer.

“Custodial Delivery Certificate” shall mean the delivery certificate, a form of
which is attached hereto as Exhibit III, executed by Seller in connection with
its delivery of a Purchased Loan File to Buyer or its designee (including the
Custodian) pursuant to Section 7 of this Annex I.

“Custodian” shall mean Wells Fargo Bank, N.A. or any successor Custodian
appointed by Buyer.

“Cut-off Date” shall mean the last Business Day of the calendar month preceding
each Remittance Date.

“Debt to Equity Ratio” shall mean the ratio of Total Indebtedness to Tangible
Net Worth without regard to the application of FAS 140 or FIN 46).

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

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“Defaulted Loan” shall mean any Purchased Loan as to which (A) there is a
material breach beyond any applicable cure period of a material representation,
warranty or covenant by the related borrower or obligor under the applicable
Purchased Loan Documents or by Seller under Exhibit V, (B) there is a material
default beyond any applicable cure period under the related Purchased Loan
Documents in the payment when due of interest, principal or any other amounts
which material default continues, (C) any other material “Event of Default”
under the related Purchased Loan Document, (D) to the extent that the related
Transaction is deemed a loan under federal, state or local law Buyer ceases to
have a first priority perfected security interest or (E) the related Purchased
Loan File or any portion thereof has been released from the possession of the
Custodian under the Custodial Agreement to anyone other than Buyer or any
Affiliate of Buyer except in accordance with the terms of the Custodial
Agreement.

“Delinquent Loan” shall mean any Purchased Loan as to which the payment of
principal and/or interest owed thereunder by the underlying obligor is 30 days
or more past due.

“Depository Bank” shall mean such depository bank appointed by Seller with the
prior written consent of Buyer which delivers a deposit account agreement in the
form of the Blocked Account Agreement or another form reasonably acceptable to
Buyer.

“Diligence Fee” shall mean fees (so long as no Event of Default is continuing,
not to exceed $50,000 annually with respect to this Agreement and the Securities
Repurchase Agreement) payable by Seller to Buyer in respect of Buyer’s
out-of-pocket expenses (other than legal expenses) incurred in connection with
its review of the Diligence Materials hereunder and under the Securities
Repurchase Agreement.

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

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

“Early Repurchase Date” shall have the meaning specified in Section 3(g) of this
Annex I.

“Early Repurchase Deposit” shall have the meaning specified in Section 3(j) of
this Annex I.

“Early Repurchase Deposit Application Date” shall have the meaning specified in
Section 3(j) of this Annex I.

“Early Repurchase Deposit Funding Date” shall have the meaning specified in
Section 3(j) of this Annex I.

“EBITDA” shall mean, for each fiscal quarter, with respect to Guarantor and its
consolidated Subsidiaries, an amount equal to (a) Net Income for such period
(excluding the effect of any extraordinary gains or losses resulting from the
sale of property or non-cash gains or losses outside the ordinary course of
business) plus (b), without duplication, an amount which, in the determination
of Net Income for such period, has been deducted for (i) interest expense for
such period, (ii) total federal, state, foreign or other income or franchise
taxes for such period, and (iii) all depreciation and amortization for such
period, all as determined with respect to any consolidated Subsidiary in
accordance with the methodology specified in the definition of Net Income, plus
(c) any nonrecurring fees and expenses incurred on or prior to the date of the
execution and delivery of the Agreement, less (d) any non-cash reserve activity.

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“Eligible Loans” shall mean any of the following types of transitional or
stabilized loans listed in (i) through (iv) below, (v) acceptable to Buyer in
the exercise of its sole and absolute discretion, (w) secured directly or
indirectly by an Eligible Property, (x) which has a loan term equal to or less
than 10 years (assuming exercise of all extension options), (y) as to which the
applicable representations and warranties set forth in Exhibit V are true and
correct in all material respects as of the applicable Purchase Date, and (z) has
a maximum LTV  specified in Schedule 1 for the related Loan Type:

(i)            performing Mezzanine Loans (or participation interests therein).

(ii)           performing Mortgage Loans secured by first liens on Eligible
Properties (“First Mortgage Loans”).

(iii)          senior subordinate participation interests (or a senior
subordinate promissory note that is, in effect, similar in nature to a senior
subordinate participation interest) in performing First Mortgage Loans that also
secures a senior promissory note (or senior interest) in such loan and may also
secure a junior subordinate promissory note (or junior subordinate interest) in
such loan (“Senior First Mortgage B Notes”).

(iv)          junior participation interests (or a junior promissory note that
is, in effect, similar in nature to a junior participation interest) in
performing First Mortgage Loans that also secure a senior (or senior
subordinate) promissory note (or senior (or senior subordinate) interest) in
such loan (“Junior First Mortgage B Notes”).

Buyer may, in its sole and absolute discretion, consider sub-performing and
non-performing loans of the types listed in (i) through (iv) above.

“Eligible Property” shall mean a property that is a multifamily, retail, office,
industrial, warehouse, condominium or hospitality property or such other
property type acceptable to Buyer in the exercise of its good faith business
judgment; provided, however, that healthcare related properties, such as
assisted living, nursing homes, acute care, rehabilitation centers, diagnostic
centers and psychiatric centers, shall not qualify as an Eligible Property.

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

“ERISA Affiliate” means any corporation or trade or business (whether or not
incorporated) that is a member of any group of organizations described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA of which
Seller is a member at any relevant time.

“Event of Default” shall have the meaning specified in Section 14(a) of this
Annex I.

“Extended Repurchase Monthly Amount” means the quotient of (i) the aggregate
Repurchase Price of the Purchased Loans as of the Facility Termination Date,
divided by (ii) 6; provided, that to the extent Seller pays the aggregate
Repurchase Price in an amount in excess of the Extended Repurchase Monthly
Amount in any month, Seller shall receive a credit against the next month’s
required payment amount (and any subsequent months’ payments, if applicable) in
an aggregate amount equal to such excess.

 

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“Facility Amount” shall mean, as of any date of determination, the sum of (i)
$300,000,000 less the Securities Aggregate Repurchase Price outstanding under
the Securities Repurchase Agreement as of such date and (ii) all or any portion
of the Future Advance Facility Amount with respect to which the conversion
option set forth in Section 3(s) of this Annex I has been exercised by Seller.

“Facility Termination Date” shall mean September 13, 2009 unless extended
pursuant to Section 3(q) of this Annex I.

“Federal Funds Rate” shall mean, for any day, an interest rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published for such day, (or, if such day is not a Business Day, for
the immediately preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations at approximately 10 a.m. (New York time) on such day
or such transactions received by the Buyer from three Federal funds brokers of
recognized standing selected by the Buyer in its sole discretion.

“Fee Letter” shall mean that certain amended and restated letter agreement,
dated the date hereof between Buyer, Goldman, Sachs & Co. and Seller, as the
same may be amended, supplemented or otherwise modified from time to time.

“Filings” shall have the meaning specified in Section 6(b) of this Annex I.

“Financial Covenant Compliance Certificate” shall mean an Officer’s Certificate
to be delivered by Guarantor within 45 days after the end of each fiscal quarter
confirming that: (i) as of the fiscal quarter most recently ended, (w)
Guarantor’s Debt to Equity Ratio is less than or equal to 5:1; (x) Guarantor’s
Tangible Net Worth is equal to or greater than the sum of (i) $129,750,000 and
(ii) 75% of the proceeds of any equity issuances after Guarantor’s initial
public offering, (y) Guarantor’s Fixed Charge Coverage Ratio equals or exceeds
1.50:1, and  (z) Guarantor’s Minimum Liquidity equals or exceeds, during the
first two years after the date of this Agreement, $10,000,000 and, thereafter,
$15,000,000; and (ii) Guarantor has cumulative positive EBITDA for the three
fiscal quarters most recently ended.

“Financing Transaction” shall mean a repurchase transaction or a financing
transaction between Buyer (or an Affiliate of Buyer) and any counterparty.

“First Mortgage B Note” shall mean any Senior First Mortgage B Note or Junior
First Mortgage B Note.

“Fitch” means Fitch Inc.

“Fixed Charge Coverage Ratio” shall mean, with respect to any Person and any
period of determination, the quotient of (i) EBITDA of such Person for such
period of determination divided by (ii) the Fixed Charges for such period.

“Fixed Charges” shall mean, with respect to any Person and any period of
determination, the sum of (a) debt service (including interest expense and
principal payments), (b) preferred dividends on any preferred securities and all
distributions due to the holders of any preferred limited partnership interests,
(c) the amortized portion of any capital lease obligations paid or accrued
during such period, (d) capital expenditures, and (e) any amounts payable under
any ground lease.  Fixed Charges shall include a proportionate share of items
(a), (b), (c), (d) and (e) of all unconsolidated affiliates.

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“Future Advance Facility Amount” shall mean an amount equal to $100,000,000, or,
in the event of a conversion as provided in Section 3(s), such lesser amount
with respect to which Seller has not elected to exercise the option described in
Section 3(s).

“Future Advance Loan” shall mean any Eligible Loan with respect to which there
exists a continuing obligation on the part of the holder of the Eligible Loan
after the related closing date of such Eligible Loan to provide additional
funding to the underlying borrower, upon the terms and conditions of the
underlying loan documents for such Eligible Loan.

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

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

“Guarantee” shall mean, as to any Person, any obligation of such Person directly
or indirectly guaranteeing any Indebtedness of any other Person or in any manner
providing for the payment of any Indebtedness of any other Person or otherwise
protecting the holder of such Indebtedness against loss (whether by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, or to take-or-pay or otherwise); provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.  The amount of any Guarantee of a Person shall be
deemed to be an amount equal to the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith in accordance with
GAAP.  The terms “Guarantee” and “Guaranteed” used as verbs shall have
correlative meanings.

“Guarantor” shall mean Gramercy Capital Corp., a Maryland corporation.

“Guaranty” shall mean that certain Guaranty dated as of January 3, 2005, made by
Guarantor in favor of Buyer, as the same may be amended, supplemented or
otherwise modified from time to time.

“Hedging Transactions” shall mean, with respect to any or all of the Purchased
Loans, any short sale of U.S. Treasury Securities or mortgage-related
securities, futures contract (including Eurodollar futures) or options contract
or any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, entered into by Seller or the underlying obligor with respect to
any Purchased Loan and pledged to Seller as collateral for such Purchased Loan,
with one or more counterparties whose unsecured debt is rated at least AA (or
its equivalent) by any Rating Agency or, with respect to any Hedging Transaction
pledged to Seller as additional collateral for a Purchased Loan, such other
rating requirement applicable to such Hedging Transaction set forth in the
related Purchased Loan Documents or which is otherwise reasonably acceptable to
Buyer; provided that Seller shall not grant or permit any liens, security
interests, charges, or encumbrances with respect to any such hedging
arrangements for the benefit of any Person other than Buyer.

“Indebtedness” shall mean, for any Person:  (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the

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respective services are rendered; (c) Indebtedness of others secured by a lien
on the property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; (e) Capital Lease Obligations of such Person; (f) obligations of such
Person under repurchase agreements or like arrangements; (g) Indebtedness of
others Guaranteed by such Person; (h) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; and
(i) Indebtedness of general partnerships of which such Person is a general
partner.

“Indemnified Amounts” and “Indemnified Parties” shall have the meaning specified
in Section 20 of this Annex I.

“Independent Director” of any corporation or limited liability company means an
individual who is duly appointed as a member of the board of directors or board
of managers of such corporation or limited liability company and who is not, and
has never been, and will not while serving as Independent Director, be any of
the following:

(i)            a member, partner, equityholder, manager, director, officer or
employee of Seller or any of its equityholders or affiliates (other than as an
independent director or manager of an affiliate of Seller that is not in the
direct chain of ownership of Seller and that is required by a creditor to be a
single purpose bankruptcy remote entity, provided that such independent director
or manager is employed by a company that routinely provides professional
independent directors or managers);

a creditor, supplier or service provider (including provider of professional
services) to Seller or any of its equityholders or affiliates (other than a
company that routinely provides professional independent managers or directors
and which also provides lien search and other similar services to Seller or any
of its equityholders or affiliates in the ordinary course of business);

(iii)          a family member of any such member, partner, equityholder,
manager, director, officer, employee, creditor, supplier or service provider; or

(iv)          a Person that controls (whether directly, indirectly or otherwise)
any of (i), (ii) or (iii) above.

“Insured Closing Letter and Escrow Instructions” shall mean a letter addressed
to Seller and Buyer from the title insurance underwriter (or any agent thereof)
acting as an agent for each Table Funded Purchased Loan and related escrow
instructions, which letter and instructions shall be in form and substance
reasonably acceptable to Buyer and Seller.

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

LIBOR

1 - Reserve Requirement

 

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

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

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

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

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

“Loan Type” shall mean, with respect to any Purchased Loan, each of the loan
types listed in Schedule 1 attached hereto.

“LTV” shall mean, with respect to any Eligible Property or Properties, the ratio
of the aggregate outstanding debt (which shall include the related Eligible Loan
and all debt senior to or pari passu with such Eligible Loan) secured, directly
or indirectly, by such Eligible Property or Properties, taking into
consideration, in Buyer’s sole discretion, reserves, letters of credit, and
recourse to third parties acceptable to Buyer, to the aggregate value of such
Eligible Property or Properties as determined by Buyer in its sole and absolute
discretion.  For purposes of Buyer’s determination, (i) the value may be
determined by reference to an Appraisal, discounted cash flow analysis or other
commercially reasonable method and (ii) for the avoidance of doubt, Buyer may
reduce value for any actual or potential risks (including risk of delay) posed
by any liens on the related Eligible Property or Properties.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations, financial condition or prospects of Seller or
Guarantor, (b) the ability of Seller or Guarantor to perform its obligations
under any of the Transaction Documents to which it is a party, (c) the validity
or enforceability of any of the Transaction Documents, (d) the rights and
remedies of Buyer under any of the Transaction Documents, (e) the timely payment
of the Repurchase Price of or accrued Price Differential in respect of the
Purchased Loans or other amounts payable in connection therewith, or (f) the
aggregate Market Value of the Purchased Loans.

“Mezzanine Loan” shall mean any loan (including any participation interest
therein) secured by a pledge of the direct or indirect equity ownership
interests in a Person that owns a Mortgaged Property that also secures a
Mortgage Note.

“Mezzanine Note” shall mean a note or other evidence of indebtedness of the
owner or owners of direct or indirect equity ownership interests in an
underlying real property owner secured by a pledge of such ownership interests.

“Minimum Liquidity” shall mean, for any Person and any date of determination,
the sum of such Person’s Cash, Cash Equivalents and actual borrowing
availability under any credit facilities, as of such date of determination.

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“Monthly Statement” shall mean, for each calendar month during which the
Agreement shall be in effect, Seller’s or Servicer’s, as applicable,
reconciliation in arrears of beginning balances, interest and principal paid to
date and ending balances for each Purchased Loan, together with a certified
written report describing (a) any developments or events that are reasonably
likely to have a Material Adverse Effect, (b) any and all written modifications
to any Purchased Loan Documents not previously described in a written report,
(c) loan status, collection performance and any delinquency and loss experience
with respect to any Purchased Loan, (d) an update as to the expected repurchase
for all Purchased Loans in the facility and (e) such other information as
mutually agreed by Seller and Buyer which report shall be delivered to Buyer for
each calendar month during the term of the Agreement within ten (10) days
following the end of each such calendar month.

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

“Mortgage” shall mean the mortgage, deed of trust, deed to secure debt or other
instruments, creating a valid and enforceable first or second lien, as
applicable, on or a first or second priority ownership interest in a Mortgaged
Property.

“Mortgage Loan” shall mean a commercial mortgage loan secured by a lien on real
property, and includes any First Mortgage Loan, Senior First Mortgage B Note and
Junior First Mortgage B Note.

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

“Mortgaged Property” shall mean the real property or properties securing
repayment of the debt evidenced by a Mortgage Note, or, in the case of any
Mezzanine Loan, owned indirectly by the related obligor.

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

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

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

“Officer’s Certificate” shall mean, as to any Person, a certificate of the chief
executive officer, any vice chairman and the chief financial officer of such
Person or, for the purpose of executing certificates, the president, the vice
president and counsel responsible therefor.

“Originated Loan” shall mean any loan that is an Eligible Loan and whose related
loan documents were prepared by Seller or an Affiliate controlled by Seller.

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

“Plan” shall mean an employee benefit or other plan established or maintained
during the five year period ended prior to the date of the Agreement or to which
Seller or any ERISA Affiliate makes, is obligated to make or has, within the
five year period ended prior to the date of the Agreement, been

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required to make contributions and that is covered by Title IV of ERISA or
Section 302 of ERISA or Section 412 of the Code.

“Plan Assets” shall mean assets of any (i) employee benefit plan (as defined in
Section 3(3) of ERISA) subject to Title I of ERISA, (ii) plan (as defined in
Section 4975(e)(l) of the Code) subject to Section 4975 of the Code, or (iii)
governmental plan (as defined in Section 3(32) of ERISA) subject to any other
federal, state or local laws, rules or regulations substantially similar to
Title I of ERISA or Section 4975 of the Code.

“Portfolio Loans” shall mean all of the Purchased Loans.

“Portfolio Securities” has the meaning specified in the Securities Repurchase
Agreement.

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

“Preliminary Due Diligence Package” shall mean with respect to any New Loan, the
following due diligence information relating to such New Loan to be provided by
Seller to Buyer pursuant to this Annex I:

(i)            Seller’s internal investment committee memorandum, among other
things, outlining the proposed transaction, including potential transaction
benefits and all material underwriting risks, and Underwriting Issues,
anticipated exit strategies and all other characteristics of the proposed
transaction that a prudent buyer would consider material;

(ii)           current rent roll, if applicable;

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

(iv)          indicative interest coverage ratios;

(v)           indicative loan-to-value ratio;

(vi)          Seller’s or any Affiliate’s relationship with its potential
underlying borrower or any affiliate;

(vii)         third party reports, to the extent available and applicable,
including:

(a)           engineering and structural reports;

(b)           current Appraisal;

(c)           Phase I environmental report (including asbestos and lead paint
report) and, if applicable, Phase II or other follow-up environmental report if
recommended in Phase I;

(d)           seismic reports; and

(e)           operations and maintenance plan with respect to asbestos
containing materials;

(viii)        documents evidencing such New Loan, or current drafts thereof,
including, without limitation, underlying debt and security documents,
guaranties, underlying borrower’s

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organizational documents, warrant agreements, loan and collateral pledge
agreements, and intercreditor agreements, as applicable;

(ix)           a list that specifically identifies any Purchased Loan Documents
that relate to such Purchased Loan but are not in Seller’s possession;

(x)            in the case of a participation interest, all information
described in this definition which would otherwise be provided for the
underlying Mortgage Loan if it constituted an Eligible Loan except that, as to
items set forth in subparagraphs (vii) and (xii), to the extent Seller possesses
such information or has access to such information because it was provided to
the related lead lender and made available to Seller, and in addition, all
documentation evidencing the participation interest;

(xi)           insurance documentation as shall be reasonably satisfactory to
Buyer; and

(xii)          analyses and reports with respect to such other matters
concerning the New Loan as Buyer may in its reasonable discretion require.

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

“Pricing Rate Period” shall mean (a) in the case of the first Pricing Rate
Period with respect to any Transaction, the period commencing on and including
the Purchase Date for such Transaction and ending on and including the last day
of the calendar month in which the Purchase Date occurs, (b) in the case of any
subsequent Pricing Rate Period, the period commencing on and including the first
day of a calendar month and ending on and including the last day of such
calendar month, and (c) in the case where the Remittance Date is not the first
day of a calendar month, the period commencing on and excluding the Remittance
Date and ending on (but including) the subsequent Remittance Date; provided,
however, that in no event shall any Pricing Rate Period end subsequent to the
Repurchase Date.

“Principal Payment” shall mean, with respect to any Purchased Loans, any payment
or prepayment of principal received in respect thereof (including casualty or
condemnation proceeds to the extent such proceeds are required under the
applicable Purchase Loan Documents to be applied toward the balance of the
underlying loan, or are not otherwise required under the underlying loan
documents to be reserved, escrowed, readvanced or applied for the benefit of the
obligor or the underlying real property).  For purposes of clarification,
prepayment premiums, fees or penalties shall not be deemed principal.

“Purchase Percentage” shall mean, with respect to any Purchased Loan, the
“Purchase Percentage” specified in Schedule 1 for the related Loan Type (or as
otherwise specified in the applicable Confirmation).

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

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

“Purchased Loan Information” shall mean, with respect to each Purchased Loan,
the information set forth in Schedule 3 attached hereto.

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“Purchased Loan Schedule” shall mean a schedule of Purchased Loans, together
with the Purchased Loan Information for each such loan attached to each Trust
Receipt and Custodial Delivery Certificate.

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

“Quarterly Report” shall mean, for each fiscal quarter during which the
Agreement shall be in effect, Seller’s or Servicer’s, as applicable, certified
written report summarizing, with respect to the Mortgaged Properties securing
each Purchased Loan (or, in the case of a Purchased Loan secured (directly or
indirectly) by a portfolio of Mortgaged Properties, such information on a
consolidated basis), the net operating income, debt service coverage, occupancy,
the revenues per room (for hospitality properties) and sales per square footage
(for retail properties) and such other information as mutually agreed by Seller
and Buyer which report shall be delivered to Buyer for each fiscal quarter
during the term of the Agreement within 60 days following the end of each such
fiscal quarter.

“Rating Agency” shall mean any of Fitch, Moody’s and Standard & Poor’s.

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

“Regulations T, U and X” shall mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.

“Remittance Date” shall mean the last calendar day of each month, or the
immediately preceding Business Day, if such calendar day shall not be a Business
Day.

“Repurchased Loan” shall mean any Purchased Loan which has been repurchased by
Seller pursuant to the terms hereof.

“Repurchased Security” shall have the meaning set forth in the Securities
Repurchase Agreement.

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

“Reserve Requirement” shall mean, with respect to any Pricing Rate Period, the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect during such Pricing Rate Period (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto) dealing with
reserve requirements

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prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of such Board of Governors) maintained by Buyer.

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

“Scheduled Purchase Date” shall mean the date agreed between the parties or
specified in the applicable Confirmation as the “Purchase Date” or the
“Scheduled Purchase Date”.

“Securities Aggregate Repurchase Price” shall mean, as of any date of
determination, the “Aggregate Repurchase Price” (as defined in the Securities
Repurchase Agreement) as of such date.

“Securities Repurchase Agreement” shall mean the Master Repurchase Agreement
dated as of the date hereof between Seller and Goldman, Sachs & Co., as amended
supplemented or otherwise modified from time to time.

“Seller” shall mean, individually and collectively, Gramercy Warehouse Funding
II LLC, a Delaware limited liability company and GKK Trading Warehouse II, LLC,
a Delaware limited liability company, together with their permitted successors
and assigns.  For the avoidance of doubt, either Seller may act to bind the
other Seller. Any notice, election or act taken by one Seller under this
Agreement or any of the other Transaction Documents shall be deemed to
constitute the action of the other Seller, and Buyer may in all such
circumstances rely on the action taken by either one as the action of both
entities.

“Servicer” shall mean GKK Manager LLC or an affiliate thereof, or such other
servicer mutually acceptable to Buyer and Seller.

“Servicing Agreement” shall mean that certain servicing agreement entered into
by Seller and Servicer or such other servicing agreement in each case approved
by Buyer in its reasonable discretion.

“Servicing Records” has the meaning specified in Section 22(b) of this Annex I.

“Significant Modification” shall mean (a) any modification or amendment of a
Purchased Loan which:

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

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

(iii)          modifies the payments of principal and interest when due of the
Purchased Loan in question;

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

(v)           subordinates the lien priority of the Purchased Loan or the
payment priority of the Purchased Loan other than subordinations expressly
required under the then existing terms

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and conditions of the Purchased Loan (provided, however, the foregoing shall not
preclude the execution and delivery of subordination, nondisturbance and
attornment agreements with tenants, subordination to tenant leases, easements,
plats of subdivision and condominium declarations and similar instruments which
in the commercially reasonable judgment of Seller do not materially adversely
affect the rights and interest of the holder of the Purchased Loan in question);

(vi)          releases (1) any collateral for the Purchased Loan other than
releases required under the then existing Purchased Loan Documents or releases
in connection with eminent domain or under threat of eminent domain or (2) any
underlying obligor with respect to a Purchased Loan;

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

(viii)        waives any due-on-sale or due-on-encumbrance provisions of the
Purchased Loan other than waivers required to be given under the then existing
Purchased Loan Documents; and

(b)           any modification, amendment or other material action with respect
to a Purchased Loan (or the related mortgage loan, if such Purchased Loan is a
Mezzanine Loan) which under the terms of the related intercreditor agreement or
participation agreement, as the case may be, requires the consent of Seller or
its “operating advisor” or the agent (as distinct from consultation rights).

“Single-Purpose Entity” shall mean a Person, other than an individual, which is
formed or organized solely for the purpose of holding, directly or indirectly
and subject to this Agreement and the Securities Repurchase Agreement, the
Purchased Loans and the Portfolio Securities, does not engage in any business
unrelated to the Purchased Loans and the Portfolio Securities, does not have any
assets other than the Purchased Loans and the Portfolio Securities or any
indebtedness other than as permitted by the Agreement and the Securities
Repurchase Agreement, has its own separate books and records and its own
accounts, in each case which are separate and apart from the books and records
and accounts of any other Person, holds itself out as being a Person, separate
and apart from any other Person and provides in its partnership agreement or
limited liability company agreement (as applicable) for the inclusion of at
least one Independent Director.  If  the foregoing entity is a limited
partnership or limited liability company, its partnership agreement or limited
liability company agreement (as applicable) shall provide that that the
dissolution and winding up or bankruptcy or insolvency filing of such
partnership or limited liability company shall require the unanimous consent of
all partners or members (including the affirmative vote of the independent
directors) and if the foregoing entity is a single-member limited liability
company whose single member is not itself a Single-Purpose Entity, its limited
liability company agreement shall provide that upon the occurrence of any event
that causes its sole member to cease to be a member during the term of this
Agreement, at least one of its independent directors shall automatically be
admitted as the sole member and shall preserve and continue the existence of the
entity without dissolution.

“Standard & Poor’s” shall mean Standard & Poor’s Ratings Services, Inc., a
division of the McGraw Hill Companies Inc.

“Subsidiary” shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or

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other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

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

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

“Table Funded Purchased Loan” shall mean a Purchased Loan which is sold to Buyer
simultaneously with the origination or acquisition thereof, which origination or
acquisition is financed with the Purchase Price, pursuant to Seller’s request,
paid directly to a title company or other settlement agent, in each case,
approved by Buyer, for disbursement in connection with such origination or
acquisition.  A Purchased Loan shall cease to be a Table Funded Purchased Loan
after the Custodian has delivered a Trust Receipt to Buyer certifying its
receipt of the Purchased Loan File therefor.

“Tangible Net Worth” shall mean, with respect to any Person, as of any date of
determination, (a) all amounts which would be included under capital on the
balance sheet of such Person at such date, determined in accordance with GAAP as
of such date, less (b)(i) amounts owing to such Person from Affiliates and (ii)
intangible assets of such Person as of such date.

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

“Title Policy” shall have the meaning specified in paragraph 2(d) of Exhibit V.

“Total Indebtedness” shall mean, with respect to any Person, as of any date of
determination, the aggregate Indebtedness of such Person as of such date less
the amount of any nonspecific balance sheet reserves maintained in accordance
with GAAP as of such date.

“Transaction” shall have the meaning specified in Section 1(a) of this Annex I.

“Transaction Conditions Precedent” shall have the meaning specified in Section
3(e) of this Annex I.

“Transaction Costs” shall mean, with respect to any Purchased Loan, all actual
out-of-pocket reasonable costs and expenses paid or incurred by Buyer and
payable by Seller relating to the purchase of such Purchased Loan (including
legal fees and other fees described in Section 20(b) of this Annex I). 
Transaction Costs shall not include costs incurred by Buyer for overhead and
general administrative expenses.

“Transaction Documents” shall mean, collectively, the Agreement (including this
Annex I and any other annexes and schedules attached to the Agreement), the
Blocked Account Agreement, the Custodial Agreement, the Fee Letter, the
Servicing Agreement, all Transfer Documents, all Confirmations

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executed pursuant to this Annex I in connection with specific Transactions and
all other documents executed in connection herewith and therewith.

“Transfer” shall mean, with respect to any Person, any sale or other whole or
partial conveyance of all or any portion of such Person’s assets, or any direct
or indirect interest therein to a third party (other than in connection with the
transfer of a Purchased Loan to Buyer in accordance herewith), including
granting of any purchase options, rights of first refusal, rights of first offer
or similar rights in respect of any portion of such assets or the subjecting of
any portion of such assets to restrictions on transfer.

“Transfer Documents” shall mean, with respect to any Purchased Loan, all
applicable documents described in Section 7(b) of this Annex I necessary to
transfer all of Seller’s right, title and interest in such Purchased Loan to
Buyer in accordance with the terms of this Annex I.

“Trust Receipt” shall mean a trust receipt issued by the Custodian, or the
Bailee, as applicable, to Buyer confirming the Bailee’s or the Custodian’s, as
applicable, possession of certain Purchased Loan Files which are the property of
and held by the Bailee or the Custodian, as applicable, on behalf of Buyer (or
any other holder of such trust receipt) in the form required under the Custodial
Agreement or the Bailee Agreement.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of any
security interest is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, “Uniform Commercial Code” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions of this Annex I relating to such perfection or effect of
perfection or non-perfection.

“Underwriting Issues” shall mean, with respect to any Eligible Loan as to which
Seller intends to request a Transaction, all material information that has come
to Seller’s attention that, based on the making of commercially reasonable
inquiries and the exercise of reasonable care and diligence by a reasonable
institutional mortgage or mezzanine loan buyer in determining whether to
originate or acquire the Eligible Loan in question under the circumstances,
would, in the context of the totality of the Transaction in question, be
considered a materially “negative” factor (either separately or in the aggregate
with other information), (including, but not limited to, whether any of the
Eligible Loans were repurchased from any warehouse loan facility or a repurchase
transaction due to the breach of a representation and warranty or a material
defect in loan documentation or closing deliveries (such as any absence of any
material Purchased Loan Document(s)).

3.                 INITIATION; CONFIRMATION; TERMINATION; FEES

The provisions of Paragraph 3 of the Agreement (“Initiation; Confirmation;
Termination”) are hereby deleted and replaced in their respective entireties by
the following provisions of this Section 3:

(a)  Seller may, from time to time, prior to the Facility Termination Date,
request that Buyer enter into a Transaction with respect to one or more New
Loans.  Seller shall initiate each request by submitting a Preliminary Due
Diligence Package for Buyer’s review and approval.  Notwithstanding anything to
the contrary herein, Buyer shall have no obligation to consider for purchase any
proposed Transaction that has an aggregate Repurchase Price (excluding the Price
Differential with respect to the Purchased Loans as of the date of
determination) that when combined with all Purchased Loans which have not been
repurchased by Seller hereunder exceeds the Facility Amount.  Buyer shall have
the right to review all New Loans proposed to be sold to Buyer in any
Transaction and to conduct its own due diligence investigation of such New Loans
as Buyer determines is reasonably necessary.  Seller agrees to

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promptly reimburse Buyer for its Diligence Fees upon request for payment or
reimbursement thereof.  Notwithstanding any provision to the contrary herein or
any other Transaction Document, Buyer shall be entitled to make a determination,
in its sole and absolute discretion, whether a New Loan qualifies as an Eligible
Loan and whether to reject any or all of the New Loans proposed to be sold to
Buyer by Seller.  Buyer shall have no obligation to consider for purchase any
New Loans proposed by Seller after the original Facility Termination Date or
during the Facility Extension Period (if applicable).

(b)  Upon Buyer’s receipt of a complete Preliminary Due Diligence Package with
respect to a proposed Transaction, Buyer shall have the right within two (2)
Business Days, to request in a Supplemental Due Diligence List such additional
Diligence Materials and deliveries that Buyer deems necessary to properly
evaluate the New Loans.  Upon Buyer’s receipt of such additional Diligence
Materials or Buyer’s waiver thereof, Buyer shall within five (5) Business Days
either (i) notify Seller of Buyer’s intent to proceed with the Transaction and
of its determination with respect to the Purchase Price and the Market Value for
the related New Loans (such notice, a “Preliminary Approval”) or (ii) deny, in
Buyer’s sole and absolute discretion, Seller’s request for the applicable
Transaction.  Buyer’s failure to respond to Seller within five (5) Business
Days, as applicable, shall be deemed to be a denial of Seller’s request to enter
into the proposed Transaction, unless Buyer and Seller have agreed otherwise in
writing.

(c)  Upon Seller’s receipt of Buyer’s Preliminary Approval with respect to a
Transaction, Seller shall, if Seller desires to enter into such Transaction with
respect to the related New Loans upon the terms set forth by Buyer in its
Preliminary Approval, deliver the documents set forth below in this Section 3(c)
with respect to each New Loan and related Eligible Property or Properties (to
the extent not already delivered in the Preliminary Due Diligence Package or
pursuant to a Supplemental Due Diligence List) as a condition precedent to
Buyer’s Final Approval and issuance of a Confirmation (as defined below), all in
a manner reasonably satisfactory to Buyer and pursuant to documentation
reasonably satisfactory to Buyer:

(i)   Delivery of Purchased Loan Documents.  Seller shall deliver to Buyer: (x)
with respect to any New Loan that is a Pre-Existing Loan, copies of the
Purchased Loan Documents, except for such Purchased Loan Documents that Seller
expressly and specifically disclosed in Seller’s Preliminary Due Diligence
Package were not in Seller’s possession; and (y) with respect to any New Loan
that is an Originated Loan, drafts of the Purchased Loan Documents.

(ii)   Environmental and Engineering.  Buyer shall have received a “Phase 1”
(and, if necessary, “Phase 2”) environmental report, an asbestos survey, if
applicable, and an engineering report, each in form reasonably satisfactory to
Buyer, by an engineer and an environmental consultant, approved by Buyer in its
reasonable discretion.

(iii)   Appraisal.  If obtained by Seller, Buyer shall have received either an
Appraisal (from the closing of the financing of the related Eligible Property or
Properties) or a Draft Appraisal of the related Eligible Property or
Properties.  If Buyer receives only a Draft Appraisal prior to entering into a
Transaction, Seller shall use its best efforts to deliver an Appraisal on or
before thirty (30) days after the Purchase Date.

(iv)   Insurance.  Buyer shall have received certificates or other evidence of
insurance detailing insurance coverage in respect of the related Eligible
Property or Properties of types (including but not limited to casualty, general
liability and terrorism insurance coverage (consistent with market standard
requirements)), in amounts, with insurers and otherwise in compliance with the
terms, provisions and conditions set forth in the Purchased Loan Documents and
otherwise reasonably satisfactory to Buyer.  Such certificates or other evidence
shall indicate that Seller (or as to a New Loan that is a participation
interest, the lead lender on the related

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whole loan in which Seller is a participant) will be named as an additional
insured as its interest may appear and shall contain a loss payee endorsement in
favor of such additional insured with respect to the policies required to be
maintained under the Purchased Loan Documents.

(v)    Survey.  Buyer shall have received all surveys of the related Eligible
Property or Properties that are in Seller’s possession.

(vi)   Lien Search Reports.  Buyer or Buyer’s counsel shall have received, as
reasonably requested by Buyer, satisfactory reports of UCC, tax lien, judgment
and litigation searches and any existing Title Policies relating to the New
Loan, Eligible Property or Properties, Seller and related underlying obligor,
such searches to be conducted in each location Buyer shall reasonably designate;
provided that such materials were a part of the closing file for the financing
of such Eligible Property or Properties.

(vii)   Opinions of Counsel.  Buyer shall have received copies of all legal
opinions with respect to the New Loan which shall be in form and substance
reasonably satisfactory to Buyer.

(viii)   Title Policy.

(a)   With respect to any New Loan that is a Mortgage Loan, Seller shall have
delivered to Buyer (1) an unconditional commitment to issue a Title Policy or
Policies in favor of Seller and Seller’s successors and/or assigns with respect
to Seller’s interest in the related real property with an amount of insurance
that shall be not less than the related Repurchase Price or such other amount as
Buyer shall require in its reasonable discretion or (2) an endorsement or
confirmatory letter from the existing title company to an existing Title Policy
(in an amount not less than the related Repurchase Price or such other amount as
Buyer shall require in its reasonable discretion) in favor of Seller and
Seller’s successors and/or assigns that adds such parties as an additional
insured.

(b)   With respect to any New Loan that is a First Mortgage B-Note, Seller shall
have delivered to Buyer a copy of an unconditional commitment to issue a Title
Policy or endorse an existing Title Policy in favor of the lead lender to whom
the related obligor issued the related Mortgage Note, in an amount not less than
the amount of such Mortgage Note and, if the First Mortgage B-Note is evidenced
by a separate promissory note rather than a participation certificate, in an
amount not less than the amount of all Mortgage Notes secured by the Mortgage
that secures the related promissory notes.

(c)   With respect to a Mezzanine Loan, (i) Seller shall have delivered to Buyer
such evidence as Buyer on a case-by-case basis, in its sole discretion, shall
require of the ownership of the real property underlying the New Loan including,
without limitation, a copy of a Title Policy, issued by a title insurer and with
such endorsements (including, without limitation, a “Mezzanine Lender’s
Endorsement”, if obtained by Seller), in each case acceptable to Buyer in its
sole discretion, showing that title is vested in the related obligor or in an
entity in whom such obligor holds an equity interest and (ii) if obtained by
Seller, Seller shall have delivered to Buyer an Eagle 9 UCC Title Policy which
policy shall (x) provide an amount of insurance that shall be not less than the
related Repurchase Price or such other amount as Buyer shall require in its sole
discretion, (y) shall insure Seller’s security interest in the equity interests
pledged and (z) be assignable by its terms with a transfer of the Mezzanine
Loan, as applicable.

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(ix)   Additional Real Estate Matters.  To the extent obtained by Seller, Seller
shall have delivered to Buyer such other real estate related certificates and
documentation as may have been requested by Buyer, such as: (y) certificates of
occupancy issued by the appropriate Governmental Authority and either letters
certifying that the related Eligible Property or Properties is in compliance
with all applicable zoning laws issued by the appropriate Governmental Authority
or evidence that the related Title Policy includes a zoning endorsement and (z)
abstracts of all leases in effect at the Mortgaged Property delivered in
connection with the New Loan.

(x)   First Mortgage B Notes.  In the case of a First Mortgage B Note, in
addition to the delivery of the items in clauses (vi), (vii) and (viii), Buyer
shall have received all documentation specified in clauses (i) through (v) and
(ix) as if the underlying Mortgage Loan were the direct collateral to the extent
Seller possesses such documentation or has access to such documentation because
it was provided to the related lead lender and made available to Seller and, to
the extent applicable, all documents evidencing a participation interest,
including, but not limited to, an original participation certificate, if
applicable, and the related participation agreement and/or the related
intercreditor agreement.

(xi)   Other Documents.  Buyer shall have received such other documents as Buyer
or its counsel shall reasonably deem necessary.

Within five (5) Business Days of Seller’s delivery of the documents and
materials contemplated in clauses (i) through (xi) above, Buyer shall either (A)
if the Purchased Loan Documents with respect to the New Loan are not reasonably
satisfactory in form and substance to Buyer, notify Seller that Buyer has not
approved the New Loan or (B) notify Seller that Buyer agrees to purchase the New
Loan, subject to satisfaction (or waiver by Buyer) of the Transaction Conditions
Precedent (a “Final Approval”) set forth in Section 3(e), below.  Buyer’s
failure to respond to Seller within five (5) Business Days shall be deemed to be
a denial of Seller’s request that Buyer purchase the New Loan, unless Buyer and
Seller have agreed otherwise in writing.

(d)   Buyer shall promptly deliver to Seller a written confirmation of any Final
Approval in the form of Exhibit I attached hereto of each proposed Transaction
(a “Confirmation”); provided, that unless otherwise agreed by Seller, Buyer
shall deliver a separate Confirmation with respect to each New Loan which will
be the subject of a Transaction.  Each Confirmation shall be deemed incorporated
herein by reference with the same effect as if set forth herein at length.  With
respect to any Transaction, the Pricing Rate shall be determined initially on
the Pricing Rate Determination Date applicable to the first Pricing Rate Period
for such Transaction, and shall be reset on each Reset Date for the next
succeeding Pricing Rate Period for such Transaction.  Buyer or its agent shall
determine in accordance with the terms of the Agreement the Pricing Rate on each
Pricing Rate Determination Date for the related Pricing Rate Period and notify
Seller of such rate for such period on the Reset Date.

(e)   Provided each of the Transaction Conditions Precedent set forth in this
Section 3(e) shall have been satisfied (or waived by Buyer), and subject to
Seller’s rights under Section 3(f), Buyer shall transfer the Purchase Price to
Seller with respect to each New Loan for which it has issued a Confirmation on
the Purchase Date specified in such Confirmation (provided Seller has not
objected to such Confirmation within the time frame permitted under Section
3(f)), and the related Purchased Loan shall be concurrently transferred by
Seller to Buyer or its nominee.  For purposes of this Section 3(e), the
“Transaction Conditions Precedent” shall be satisfied with respect to any
proposed Transaction if:

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(1)   No (A) monetary or material non-monetary Default or (B) Event of Default
under the Agreement shall have occurred and be continuing as of the Purchase
Date for such proposed Transaction;

(2)   Guarantor shall have delivered a true and accurate Financial Covenant
Compliance Certificate in a timely manner with respect to the most recently
ended fiscal quarter;

(3)   Seller shall have delivered to the Buyer an Officer’s Certificate of the
Seller certifying that (A) the representations and warranties made by Seller in
any of the Transaction Documents are true and correct in all material respects
as of the Purchase Date for such Transaction and unless waived by Buyer (except
such representations which by their terms speak as of a specified date).  If
requested by Buyer, Seller shall also deliver an Officer’s Certificate covering
such matters as Buyer may request with respect to matters relating to the
Agreement or the other Transaction Documents;

(4)   Buyer shall have (A) determined, in accordance with the applicable
provisions of Section 3(a) of this Annex I that the New Loan proposed to be sold
to Buyer by Seller in such Transaction is an Eligible Loan and (B) obtained
internal credit approval for the inclusion of such New Loan as a Purchased Loan
in a Transaction;

(5)   The applicable Purchased Loan File described in Section 7(b) shall have
been delivered to Custodian or Bailee and Buyer shall have received a Trust
Receipt from Custodian or Bailee with respect to such Purchased Loan File;

(6)   Seller shall have delivered to each Mortgagor or obligor or related
servicer or lead lender under any Purchased Loan a direction letter in
accordance with Section 5(a) of this Annex I unless such Mortgagor or obligor or
related servicer or lead lender is already remitting payments to the Servicer
whereupon Seller shall direct the Servicer to remit all such amounts into the
Blocked Account in accordance with Section 5(a) of this Annex I and to service
such payments in accordance with the Servicing Agreement and the provisions of
this Annex I;

(7)   Seller shall have paid to Buyer (i) any fees then due and payable under
the Fee Letter and (ii) any unpaid Diligence Fees and Transaction Costs in
respect of such Purchased Loan (which amounts, at Seller’s option, may be held
back from funds remitted to Seller by Buyer on the Purchase Date);

(8)   No Purchased Loan shall be a Delinquent Loan or a Defaulted Loan;

(9)   Buyer shall have received fully executed originals of all Transfer
Documents in form and substance reasonably satisfactory to Buyer, covering the
enforceability, authority, execution, delivery and perfection of the assignment
of the Purchased Loan and all Transfer Documents, and such other matters as
Buyer may reasonably require;

(10)   Buyer shall have determined that after giving effect to the proposed
Transaction, (i) the Repurchase Price (exclusive of accrued and unpaid Price
Differential) of no single Purchased Loan exceeds 25% of the Aggregate
Repurchase Price and (ii) the aggregate Repurchase Price (exclusive of accrued
and unpaid Pricing Differential) of Purchased Loans secured directly or
indirectly by Eligible Properties which are hotels, lodging or hospitality
properties does not exceed 35% of the Aggregate Repurchase Price;

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(11)   No event shall have occurred or circumstance shall exist which has a
Material Adverse Effect;

(12)   There shall not have occurred (i) a material adverse change in the
financial condition of the Buyer which affects (or can reasonably be expected to
affect) materially and adversely the ability of the Buyer to fund its
obligations under this Agreement; (ii) a material change in financial markets,
an outbreak or escalation of hostilities or a material change in national or
international political, financial or economic conditions; (iii) a general
suspension of trading on major stock exchanges or suspension of trading in
Guarantor’s stock; or (iv) a disruption in or moratorium on commercial banking
activities or securities settlement services.

(f)   (i) Each Confirmation, together with the Agreement, shall be conclusive
evidence of the terms of the Transaction covered thereby unless objected to in
writing by Seller no more than two (2) Business Days after the date such
Confirmation is received by Seller.  An objection sent by Seller with respect to
any Confirmation must state specifically that the writing is an objection, must
specify the provision(s) of such Confirmation being objected to by Seller, must
set forth such provision(s) in the manner that Seller believes such provisions
should be stated, and must be received by Buyer no more than two (2) Business
Days after such Confirmation is received by Seller.  Buyer, in its sole
discretion, may issue another Confirmation addressing Seller’s objections or may
elect not to proceed with the proposed Transaction.

(ii)   With respect to any Transaction involving an Eligible Loan that is a
Future Advance Loan, the Seller shall indicate in the related Preliminary Due
Diligence Package that such Eligible Loan is a Future Advance Loan and shall
provide Buyer with the information required to complete the Confirmation
regarding such Future Advance Loan, as well as, as the then current total of the
remaining unfunded principal amount of all Purchased Loans that constitute
Future Advance Loans.  On the purchase date of a Future Advance Loan, (i) the
amounts designated as the “Remaining Future Advance Amount” on the related
Confirmation shall be allocated to reduce the available amount of the Future
Advance Facility Amount and (ii) the amounts designated as the “Initial Advance
Amount” and the “Funded Future Advance Amount” shall be allocated to reduce the
available amount of the Facility Amount.  Amounts allocated to the Future
Advance Facility Amount and subsequently allocated to the Facility Amount in
accordance with clause (ii) shall thereafter, be available to the extent set
forth herein, for subsequent Future Advance Loans.  In no event shall the
aggregate unfunded portion of all Future Advance Loans that are Purchased Loans
exceed the Future Advance Facility Amount.

(g)   Seller shall be entitled to terminate a Transaction on demand, and
repurchase the related Purchased Loan on any Business Day prior to the
Repurchase Date (an “Early Repurchase Date”); provided, however, that:

(i)   No Event of Default shall be continuing or would occur or result from such
early repurchase,

(ii)   Seller notifies Buyer in writing of its intent to terminate such
Transaction and repurchase the related Purchased Loan no later than five (5)
Business Days prior to the Early Repurchase Date,  and

(iii)   Seller shall pay to Buyer on the Early Repurchase Date, an amount equal
to the sum of the Repurchase Price for such Transaction, all Costs and any other
amounts payable by Seller and outstanding under the Agreement (including,
without limitation, Section 3(m) of this

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Annex I) with respect to such Transaction against transfer to Seller or its
agent of the related Purchased Loan.

(h)   On the Repurchase Date (or the Early Repurchase Date, as applicable),
termination of the applicable Transactions will be effected by transfer to
Seller or, if requested by Seller, its designee of the related Purchased Loans,
and any Income in respect thereof received by Buyer (and not previously credited
or transferred to, or applied to the obligations of, Seller pursuant to Section
4 or Section 5) against the simultaneous transfer of the Repurchase Price, all
Costs and any other amounts payable and outstanding under the Agreement
(including without limitation, Sections 3(m), 3(n) and 3(o) of this Annex I, if
any) to an account of Buyer.

(i)   So long as no Default or Event of Default has occurred and is then
continuing, the Repurchase Price with respect to one or more Purchased Loans may
be paid in part at any time upon two (2) Business Days prior written notice;
provided, however, that any such payment shall be accompanied by an amount
representing accrued Price Differential with respect to such Purchased Loan(s)
on the amount of such payment and all other amounts then due under the
Transaction Documents.  Each partial payment of the Repurchase Price that is
voluntary (as opposed to mandatory under the terms of the Agreement) shall be in
an amount of not less than One Hundred Thousand Dollars ($100,000).

(j)   In lieu of repaying the Repurchase Price, in whole or in part, with
respect to the Transactions when and as otherwise required or permitted by the
Agreement, Seller may elect to deposit any such amount (the “Early Repurchase
Deposit”) with Buyer (the date of such deposit, the “Early Repurchase Deposit
Funding Date”) until such date as the application of the Early Repurchase
Deposit towards the Repurchase Price would not cause Buyer to incur the costs
described in Section 3(m) hereof (the “Early Repurchase Deposit Application
Date”).  The Early Repurchase Deposit shall be held in an interest-bearing
account controlled by Buyer and, at Buyer’s option, shall be accompanied by a
payment (as estimated by Buyer) equal to the difference between the interest
earned on the Early Repurchase Deposit and the Price Differential that will
accrue on a portion of the relevant Transaction equal to the Early Repurchase
Deposit during the period from the Early Repurchase Deposit Funding Date to the
Early Repurchase Deposit Application Date.

(k)   If prior to the first day of any Pricing Rate Period with respect to any
Transaction, Buyer shall have reasonably determined (which determination shall
be conclusive and binding upon Seller absent manifest error) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate for such Pricing Rate Period.  If such
notice is given, the Pricing Rate with respect to such Transaction for such
Pricing Rate Period, and for any subsequent Pricing Rate Periods until such
notice has been withdrawn by Buyer, shall be a per annum rate equal to the sum
of (i) the Federal Funds Rate, (ii) 0.25% and (iii) the Applicable Spread (the
“Alternative Rate”).

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

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(m)   Upon demand by Buyer, Seller shall indemnify Buyer and hold Buyer harmless
from any net loss or expense (not to include any lost profit or opportunity)
(including, without limitation, reasonable attorneys’ fees and disbursements)
which Buyer actually sustains or incurs as a consequence of (i) default by
Seller in terminating any Transaction after Seller has given a notice in
accordance with Section 3(g) of a termination of a Transaction, (ii) any payment
of all or any portion of the Repurchase Price, as the case may be, on any day
other than a Remittance Date (including, without limitation, any such loss or
expense arising from the reemployment of funds obtained by Buyer to maintain
Transactions hereunder or from fees payable to terminate the deposits from which
such funds were obtained, provided Seller shall not be obligated to reimburse
Buyer for the incremental cost of reemploying funds or terminating deposits
which arise solely as a result of Buyer depositing funds or employing funds at a
rate calculated other than by reference to LIBOR (as defined herein)) or (iii)
default by Seller in selling Eligible Loans after Seller has notified Buyer of a
proposed Transaction and Buyer has agreed to purchase such Eligible Loans in
accordance with the provisions of the Agreement.  A certificate as to such
costs, losses, damages and expenses, setting forth the calculations therefor
shall be submitted promptly by Buyer to Seller and shall be conclusive and
binding on Seller in the absence of manifest error.

(n)   If (A) the Transactions are characterized by a U.S. Federal, state or
local taxing authority in a manner other than as described in Section 23 of this
Annex I, or (B) after the date of the Agreement, the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof by any
Governmental Authority or compliance by Buyer with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority having jurisdiction over Buyer made subsequent to the
date hereof:

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

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

(iii)   shall impose on Buyer any other condition due to the Agreement or the
Transactions;

and the result of any of the foregoing is to increase the cost to Buyer of
entering into, continuing or maintaining Transactions or to reduce any amount
receivable under the Transaction Documents in respect thereof; then, in any such
case, Seller shall pay Buyer, within ten (10) Business Days after written demand
therefor is received by Seller, any additional amounts necessary to compensate
Buyer for such increased cost payable or reduced amount receivable.  If Buyer
becomes aware that it is entitled to claim any additional amounts pursuant to
this Section 3(o), it shall notify Seller in writing of the event by reason of
which it has become so entitled within a reasonable period after Buyer becomes
aware thereof.  A certificate as to the calculation of any additional amounts
payable pursuant to this subsection shall be submitted by Buyer to Seller and
shall be conclusive and binding upon Seller in the absence of manifest error. 
This covenant shall survive the termination of the Agreement and the repurchase
by Seller of any or all of the Purchased Loans.

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

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compliance by Buyer or any corporation controlling Buyer with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any Governmental Authority made subsequent to the date hereof does have the
effect of reducing the rate of return on Buyer’s or such corporation’s capital
as a consequence of its obligations hereunder to a level below that which Buyer
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration Buyer’s or such corporation’s policies
with respect to capital adequacy) by an amount deemed by Buyer to be material,
then from time to time, within five (5) Business Days after submission by Buyer
to Seller of a written request therefor, Seller shall pay to Buyer such
additional amount or amounts as will compensate Buyer for such reduction.  A
certificate as to the calculation of any additional amounts payable pursuant to
this subsection shall be submitted by Buyer to Seller and shall be conclusive
and binding upon Seller in the absence of manifest error.  This covenant shall
survive the termination of the Agreement and the repurchase by Seller of any or
all of the Purchased Loans.

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

(q)   The facility under the Agreement shall terminate on September 13, 2009,
unless extended as provided herein. Provided that (i) no Event of Default has
occurred and is continuing and (ii) Seller shall have paid to Buyer the
applicable fees in accordance with the Fee Letter, Seller may elect by written
notice not later than 45 days prior to such Facility Termination Date to extend
the Facility Termination Date for a period ending on the Remittance Date that is
six months after the initial Facility Termination Date (such period, the
“Facility Extension Period”).  During the Facility Extension Period, the
Applicable Spread with respect to each Transaction shall be increased as set
forth in Schedule 1.  On each Remittance Date during the Facility Extension
Period, Seller shall be obligated to pay the Extended Repurchase Monthly Amount,
in addition to payments in respect of the accrued Price Differential and any
other amounts due and payable under this Agreement, which shall be applied to
reduce the Repurchase Price of each Purchased Loan pro rata.

(r)   From and after the Facility Termination Date (including during the
Facility Extension Period, if applicable), Buyer shall have no further
obligation to purchase any New Loans.  On the Facility Termination Date, Seller
shall be obligated to repurchase all of the Purchased Loans and transfer payment
of the aggregate Repurchase Price for each such Purchased Loan, together with
the accrued and unpaid Price Differential and all Costs and other amounts due
and payable to Buyer hereunder.  Following the Facility Termination Date, Buyer
shall not be obligated to transfer any Purchased Loans to Seller until payment
in full to Buyer of all amounts due hereunder; provided, however, upon Seller’s
request, Buyer shall transfer to Seller the Purchased Loans with respect to
which Buyer shall have received the full Repurchase Price and such other amounts
payable to Buyer in respect of such Purchased Loans in accordance with the
requirements of this Annex I, provided an Event of Default is not then
continuing and the transfer of such Purchased Loans would not result in a Margin
Deficit.

(s)    Upon written request by the Seller, all or a portion of the Future
Advance Facility Amount may be converted and added

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to the Facility Amount, such that the Future Advance Facility Amount after such
conversion shall be reduced to zero or to such lesser unconverted amount.

4.                                      MANDATORY PAYMENT OR DELIVERY OF
ADDITIONAL ASSETS

Paragraphs 4 (a) through (f) of the Agreement (“Margin Maintenance”) shall be
deleted in their entirety and replaced with the following provisions of this
Section 4:

(a)           Buyer may determine and re-determine the Asset Base on any
Business Day and on as many Business Days as it may elect.  If at any such time
the aggregate Repurchase Price of the Portfolio Loans is greater than the
aggregate Asset Base as determined by Buyer in its sole discretion and notified
to Seller on any Business Day (a “Margin Deficit”), then Seller shall, no later
than one (1) Business Day after receipt of such notice, either deliver to Buyer
(A) cash (which shall be applied to reduce the Repurchase Price of each
Purchased Loan to be determined by Seller) or (B) additional assets acceptable
to Buyer in its sole and absolute discretion in such amounts that after giving
effect to such delivery of cash or other assets, the aggregate Repurchase Price
of the Portfolio Loans does not exceed the Asset Base as re-determined by Buyer
after giving effect to the delivery of cash (or other assets) by Seller to Buyer
pursuant to this Section 4.

(b)           If at any time the aggregate Repurchase Price of the Portfolio
Loans is less than the aggregate Asset Base as determined by Buyer in its sole
discretion and notified to Seller on any Business Day Seller requests such
notification (a “Margin Excess”), then Seller may, upon providing written notice
to Buyer by 3 p.m. on the Business Day prior to the date funds are requested,
request that Buyer advance additional funds (not to exceed such Margin Excess)
(a “Margin Excess Advance”) to Seller in respect of the Purchased Loans.  On the
date set forth in such request, Buyer shall transfer cash to Seller in the
amount of such Margin Excess Advance.  Each Margin Excess Advance by Buyer to
Seller shall increase the Repurchase Price of one or more Purchased Loans (such
aggregate increase not to exceed such Margin Excess Advance) as Buyer shall
determine in its sole discretion.

5.                                      INCOME PAYMENTS AND PRINCIPAL PAYMENTS

Paragraph 5 of the Agreement (“Income Payments”) is hereby deleted and replaced
in its entirety by the following provisions of this Section 5:

(a)           On or before the date hereof, Seller and Buyer shall establish and
maintain with the Depository Bank a deposit account owned by, in the name of and
under the sole control of Buyer with respect to which the Blocked Account
Agreement shall have been executed (such account, together with any replacement
or successor thereof, the “Blocked Account”).  Seller shall cause all Income
with respect to the Purchased Loans or other assets (if cash) delivered under
Section 4 to be deposited in the Blocked Account no later than the next Business
Day following its collection and receipt thereof.  Simultaneously with the
transfer of any Purchased Loan under Section 3, Seller shall deliver to each
Mortgagor or obligor (or the related collection account bank, as applicable), or
the related lead lender or servicer under a Purchased Loan an irrevocable
direction letter in form and substance satisfactory to Buyer instructing such
Person to remit to the Blocked Account all amounts payable to Seller under the
related Purchased Loan (unless such Mortgagor or obligor or related servicer or
lender is already remitting payments to the Servicer, whereupon Seller shall
direct Servicer to remit all such amounts into the Blocked Account and service
such payments in accordance with the Servicing Agreement and the provisions
hereof) and shall provide to Buyer written proof of such delivery.  If a
Mortgagor or obligor (or the related collection account bank) or the related
lead lender or servicer under a Purchased Loan forwards any Income with respect
to such Purchased Loan to Seller rather than directly to the Blocked Account,
Seller shall (i) deliver an additional irrevocable direction letter to the
applicable Person and cause such Person to

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forward such amounts directly to the Blocked Account and (ii) hold such amounts
in trust for Buyer and immediately deposit in the Blocked Account any such
amounts.  All Income in respect of the Portfolio Loans, which may include
payments in respect of associated Hedging Transactions, shall be deposited
directly into, or, if applicable, remitted directly from the applicable
underlying collection account to, the Blocked Account.

(b)           So long as no Event of Default shall have occurred and be
continuing, all Income on deposit in the Blocked Account in respect of the
Portfolio Loans and the associated Hedging Transactions during each Collection
Period shall be applied by the Buyer on the related Remittance Date as follows:

(i)            first, to Buyer an amount equal to the Price Differential which
has accrued and is outstanding in respect of the Transactions as of such
Business Day;

(ii)           second, to Buyer an amount equal to all Costs and other amounts
payable by Seller and outstanding hereunder and under the other Transaction
Documents (other than the Repurchase Price);

(iii)          third, if a Principal Payment in respect of any Purchased Loan
has been made during such Collection Period, to Buyer in respect of the
Repurchase Price an amount equal to the greater of (i) the product of the amount
of such Principal Payment multiplied by the Purchase Percentage and (ii) such
greater amount, such that after giving effect to such payment of the applicable
Repurchase Price, the aggregate Repurchase Price of the Portfolio Loans is less
than or equal to the Asset Base, as determined by Buyer after giving effect to
such payment;

(iv)          fourth, during the Facility Extension Period, to Buyer the
Extended Repurchase Monthly Amount;

(v)           fifth, during the Facility Extension Period, to Buyer in respect
of the Aggregate Repurchase Price until the Aggregate Repurchase Price for all
of the Purchased Loans has been reduced to zero; and

(vi)          sixth, to remit to Seller the remainder, if any.

If on any Remittance Date, the amounts deposited in the Blocked Account shall be
insufficient to make the payments required under clauses (i) through (iv) of
this Section 5(b), the same shall constitute an Event of Default hereunder.

(c)           If an Event of Default shall have occurred and be continuing, all
Income on deposit in the Blocked Account in respect of the Purchased Loans and
the associated Hedging Transactions shall be applied on the Business Day next
following the Business Day on which such funds are deposited in the Blocked
Account as follows:

(i)            first, to Buyer, an amount equal to the Price Differential which
has accrued and is outstanding in respect of the Transactions as of such
Business Day;

(ii)           second, to Buyer, all Costs and all other amounts payable by
Seller and outstanding hereunder and under the other Transaction Documents
(other than the Repurchase Price);

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(iii)          third, to Buyer, an amount equal to the aggregate Repurchase
Price of the Purchased Loans, until the Aggregate Repurchase Price for all of
the Purchased Loans has been reduced to zero; and

(iv)          fourth, to Seller, the remainder.

(d)           If at any time during the term of any Transaction any Income is
distributed to Seller or Seller has otherwise received such Income and has made
a payment in respect of such Income to Buyer pursuant to this Section 5, and for
any reason such amount is required to be returned by Buyer to an obligor under
such Purchased Loan (either before or after the Repurchase Date), Buyer may
provide Seller with notice of such required return, and Seller shall pay the
amount of such required return to Buyer by 11:00 a.m., New York time, on the
Business Day following Seller’s receipt of such notice.

(e)           Subject to the other provisions hereof, Seller shall be
responsible for all Costs in respect of any Purchased Loans to the extent it
would be so obligated if the Purchased Loans had not been sold to Buyer.  Buyer
shall provide Seller with notice of any Costs promptly upon receiving such
notice, and Seller shall pay the amount of any Costs to Buyer by 11:00 a.m., New
York time, on the later of (i) five (5) Business Days after Buyer has informed
Seller that such amount is due under the Purchased Loan Documents and (ii) three
(3) Business Days following Seller’s receipt of such notice.

6.                                      CAUTIONARY SECURITY INTEREST

Paragraph 6 of the Agreement (“Security Interest”) is hereby deleted and
replaced in its entirety by the following provisions of this Section 6:

(a)           Buyer and Seller intend that all Transactions hereunder be sales
to Buyer of the Purchased Loans for all purposes (other than for U.S. Federal,
state and local income or franchise tax purposes) and not loans from Buyer to
Seller secured by the Purchased Loans.  However, in the event any Transaction is
deemed to be a loan, Seller shall be deemed to have pledged to Buyer as security
for the performance by Seller of its obligations under such Transaction and
shall be deemed to have granted to Buyer a security interest in (i) the Blocked
Account, (ii) all of the Purchased Loans, (iii) all “general intangibles,”
“accounts” and “chattel paper” as defined in the UCC relating to or constituting
any and all of the foregoing, (iv) all Income from the Purchased Loans and (v)
all replacements, substitutions or distributions on or proceeds, payments and
profits of, and records and files relating to, any and all of the foregoing
(excluding any Margin Excess Advances).

(b)           To the extent Buyer is deemed to have a security interest with
respect to the Purchased Loans as provided in Section 6(a) hereof, and with
respect to the security interests granted in subsection (c) of this Section 6,
Buyer shall have all of the rights and may exercise all of the remedies of a
secured creditor under the UCC and any other applicable law.  In furtherance of
the foregoing, (i) Seller, at its sole cost and expense, shall cause to be filed
as a protective filing with respect to the Purchased Loans and as a UCC filing
with respect to the security interests granted in subsection (c)) of this
Section 6 one or more UCC financing statements in form satisfactory to Buyer (to
be filed in the filing office indicated therein), in such locations as may be
necessary to perfect and maintain perfection and priority of the outright
transfer and the security interest granted hereby (including under Section 22 of
this Annex I) and, in each case, continuation statements and any amendments
thereto (collectively, the “Filings”), and shall forward copies of such Filings
to Buyer upon completion thereof, and (ii) Seller shall from time to time, at
its own expense, deliver and cause to be duly filed all such further filings,
instruments and documents and take all such further actions as may be necessary
or desirable or as may be requested by Buyer with respect to the perfection and
priority of the outright transfer of the Purchased Loans and the security
interest deemed granted hereunder and in the Purchased Loans and the rights and
remedies of the Buyer with respect to

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the Purchased Loans (including under Section 22 of this Annex I) (including the
payments of any fees and taxes required in connection with the execution and
delivery of the Agreement).

(c)           Seller hereby pledges to Buyer, as security for the performance by
Seller of its obligations under all Transactions, all Hedging Transactions
relating to Purchased Loans entered into by Seller and all proceeds thereof. 
Seller shall take all action as is necessary or desirable to obtain consent to
assignment of any such Hedging Transaction to Buyer and shall cause the
counterparty under each such Hedging Transaction to enter into such document or
instrument satisfactory to Buyer, Seller and such counterparty, pursuant to
which such counterparty will covenant and agree to accept notice from Buyer to
redirect payments under such Hedging Transaction as Buyer may direct.  So long
as no Event of Default shall be continuing, Buyer agrees that it will not
redirect payments under any Hedging Transaction pledged to Buyer pursuant to the
terms of this Section 6(c).

(d)           In connection with the repurchase by Seller of any Purchased Loan
in accordance herewith, upon receipt of the Repurchase Price by Buyer, Buyer
will deliver to Seller, at Seller’s expense, such documents and instruments as
may be reasonably necessary to reconvey such Purchased Loan and any income
related thereto to Seller.

7.                                      PAYMENT, TRANSFER AND CUSTODY

Paragraph 7 of the Agreement (“Payment and Transfer”) is hereby deleted and
replaced in its entirety by the following provisions of this Section 7:

(a)           Subject to the terms and conditions of the Agreement, on the
Purchase Date for each Transaction, ownership of the Purchased Loans and all
rights thereunder shall be transferred to Buyer or its designee (including the
Custodian) against the simultaneous transfer of the Purchase Price to an account
of Seller specified in the Confirmation relating to such Transaction.  On the
Purchase Date for the first Transaction, Buyer will provide Seller with a power
of attorney, substantially in the form attached as Exhibit IV-2 hereto, in
recordable form, allowing Seller to administer, operate and service such
Purchased Loans.  Provided no Event of Default beyond any applicable cure period
shall have occurred and be continuing, the power of attorney shall be binding
upon Buyer and Buyer’s successors and assigns.

(b)           With respect to each Table Funded Purchased Loan, Seller shall
cause the Bailee to deliver to the Custodian (with a copy to Buyer) by no later
than 1:00 p.m. (New York time), on the Purchase Date, by facsimile the related
promissory note (or the participation certificate, as applicable), the Insured
Closing Letter and Escrow Instructions, if any, the Bailee Agreement and a Trust
Receipt issued by the Bailee thereunder on or before the related Purchase Date. 
In connection with the sale of each Purchased Loan, not later than 1:00 p.m.,
two (2) Business Days prior to the related Purchase Date (or on the related
Purchase Date, as may be agreed by Buyer and Seller on a case by case basis) (or
with respect to a Table Funded Purchased Loan not later than 1:00 p.m. (New York
time) on the third Business Day following the applicable Purchase Date), Seller
shall deliver or cause Bailee to deliver (with a copy to Buyer) and release to
the Custodian (together with the Custodial Delivery Certificate in the form
attached hereto as Exhibit III), and shall cause the Custodian to deliver a
Trust Receipt on the Purchase Date (or in the case of a Table Funded Purchased
Loan, not later than two (2) Business Days following the receipt by the
Custodian) confirming the receipt of the following original documents
(collectively, the “Purchased Loan File”), pertaining to each of the Purchased
Loans identified in the Custodial Delivery Certificate delivered therewith:

(i)            With respect to each Purchased Loan that is a Mortgage Loan
(including a First Mortgage B Note), the following documents, as applicable:

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

(B)           The original or a copy of the loan agreement and the guarantee, if
any, executed in connection with the Purchased Loan.

(C)           The original Mortgage with evidence of recording thereon, or a
copy thereof together with an officer’s certificate of Seller certifying that
such represents a true and correct copy of the original and that such original
has been submitted for recordation in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located.

(D)          The originals of all assumption, modification, consolidation or
extension agreements with evidence of recording thereon, or copies thereof
together with an officer’s certificate of Seller certifying that such represent
true and correct copies of the originals and that such originals have each been
submitted for recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.

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

(F)           The originals of all intervening assignments of mortgage with
evidence of recording thereon, or copies thereof together with an officer’s
certificate of Seller certifying that such represent true and correct copies of
the originals and that such originals have each been submitted for recordation
in the appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.

(G)           The original Title Policy, or if the original Title Policy has not
been issued, the original irrevocable marked commitment to issue the same.

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

(I)            The original Assignment of Leases, if any, with evidence of
recording thereon, or a copy thereof together with an officer’s certificate of
Seller, certifying that such copy represents a true and correct copy of the
original that has been submitted for

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recordation in the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.

(J)            The originals of all intervening assignments of assignment of
leases and rents, if any, or copies thereof, with evidence of recording thereon,
or copies thereof together with an officer’s certificate of Seller certifying
that such represent true and correct copies of the originals and that such
originals have each been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.

(K)          A copy of the UCC financing statements, certified as true and
correct by Seller, and all necessary UCC continuation statements with evidence
of filing thereon or copies thereof certified by Seller to have been sent for
filing, and UCC assignments to Buyer, which UCC assignments shall be in form and
substance acceptable for filing in the applicable jurisdictions.

(L)           The original environmental indemnity agreement or similar guaranty
or indemnity, whether stand-alone or incorporated into the applicable loan
documents (if any).

(M)         The original omnibus assignment to Buyer or such other documents
necessary and sufficient to transfer to Buyer all of Seller’s right, title and
interest in and to the Purchased Loan (if any).

(N)          A disbursement letter from the Mortgagor to the original mortgagee
or other evidence that the Purchased Loan has been fully disbursed (if
applicable).

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

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

(Q)          The original of any participation agreement, intercreditor
agreement and/or servicing agreement executed in connection with such Purchased
Loan.

(R)           A copy of all servicing agreements and Servicing Records related
to such Purchased Loan, which Seller shall deliver to Servicer (with a copy to
Buyer).

(S)           A copy of the Mortgagor’s opinions of counsel.

(T)           An assignment of any management agreements, permits, contracts and
other material agreements (if any).

(U)          Reports of UCC, tax lien, judgment and litigation searches as
requested by Buyer, conducted by search firms reasonably acceptable to Buyer
with respect to the Purchased Loan, Seller and the related underlying obligor,
such searches to be conducted in each location Buyer shall reasonably designate
and such reports reasonably satisfactory to Buyer.

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(V)           The original or a copy of the intercreditor or loan coordination
agreement (if any) executed in connection with the Purchased Loan to the extent
the subject borrower, or an affiliate thereof, has encumbered its assets with
senior, junior or similar financing, whether mortgage financing or mezzanine
loan financing.

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

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

(Y)           Evidence that the Purchased Loan has been fully disbursed (if
applicable).

If Seller cannot deliver, or cause to be delivered, any of the documents and/or
instruments required above to be delivered as originals, Seller shall deliver a
photocopy thereof and, unless waived by Buyer, an Officer’s Certificate of
Seller certifying that such copy represents a true and correct copy of the
original.  Seller shall then, in the event that Seller has a legitimate and
reasonable opportunity to obtain the original documents in question if the
document in question exists in original form (1) use reasonable efforts to
obtain and deliver the original document within 180 days after the related
Purchase Date (or such longer period after the related Purchase Date as Buyer
may consent to, which consent shall not be unreasonably withheld so long as
Seller is, as certified in writing to Buyer no less often than monthly, in good
faith attempting to obtain the original) and (2) after the expiration of such
reasonable efforts period, deliver to Buyer a certification that states, despite
Seller’s reasonable efforts, Seller was unable to obtain such original document.

(ii)           With respect to each Purchased Loan which is a Mezzanine Loan
secured by a pledge of the equity ownership interests in an entity that owns
Eligible Property, the following, as applicable:

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

(B)           The original or a copy of the loan agreement and the guarantee, if
any, executed in connection with the Purchased Loan.

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(C)           The original or a copy of the intercreditor or loan coordination
agreement executed in connection with the Purchased Loan to the extent the
subject borrower, or an affiliate thereof, has encumbered its assets with
senior, junior or similar financing, whether mortgage financing or mezzanine
loan financing.

(D)          The original security agreement executed in connection with the
Purchased Loan.

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

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

(G)           An omnibus assignment to Buyer or other documents necessary and
sufficient to transfer to Buyer all of Seller’s right, title and interest in and
to the Purchased Loan.

(H)          The original of any participation agreement executed in connection
with such Purchased Loan.

(I)            A copy of all servicing agreements and Servicing Records related
to such Purchased Loan, which Seller shall deliver to Servicer (with a copy to
Buyer).

(J)            A copy of the borrower’s opinions of counsel.

(K)          A copy of the UCC financing statements, certified as true and
correct by Seller, and all necessary UCC continuation statements with evidence
of filing thereon or copies thereof certified by Seller to have been sent for
filing, and UCC assignments to Buyer, which UCC assignments shall be in form and
substance acceptable for filing in the applicable jurisdictions.

(L)           The original certificates representing the pledged equity
interests to the extent such interests are in certificated form.

(M)         Stock or similar powers relating to each pledged equity interest,
executed in blank, if such equity interests are in certificated form.

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

(O)          If the pledged equity interests are not certificated, evidence
(which may be an Officer’s Certificate confirming such circumstances or in the
form of an executed instruction to register such pledge by the mezzanine
borrower and acknowledgment by the entity in which such pledged equity interests
are held) that the pledged equity

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interests have been transferred to, or otherwise made subject to a first
priority security interest in favor of, Seller.

(P)           Copies of all material documents evidencing or securing the
related mortgage loan and any other documents affecting the related mortgaged
property to the extent in possession of Seller.

(Q)          If the mezzanine borrower is an Affiliate of Seller, a pledge
agreement and any UCC financing statements, executed by the owner(s) of all the
equity interests of the mezzanine borrower as debtor in favor of Seller as
secured party (which pledge agreement and UCC financing statements shall be
transferred by Seller to Buyer), covering all equity interests in the mezzanine
borrower, if not previously delivered to Buyer, together with any related
original certificates of equity ownership and blank assignments thereof, all to
give Buyer a security interest in such equity as additional collateral for
Seller’s obligations.

(R)           Evidence that the Purchased Loan has been fully disbursed (if
applicable).

In connection with the transfer of any Purchased Loan, if Seller cannot deliver,
or cause to be delivered, any of the documents and/or instruments referred to
above, required to be delivered as originals, Seller shall deliver a photocopy
thereof and, unless waived by Buyer, an Officer’s Certificate of Seller
certifying that such copy represents a true and correct copy of the original. 
Seller shall then, in the event that Seller has a legitimate and reasonable
opportunity to obtain the original documents in question if the document in
question exists in original form (1) use reasonable efforts to obtain and
deliver the original document within 180 days after the related Purchase Date
(or such longer period after the related Purchase Date as Buyer may consent to,
which consent shall not be unreasonably withheld so long as Seller is, as
certified in writing to Buyer no less often than monthly, in good faith
attempting to obtain the original) and (2) after the expiration of such
reasonable efforts period, deliver to Buyer a certification that states, despite
Seller’s reasonable efforts, Seller was unable to obtain such original document.

(c)           From time to time, Seller shall forward to the Custodian
additional original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Purchased Loan approved in
accordance with the terms of the Agreement, and upon receipt of any such other
documents, the Custodian shall hold such other documents on behalf of Buyer and
as Buyer shall request from time to time.  With respect to any documents which
have been delivered or are being delivered to recording offices for recording
and have not been returned to Seller in time to permit their delivery hereunder
at the time required, in lieu of delivering such original documents, Seller
shall deliver to Buyer a true copy thereof with an officer’s certificate
certifying that such copy is a true, correct and complete copy of the original,
which has been transmitted for recordation.  Seller shall deliver such original
documents to the Custodian promptly when they are received.  With respect to all
of the Purchased Loans delivered by Seller to Buyer or its designee (including
the Custodian), Seller shall execute an omnibus power of attorney substantially
in the form of Exhibit IV-1 attached hereto irrevocably appointing Buyer its
attorney-in-fact with full power to (i) complete and record any Assignment of
Mortgage, (ii) complete the endorsement of any Mortgage Note or Mezzanine Note
and (iii) take such other steps as may be necessary or desirable to enforce
Buyer’s rights against any Purchased Loans and the related Purchased Loan Files
and the Servicing Records.  Buyer shall deposit the Purchased Loan Files
representing the Purchased Loans, or cause the Purchased Loan Files to be
deposited directly, with the Custodian to be held by the Custodian on behalf of
Buyer.  The Purchased Loan Files shall be maintained in accordance with the
Custodial Agreement.  Any Purchased Loan Files not delivered to Buyer or its
designee

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(including the Custodian) are and shall be held in trust by Seller or its
designee for the benefit of Buyer as the owner thereof.  Seller or its designee
shall maintain a copy of the Purchased Loan File and the originals of the
Purchased Loan File not delivered to Buyer or its designee.  The possession of
the Purchased Loan File by Seller or its designee is at the will of Buyer for
the sole purpose of servicing the related Purchased Loan, and such retention and
possession by Seller or its designee is in a custodial capacity only.  The books
and records (including, without limitation, any computer records or tapes) of
Seller or its designee shall be marked appropriately to reflect clearly the
transfer, subject to the terms and conditions of the Agreement, of the related
Purchased Loan to Buyer.  Seller or its designee (including the Custodian) shall
release its custody of the Purchased Loan File only in accordance with written
instructions from Buyer, unless such release is required as incidental to the
servicing of the Purchased Loans or is in connection with a repurchase of any
Purchased Loan by Seller or is pursuant to the order of a court of competent
jurisdiction.

(d)           In addition to any documents or instruments that are required to
be delivered by Seller to Buyer hereunder in connection with the transfer of
Purchased Loans by Seller to Buyer, on the date of the Agreement, Buyer shall
have received all of the following items and documents either in connection with
this Agreement or the Original Agreement, each of which shall be satisfactory to
Buyer in form and substance:

(i)            Transaction Documents.

(A)          The Agreement (including this Annex I), duly executed and delivered
by Seller and Buyer;

(B)           The Guaranty, duly executed and delivered by the Guarantor;

(C)           The Custodial Agreement, duly executed and delivered by Seller,
Buyer and Custodian;

(D)          The Blocked Account Agreement, duly executed and delivered by
Seller, Buyer and Depository Bank;

(E)           The Servicing Agreement, duly executed and delivered by Seller,
Buyer and Servicer; and

(F)           The Fee Letter, duly executed and delivered by Seller, Buyer and
Goldman, Sachs & Co.

(ii)           Organizational Documents. Certified copies of the Seller’s and
Guarantor’s organizational documents and resolutions or other documents
evidencing the authority of Seller and Guarantor with respect to the execution,
delivery and performance of the Transaction Documents to which it is a party and
each other document to be delivered by Seller and Guarantor from time to time in
connection with the Transaction Documents (and Buyer may conclusively rely on
such certifications until it receives notice in writing from Seller to the
contrary);

(iii)          Legal Opinion.  Opinions of counsel to the Seller and Guarantor
in form and substance satisfactory to Buyer as to (i) authority, enforceability
of the Transaction Documents to which it is a party and such other matters as
may be requested by Buyer and (ii) nonconsolidation; and

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(iv)          Other Documents.  Such other documents as Buyer may reasonably
request.

8.                                      CERTAIN RIGHTS OF BUYER WITH RESPECT TO
THE PURCHASED LOANS

Paragraph 8 of the Agreement (“Segregation of Purchased Securities”) is hereby
deleted and replaced in its entirety by the following provisions of this Section
8:

(a)           Subject to the terms and conditions of the Agreement, title to all
Purchased Loans shall pass to Buyer on the applicable Purchase Date, and Buyer
shall have free and unrestricted use of its interest in the Purchased Loans in
accordance with the terms and conditions of the Purchased Loans.  Nothing in the
Agreement or any other Transaction Document shall preclude Buyer from engaging
in repurchase transactions with the Purchased Loans with Persons in conformity
with the terms and conditions of the Purchased Loans or otherwise selling,
transferring, pledging, repledging, hypothecating, or rehypothecating all or a
portion of its interest in the Purchased Loans to Persons in conformity with the
terms and conditions to the Purchased Loans, but no such transaction shall
relieve Buyer of its obligations to transfer the Purchased Loans to Seller
pursuant to Section 3 of this Annex I or of Buyer’s obligation to credit or pay
Income to, or apply Income to the obligations of, Seller pursuant to Section 5
of this Annex I or otherwise affect the rights, obligations and remedies of any
party to the Agreement.

(b)           Subject to the terms and conditions of the Agreement, any
documents delivered to the Custodian pursuant to Section 7(b) and 7(c) of this
Annex I shall only be released in accordance with the terms and conditions of
the Custodial Agreement.

9.                                      RESERVED.

10.                               REPRESENTATIONS

Paragraph 10 of the Agreement (“Representations”) is hereby supplemented by the
following:

(a)           Seller represents and warrants to Buyer that as of the Purchase
Date for the purchase of any Purchased Loan by Buyer from Seller and any
Transaction thereunder and as of the date of the Agreement and at all times
while the Agreement and any Transaction thereunder is in full force and effect:

(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 such licensing or qualification is necessary for the transaction of
Seller’s business, except where lack of such licenses or qualifications would
not be reasonably likely to result in a Material Adverse Effect.  Seller has the
power to own and hold the assets it purports to own and hold, and to carry on
its business as now being conducted and proposed to be conducted, and has the
power to execute, deliver, and perform its obligations under the Agreement and
the other Transaction Documents.

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

(iii)          Non-Contravention; Consents.  Neither the execution and delivery
of the Transaction Documents, nor consummation by Seller of the transactions
contemplated by the

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Transaction Documents (or any of them), nor compliance by Seller with the terms,
conditions and provisions of the Transaction Documents (or any of them) will (x)
conflict with or result in a breach or violation of any of the terms, conditions
or provisions of any judgment or order, writ, injunction, decree or demand of
any court applicable to Seller, or (y) result in the creation or imposition of
any lien or any other encumbrance upon any of the assets of Seller, other than
pursuant to the Transaction Documents.  Seller has all necessary licenses,
permits and other consents from Governmental Authorities necessary to acquire,
own and sell the Portfolio Loans and for the performance of its obligations
under the Transaction Documents except where the failure to have any such
license, permit or consent would not be reasonably likely to result in a
Material Adverse Effect.

(iv)          Litigation; Requirements of Law.  There is no action, suit,
proceeding, investigation, or arbitration pending or, to the best knowledge of
Seller, threatened against Seller, or any of its assets which may result in any
Material Adverse Effect, or which may have an adverse effect on the validity of
the Transaction Documents or any action taken or to be taken in connection with
the obligations of Seller under any of the Transaction Documents.  Seller is in
compliance in all material respects with all Requirements of Law.  Seller is not
in default in any material respect with respect to any judgment, order, writ,
injunction, decree, rule or regulation of any arbitrator or Governmental
Authority.

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

(vi)          Good Title to Purchased Loans.  Immediately prior to the purchase
of any Purchased Loans by Buyer from Seller, such Purchased Loans are free and
clear of any lien, security interest, claim, option, charge, encumbrance or
impediment to transfer (including any “adverse claim” as defined in Section
8-102(a)(1) of the UCC but excluding any liens or encumbrances to be released
simultaneously with the sale to Buyer hereunder), and are not subject to any
rights of setoff, any prior sale, transfer, assignment, or participation by
Seller or any agreement by Seller to assign, convey, transfer or participate, in
whole or in part, and Seller is the sole legal record and beneficial owner of
and owns and has the right to sell and transfer such Purchased Loans to Buyer
and, upon transfer of such Purchased Loans to Buyer, Buyer shall be the owner of
such Purchased Loans (other than for U.S. Federal, state and local income and
franchise tax purposes) free of any adverse claim, subject to Seller’s rights
pursuant to the Agreement.  In the event the related Transaction is
recharacterized as a secured financing of the Purchased Loans and with respect
to the security interests granted in Sections 6(a) and 6(c), the provisions of
the Agreement are effective to create in favor of Buyer a valid security
interest in all rights, title and interest of Seller in, to and under the
Purchased Loans and the collateral specified in Sections 6(a) and 6(c), Buyer
shall have a valid, perfected and enforceable first priority security interest
in the Purchased Loans and such other collateral, subject to no lien or rights
of others other than as granted herein.

(vii)         No Default.  No Default or Event of Default exists under or with
respect to the Transaction Documents.

(viii)        Representations and Warranties Regarding Purchased Loans; Delivery
of Purchased Loan File.  Seller represents and warrants to Buyer that each
Purchased Loan sold hereunder, as of the applicable Purchase Date for the
Transaction in question conforms to the applicable representations and
warranties set forth in Exhibit V attached hereto, except as have

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been disclosed to Buyer in writing prior to Buyer’s issuance of a Confirmation
with respect to the related Purchased Loan.  It is understood and agreed that
the representations and warranties set forth in Exhibit V hereto, if any, shall
survive delivery of the respective Purchased Loan File to Buyer or its designee
(including the Custodian).  With respect to each Purchased Loan, the Mortgage
Note or Mezzanine Note, the Mortgage (if any), the Assignment of Mortgage (if
any) and any other documents required to be delivered under the Agreement and
the Custodial Agreement for such Purchased Loan have been delivered (or with
respect to Table Funded Loans shall be delivered in accordance with Section
7(b)) to Buyer or the Custodian on its behalf or such requirement will have been
expressly waived in writing by Buyer.  Seller or its designee is in possession
of a complete, true and accurate Purchased Loan File with respect to each
Purchased Loan, except for such documents the originals of which have been
delivered to the Custodian.

(ix)           Adequate Capitalization; No Fraudulent Transfer.  Seller has, as
of such Purchase Date, adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations.  Seller is generally able to pay, and as of
the date hereof is paying, its debts as they come due.  Seller has not become,
or is presently, financially insolvent nor will Seller be made insolvent by
virtue of Seller’s execution of or performance under any of the Transaction
Documents within the meaning of the bankruptcy laws or the insolvency laws of
any jurisdiction.  Seller has not entered into any Transaction Document or any
Transaction pursuant thereto in contemplation of insolvency or with intent to
hinder, delay or defraud any creditor.  Seller has not received any written
notice that any payment or other transfer made to or on account of Seller from
or on account of any Mortgagor or any other person obligated under any Purchased
Loan Documents is or may be void or voidable as an actual or constructive
fraudulent transfer or as a preferential transfer.

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

(xi)           No Encumbrances.  There are (i) no outstanding rights, options,
warrants or agreements on the part of Seller for a purchase, sale or issuance,
in connection with the Purchased Loans and (ii) no agreements on the part of
Seller to issue, sell or distribute the Purchased Loan.

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

(xiii)         Taxes.  Seller has filed or caused to be filed all tax returns
which would be delinquent if they had not been filed on or before the date
hereof and has paid all taxes due and payable on or before the date hereof and
all other taxes, fees or other charges imposed on it and any of its assets by
any Governmental Authority; no tax liens have been filed against any of Seller’s
assets and, to Seller’s knowledge, no claims are being asserted with respect to
any such taxes, fees or other charges.

(xiv)        ERISA.  Neither Seller nor any ERISA Affiliate (a) sponsors or
maintains any Plans or (b) makes any contributions to or has any liabilities or
obligations (direct or contingent) with respect to any Plans. Seller does not,
and would not be deemed to, hold Plan Assets and the consummation of the
transactions contemplated by the Agreement will not constitute or result in

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any non-exempt prohibited transaction under Section 406 of ERISA, Section 4975
of the Code or substantially similar provisions under any other federal, state
or local laws, rules or regulations.

(xv)         Judgments/Bankruptcy.  Except as disclosed in writing to Buyer,
there are no judgments against Seller or unsatisfied of record or docketed in
any court located in the United States of America and no Act of Insolvency has
ever occurred with respect to Seller.

(xvi)        Full and Accurate Disclosure.  No information contained in the
Transaction Documents, or any written statement furnished by or on behalf of
Seller pursuant to the terms of the Transaction Documents, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made when such statements and omissions are
considered in the totality of the circumstances in question.

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

(xviii)      Jurisdiction of Organization.  The Seller’s jurisdiction of
organization is the State of Delaware.

(xix)         Location of Books and Records.  The location where Seller keeps
its books and records, including all computer tapes and records relating to the
Purchased Securities is its chief executive office at 420 Lexington Avenue, New
York, New York 10170.

(xx)          Regulation T, U and X.  Neither the entering into nor consummation
of any Transaction hereunder, nor the use of the proceeds thereof, will violate
any provisions of Regulation T, U or X. If requested by Buyer, Seller, any
applicable Affiliate of Seller and the recipient of any portion of the proceeds
of, or any portion of, any Transaction shall furnish to Buyer a statement on
Federal Reserve Form G-3 referred to in Regulation U.

(b)           On the Purchase Date for any Transaction, Seller shall be deemed
to have made all of the representations set forth in Paragraph 10 of the
Agreement and Section 10(a) of this Annex I as of such Purchase Date.

11.                               NEGATIVE COVENANTS OF SELLER

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

(a)           subject to Seller’s right to repurchase, take any action which
would directly or indirectly impair or adversely affect Buyer’s title to the
Purchased Loans;

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

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Purchased Loans (or any of them) with any Person other than Buyer, except where
the Purchased Loans in question are simultaneously repurchased from Buyer;

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

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

(e)           create, incur or permit any lien, security interest, charges, or
encumbrances with respect to any Hedging Transaction for the benefit of any
Person other than Buyer;

(f)            materially modify or terminate any of the organizational
documents of Seller or take any action which would cause it to cease to be a
Single-Purpose Entity;

(g)           consent or assent to a Significant Modification or any extension
or termination of any note, loan agreement, mortgage, pledge agreement or
guaranty relating to the Purchased Loans or other material agreement or
instrument relating to the Purchased Loans without the prior written consent of
Buyer;

(h)           take any action or permit such action to be taken which would
result in a Change in Control;

(i)            after the occurrence and during the continuation of any Event of
Default or monetary Default, make any distribution, payment on account of, or
set apart assets for, a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of any equity or
ownership interest of Seller, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of Seller; or

(j)            sponsor or maintain any Plans or make any contributions to, or
have any liability or obligation (direct or contingent) with respect to any Plan
and shall not permit any ERISA Affiliate to sponsor or maintain any Plans or
make any contributions to, or have any liability or obligation (direct or
contingent) with respect to any Plan;

(k)           engage in any transaction that would cause any obligation or
action taken or to be taken hereunder (or the exercise by Buyer of any of its
rights under the Agreement, the Purchased Loans or any Transaction Document) to
be a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975
of the Code or substantially similar provisions under any other federal, state
or local laws, rules or regulations; or

(l)            make any future advances under any Purchased Loan to any
underlying obligor which are not permitted by the related Purchased Loan
Documents.

12.                               AFFIRMATIVE COVENANTS OF SELLER

(a)           Seller shall promptly notify Buyer of any event and/or condition
which is likely to have a Material Adverse Effect.

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(b)           Seller shall give notice to Buyer of the following (accompanied by
an Officer’s Certificate setting forth details of the occurrence referred to
therein and stating what actions Seller has taken or proposes to take with
respect thereto):

(i)            promptly upon receipt of notice or knowledge of the occurrence of
any Default or Event of Default;

(ii)           with respect to any Purchased Loan sold to Buyer hereunder,
immediately upon receipt of any Principal Payment (in full or in part);

(iii)          with respect to any Purchased Loan sold to Buyer hereunder,
immediately upon receipt of notice or knowledge that the related Mortgaged
Property has been damaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty, or otherwise damaged so as to
affect adversely the value of such Mortgaged Property;

(iv)          promptly upon receipt of notice or knowledge of (i) any Purchased
Loan which becomes a Defaulted Loan, (ii) any lien or security interest (other
than security interests created hereby) on, or claim asserted against, any
Purchased Loan or, to Seller’s knowledge, the underlying collateral therefor or
(iii) any event or change in circumstances that has or could reasonably be
expected to have an adverse affect on the Market Value of a Purchased Loan; and

(v)           promptly, and in any event within 10 days after service of process
on any of the following, give to Buyer notice of all litigation, actions, suits,
arbitrations, investigations (including, without limitation, any of the
foregoing which are pending or threatened) or other legal or arbitrable
proceedings affecting Seller or affecting any of the assets of Seller before any
Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Transaction Documents or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim or
claims in an aggregate amount greater than $5,000,000, or (iii) which,
individually or in the aggregate, if adversely determined could reasonably be
likely to have a Material Adverse Effect.

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

(d)           Seller shall defend the right, title and interest of Buyer in and
to the Purchased Loans against, and take such other action as is necessary to
remove, the liens, security interests, claims, encumbrances, charges and demands
of all Persons (other than security interests granted to Buyer hereunder).

(e)           Seller will permit Buyer or its designated representative to
inspect any of Seller’s records with respect to all or any portion of the
Purchased Loans and the conduct and operation of its business related thereto,
at such reasonable times and with reasonable frequency requested by Buyer or its
designated representative, and to make copies of extracts of any and all
thereof.

(f)            If any amount payable under or in connection with any of the
Purchased Loans shall be or become evidenced by any promissory note, other
instrument or chattel paper (as each of the foregoing is defined under the UCC),
such note, instrument or chattel paper shall be immediately delivered to Buyer
or its designee, duly endorsed in a manner satisfactory to Buyer or if any
collateral or other security shall subsequently be delivered to Seller in
connection with any Purchased Loan, Seller shall immediately

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deliver or forward such item of collateral or other security to Buyer or its
designee, together with such instruments of assignment as Buyer may request.

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

(i)            the Monthly Statement;

(ii)           within 10 days of Seller’s receipt, all operating statements and
occupancy information that Seller or Servicer has received relating to the
Portfolio Loans;

(iii)          the Quarterly Report;

(iv)          the Financial Covenant Compliance Certificate;

(v)           as soon as available and in any event within fifty-five (55) days
after the end of each of the first three quarterly fiscal periods of each fiscal
year of Seller, the unaudited, consolidated balance sheets of Seller, which
shall incorporate its consolidated subsidiaries, as at the end of such period
and the related unaudited, consolidated statements of income and retained
earnings and of cash flows for Seller, which shall incorporate its consolidated
Subsidiaries, for such period and the portion of the fiscal year through the end
of such period, accompanied by an Officer’s Certificate of Seller, which
certificate shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations Seller
and its consolidated Subsidiaries in accordance with GAAP, consistently applied,
as at the end of, and for, such period (subject to normal year-end audit
adjustments);

(vi)          within sixty (60) days following the end of each quarter, or
within one hundred twenty (120) days following the end of each fiscal year, as
the case may be, an Officer’s Certificate of Seller in form and substance
reasonably satisfactory to Buyer that Seller during such fiscal period or year
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in the Agreement and the other Transaction
Documents to be observed, performed or satisfied by it, and that there has been
no Event of Default and no event or circumstance has occurred that is reasonably
likely to result in a Material Adverse Effect;

(vii)         as soon as available and in any event within one hundred (100)
days after the end of each fiscal year of Seller, the consolidated balance
sheets of Seller, which shall incorporate its consolidated Subsidiaries, if any,
as at the end of such fiscal year and the related consolidated statements of
income and retained earnings and of cash flows for Seller, which shall
incorporate its consolidated Subsidiaries, if any, for such year, accompanied by
an opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of Seller
and its consolidated Subsidiaries as at the end of, and for, such fiscal year in
accordance with GAAP;

(viii)        within ten (10) Business Days after Buyer’s reasonable request,
such further information with respect to the operation of any Mortgaged
Property, Purchased Loan, the financial affairs of the Seller and any Plan and
Multiemployer Plan as may be requested by Buyer, including all business plans
prepared by or for Seller; provided, however, that with respect to information
not previously known to, or in the possession of, Seller relating to any

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Multiemployer Plan, Seller shall only be required to provide such information as
may be obtained through good faith efforts;

(ix)           within sixty (60) Business Days after the end of each calendar
year, such information as may be reasonably requested by Buyer, its successors
and assigns, and transferees, in connection with the Portfolio Loans, and that
are necessary for the party requesting such information in preparing its tax
return and paying taxes in any country or jurisdiction where such tax return or
taxes are due; and

(x)            such other reports as Buyer shall reasonably require.

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

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

(j)            Seller shall advise Buyer in writing of the opening of any new
chief executive office or the closing of any such office and of any change in
Seller’s name or the places where the books and records pertaining to the
Purchased Securities are held not less than the later of fifteen (15) Business
Days prior to taking any such action or 90 days before any financial statement
filing will lapse, lose perfection or become materially misleading.

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

(l)            Seller shall maintain its existence as a limited liability
company, organized solely and in good standing under the law of the State of
Delaware and shall not dissolve, liquidate, merge with or into any other Person
or otherwise change its organizational structure or identity or incorporate in
any other jurisdiction.

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

(n)           Seller shall provide Buyer with notice of each modification of any
Purchased Loan Documents consented to by Seller (including such modifications
which do not constitute a Significant Modification).

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(o)           Seller shall provide Buyer with notice of the occurrence of any
“appraisal reduction event”, “control appraisal period” or similar event under
any participation agreement related to any Purchased Loan.

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

(q)           Seller may propose, and Buyer will consider but shall be under no
obligation to approve, strategies for the foreclosure or other realization upon
the security for any Purchased Loan that has become a Defaulted Loan.

(r)            Seller shall not cause any Purchased Loan to be serviced by any
servicer other than a servicer expressly approved in writing by Buyer.

13.                               SINGLE-PURPOSE ENTITY

Seller hereby represents and warrants to Buyer and covenants with Buyer, that as
of the date hereof and so long as any of the Transaction Documents shall remain
in effect:

(a)           It is and intends to remain solvent and it has paid and will pay
its debts and liabilities (including employment and overhead expenses) from its
own assets as the same shall become due.

(b)           It has complied and will comply with the provisions of its
certificate of formation and its limited liability company agreement.

(c)           It has done or caused to be done and will do all things necessary
to observe limited liability company formalities and to preserve its existence.

(d)           It has maintained and will maintain all of its books, records,
financial statements and bank accounts separate from those of its affiliates,
its members and any other Person, and it will file its own tax returns (except
to the extent consolidation is required under GAAP or as a matter of law).

(e)           It has been, is and will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate), shall correct any known misunderstanding regarding
its status as a separate entity, shall conduct business in its own name, shall
not identify itself or any of its Affiliates as a division or part of the other
and shall maintain and utilize separate stationery, invoices and checks.

(f)            It has not owned and will not own any property or any other
assets other than the Purchased Loans and Portfolio Securities, cash and its
interest under any associated Hedging Transactions.

(g)           It has not engaged and will not engage in any business other than
the origination, acquisition, ownership, financing and disposition of the the
Purchased Loans and Portfolio Securities and the associated Hedging Transactions
in accordance with the applicable provisions of the Transaction Documents and
the Securities Repurchase Agreement.

(h)           It has not entered into, and will not enter into, any contract or
agreement with any of its affiliates, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arm’s-length basis with Persons other than such affiliate.

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(i)       It has not incurred and will not incur any indebtedness or obligation,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (A) obligations under the Transaction
Documents and the Securities Repurchase Agreement, (B) obligations under the
documents evidencing the Purchased Loans and Portfolio Securities and
(C) unsecured trade payables, in an aggregate amount not to exceed $100,000 at
any one time outstanding, incurred in the ordinary course of acquiring, owning,
financing and disposing of the the Purchased Loans and Portfolio Securities;
provided, however, that any such trade payables incurred by Seller shall be paid
within 30 days of the date incurred.

(j)            It has not made and will not make any loans or advances to any
other Person, and shall not acquire obligations or securities of any member or
affiliate of any member or any other Person (other than in connection with the
origination or acquisition of Purchased Loans and Portfolio Securities).

(k)           It will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.

(l)            Neither it nor Guarantor will seek its dissolution, liquidation
or winding up, in whole or in part, or suffer any Change of Control,
consolidation or merger.

(m)          It will not commingle its funds and other assets with those of any
of its Affiliates or any other Person.

(n)           It has maintained and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any of its Affiliates or any other Person.

(o)           It has not held and will not hold itself out to be responsible for
the debts or obligations of any other Person.

(p)           It has no liabilities, contingent or otherwise, other than those
normal and incidental to the acquisition, origination, ownership, servicing,
administration, enforcement, financing and disposition of the Purchased Loans
and Portfolio Securities.

(q)           It has conducted and shall conduct its business consistent with
the requirements of being a Single-Purpose Entity.

(r)            It shall not maintain any employees.

14.                               EVENTS OF DEFAULT; REMEDIES

Paragraph 11 (“Events of Default”) of the Agreement is hereby amended by the
deletion in their entirety of the first paragraph thereof (other than the
clauses referenced in Section 14(a) below) and Paragraphs 11(a) through (i)
thereof and by the addition of the provisions (a) through (c) of Section 14 of
this Annex I:

(a)           Together with clauses (iii) through (v) and (vii) of the first
paragraph of Paragraph 11 of the Agreement, the following shall constitute an
event of default hereunder (each an “Event of Default”):

(i)            failure of Seller to repurchase or the failure of Buyer to
transfer the Purchased Loan on the applicable Repurchase Date (except when such
failure to transfer is a result of Buyer’s inability to obtain necessary
consents to, or fulfill restrictions on, such transfer);

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(ii)           failure of Seller to apply any Income received by Seller in
accordance with the provisions hereof;

(iii)          (A) the Transaction Documents shall for any reason not cause, or
shall cease to cause, Buyer to be the owner or, if recharacterized as a secured
financing, a secured party with respect to any of the Purchased Loans or the
collateral specified in Section 6(a) and 6(c) free of any adverse claim, liens
and other rights of others (other than as granted herein) or (B) if a
Transaction is recharacterized as a secured financing, the Transaction Documents
with respect to any Transaction shall for any reason cease to create a valid
first priority security interest in favor of Buyer in any of the Purchased Loans
or the collateral specified in Sections 6(a) and 6(c) or (C) if the Transaction
Documents shall cease to be in full force and effect or if their enforceability
is challenged by Seller;

(iv)          failure of Seller to make the payments required under Section 4 or
Section 5(b) on any Remittance Date which failure is not remedied within one (1)
Business Day;

(v)           failure of Seller to make any other payment owing to Buyer which
has become due, whether by acceleration or otherwise, under the terms of the
Agreement which failure is not remedied within the applicable period (in the
case of a failure pursuant to Section 4) or, if no period is specified, five (5)
Business Days after notice thereof to Seller; provided, however, that Buyer
shall not be required to provide notice in the event of a failure by Seller to
repurchase on the Repurchase Date;

(vi)          breach by Seller in the due performance or observance of any term,
covenant or agreement contained in Section 11(k) of this Annex I;

(vii)         Change of Control shall have occurred with respect to the Seller
or Guarantor;

(viii)        any representation made by Seller or Buyer shall have been
incorrect or untrue in any material respect when made or repeated or deemed to
have been made or repeated; provided that the representations and warranties set
forth in Section 10(a) (vi) or (viii) (in the case of (vi), with respect to the
affected or Purchased Loans only) made by Seller shall not be considered an
Event of Default if incorrect or untrue in any material respect, if Buyer
terminates the related Transaction and Seller repurchases the related Purchased
Loans on an Early Repurchase Date no later than ten (10) Business Days after
receiving written notice of such incorrect or untrue representation;  provided,
however, that if Seller shall have made any such representation with knowledge
that it was materially incorrect or untrue at the time made, such
misrepresentation shall constitute an Event of Default;

(viiii)       a final judgment by any competent court in the United States of
America for the payment of money (in the case of Seller) or for the payment of
money in an amount greater than $5,000,000 (in the case of Guarantor) shall have
been rendered against Seller or Guarantor, as the case may be, and remained
undischarged or unpaid for a period of forty-five (45) days, during which period
execution of such judgment is not effectively stayed;

(x)            Guarantor shall have defaulted or failed to perform under any
note, indenture, loan agreement, guaranty, swap agreement or any other contract,
agreement or transaction to which it is a party, and which default (A) involves
the failure to pay a matured obligation in excess of $10,000,000, or (B)
involving an obligation of at least $10,000,000 is a monetary default or a
material non-monetary default and results in acceleration or permits the
acceleration

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of the obligation by any other party to or beneficiary of such note, indenture,
loan agreement, guaranty, swap agreement or other contract agreement or
transaction; provided, however, that any such default, failure to perform or
breach shall not constitute an Event of Default if Guarantor cures such default,
failure to perform or breach, as the case may be, within the grace period, if
any, provided under the applicable agreement;

(xi)           As of the end of any fiscal quarter (A) Guarantor’s (1) Debt to
Equity Ratio is greater than 5:1, (2) Tangible Net Worth is less than the sum of
(x) $129,750,000 and (y) 75% of the proceeds of any equity issuances occurring
after Guarantor’s initial public offering, (3) Fixed Charge Coverage Ratio is
less than 1.50:1, or (4) Minimum Liquidity is less than $10,000,000, for the
first two years after the date of this Agreement, and less than $15,000,000
thereafter; or (B) Guarantor fails to maintain cumulative positive EBITDA for
the three fiscal quarters most recently ended.

(xii)          if Seller or Buyer shall breach or fail to perform any of the
terms, covenants, obligations or conditions of the Agreement, other than as
specifically otherwise referred to in this definition of “Event of Default”, and
such breach or failure to perform is not remedied within ten (10) Business Days,
or if such breach is not curable by the payment of a sum of money, thirty (30)
days after notice thereof to Seller or Buyer from the applicable party or its
successors or assigns;

(xiii)         an Act of Insolvency shall have occurred with respect to the
Seller or Guarantor;

(xiv)        an “event of default” beyond any applicable notice and cure period
shall have occurred under (A) the Securities Repurchase Agreement, (B) any
repurchase facility or loan facility entered into by Seller and Buyer or any
affiliate thereof or (C) any facility with Buyer or any affiliate thereof in
which Seller is a guarantor; or

(xv)         (A) any of the representations, warranties and covenants of
Guarantor in the Guaranty or any Financial Covenant Compliance Certificate shall
have been incorrect or untrue in any material respect when made or repeated or
deemed to have been made or repeated and such misrepresentation or breach of
warranty or covenant has not been cured within ten (10) Business Days of after
receiving written notice of such incorrect or untrue representation or such
breach of covenant or (B) Guarantor shall have defaulted or failed to perform
under the Guaranty.

(b)           If an Event of Default shall occur and be continuing with respect
to Seller, the following rights and remedies shall be 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, if it has not already occurred, be
deemed immediately to occur (the date on which such option is exercised or
deemed to have been exercised being referred to hereinafter as the “Accelerated
Repurchase Date”) (and any Transaction for which the related Purchase Date has
not yet occurred shall be canceled).

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

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

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all Income deposited in the Blocked Account shall be retained by Buyer and
applied to the aggregate unpaid Repurchase Price and any other amounts owing by
Seller hereunder; and

(B)           to the extent permitted by applicable law, the Repurchase Price
with respect to each Transaction (determined as of the Accelerated Repurchase
Date) shall be increased by the aggregate amount obtained by daily application
of, on a 360 day per year basis for the actual number of days during the period
from and including the Accelerated Repurchase Date to but excluding the date of
payment of the Repurchase Price (as so increased), (x) the Pricing Rate
applicable upon an Event of Default for such Transaction multiplied by (y) the
Repurchase Price for such Transaction (decreased by (I) any amounts actually
remitted to Buyer by Seller from time to time pursuant to Section 5 and applied
to such Repurchase Price to the extent such amounts are not already included in
the computation of the Repurchase Price and (II) any amounts applied to the
Repurchase Price pursuant Section 14(b)(iii) of this Annex I); and

(C)           the Custodian shall, upon the request of Buyer (with simultaneous
copy of such request to Seller), deliver to Buyer all instruments, certificates
and other documents then held by the Custodian relating to the Purchased Loans.

(iii)          Buyer may, after ten (10) days notice to Seller of Buyer’s intent
to take such action (provided that no such notice shall be required in the
circumstances set forth in Section 9-611(d) of the UCC), (A) immediately sell,
at a public or private sale in a commercially reasonable manner and at such
price or prices as Buyer may reasonably deem satisfactory any or all of the
Purchased Loans or (B) in its sole discretion elect, in lieu of selling all or a
portion of such Purchased Loans, to give Seller credit for such Purchased Loans
in an amount equal to the Market Value of such Purchased Loans against the
aggregate unpaid Repurchase Price for such Purchased Loans and any other amounts
owing by Seller under the Transaction Documents.  The proceeds of any
disposition of Purchased Loans effected pursuant to this Section 14(b)(iii)
shall be applied, (v) first, to the costs and expenses incurred by Buyer in
connection with Seller’s default; (w) second, to costs of cover and/or Hedging
Transactions, if any; (x) third, to the Repurchase Price; (y) fourth, to any
other outstanding obligation of Seller to Buyer or its Affiliates pursuant to
the Transaction Documents, and (z) the balance, if any, to Seller.

(iv)          The parties recognize that it may not be possible to purchase or
sell all of the Purchased Loans on a particular Business Day, or in a
transaction with the same purchaser, or in the same manner because the market
for such Purchased Loans may not be liquid.  In view of the nature of the
Purchased Loans, the parties agree that, to the extent permitted by applicable
law, liquidation of a Transaction or the Purchased Loans shall not require a
public purchase or sale and that a good faith private purchase or sale shall be
deemed to have been made in a commercially reasonable manner.  Accordingly,
Buyer may elect, in its sole discretion, the time and manner of liquidating any
Purchased Loans, and nothing contained herein shall (A) obligate Buyer to
liquidate any Purchased Loans on the occurrence and during the continuance of an
Event of Default or to liquidate all of the Purchased Loans in the same manner
or on the same Business Day or (B) constitute a waiver of any right or remedy of
Buyer.

(v)           Seller shall be liable to Buyer for the amount of all reasonable
expenses, including reasonable legal fees and expenses, actually incurred by
Buyer in connection with or as a consequence of an Event of Default with respect
to Seller, (B) all costs incurred in connection with covering transactions or
Hedging Transactions (including short sales) or entering into replacement
transactions (C) all damages, losses, judgment costs and expenses of any kind
which

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may be imposed on, incurred by or asserted against Buyer relating to or arising
out of such Hedging Transactions or covering transactions and (D) any other
loss, damage, cost or expense directly arising or resulting from the occurrence
of an Event of Default with respect to Seller.

(vi)          Buyer may exercise any or all of the remedies available to Buyer
immediately upon the occurrence of an Event of Default and at any time during
the continuance thereof.  All rights and remedies arising under the Transaction
Documents, as amended from time to time, are cumulative and not exclusive of any
other rights or remedies which Buyer may have.

(vii)         Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and Seller hereby expressly waives any defenses
Seller might otherwise have to require Buyer to enforce its rights by judicial
process.  Seller also waives any defense Seller might otherwise have arising
from the use of nonjudicial process, disposition of any or all of the Purchased
Loans, or from any other election of remedies.  Seller recognizes that
nonjudicial remedies are consistent with the usages of the trade, are responsive
to commercial necessity and are the result of a bargain at arm’s length.

(viii)        Without limiting any other rights or remedies of Buyer, Buyer
shall have the right to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by or for
account of Buyer or Buyer’s Affiliates on behalf of Seller to any obligations of
Seller hereunder to Buyer, irrespective of whether Buyer shall have made any
demand under the Agreement or the other Transaction Documents.

(ix)           Buyer shall have, in addition to its rights and remedies under
the Transaction Documents, all of the rights and remedies provided by applicable
federal, state, foreign, and local laws (including, without limitation, if the
Transactions are recharacterized as secured financings, the rights and remedies
of a secured party under the UCC of the State of New York, to the extent that
the UCC is applicable, and the right to offset any mutual debt and claim), in
equity, and under any other agreement between Buyer and Seller, exercisable upon
ten (10) days notice from Buyer to Seller.  Without limiting the generality of
the foregoing, Buyer shall be entitled to set off the proceeds of the
liquidation of the Purchased Loans against all of Seller’s obligations to Buyer,
whether or not such obligations are then due, without prejudice to Buyer’s right
to recover any deficiency.

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

(i)            Upon tender by Seller of payment of the aggregate Repurchase
Price for all Purchased Loans, together with all other amounts due hereunder to
Buyer, Buyer’s right, title and interest in such Purchased Loans shall be deemed
transferred to Seller, and Buyer shall simultaneously deliver such Purchased
Loans to Seller.

(ii)           Seller shall have all the rights and remedies provided herein or
provided by applicable federal, state, foreign, local and any other applicable
laws, in equity, and under any other agreement between Buyer and Seller
(including the right to offset any debt or claim).

(iii)          If Seller exercises the option referred to in Section 14(c)(i)
hereof and Buyer fails to deliver any Purchased Loans to Seller, after three (3)
Business Days’ notice to Buyer, Seller may purchase loans that are in as similar
an amount and interest rate as is reasonably practicable and in the same Loan
Type as such Purchased Loans.

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15.                               SINGLE AGREEMENT

Clause (ii) of Paragraph 12 of the Agreement (“Single Agreement”) is hereby
deleted.

16.                               NOTICES AND OTHER COMMUNICATIONS

Paragraph 13 of the Agreement (“Notices and Other Communications”) is hereby
deleted and replaced in its entirety by the following provisions of this Section
16:

All notices, consents, approvals and requests required or permitted hereunder
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) hand delivery, with proof of attempted delivery, (b)
certified or registered United States mail, postage prepaid, (c) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, or (d) by telecopier (with answerback
acknowledged); provided that such telecopied notice must also be delivered by
one of the means set forth in (a), (b) or (c) above, to the addresses specified
in Annex II hereto or at such other address and person as shall be designated
from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this Section 16.  A
notice shall be deemed to have been given:  (a) in the case of hand delivery, at
the time of delivery, (b) in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day, (c) in the case of
expedited prepaid delivery upon the first attempted delivery on a Business Day;
or (d) in the case telecopier, upon receipt of answerback confirmation, provided
that such telecopied notice was also delivered as required in this Section.  A
party receiving a notice which does not comply with the technical requirements
for notice under this Section may elect to waive any deficiencies and treat the
notice as having been properly given.

17.                               NON-ASSIGNABILITY

The provisions of Paragraph 15 of the Agreement (“Nonassignability;
Termination”) are hereby deleted and replaced in their respective entireties by
the following provisions of this Section 17:

(a)           The rights and obligations of Seller under the Transaction
Documents, the Hedging Transactions and under any Transaction shall not be
assigned by Seller without the prior written consent of Buyer.  Buyer may assign
or participate its rights and obligations under the Transaction Documents and
under any Transaction and its rights and interests in any Hedging Transaction,
in each case, without the prior written consent of Seller.  Seller agrees to use
its good faith efforts to include in the participation agreement or
intercreditor agreement, as applicable, relating to each Purchased Loan a
provision expressly recognizing Goldman Sachs Mortgage Company, together with
its successors and assigns, as a permitted transferee of each such Purchased
Loan.

Notwithstanding anything to the contrary contained herein, with respect to
Seller, (A) Buyer shall remain responsible for reviewing and determining the
eligibility of any New Loan for purposes of any Transaction and (B) Seller shall
continue to deal solely and directly with Buyer in connection with any
Transaction.  As long as an Event of Default on the part of Seller shall have
occurred and be continuing, Buyer may assign or participate its rights and
obligations under the Transaction Documents and/or any Transaction to any
Person.

(b)           The Buyer shall maintain a record of ownership identifying all
assignees.  If any assignee is a non-U.S. Person, such assignee shall timely
provide Seller with such forms as may be required to establish the assignee’s
status for U.S. withholding tax purposes.

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(c)           With respect to any issuance by Buyer of a participation in any
Transaction, (i) Buyer shall act as agent for all participants in any dealings
with Seller in connection with such Transactions and will maintain, on behalf of
Seller, a record of ownership that identifies all participants, and (ii) Seller
shall not be obligated to deal directly with any party other than Buyer in
connection with such Transactions, or to pay or reimburse Buyer for any costs
that would not have been incurred by Buyer had no participation interests in
such Transactions been issued.

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

18.                               GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL

The language in Paragraph 16 of the Agreement (“Governing Law”) which reads
“without giving effect to the conflict of law principals thereof” is hereby
deleted. Paragraph 18 of the Agreement (“Use of Employee Plan Assets”) is hereby
deleted in its entirety.  Paragraph 17 (“No Waivers, Etc.”) is hereby deleted
and replaced in its entirety by the following provisions of this Section 18:

(a)           Each party irrevocably and unconditionally submits to the
non-exclusive jurisdiction of any United States Federal or New York State court
sitting in Manhattan, and any appellate court from any such court, solely for
the purpose of any suit, action or proceeding brought to enforce its obligations
under the Agreement or relating in any way to the Agreement or any Transaction
under the Agreement.

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

(c)           Each party hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court and any right of jurisdiction on
account of its place of residence or domicile and irrevocably consents to the
service of any summons and complaint and any other process by the mailing of
copies of such process to them at their respective address specified herein. 
Each party hereby agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Section 18
shall affect the right of Buyer to serve legal process in any other manner
permitted by law or affect the right of Buyer to bring any action or proceeding
against Seller or its property in the courts of other jurisdictions.

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

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19.                               NO RELIANCE; DISCLAIMERS

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

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

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

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

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

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

(b)           Each determination by Buyer of the Market Value with respect to
each New Loan or Purchased Loan or the communication to Seller of any
information pertaining to Market Value under the Agreement shall be subject to
the following disclaimers:

(i)            Buyer has assumed and relied upon, with Seller’s consent and
without independent verification, the accuracy and completeness of the
information provided by Seller and reviewed by Buyer.  Buyer has not made any
independent inquiry of any aspect of the New Loans or Purchased Loans or the
underlying collateral.  Buyer’s view is based on economic, market and other
conditions as in effect on, and the information made available to Buyer as of,
the date of any such determination or communication of information, and such
view may change at any time without prior notice to Seller.

(ii)           Market Value determinations and other information provided to
Seller constitute a statement of Buyer’s view of the value of one or more loans
or other assets at a particular point in time and neither (x) constitute a bid
for a particular trade, (y) indicate a willingness on the part of Buyer or any
Affiliate thereof to make such a bid, nor (z) reflect a valuation for
substantially similar assets at the same or another point in time, or for the
same assets at another point in time.

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(iii)          Market Value determinations and other information provided to
Seller may vary significantly from valuation determinations and other
information which may be obtained from other sources.

(iv)          Market Value determinations and other information provided to
Seller are communicated to Seller solely for its use and may not be relied upon
by any other person and may not be disclosed or referred to publicly or to any
third party without the prior written consent of Buyer, which consent Buyer may
withhold or delay in its sole and absolute discretion.

(v)           Buyer makes no representations or warranties with respect to any
Market Value determinations or other information provided to Seller. Buyer shall
not be liable for any incidental or consequential damages arising out of any
inaccuracy in such valuation determinations and other information provided to
Seller, including as a result of any act of gross negligence or breach of any
warranty.

(vi)          Market Value indications and other information provided to Seller
in connection with Section 3(b) are only indicative of the initial Market Value
of the New Loan submitted to Buyer for consideration thereunder, and may change
without notice to Seller prior to, or subsequent to, the transfer by Seller of
the New Loan pursuant to Section 3(e).  No indication is provided as to Buyer’s
expectation of the future value of such Purchased Loan or the underlying
collateral.

(vii)         Initial Market Value indications and other information provided to
Seller in connection with Section 3(b) are to be used by Seller for the sole
purpose of determining whether to proceed in accordance with Section 3 and for
no other purpose.

20.                               INDEMNITY AND EXPENSES

(a)           Seller hereby agrees to hold Buyer and its Affiliates and each of
their respective officers, directors, employees and agents (“Indemnified
Parties”) harmless from and indemnify the Indemnified Parties against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, taxes (including stamp, excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Purchased Loans or in
connection with any of the transactions contemplated by the Agreement (or the
recharacterization of any Transaction) and the documents delivered in connection
herewith and therewith, other than net income taxes of Buyer), fees, costs,
expenses (including reasonable attorneys fees and disbursements and any and all
servicing and enforcement costs with respect to the Purchased Loans) or
disbursements (all of the foregoing, collectively “Indemnified Amounts”) which
may at any time (including, without limitation, such time as the Agreement shall
no longer be in effect and the Transactions shall have been repaid in full) be
imposed on or asserted against any Indemnified Party in any way whatsoever
arising out of or in connection with, or relating to, the Agreement or any
Transactions thereunder or any action taken or omitted to be taken by any
Indemnified Party under or in connection with any of the foregoing; provided,
that Seller shall not be liable for Indemnified Amounts resulting from the gross
negligence or willful misconduct of any Indemnified Party.  Without limiting the
generality of the foregoing, Seller agrees to hold Buyer harmless from and
indemnify Buyer against all Indemnified Amounts with respect to all Purchased
Loans relating to or arising out of any violation or alleged violation of any
environmental law, rule or regulation or any consumer credit laws, including
without limitation ERISA, that, in each case, results from anything other than
Buyer’s gross negligence or willful misconduct.  In any suit, proceeding or
action brought by Buyer in connection with any Purchased Loan for any sum owing
thereunder, or to enforce any provisions of any Purchased Loan Documents, Seller
will save, indemnify and hold Buyer harmless from and against all expense, loss
or damage suffered by reason of any defense, set-off, counterclaim, recoupment
or reduction or liability whatsoever

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of the account debtor or obligor thereunder, arising out of a breach by Seller
of any obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such account debtor or obligor
or its successors from Seller.  Seller also agrees to reimburse an Indemnified
Party as and when billed by such Indemnified Party for all such Indemnified
Party’s costs and expenses incurred in connection with the enforcement or the
preservation of such Indemnified Party’s rights under the Agreement and any
other Transaction Document or any transaction contemplated hereby or thereby,
including without limitation the reasonable fees and disbursements of its
counsel.  Seller hereby acknowledges its obligations hereunder are recourse
obligations of Seller.

(b)           Seller agrees to pay as and when billed by Buyer all of the
out-of-pocket costs and expenses incurred by Buyer in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, the Agreement, this Annex I and the other Transaction Documents
or any other documents prepared in connection herewith or therewith.  Seller
agrees to pay as and when billed by Buyer all of the out-of-pocket costs and
expenses incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without limitation
(i) all the reasonable fees, disbursements and expenses of counsel to Buyer, not
to exceed $15,000 for each Transaction and (ii) all the Due Diligence Fees,
testing and review costs and expenses incurred by Buyer in connection with the
evaluation of any New Loan and with respect to any Transaction.

21.                               DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence
reviews with respect to the Purchased Loans, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or determining or re-determining the Asset Base for purposes of
Section 4 of this Annex I, or otherwise, and Seller agrees that Buyer, at its
option, has the right at any time to conduct a partial or complete due diligence
review on any or all of the Purchased Loans, including, without limitation,
ordering new credit reports and Appraisals on the applicable collateral and
otherwise regenerating the information used to originate such Purchased Loans. 
Upon reasonable (but no less than one (1) Business Day) prior notice to Seller,
Buyer or its authorized representatives will be permitted during normal business
hours to examine, inspect, and make copies and extracts of, the Purchased Loan
Files and any and all documents, records, agreements, instruments or information
relating to any Purchased Loan in the possession or under the control of Seller,
any servicer or sub-servicer and/or Custodian.  Seller also shall make available
to Buyer a knowledgeable financial or accounting officer for the purpose of
answering questions respecting the Purchased Loan Files and the Purchased Loans.
Seller agrees to cooperate with Buyer and any third party underwriter designated
by Buyer in connection with such underwriting, including, but not limited to,
providing Buyer and any third party underwriter with access to any and all
documents, records, agreements, instruments or information relating to such
Purchased Loans in the possession, or under the control, of such Seller.

22.                               SERVICING

(a)           Notwithstanding the purchase and sale of the Purchased Loans by
Seller to Buyer hereunder, GKK Manager LLC or such other Servicer shall continue
to service the Purchased Loans at Seller’s sole cost and for the benefit of
Buyer and, if Buyer shall exercise its rights to pledge or hypothecate the
Purchased Loans prior to the Repurchase Date pursuant to Section 8 or 17 of this
Annex I, Buyer’s assigns; provided, however, that the obligations of Seller to
service any of the Purchased Loans shall cease automatically upon the earliest
of (i) an Event of Default, (ii) the date on which the aggregate Repurchase
Price for the Portfolio Loans together with all accrued and unpaid Price
Differential, unpaid Costs and other amounts payable by Seller to Buyer
hereunder have been paid in full or (iii) the transfer of servicing approved by
Seller and Buyer, which Buyer’s consent shall not be unreasonably withheld.

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Seller shall service and shall cause the Servicer to service the Purchased Loans
in accordance with Accepted Servicing Practices.

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

(c)           Upon the occurrence and continuance of an Event of Default, Buyer
may, in its sole discretion, (i) sell its right to the Purchased Loans on a
servicing released basis or (ii) terminate Servicer or any sub-servicer of the
Purchased Loans with or without cause, in each case without payment of any
termination fee or such other costs or expenses to Buyer, it being agreed that
Seller will pay any and all fees, costs and expenses required to terminate the
Servicing Agreement and to effectuate a transfer of servicing to a designee of
the Buyer; provided, however, that Buyer shall cause any successor servicer to
deliver to Seller reports generated for Buyer relating to the Purchased Loans.

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

(e)           Seller shall cause Servicer and any sub-servicers engaged by
Seller to execute a letter agreement with Buyer acknowledging Buyer’s security
interest in the Purchased Loans and the Servicing Agreements and agreeing that
each such sub-servicer shall deposit all Income with respect to the Purchased
Loans in the Blocked Account, all in such manner as shall be reasonably
acceptable to Buyer.

(f)            In the event Seller or its Affiliate is servicing any Purchased
Loan, Seller shall permit Buyer to inspect Seller’s or its Affiliate’s servicing
facilities, as the case may be, for the purpose of satisfying Buyer that Seller
or its Affiliate, as the case may be, has the ability to service such Purchased
Loans as provided in the Agreement.

(g)           Seller shall cause the Servicer to provide a copy of each report
and notice sent to Seller to be sent to Buyer concurrently therewith.

23.                               TREATMENT FOR TAX PURPOSES

It is the intention of the parties that, for U.S. Federal, state and local
income and franchise tax purposes, the Transactions constitute a financing, and
that the Seller is, and, so long as no Event of Default shall have occurred and
be continuing, will continue to be, treated as the owner of the Purchased Loans
for such purposes.  Unless prohibited by applicable law, Seller and Buyer agree
to treat the Transactions as described in the preceding sentence on any and all
filings with any U.S. Federal, state or local taxing authority.

24.                               INTENT

The provisions of Paragraph 19 of the Agreement (“Intent”) are hereby deleted
and replaced in their respective entireties by the following provisions of this
Section 24:

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

25.                               MISCELLANEOUS

The provisions of Paragraph 20 of the Agreement (“Disclosure Relating to Certain
Federal Protections”) are hereby deleted in their entirety and replaced by the
following provisions of this Section 26:

(a)           Time is of the essence under the Transaction Documents and all
Transactions thereunder and all references to a time shall mean New York time in
effect on the date of the action unless otherwise expressly stated in the
Transaction Documents.

(b)           All rights, remedies and powers of Buyer hereunder and in
connection herewith are irrevocable and cumulative, and not alternative or
exclusive, and shall be in addition to all other rights, remedies and powers of
Buyer whether under law, equity or agreement.  In addition to the rights and
remedies granted to it in the Agreement to the extent applicable, Buyer shall
have all rights and remedies of a secured party under the UCC and any other
applicable law.

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

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

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

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

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

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

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(i)            Buyer agrees not to seek before any court or governmental agency
to have any director or officer of the Seller held personally liable for any
action or inactions of the Seller or any obligations of the Seller under the
Agreement or the related Transaction Documents, except if such actions or
inactions are the result of the gross negligence, fraud or willful misconduct of
such director or officer.

(j)            Guarantor is executing this Agreement as an acknowledgment and
confirmation that the Guaranty in favor of Buyer continues to be in full force
and effect and that Guarantor continues to guarantee the Guaranteed Obligations
(as defined in the Guaranty) which the Guarantor and the parties hereto agree
include the obligations and indemnities of each Seller under this Agreement and
the other Transaction Documents, as same may be amended, modified or amended and
restated from time to time.  All references to the Original Agreement in the
Guaranty shall be deemed to refer to this Agreement (as may be further amended,
modified or amended and restated).

(k)           All references to “Seller” in the Custodial Agreement shall be
deemed to refer to both Gramercy Warehouse Funding II LLC (“Gramercy”) and GKK
Trading Warehouse II, LLC (“GKK”).  For the avoidance of doubt, any notice,
election or act taken by Seller under the Custodial Agreement shall be deemed to
constitute the action of both GKK and Gramercy, and Buyer, and as applicable,
the Custodian, may in all such circumstances rely on the action taken by either
one as the action of both GKK and Gramercy.  All references to the Original
Agreement in the Custodial Agreement shall be deemed to refer to this Agreement
(as may be further amended, modified or amended and restated).

(l)            All references to “Company” in the Blocked Account Agreement
shall be deemed to refer to both GKK and Gramercy.  For the avoidance of doubt,
any notice, election or act taken by Company under the Blocked Account Agreement
shall be deemed to constitute the action of both GKK and Gramercy, and Buyer,
and as applicable, the Bank (as defined in the Blocked Account Agreement), may
in all such circumstances rely on the action taken by either one as the action
of both GKK and Gramercy. All references to the Original Agreement in the
Blocked Account Agreement shall be deemed to refer to this Agreement (as may be
further amended, modified or amended and restated).

[SIGNATURES COMMENCE ON NEXT PAGE]

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IN WITNESS WHEREOF, the parties have executed this Annex I as of the date first
above written.

BUYER:

 

 

 

 

GOLDMAN SACHS MORTGAGE COMPANY a New York limited partnership

 

 

 

 

By:

 

Goldman Sachs Real Estate Funding Corp., its

general partner

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

SELLER:

 

GRAMERCY WAREHOUSE FUNDING II LLC, a

Delaware limited liability company, as a Seller

 

 

 

 

BY:

Gramercy Investment Trust, a Maryland real

estate investment trust, its sole member and

manager

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

GKK TRADING WAREHOUSE II LLC, aDelaware limited liability company, as a Seller

 

 

 

BY:

By: GKK Trading Corp., its sole member and

manager

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Acknowledged and Agreed (as to Paragraph 25(j) hereof only):

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GRAMERCY CAPITAL CORP.,
a Maryland corporation

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

Acknowledged and Agreed (as to Paragraph 25(k) hereof only):

WELLS FARGO BANK, N.A., as Custodian

By:

 

Name:

 

 

Title:

 

 

 

 

Acknowledged and Agreed (as to Paragraph 25(l) hereof only):

WACHOVIA BANK, NATIONAL ASSOCIATION, as Bank

By:

 

Name:

 

 

Title:

 

 

 

 

 

 

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