U.S. $100,000,000
 
AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
 
by and among
 
NRFC WA HOLDINGS, LLC,
NRFC WA HOLDINGS II, LLC,
NRFC WA HOLDINGS VII, LLC,
NRFC WA HOLDINGS X, LLC,
NRFC WA HOLDINGS XI, LLC,
and
NRFC WA HOLDINGS XII, LLC,
as the Seller
 
WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Purchaser
 
and
 
NORTHSTAR REALTY FINANCE CORP.,
and
NORTHSTAR REALTY FINANCE L.P.
as the Guarantor
 
Dated as of June 5, 2007
 

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TABLE OF CONTENTS

         
Page
 ARTICLE I DEFINITIONS  
2
 
Section 1.1
 
Certain Defined Terms
 
2
 
Section 1.2
 
Interpretation
 
36
 ARTICLE II PURCHASE OF ELIGIBLE ASSETS  
37
 
Section 2.1
 
Purchase and Sale
 
37
 
Section 2.2
 
Transaction Mechanics; Related Matters
 
38
 
Section 2.3
 
Optional Repurchase
 
41
 
Section 2.4
 
Extension of Facility Maturity Date and Funding Expiration Date
 
41
 
Section 2.5
 
Payment of Price Differential
 
42
 
Section 2.6
 
[Reserved]
 
43
 
Section 2.7
 
Margin Maintenance
 
43
 
Section 2.8
 
Income Payments
 
43
 
Section 2.9
 
Payment, Transfer and Custody
 
44
 
Section 2.10
 
Reserved
 
45
 
Section 2.11
 
Hypothecation or Pledge of Purchased Assets
 
45
 
Section 2.12
 
Fees
 
45
 
Section 2.13
 
Increased Costs; Capital Adequacy; Illegality
 
45
 
Section 2.14
 
Taxes
 
47
 
Section 2.15
 
Obligations Absolute
 
47
 
Section 2.16
 
Over-Advances
 
48
 ARTICLE III CONDITIONS TO TRANSACTIONS  
48
 
Section 3.1
 
Conditions to Closing and Initial Purchase
 
48
 
Section 3.2
 
Conditions Precedent to all Transactions
 
49
 ARTICLE IV REPRESENTATIONS AND WARRANTIES  
53
 
Section 4.1
 
Representations and Warranties
 
53
 ARTICLE V COVENANTS  
61
 
Section 5.1
 
Covenants
 
61
 ARTICLE VI ADMINISTRATION AND SERVICING  
70
 
Section 6.1
 
Servicing
 
70
 
Section 6.2
 
Seller as Servicer
 
71
 
Section 6.3
 
Third Party Servicer
 
71
 
Section 6.4
 
Duties of the Seller
 
71
 
Section 6.5
 
Authorization of the Seller
 
72
 
Section 6.6
 
Event of Default
 
72
 
Section 6.7
 
Inspection
 
73
 
Section 6.8
 
Payment of Certain Expenses by Servicer
 
73
 
Section 6.9
 
Pooling and Servicing Agreements
 
73
 
Section 6.10
 
Servicer Default
 
74
 
Section 6.11
 
Servicer
 
74
 ARTICLE VII [RESERVED]  
74
 ARTICLE VIII SECURITY INTEREST  
74
 
Section 8.1
 
Security Interest
 
74
 
Section 8.2
 
Release of Lien on Purchased Assets
 
76
 
Section 8.3
 
Further Assurances
 
77
 
Section 8.4
 
Remedies
 
77
 
Section 8.5
 
Purchaser’s Duty of Care
 
77
 ARTICLE IX [RESERVED]  
77

 
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 ARTICLE X EVENTS OF DEFAULT  
77
 
Section 10.1
 
Events of Default
 
77
 
Section 10.2
 
Remedies
 
80
 
Section 10.3
 
Determination of Events of Default
 
82
 ARTICLE XI INDEMNIFICATION  
83
 
Section 11.1
 
Indemnification by the Seller
 
83
 
Section 11.2
 
After-Tax Basis
 
84
 ARTICLE XII [RESERVED]  
85
 ARTICLE XIII MISCELLANEOUS  
85
 
Section 13.1
 
Amendments and Waivers
 
85
 
Section 13.2
 
Notices and Other Communications
 
85
 
Section 13.3
 
Set-offs
 
85
 
Section 13.4
 
No Waiver; Etc.
 
86
 
Section 13.5
 
Binding Effect
 
86
 
Section 13.6
 
Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue
 
86
 
Section 13.7
 
Jurisdiction; Waiver of Jury Trial
 
87
 
Section 13.8
 
Costs, Expenses and Taxes
 
87
 
Section 13.9
 
Legal Matters
 
88
 
Section 13.10
 
Recourse
 
88
 
Section 13.11
 
Protection of Right, Title and Interest; Further Action Evidencing Transactions
 
89
 
Section 13.13
 
Confidentiality
 
89
 
Section 13.14
 
Execution in Counterparts
 
91
 
Section 13.15
 
Entire Agreement; Severability
 
91
 
Section 13.16
 
Non-assignability; Termination
 
91
 
Section 13.17
 
Single Agreements
 
92
 
Section 13.18
 
Disclosure Relating to Certain Federal Protections
 
92
 
Section 13.19
 
Intent
 
93
 
Section 13.20
 
Review of Due Diligence and Books and Records
 
93
 
Section 13.21
 
Use of Employee Plan Assets
 
94
 
Section 13.22
 
Time of the Essence
 
94
 
Section 13.23
 
Construction
 
94
 
Section 13.25
 
Swap Counterparty
 
95
 
Section 13.26
 
Amendment and Restatement
 
95
 
Section 13.27
 
Heading and Exhibits
 
96

 
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SCHEDULES
 
Schedule 1
 
Representations and Warranties Regarding Mortgage Assets
 
Schedule 2
 
List of Accounts
 
Schedule 3
 
List of Existing Financing Facilities
 
 
Schedule 4
 
Organizational Chart
 
 
Schedule 5
 
List of UCC Filing Locations
 
Schedule 6
 
List of Approved Servicers
 
Schedule 7
 
Trust Preferred Securities
 

 
EXHIBITS
 
Exhibit I
 
Form of Transaction Request
 
Exhibit II
 
Form of Confirmation
 
 
Exhibit III
 
[Reserved]
 
 
Exhibit IV
 
Form of Power of Attorney of Seller
 
 
Exhibit V
 
Form of Account Control Agreement
 
 
Exhibit VI
 
Form of Securities Account Control Agreement
 
 
Exhibit VII
 
Form of Servicer Redirection Notice
 
 
Exhibit VIII
 
Form of Compliance Certificate
 
 
Exhibit IX
 
Form of Purchased Asset Data Summary
 
 
Exhibit X
 
Form of Margin Deficit Notice
 
 
Exhibit XI
 
Form of Assignment
 
 
Exhibit XII-A
 
Form of Seller’s Release Letter
 
 
Exhibit XII-B
 
Form of Warehouse Lender’s Release Letter
 
 

iii

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AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
 
THIS AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (as amended, modified,
restated, replaced, waived, substituted, supplemented or extended from time to
time, the “Agreement”) is made as of this 5th day of June, 2007, by and among:

(1) NRFC WA HOLDINGS, LLC, a Delaware limited liability company, NRFC WA
HOLDINGS II, LLC, a Delaware limited liability company, NRFC WA HOLDINGS VII,
LLC, a Delaware limited liability company, NRFC WA HOLDINGS X, LLC, a Delaware
limited liability company, NRFC WA HOLDINGS XI, LLC, a Delaware limited
liability company, and NRFC WA HOLDINGS XII, LLC, a Delaware limited liability
company, as the Seller;

(2) WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
(together with its successors and assigns, “Wachovia”), as the Purchaser; and

(3) NORTHSTAR REALTY FINANCE CORP., a Maryland corporation (together with its
successors and assigns, “NorthStar”), and NORTHSTAR REALTY FINANCE L.P., a
Delaware limited partnership, as the Guarantor.

Acknowledged and agreed to by EACH OF THE PLEDGORS THAT BECOMES A PARTY HERETO,
each as a Pledgor; and

WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as the Swap
Counterparty.

RECITALS

WHEREAS, the Seller, the Purchaser, the Guarantor and other Persons are parties
to that certain Master Repurchase Agreement, dated as of July 13, 2005, as
amended, modified, restated, replaced, waived, substituted, supplemented or
extended from time to time (as heretofore amended, modified, restated, replaced,
waived, substituted, supplemented or extended from time to time, the “Existing
Agreement”);

WHEREAS, the Seller, the Purchaser and the Guarantor wish to amend and restate
the Existing Agreement upon the terms and subject to the conditions set forth
herein;

WHEREAS, the Seller desires to sell and the Purchaser desires to purchase from
time to time Eligible Assets under the terms and conditions stated herein; and

WHEREAS, if the Purchaser purchases one (1) or more Eligible Assets, the parties
desire that the Seller repurchase the Purchased Asset(s) on or before the
Facility Maturity Date under the terms and conditions stated herein.

NOW, THEREFORE, based upon the foregoing Recitals, the mutual premises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
 
1

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ARTICLE I

DEFINITIONS

Section 1.1 Certain Defined Terms.

(a) Certain capitalized terms used throughout this Agreement are defined above
or in this Article I.

(b) As used in this Agreement and the schedules, exhibits and other attachments
hereto, unless the context requires a different meaning, the following terms
shall have the following meanings:

“40 Act”: The Investment Company Act of 1940, as amended from time to time.

“AAA IO”: An “AAA” rated bond that is “interest only,” including any such bond
designated “X-C” or “X-P.”

“Accepted Servicing Practices”: With respect to each Purchased Item, those
mortgage, mezzanine loan and/or secured lending servicing practices, as
applicable, of prudent lending institutions that service Purchased Items of the
same type, size and structure as such Purchased Items in the jurisdiction where
the related Underlying Mortgaged Property is located, as applicable, but in any
event, (i) in accordance with the terms of the Repurchase Documents and
Applicable Law, (ii) without prejudice to the interests of the Purchaser,
(iii) with a view to the maximization of the recovery on such Purchased Items on
a net present value basis, and (iv) without regard to (A) any relationship that
the Seller, the Guarantor and any Affiliate of the foregoing may have with the
related Borrower, mortgagor, the Seller, any servicer, any PSA Servicer or any
other party to the Repurchase Documents, the Mortgage Loan Documents or any
Affiliate of any of the foregoing; (B) the right of the Seller, the Guarantor or
any Affiliate of the foregoing to receive compensation or other fees for its
services rendered pursuant to this Agreement, the Repurchase Documents or any
other document or agreement; (C) the ownership, servicing or management by the
Seller, the Guarantor or any Affiliate of the foregoing for others of any other
mortgage loans or mortgaged property; (D) any obligation of the Seller, the
Guarantor or any Affiliate of the foregoing to repurchase or substitute a
Purchased Item; (E) any obligation of the Seller, the Guarantor or any Affiliate
of the foregoing to cure a breach of a representation and warranty with respect
to a Purchased Item; and (F) any debt the Seller, the Guarantor or any Affiliate
has extended to any Borrower, mortgagor or any Affiliate of such Borrower or
mortgagor.

“Account Agreement”: A letter agreement, dated as of even date herewith, among
the Seller, the Purchaser and Wachovia in the form of Exhibit V attached hereto.

“Accrual Period”: With respect to the first Payment Date, the period from and
including the applicable Purchase Date to but excluding such first Payment Date,
and, with respect to any subsequent Payment Date, the period from and including
the previous Payment Date to but excluding such subsequent Payment Date.

“Additional Amount”: Defined in Subsection 2.14(a) of this Agreement.

“Additional Purchased Asset”: An Eligible Asset transferred to the Purchaser in
a satisfaction of a Margin Deficit pursuant to Section 2.7 of this Agreement,
which Additional Purchased Asset shall satisfy all requirements of, and be
transferred in accordance with the provisions of, this Agreement.
 
2

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“Adjusted Eurodollar Rate”: For any Eurodollar Period, a rate per annum equal to
a fraction, expressed as a percentage and rounded upwards (if necessary) to the
nearest 1/100 of 1%, (i) the numerator of which is equal to the Eurodollar Rate
for such Eurodollar Period and (ii) the denominator of which is equal to 100%
minus the Eurodollar Reserve Percentage for such Eurodollar Period.

“Adjusted Total Assets”: Means the sum of Total Assets plus Off-Balance Sheet
Assets.

“Adjusted Total Liabilities”: Means, the sum of Total Liabilities plus
Off-Balance Sheet Liabilities minus Trust Preferred Securities.

“Advance Rate”: Subject to the Refinance Option, with respect to a Mortgage
Asset of a certain Class and, as applicable, the applicable Type of Underlying
Mortgaged Property, the “Maximum Advance Rate” set forth in the applicable
column on Schedule 1 to the Fee Letter or, if not set forth therein with respect
to Preferred Equity Interests and Construction Loans, the “Advance Rate” set
forth in the related Confirmation; provided, however, during the time that any
amount is outstanding under the Note Purchase Agreement, the Advance Rates for
one (1) or more Purchased Assets may be reduced and/or adjusted in such manner
as the Purchaser shall determine in its discretion from time to time so that the
Margin Base is equal to or less than the aggregate Purchase Price for all
outstanding Transactions plus the Note Purchase Margin.

“Affected Party”: The Purchaser and all assignees, pledgees and participants of
the Purchaser.

“Affiliate”: With respect to a Person, means any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person, or is a director of such Person. For purposes of this definition,
“control” (including the terms “controlling,” “controlled by” and “under common
control with”) when used with respect to any specified Person means the
possession, direct or indirect, of the power to vote 20% or more of the voting
securities of such Person or to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.

“Aggregate Unpaids”: At any time, an amount equal to the sum of the aggregate
Purchase Price outstanding for all Transactions, the aggregate Price
Differential outstanding, the aggregate Margin Deficits outstanding, Breakage
Costs (if any), Increased Costs (if any), Taxes (if any), Additional Amounts (if
any), Late Payment Fees (if any), any fee due under any fee letter or the
Repurchase Documents (including, without limitation, the Fee Letter and the
Custodial Fee Letter), all other amounts owed by the Seller or any other Person
to the Purchaser, any Affected Party, any Indemnified Party or any other Person
under or with respect to this Agreement, the Repurchase Documents or any
Transaction entered into pursuant thereto and all interest and/or fees that
accrue after the commencement by or against the Seller, the Guarantor, the
Pledgor or any Affiliate thereof of any proceeding under any Insolvency Laws
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding (whether due or
accrued).

“Agreement”: Defined in the Preamble of this Agreement.

“ALTA”: The American Land Title Association.

“Anti-Terrorism Laws”: Any Applicable Law relating to money laundering or
terrorism, including, but not limited to, Executive Order 13224, the OFAC
Regulations and the USA Patriot Act.

“Applicable Law”: For any Person or Property of such Person, all existing and
future applicable laws, rules, regulations (including temporary and final income
tax regulations), statutes, treaties, codes, ordinances, permits, certificates,
orders and licenses of and interpretations by any Governmental Authority
(including, without limitation, usury laws, the Federal Truth in Lending Act, as
amended from time to time, and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System), and applicable judgments, decrees,
injunctions, writs, awards or orders of any court, arbitrator or other
administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction.
 
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“Asset Schedule and Exception Report”: Defined in the Custodial Agreement.

“Asset Value”: As of any date of determination for each Eligible Asset or
Purchased Asset, as applicable, with respect to a Mortgage Asset or Purchased
Asset, as applicable, of a certain Class, the lesser of (a) (i) for each
Mortgage Asset or Purchased Asset, as applicable, other than as provided in
clause (a)(ii) of this definition, the product of the Book Value of such
Mortgage Asset or Purchased Asset, as applicable, times the Advance Rate
applicable thereto and (ii) subject to Section 2.16 of this Agreement, for each
Over-Advance Purchased Asset prior to an Event of Default, the Book Value of
such Over-Advance Purchased Asset and (b) (i) for each Mortgage Asset or
Purchased Asset, as applicable, other than as provided in clause (b)(ii) of this
definition, the product of the Market Value of such Mortgage Asset or Purchased
Asset, as applicable, times the Advance Rate applicable thereto and (ii) subject
to Section 2.16 of this Agreement, for each Over-Advance Purchased Asset prior
to an Event of Default, the Market Value of such Over-Advance Purchased Asset,
in all cases under clauses (a) and (b) of this definition taking into account
the Maximum LTV percentages, applicable to such Mortgaged Asset or Purchased
Asset, as applicable, set forth on Schedule 1 to the Fee Letter (or, in the case
of Preferred Equity Interests and Construction Loans, to the extent applicable,
as set forth in the related Confirmation); provided, however, the Asset Value
may be reduced in the Purchaser’s discretion by an amount determined by the
Purchaser in its discretion (which amount may, in the Purchaser’s discretion, be
reduced to zero (0)), with respect to each Mortgage Asset or Purchased Asset, as
applicable (A) in respect of which one (1) or more eligibility requirements set
forth in Schedule 1 to this Agreement is not satisfied in any respect (assuming
each such criteria is determined as of the date the Asset Value is determined),
in each case without regard to any Seller’s knowledge or lack of knowledge
thereof and without regard to any Seller’s representations or warranties with
respect to its knowledge or lack of knowledge thereof, and, in the Purchaser’s
determination in its discretion, the same impacts, impairs or affects the Market
Value or Book Value of such Mortgage Asset or Purchased Asset, (B) in respect of
which the complete Mortgage Asset File has not been delivered to the Custodian
within the time period required by the Custodial Agreement, (C) which is a Table
Funded Purchased Asset in respect of which the Mortgage Asset File has not been
delivered to the Custodian within three (3) Business Days following the Purchase
Date, or (D) which has been released from the possession of the Custodian under
the Custodial Agreement to a Seller or an Affiliate for a period in excess of
twenty (20) calendar days.

“Assignment”: The transfer of all of the Seller’s rights and interests under an
Eligible Asset pursuant to an assignment agreement executed by the Seller in
blank, which agreement shall be in the form of Exhibit XI and is otherwise
satisfactory to the Purchaser in its discretion.

“Assignment of Leases”: With respect to any Mortgage, an assignment of leases
thereunder, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the Underlying Mortgaged
Property is located to reflect the assignment of leases to the Purchaser.

“Assignment of Mortgage”: 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 Underlying
Mortgaged Property is located to reflect the assignment of the Mortgage to the
Purchaser.
 
4

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“Authority Documents”: As to any Person, as applicable, the articles or
certificate of incorporation or formation, by-laws, limited liability company
agreement, general partnership agreement, limited partnership agreement, trust
agreement, joint venture agreement, resolutions and other applicable
organizational or governing documents of such Person.

“Availability”: At any time, an amount equal to the positive excess (if any) of
(a) the Maximum Amount minus (b) the aggregate Purchase Price outstanding for
all Transactions on such day; provided, however, the Availability shall be
zero (0) (i) on and after the occurrence of the Funding Expiration Date
(including any extensions thereof), (ii) while a Margin Deficit is outstanding,
or (iii) after an Event of Default has occurred and is continuing.

“Bailee”: With respect to each Table Funded Purchased Asset, the related title
company, attorney or settlement agent, in each case, approved in writing by the
Purchaser in its discretion.

“Bailee Agreement”: The Bailee Agreement among the Seller, the Purchaser and the
Bailee in the form of Annex 13 to the Custodial Agreement.

“Bailee’s Trust Receipt”: A Trust Receipt in the form of Attachment 2 to the
Bailee Agreement.

“Bankruptcy Code”: The United States Bankruptcy Reform Act of 1978 (11 U.S.C. §
101, et seq.), as amended from time to time.

“Base Rate”: On any date, a fluctuating rate per annum equal to the lesser of
(a) the Prime Rate or (b) the Federal Funds Rate, plus 1.0%.

“Basic Mortgage Loan Documents”: Defined in the Custodial Agreement.

“Book Value”: With respect to any Mortgage Asset at any time, an amount, as
certified by the Seller, equal to the lesser of (a) face or par value and
(b) the price that the Seller initially paid or advanced for or in respect of
such Mortgage Asset, as such Book Value may be marked down by the Seller from
time to time, including, as applicable, from any loss/price adjustments, less an
amount equal to the sum of all principal payments, prepayments or paydowns paid
and realized losses recognized relating to such Mortgage Asset; provided,
however, any such markdowns or adjustments must be made in good faith and shall
be disclosed contemporaneously therewith in writing to the Purchaser, which mark
downs or adjustments, without a corresponding payment and application of
principal, may result in a Margin Deficit.

“Borrower”: Collectively (and individually as the context may expressly provide
or require), the borrowers, obligors or debtors under a Mortgage Asset,
including, but not limited to, any guarantor thereof, the borrowers, obligors or
debtors of any debt, including any guarantor thereof, senior to the Mortgage
Asset, including obligors, debtors and guarantors with respect to the debt
secured by any Underlying Mortgaged Property, and any Person that has not signed
the related Mortgage Note, Junior Interest Document, Mezzanine Note or other
note, certificate or instrument but owns an interest in the related Underlying
Mortgaged Property, which interest has been encumbered to secure such Mortgage
Asset.

“Borrower Reserve Payments”: Any payments made by a Borrower under the
applicable Mortgage Loan Documents which, pursuant to the terms of such Mortgage
Loan Documents, are required to be deposited into escrow or into a reserve to be
used for a specific purpose (e.g., tax and insurance escrows).
 
5

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“Borrowing Capacity”: The ability to obtain draws or advances at the request of
a Guarantor or any Affiliate or Subsidiary of a Guarantor in Dollars and within
two (2) Business Days of the request therefor and to use or apply such draws or
advances to repay amounts under the Repurchase Documents or Other Credit
Facilities.

“Breakage Costs”: Any amount or amounts as shall compensate the Purchaser or any
Affected Party for any loss, cost or expense incurred by the Purchaser or any
Affected Party (as determined by the Purchaser in its discretion) as a result of
a prepayment by the Seller or the Guarantor of all or any portion of any
Repurchase Price and any losses, costs and/or expenses that the Purchaser or any
Affected Party may sustain or incur arising from the reemployment of funds
obtained by the Purchaser or any Affected Party hereunder or from fees payable
to terminate the deposits from which such funds were obtained.

“Bridge Loan”: A performing Whole Loan that is otherwise an Eligible Asset
except that the Underlying Mortgaged Property is not stabilized or is otherwise
considered to be in a transitional state, which exceptions shall be disclosed in
writing to the Purchaser and such exceptions must be acceptable to the Purchaser
in its discretion, which acceptance may, in the Purchaser’s discretion, be
conditioned on additional terms, conditions and requirements with respect to
such Bridge Loan; provided, however, the debt and equity fundings for each
Bridge Loan must be sufficient to finance 100% of the completion of the
improvements to the related Underlying Mortgaged Property or there must exist
sufficient net operating income or interest reserves or guaranties or
replenishments to cover the debt service related to the Eligible Asset.

“Business Day”: Any day other than a Saturday or a Sunday on which (a) banks are
not required or authorized to be closed in Charlotte, North Carolina, and (b) if
the term “Business Day” is used in connection with the determination of the
Eurodollar Rate, dealings in United States dollar deposits are carried on in the
London interbank market.

“Capital Lease Obligations”: For any Person and its Consolidated Subsidiaries,
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 this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.

“Cash Collateral”: The cash received by the Purchaser in satisfaction of a
Margin Deficit or as Income on Purchased Assets.

“Cash Equivalents”: As to any Person, (i) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits or certificates of deposit
of any commercial bank incorporated under the laws of the United States or any
state thereof, of recognized standing having capital and unimpaired surplus in
excess of $1,000,000,000 and whose short-term commercial paper rating at the
time of acquisition is at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody’s (any such bank, an “Approved Bank”),
with such deposits or certificates having maturities of not more than one year
from the date of acquisition, (iii) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clauses (i) and (ii) above entered into with any Approved Bank, (iv) commercial
paper or finance company paper issued by any Person incorporated under the laws
of the United States or any state thereof and rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s,
and in each case maturing not more than one year after the date of acquisition,
and (v) investments in money market funds that are registered under the 40 Act,
which have net assets of at least $1,000,000,000 and at least 85% of whose
assets consist of securities and other obligations of the type described in
clauses (i) through (iv) above. All such Cash Equivalents must be denominated
solely for payment in Dollars.
 
6

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“CDO Securitization Transaction”: A commercial real estate cash flow CDO
securitization transaction involving some or all of the Purchased Assets engaged
in by an Affiliate of any of the Guarantors or the Sellers, which transaction
and parties are acceptable to Purchaser in its discretion.

“Class”: With respect to a Mortgage Asset, such Mortgage Asset’s classification
as a Whole Loan, a Junior Interest, a Mezzanine Loan, a Bridge Loan, a CMBS
Security, a CTL Loan, a Subordinate CTL Loan, Senior Secured Bank Debt or a
Preferred Equity Interest.

“Closing Date”: June 5, 2007.

“CMBS Security”: A performing fixed or floating rate mortgage-backed
pass-through certificate, representing a beneficial ownership interest in one or
more first lien mortgage loans secured by Commercial Real Estate, rated by at
least two (2) Rating Agencies as AAA (including AAA IO), AA+, AA, AA-, A+, A,
A-, BBB+, BBB, BBB-, BB+, BB, BB-, B+, B or B-.

“Code”: The Internal Revenue Code of 1986, as amended from time to time.

“Collection Account”: The deposit account identified on Schedule 2 established
in the name of the Seller into which all Income and Cash Collateral shall be
deposited, which account shall be subject to the Account Agreement. Funds in the
Collection Account may be invested at the direction and in the discretion of the
Purchaser in Permitted Investments for the benefit of the Seller.

“Commercial Real Estate”: Any real estate included in the definition of Type.

“Commercial Real Estate Loan”: Any loan secured directly or indirectly by
Commercial Real Estate or, as applicable, ownership interests in an entity that
owns directly or indirectly Commercial Real Estate.

“Compliance Certificate”: Defined in Subsection 3.2(f) of this Agreement.

“Confirmation”: A purchase confirmation in the form attached to this Agreement
as Exhibit II duly executed, completed and delivered by the Seller in accordance
with the provisions of Subsection 2.2(c) of this Agreement.

“Consolidated Adjusted EBITDA”: For any period, with respect to any Person, the
sum, without duplication, for such period of (a) the Net Income of such Person
and its Consolidated Subsidiaries determined on a consolidated basis for such
period, (b) the sum of the provisions for such period for income taxes, interest
expense, and depreciation and amortization expense used in determining such Net
Income for such Person and its Consolidated Subsidiaries, (c) amounts deducted
in accordance with GAAP in respect of other non-cash expenses in determining
such Net Income for such Person and its Consolidated Subsidiaries and (d) the
amount of any aggregate net loss (or minus the amount of any gain) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person and its Consolidated Subsidiaries determined on a consolidated
basis.

“Consolidated Subsidiaries”: An as of any date and for any Person, any
Subsidiary or other entities that are consolidated with such Person in
accordance with GAAP.

“Construction Loan”: A performing Whole Loan, the Underlying Mortgaged Property
for which has received all necessary entitlements and approvals to develop the
Underlying Mortgaged Property and construct improvements thereon in a manner
consistent with the applicable Seller’s representations to the Purchaser
regarding such construction, which information shall be set forth in the related
Confirmation, such loan and the documents related thereto are otherwise
acceptable to the Purchaser in its discretion and all construction related
documents are delivered to the Custodian as a part of the Mortgage Asset File
for such Whole Loan.
 
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“Contingent Liabilities”: Means, with respect to any Person and its Consolidated
Subsidiaries (without duplication): (i) liabilities and obligations (including
any Guarantee Obligations) of such Person, any Subsidiary or any other Person in
respect of “off-balance sheet arrangements” (as defined in the SEC Off-Balance
Sheet Rules), (ii) any obligation, including, without limitation, any Guarantee
Obligation, whether or not required to be disclosed in the footnotes to such
Person’s financial statements, guaranteeing partially or in whole any
Non-Recourse Indebtedness, lease, dividend or other obligation, exclusive of
contractual indemnities (including, without limitation, any indemnity or
price-adjustment provision relating to the purchase or sale of securities or
other assets) and guarantees of non-monetary obligations (other than guarantees
of completion, environmental indemnities and guarantees of customary carve-out
matters made in connection with Non-Recourse Indebtedness, such as (but not
limited to) fraud, misappropriation, bankruptcy and misapplication) which have
not yet been called on or quantified, of such Person or of any other Person, and
(iii) any forward commitment or obligation to fund or provide proceeds with
respect to any loan or other financing which is obligatory and non-discretionary
on the part of the lender. The amount of any Contingent Liabilities described in
clause (ii) shall be deemed to be, (a) with respect to a guarantee of interest
or interest and principal, or operating income guarantee, the sum of all
payments required to be made thereunder (which, in the case of an operating
income guarantee, shall be deemed to be equal to the debt service for the note
secured thereby), through, (x) in the case of an interest or interest and
principal guarantee, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder), or (y) in
the case of an operating income guarantee, the date through which such guarantee
will remain in effect, and (b) with respect to all guarantees not covered by the
preceding clause (a), an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as recorded on
the balance sheet and on the footnotes to the most recent financial statements
of such Person. As used in this definition, the term “SEC Off-Balance Sheet
Rules” means the Disclosure in Management’s Discussion and Analysis About
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations, Securities
Act Release Nos. 33-8182; 34-47264; FR-67 International Series Release No. 1266
File No. S7-42-02, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR pts.
228, 229 and 249).

“Contractual Obligation”: With respect to any Person, any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust,
contract, undertaking, agreement, instrument or other document to which such
Person is a party or by which it or any of its Property is bound or is subject.

“CTL Loan”: A performing Whole Loan secured by a first priority perfected
security interest in Commercial Real Estate 100% leased under a Credit Tenant
Lease to, or guaranteed in full by, a Credit Tenant and all payments due under
such Credit Tenant Lease, and such CTL Loan satisfies such additional
underwriting criteria and other terms, conditions and requirements as the
Purchaser may require in its discretion.

“Credit Tenant”: The tenant or guarantor under a Credit Tenant Lease with a
credit rating of BBB- or better by at least two (2) Rating Agencies.
 
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“Credit Tenant Lease”: A financeable lease of Commercial Real Estate, which
lease is a triple net lease (i.e., the tenant is responsible for all
maintenance, insurance and taxes), a double net lease (i.e., the tenant is
responsible for all taxes and insurance) or is a bondable lease.

“Current Appraisal”: An appraisal dated within twelve (12) months of the date of
determination; provided, however, (i) in the case of the valuation of an
Underlying Mortgaged Property, such appraisal shall be a FIRREA Appraisal and
(ii) in the case of the valuation of a Mortgage Asset, such appraisal shall be
from a nationally recognized appraisal firm (other than the Seller, the
Guarantor or any Affiliate of the foregoing) (A) with substantial experience
valuing assets similar in type, size and structure to the Mortgage Asset in
question, (B) having substantial familiarity with the market for such Mortgage
Asset and (C) that is otherwise acceptable to the Purchaser in its discretion.

“Custodial Agreement”: The Amended and Restated Custodial Agreement, dated as of
even date herewith, by and among the Purchaser, the Seller and the Custodian, as
the same shall be amended, modified, waived, supplemented, extended, replaced or
restated from time to time.

“Custodial Fee Letter”: The Custodial Fee Letter (if any), dated as of even date
herewith, among the Seller and the Custodian, as such letter may be amended,
modified, waived, supplemented, extended, restated or replaced from time to
time.

“Custodial Identification Certificate”: Defined in the Custodial Agreement.

“Custodian”: Wells Fargo Bank, National Association, and its successor in
interest as the custodian under the Custodial Agreement, and any successor
Custodian under the Custodial Agreement.

“Deal Agent’s Account”: The account of the Purchaser disclosed to the Seller
from time to time.

“Debt Service”: For any period, the sum of (a) Interest Expense of NorthStar and
its Subsidiaries determined on a consolidated basis for such period and (b) all
regularly scheduled principal payments made with respect to Indebtedness of
NorthStar and its Subsidiaries during such period, other than any balloon,
bullet, margin or similar principal payment which repays such Indebtedness in
full.

“Debt Service Coverage Ratio or DSCR”: With respect to any Mortgage Asset or
Purchased Asset, as applicable, as of any date of determination, for the period
of time to be determined by the Purchaser in its reasonable discretion (it being
understood that it is the Purchaser’s intent to make the determination based on
the period of twelve (12) consecutive complete calendar months preceding such
date (or, if such Mortgage Asset was originated less than twelve (12) months
from the date of determination, the number of months from the date of
origination), the ratio of (a) the aggregate Net Cash Flow in respect of the
Underlying Mortgaged Properties relating to such Mortgage Asset or Purchased
Asset, as applicable, for such period, taking into account (x) any guaranty of
the indebtedness under the related Mortgage Asset or Purchased Asset and (y) any
applicable interest reserves held during such time by the Seller or any Servicer
on its behalf or future funding obligations or monies available to satisfy such
obligations with respect to such Mortgage Asset or Purchased Asset and, as
applicable, the senior mortgage lender for the related Underlying Mortgaged
Property, to (b) the aggregate amount of all amounts due for such period in
respect of all Indebtedness that was outstanding from time to time during such
period that is secured, directly or indirectly, by such Underlying Mortgaged
Properties (including, without limitation, by way of a pledge of the equity of
the owner(s) of such Underlying Mortgaged Properties) or that is otherwise owing
by the owner(s) of such Underlying Mortgaged Properties, including, without
limitation, all scheduled principal and/or interest payments due for such period
in respect of each Mortgage Asset or Purchased Asset, as applicable, that is
secured or supported by such Underlying Mortgaged Properties, as any of the
foregoing elements of DSCR may be adjusted by the Purchaser as determined by the
Purchaser in its discretion; provided, however, that, with respect to Junior
Interests, Mezzanine Loans, Bridge Loans, Preferred Equity Interests and
Subordinate CTL Loans that are also Junior Interests or Mezzanine Loans, all
such calculations shall be made taking into account any senior or pari passu
debt or other obligations, including debt or other obligations secured directly
or indirectly by the applicable Underlying Mortgaged Property; provided,
further, however, the DSCR shall not be less than the Minimum DSCR.
 
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“Default”: Any event which, with, as applicable, the giving of notice or the
lapse of time or both, would constitute an Event of Default.

“Defaulted Mortgage Asset”: Any Mortgage Asset (a) that is ninety (90) days or
more delinquent or (b) for which there is a non-monetary default (beyond any
applicable notice and cure period) under the related Mortgage Loan Documents
(including, with respect to Preferred Equity Interests, amounts that are not
paid current for the relevant period under the terms of the Mortgage Loan
Documents).

“Delinquent Mortgage Asset”: A Mortgage Asset that is thirty (30) or more days,
but less than ninety (90) days, delinquent under the related Mortgage Loan
Documents (including, with respect to Preferred Equity Interests, amounts that
are not paid current for the relevant period under the terms of the Mortgage
Loan Documents).

“Derivatives Contract”: Any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement. Not in limitation of the foregoing, the term “Derivatives
Contract” includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.

“Derivatives Termination Value”: Means, in respect of any one or more
Derivatives Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Derivatives Contracts, (a) for
any date on or after the date such Derivatives Contracts have been closed out
and termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) for such Derivatives
Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Derivatives
Contracts (which may include the Purchaser).

“Dollars” and “$”: Lawful money of the United States.

“EBITDA”: With respect to NorthStar and its Consolidated Subsidiaries for any
period, the net income (or loss) of NorthStar and its Consolidated Subsidiaries
for such period determined on a consolidated basis (prior to any impact from
minority interests and before deduction of preferred dividends on preferred
stock, if any, of NorthStar), in accordance with GAAP, plus the following (but
only to the extent actually included in determination of such net income
(loss)): (i) income tax expense; (ii) extraordinary or non-recurring gains and
losses; (iii) depreciation and amortization expense; (iv) interest expense; and
(v) amounts deducted in accordance with GAAP in respect of other non-cash
expenses in determining such net income. The EBITDA will be adjusted to remove
all impact of FAS 141.
 
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“Electronic Transmission”: The delivery of information and executed documents in
an electronic format acceptable to the applicable recipient thereof.

“Eligible Asset”: A Mortgage Asset that, as of any date of determination, (i) is
not a Defaulted Mortgage Asset or Delinquent Mortgage Asset; (ii) satisfies each
of the eligibility criteria set forth on Schedule 1 hereto in all material
respects; (iii) with respect to the portion of such Mortgage Asset to be
acquired by the Purchaser, the funding obligations have been satisfied in full
and there is no unfunded commitment with respect thereto (unless otherwise
approved by the Purchaser in its discretion); (iv) has been approved in writing
by the Purchaser in its discretion; (v) has, to the extent applicable, an LTV
not in excess of the Maximum LTV; (vi) has, to the extent applicable, a DSCR
equal to or greater than the Minimum DSCR; (vii) is not a loan to an operating
business (other than a hotel); (viii) the purchase of such Eligible Asset will
not violate any applicable Sub-Limit; (ix) the Underlying Mortgage Property and
the Borrower and its Affiliates are domiciled in the United States (unless
otherwise approved by the Purchaser subject to such additional terms and
conditions as the Purchaser may require in its discretion); and (x) such
Mortgage Asset is denominated and payable in Dollars; provided, however,
notwithstanding a Mortgage Asset’s failure to conform to the criteria set forth
above (including, without limitation, a Mortgage Asset with a single or split
rating by a Rating Agency), the Purchaser may, in its discretion and subject to
such terms, conditions and requirements and Advance Rate and Pricing Spread
adjustments as the Purchaser may require in its discretion, designate in writing
any such non-compliant Mortgage Asset as an Eligible Asset, which designation
shall not be deemed a waiver of the requirement that all other Purchased Assets
and all other Mortgage Assets submitted for purchase by the Purchaser, whether
existing or in the future, must be Eligible Assets.

“Engagement Letter”: That certain letter agreement, dated as of June 2, 2005,
among the Purchaser and NRFC WA Holdings, LLC, as the same may be amended,
modified, restated, replaced, waived, substituted, supplemented or extended from
time to time.

“Environmental Laws”: Any and all Applicable Laws and all other foreign,
federal, state and local laws, statutes, ordinances, rules, regulations,
permits, licenses, approvals, interpretations and orders of courts or
Governmental Authorities, relating to the protection of human health or the
environment, including, but not limited to, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of hazardous materials. Environmental Laws include, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Material Transportation
Act (49 U.S.C. § 331 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
§ 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the Safe Drinking Water Act
(42 U.S.C. § 300, et seq.), the Environmental Protection Agency’s regulations
relating to underground storage tanks (40 C.F.R. Parts 280 and 281), and the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), and the rules and
regulations thereunder, each as amended, modified, waived, supplemented,
extended, restated or replaced from time to time.

“Equity Interest”: With respect to any Person, any share of capital stock of (or
other ownership, equity or profit interests in) such Person, any warrant, option
or other right for the purchase or other acquisition from such Person of any
share of capital stock of (or other ownership, equity or profit interests in)
such Person, any security convertible into or exchangeable for any share of
capital stock of (or other ownership, equity or profit interests in) such Person
or warrant, right or option for the purchase or other acquisition from such
Person of such shares (or such other interests), and any other ownership or
profit interest in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such share, warrant, option, right or other interest is authorized or
otherwise existing on any date of determination.
 
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“ERISA”: The Employee Retirement Income Security Act of 1974, as the same are
amended from time to time, and the regulations promulgated and rulings issued
thereunder, as the same are amended from time to time.

“ERISA Affiliate”: (a) Any corporation that is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code) as the
Seller or the Guarantor, (b) a trade or business (whether or not incorporated)
under common control (within the meaning of Section 414(c) of the Code) with the
Seller or the Guarantor, or (c) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as the Seller, the Guarantor,
any corporation described in clause (a) above or any trade or business described
in clause (b) above.

“Eurocurrency Liabilities”: Defined in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect and amended from time to time.

“Eurodollar Disruption Event”: The occurrence of any of the following: (a) the
Purchaser or any other Affected Party has determined that it would be contrary
to law or to the directive of any central bank or other Governmental Authority
(whether or not having the force of law) to obtain United States dollars in the
London interbank market to fund any Transaction, (b) the inability, for any
reason, of the Purchaser or any other Affected Party to determine the Adjusted
Eurodollar Rate, (c) the Purchaser or any other Affected Party shall have
determined that the rate at which deposits of United States dollars are being
offered to the Purchaser or any other Affected Party in the London interbank
market does not accurately reflect the cost to the Purchaser or such other
Affected Party of making, funding or maintaining any Transaction, or (d) the
inability of the Purchaser or any other Affected Party to obtain United States
dollars in the London interbank market to make, fund or maintain any
Transaction.

“Eurodollar Period”: With respect to any Transaction, (i) initially, the period
commencing on the Purchase Date with respect to such Transaction and ending on
the earlier of (x) the related Repurchase Date or (y) the first Payment Date
following the Purchase Date, and (ii) thereafter, each period commencing on the
day following the last day of the preceding Eurodollar Period applicable to such
Transaction and ending on the earliest of (x) the related Repurchase Date,
(y) the date that is one-month thereafter, or (z) the Facility Maturity Date.

“Eurodollar Rate”: With respect to each Eurodollar Period during which a
Transaction is outstanding, the rate per annum equal to the rate appearing at
Reuters Screen LIBOR01 Page as one-month LIBOR, at or about 9:00 a.m.,
Charlotte, North Carolina time, three (3) Business Days prior to the beginning
of such Eurodollar Period (and if such date is not a Business Day, the
Eurodollar Rate in effect on the Business Day immediately preceding such date),
or, if no such rate appears on Reuters Screen LIBOR01 Page at such time and day,
then the Eurodollar Rate shall be determined by Wachovia at its principal office
in Charlotte, North Carolina as its rate (each such determination, absent
manifest error, to be conclusive and binding on all parties hereto and their
assignees) at which thirty (30) day deposits in United States Dollars are being,
have been, or would be offered or quoted by Wachovia to major banks in the
applicable interbank market for Eurodollar deposits at or about 11:00 a.m. on
such day. The Purchaser’s determination of Eurodollar Rate shall be conclusive
upon the parties absent manifest error on the part of the Purchaser.

“Eurodollar Reserve Percentage”: For any period means the percentage, if any,
applicable during such period (or, if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any basic, emergency, supplemental, marginal or other
reserve requirements) with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to the applicable
Eurodollar Period.
 
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“Event of Default”: Defined in Section 10.1 of this Agreement.

“Exception”: Defined in the Custodial Agreement.

“Excepted Persons”: Defined in Subsection 13.13(a) of this Agreement.

“Excess Purchase Price”: Defined in the Fee Letter.

“Exchange Act”: The Securities Exchange Act of 1934, as amended from time to
time.

“Existing Agreement”: Defined in the Recitals to this Agreement.

“Existing Seller”: The sellers under the Existing Agreement.

“Extension Fee”: Defined in the Fee Letter.

“Facility”: The facility evidenced by and the Transactions contemplated under
the Repurchase Documents.

“Facility Maturity Date”: Subject to Article X of this Agreement, the earlier of
(a) June 5, 2010, as such original Facility Maturity Date may be extended
pursuant to Subsection 2.4(a) of this Agreement or (b) the date on which this
Agreement shall terminate in accordance with the provisions hereof or by
operation of Applicable Law.

“Facility Period”: The period commencing on the Closing Date terminating on the
Funding Expiration Date.

“Federal Funds Rate”: For any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the overnight
federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or
any successor or substitute publication selected by the Purchaser (or, if such
day is not a Business Day, for the next succeeding Business Day), or, if, for
any reason, such rate is not available on any day, the rate determined, in the
sole opinion of the Purchaser, to be the rate at which overnight federal funds
are being offered in the national federal funds market at 9:00 a.m., Charlotte,
North Carolina time.

“Fee Letter”: The Second Amended and Restated Fee Letter, dated as of even date
herewith, between the Purchaser and the Seller, as amended, modified, waived,
substituted, supplemented, extended restated or replaced from time to time.

“Financial Covenants”: The covenants set forth in Subsection 5.1(v) of this
Agreement.

“FIRREA Appraisal”: An appraisal prepared by an independent third party
appraiser approved in writing by the Purchaser in its discretion and satisfying
the requirements of Title XI of the Federal Institutions, Reform, Recovery and
Enforcement Act of 1989 and the regulations promulgated thereunder (as the
foregoing are amended, modified, restated, replaced, waived, substituted,
supplemented or extended from time to time), as in effect on the date of such
appraisal.
 
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“Fitch”: Fitch Ratings, Inc. and any successor thereto.

“Fixed Charge Coverage Ratio”: For NorthStar and its Consolidated Subsidiaries
during any period, EBITDA for such period divided by the Fixed Charges for the
same period.

“Fixed Charges”: For NorthStar and its Consolidated Subsidiaries determined on a
consolidated basis during any period, the sum of (without duplication) (a) Debt
Service, (b) all Preferred Dividends required to be paid during such period,
(c) Capital Lease Obligations required to be paid during such period, and
(d) all payments due under any ground lease.

“Foreclosed Loan”: A loan the security for which has been foreclosed upon by the
Seller.

“Funding Expiration Date”: The earlier of (a) the date that is 364 days
immediately following the Closing Date, as the same may be extended in
accordance with the terms of Subsection 2.4(b) of this Agreement, or (b) the
Business Day designated by the Seller to the Purchaser as the expiration date at
any time following two (2) Business Days’ prior written notice to the Purchaser.

“GAAP”: Generally accepted accounting principles as in effect from time to time
in the United States, consistently applied.

“Governmental Authority”: Any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any body or entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
any court or arbitrator having jurisdiction over such Person, any of its
Subsidiaries or any of its Properties, and any accounting board or authority
(whether or not a part of government) that is responsible for the establishment
or interpretation of national or international accounting principles, in each
case whether foreign or domestic.

“Ground Lease”: With respect to any Commercial Real Estate Loan for which the
Borrower has a leasehold interest in the related Underlying Mortgaged Property
or space lease within such Underlying Mortgaged Property, the lease agreement
creating such leasehold interest.

“Guarantee Obligation”: Means, as to any Person (the “guaranteeing person”),
without duplication, any obligation of (a) the guaranteeing person or
(b) another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of the obligations for which the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends, Contractual Obligation, Derivatives Contract or other obligations
(the “primary obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
maximum stated amount of the primary obligation relating to such Guarantee
Obligation (or, if less, the maximum stated liability set forth in the
instrument embodying such Guarantee Obligation); provided, however, that in the
absence of any such stated amount or stated liability, the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as reasonably determined by such Person
in good faith.
 
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“Guarantor”: Individually and collectively, as the context may require,
NorthStar Realty Finance Corp., a Maryland corporation (together with its
successors and permitted assigns) and NorthStar Realty Finance L.P., a Delaware
limited partnership (together with its successors and permitted assigns), as
joint and several Guarantors under the Guaranty.

“Guaranty”: The Amended and Restated Limited Guaranty, dated as of the date
hereof, executed by the Guarantor in favor of the Purchaser, as such agreement
is amended, modified, restated, replaced, waived, substituted, supplemented or
extended from time to time.

“Income”: With respect to each Purchased Item, at any time, all of the
following: collections, prepayments, recoveries, insurance and condemnation
proceeds and all other payments or proceeds on or in respect of the Purchased
Assets to which the Seller or the holder thereof is entitled, including, without
limitation, any principal thereof then payable and all interest, fees,
prepayment fees, premiums, extension fees, exit fees, yield maintenance charges,
defeasance fees, transfer fees, penalties, default interest, late fees, late
charges, dividends, gains, receipts, allocations, profits, payments in kind,
returns or repayment of contributions and all other distributions and payments
of any kind or nature whatsoever payable thereon, in connection therewith, or
with respect thereto and amounts received from any Interest Rate Protection
Agreement, including, without limitation, Net Swap Receipts and Swap Breakage
Receipts, provided, however, Income shall not include any Borrower Reserve
Payments unless the Seller, a Servicer or a PSA Servicer has exercised rights
with respect to such payments under the terms of the related Mortgage Loan
Documents, the Servicing Agreements or the Pooling and Servicing Agreements, as
applicable.

“Increased Costs”: Any amounts required to be paid by the Seller to the
Purchaser or any Affected Party pursuant to Section 2.13 of this Agreement.

“Indebtedness”: Means, with respect to any Person and its Consolidated
Subsidiaries determined on a consolidated basis, at the time of computation
thereof, all of the following (without duplication): (a) all obligations of such
Person in respect of money borrowed (including without limitation principal,
interest, assumption fees, prepayment fees, yield maintenance charges,
penalties, contingent interest and all other monetary obligations whether choate
or inchoate); (b) all obligations of such Person, whether or not for money
borrowed (i) represented by notes payable, letters of credit, or drafts
accepted, in each case representing extensions of credit, (ii) evidenced by
bonds, debentures, notes or similar instruments, (iii) constituting purchase
money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property or services rendered or (iv) in connection with the issuance of
preferred equity or trust preferred securities; (c) Capital Lease Obligations of
such Person; (d) all Off-Balance Sheet Obligations of such Person (other than
non-recourse indebtedness incurred in connection with any CDO Securitization
Transaction); (e) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Mandatory Redeemable
Stock issued by such Person or any other Person (inclusive of forward equity
contracts), valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends; (f) as applicable, all obligations
of such Person (but not the obligation of others) in respect of any keep well
arrangements, credit enhancements, contingent or future funding obligations
under any Eligible Asset or any obligation senior to the Eligible Asset,
unfunded interest reserve amount under any Eligible Asset or any obligation that
is senior to the Eligible Asset, purchase obligation, repurchase obligation,
takeout commitment or forward equity commitment, in each case evidenced by a
binding agreement (excluding any such obligation to the extent the obligation
can be satisfied by the issuance of Equity Interest (other than Mandatory
Redeemable Stock)); (g) net obligations under any Derivative Contract not
entered into as a hedge against existing Indebtedness, in an amount equal to the
Derivatives Termination Value thereof; (h) all Indebtedness of other Persons
which such Person has guaranteed or is otherwise recourse to such Person (except
for guaranties of customary exceptions for fraud, misapplication of funds,
environmental indemnities and other similar exceptions to recourse liability
(but not exceptions relating to bankruptcy, insolvency, receivership or other
similar events)); (i) all Indebtedness of another Person secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien (other than certain Permitted Liens) on
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness or other payment
obligation; provided, however, if such Person has not assumed or become liable
for the payment of such Indebtedness, then for the purposes of this definition
the amount of such Indebtedness shall not exceed the market value of the
property subject to such Lien and (j) Contingent Liabilities.
 
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“Indemnified Amounts”: Defined in Subsection 11.1(a) of this Agreement.

“Indemnified Party”: Defined in Subsection 11.1(a) of this Agreement.

“Independent Director”: A natural Person who (a) is not at the time of initial
appointment as Independent Director, and may not have been at any time during
the five (5) years preceding such initial appointment or at any time while
serving as Independent Director, (i) a stockholder, partner, member or direct or
indirect legal or beneficial owner of the Seller, the Guarantor or any Affiliate
of the Seller or the Guarantor; (ii) a contractor, creditor, customer, supplier,
director (with the exception of serving as the Independent Director of the
Seller), officer, employee, attorney, manager or other Person who derives any of
its purchases or revenues from its activities with the Seller, the Guarantor or
any Affiliate of the Seller or the Guarantor; (iii) a natural Person who
controls (directly or indirectly or otherwise) the Seller, the Guarantor or any
Affiliate of the Seller or Guarantor or who controls or is under common control
with any Person that would be excluded from serving as an Independent Director
under (i) or (ii), above; or (iv) a member of the immediate family of a natural
Person excluded from servicing as an Independent Director under (i) or (ii)
above and (b) otherwise satisfies the then current requirements of the Rating
Agencies. A Person who is an employee of a nationally recognized organization
that supplies independent directors and who otherwise satisfies the criteria in
clause (a) but for the fact that such organization receives payment from the
Seller or Guarantor for providing such independent director shall not be
disqualified from serving as an Independent Director hereunder.

“Insolvency Event”: With respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in respect of such
Person or any substantial part of its Property in an involuntary case under any
applicable Insolvency Law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its Property, or ordering the
winding-up or liquidation of such Person’s affairs, and such decree or order
shall remain unstayed and in effect for a period of sixty (60) consecutive days;
or (b) the commencement by such Person of a voluntary case under any applicable
Insolvency Law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.
 
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“Insolvency Laws”: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments or similar debtor relief laws
from time to time in effect affecting the rights of creditors generally.

“Insolvency Proceeding”: Any case, action or proceeding before any court or
other Governmental Authority relating to any Insolvency Event.

“Interest Expense”: Means for any period, total interest expense, both expensed
and capitalized, of the Seller for such period with respect to all outstanding
Indebtedness of the Seller (including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing and net costs under interest rate protection
agreements), determined in accordance with GAAP, net of interest income of the
Seller for such period (determined in accordance with GAAP).

“Interest Rate Protection Agreement”: With respect to any or all of the Mortgage
Assets and Purchased Assets, as applicable, (i) any Derivatives Contract
required under the terms of the related Mortgage Loan Documents providing for
protection against fluctuations in interest rates or the exchange of nominal
interest obligations, either generally or under specific contingencies, and
acceptable to the Purchaser in its reasonable discretion, which Interest Rate
Protection Agreement shall be performed, maintained and in place in accordance
with the terms of the Mortgage Loan Documents, and (ii) any Derivatives Contract
put in place by the Seller, the Guarantor or any Affiliate of the foregoing with
respect to any Mortgage Asset or Purchased Asset, as applicable, including,
without limitation, the Swap Documents, which Interest Rate Protection Agreement
shall be performed, maintained and in place during the time the related
Purchased Asset is subject to a Transaction under this Agreement.

“Junior Interest”: (a) A senior, pari passu or junior participation interest in
a performing Commercial Real Estate Loan or (b) a senior, pari passu or junior
note or certificate in an “A/B” or similar structure in a performing Commercial
Real Estate Loan.

“Junior Interest Document”: The original executed promissory note, Participation
Certificate, Participation Agreement and any other evidence of a Junior
Interest, as applicable.

“Late Payment Fee”: Defined in Subsection 2.5(a) of this Agreement.

“Lien”: Any mortgage, lien, pledge, charge, right, claim, security interest or
encumbrance of any kind of or on any Person’s assets or properties in favor of
any other Person (including any UCC financing statement or any similar
instrument filed against such Person’s assets or properties).

“Liquidity”: An amount equal to the (a) sum of (without duplication) (i) the
amount of unrestricted cash and unrestricted Cash Equivalents and
(ii) Availability under this Agreement and (iii) the amount of Borrowing
Capacity under the Other Credit Facilities less, (b) amounts necessary to
satisfy Margin Deficits under this Agreement.

“Loan-to-Value Ratio” or “LTV”: With respect to any Mortgage Asset or Purchased
Asset (other than any CMBS Security), as applicable, as of any date of
determination, the ratio of the outstanding principal amount of such Mortgage
Asset or Purchased Asset, as applicable, to the market value of the related
Underlying Mortgaged Property at such time (or, in the case of the Bridge Loans,
the cost of completion of the intended improvements), as determined by the
Purchaser, (i) in connection with the initial purchase of a Mortgage Asset only
and to the extent a Current Appraisal is available, based on the Current
Appraisal, as the LTV may be adjusted by the Purchaser as the Purchaser
determines in its discretion, and, (ii) in all other cases, as the Purchaser may
determine in its discretion based on such sources of information as the
Purchaser may determine to rely on in its discretion; provided, however, that,
with respect to Junior Interests, Mezzanine Loans, Bridge Loans, Preferred
Equity Interests and Subordinate CTL Loans that are also Junior Interests or
Mezzanine Loans, all such calculations shall be made taking into account any
senior or pari passu debt or other obligations, including debt or other
obligations secured directly or indirectly by the applicable Underlying
Mortgaged Property; provided, further, however, the LTV shall not exceed the
Maximum LTV.
 
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“Mandatory Redeemable Stock”: Means, with respect to any Person and any
Subsidiary thereof, any Equity Interest of such Person which by the terms of
such Equity Interest (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the happening
of any event or otherwise (a) matures or is required to be redeemed, pursuant to
a sinking fund obligation or otherwise (other than an Equity Interest to the
extent redeemable in exchange for common stock or other equivalent common Equity
Interest), (b) is convertible into or exchangeable or exercisable for
Indebtedness or Mandatory Redeemable Stock, or (c) is redeemable at the option
of the holder thereof, in whole or in part (other than any Equity Interest which
is redeemable solely in exchange for common stock or other equivalent common
Equity Interest); in each case, on or prior to the Facility Maturity Date.

“Margin Base”: On any day, the aggregate Asset Value of all Purchased Assets or
certain specified Purchased Assets, as applicable.

“Margin Correction Deadline”: 3 p.m. on the second Business Day after any Margin
Deficit Notice is delivered by the Purchaser.

“Margin Deficit”: Defined in Section 2.7 of this Agreement.

“Margin Deficit Notice”: Defined in Section 2.7 of this Agreement.

“Market Value”: As of any date in respect of any Mortgage Asset or Purchased
Asset, as applicable, the price at which such Mortgage Asset or Purchased Asset,
as applicable, could readily be sold, as determined by the Purchaser (i) in
connection with the initial purchase of a Mortgage Asset only and to the extent
a Current Appraisal is available, based on the Current Appraisal value, and,
(ii) in all other cases, as the Purchaser may determine in its discretion and in
good faith based on such sources and information as the Purchaser may determine
to rely on in its discretion (which value may be determined to be zero), as such
Market Value may be adjusted by the Purchaser as the Purchaser determines in its
discretion.

“Material Adverse Effect”: A material adverse effect on (a) the financial
condition or credit quality of the Seller or the Guarantor, (b) the ability of
the Seller, the Guarantor or the Pledgor to perform its obligations under any of
the Repurchase Documents or Mortgage Loan Documents to which it is a party,
(c) the validity or enforceability of any of the Repurchase Documents, (d) the
rights and remedies of the Purchaser or the Swap Counterparty under any of the
Repurchase Documents, (e) the timely payment of any amounts payable under the
Repurchase Documents or Mortgage Loan Documents, or (f) the Asset Value of the
Purchased Assets; provided, however, the occurrence of an event under clause (e)
or (f) of this definition of Material Adverse Effect shall not, in and of
itself, constitute an Event of Default under Subsection 10.1(e), but such
occurrence may be or form the basis for an Event of Default under other
provisions of Section 10 other than Subsection 10.1(e).

“Materials of Environmental Concern”: Any mold, petroleum (including, without
limitation, crude oil or any fraction thereof) or petroleum products (including,
without limitation, gasoline), or any hazardous or toxic substances, materials
or wastes, defined as such in or regulated under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
 
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“Maximum Aggregate Over-Advance Purchase Price Amount”: Defined in the Fee
Letter.

“Maximum Amount”: Means $100,000,000; provided, however, on and after the
Facility Maturity Date, the Maximum Amount shall mean the aggregate Purchase
Price outstanding for all Transactions.

“Maximum LTV”: With respect to any Eligible Asset (other than any CMBS Security)
at any time, the Loan-to-Value Ratio for the related Underlying Mortgaged
Property set forth on Schedule 1 to the Fee Letter under the heading “End LTV”
or “End LTC” (or, if not set forth therein in the case of Preferred Equity
Interests and Construction Loans to the extent applicable, as set forth in the
related Confirmation under the same or similar headings); provided, however, in
no event shall the Maximum LTV for a Construction Loan exceed 85%) for the
applicable Class of such Mortgage Asset and, as applicable, the applicable Type
of Underlying Mortgaged Property; provided, however, the Maximum LTV shall take
into account any senior or pari passu debt or other obligations, including debt
or other obligations secured directly or indirectly by the applicable Underlying
Mortgaged Property.

“Mezzanine Loan”: A performing mezzanine loan secured by a first priority
perfected lien and pledge of the Equity Interest of the Person that owns
directly or indirectly income producing Commercial Real Estate that is
performing; provided, however, on a case by case basis, and in the Purchaser’s
discretion and subject to such terms, conditions and requirements and Advance
Rate and Pricing Spread adjustments as the Purchaser may require in its
discretion, the Purchaser may (but is not required to) consider purchasing a
Mezzanine Loan that is secured by less than all of the Equity Interest of the
Person that owns directly or indirectly income producing Commercial Real Estate.

“Mezzanine Note”: The original executed promissory note or other evidence of
Mezzanine Loan indebtedness.

“Minimum DSCR”: With respect to any Mortgage Asset or Purchased Asset (other
than any CMBS Security), as applicable, at any time, the DSCR for the related
Underlying Mortgaged Property set forth on Schedule 1 to the Fee Letter under
the heading “In-Place DSCR” (or, if not set forth therein in the case of
Preferred Equity Interests and Construction Loans to the extent applicable, as
set forth in the related Confirmation under the same or similar headings) for
the applicable Class of such Mortgage Asset and, as applicable, the applicable
Type of Underlying Mortgaged Property; provided, however, the Minimum DSCR shall
take into account any senior or pari passu debt or other obligations, including
debt or other obligations secured directly or indirectly by the applicable
Underlying Mortgaged Property.

“Moody’s”: Moody’s Investors Services, Inc., and any successor thereto.

“Mortgage”: Each mortgage, assignment of rents, security agreement and fixture
filing, or deed of trust, assignment of rents, security agreement and fixture
filing, or similar instrument creating and evidencing a Lien on real property,
fixtures and other property and rights incidental thereto.

“Mortgage Asset”: A Whole Loan, a Junior Interest, a Mezzanine Loan, a Bridge
Loan, a CMBS Security, a CTL Loan, a Subordinate CTL Loan, Senior Secured Bank
Debt or a Preferred Equity Interest, (i) the Underlying Mortgaged Property for
which is included in the categories for Types of Mortgage Assets, (ii) that is
listed on a Confirmation and (iii) for which the Custodian has been instructed
by a Seller to hold the related Mortgage Asset File for the Purchaser pursuant
to the Custodial Agreement; provided, however, Mortgage Assets shall not include
any Retained Interest (if any) (unless approved by the Purchaser in its
discretion).

“Mortgage Asset File”: Defined in the Custodial Agreement.
 
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“Mortgage Asset File Checklist”: Defined in the Custodial Agreement.

“Mortgage Loan Documents”: Defined in the Custodial Agreement.

“Mortgage Note”: The original executed promissory note or other evidence of the
Indebtedness of a Borrower with respect to a Mortgage Asset.

“Mortgaged Property”: The Commercial Real Estate (including all improvements,
buildings, fixtures, building equipment and personal property thereon and all
additions, alterations and replacements made at any time with respect to the
foregoing and any Credit Tenant Lease to which such real property is subject)
and all other collateral securing repayment of the related debt evidenced by a
Mortgage Note, a Junior Interest Document or other note, certificate or debt
instrument.

“Net Cash Flow”: With respect to any Underlying Mortgaged Property, for any
period, the net income (or deficit) attributable to such Underlying Mortgaged
Property for such period, determined in accordance with GAAP (and if such
Property is subject to a Credit Tenant Lease, the net rents paid during such
period under such lease), less the amount of all (a) capital expenditures
incurred, (b) reserves established, (c) leasing commissions paid (other than
commissions paid from reserves held under the Mortgage Loan Documents) and
(d) tenant improvements paid during such period (other than tenant improvements
paid from reserves held under the Mortgage Loan Documents) in each case
attributable to such Underlying Mortgaged Property, plus all non-cash charges
deducted in the calculation of such net income.

“Net Income”: With respect to any Person and its Consolidated Subsidiaries for
any period, the net income of such Person and its Consolidated Subsidiaries
determined on a consolidated basis for such period as determined in accordance
with GAAP.

“Net Swap Payments”: With respect to each Payment Date, the excess, if any, of
(a) the monthly payments by the Seller to the Swap Counterparty under the Swap
Documents and any interest accrued thereon over (b) the monthly payments by the
Swap Counterparty to the Seller under the Swap Documents and any interest
accrued thereon.

“Net Swap Receipts”: With respect to each Payment Date, the excess, if any, of
(a) the monthly payments by the Swap Counterparty to the Seller under the Swap
Documents and any interest accrued thereon over (b) the monthly payments by the
Seller to the Swap Counterparty under the Swap Documents and any interest
accrued thereon.

“Non-Recourse Indebtedness”: Means, with respect to any Person, Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities, and
other similar exceptions to non-recourse provisions (but not exceptions relating
to bankruptcy, insolvency, receivership or other similar events)) is
contractually limited to specific assets of such Person encumbered by a Lien
securing such Indebtedness.

“Non-Table Funded Purchased Asset”: A Purchased Asset that is not a Table Funded
Purchased Asset.

“Non-Wachovia Assets”: Any Mortgage Asset issued or extended by a Person other
than Wachovia Corporation or an Affiliate of Wachovia Corporation.

“NorthStar”: Defined in the Preamble of this Agreement.
 
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“Note Purchase Agreement”: The Note Purchase Agreement, dated as of March 29,
2007, between NRF-Reindeer Ltd., a Cayman Islands exempted limited liability
company, and Wachovia Bank, N.A. (London Branch), as amended, modified,
restated, replaced, waived, substituted, supplemented or extended from time to
time, together with all other documents executed in connection therewith, as the
same are amended modified, restated, replaced, waived, substituted, supplemented
or extended from time to time.

“Note Purchase Margin”: The difference between the Note Purchase Price and the
Note Purchase Price that would be outstanding if an 80% Advance Rate (as defined
in the Note Purchase Agreement) were in effect under the Note Purchase
Agreement, as determined by the Purchaser on at least a weekly basis and as
converted by the Purchaser in its discretion to Dollars.

“Note Purchase Price”: The Purchase Price (as defined in the Note Purchase
Agreement) outstanding under the Note Purchase Agreement.

“Obligations”: Defined in Subsection 8.1(b) of this Agreement.

“OFAC”: The U.S. Department of the Treasury’s Office of Foreign Assets Control.

“OFAC Regulations”: The regulations promulgated by OFAC, as amended from time to
time.

“Off-Balance Sheet Assets”: Means, with respect to any Person, any asset that is
subject to an off-balance sheet financing, and as a result of such transaction
such asset does not (and is not required pursuant to GAAP) to appear as an asset
on the balance sheet of such Person.

“Off-Balance Sheet Liabilities”: Means, with respect to any Person, any
(a) repurchase obligation or liability, contingent or otherwise, of such Person
with respect to any mortgages, mortgage notes, accounts or notes receivable
sold, transferred or otherwise disposed of by such Person, (b) repurchase
obligation or liability, contingent or otherwise, of such Person with respect to
Property or assets leased by such Person as lessee and (c) obligations,
contingent or otherwise, of such Person under any Off-Balance Sheet Transaction,
in each case, if the transaction giving rise to such obligation (i) is
considered Indebtedness for borrowed money for tax purposes, and (ii) does not
(and is not required pursuant to GAAP) to appear as a liability on the balance
sheet of such Person.

“Off-Balance Sheet Obligations”: With respect to any Person and its Consolidated
Subsidiaries determined on a consolidated basis as of any date of determination
thereof, without duplication and to the extent not included as a liability on
the consolidated balance sheet of such Person and its Consolidated Subsidiaries
in accordance with GAAP: (a) the monetary obligations under any financing lease
or so-called “synthetic,” tax retention or off-balance sheet lease transaction
which, upon the application of any Insolvency Laws to such Person or any of its
Consolidated Subsidiaries, would be characterized as indebtedness; (b) the
monetary obligations under any sale and leaseback transaction which does not
create a liability on the consolidated balance sheet of such Person and its
Consolidated Subsidiaries; or (c) any other monetary obligation arising with
respect to any other transaction which (i) is characterized as indebtedness for
tax purposes but not for accounting purposes in accordance with GAAP or (ii) is
the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person and its
Consolidated Subsidiaries (for purposes of this clause (c), any transaction
structured to provide tax deductibility as interest expense of any dividend,
coupon or other periodic payment will be deemed to be the functional equivalent
of a borrowing).

“Off-Balance Sheet Transaction”: Means, with respect to any Person, any
synthetic lease, tax retention operating lease, commercial mortgage backed
securities transaction, securitization transaction, collateralized debt
obligation transaction, off balance sheet loan or similar off balance sheet
financing.
 
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“Officer’s Certificate”: A certificate signed by a Responsible Officer of the
Seller, the Guarantor or the Pledgor, as applicable.

“Operating Company”: An “operating company” within the meaning of 29 C.F.R.
2510.3-101(c) of the regulations of the U.S. Department of Labor.

“Opinion of Counsel”: A written opinion of counsel, which opinion and counsel
are acceptable to the Purchaser in its reasonable discretion.

“Originator”: With respect to each Mortgage Asset, the Person who originated
such Mortgage Asset.

“Other Costs” Defined in Subsection 13.8(c) of this Agreement.

“Other Credit Facilities”: Any warehouse, repurchase, loan or credit facility
provided by a national banking association or any syndicate thereof (or any
other financial institution approved by the Purchaser in its reasonable
discretion) to a Guarantor or any Affiliate or Subsidiary of a Guarantor
(including the Unsecured Credit Facility).

“Over-Advance Advance Rate”: Defined in the Fee Letter.

“Over-Advance Draw Fee”: Defined in the Fee Letter.

“Over-Advance Pricing Spread”: Defined in the Fee Letter.

“Over-Advance Provisions”: Defined in the Fee Letter.

“Over-Advance Purchase Price”: Defined in the Fee Letter.

“Over-Advance Purchased Asset”: Defined in the Fee Letter.

“Over-Advance Repayment Date”: Defined in the Fee Letter.

“Participation Agreement”: With respect to any Junior Interest, any executed
participation agreement, sub-participation agreement or similar agreement under
which the Junior Interest is created, evidenced, issued and/or guaranteed. 

“Participation Certificate”: With respect to any Junior Interest, an executed
certificate, note, instrument or other document representing the participation
interest or sub-participation interest granted under a Participation Agreement.

“paying Seller”: Defined in Subsection 13.24(b).

“Payment Date”: The 1st day of each calendar month, or, if such day is not a
Business Day (i) if the next Business Day occurs during the succeeding month,
the previous Business Day and (ii) if the next Business Day does not occur
during the succeeding month, the next succeeding Business Day.

“Periodic Advance Repurchase Payment”: Defined in Subsection 2.5(a) of this
Agreement.
 
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“Permitted Indebtedness”: With respect to Preferred Equity Interests,
Indebtedness that is permitted under the related Mortgage Loan Documents and
disclosed in writing to the Purchaser in a Transaction Request and a
Confirmation.

“Permitted Investments”: Investments of any one or more of the following types:
(a) marketable obligations of the United States, the full and timely payment of
which are backed by the full faith and credit of the United States of America
and that have a maturity of not more than 270 days from the date of acquisition;
(b) marketable obligations, the full and timely payment of which are directly
and fully guaranteed by the full faith and credit of the United States and that
have a maturity of not more than 270 days from the date of acquisition;
(c) bankers’ acceptances and certificates of deposit and other interest-bearing
obligations (in each case having a maturity of not more than 270 days from the
date of acquisition) denominated in Dollars and issued by any bank with capital,
surplus and undivided profits aggregating at least $100,000,000, the short-term
obligations of which are rated of least A-1 by S&P and P-1 by Moody’s;
(d) repurchase obligations with a term of not more than ten (10) days for
underlying securities of the types described in clauses (a), (b) and (c) above
entered into with any bank of the type described in clause (c) above;
(e) commercial paper rated at least A-1 by S&P and P-1 by Moody’s; (f) demand
deposits, time deposits or certificates of deposit (having original maturities
of no more than 365 days) of depository institutions or trust companies
incorporated under the laws of the United States of America or any state thereof
(or domestic branches of any foreign bank) and subject to supervision and
examination by federal or state banking or depository institution authorities;
provided, however, that at the time such investment, or the commitment to make
such investment, is entered into, the short-term debt rating of such depository
institution or trust company shall be at least A-1 by S&P and P-1 by Moody’s;
and (g) money market mutual funds possessing the highest available rating from
S&P and Moody’s.

“Permitted Liens”: Any of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced or
threatened: (a) Liens for federal, state, municipal or other local or other
Governmental Authority taxes if such taxes shall not at the time be due and
payable, (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’,
workmen’s and repairmen’s Liens and other similar Liens, arising in the ordinary
course of business securing obligations that are not overdue for a period of
more than thirty (30) days, and (c) Liens granted pursuant to or by the
Repurchase Documents.

“Person”: An individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.

“Plan”: Any plan, including single employer and multi-employer plans, to which
section 4021(a) of ERISA applies or any retirement medical plan, each as
established or maintained for employees of the Seller, the Guarantor or any
ERISA Affiliate of the Seller or the Guarantor to which Section 4021(a) of ERISA
applies.

“Plan Asset Regulations”: 29 C.F.R. 2510.3-101, et. seq.

“Plan Assets”: “Plan assets” within the meaning of the Plan Asset Regulations.

“Pledge and Security Agreement”: The Pledge and Security Agreement to be entered
into pursuant to Subsection 5.1(ff) of this Agreement between the Purchaser and
the Pledgor, as such agreement is amended, modified, restated, replaced, waived,
substituted, supplemented or extended from time to time.

“Pledged Collateral”: Defined in the Pledge and Security Agreement.
 
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“Pledged Preferred Equity Collateral”: Defined in the Preferred Equity Pledge
and Security Agreement.

“Pledgor”: Each Person that becomes a Pledgor under the Pledge and Security
Agreement and the other Repurchase Documents, together with their successors and
assigns.

“Pooling and Servicing Agreements”: Any and all pooling and servicing
agreements, trust agreements or indentures governing servicing and other matters
entered into in connection with a (i) CMBS Security or (ii) a securitization of
a senior interest in a Mortgage Asset, where such securitization transaction is
rated by one (1) or more Rating Agencies.

“Post-Default Rate”: In respect of any day a Transaction is outstanding or any
other amount under this Agreement or any other Repurchase Document is not paid
when due to the Purchaser at the stated Repurchase Date or otherwise when due, a
rate per annum determined on a 360 day per year basis during the period from and
including the due date to but excluding the date on which such amount is paid in
full equal to the applicable Rate plus 500 basis points.

“Pre-Approved Purchaser”: A bank, financial institution or similar Person having
a rating assigned by S&P of BBB or better (or an equivalent rating assigned by
another Rating Agency), Variable Funding Capital Corporation, Atlas Capital
Funding, Ltd., Blue Ridge Asset Funding Corporation or any other off-balance
sheet vehicle; provided, however, a Pre-Approved Purchaser shall not include
competitors of NorthStar that are disclosed in writing from time to time to
Wachovia, provided that Wachovia and any of its Affiliates shall not be deemed
to be competitors of NorthStar.

“Preferred Dividends”: Means, for any period and without duplication, all
Restricted Payments paid or required to be paid during such period on Preferred
Securities issued by NorthStar or any Consolidated Subsidiary. Preferred
Dividends shall not include dividends or distributions (a) paid or payable
solely in Equity Interests (other than Mandatory Redeemable Stock) payable to
holders of such class of Equity Interests; (b) paid or payable to NorthStar or
any Consolidated Subsidiary; or (c) constituting or resulting in the redemption
of Preferred Securities, other than scheduled redemptions not constituting
balloon, bullet or similar redemptions in full.

“Preferred Equity Grantor”: The entity in which a Preferred Equity Interest
represents an investment.

“Preferred Equity Interest”: The entire Equity Interest representing the
preferred equity interest in an entity that owns directly or indirectly
Commercial Real Estate, including, but not limited to, all equity interests
representing a dividend on any of the Equity Interest of the Preferred Equity
Grantor or representing a distribution or return of capital upon or in respect
of the Equity Interest of the Preferred Equity Grantor, in each case as it
relates to a Preferred Equity Interest; provided, however, (i) such Preferred
Equity Interest must contain a synthetic maturity feature acceptable to the
Purchaser in its discretion, (ii) the Purchaser’s funding of the Preferred
Equity Interest is subject to regulatory and compliance criteria, (iii) the
Purchaser reserves the right in its reasonable discretion to require that each
Preferred Equity Interest be acquired by and transferred to the Purchaser by a
special purpose entity as a co-Seller under the Agreement and for the co-Seller
to execute the Purchaser’s then current form of joinder agreement as a condition
to the purchase of the Preferred Equity Interest and (iv) the Preferred Equity
Interest is structured so as to avoid consolidation of the Preferred Equity
Interest and the other equity interests in the Preferred Equity Grantor, as
required by customary legal and GAAP accounting requirements applicable to the
Seller and the Purchaser. All references to, and calculations required to be
made in respect of, any principal and/or interest associated with any Preferred
Equity Interest shall be deemed to refer to the face amount of such Preferred
Equity Interest and the preferred return or yield (however such terms are
denominated, as set forth in the related Mortgage Loan Documents), whether
payable or accrued.
 
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“Preferred Equity Interest Documents”: The related Authority Documents of the
Preferred Equity Grantor together with any certificate, instrument or other
tangible evidence of the Equity Interest in the Preferred Equity Grantor.

“Preferred Equity Pledge and Security Agreement”: The Second Amended and
Restated Preferred Equity Interest Pledge and Security Agreement, dated as of
even date herewith, between the Seller and Purchaser relating to the Preferred
Equity Interests, as such agreement is amended, modified, waived, supplemented,
extended, restated or replaced from time to time.

“Preferred Securities”: Means, with respect to any Person, Equity Interest in
such Person that are entitled to preference or priority over any other Equity
Interest in such Person in respect of the payment (or accrual) of dividends or
distribution of assets upon liquidation, or both.

“Price Differential”: For each Accrual Period or portion thereof and each
Transaction outstanding, the sum of the products (for each day during such
Accrual Period or portion thereof) of:

   
PR x PP x
1
       
D
 
where:
 
PR
=
the Pricing Rate applicable on such day;
     
PP
=
the Purchase Price for such Transaction on such day; and
     
D
=
360,

provided, however, that (i) no provision of this Agreement shall require the
payment or permit the collection of any Price Differential in excess of the
maximum permitted by Applicable Law and (ii) the Price Differential shall not be
considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.

“Pricing Rate”: With respect to each Transaction, at any date of determination,
a rate per annum equal to the sum of (a) the applicable Rate on such date plus
(b) the applicable Pricing Spread for such Eligible Asset on such date, as such
Pricing Spreads are set forth in the Fee Letter (or, if not set forth therein in
the case of the Preferred Equity Interests and Construction Loans, as set forth
in the related Confirmation).

“Pricing Spread”: Subject to the Refinance Option, the financing spreads set
forth on Schedule 1 to the Fee Letter (or, in the case of the Preferred Equity
Interests and Construction Loans, as set forth in the related Confirmation)
corresponding to the Classes and, as applicable, Types of Mortgage Assets set
forth therein; provided, however, from and after an Event of Default, the
Pricing Spread for each Transaction shall automatically be increased by an
additional 500 basis points above and beyond the applicable Pricing Spread set
forth in the Fee Letter (or, in the case of the Preferred Equity Interests and
Construction Loans, as set forth in the Confirmation).

“Prime Rate”: The rate announced by Wachovia from time to time as its prime rate
in the United States, such rate to change as and when such designated rate
changes. The Prime Rate is not intended to be the lowest rate of interest
charged by Wachovia in connection with extensions of credit to debtors.

“Prohibited Person”: Means (i) a Person that is listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224, (ii) a Person
owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (iii) a Person with whom the Seller, the Guarantor and/or the Pledgor
is prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law, (iv) a Person who commits, threatens or conspires to commit
or supports “terrorism” as defined in Executive Order No. 13224, (v) an agency
of the government of, an organization directly or indirectly controlled by, or a
Person resident in, a country that is subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person, (vi) a Person that is named as a “specially designated
national or blocked person” on the most current list maintained or published by
OFAC and available at http://www.treas.gov/offices/eotffc/ofac/sdn.index.html or
at any replacement website or in any other official publication of such list,
and (vii) a Person who is affiliated with a Person described in clauses (i)-(vi)
above.
 
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“Property”: Any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed, and whether tangible or intangible.

“PSA Servicer”: A third party servicer (other than the Seller, the Guarantor or
any Affiliates of the foregoing) servicing all or a portion of the Purchased
Assets under a Pooling and Servicing Agreement.

“Purchase Agreement”: Any purchase agreement by and between the Seller and any
third party, including, without limitation, any Affiliate of the Seller,
pursuant to which the Seller has purchased Mortgage Assets subsequently sold to
the Purchaser hereunder.

“Purchase Date”: The date on which Eligible Assets are transferred by the Seller
to the Purchaser (including, without limitation, any First Refinance Purchase
Date or Second Refinance Purchase Date) or, as applicable, the date on which
additional advances (if any) are made to the Seller in connection with an
existing Purchased Asset in accordance with Subsection 2.2(j) of this Agreement.

“Purchase Price”: On each Purchase Date, the price at which Purchased Assets are
transferred by the Seller to the Purchaser, which amount shall be equal (unless
the Seller requests a lesser amount) to the Asset Value for each such Eligible
Asset on the Purchase Date, (i) decreased by the amount of any cash transferred
by the Seller to the Purchaser pursuant to Section 2.3 or 2.7 of this Agreement
or applied to reduce the Seller’s obligations in respect of principal under
Section 2.8 hereof, or otherwise in accordance with, this Agreement and
(ii) increased by the amount of any additional advances (if any) under Article
II of the Agreement.

“Purchased Asset Data Summary”: Defined in Subsection 5.1(q)(iii) of this
Agreement.

“Purchased Assets”: The Eligible Assets transferred by the Seller to the
Purchaser pursuant to a Transaction in accordance with the terms of this
Agreement, including Additional Purchased Assets.

“Purchased Items”: Defined in Subsection 8.1(a) of this Agreement.

“Purchaser”: Individually or collectively as the context requires, Wachovia and
the successors and assigns of the foregoing.

“Purchaser’s Account”: The account of the Purchaser disclosed to the Seller from
time to time.

“Rate”: For any Accrual Period and for each Transaction outstanding and for each
day during such Accrual Period, the rate per annum equal to the Adjusted
Eurodollar Rate; provided, however, the Rate for any Accrual Period shall be the
Base Rate if a Eurodollar Disruption Event occurs.
 
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“Rating Agency”: Each of S&P, Moody’s, Fitch and any other nationally recognized
statistical rating agency that has been requested to issue a rating in
connection with the matter at issue, including successors of the foregoing.

“Refinance Option”: Subject to the other provisions of this Agreement, the
Seller shall repurchase each Purchased Asset no later than 364 calendar days
from the related Purchase Date; provided, however, (i) with respect to any
Purchased Asset purchased during the first or second year of the Facility and
which is still outstanding under the Facility at the end of the applicable 364
calendar day period, upon the written request of the Seller delivered to the
Purchaser at least ten (10) Business Days prior to the applicable Repurchase
Date, the Purchaser agrees, concurrently with the Seller’s repurchase of any
such Purchased Asset, to enter into a new Transaction to purchase any such
Purchased Asset for an additional 364 calendar day period pursuant to a
Transaction documented as a repurchase by the Seller and a purchase by the
Purchaser, respectively, in book entry form (the date of such purchase under
clause (i) of this definition of Refinance Option being referred to herein as
the “First Refinance Purchase Date”), provided, that, in connection with and as
a condition to any such new purchase, (1) at the time of such request by the
Seller and up to the time of such purchase, the following shall be true and the
Seller shall provide the Purchaser with a written certification that: (A) no
Event of Default has occurred and is continuing, (B) the related Purchased Asset
is not a Delinquent Mortgage Asset or Defaulted Mortgage Asset, (C) the related
Purchased Asset, the related Underlying Mortgaged Property and/or the value or
Market Value of any of the foregoing has not deteriorated materially (as
determined by the Purchaser in its discretion) from the original Purchase Date,
(D) the related Purchased Asset, the Underlying Mortgaged Property and any
applicable development plan are performing as expected at the Purchase Date,
including, but not limited to, with respect to such matters as construction
progress, re-leasing, zoning, reserve balances and servicing, as determined by
the Purchaser in its discretion, (E) no Margin Deficit exists, (F) the
outstanding principal amount of the Purchased Asset (including amounts not
advanced against by the Purchaser) does not exceed $50,000,000 and (G) the
Purchased Asset and/or the related Underlying Mortgaged Property do not involve
condominiums (or condominium conversions), Construction Loans or land
loans, (2) the new Repurchase Date is not later than the Facility Maturity Date
(not including any extensions thereof under Subsection 2.4(a) of this
Agreement), (3) notwithstanding anything contained in the Repurchase Documents
to the contrary, the Advance Rate for the Purchased Asset shall initially be the
lesser of 80% and the Advance Rate otherwise applicable to such Purchased Asset,
but such Advance Rate shall automatically decrease by 5% every six (6) months
after the First Refinance Purchase Date and the Seller shall, after each such
decrease in the Advance Rate, make principal payments to the Purchaser in an
amount necessary so that the Purchase Price outstanding for the related
Purchased Asset is equal to or less than the Purchase Price based on the reduced
Advance Rate and, in connection with such principal payments, pay any Price
Differential due thereon and any Breakage Costs payable in connection therewith,
(4) notwithstanding anything contained in the Repurchase Documents to the
contrary, the applicable Pricing Spread for the Purchased Asset shall initially
be the Pricing Spread then in effect for such Purchased Asset, but such Pricing
Spread shall automatically increase an additional ten (10) basis points (above
and beyond the Pricing Spread otherwise applicable to such Purchased Asset)
every three (3) months after the First Refinance Purchase Date, and (5) the
Purchaser and the Seller execute a new Confirmation with respect to such
Purchased Asset reflecting the new Repurchase Date (which shall be no later than
364 calendar days after such First Refinance Purchase Date) and any additional
terms as the Purchaser may require in its discretion and (ii) the Seller shall
thereafter repurchase each Purchased Asset that was purchased by the Purchaser
in accordance with clause (i) of this definition of Refinance Option no later
than 364 calendar days from the Repurchase Date; provided, further, however,
(x) with respect to any Purchased Asset purchased during the first year of the
Facility and subsequently repurchased by the Seller and purchased by the
Purchaser in accordance with clause (i) of this definition of Refinance Option
and which are still outstanding under the Facility as of the Repurchase Date,
upon the written request of the Seller delivered to the Purchaser at least
ten (10) Business Days prior to the applicable Repurchase Date, the Purchaser
agrees, concurrently with the Seller’s repurchase of any such Purchased Asset,
to enter into a new Transaction to purchase any such Purchased Asset for an
additional 364 calendar day period pursuant to a Transaction documented as a
repurchase by the Seller and a purchase by the Purchaser, respectively, in book
entry form (the date of such purchase under clause (x) of this definition of
Refinance Option being referred to herein as the “Second Refinance Purchase
Date”), provided, that, in connection with and as a condition to any such new
purchase, (1) at the time of such request by the Seller and up to the time of
such purchase, the following shall be true and the Seller shall provide the
Purchaser with a written certification that: (A) no Event of Default has
occurred and is continuing, (B) the related Purchased Asset is not a Delinquent
Mortgage Asset or Defaulted Mortgage Asset, (C) the related Purchased Asset, the
related Underlying Mortgaged Property and/or the value or Market Value of any of
the foregoing has not deteriorated materially (as determined by the Purchaser in
its discretion) from the First Refinance Purchase Date in accordance with
clause (i) of this definition of Refinance Option, (D) the related Purchased
Asset, the Underlying Mortgaged Property and any applicable development plan are
performing as expected at the Purchase Date, including, but not limited to, with
respect to such matters as construction progress, re-leasing, zoning, reserve
balances and servicing, as determined by the Purchaser in its discretion, (E) no
Margin Deficit exists, (F) the outstanding principal amount of the Purchased
Asset (including amounts not advanced against by the Purchaser) does not exceed
$50,000,000 and (G) the Purchased Asset and/or the related Underlying Mortgaged
Property do not involve condominiums (or condominium conversions), Construction
Loans or land loans, (2) the new Repurchase Date is not later than the Facility
Maturity Date (not including any extensions thereof under Subsection 2.4(a) of
this Agreement), (3) notwithstanding anything contained in the Repurchase
Documents to the contrary, the Advance Rate for the Purchased Asset shall
initially be the Advance Rate in effect prior to the Second Refinance Purchase
Date (as determined under clause (i)(3) of this definition of Refinance Option),
but such Advance Rate shall automatically decrease by 5% every six(6) months
after the Second Refinance Purchase Date and the Seller shall, after each such
decrease in the Advance Rate, make principal payments to the Purchaser in an
amount necessary so that the Purchase Price outstanding for the related
Purchased Asset is equal to or less than the Purchase Price based on the reduced
Advance Rate and, in connection with such principal payments, pay any Price
Differential due thereon and any Breakage Costs payable in connection therewith,
(4) notwithstanding anything contained in the Repurchase Documents to the
contrary, the applicable Pricing Spread for the Purchased Asset shall initially
be the Pricing Spread in effect prior to the Second Refinance Purchase Date (as
determined under clause (i)(4) of this definition of Refinance Option), but
automatically increase an additional ten (10) basis points (above and beyond the
Pricing Spread otherwise applicable to such Purchased Asset) every three (3)
months after the Second Refinance Purchase Date, and (5) the Purchaser and the
Seller execute a new Confirmation with respect to such Purchased Asset
reflecting the new Repurchase Date (which shall be no later than 364 calendar
days after such Second Refinance Purchase Date) and any additional terms as the
Purchaser may require in its discretion and (y) the Seller shall repurchase each
Purchased Asset that was purchased by the Purchaser in accordance with
clause (x) of this definition of Refinance Option no later than 364 calendar
days from the Repurchase Date.  For the avoidance of doubt, in no event may any
Repurchase Date extended under this definition of Refinance Option or otherwise
under this Agreement be later than the Facility Maturity Date (not including any
extensions thereof under Subsection 2.4(a) of this Agreement).
 
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“Regulations T, U and X”: Regulations T, U and X of the Board of Governors of
the Federal Reserve System (or any successor), as the same may be amended from
time to time.

“REIT”: A Person qualifying for treatment as a “real estate investment trust”
under the Code.

“Related Party Loan”: Any loan, Indebtedness or preferred equity investment
identified or presented as a related party loan in such Person’s and its
Consolidated Subsidiaries’ consolidated financial statements or in the notes to
the consolidated financial statements, in accordance with GAAP; provided,
however, the term Related Party Loan shall not include negotiated, arms-length,
market standard loan transactions with third parties.
 
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“Release”: Any generation, treatment, use, storage, transportation, manufacture,
refinement, handling, production, removal, remediation, disposal, presence or
migration of Materials of Environmental Concern on, about, under or within all
or any portion of any Property or Underlying Mortgaged Property.

“Remedial Work”: Any investigation, inspection, site monitoring, containment,
clean-up, removal, response, corrective action, mitigation, restoration or other
remedial work of any kind or nature because of, or in connection with, the
current or future presence, suspected presence, Release or threatened Release in
or about the air, soil, ground water, surface water or soil vapor at, on, about,
under or within all or any portion of any Property or Underlying Mortgaged
Property of any Materials of Environmental Concern, including any action to
comply with any applicable Environmental Laws or directives of any Governmental
Authority with regard to any Environmental Laws.

“REMIC”: A real estate mortgage investment conduit.

“REO Property”: Real property acquired by the Seller, including a Mortgaged
Property, acquired through foreclosure of a Mortgage Asset or by deed in lieu of
such foreclosure.

“Reportable Event”: Any of the events set forth in Section 4043(c) of ERISA or a
successor provision thereof, other than those events as to which the notice
requirement has been waived by regulation.

“Repurchase Date”: The earliest of (i) the Facility Maturity Date, (ii) the date
that is 364 days from the Purchase Date, subject to the Refinance Option or
(iii) the Business Day on which any Seller is to repurchase the Purchased Assets
from the Purchaser (a) as specified by any Seller and agreed to by the Purchaser
in the related Confirmation or (b) if a Transaction is terminable by any Seller
on demand, the date determined in accordance with Subsection 2.2(i) of this
Agreement, as such dates in clauses (i), (ii) and (iii) above may be modified by
application of the provisions of Articles II or X of this Agreement.

“Repurchase Documents”: This Agreement, the Custodial Agreement, the Pledge and
Security Agreement, the Account Agreement, the Security Account Control
Agreement, the Fee Letter, the Guaranty, the Assignments, the Confirmations, the
Custodial Fee Letter, all UCC financing statements (and amendments thereto)
filed pursuant to the terms of this Agreement or any other Repurchase Document,
the Preferred Equity Pledge and Security Agreement, any joinder agreement
executed by a Seller and any additional document, certificate or agreement, the
execution of which is necessary or incidental to or desirable for performing or
carrying out the terms of the foregoing documents, as each of the foregoing
documents is amended, modified, restated, replaced, waived, substituted,
supplemented or extended from time to time.

“Repurchase Obligations”: Defined in Subsection 8.1(b) of this Agreement.

“Repurchase Price”: The price at which Purchased Assets are to be transferred
from the Purchaser or its designee (including the Custodian) to the Seller upon
termination of a Transaction, which will be determined in each case (including
Transactions terminable upon demand) as the sum of the Purchase Price, the
accrued and unpaid Price Differential applicable to each such Transaction as of
the date of such determination plus any related Breakage Costs and other amounts
owed with respect thereto.

“Responsible Officer”: With respect to any Person, any duly authorized officer
of such Person with direct responsibility for the administration of the
Repurchase Documents and also, with respect to a particular matter, any other
duly authorized officer to whom such matter is referred because of such
officer’s knowledge of and familiarity with the particular subject.
 
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“Restricted Payment”: Means (a) any dividend or other distribution, direct or
indirect, on account of any Equity Interest of NorthStar or any Consolidated
Subsidiary now or hereafter outstanding, except a dividend payable solely in
Equity Interests of identical class to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interest of NorthStar or any Consolidated Subsidiary now or hereafter
outstanding; and (c) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire any Equity Interest
of NorthStar or any Consolidated Subsidiary now or hereafter outstanding.

“Retained Interest”: (a) With respect to any Mortgage Asset with an unfunded
commitment on the part of the Seller, all of the obligations, if any, to provide
additional funding, contributions, payments or credits with respect to such
Mortgage Asset, (b) all duties, obligations and liabilities of the Seller under
any Mortgage Asset or any related Interest Rate Protection Agreement, including
but not limited to any payment or indemnity obligations, and, (c) with respect
to any Mortgage Asset that is transferred by the Seller to the Purchaser,
(i) all of the obligations, if any, of the agent(s), trustee(s), servicer(s) or
other similar persons under the documentation evidencing such Mortgage Asset and
(ii) the applicable portion of the interests, rights and obligations under the
documentation evidencing such Mortgage Asset that relate to such portion(s) of
the Indebtedness that is owned by another lender or is being retained by the
Seller pursuant to clause (a) of this definition.

“S&P”: Standard & Poor’s, a division of The McGraw Hill Companies, Inc., and any
successor thereto.

“Securities Account”: The securities account set forth on Schedule 2 established
in the name of the Purchaser into which all CMBS Securities that are Purchased
Assets and other Purchased Items related thereto shall be deposited (except
those CMBS Securities that are certificated securities within the meaning of
Article 8 of the UCC), which Securities Account shall be subject to the
Securities Account Control Agreement. Any Income on deposit or credited to the
Securities Account shall be transferred by the Purchaser from the Securities
Account to the Collection Account on or prior to each Payment Date.

“Securities Account Control Agreement”: A letter agreement, dated as of even
date herewith, among the Seller, the Purchaser and Wachovia in the form of
Exhibit VI attached hereto.

“Security Agreement”: With respect to any Mortgage Asset, any contract,
instrument or other document related to security for repayment thereof (other
than the related Mortgage, Mortgage Note, Mezzanine Note or any other note,
certificate or instrument) executed by the Borrower and/or others in connection
with such Mortgage Asset, including, without limitation, any security agreement,
UCC financing statement, Liens, warranties, guaranty, title insurance policy,
hazard insurance policy, chattel mortgage, letter of credit, accounts, bank
accounts or certificates of deposit or other pledged accounts, and any other
documents and records relating to any of the foregoing.

“Seller”: Individually and collectively as the context requires, NRFC WA
Holdings, LLC, a Delaware limited liability company, NRFC WA Holdings II, LLC, a
Delaware limited liability company, NRFC WA Holdings VII, LLC, a Delaware
limited liability company, NRFC WA Holdings X, LLC, a Delaware limited liability
company, NRFC WA Holdings XI, LLC, a Delaware limited liability company, NRFC WA
Holdings XII, LLC, a Delaware limited liability company, and any other Person
that becomes a party to the Repurchase Documents as a Seller, in each such case,
together with their successors and permitted assigns. Each Seller shall be
jointly and severally liable under the Repurchase Documents.
 
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“Seller Asset Schedule”: Defined in the Custodial Agreement.

“Seller-Related Obligations”: Any obligations, liabilities and/or Indebtedness
of the Seller and/or any Indebtedness of the Guarantor or the Pledgor under any
other arrangement between the Seller, the Guarantor and/or the Pledgor on the
one hand and the Purchaser, any Affiliate or any Subsidiary of the Purchaser
(including, without limitation the obligations, liabilities and Indebtedness
under the Swap Documents) and/or any commercial paper conduit for which the
Purchaser or any Affiliate or Subsidiary of the Purchaser acts as a liquidity
provider, administrator or agent on the other hand; provided, however,
Seller-Related Obligations shall be deemed to include the obligations,
liabilities and Indebtedness of (i) NRF-Reindeer Ltd. and the Guarantor under
the Note Purchase Agreement and (ii) the Seller and Guarantor under the VFCC
Repurchase Facility.

“Seller’s Release Letter”: A letter, substantially in the form of Exhibit XII-A
hereto, delivered by the Seller when no Warehouse Lender has an interest in an
Eligible Asset, releasing, subject to the terms of this Agreement, all of the
Seller’s right, title and interest in such Eligible Asset upon receipt of the
related Purchase Price by the Seller.

“Senior Secured Bank Debt”: An assignment of or participation in all or a
portion of a secured senior term loan to a Borrower, which loan (a) is rated B-
or better by at least two (2) Rating Agencies, (b) is senior or pari passu with
other secured obligations of such Borrower and (c) is secured by (i) 100% of the
Equity Interest of each existing and subsequently acquired or organized direct
or indirect domestic Subsidiary of the Borrower and (ii) substantially all
tangible and intangible assets (including, but not limited to, inventory,
accounts receivable, plant, machinery, equipment, fixtures, Commercial Real
Estate, leasehold interests, intellectual property, contracts, license rights
and other general intangibles and investment property) of the Borrower. Each
Senior Secured Bank Debt is subject to such additional underwriting criteria and
other terms, conditions and requirements as the Purchaser may require in its
discretion.

“Servicer”: A Person (other than the Seller) servicing all or a portion of the
Purchased Assets under a Servicing Agreement, which Servicer shall be acceptable
to the Purchaser in its discretion.

“Servicer Account”: Any account established by a Servicer or a PSA Servicer in
connection with the servicing of the Purchased Assets.

“Servicer Default”: Defined in Section 6.10 of this Agreement.

“Servicer Redirection Notice”: The notice from the Seller to a Servicer or PSA
Servicer, as applicable, substantially in the form of Exhibit VII attached
hereto.

“Servicing Agreement”: An agreement entered into by the Seller and a third party
for the servicing of the Purchased Assets, the form and substance of which has
been approved in writing by the Purchaser in its reasonable discretion.

“Servicing File”: With respect to each Purchased Asset, the file retained by the
Seller consisting of the originals of all documents that are not required to be
delivered to the Custodian and copies of all documents in the Mortgage Asset
File set forth in Section 3.1 of the Custodial Agreement, which Servicing File
shall be held by the Seller or Servicer on behalf of the Purchaser.

“Servicing Records”: Defined in Section 6.2 of this Agreement.
 
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“Solvent”: As to any Person at any time, having a state of affairs such that all
of the following conditions are met: (a) the fair value of the Property of such
Person is greater than the amount of such Person’s liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy
Code; (b) the present fair salable value of the Property of such Person in an
orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to realize upon its
Property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person’s ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person’s Property would constitute unreasonably small capital.

“Sub-Limit”: With respect to the characteristics of the Mortgage Assets or
Purchased Assets, as applicable:

(a) the aggregate Purchase Price for all outstanding Transactions involving
Mezzanine Loans shall not exceed 67% of the Maximum Amount;

(b) the aggregate Purchase Price for all outstanding Transactions involving CTL
Loans and/or Subordinate CTL Loans shall not exceed 50% of the Maximum Amount;

(c) the aggregate Purchase Price for all outstanding Transactions involving
Ground Leases shall not exceed 35% of the Maximum Amount;

(d) the aggregate Purchase Price for all outstanding Transactions involving
hotels shall not exceed 45% of the Maximum Amount;

(e) the aggregate Purchase Price for all outstanding Transactions involving
Construction Loans shall not exceed 35% of the Maximum Amount;

(f) the aggregate Purchase Price for all outstanding Transactions involving
Underlying Mortgage Properties located in the same metropolitan statistical area
shall not exceed 50% of the Maximum Amount;

(g) the aggregate Purchase Price for any single outstanding Transaction or for
multiple Transactions to a single Borrower (including any Affiliate of a
Borrower) shall not exceed 40% of the Maximum Amount;

(h) the aggregate Purchase Price for all outstanding Transactions involving CMBS
Securities or Senior Secured Bank Debt rated BB- or below by any Rating Agency
shall not exceed 25% of the Maximum Amount;

(i) the aggregate Purchase Price for all outstanding Transactions involving
Preferred Equity Interests shall not exceed 25% of the Maximum Amount; and

(j) the aggregate Over-Advance Purchase Price for all Over-Advance Purchased
Assets shall not exceed $50,000,000.

“Subordinate CTL Loan”: (i) A loan that is a CTL Loan in all respects except for
the failure to satisfy the ratings requirements for a Credit Tenant or (ii) a
performing Junior Interest or Mezzanine Loan in which the related senior loan is
secured by a first priority perfected security interest in Commercial Real
Estate 100% leased to, or guaranteed in full by, a Credit Tenant, and such
Junior Interest or Mezzanine Loan, as applicable, itself is secured by a first
priority perfected security interest in and to the payments under the Credit
Tenant Lease; provided, however, in the case of both clauses (i) and (ii), such
Subordinate CTL Loan satisfies such additional underwriting criteria and other
terms, conditions and requirements as the Purchaser may require in its
discretion.
 
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“Subsidiary”: With respect to any Person, any corporation, partnership, limited
liability company 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, limited liability company 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 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.

“Swap Breakage Costs”: For any Swap Transaction, any amount (other than Net Swap
Payments) payable by the Seller to the Swap Counterparty for the early
termination of that Swap Transaction or any portion thereof.

“Swap Breakage Receipts”: For any Swap Transaction, any amount (other than Net
Swap Receipts) payable by the Swap Counterparty to the Seller for the early
termination of that Swap Transaction or any portion thereof.

“Swap Counterparty”: Wachovia Bank, National Association and/or any Affiliate
thereof, together with its successors and assigns.

“Swap Documents”: The Interest Rate Protection Agreements entered into by the
Seller and the Swap Counterparty with respect to the Facility or any Purchased
Asset, including all obligations, liabilities and Indebtedness thereunder, as
such Swap Documents are amended, modified, restated, replaced, waived,
substituted, supplemented or extended from time to time.

“Swap Transaction”: Any interest rate swap transaction between the Seller and
the Swap Counterparty that is governed by the Swap Documents.

“Table Funded Purchased Asset”: A Purchased Asset which is sold to the Purchaser
simultaneously with the origination or acquisition thereof, which origination or
acquisition, pursuant to the Seller’s request, is financed with the Purchase
Price and paid directly to a title company, settlement agent or other Person
(including the Seller if the Purchaser determines to fund to the Seller in
Purchaser’s discretion) in trust for the current holder of the Mortgage Asset,
in each case, approved in writing by the Purchaser in its reasonable discretion,
for disbursement to the parties entitled thereto in connection with such
origination or acquisition. A Purchased Asset shall cease to be a Table Funded
Purchased Asset after the Custodian has delivered a Trust Receipt (along with a
completed Mortgage Asset File Checklist attached thereto) to the Purchaser
certifying its receipt of the Mortgage Asset File therefor.

“Table Funded Trust Receipt”: Defined in the Custodial Agreement.

“Tangible Net Worth”: As of a particular date and as to any Person:

(a) all amounts that would be included under stockholder equity (or the
equivalent) on a balance sheet of such Person and its Consolidated Subsidiaries
(including minority interests relating to NorthStar Realty Finance L.P.)
determined on a consolidated basis at such date determined in accordance with
GAAP, less
 
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(b) in each case with respect to such Person and its Consolidated Subsidiaries
determined on a consolidated basis (i) amounts owing to such Person from
Affiliates, or from officers, employees, partners, members, directors,
shareholders or other Persons similarly affiliated with such Person or its
respective Affiliates, (ii) intangible assets of such Person, as determined in
accordance with GAAP, (iii) the value of REO Property and Foreclosed Loans of
such Person, (iv) prepaid taxes and expenses, (v) unamortized hedging positions
under Derivatives Contracts, and (vi) (without duplication) Related Party Loans.

“Taxes”: Any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any Governmental Authority.

“Test Period”: The most recent calendar quarter.

“Title Exception”: Defined in Schedule 1, Part 1 of this Agreement.

“Total Assets”: At any time, an amount equal to the aggregate book value of
(a) all assets owned by any Person(s) (on a consolidated basis) and (b) the
proportionate share of assets owned by non-consolidated Subsidiaries of such
Person(s), less (i) amounts owing to such Person(s) from any Affiliates thereof,
or from officers, employees, partners, members, directors, shareholders or other
Persons similarly affiliated with such Person(s) or their respective Affiliates,
(ii) intangible assets (other than Interest Rate Protection Agreements
specifically related to the Purchased Assets) and (iii) prepaid taxes and/or
expenses.

“Total Liabilities”: Means all Indebtedness and Contingent Liabilities of any
Person (without duplication) and all Subsidiaries thereof determined on a
consolidated basis in accordance with GAAP.

“Transaction”: Defined in Section 2.1 of this Agreement.

“Transaction Request”: A request in the form of Exhibit I to this Agreement duly
completed and executed by the Seller.

“Transferor”: The seller of mortgage assets under a Purchase Agreement.

“True Sale Opinion”: An Opinion of Counsel to the Seller opining that the
subject transaction constitutes a “true sale”.

“Trust Preferred Securities”: Means those REIT trust preferred securities issued
by NorthStar or its Affiliates identified on Schedule 7 attached hereto and such
other REIT trust preferred securities issued by NorthStar and/or an Affiliate
which are approved by the Purchaser in its discretion, in each case which are
expressly subordinated to all other Indebtedness of NorthStar and its
Affiliates. REIT trust preferred securities issued by NorthStar and/or its
Affiliates shall be deemed approved by the Purchaser if such securities are
issued on terms substantially similar to those securities listed on Schedule 7,
as determined by the Purchaser in its reasonable discretion.

“Trust Receipt”: Defined in the Custodial Agreement.

“Type”: With respect to a Mortgage Asset, the classification of the Underlying
Mortgaged Property as one of the following: multifamily, mobile home park,
retail, office, industrial, hotel, self-storage facility, condominium
conversions and entitled land.
 
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“UCC-9 Policy”: Defined in Schedule 1, Part II of this Agreement.

“Underlying Mortgaged Property”: (a) In the case of a Whole Loan, the Mortgaged
Property securing the Whole Loan, (b) in the case of a Junior Interest, the
Mortgaged Property securing such Junior Interest (if the Junior Interest is of
the type described in clause (b) of the definition thereof), or the Mortgaged
Property securing the mortgage loan in which such Junior Interest represents a
participation (if the Junior Interest is of the type described in clause (a) of
the definition thereof), (c) in the case of a Mezzanine Loan or a Junior
Interest in a Mezzanine Loan, the Mortgaged Property that secures the senior
mortgage loan, (d) in the case of a Bridge Loan, CTL Loan or Subordinate CTL
Loan, the Mortgaged Property securing the Whole Loan, Junior Interest or
Mezzanine Loan, as applicable, (e) in the case of a CMBS Security, the Mortgaged
Properties backing such CMBS Securities, (f) in the case of Senior Secured Bank
Debt, the Mortgaged Property, if any, securing such Senior Secured Bank Debt and
(g) in the case of a Preferred Equity Interest, the Mortgaged Property owned
directly or indirectly by the Preferred Equity Grantor.

“Underwriting Package”: With respect to any Mortgage Asset (other than a CMBS
Security), the Underwriting Package shall include, to the extent applicable,
(i) a copy of the Current Appraisal or, if unavailable, any other recent
appraisal, (ii) the current rent roll, (iii) a minimum of two (2) years of
property level financial statements to the extent available, (iv) the current
financial statements of the Borrowers under the Mortgage Asset, and, if such
Mortgage Asset is not a Whole Loan, the Borrower under the Commercial Real
Estate Loan to the extent provided to or reasonably available to the applicable
Seller upon request, (v) the loan documents, Authority Documents and title
commitment/policy to be included in the Mortgage Asset File, together with
copies of any appraisals, environmental reports, studies or assessments (to
include, at a minimum, a phase I report), evidence of zoning compliance,
property management agreements, assignments of property management agreements,
contracts, licenses and permits, in each case to the extent in the Seller’s
possession or reasonably available to the Seller and, if the Mortgage Asset is
purchased by the Purchaser, assignments of such documents by the Seller in blank
to the extent covered by assignments in blank delivered to the Custodian,
(vi) any financial analysis, site inspection, market studies, environmental
reports and any other diligence conducted by or provided to the Seller and
(vii) such further documents or information as the Purchaser may reasonably
request. With respect to any CMBS Security, the Underwriting Package shall
consist of, to the extent applicable, (i) the related prospectus or offering
circular, (ii) all structural and collateral term sheets and all other
computational or other similar materials provided to the Seller in connection
with its acquisition of such CMBS Security, (iii) all distribution date
statements issued in respect thereof during the immediately preceding
twelve (12) months (or, if less, since the date such CMBS Security was issued),
(iv) all monthly reporting packages issued in respect of such CMBS Security
during the immediately preceding twelve (12) months (or, if less, since the date
such CMBS Security was issued), (v) all Rating Agency pre-sale reports, (vi) all
asset summaries and any other due diligence materials, including, without
limitation, reports prepared by third parties, provided to the Seller in
connection with its acquisition of such CMBS Security, and (vii) such further
documents or information as the Purchaser may reasonably request.

“Uniform Commercial Code” or “UCC”: The Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided that if by reason of
mandatory provisions of Applicable Law, the perfection or the effect of
perfection or non-perfection of the security interest in any Purchased Asset 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 hereof
relating to such perfection or effect of perfection or non-perfection.

“United States”: The United States of America.
 
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“Unsecured Credit Facility”: The credit facility represented by the Revolving
Credit Agreement, dated as of November 3, 2006, among NorthStar Realty Finance
Corp., NorthStar Realty Finance Limited Partnership, NRFC Sub-REIT Corp. and NS
Advisors, LLC, as borrowers, the lenders from time to time party thereto,
KeyBank National Association, as administrative agent, Keybanc Capital Markets
and Bank of America, N.A., as co-lead arrangers, KeyBank Capital Markets, as
sole book manager, Bank of America, N.A., as syndication agent, and Citicorp
North America, Inc., as documentation agent, as amended, modified, restated,
replaced, waived, substituted, supplemented or extended from time to time,
together with all other documents executed in connection therewith, as the same
are amended, modified, restated, replaced, waived, substituted, supplemented or
extended from time to time.

“Unused Fee”: The “Unused Fee” payable under the Fee Letter.

“Upsize Fee”: The “Upsize Fee” payable under the Fee Letter.

“USA Patriot Act”: The “United and Strengthening America by providing Tools
Required to Intercept and Obstruct Terrorism Act of 2001” (Public Law 107-56),
as amended from time to time.

“VFCC”: Variable Funding Capital Company LLC, together with its successors and
assigns.

“VFCC Repurchase Facility”: The repurchase facility represented by the Master
Repurchase Agreement (VFCC), dated as of May 14, 2007, among the Sellers, the
Guarantors, VFCC and others as amended, modified, restated, replaced, waived,
substituted, supplemented or extended from time to time, together with all other
documents and agreements executed in connection therewith, as such documents and
agreements are amended, modified, restated, replaced, waived, substituted,
supplemented or extended from time to time.

“Wachovia”: Wachovia Bank, National Association, a national banking association
in its individual capacity, and its successors and assigns.

“Wachovia Assets”: Any Mortgage Asset issued or extended by Wachovia Corporation
or an Affiliate of Wachovia Corporation.

“Warehouse Lender”: Any lender (a) providing financing to the Seller for the
purpose of warehousing, originating or purchasing Eligible Assets, or
(b) providing financing to a party from whom the Seller is purchasing the
Eligible Assets simultaneously with the purchase by the Purchaser.

“Warehouse Lender’s Release Letter”: A letter, substantially in the form of
Exhibit XII-B hereto (or such other form acceptable to the Purchaser in its
discretion), from a Warehouse Lender to the Purchaser, unconditionally releasing
all of Warehouse Lender’s right, title and interest in certain Eligible Assets
identified therein upon receipt of payment therefor by the Warehouse Lender.

“Whole Loan”: A performing Commercial Real Estate whole loan (including, without
limitation, a Construction Loan) secured by a first priority perfected security
interest in the Underlying Mortgaged Property.

Section 1.2 Interpretation.

In each Repurchase Document, unless a contrary intention appears:

(i) the singular number includes the plural number and vice versa;
 
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(ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by the
Repurchase Documents;

(iii) reference to any gender includes each other gender;

(iv) reference to day or days without further qualification means calendar days;
 
(v) reference to any time means Charlotte, North Carolina time;

(vi) reference to any agreement (including any Repurchase Document), document or
instrument means such agreement, document or instrument as amended, modified,
restated, replaced, waived, substituted, supplemented or extended from time to
time in accordance with the terms thereof and, if applicable, the terms of the
other Repurchase Documents, and reference to any promissory note, certificate,
instrument or trust receipt includes any promissory note, certificate,
instrument or trust receipt that is an extension or renewal thereof or a
substitute or replacement therefor;

(vii) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder and
reference to any Section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such Section or other provision;

(viii) unless otherwise expressly provided in this Agreement, reference to any
notice, request, approval, consent or determination provided for, permitted or
required under the terms of the Repurchase Documents with respect to the Seller,
the Guarantor, the Pledgor or the Purchaser means, in order for such notice,
request, approval, consent or determination to be effective hereunder, such
notice, request, approval or consent must be in writing and, with respect to
notice to the Swap Counterparty only, such notice shall contain an
acknowledgement of receipt signed by the Swap Counterparty; and

(ix) reference herein or in any Repurchase Document to the Purchaser’s
discretion shall mean, unless otherwise stated herein or therein, the
Purchaser’s sole and absolute discretion, and the exercise of such discretion
shall be final and conclusive. In addition, whenever the Purchaser has a
decision or right of determination or request, exercises any right given to it
to agree, disagree, accept, consent, grant waivers, take action or no action or
to approve or disapprove, or any arrangement or term is to be satisfactory or
acceptable (or any similar language or terms) to the Purchaser, the decision of
the Purchaser with respect thereto shall be in the sole and absolute discretion
of the Purchaser, and such decision shall be final and conclusive, except as may
be otherwise specifically provided herein.
 
ARTICLE II

PURCHASE OF ELIGIBLE ASSETS

Section 2.1 Purchase and Sale.

Subject to the terms and conditions hereof, from time to time during the
Facility Period (but at no time thereafter) and at the written request of the
Seller, the parties hereto may enter into transactions in which the Seller
transfers Eligible Assets to the Purchaser in a sales transaction against the
transfer of funds by the Purchaser representing the Purchase Price for such
Purchased Assets, with a simultaneous agreement by the Purchaser to transfer to
the Seller and the Seller to repurchase such Purchased Assets in a repurchase
transaction at a date certain not later than the Facility Maturity Date, against
the transfer of funds by the Seller representing the Repurchase Price for such
Purchased Assets. Each such transaction, including transfers of Additional
Purchased Assets, shall be referred to herein as a “Transaction” and shall be
governed by this Agreement, unless otherwise agreed to in writing.
 
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Section 2.2 Transaction Mechanics; Related Matters.

(a) From time to time during the Facility Period but no more frequently than
once per week, the Purchaser may in its discretion purchase from the Seller the
Seller’s rights and interests (but none of its obligations) under certain
Eligible Assets; provided, however, (i) at no time shall the aggregate Purchase
Price of the outstanding Transactions and any proposed Transactions exceed the
Maximum Amount and (ii) at no time shall the Purchaser enter into Transactions
after the Facility Period. The Seller shall request a Transaction by delivering
to the Purchaser, via Electronic Transmission, a written Transaction Request,
together with, via Electronic Transmission (to the extent available in such form
and otherwise by overnight delivery), a Seller Asset Schedule, a draft
Confirmation and an Underwriting Package. The Transaction Request shall set
forth, among other things, (i) the proposed Purchase Date, that, except with
respect to the initial Transaction, shall be at least ten (10) Business Days (or
such additional reasonable time as the Purchaser may reasonably request) after
the delivery of the Transaction Request, the Seller Asset Schedule, the draft
Confirmation, the complete Underwriting Package and any supplemental requests
(requested orally or in writing) relating to the proposed Mortgage Assets,
(ii) the proposed Purchase Price, which shall be in a minimum amount of
$1,000,000, (iii) the proposed Repurchase Date, (iv) the applicable Class and
Type for each such Mortgage Asset, and (v) such other additional terms and
conditions requested by the Purchaser in its reasonable discretion. The
Purchaser shall have ten (10) Business Days (or such additional reasonable time
as the Purchaser may reasonably request) from the receipt thereof to review the
Transaction Request, the Seller Asset Schedule, the draft Confirmation, the
Underwriting Package and any supplemental requests (requested orally or in
writing) relating to the proposed Mortgage Assets.

(b) The Purchaser shall notify the Seller in writing of the Purchaser’s
tentative approval (and the proposed Purchase Price for each Mortgage Asset) or
final disapproval of each proposed Mortgage Asset within ten (10) Business Days
(or such additional reasonable time as the Purchaser may reasonably request)
after its receipt of the Transaction Request, the Seller Asset Schedule, the
draft Confirmation, the complete Underwriting Package and any supplemental
requests (requested orally or in writing) relating to such proposed Mortgage
Asset. Unless the Purchaser notifies the Seller in writing of the Purchaser’s
approval of such proposed Mortgage Asset within the applicable period, the
Purchaser shall be deemed not to have approved the purchase of such proposed
Mortgage Asset.

(c) Provided that the Purchaser has tentatively agreed to purchase the Mortgage
Assets described in the Transaction Request and the proposed Purchase Price is
acceptable to the Seller, the Seller shall forward to the Purchaser, via
Electronic Transmission, on the requested Purchase Date a completed and executed
Confirmation with respect to each Transaction, and a copy of the executed
Assignment. The Confirmation delivered by the Seller to the Purchaser may
specify any additional terms or conditions of the Transaction not inconsistent
with this Agreement. Delivery of a Confirmation to the Purchaser shall be deemed
to be a certification by the Seller, among other things, that all conditions
precedent to such Transaction set forth in Article III of this Agreement have
been satisfied (except the Purchaser’s consent). Unless otherwise agreed in
writing, upon receipt of the Confirmation and Assignment, the Purchaser may, in
its discretion, agree to enter into the requested Transaction with respect to a
Mortgage Asset, with such additional terms, conditions and requirements
contained in the Confirmation as the Purchaser may require in its discretion (if
additional terms, conditions or requirements are required by the Purchaser, the
Seller shall include such terms, conditions and/or requirements in the
Confirmation to the extent it approves of same, and provide a re-executed
Confirmation to the Purchaser), and the Purchaser’s agreement to purchase the
Mortgage Asset on the terms, conditions and requirements as the Purchaser may
require in its discretion shall be evidenced by the Purchaser’s signature on the
Confirmation. Any Confirmation executed by the Purchaser shall be deemed to have
been received by the Seller on the date actually received by the Seller.
 
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(d) (A) The Seller shall release or cause to be released to the Custodian in
accordance with the Custodial Agreement (1) in the case of a single Non-Table
Funded Purchased Asset, no later than 1:00 p.m. one (1) Business Day (for more
than one (1) Non-Table Funded Purchased Asset, two (2) Business Days) prior to
the requested Purchase Date, and, (2) in the case of a Table Funded Purchased
Asset, no later than 1:00 p.m. three (3) Business Days following the applicable
Purchase Date, the Mortgage Asset File pertaining to each Eligible Asset to be
purchased by the Purchaser, and (B) the Seller shall deliver to the Custodian,
in connection with the applicable delivery under clause (A) above, a Custodial
Identification Certificate and a completed Mortgage Asset File Checklist
required under Section 3.2 of the Custodial Agreement.

(e) Pursuant to the Custodial Agreement, the Custodian shall deliver to the
Purchaser and the Seller by 1:00 p.m. on the Purchase Date for each Non-Table
Funded Purchased Asset a Trust Receipt (along with a completed Mortgage Asset
File Checklist attached thereto) and an Asset Schedule and Exception Report with
respect to the Basic Mortgage Loan Documents for the Eligible Assets that the
Seller has requested the Purchaser purchase on such Purchase Date. With respect
to each Table Funded Purchased Asset, the Seller shall cause the Bailee to
deliver to the Custodian, with a copy to the Purchaser, no later than 1:00 p.m.
on the Purchase Date, by Electronic Transmission, copies of the related Basic
Mortgage Loan Documents, a fully executed Bailee Agreement, a Bailee’s Trust
Receipt issued by the Bailee thereunder and such other evidence satisfactory to
the Purchaser in its reasonable discretion that all documents necessary to
effect a transfer of the Eligible Assets to the Purchaser have been delivered to
Bailee. With respect to each Table Funded Purchased Asset, the Custodian shall
deliver to the Purchaser with a copy to the Seller a Table Funded Trust Receipt
no later than 3:00 p.m. on the Purchase Date, which receipt and all other
documents delivered to the Bailee shall be acceptable to the Purchaser in its
reasonable discretion. In the case of a Table Funded Purchased Asset, no later
than 3:00 p.m. on the second (2nd) Business Day following the Custodian’s
receipt of the related Mortgage Loan Documents comprising the Mortgage Asset
File, the Custodian shall deliver to the Purchaser a Trust Receipt (along with a
completed Mortgage Asset File Checklist attached thereto) certifying its receipt
of the documents required to be delivered pursuant to the Custodial Agreement,
together with an Asset Schedule and Exception Report relating to the Basic
Mortgage Loan Documents, with any Exceptions identified by the Custodian as of
the date and time of delivery of such Asset Schedule and Exception Report. The
Custodian shall deliver to the Purchaser an Asset Schedule and Exception Report
relating to all of the Mortgage Loan Documents within five (5) Business Days of
its receipt of the Mortgage Asset Files.

(f) On the Purchase Date for each Eligible Asset to be purchased on such date,
and provided the requirements set forth in this Agreement and the other
Repurchase Documents are satisfied, including, without limitation, the delivery
to the Purchaser of a Trust Receipt pursuant to Subsection 2.2(e) of this
Agreement, ownership of the Purchased Assets shall be transferred to the
Purchaser (subject to the terms of this Agreement) against the simultaneous
transfer of the lesser of (A) Purchase Price and (B) the Availability to the
Seller not later than 5:00 p.m. on such date. The Seller hereby sells,
transfers, conveys and assigns to the Purchaser all the right, title and
interest (but none of the obligations) of the Seller in and to the Purchased
Assets together with all right, title and interest in and to the proceeds of any
related Purchased Assets (subject to the terms of this Agreement).
 
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(g) Each Confirmation, together with this Agreement, shall constitute conclusive
evidence of the terms agreed between the Purchaser and the Seller with respect
to the Transaction to which the Confirmation relates. The Seller’s acceptance of
the related proceeds shall, to the extent the Confirmation is not for any reason
executed by the Seller, constitute the Seller’s agreement to the terms of such
Confirmation. It is the intention of the parties that each Confirmation shall
not be separate from this Agreement but shall be made a part of this Agreement.

(h) In no event shall a Transaction be entered into when any Default or Event of
Default has occurred and is continuing or when the Repurchase Date for such
Transaction would be later than the Facility Maturity Date.

(i) In the case of individual Transactions terminable upon demand (if any), such
demand shall be made by the Purchaser or the Seller no later than such time as
is customary in accordance with market practice, by telephone or otherwise, on
or prior to the Business Day on which such termination will be effective. The
Seller shall repurchase the Purchased Assets by no later than 3:00 p.m. on the
Repurchase Date. On a Repurchase Date, termination of a Transaction will be
effected by transfer to the Seller or its designee of the Purchased Assets after
the Purchaser receives the Repurchase Price for the Purchased Asset. In
connection with the termination of a Transaction, any Income in respect of any
Purchased Assets received by the Purchaser and not previously credited or
transferred to, or applied to the obligations of, the Seller pursuant to Section
2.8 of this Agreement shall be netted against the Repurchase Price by the
Purchaser. To the extent a net amount is owed to one party, the other party
shall pay such amount to such party.

(j) Subject to the terms and conditions of this Agreement, during the term of
this Agreement, the Seller may sell to the Purchaser, repurchase from the
Purchaser and resell to the Purchaser, Eligible Assets hereunder; provided,
however, the Seller shall have no right to substitute an Eligible Asset for a
Purchased Asset. To the extent the Seller requests less than the Purchase Price
that it would otherwise be entitled to receive under the terms of this Agreement
in connection with the purchase of any Eligible Asset, and provided (A) no
Default or Event of Default exists, (B) the Purchased Asset continues to be a
Purchased Asset, (C) such Purchased Asset is not a Defaulted Mortgage Asset or
Delinquent Mortgage Asset and (D) each applicable eligibility criteria set forth
in Schedule 1 to this Agreement is satisfied in all material respects, the
Seller may request an additional advance of the Purchase Price against such
Purchased Asset in an amount not to exceed the positive difference (if any)
between the current Purchase Price (calculated as if such Purchased Asset were
purchased on such day) and the Purchase Price originally advanced by the
Purchaser with respect thereto; provided, however, in no event shall the
aggregate amounts advanced against such Purchased Asset exceed the maximum
Purchase Price that the Purchaser was prepared to advance on the date the
Purchased Asset was acquired by the Purchaser under this Agreement. If the
Purchaser has advanced the full amount of the Purchase Price that is then
available to the Seller on the Purchase Date for the purchase of the Purchased
Asset, the Seller may request in writing that the Purchaser reunderwrite the
Purchased Asset and/or redetermine the Asset Value of such Purchased Asset (in
each case in accordance with the same standards used by the Purchaser with
respect thereto at the time the Purchased Asset was originally purchased on the
Purchase Date) for the purposes of obtaining additional advances of the Purchase
Price with respect to such Purchased Asset, and, provided (A) no Default or
Event of Default exists, (B) the Purchased Asset continues to be a Purchased
Asset, (C) such Purchased Asset is not a Defaulted Mortgage Asset or Delinquent
Mortgage Asset and (D) each applicable eligibility criteria set forth in
Schedule 1 to this Agreement is satisfied in all material respects, the
Purchaser may, in its discretion, consider such request and may take such action
(or no action) in response thereto as the Purchaser may determine in its
discretion.
 
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(k) All of the Seller’s right, title and interest in the Purchased Assets that
constitute CMBS Securities shall pass to the Purchaser on the applicable
Purchase Date. The Seller shall deliver to the Custodian on behalf of the
Purchaser a complete set of all transfer documents to be completed by the
Purchaser and executed copies of any transfer documents to be completed by the
Seller, in either case in blank, but in form sufficient to allow transfer and
registration of such Purchased Assets to the Purchaser no later than the
proposed Purchase Date for the relevant Purchased Asset, and such CMBS
Securities shall be medallion guaranteed. All transfers of certificated
securities from the Seller to the Purchaser shall be effected by physical
delivery to the Custodian of the Purchased Assets (duly endorsed by the Seller,
in blank), together with a stock power executed by the Seller, in blank. With
respect to Purchased Assets that shall be delivered through the DTC or the
National Book Entry System of the Federal Reserve or any similar firm or agency,
as applicable, in book-entry form and credited to or otherwise held in an
account, the Seller shall take such actions necessary to provide instruction to
the relevant financial institution, clearing corporation, securities
intermediary or other entity to effect and perfect a legally valid delivery of
the relevant interest granted herein to the Purchaser hereunder to be held in
the Securities Account. Purchased Assets delivered in book-entry form shall be
under the custody of and held in the name of the Purchaser in the Securities
Account. With respect to any Mortgage Asset or collateral for a Mortgage Asset
that is an uncertificated security (as defined in the UCC), securities
entitlement (as defined in the UCC) or is held in a securities account (as
defined in the UCC), the Seller shall provide to the Purchaser a control
agreement, which shall be acceptable to the Purchaser in its discretion and
shall be delivered to the Custodian under the Custodial Agreement, executed by
the issuer of the Mortgage Asset or the collateral for the Mortgage Asset or the
related securities intermediary (as defined in the UCC), as applicable, granting
control (as defined in the UCC) of such Mortgage Asset or collateral for such
Mortgage Asset to the Purchaser and providing that, after an Event of Default,
the Purchaser shall be entitled to notify the issuer or securities intermediary,
as applicable, that such issuer or securities intermediary shall comply
exclusively with the instructions or entitlement orders (as defined in the UCC),
as applicable, of the Purchaser without the consent of the Seller or any other
Person and no longer follow the instructions or entitlement orders, as
applicable, of the Seller or any other Person (other than the Purchaser).
 
Section 2.3 Optional Repurchase.

The Seller may, upon two (2) Business Days’ prior written notice or such shorter
period as the Purchaser may agree in its discretion (such notice to be received
by the Purchaser no later than 5:00 p.m. (Charlotte, North Carolina time) on
such day) to the Purchaser and the Swap Counterparty, reduce the aggregate
Repurchase Price of all Purchased Assets (or, prior to an Event of Default, any
portion of all Purchased Assets or any individual Purchased Asset) currently
outstanding by remitting (1)  to the Collection Account cash in the amount of
the principal reduction plus accrued and unpaid Price Differential and any
related Breakage Costs owed in connection with such reduction and (2)  to the
Purchaser instructions to reduce such Repurchase Price, provided that (A) in
connection with such reduction the Seller shall comply with the terms of any
related Interest Rate Protection Agreement requiring that the Interest Rate
Protection Agreement be terminated in whole or in part as the result of any such
reduction of the Repurchase Price and the Seller has paid all amounts due to the
applicable parties in connection with any such termination and (B) after giving
effect to such reduction, the Seller shall be in compliance with all Sub-Limits
and all other terms, conditions and requirements contained in the Repurchase
Documents.

Section 2.4 Extension of Facility Maturity Date and Funding Expiration Date.

(a) Extension of Facility Maturity Date. At the written request of the Seller
delivered to the Purchaser no earlier than ninety (90) days and no later than
thirty (30) days prior to the Facility Maturity Date, the Purchaser may in its
discretion grant one extension of the Facility Maturity Date for a period not to
exceed one (1) year by giving written notice of such extension to the Seller no
later than fifteen (15) days before the expiration of the Facility Maturity
Date. Any failure by the Purchaser to deliver such notice of extension on a
timely basis shall be deemed to be the Purchaser’s determination not to extend
the original Facility Maturity Date. An extension of the Facility Maturity Date
is subject to the following requirements: (i) no Default or Event of Default
shall have occurred and is continuing, (ii) the Seller shall pay to the
Purchaser an Extension Fee as set forth in the Fee Letter, (iii) no additional
Transactions shall be permitted to be entered into after the original Facility
Maturity Date, (iv) the Seller must, in addition to other amounts owed by the
Seller hereunder, amortize and pay to the Purchaser the aggregate Repurchase
Price for all Transactions then outstanding in equal quarterly installments over
the term of the extension commencing with the original Facility Maturity Date
and on the Payment Date for each quarter thereafter, (v) not later than the
Facility Maturity Date (as extended in accordance with the terms of this
Agreement), the Seller shall pay to Purchaser an amount equal to the aggregate
Repurchase Price then outstanding, together with all other Aggregate Unpaids and
any other amounts then owing to the Purchaser and the Affected Parties by the
Seller pursuant to this Agreement or any other Repurchase Document, and (vi) if
for any reason the Facility Maturity Date were extended beyond four (4) years
from the Closing Date (by extensions of the Facility Maturity Date, amendments
to the Facility or otherwise), to which the Purchaser makes no promise or
commitment whatsoever, continuation statements have been filed with respect to
any outstanding UCC financing statement in favor of the Purchaser with respect
to this Facility. The Seller confirms that the Purchaser, in its discretion,
without regard to the value or performance of the Purchased Assets or any other
factor, may elect not to extend the Facility Maturity Date.
 
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(b) Extension of Funding Expiration Date. The Seller may, by written notice to
the Purchaser at any time prior to the Funding Expiration Date then in effect,
make written request for the Purchaser to extend the Funding Expiration Date for
a period not to exceed 364 days from the then current Funding Expiration Date.
Provided no Event of Default has occurred and is continuing on the date of the
Funding Expiration Date then in effect, the Funding Expiration Date shall be
extended to the date that is not greater than 364 days immediately following the
Funding Expiration Date then in effect; provided, that the Funding Expiration
Date shall in no event be extended beyond the third one-year anniversary of the
Closing Date or beyond the Facility Maturity Date.

Section 2.5 Payment of Price Differential.

(a) Notwithstanding that the Purchaser and the Seller intend that the
Transactions hereunder be sales to the Purchaser of the Purchased Assets, the
Seller shall pay to the Purchaser an amount equal to the accrued value of the
Price Differential of each Transaction for the most recently ended Accrual
Period (each such payment, a “Periodic Advance Repurchase Payment”) on each
Payment Date less any portion thereof previously paid, if any. The Purchaser
shall deliver to the Seller, via Electronic Transmission, notice of the required
Periodic Advance Repurchase Payment on or prior to the second (2nd) Business Day
preceding each Payment Date; provided, however, the Purchaser’s failure to
timely deliver such notice shall not affect the Seller’s obligations to pay the
Periodic Advance Repurchase Payment due. If the Seller fails to make all or part
of the Periodic Advance Repurchase Payment by 11:00 a.m., Charlotte, North
Carolina time, on the Payment Date, the Seller shall be obligated to pay to the
Purchaser (in addition to, and together with, the Periodic Advance Repurchase
Payment) interest on the unpaid amount of the Periodic Advance Repurchase
Payment at a rate per annum equal to the Post-Default Rate (the “Late Payment
Fee”) until the overdue Periodic Advance Repurchase Payment is received in full
by the Purchaser.

(b) If the Seller repurchases Purchased Assets on any day prior to the last day
of a Eurodollar Period or if the Seller repurchases Purchased Assets on any day
that is not a Repurchase Date for such Purchased Assets, the Seller shall
indemnify the Purchaser and hold the Purchaser harmless from any Breakage Costs
actually incurred by the Purchaser for the remainder of the Eurodollar Period.
The Purchaser shall deliver to the Seller a statement setting forth the amount
and basis of determination of any Breakage Costs, it being agreed that such
statement and the method of its calculation shall be conclusive and binding upon
the Seller, absent manifest error. This Subsection 2.5(b) shall survive
termination of this Agreement and the repurchase of all Purchased Assets subject
to Transactions hereunder until the expiration of the applicable statute of
limitations.
 
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Section 2.6 [Reserved]

Section 2.7 Margin Maintenance.

If at any time the Purchaser determines in good faith (based on such factors as
the Purchaser determines to rely on in its discretion, including, but not
limited to, a credit analysis of the Underlying Mortgaged Properties and/or the
current market conditions for the Purchased Assets) that the Margin Base for all
Purchased Assets (as determined by the Purchaser in its good faith discretion on
such date) is less than the aggregate Purchase Price for all outstanding
Transactions plus the Note Purchase Margin (in each case a “Margin Deficit”),
then the Purchaser may by notice to the Seller in the form of Exhibit X (a
“Margin Deficit Notice”) require the Seller to transfer to the Purchaser cash or
Additional Purchased Assets in the amount of the Margin Deficit to the Purchaser
by no later than the Margin Correction Deadline. All cash transferred to the
Purchaser pursuant to this Section 2.7 shall be deposited in the Collection
Account and shall be attributed to such Transaction or Transactions that caused
the Margin Deficit to reduce the outstanding Purchase Price to which it has been
attributed. Transfers of Eligible Assets to the Purchaser under this Section 2.7
shall be subject to the same conditions and requirements that are applicable to
the transfers of Eligible Assets under Section 2.2. The Purchaser’s election, in
its discretion, not to deliver a Margin Deficit Notice at any time there is a
Margin Deficit shall not waive the Margin Deficit or in any way limit or impair
the Purchaser’s right to deliver a Margin Deficit Notice at any time the same or
any other Margin Deficit exists.

Section 2.8 Income Payments.

The Purchaser shall be entitled to receive for application in accordance with
the provisions of this Agreement an amount equal to all Income paid or
distributed on or in respect of the Purchased Items, which amount shall be
deposited by the Seller, each Servicer and each PSA Servicer and all other
applicable Persons into the Collection Account. The Seller hereby agrees to
instruct each Servicer, PSA Servicer, Swap Counterparty, each counterparty under
any other Interest Rate Protection Agreement and all other applicable Persons to
transfer all Income with respect to the Purchased Items in accordance with
Subsection 5.1(e) of this Agreement, who shall hold any funds so received
pending application pursuant to the following sentence. On each Payment Date,
any amounts received by the Purchaser and deposited to the Collection Account
since the immediately preceding Payment Date shall be applied as follows: first,
to the extent not paid, to the payment of all outstanding fees, costs and
expenses due to the Custodian under the Custodial Fee Letter, second, to the
payment of all fees, costs, expenses and advances then due to the Purchaser
pursuant to the Repurchase Documents, other than the items covered in third
through ninth; third, to the payment of outstanding Late Payment Fees and Price
Differential at the Post-Default Rate, fourth, pari passu and pro-rata (based on
the amounts owed to such Persons under this clause fourth), to the payment of
accrued and unpaid Price Differential on the Purchased Assets then due to the
Purchaser and to the Swap Counterparty any Net Swap Payments then due to the
Swap Counterparty for the current and any prior Payment Dates (other than Swap
Breakage Costs); fifth, to the extent not previously paid by the Seller, to pay
the Repurchase Price for Purchased Assets then subject to a request to
repurchase in accordance with the terms of Section 2.3 of this Agreement; sixth,
without limiting the Seller’s obligations to cure Margin Deficits in a timely
manner in accordance with Section 2.7 of this Agreement, to the Purchaser for
the payment of, as applicable, any Margin Deficit outstanding; seventh, to the
extent any Income includes payments or prepayments of principal on the
underlying Purchased Assets, such payments shall be applied to reduce the
aggregate Repurchase Price outstanding; provided, however, prior to an Event of
Default and provided no Margin Deficit is outstanding, only an amount equal to
the product of the Advance Rate and the amount of such principal payment or
prepayment shall be applied to reduce the Repurchase Price outstanding for the
related Transaction; eighth, without limiting the Seller’s obligations under
Section 2.4 of this Agreement and to the extent not paid previously by the
Seller, to the Purchaser for the reduction of the Purchase Price outstanding in
accordance with Section 2.4 of this Agreement; ninth, pari passu and pro-rata
(based on the amounts owed to such Persons under this clause ninth), to the
payment of Breakage Costs, if any, Swap Breakage Costs, if any, Indemnified
Amounts, if any, Increased Costs, if any, Additional Amounts, if any, and all
other amounts then due and owing to the Purchaser, the Swap Counterparty, any
Affected Party or any other Person pursuant to the Repurchase Documents; and
tenth, the remainder to the Seller, for such purposes as the Seller shall
determine in its discretion, subject to the Financial Covenants and other
requirements of the Repurchase Documents; provided, however, that if a Margin
Deficit, Default or Event of Default has occurred and is continuing, amounts
collected pursuant to this Section 2.8 of this Agreement shall not be
transferred to the Seller but shall be retained by the Purchaser and applied in
reduction of the Obligations.
 
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Section 2.9 Payment, Transfer and Custody.

(a) Unless otherwise expressly provided herein, all amounts to be paid or
deposited by the Seller hereunder shall be paid or deposited in accordance with
the terms of this Agreement no later than 3:00 p.m. on the day when due in
lawful money of the United States, in immediately available funds and without
deduction, set-off or counterclaim to the Purchaser’s Account and if not
received before such time shall be deemed to be received on the next Business
Day. The Seller shall, to the extent permitted by Applicable Law, pay to the
Purchaser interest on any amounts not paid when due hereunder or under the
Repurchase Documents at the Post-Default Rate, payable on demand; provided,
however, that such interest rate shall not at any time exceed the maximum rate
permitted by Applicable Law. Such interest shall be for the account of, and
distributed to, the Purchaser. All computations of interest, Price Differential
and fees hereunder or under the Fee Letter shall be made on the basis of a year
consisting of 360 days for the actual number of days (including the first but
excluding the last day) elapsed. The Seller acknowledges that it has no rights
of withdrawal from the foregoing Purchaser’s Account or from the Collection
Account or the Securities Account.

(b) Whenever any payment hereunder shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
the payment of the Price Differential or any fee payable hereunder or under the
Fee Letter, as the case may be.

(c) Any Mortgage Asset Files not delivered to the Purchaser or its designee
(including the Custodian) are and shall be held in trust by the Seller or its
agent for the benefit of the Purchaser as the owner thereof. The Seller or its
agent shall maintain a copy of the Mortgage Asset File and the originals of the
Mortgage Asset File not delivered to the Purchaser or its designee (including
the Custodian). The possession of the Mortgage Asset File by the Seller or its
agent is at the will of the Purchaser for the sole purpose of servicing the
related Purchased Asset, and such retention and possession by the Seller or its
agent is in a custodial capacity only. Each Mortgage Asset File retained or held
by the Seller or its agent shall be segregated on the Seller’s books and records
from the other assets of the Seller or its agent, and the books and records of
the Seller or its agent shall be marked appropriately to reflect clearly the
sale of the related Purchased Asset to the Purchaser. The Seller or its agent
shall release custody of the Mortgage Asset File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the servicing of the Purchased Assets or is in connection with a repurchase
of any Purchased Asset by the Seller, in each case in accordance with the terms
of the Custodial Agreement.
 
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(d) Notwithstanding anything contained in this Agreement to the contrary, all
Repurchase Price and all other Obligations shall be paid in full on or before
the Facility Maturity Date.

Section 2.10 Reserved.

Section 2.11 Hypothecation or Pledge of Purchased Assets.

Title to all Purchased Items shall pass to the Purchaser, and the Purchaser
shall have free and unrestricted use of all Purchased Items subject to the terms
of this Agreement. Nothing in this Agreement shall preclude the Purchaser from
engaging in repurchase transactions with the Purchased Items or otherwise
selling, pledging, syndicating, repledging, transferring, hypothecating, or
rehypothecating the Purchased Items, all on terms that the Purchaser may
determine in its discretion subject, however, to the Purchaser’s obligations to
apply Income and reconvey the Purchased Assets to the Seller in accordance with
the terms hereof. Notwithstanding the foregoing, Purchaser shall reconvey,
without recourse, representation or warranty, the Purchased Items to the Seller
free and clear of all Liens created by the Purchaser or any party claiming by or
through the Purchaser, in accordance with the terms of this Agreement.

Section 2.12 Fees.

(a) To the extent not separately paid by the Seller under the Fee Letter, the
Price Differential, the Unused Fee and all other fees and amounts payable under
the Fee Letter shall be paid to the Purchaser from the Collection Account to the
extent funds are available on each Payment Date pursuant to Section 2.8 of this
Agreement.

(b) To the extent not separately paid by the Seller, the Custodian’s fees and
expenses shall be paid to the Custodian from the Collection Account to the
extent funds are available on each Payment Date pursuant to Section 2.8 of this
Agreement.

(c) The Seller shall pay to Moore & Van Allen PLLC, as counsel to the Purchaser,
on the Closing Date, its estimated, but reasonable, fees and out-of-pocket
expenses in immediately available funds and shall pay all additional fees and
out-of-pocket expenses of Moore & Van Allen PLLC (including reasonable fees and
expenses incurred in reviewing proposed Mortgage Assets for purchase by the
Purchaser within ten (10) days after receiving an invoice for such amounts.
 
Section 2.13 Increased Costs; Capital Adequacy; Illegality.

(a) If either (i) the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation, or (ii) the compliance by
the Purchaser and/or any other Affected Party with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law) shall (1) subject the Purchaser and/or any other Affected Party to
any Tax (except for Taxes on the overall net income or franchise of the
Purchaser and/or any other Affected Party), duty or other charge with respect to
any ownership interest in the Purchased Items, or any right to enter into
Transactions hereunder, or on any payment made hereunder, (2) impose, modify or
deem applicable any reserve requirement (including, without limitation, any
reserve requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding any reserve requirement, if any, included in the
determination of the Price Differential), special deposit or similar requirement
against assets of, deposits with or for the amount of, or credit extended by,
the Purchaser and/or any other Affected Party or (3) impose any other condition
affecting the ownership interest in the Purchased Items conveyed to the
Purchaser hereunder or the Purchaser’s and/or any other Affected Party’s rights
hereunder, the result of which is to increase the cost to the Purchaser and/or
any other Affected Party or to reduce the amount of any sum received or
receivable by the Purchaser and/or any other Affected Party under this
Agreement, then within ten (10) days after demand by the Purchaser and/or any
other Affected Party (which demand shall be accompanied by a statement setting
forth the basis for such demand), the Seller shall pay directly to the Purchaser
and/or any other Affected Party such additional amount or amounts as will
compensate the Purchaser and/or any other Affected Party for such additional or
increased cost actually incurred or such reduction actually suffered.
 
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(b) If either (i) the introduction of or any change in or in the interpretation
of any law, guideline, rule, regulation, directive or request or (ii) compliance
by the Purchaser and/or any other Affected Party with any law, guideline, rule,
regulation, directive or request from any central bank or other Governmental
Authority or agency (whether or not having the force of law), including, without
limitation, compliance by the Purchaser and/or any other Affected Party with any
request or directive regarding capital adequacy, has or would have the effect of
reducing the rate of return on the capital of the Purchaser and/or any other
Affected Party as a consequence of its obligations hereunder or arising in
connection herewith to a level below that which the Purchaser and/or any other
Affected Party could have achieved but for such introduction, change or
compliance (taking into consideration the policies of the Purchaser and/or any
other Affected Party with respect to capital adequacy) by an amount deemed by
the Purchaser and/or any other Affected Party to be material, then from time to
time, within ten (10) days after demand by the Purchaser and/or any other
Affected Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Seller shall pay directly to the Purchaser
and/or any other Affected Party such additional amount or amounts as will
compensate the Purchaser and/or any other Affected Party for such reduction. For
the avoidance of doubt, any interpretation of Accounting Research Bulletin
No. 51 by the Financial Accounting Standards Board shall constitute an
adaptation, change, request or directive subject to this Subsection 2.13(b).

(c) In determining any amount provided for in this Section 2.13, the Purchaser
and/or any other Affected Party may use any reasonable averaging and attribution
methods. The Purchaser and/or any other Affected Party making a claim under this
Section 2.13 shall submit to the Seller a written description as to such
additional or increased cost or reduction and the calculation thereof, which
written description shall be conclusive absent demonstrable error.
Notwithstanding anything to the contrary contained in subsections (a) or (b) of
this Section 2.13, the Purchaser and/or any other Affected Party shall not seek
to impose any such Increased Costs on the Seller unless the Purchaser and/or any
other Affected Party is imposing such Increased Costs on similarly situated
sellers or borrowers. To the extent possible, the Purchaser will use its best
efforts to give prior notice to the Seller that there will be Increased Costs
incurred. If the Purchaser gives notice of Increased Costs and the Seller either
accepts such Increased Costs or continues to utilize the Facility with knowledge
of such Increased Costs, the Seller shall be obligated to pay such Increased
Costs before exercising the termination option set forth in the next sentence.
If the proposed Increased Costs exceed 7.5% of the Seller’s Facility costs for
the preceding year, the Seller shall have the option to terminate the Agreement
by giving three (3) Business Days prior written notice to the Purchaser and
remitting to the Purchaser on or before the effective date of the termination
all outstanding Obligations (including any Breakage Costs incurred in connection
with such termination) due to the Purchaser and/or any other Affected Party
under the Repurchase Documents.

(d) If the Purchaser and/or any other Affected Party shall notify the Seller
that a Eurodollar Disruption Event as described in clause (a) of the definition
of “Eurodollar Disruption Event” has occurred, all Transactions in respect of
which the Price Differential accrues at the Adjusted Eurodollar Rate shall
immediately be converted into Transactions in respect of which the Price
Differential accrues at the Base Rate.
 
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(e) To the extent possible, the Purchaser shall use its best efforts to give
thirty (30) days notice to the Seller that the Purchaser or an Affected Party
will incur increased costs or other amounts under this Section 2.13.

(f) Without prejudice to the survival of any other agreement of the Seller
hereunder, the agreements and obligations of the Seller contained in this
Section 2.13 shall survive the termination of this Agreement until the
expiration of the applicable statute of limitations.

Section 2.14 Taxes.

(a) All payments made by a Borrower or the Seller, the Guarantor or the Pledgor
under the Repurchase Documents will be made free and clear of and without
deduction or withholding for or on account of any Taxes. If any Taxes are
required to be withheld from any amounts payable to the Purchaser and/or any
other Affected Party, then the amount payable to such Person will be increased
(such increase, the “Additional Amount”) such that every net payment made under
the Repurchase Documents after withholding for or on account of any Taxes
(including, without limitation, any Taxes on such increase) is not less than the
amount that would have been paid had no such deduction or withholding been
deducted or withheld. The foregoing obligation to pay Additional Amounts,
however, will not apply with respect to net income or franchise taxes imposed on
the Purchaser and/or any other Affected Party, with respect to payments required
to be made by the Seller, the Guarantor or the Pledgor under the Repurchase
Documents, by a taxing jurisdiction in which the Purchaser and/or any other
Affected Party is organized, conducts business or is paying taxes (as the case
may be).

(b) The Seller will indemnify the Purchaser and any other Affected Party for the
full amount of Taxes payable by such Person in respect of Additional Amounts and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. All payments in respect of this indemnification shall be
made within ten (10) days from the date a written invoice therefor is delivered
to either Seller.

(c) Within thirty (30) days after the date of any payment by the Seller of any
Taxes, the Seller will furnish to the Purchaser, at its address set forth under
its name on the signature pages of this Agreement, appropriate evidence of
payment thereof.

(d) Without prejudice to the survival of any other agreement of the Seller
hereunder, the agreements and obligations of the Seller contained in this
Section 2.14 shall survive the termination of this Agreement until the
expiration of the applicable statute of limitations.

Section 2.15 Obligations Absolute.

Except as set forth to the contrary in the Repurchase Documents, all sums
payable by the Seller and/or the Guarantor hereunder shall be paid without
notice, demand, counterclaim, setoff, deduction or defense and without
abatement, suspension, deferment, diminution or reduction, and the obligations
and liabilities of the Seller and the Guarantor hereunder shall in no way be
released, discharged, or otherwise affected (except as expressly provided
herein) by reason of: (a) any damage to or destruction of or any taking of any
Property, any Underlying Mortgaged Property, any other collateral for a
Purchased Asset or any portion of the foregoing; (b) any restriction or
prevention of or interference with any use of any Property, Underlying Mortgaged
Property, any other collateral for a Purchased Asset or any portion of the
foregoing; (c) any title defect or encumbrance or any eviction from any
Property, Underlying Mortgaged Property, any other collateral for a Purchased
Asset or any portion of the foregoing by title paramount or otherwise; (d) any
Insolvency Proceeding relating to any of the Seller, the Guarantor, a Borrower
or any obligor, account debtor or indemnitor under the Mortgage Loan Documents
or any Affiliate of the foregoing, or any action taken with respect to this
Agreement or any other Repurchase Document by any trustee or receiver of any of
the Seller, the Guarantor, a Borrower or any obligor, account debtor or
indemnitor under the Mortgage Loan Documents or any Affiliate of the foregoing,
or by any court, in any such proceeding; (e) any claim that the Seller has or
might have against the Purchaser or any Affiliate; (f) any default or failure on
the part of the Purchaser or any Affiliate to perform or comply with any of the
terms of this Agreement, the Repurchase Documents, the Engagement Letter or of
any other agreement with the Seller, the Guarantor or any Affiliate of the
foregoing; (g) the invalidity or unenforceability of any Purchased Asset or any
of the Mortgage Loan Documents; (h) any failure, refusal or inability of a
Borrower to pay any obligation due under the Mortgage Loan Documents; or (i) any
other occurrence whatsoever, whether similar or dissimilar to the foregoing,
whether or not any of the Seller, the Guarantor or any Affiliate of the
foregoing shall have notice or knowledge of any of the foregoing.”
 
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Section 2.16 Over-Advances.

During the Facility Period and provided no Event of Default is then existing,
the Purchaser may, in its discretion, purchase certain Over-Advance Purchased
Assets using the Over-Advance Advance Rate, subject to the satisfaction of the
Over-Advance Provisions.

ARTICLE III

CONDITIONS TO TRANSACTIONS

Section 3.1 Conditions to Closing and Initial Purchase.

The Purchaser shall not be obligated to enter into any Transaction hereunder nor
shall the Purchaser be obligated to take, fulfill or perform any other action
hereunder until the following conditions have been satisfied, in the discretion
of, or waived in writing by, the Purchaser:

(a) The Purchaser shall be in receipt of good standing certificates, secretary
certificates (or the equivalent) and copies of the Authority Documents and
applicable resolutions of the Seller, the Guarantor and the Pledgor evidencing,
as applicable, the corporate or other authority for the Seller, the Guarantor
and the Pledgor with respect to the execution, delivery and performance of the
Repurchase Documents and each of the other documents to be delivered by the
Seller, the Guarantor and the Pledgor from time to time in connection herewith;

(b) This Agreement, the Guaranty and each other Repurchase Document shall have
been duly executed by, and delivered to, the parties thereto and such documents
shall be in form and substance satisfactory to the Purchaser;

(c) UCC financing statements shall have been filed against the Seller and the
Pledgor in the appropriate filing office;

(d) The Seller shall have delivered to the Purchaser a duly executed Power of
Attorney in the form of Exhibit IV;

(e) The Purchaser shall be in receipt of such Opinions of Counsel from the
counsel to the Seller, the Guarantor and the Pledgor and an Opinion of Counsel
from in-house counsel to the Custodian as the Purchaser may require, each in
form and substance satisfactory to the Purchaser in its reasonable discretion,
including, without limitation, corporate opinions and perfection opinions;
 
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(f) The Purchaser shall be in receipt of the Servicing Agreements and the
Pooling and Servicing Agreements (if any), certified as true, correct and
complete copies of the originals, together with the Servicer Redirection
Notices, fully executed by the Seller and any applicable Servicer;

(g) The Purchaser shall have received payment from the Seller of the fees
payable under the Fee Letter and the amount of actual costs and expenses,
including, without limitation, the reasonable fees and expenses of counsel to
the Purchaser as contemplated by Section 2.12 and Section 13.8 of this
Agreement, incurred by the Purchaser in connection with the development,
preparation and execution of this Agreement, the other Repurchase Documents and
any other documents prepared in connection herewith or therewith;

(h) The Purchaser shall have completed to its satisfaction such due diligence as
it may require in its discretion and obtained internal credit approval of the
Facility;

(i) The Purchaser shall have received UCC searches with respect to the Seller
and the Pledgor, which search results shall be satisfactory to the Purchaser in
its discretion;

(j) The Purchaser shall have received all such other and further documents,
certifications, reports, approvals and legal opinions as the Purchaser may
reasonably require and which are customary for a transaction of this type;

(k) no Applicable Law shall prohibit or render it unlawful, and no order,
judgment or decree of Governmental Authority shall prohibit, enjoin or render it
unlawful, to enter into the Facility or any Transaction;

(l) the Seller, the Guarantor and the Pledgor shall each be in compliance in all
material respects with all Applicable Laws (including Anti-Terrorism Laws),
Contractual Obligations and all Indebtedness, each shall have obtained all
required consents, approvals and/or waivers of all necessary Persons, if any,
including all requisite Governmental Authorities, if any, to the execution,
delivery and performance of this Agreement and the other Repurchase Documents to
which each is a party and the consummation of the transactions contemplated
hereby or thereby;

(m) any and all consents, approvals and waivers applicable to the Purchased
Items shall have been obtained;

(n) the Purchaser is in receipt of pro-forma Financial Covenant calculations;
and

(o) no Material Adverse Effect has occurred.

Section 3.2 Conditions Precedent to all Transactions.

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

(a) no Applicable Law shall prohibit or render it unlawful, and no order,
judgment or decree of Governmental Authority shall prohibit, enjoin or render it
unlawful, to enter into such Transaction by the Purchaser in accordance with the
provisions of this Agreement or any other transaction contemplated herein;
 
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(b) the Seller, the Guarantor, each Servicer and each PSA Servicer shall have
delivered to the Purchaser all reports and other information required to be
delivered as of the date of such Transaction;

(c) the Purchaser shall have received a written Transaction Request, the related
Underwriting Package and the related Seller Asset Schedule;

(d) the Seller shall have delivered a Confirmation, via Electronic Transmission,
in accordance with the procedures set forth in Section 2.2 of this Agreement,
the Mortgage Asset shall be an Eligible Asset (unless waived by the Purchaser in
its discretion) and the Purchaser shall have approved in writing the purchase of
the Eligible Asset to be included in such Transaction in its discretion and
shall have obtained all necessary internal credit and other approvals for such
Transaction;

(e) no Default or Event of Default shall have occurred and be continuing, no
Margin Deficits are outstanding (unless the Transaction shall eliminate the
Margin Deficit), and no Material Adverse Effect has occurred;

(f) the Purchaser shall have received a Compliance Certificate in the form of
Exhibit VIII attached hereto (“Compliance Certificate”) from a Responsible
Officer of the Seller and the Guarantor that, among other things: (A) shows in
detail the calculations demonstrating that, after giving effect to the requested
Transaction, the aggregate Purchase Price of the Transactions outstanding shall
not exceed the Maximum Amount, (B) the Seller, the Guarantor and the Pledgor
have in all material respects observed or performed all of their covenants and
other agreements, and satisfied in all material respects every condition,
contained in this Agreement, the Repurchase Documents and the related documents
to be observed, performed or satisfied by them, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate, (C) states that all representations and
warranties contained in the Repurchase Documents are true and correct in all
material respects on and as of such day as though made on and as of such day and
shall be deemed to be made on such day, (D) shows that the Seller and NorthStar
are in compliance with the Financial Covenants and, on a quarterly basis as
provided in Subsection 5.1(q)(i)(B) of this Agreement, showing in detail the
calculations supporting the certification of the Seller’s and NorthStar’s
compliance with the Financial Covenants, (E) and discloses the status of each
Interest Rate Protection Agreement described under clause (ii) of the definition
thereof;

(g) subject to the Purchaser’s right to perform one or more due diligence
reviews pursuant to Section 13.20 of this Agreement, the Purchaser shall have
completed, in accordance with Section 2.2 of this Agreement, its due diligence
review of the Mortgage Asset, the Mortgage Asset File and the Underwriting
Package for each proposed Mortgage Asset and such other documents, records,
agreements, instruments, mortgaged properties or information relating to such
Mortgage Asset as the Purchaser in its discretion deems appropriate to review,
and such reviews shall be satisfactory to the Purchaser in its discretion;

(h) with respect to any Eligible Asset to be purchased hereunder on the related
Purchase Date that is not serviced by the Seller, the Seller shall have provided
to the Purchaser copies of the related Servicing Agreements and the Pooling and
Servicing Agreements, certified as true, correct and complete copies of the
originals, together with Servicer Redirection Notices fully executed by the
Seller and the Servicer;

(i) the Purchaser shall have received all reasonable fees and expenses of the
Purchaser and counsel to the Purchaser as contemplated by Section 2.12 and
Section 13.8 of this Agreement and the Fee Letter and the Purchaser shall have
received the reasonable costs and expenses incurred by them in connection with
the entering into of any Transaction hereunder, including, without limitation,
costs associated with due diligence recording or other administrative expenses
necessary or incidental to the execution of any Transaction hereunder, which
amounts, at the Purchaser’s option, may be withheld from the sale proceeds of
any Transaction hereunder;
 
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(j) for each Non-Table Funded Purchased Asset, the Purchaser shall have received
from the Custodian on each Purchase Date a Trust Receipt (along with a completed
Mortgage Asset File Checklist attached thereto) and an Asset Schedule and
Exception Report with respect to each Eligible Asset, each dated the Purchase
Date, duly completed and, in the case of the Asset Schedule and Exception
Report, with exceptions acceptable to the Purchaser in its discretion in respect
of Eligible Assets to be purchased hereunder on such Business Day. In the case
of a Table Funded Purchased Asset, the Purchaser shall have received on the
related Purchase Date the Table Funded Trust Receipt and all other items
described in the second (2nd) sentence of Subsection 2.2(e), each in form and
substance satisfactory to the Purchaser in its discretion, provided that the
Purchaser subsequently receives the items described in Subsection 2.2(d) and
(e) and the other delivery requirements under the Custodial Agreement on or
before the date and time specified herein and therein, which items shall be in
form and substance satisfactory to the Purchaser in its discretion;

(k) the Purchaser shall have received from the Seller a Warehouse Lender’s
Release Letter, if applicable, or a Seller’s Release Letter covering each
Eligible Asset to be sold to the Purchaser;

(l) prior to the purchase of any Eligible Asset acquired (by purchase or
otherwise) by the Seller from any Affiliate of Seller, the Purchaser shall have
received certified copies of the applicable Purchase Agreements (if any) and, if
requested by the Purchaser in its reasonable discretion, a True Sale Opinion;

(m) on and as of such day, the Seller, the Guarantor, the Pledgor and the
Custodian shall have performed all of the covenants and agreements contained in
the Repurchase Documents to be performed by such Person at or prior to such day;

(n) the Repurchase Date for such Transaction is not later than the earlier of
(i) Facility Maturity Date and (ii) 364 calendar days from the Purchase Date
(subject to the Refinance Option);

(o) the Purchaser shall have received evidence satisfactory to the Purchaser
that the Seller has delivered an irrevocable instruction to each Servicer, PSA
Servicer or other applicable Person to pay Income with respect to the Purchased
Items directly to the Collection Account, as provided herein, which instructions
may not be modified without the prior written consent of the Purchaser, and the
Seller shall have delivered all notices and instructions and obtained all
certifications, acknowledgments, agreements and registrations required to
perfect any CMBS Security;

(p) both immediately prior to the requested Transaction and also after giving
effect thereto and to the intended use thereof, all representations and
warranties made by each of the Seller, the Guarantor and the Pledgor shall be
true, correct and complete on and as of such Purchase Date in all material
respects with the same force and effect as if made on and as of such date;

(q) the Purchaser shall be in receipt of the evidence of insurance (if any)
required by Section 9.1 of the Custodial Agreement;

(r) none of the following shall have occurred and/or be continuing:

(i) an event or events shall have occurred in the good faith determination of
the Purchaser resulting in the effective absence of a “repo market” or related
“lending market” for purchasing (subject to repurchase) or financing debt
obligations secured by commercial mortgage loans or securities, or an event or
events shall have occurred resulting in the Purchaser not being able to finance
Mortgage Assets through the “repo market” or “lending market” with traditional
counterparties at rates that would have been reasonable prior to the occurrence
of such event or events;
 
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(ii) an event or events shall have occurred resulting in the effective absence
of a “securities market” for securities backed by Mortgage Assets or commercial
or multifamily real property, or an event or events shall have occurred
resulting in the Purchaser not being able to sell securities backed by Mortgage
Assets or commercial or multifamily real property at prices that would have been
reasonable prior to such event or events; or

(iii) there shall have occurred a material adverse change in the financial
condition of the Purchaser that affects (or can reasonably be expected to
affect) materially and adversely the ability of the Purchaser to fund its
obligations under this Agreement;

(s) after giving effect to the requested Transaction, the aggregate outstanding
Purchase Price of the Transactions outstanding shall not exceed the Asset Value
of all the Purchased Assets subject to outstanding Transactions or the Maximum
Amount;

(t) the Purchaser shall have received all such other and further documents,
reports, certifications, approvals and legal opinions as the Purchaser in its
discretion shall reasonably require; and

(u) for each Preferred Equity Interest, the applicable Seller has executed and
delivered all instruments and documents and has taken all further action
reasonably necessary and desirable or that the Purchaser has reasonably
requested in order to (i) perfect and protect the Purchaser’s security interest
in such Preferred Equity Interest (including, without limitation, execution and
delivery of one or more control agreements reasonably acceptable to the
Purchaser, and any and all other actions reasonably necessary to satisfy the
Purchaser that the Purchaser has obtained a first priority perfected security
interest in such Preferred Equity Interest); (ii) enable the Purchaser to
exercise and enforce its rights and remedies hereunder in respect of such
Preferred Equity Interest; and (iii) otherwise effect the purposes of this
Agreement, including, without limitation and if requested by the Purchaser,
having delivered to the Purchaser irrevocable proxies in respect of such
Preferred Equity Interest.

(v) to the extent the Mortgage Loan Documents for the related Eligible Asset
contain notice, cure and other provisions in favor of a pledgee of the Eligible
Asset under a repurchase or warehouse facility, and without prejudice to the
sale treatment of the Eligible Asset to the Purchaser, the Seller shall provide
evidence to the Purchaser that the Seller has given notice to the applicable
Persons of the Purchaser’s interest in such Eligible Asset and otherwise
satisfied any other applicable requirements under such pledgee provisions so
that the Purchaser is entitled to receive the benefits and exercise the rights
of a pledgee under the terms of such pledgee provisions contained in the related
Mortgage Loan Documents;

The failure of the Seller or the Guarantor, as applicable, to satisfy any of the
foregoing conditions precedent in respect of any Transaction shall, unless such
failure was expressly waived in writing by the Purchaser on or prior to the
related Purchase Date, give rise to a right of the Purchaser, which right may be
exercised at any time on the demand of the Purchaser, to rescind the related
Transaction and direct the Seller to pay to the Purchaser for the benefit of the
Purchaser an amount equal to the Purchase Price, the Price Differential,
Breakage Costs and other amounts due in connection therewith during any such
time that any of the foregoing conditions precedent were not satisfied.
 
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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.1 Representations and Warranties.

The Seller represents and warrants, as of the date of this Agreement and any
Transaction hereunder and at all times while any Repurchase Document and any
Transaction hereunder is in full force and effect, as follows:

(a) Organization and Good Standing. Each of the Seller and the Guarantor has
been duly organized, and is validly existing as a limited liability company,
with respect to each Seller, and as a corporation or limited partnership, as
applicable, with respect to the Guarantor, in good standing, under the laws of
the state of its organization or formation, with all requisite power and
authority to own or lease its Properties and conduct its business as such
business is presently conducted, and had, at all relevant times, and now has,
all necessary power, authority and legal right to acquire, own, sell and pledge
the Purchased Items.

(b) Due Qualification. Each of the Seller and the Guarantor is duly qualified to
do business and is in good standing as a limited liability company, corporation
or partnership, as applicable, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its Property
or the conduct of its business requires such qualification, licenses or
approvals.

(c) Power and Authority; Due Authorization; Execution and Delivery. Each of the
Seller and the Guarantor (i) has all necessary power, authority and legal right
(A) to execute and deliver the Repurchase Documents to which it is a party,
(B) to carry out and perform the terms of the Repurchase Documents to which it
is a party, and (C)  to sell, assign and pledge the Purchased Items on the terms
and conditions provided herein but subject to the terms of the Mortgage Loan
Documents, and (ii) has duly authorized by all necessary corporate or limited
liability company action, as applicable, (A) the execution, delivery and
performance of the Repurchase Documents to which it is a party, and (B) the
sale, assignment and pledge of the Purchased Items on the terms and conditions
herein provided. The Repurchase Documents to which the Seller or the Guarantor
is a party have been duly executed and delivered by the Seller and the
Guarantor.

(d) Binding Obligation. Each of the Repurchase Documents to which each of the
Seller and the Guarantor is a party constitutes a legal, valid and binding
obligation of the Seller and the Guarantor, enforceable against the Seller and
the Guarantor in accordance with its respective terms, except as such
enforceability may be limited by Insolvency Laws and by general principles of
equity (whether considered in a suit at law or in equity).

(e) No Violation or Defaults. The consummation of the transactions contemplated
by the Repurchase Documents to which each of the Seller and the Guarantor is a
party and the fulfillment of the terms of the Repurchase Documents will not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default under,
the Seller’s or the Guarantor’s, as applicable, Authority Documents or any
material Indebtedness, Guarantee Obligation or Contractual Obligation of the
Seller or the Guarantor, as applicable, (ii) result in the creation or
imposition of any Lien (other than Permitted Liens) upon any of the Seller’s or
the Guarantor’s Properties pursuant to the terms of any such Indebtedness,
Contractual Obligation or Guarantee Obligation other than this Agreement, or
(iii) violate any Applicable Law.
 
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(f) No Proceedings. There is no litigation, proceeding or investigation pending
or, to the best knowledge of the Seller or the Guarantor, threatened in writing
against the Seller or the Guarantor, before any Governmental Authority
(i) asserting the invalidity of the Repurchase Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by the
Repurchase Documents to which the Seller or the Guarantor is a party, or
(iii) seeking any determination or ruling that could reasonably be expected to
have Material Adverse Effect.

(g) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Person or of any Governmental Authority (if any) required
for the due execution, delivery and performance by the Seller and the Guarantor
of the Repurchase Documents to which each is a party (including the transfer of
and the grant of a security interest in the Purchased Items) have been obtained,
effected, waived or given and are in full force and effect.

(h) Bulk Sales. The execution, delivery and performance of this Agreement and
the other Repurchase Documents and the transactions contemplated hereby and
thereby do not require compliance with any “bulk sales” act or similar law by
the Seller or the Guarantor.

(i) Solvency. None of this Agreement, any other Repurchase Document or any
Transaction hereunder is entered into in contemplation of insolvency or with
intent to hinder, delay or defraud any of the Seller’s or the Guarantor’s
creditors. The transfer of the Purchased Items subject hereto, the obligation to
repurchase such Purchased Items and the entering into of the Repurchase
Documents (including the Guaranty) are not undertaken with the intent to hinder,
delay or defraud any of the Seller’s or the Guarantor’s creditors. As of each
Purchase Date, the Seller and the Guarantor are and will be Solvent, and the
transfer and sale of the Purchased Items pursuant hereto, the obligation to
repurchase such Purchased Items and the entering into of the Repurchase
Documents (including the Guaranty) will not render any such party not Solvent.
No petition in bankruptcy has been filed against either Seller or the Guarantor
in the last ten (10) years, and neither the Seller nor the Guarantor has in the
last ten (10) years made an assignment for the benefit of creditors or taken
advantage of any debtor relief laws.

(j) Tax Liens. Each of the Seller and the Guarantor have timely filed returns
for and, subject to the next sentence, paid all applicable federal, state, and
local Taxes. The Seller and the Guarantor represents and warrants that there are
no delinquent federal, state, city, county or other Taxes relating to such
Person, the Purchased Items or any arrangement pursuant to which the Purchased
Items are issued, except those relating to the Seller or Guarantor that are
being contested by such Person, in good faith and with respect to which payment
has been stayed by a court of competent jurisdiction.

(k) Exchange Act Compliance; Regulations T, U and X. None of the Transactions
contemplated herein (including, without limitation, the use of the proceeds from
the sale of the Purchased Items) will violate or result in a violation of
Section 7 of the Exchange Act, or any regulations issued pursuant thereto,
including, without limitation, Regulations T, U and X. Neither the Seller nor
the Guarantor owns or intends to carry or purchase, and no proceeds from the
Transactions will be used to carry or purchase, any “margin stock” within the
meaning of Regulation U or to extend “purpose credit” within the meaning of
Regulation U.
 
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(l) Environmental Matters. With respect to Properties of the Seller or the
Guarantor other than Purchased Assets:

(i) No Properties owned or leased by the Seller or the Guarantor and, to the
knowledge of the Seller and the Guarantor, no Properties formerly owned or
leased by the Seller or the Guarantor, or any Subsidiaries thereof, contain, or
have previously contained, any Materials of Environmental Concern in amounts or
concentrations that constitute or constituted a violation of, or reasonably
could be expected to give rise to liability under, Environmental Laws;

(ii) Each of the Seller and the Guarantor is in compliance, and has in the last
five (5) years (or such shorter period as the Seller and/or the Guarantor shall
have been in existence) been in compliance, with all applicable Environmental
Laws, and, to the knowledge of the Seller and the Guarantor, there is no
violation of any Environmental Laws that reasonably could be expected to
interfere with the continued operations of the Seller or the Guarantor;

(iii) Neither the Seller nor the Guarantor has received any notice of violation,
alleged violation, non-compliance, liability or potential liability under any
Environmental Law, nor does the Seller or the Guarantor have knowledge that any
such notice will be received or is being threatened;

(iv) Materials of Environmental Concern have not been transported or disposed of
by the Seller or the Guarantor (including any employee or agent of either the
Seller or the Guarantor) in violation of, or in a manner or to a location that
reasonably could be expected to give rise to liability under, any applicable
Environmental Law, nor has any of them generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a manner that
reasonably could be expected to give rise to liability under, any applicable
Environmental Law;

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

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

(vii) To the best knowledge of the Seller and the Guarantor, each of the
representations and warranties set forth in the preceding clauses (i) through
(vi) is true and correct with respect to each parcel of real property owned or
operated by the Seller or the Guarantor.

(m) Security Interest.

(i) This Agreement and the other Repurchase Documents constitute a valid
transfer to the Purchaser of all right, title and interest of the Seller in, to
and under all Purchased Items, free and clear of any Lien of any Person claiming
through or under the Seller, the Guarantor, the Pledgor or any of their
Affiliates, except for Permitted Liens and the Seller’s repurchase rights
described herein, and is enforceable against creditors of and purchasers from
the Seller. If the conveyances contemplated by this Agreement are determined to
be transfers for security, then this Agreement constitutes a grant of a security
interest in all Purchased Items to the Purchaser, that, upon the delivery of the
Confirmations, the Assignments and Mortgage Asset Files to the Custodian and the
filing of the financing statements described in Subsection 3.1(c), shall be a
first priority perfected security interest in all Purchased Items to the extent
such Purchased Items can be perfected by possession, by filing or control,
subject only to Permitted Liens. Neither the Seller nor any Person claiming
through or under the Seller shall have any claim to or interest in the
Collection Account or the Securities Account, except for the interest of the
Seller in such property as a debtor for purposes of the UCC;
 
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(ii) Other than the Lien and transfers contemplated hereunder, the Seller has
not sold, assigned, pledged, encumbered or otherwise conveyed any of the
Purchased Items to any Person, and, immediately prior to the sale to the
Purchaser, the Seller was the sole owner of such Purchased Items, and the Seller
owns and has good and marketable title to the Purchased Items free and clear of
any Lien (other than Permitted Liens);

(iii) The Seller has received all consents and approvals, if any, required by
the terms of any Purchased Items to the sale and granting of a security interest
in the Purchased Items hereunder to the Purchaser;

(iv) Upon execution and delivery of the Account Agreement and the Securities
Account Agreement, the Purchaser shall either be the owner of, or have a valid
and fully perfected first priority security interest in, the Collection Account
and the Securities Account and the securities, deposits, investment property and
other Purchased Items contained therein;

(v) The Seller has not authorized the filing of and is not aware of any
financing statements against the Seller as debtor that include a description of
collateral covering the Purchased Items other than any financing statement
(A) that has been terminated, or (B) granted pursuant to this Agreement. The
Seller is not aware of the filing of any judgment or tax Lien filings against
the Seller;

(vi) None of the Mortgage Loan Documents has any marks or notations indicating
that it has been pledged, assigned or otherwise conveyed to any Person other
than the Purchaser.

(n) Tradenames. The exact legal name of each of the Seller is set forth on the
signature pages to this Agreement. The Seller has no trade names, fictitious
names, assumed names or “doing business as” names or other names under which it
has done or is doing business.

(o) Value Given. The Seller shall have given reasonably equivalent value to each
Transferor in consideration for the transfer to the Seller of the Purchased
Items under the applicable Purchase Agreement, no such transfer shall have been
made for or on account of an antecedent debt owed by the Transferor thereunder
to the Seller, and no such transfer is or may be voidable or subject to
avoidance under any section of the Bankruptcy Code.

(p) Certain Tax Matters. Each of the Seller and the Guarantor represents,
warrants, acknowledges and agrees, that it does not intend to treat any
Transaction or any related transactions hereunder as being a “reportable
transaction” (within the meaning of United States Treasury Department
Regulation Section 1.6011-4). In the event that the Seller or the Guarantor
determines to take any action inconsistent with such intention, it will promptly
notify the Purchaser. If the Seller or the Guarantor so notifies the Purchaser,
the Seller or Guarantor, as applicable, acknowledges and agrees that the
Purchaser may treat each Transaction as part of a transaction that is subject to
United States Treasury Department Regulation Section 301.6112-1, and the
Purchaser will maintain the lists and other records required by such Treasury
Regulation.
 
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(q) Compliance with Anti-Terrorism Laws. Neither the Seller, the Guarantor nor
the Pledgor (i) is or will be in violation of any Anti-Terrorism Law, (ii) is or
will be a Prohibited Person, (iii) conducts any business or engages in any
transaction or dealing with any Prohibited Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Prohibited Person, (iv) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224, (v) engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law, (vi) has
more than 10% of its assets in a Prohibited Person or derives more than 10% of
its operating income from direct or indirect investments in, or transactions
with, any Prohibited Person, and (vii) engages in or will engage in any of the
foregoing activities in the future. To the extent applicable, each of the
Seller, the Guarantor and the Pledgor has established an adequate anti-money
laundering compliance program as required by the Anti-Terrorism Laws, has
conducted the requisite due diligence in connection with the origination or
acquisition of each Mortgage Asset and each Purchased Asset for purposes of the
Anti-Terrorism Laws, including with respect to the legitimacy of the applicable
Borrower and the origin of the assets used by the said Borrower to purchase the
property in question, and maintains, and will maintain, sufficient information
to identify the applicable Borrower for purposes of the Anti-Terrorism Laws. No
Mortgage Asset or Purchased Asset is subject to nullification pursuant to any
Anti-Terrorism Law, no Mortgage Asset is in violation of any Anti-Terrorism Law,
and no Borrower is in violation of or adversely affected by the provisions of
any Anti-Terrorism Law nor listed as a Prohibited Person. The proceeds of any
Purchase Price have not been used and shall not be used to fund any operations
in, finance any investments or activities in or make any payments to a
Prohibited Person.

(r) Compliance with FCPA. Each of the Seller, the Guarantor and the Pledgor are
in compliance with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et
seq., and any foreign counterpart thereto. Neither the Seller, the Guarantor nor
the Pledgor has made a payment, offering or promise to pay, or authorized the
payment of, money or anything of value (a) in order to assist in obtaining or
retaining business for or with, or directing business to, any foreign official,
foreign political party, party official or candidate for foreign political
office, (b) to a foreign official, foreign political party or party official or
any candidate for foreign political office, and (c) with the intent to induce
the recipient to misuse his or her official position to direct business
wrongfully to such Seller, the Guarantor, the Pledgor or to any other Person, in
violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq. 

(s) Investment Company Act. Neither of the Seller nor the Guarantor is required
to register as or is controlled by an entity required to register as an
“investment company” within the meaning of the 40 Act.

(t) ERISA Compliance. (A) Neither the Seller nor Guarantor has established nor
maintained any Plan; and (B) each of Seller and Guarantor either (1) qualifies
as an Operating Company; (2) complies with an exception set forth in the Plan
Asset Regulations such that the assets of such Person would not be subject to
Title I of ERISA or Section 4975 of the Internal Revenue Code; or (3) does not
hold any Plan Assets that are subject to ERISA.

(u) Compliance. Each of the Seller and the Guarantor has complied in all
material respects (i) with all Applicable Laws to which it may be subject, and
no Purchased Item contravenes any Applicable Laws (including, without
limitation, laws, rules and regulations relating to licensing, truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and (ii) all Contractual Obligations,
Indebtedness and Guarantee Obligations.
 
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(v) Income. The Seller acknowledges that all Income received by it or its
Affiliates and the Servicers and PSA Servicers with respect to the Purchased
Items sold hereunder are held in trust and shall be held in trust for the
benefit of the Purchaser until deposited into the Collection Account as required
herein.

(w) Set-Off, etc. No Purchased Item has been compromised, adjusted, extended,
satisfied, subordinated, rescinded, set-off or modified by the Seller, the
Guarantor or any Affiliate of the foregoing, and no Purchased Item is subject to
compromise, adjustment, extension (except as set forth in the related Mortgage
Asset File), satisfaction, subordination, rescission, set-off, counterclaim,
defense, abatement, suspension, deferment, deduction, reduction, termination or
modification, whether arising out of transactions concerning the Purchased Item
or otherwise, by the Seller, the Guarantor or any Affiliate of the foregoing,
except for amendments to such Purchased Items otherwise permitted under
Subsection 6.5(c) of this Agreement.

(x) Full Payment. The Seller or the Guarantor has knowledge of any fact that
should lead it to expect that any Purchased Asset will not be paid in full.

(y) Ongoing Representations. On the Purchase Date for each Transaction and on
each day that a Purchased Asset remains subject to this Agreement, the Seller
shall be deemed to restate and make each of the representations and warranties
made by it in this Section 4.1 of this Agreement.

(z) Eligibility of Purchased Assets. With respect to each Purchased Asset, to
the Seller’s actual knowledge, except as disclosed to the Purchaser, the Seller
is not aware of any material exception to or non-compliance with the eligibility
criteria set forth on Schedule 1 to this Agreement applicable to such Purchased
Asset.

(aa) Acting as Principal. The Seller will engage in such Transactions as
principal, or, if agreed in writing in advance of any Transaction by the
Purchaser, as agent for a disclosed principal.

(bb) No Broker. Neither the Seller, the Guarantor nor any Affiliate of the
foregoing has dealt with any broker, investment banker, agent or other Person,
except for the Purchaser (or an Affiliate of the Purchaser), who may be entitled
to any commission or compensation in connection with the sale of Purchased
Assets pursuant to this Agreement.

(cc) Ability to Perform. Neither the Seller nor the Guarantor believes, nor do
they have any reason or cause to believe, that it cannot perform each and every
agreement and covenant contained in the Repurchase Documents applicable to it
and to which it is a party.

(dd) No Event of Default. No Default or Event of Default has occurred and is
continuing hereunder.

(ee) Financial Condition.

(i) The audited consolidated balance sheet of NorthStar and its Consolidated
Subsidiaries as of the fiscal year ending December 31, 2006 provided to the
Purchaser and the related audited consolidated statements of income and retained
earnings and of cash flows for the year then ended, setting forth in each case
in comparative form the figures for the previous year, reported on without a
“going concern” or like qualification arising out of the scope of the audit
conducted by Grant Thornton, copies of which have heretofore been furnished to
the Purchaser, are complete and correct and present fairly in all material
respects the consolidated financial condition of NorthStar and its Consolidated
Subsidiaries of the foregoing as of such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. All such financial statements, including the related schedules and notes
thereto (if any), have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as disclosed therein).
Neither NorthStar nor any of its Consolidated Subsidiaries had, as of the date
of the most recent balance sheet referred to above, any material contingent
liability or liability for taxes, or any long term lease or unusual forward or
long term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other financial derivative,
that is not reflected in the foregoing statements or in the notes thereto.
Except as otherwise disclosed publicly, during the period from December 31, 2006
to and including the date hereof, there has been no sale, transfer or other
disposition by the Seller, the Guarantor or any Consolidated Subsidiaries of the
foregoing of any material part of their business or Property and no purchase or
other acquisition of any business or Property (including any Equity Interest of
any other Person) material in relation to the consolidated financial condition
of the Seller, the Guarantor or any Consolidated Subsidiaries of the foregoing
on the date hereof.
 
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(ff) Servicing Agreements. The Seller has delivered to the Purchaser all
Servicing Agreements and all Pooling and Servicing Agreements with respect to
the Purchased Assets, and, to the best of the Seller’s knowledge, no material
default or event of default exists thereunder.

(gg) True and Complete Disclosure. Each of the Seller and the Guarantor
represents and warrants that the information, reports, financial statements,
exhibits and schedules furnished in writing by or on behalf of the Seller or the
Guarantor to the Purchaser in connection with the negotiation, preparation or
delivery of this Agreement and the other Repurchase Documents or included herein
or therein or delivered pursuant hereto or thereto, when taken as a whole, do
not contain any untrue statement of material fact or knowingly omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading. There is no fact
known to the Seller or the Guarantor, after due inquiry, that would reasonably
be expected to have a Material Adverse Effect that has not been disclosed herein
or in a report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to the Purchaser for use in connection with the
transactions contemplated hereby or thereby. All written information furnished
after the date hereof by or on behalf of the Seller or the Guarantor to the
Purchaser in connection with this Agreement or the other Repurchase Documents
and the transactions contemplated hereby and thereby will be true, complete and
accurate in all material respects, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified.

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

(ii) Seller’s Indebtedness. The Seller has no Indebtedness or Contractual
Obligations other than (i) ordinary trade payables, (ii) in connection with
Mortgage Assets originated or acquired for this Facility, (iii) the Repurchase
Documents and (iv) the VFCC Repurchase Facility. The Seller has no Guarantee
Obligations.
 
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(jj) Insurance. Each of the Seller and the Guarantor has and maintains, with
respect to its Properties and business, insurance which meets the requirements
of Subsection 5.1(y) of this Agreement. In addition, the Seller shall maintain
the insurance required by Section 5.7 of the Custodial Agreement.

(kk) Purchased Assets. (i) There are no outstanding rights, options, warrants or
agreements for the purchase, sale or issuance of the Purchased Assets created
by, through, or as a result of the Seller’s or the Guarantor’s actions or
inactions; (ii) there are no agreements on the part of the Seller or the
Guarantor to issue, sell or distribute the Purchased Assets, other than this
Agreement, and (iii) other than this Agreement, the Seller has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any
securities or any interest therein or to pay any dividend or make any
distribution in respect of the Purchased Assets.

(ll) Subsidiaries. The Seller is a Subsidiary of the Guarantor. The Seller does
not have any Subsidiaries.

(mm) Separateness. As of the date hereof, the Seller (i) owns no assets, and
does not engage in any business, other than the assets and transactions intended
to be transferred to the Purchaser under this Agreement; (ii) has not incurred
any indebtedness or obligation, secured or unsecured, direct or indirect,
absolute or contingent (including guaranteeing any obligation), other than
(A) with respect to Retained Interests, (B) commitments to make loans which may
become Eligible Assets, and (C) as permitted herein; (iii) has not made any
loans or advances to any Affiliate other than loans to the Guarantor that have
been disclosed in writing to and approved in writing by the Purchaser, and has
not acquired obligations or securities of its Affiliates; (iv) has paid its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) only from its own assets; (v) complies with the provisions of its
organizational documents; (vi) does all things necessary to observe
organizational formalities and to preserve its existence, and has not amended,
modified or otherwise changed its Authority Documents other than as the same
have been heretofore amended, or suffered same to be amended, modified or
otherwise changed other than as the same have been heretofore amended;
(vii) maintains all of its books, records, financial statements and bank
accounts separate from those of its Affiliates (except that such financial
statements may be consolidated to the extent consolidation is required under
GAAP consistently applied or as a matter of Applicable Law); (viii) is, and at
all times holds itself out to the public as, a legal entity separate and
distinct from any other entity (including any Affiliate), corrects any known
misunderstanding regarding its status as a separate entity, conducts business in
its own name, and does not identify itself or any of its Affiliates as a
division or part of the other; (ix) maintains adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations; (x) does not engage in or
suffer any direct change of ownership, dissolution, winding up, liquidation,
consolidation or merger in whole or in part; (xi) does not commingle its funds
or other assets with those of any Affiliate or any other Person; (xii) maintains
its accounts separately from those of any Affiliate or any other Person;
(xiii) does not hold itself out to be responsible for the debts or obligations
of any other Person; (xiv) has not (A) filed or consented to the filing of any
Insolvency Proceeding with respect to the Seller, instituted any proceedings
under any applicable Insolvency Law or otherwise sought any relief under any
laws relating to the relief from debts or the protection of debtors generally
with respect to the Seller, (B) sought or consented to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official for the Seller or a substantial portion of its properties or (C) made
any assignment for the benefit of the Seller’s creditors; (xv) has at least
one (1) Independent Director or such greater number as required by the Purchaser
or any Rating Agency; (xvi) maintains an arm’s length relationship with its
Affiliates; (xvii) uses separate stationary, invoices and checks; and
(xviii) allocates fairly and reasonably any overhead for shared office space.
 
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(nn) No Defenses. To the actual knowledge of the Seller and the Guarantor, there
are no defenses, offsets, counterclaims, abatements, rights of rescission or
other claims, legal or equitable, available to the Seller or the Guarantor or
any other Person with respect to this Agreement, the Engagement Letter, the
Repurchase Documents, any other instrument, document and/or agreement described
herein or therein (including, without limitation, the validity or enforceability
of any of the foregoing) or with respect to the obligation of the Seller and the
Guarantor to repay the Aggregate Unpaids and other amounts due hereunder.

(oo) REIT Status. Subject to Subsection 5.1(kk) to the Agreement, NorthStar
qualifies as a REIT.

(pp) Financial Statements. Each of the Seller and the Guarantor represents and
warrants that, since the date of the financial statements heretofore most
recently delivered by such Person (which such Person represents and warrants to
be the most recent financial statement), there has been no development or event
(or prospective development or event), that would constitute a Material Adverse
Effect.

(qq) Interest Rate Protection Agreements. Each of the Seller and the Guarantor
represents and warrants that no “default” has occurred or is continuing under
any Interest Rate Protection Agreement.

(rr) Assignments. The Assignments do not violate any provisions of the
underlying Mortgage Loan Documents, such documents do not contain any express or
implied prohibitions on sales or assignments of the Purchased Assets to national
banks, and such agreements are valid, binding and enforceable against the
Seller.
 
ARTICLE V

COVENANTS

Section 5.1 Covenants.

(a) Compliance with Laws and Contractual Obligations. The Seller and the
Guarantor shall comply in all material respects with all Applicable Laws
(including Environmental Laws), including those with respect to the Purchased
Assets or any part thereof, and shall comply, and perform all duties and
obligations under, all Contractual Obligations, Indebtedness and Guarantee
Obligations (including, without limitation, its duties and obligations under the
Mortgage Loan Documents). No part of the proceeds of any Transaction shall be
used for any purpose which violates, or would be inconsistent with, the
provisions of Regulation T, U or X.

(b) Corporate Existence. The Seller and the Guarantor shall continue to engage
in business of the same general type as now conducted by it and shall preserve
and maintain its company existence, rights, franchises and privileges in the
jurisdiction of its formation and will qualify and remain qualified in good
standing as a corporation or other entity in each jurisdiction where the failure
to preserve and maintain such existence, rights, franchises, privileges and
qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.

(c) Performance and Compliance with Purchased Assets. The Seller will, at its
expense, timely and fully perform and comply (or as applicable cause the
Transferors, Servicers and PSA Servicers to perform and comply) with all
provisions, covenants, duties, agreements, obligations and other promises
required to be observed under the Purchased Items, all other agreements related
to such Purchased Items, including the Mortgage Loan Documents, and the Retained
Interests.
 
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(d) Keeping of Records and Books of Account. Subject to the Seller’s document
retention policy, the Seller will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing the Purchased Items in the event of the destruction of the
originals thereof) and will keep and maintain all documents, books, records and
other information reasonably necessary or advisable in which complete entries
are made in accordance with GAAP and Applicable Laws.

(e) Delivery of Income. The Seller will deposit and cause all Servicers and
other applicable Persons to deposit all Income received in respect of the
Purchased Items into the Collection Account within two (2) Business Days of
receipt thereof. The Seller shall instruct all PSA Servicers and other
applicable Persons under the Pooling and Servicing Agreements to deposit into
the Collection Account within two (2) Business Days of the date the PSA Servicer
is obligated to disburse the same under the Pooling and Servicing Agreements all
Income in respect of the Purchased Items and the Seller shall take reasonable
steps necessary to enforce such instructions. The Seller will instruct the Swap
Counterparty under the Swap Documents and all other counterparties under other
Interest Rate Protection Agreements to deposit any payments due to the Seller
from time to time under the Swap Documents and the other Interest Rate
Protection Agreements into the Collection Account within two (2) Business Days
of the date such Person is obligated to disburse same and the Seller shall take
reasonable steps to enforce such instructions. Furthermore, the Seller shall
remit or cause to be remitted to the Purchaser via Electronic Transmission
sufficient detail to enable the Purchaser to appropriately identify the
Purchased Asset to which any full or partial principal payment or prepayment
applies.

(f) Notices. The Seller and the Guarantor will furnish written notice to the
Purchaser and the Swap Counterparty with respect to the following:

(i) Representations. Promptly upon notice or knowledge thereof, notice of (A)
any representation or warranty set forth in Section 4.1 of this Agreement was
incorrect at the time it was given or deemed to have been given or (B) any
eligibility criteria set forth in Schedule 1 to this Agreement is or was not
satisfied in any material respect at any time;

(ii) Covenants. Promptly upon notice or knowledge thereof, notice of any
material default with respect to any covenant, duty or agreement of the Seller,
the Guarantor or the Pledgor under any Repurchase Document;

(iii) Material Events. Promptly upon becoming aware thereof, notice of any
material change in the Asset Value of any Purchased Asset, any material change
in the market value of any or all of the Seller’s or Guarantor’s assets or any
other event or circumstance that, in the reasonable judgment of the Seller or
the Guarantor, is likely to have a Material Adverse Effect;

(iv) Event of Default. The Seller and the Guarantor shall immediately notify the
Purchaser upon the Seller or the Guarantor becoming aware of any event which
would constitute a Default or an Event of Default;

(v) Casualty. With respect to any Purchased Asset hereunder, promptly upon
notice or knowledge thereof that the Underlying Mortgaged Property has been
damaged by waste, fire, earthquake or earth movement, flood, tornado or other
casualty, or otherwise damaged so as to affect materially and adversely the
Asset Value of such Purchased Asset;

(vi) Liens. Promptly upon notice or knowledge of any Lien or security interest
on, or claim asserted against, any Purchased Asset or the Pledged Collateral
other than Permitted Liens;
 
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(vii) Defaults. Promptly upon notice or knowledge thereof, notice of (A) any
material default (beyond any applicable notice and cure period) related to any
Purchased Items or the Mortgage Loan Documents, or (B) any default (beyond any
applicable notice and cure period) under any Contractual Obligation,
Indebtedness or Guarantee Obligation of the Seller or the Guarantor, which, if
not cured, could reasonably be expected to have a Material Adverse Effect;

(viii) Servicers. Promptly upon notice or knowledge thereof, notice of the
resignation or termination of any Servicer under any Servicing Agreement with
respect to any Purchased Items or any PSA Servicer under a Pooling and Servicing
Agreement;

(ix) Losses. Promptly upon notice or knowledge thereof, notice of any loss or
expected loss in respect of any Purchased Item, or any other event or change in
circumstances or expected event or change in circumstances that could be
reasonably be expected to result in a material decline in value or cash flow of
any Purchased Item or any Underlying Mortgaged Property;

(x) [Reserved]; and

(xi) Proceedings. As soon as possible and in any event within five (5) Business
Days after the Seller or the Guarantor receives notice or obtains knowledge
thereof, notice of any settlement of, material judgment (including a material
judgment with respect to the liability phase of a bifurcated trial) in or
commencement of any labor controversy (of a material nature), litigation,
action, suit, arbitration or proceeding before any court or governmental
department, commission, board, bureau, agency, arbitrator, investigation or
instrumentality, domestic or foreign, affecting (A) the Purchased Items, (B) the
Repurchase Documents, (C) the Purchaser’s interest in the Purchased Items, or
(D) the Seller or the Guarantor and, with respect to this clause (D) only, the
amount in controversy exceeds $250,000 with respect to the Seller and/or
$1,000,000 with respect to the Guarantor.

Each notice pursuant to this Subsection 5.1(f) shall be accompanied by an
Officer’s Certificate from the Seller and/or the Guarantor, as applicable,
setting forth details of the occurrence referred to therein and stating what
action the Seller or the Guarantor has taken or proposes to take with respect
thereto.

(g) Purchased Items Not to be Evidenced by Instruments. Neither the Seller nor
the Guarantor will take any action to cause any Purchased Item that is not, as
of the applicable Purchase Date, evidenced by an Instrument to be so evidenced
except in connection with the enforcement or collection of such Purchased Items.

(h) Limitations on Liens. Without prior written consent of the Purchaser, the
Seller will not: (i) except in connection with the sale of any Purchased Asset
in the ordinary course of business prior to an Event of Default, assign, sell,
transfer, pledge, grant, create, incur, assume or suffer or permit to exist any
security interest in or Lien on any of the Purchased Items to anyone except
Purchaser, (ii) permit any financing statement (except any financing statements
in favor of Purchaser) or assignment (except for any assignments in favor of
Purchaser) to be on file in any public office with respect thereto, (iii) permit
or suffer to exist any Lien or right of others to attach to any of the Purchased
Items (or any portion thereof), except as contemplated by this Agreement, or
(iv) consent to any amendment or supplement to the Mortgage Loan Documents
pursuant to which the Purchased Assets were issued or created that would
materially and adversely affect Purchaser’s interests hereunder or with respect
to the Purchased Items without the prior written consent of Purchaser or
(v) sell, pledge, transfer, assign, participate or grant a Lien on its interest
under the Repurchase Documents or the Purchased Items.
 
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(i) Lien Covenants. With respect to each Purchased Item acquired by the
Purchaser, the Seller will (i) take all action reasonably requested by the
Purchaser to perfect, protect and more fully evidence the Purchaser’s ownership
of and first priority perfected security interest in such Purchased Item,
including, without limitation, executing or causing to be executed such other
instruments or notices as may be necessary or appropriate and (ii) taking all
additional action that the Purchaser may reasonably request to perfect, protect
and more fully evidence the respective interests of the parties to this
Agreement and the Repurchase Documents in such Purchased Items. Immediately upon
notice to the Seller of a Lien or any circumstance which, if adversely
determined would be reasonably likely to give rise to a Lien (other than in
favor of the Purchaser or created by or through the Purchaser), on any of the
Purchased Items, the Seller shall notify the Purchaser and the Seller shall
further defend the Purchased Items against, and will take such other action as
is necessary to remove, any Lien or claim on or to the Purchased Items (other
than any Lien created under this Agreement), and the Seller will defend the
right, title and interest of the Purchaser in and to any of the Purchased Items
against the claims and demands of all Persons whomsoever.

(j) Deposits. The Seller will not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to the Collection Account cash or cash
proceeds other than Income in respect of Purchased Items. The Seller will not
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to the Securities Account any item except uncertificated CMBS Securities that
are Purchased Assets and all cash, property, proceeds, securities or investment
property with respect to such Purchased Assets. The Seller shall perform all of
its obligations under the Account Control Agreement and Securities Account
Control Agreement.

(k) Change of Name or Location of Asset Files. The Seller shall not (i) change
its name, organizational number, identity, structure or jurisdiction of
formation, move the location of its principal place of business and chief
executive office, or change the offices where it keeps the records (as defined
in the UCC) from the location referred to in on the signature page to this
Agreement, or (ii) move, or consent to the Custodian moving, the Mortgage Asset
Files from the location thereof on the Closing Date, unless the Seller has given
at least thirty (30) days’ prior written notice to the Purchaser and its
counsel.

(l) Exceptions. The Seller shall promptly correct any and all Exceptions set
forth on any Asset Schedule and Exception Report to the extent the same are able
to be cured by the Seller in a commercially reasonable manner.

(m) ERISA Matters. Each of the Seller and the Guarantor will not without the
prior approval of the Purchaser, establish or maintain any Plan, nor take any
action that would (i) cause it to fail to qualify as an Operating Company or
(ii) cause it to fail to otherwise meet an exception under the Plan Asset
Regulations which would prevent the assets of such Person from being subject to
Title I of ERISA or Section 4975 of the Code.

(n) Purchase Agreements; Servicing Agreements. The Seller or the Guarantor will
not materially amend, modify, waive or terminate any provision of any Purchase
Agreement, Servicing Agreement or Pooling and Servicing Agreement without the
prior written consent of the Purchaser, which consent shall not be unreasonably
withheld.

(o) Compliance with Anti-Terrorism Laws. The Seller, the Guarantor and the
Pledgor shall comply with all applicable Anti-Terrorism Laws. The Seller shall
conduct the requisite due diligence in connection with the origination or
acquisition of each Mortgage Asset for purposes of complying with the
Anti-Terrorism Laws, including with respect to the legitimacy of the applicable
Borrower, obligor or account debtor and the origin of the assets used by the
said Borrower, obligor or account debtor to purchase the property in question,
and will maintain sufficient information to identify the applicable Borrower,
obligor or account debtor for purposes of the Anti-Terrorism Laws. Neither the
Seller, the Guarantor nor the Pledgor shall engage in any conduct described in
Subsections 4.1(q) and (r). The Seller, the Guarantor and the Pledgor shall,
upon the request of the Purchaser from time to time, provide certification and
other evidence of the Seller’s, the Guarantor’s and the Pledgor’s compliance
with this Subsection 5.1(o).
 
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(p) Financial Statements. The Seller and the Guarantor shall deliver to the
Purchaser:

(i) as soon as available, and in any event within forty-five (45) calendar days
after the end of the first three fiscal quarters of the Seller and the
Guarantor, the unaudited consolidated balance sheets for the Seller and the
Guarantor as at the end of such period and the related unaudited consolidated
statements of income and retained earnings and of cash flows for the Seller and
the Guarantor for such period and the portion of the fiscal year through the end
of such period, accompanied by an Officer’s Certificate from the Seller and the
Guarantor, which certificate shall state that said consolidated financial
statements fairly present in all material respects the consolidated financial
condition and results of operations of the Seller or the Guarantor, as
applicable, in accordance with GAAP, consistently applied, as at the end of, and
for, such period (subject to normal year-end adjustments);

(ii) as soon as available, and in any event within ninety (90) days after the
end of each fiscal year of the Seller and the Guarantor, the audited (in the
case of the Guarantor only) or the signed (in the case of the Seller only)
consolidated balance sheets of the Seller and the Guarantor, as applicable, as
at the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for the Seller and the Guarantor for
such year, and, in the case of the Guarantor only, setting forth in each case in
comparative form the figures for the previous 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 the
Guarantor as at the end of, and for, such fiscal year in accordance with GAAP;

(iii) with respect to each Purchased Asset, if provided to the Seller, the
Guarantor or any Servicer or PSA Servicer by any Borrower under any Purchased
Asset, as soon as available, but in any event not later than forty-five (45)
days after the end of each fiscal quarter of the Seller, the operating statement
and rent roll for each Underlying Mortgaged Property; provided, however, the
Purchaser reserves the right in its discretion to request such information on a
monthly basis (to be provided no later than thirty (30) days after the end of
each month) but the Seller’s failure to obtain such information shall not be a
breach of this covenant provided the related Purchased Asset with respect to
which information was not provided is included in the Facility for less than
six (6) months;

(iv) with respect to each Purchased Asset, if provided to the Seller or the
Guarantor by any Borrower under any Purchased Asset, as soon as available, but
in any event not later than thirty (30) days after receipt thereof, the annual
balance sheet with respect to such Borrower;

(v) with respect to each Purchased Asset, as soon as available but in any event
not later than thirty (30) days after receipt thereof, (A) the related monthly
securitization report, if any, and any other reports delivered under the Pooling
and Servicing Agreements to the Seller or the Guarantor, if any, and, (B) within
forty-five (45) days after the end of each quarter, a copy of the standard
monthly exception report (if any) , prepared by the Seller in the ordinary
course of its business in respect of the related Purchased Asset or Underlying
Mortgaged Property; and
 
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(vi) from time to time such other information regarding the financial condition,
operations or business of the Seller and the Guarantor as the Purchaser may
reasonably request.

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein); provided, that any financial statements delivered by the
Seller or the Guarantor with respect to any Borrower under any Underlying
Mortgage Loan shall be delivered to the Purchaser in the form received by the
Seller or the Guarantor.

(q) Certificates; Other Information. The Seller and the Guarantor shall furnish
to the Purchaser:

(i) (A) concurrently with the delivery of the annual financial statements
referred to in Subsection 5.1(p) above, a certification from the independent
certified public accountant reporting on such financial statements stating that,
in making the examination necessary therefore, no information was obtained of
any Defaults or Events of Default except as specified in such certificate, and
(B) concurrently with the delivery of the financial statements referred to in
Subsection 5.1(p) above and in connection with the delivery of each
Confirmation, a Compliance Certificate from a Responsible Officer of the Seller
and the Guarantor, which Compliance Certificate shall, among other things,
describe in detail, on a quarterly basis, the calculations supporting the
Responsible Officer’s certification of the Seller’s and NorthStar’s compliance
with the Financial Covenants;

(ii) (A) within thirty (30) days of the end of each calendar quarter, the Seller
shall provide the Purchaser with a quarterly report, which report shall include,
among other items, a summary of the Seller’s delinquency and loss experience
with respect to Purchased Assets serviced by the Seller, any Servicer, any PSA
Servicer or any designee of the foregoing, the Seller’s internal risk rating,
the Seller’s and any Servicer’s or PSA Servicer’s surveillance reports on the
Purchased Assets, and the operating statements, occupancy status and other
property level information with respect to each Purchased Asset, (B) within ten
(10) days of receipt thereof by the Seller, any Servicer or PSA Servicer, any
remittance reports with respect to the servicing of any Purchased Items and
(C) promptly, any such additional reports as the Purchaser may reasonably
request with respect to the Seller, any Servicer or PSA Servicer servicing the
portfolio, or pending originations of Mortgage Assets;

(iii) no later than the fifteenth (15th) day of each month, with respect to each
Purchased Asset, a Purchased Asset Data Summary, substantially in the form of
Exhibit IX (“Purchased Asset Data Summary”), properly completed;

(iv) the Seller shall promptly deliver or cause to be delivered to the Purchaser
(i) any report or material notice received by the Seller from any Borrower or
obligor under the Purchased Items promptly following receipt thereof and
(ii) any other such document or information relating to the Purchased Items as
the Purchaser may reasonably request in writing from time to time;

(v) promptly, any modifications or additions to the items contained in the
Underwriting Package; and
 
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(vi) promptly, such additional financial and other information as the Purchaser
may from time to time reasonably request.

(r) Prohibition of Fundamental Changes. The Seller or the Guarantor shall not
enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution) or sell all or substantially all of its assets; provided, however,
that the Seller or the Guarantor may merge or consolidate with (i) any wholly
owned Subsidiary of such Person, or (ii) any other Person if (A) the Seller or
the Guarantor is the surviving corporation or (B) if the surviving entity is not
in the Purchaser’s reasonable opinion materially weaker in its financial
condition (in the aggregate) than the prior entities pre-merger or
pre-consolidation; provided, that, (x) if after giving effect thereto, no Event
of Default would exist hereunder, (y) if such merger or consolidation would
adversely affect the Swap Counterparty, the Swap Counterparty has consented
thereto, and (z) the new entity (if any) assumes the obligations, liabilities
and Indebtedness under the Repurchase Documents and the Swap Documents.

(s) Transactions with Affiliates. The Seller may enter into any transaction with
an Affiliate, provided that such transaction is upon fair and reasonable terms
no less favorable to the Seller than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate; provided, however,
that in no event shall the Seller transfer to the Purchaser hereunder any
Eligible Asset acquired by the Seller from an Affiliate of the Seller unless the
Seller shall have delivered a certified copy of the related Purchase Agreement
and, if requested by the Purchaser in its reasonable discretion, a True Sale
Opinion has been delivered to the Purchaser prior to such sale.

(t) Sub-Limit. The Seller shall not sell to the Purchaser any Eligible Asset if,
after giving effect to such Transaction, a Sub-Limit would be exceeded, unless
waived in advance in writing by the Purchaser in its discretion.

(u) Limitation on Distributions. The Seller or the Guarantor shall not declare
or make any 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 partnership interest of the Seller or the
Guarantor, as applicable, 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 the Guarantor, as applicable,
except that the Seller and the Guarantor, as applicable, each may declare and
pay dividends in accordance with its respective Authority Documents, and without
restriction as to amount, so long as, in the case of the Seller and the
Guarantor, (i) no Default or Event of Default shall have occurred, (ii) no
Margin Deficit is outstanding and (iii) the distribution of such funds will not
violate any Financial Covenant. Notwithstanding the preceding sentence and
irrespective of the occurrence of the events described in clauses (i), (ii) or
(iii) of the immediately preceding sentence, the Guarantor may at all times pay
dividends either (A) as required by Applicable Law to maintain its REIT status
and/or (B) to its preferred equity holders.

(v) Financial Covenants.

(i) Maintenance of Liquidity. Subject to Section 2.16 of this Agreement and the
related provisions in the Fee Letter for each Test Period, NorthStar shall not
permit its Liquidity for such Test Period to be less than $15,000,000, at least
$7,500,000 of which shall consist of cash or Cash Equivalents.

(ii) Maintenance of Tangible Net Worth. For each Test Period, NorthStar shall
not permit NorthStar’s and its Consolidated Subsidiaries’ Tangible Net Worth at
any time to be less than the sum of (A) $750,000,000 plus (B) an amount equal to
75% of the aggregate net proceeds after costs and expenses received by NorthStar
or any Consolidated Subsidiaries of NorthStar in connection with the offering or
issuance of any Equity Interest of NorthStar or any Consolidated Subsidiaries of
NorthStar (in each case only to the extent such Equity Interests would be
included in Tangible Net Worth) after the Closing Date.
 
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(iii) Interest Coverage. For each Test Period, the Sellers shall not permit the
ratio of (A) the sum of Consolidated Adjusted EBITDA for all Sellers for such
Test Period to (B) Interest Expense for all Sellers for such Test Period to be
less than 1:5 to 1:0.

(iv) Leverage Ratio. For each Test Period, NorthStar shall not permit the ratio
of (A) NorthStar’s and its Consolidated Subsidiaries’ Adjusted Total Liabilities
to (B) NorthStar’s and its Consolidated Subsidiaries’ Adjusted Total Assets to
exceed 0.90 to 1.00.

(v) Recourse Debt Ratio. For each Test Period, NorthStar shall not permit the
ratio of (A) NorthStar’s and its Consolidated Subsidiaries’ Indebtedness
(excluding Non-Recourse Indebtedness, borrowings under the Unsecured Credit
Facility and Trust Preferred Securities) to (B) Adjusted Total Assets of
NorthStar and its Consolidated Subsidiaries to exceed .10 to 1.00.

(vi) Fixed Charge Coverage. For each Test Period, NorthStar shall maintain a
minimum Fixed Charge Coverage Ratio of 1.3x.

(w) Extension or Amendment of Purchased Items. The Seller shall not, except as
otherwise permitted in Subsection 6.5(c) of this Agreement, extend, amend, waive
or otherwise modify, or permit any Servicer or PSA Servicer to extend, amend,
waive or otherwise modify, the material terms of any Purchased Item.

(x) Inconsistent Agreements. The Seller and the Guarantor shall not, and shall
not permit the Pledgor to, directly or indirectly, enter into any agreement
containing any provision that would be violated or breached by any Transaction
hereunder or by the performance by the Seller, the Guarantor or the Pledgor of
its obligations under any Repurchase Document.

(y) Maintenance of Property; Insurance. The Seller and the Guarantor shall keep
all Property useful and necessary in its business in good working order and
condition, shall maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks as are usually and customarily insured against in the same
general area by companies acting prudently and engaged in the same or a similar
business, and furnish to the Purchaser, upon written request, full information
as to the insurance carried.

(z) Interest Rate Protection Agreements. Each of the Seller and the Guarantor
shall perform its duties and obligations and make all payments due under and
shall otherwise maintain any existing Interest Rate Protection Agreements.

(aa) Payment of Taxes. The Seller and the Guarantor shall pay and discharge all
Taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

(bb) Distributions in Respect of Purchased Items. If the Seller shall receive
any rights, whether in addition to, in substitution of, as a conversion of, or
in exchange for any Purchased Items, or otherwise in respect thereof, the Seller
shall accept the same as the Purchaser’s agent, hold the same in trust for the
Purchaser and deliver the same forthwith to the Purchaser (or its designee) in
the exact form received, together with duly executed instruments of transfer or
assignment in blank and such other documentation as the Purchaser shall
reasonably request. If any sums of money or property are paid or distributed in
respect of the Purchased Items and received by the Seller (other than the
Borrower Reserve Payments), the Seller shall promptly pay or deliver such money
or property to the Purchaser and, until such money or property is so paid or
delivered to the Purchaser, hold such money or property in trust for the
Purchaser, segregated from other funds of the Seller.
 
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(cc) Limitation on Indebtedness. The Seller shall not create, incur, assume or
suffer to exist any Indebtedness (including, but not limited to, any credit or
repurchase facility), Guarantee Obligation or Contractual Obligation of the
Seller, except the VFCC Repurchase Facility and any other Indebtedness,
Guarantee Obligations and Contractual Obligations of the Seller permitted under
this Agreement.

(dd) Unrelated Activities. The Seller shall not engage in any activity other
than activities specifically permitted by this Section 5, including, but not
limited to, investment in real estate related assets and the purchasing,
financing and holding of commercial mortgage-backed securities and activities
incident thereto.

(ee) Separateness. The Seller shall not take any action or fail to take any
action that would cause it to violate or be inconsistent with the
representations and warranties in Subsection 4.1(mm) of the Agreement.

(ff) Pledge and Security Agreement. If the VFCC Repurchase Facility is
terminated at any time and all amounts due thereunder are paid in full, the
Pledgor shall enter into the Pledge and Security Agreement pledging to the
Purchaser the Equity Interests in the Seller and all other Pledged Collateral
pledged thereunder and, in connection therewith, the Pledgor shall take such
other actions and provide such other agreements and documents as shall be
reasonably required by the Purchaser. Neither the Seller nor the Guarantor shall
take any direct or indirect action inconsistent with the Pledge and Security
Agreement or the security interest granted thereunder to the Purchaser in the
Pledged Collateral.

(gg) Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Default or Event of Default if such action is taken or
condition exists.

(hh) Investments. The Seller, the Guarantor or any of their Affiliates shall not
acquire or maintain any right or interest in any Purchased Asset that is senior
to or pari passu with the rights and interests of the Purchaser therein under
this Agreement unless such Mortgage Asset is also a Purchased Asset.

(ii) Seller Subsidiaries. The Seller shall not create, form or permit to exist
any Subsidiary prior to the later of (i) the Facility Maturity Date (as it may
be extended in accordance with this Agreement) and (ii) the indefeasible payment
in full of the Obligations.

(jj) Negative Pledge. The Seller shall not contract, create, incur, assume or
permit to exist any Lien on or with respect to any of its Property or assets of
any kind (whether real or personal, tangible or intangible), whether now owned
or hereafter acquired, except for Permitted Liens.
 
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(kk) NorthStar Status. NorthStar shall remain listed on a nationally recognized
securities exchange in good standing. NorthStar may change its status as a REIT
provided it remains in compliance with the Financial Covenants in all respects.

(ll) Registration of Securities. In the case of any Purchased Asset not
physically delivered to the Purchaser or its designee, unless otherwise
consented to by the Purchaser, the Seller shall maintain, or cause to be
maintained, each of the Securities with either DTC or with the National
Book Entry System of the Federal Reserve, DTC or any similar firm or agency, as
applicable, in the Purchaser’s name.

(mm) Payment of Obligations. The Seller and the Guarantor shall pay, discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all its obligations in excess of $250,000 with respect to the
Seller and $1,000,000 with respect to the Guarantor, including, without
limitation, all Indebtedness, Contractual Obligations and Guarantee Obligations,
except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Seller, the Guarantor or
any of their Subsidiaries, as the case may be.

(nn) Authority Documents. The Seller shall comply with its Authority Documents
and shall not amend its Authority Documents in any material respect without the
prior written consent of the Purchaser.

(oo) Preferred Equity Interests. The Seller shall not permit any Equity Interest
that is the subject of a Preferred Equity Interest to consist of an interest in
an entity other than a partnership or limited liability company and, with
respect to such limited partnership and limited liability company interests,
shall not permit any such interest to: (i) be dealt in or traded on a securities
exchange or in a securities market or (ii) be held in a Securities Account. The
Seller shall execute and deliver, or cause to be executed or delivered, to the
Purchaser (or the Custodian on its behalf) such agreements, documents and
instruments as the Purchaser may reasonably require to perfect its security
interest in any such Equity Interest.

(pp) Termination of Securities Account. Upon the Seller’s receipt of notice from
any securities intermediary (as defined in the UCC) of its intent to terminate
any securities account (as defined in the UCC) of the Seller held by such
securities intermediary and relating to a Purchased Asset or collateral for a
Purchased Asset, prior to the termination of such securities account the
collateral in such account (i) shall be transferred to a new securities account,
upon the request of the Purchaser, which shall be subject to an executed control
agreement as provided in Subsection 2.2(k) of this Agreement or (ii) transferred
to an account held by the Purchaser in which such collateral will be held until
a new securities account is established with an executed control agreement
acceptable to the Purchaser in its discretion.

ARTICLE VI

ADMINISTRATION AND SERVICING

Section 6.1 Servicing.

(a) Appointment. The Purchaser hereby appoints the Seller as its agent to
service the Purchased Items and enforce its rights in and under such Purchased
Items. The Seller hereby accepts such appointment and agrees to perform the
duties and obligations with respect thereto as set forth herein.
 
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(b) Servicing Standard. The Seller covenants to maintain or cause the servicing
of the Purchased Items to be maintained in conformity with Accepted Servicing
Practices. In the event that the preceding language is interpreted as
constituting one or more servicing contracts, each such servicing contract shall
terminate automatically upon the earliest of (i) an Event of Default, (ii) the
date on which this Agreement terminates or the Seller repurchases any related
Purchased Asset, or (iii) the transfer of servicing approved in writing by the
Purchaser.

Section 6.2 Seller as Servicer.

If the Purchased Assets are serviced by the Seller, the Seller agrees that,
until the repurchase of a Purchased Asset on a Repurchase Date, the Purchaser is
the owner of all servicing records for the period that the Purchaser owns the
Purchased Items, including, but not limited to, any and all servicing
agreements, files, documents, records, data bases, computer tapes, copies of
computer tapes, computer programs, proof of insurance coverage, insurance
policies, appraisals, other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of such Purchased
Assets (the “Servicing Records”). The Seller covenants to safeguard such
Servicing Records and to deliver them promptly to Purchaser or its designee
(including the Custodian) at the Purchaser’s request.

Section 6.3 Third Party Servicer.

If the Purchased Assets are serviced by a Servicer or a PSA Servicer pursuant to
a Servicing Agreement or Pooling and Servicing Agreement, as applicable, the
Seller (i) shall, in accordance with Subsection 3.2 of this Agreement, provide
to the Purchaser (subject to the last sentence of this Subsection 6.3) a copy of
each Servicing Agreement (which agreements shall be in form and substance
reasonably acceptable to the Purchaser), and each Pooling and Servicing
Agreement and a Servicer Redirection Notice substantially in the form of
Exhibit VII hereto and fully executed by the Seller and the related Servicer or
PSA Servicer (in the case of a Pooling and Servicing Agreement for a Mortgage
Asset that is not a Whole Loan, the Purchaser may in its discretion waive the
requirement of an executed Servicer Redirection Notice), and (ii) hereby
irrevocably assigns to the Purchaser and the Purchaser’s successors and assigns
all right, title and interest of the Seller in, to and under, and the benefits
of (but not the obligations of), each Servicing Agreement and each Pooling and
Servicing Agreement with respect to the Purchased Items. Notwithstanding the
fact that the Seller has contracted with a Servicer or PSA Servicer to service
the Purchased Items, the Seller shall remain liable to the Purchaser for the
acts of the Servicers and the PSA Servicer and for the performance of the duties
and obligations set forth herein. The Seller agrees that no Person shall assume
the servicing obligations with respect to the Purchased Assets as successor to a
Servicer or PSA Servicer unless such successor is approved in writing by the
Purchaser prior to such assumption of servicing obligations. Unless otherwise
approved in writing by the Purchaser, if the Purchased Assets are serviced by a
Servicer or PSA Servicer, such servicing shall be performed pursuant to a
written Servicing Agreement or Pooling and Servicing Agreement approved by the
Purchaser.

Section 6.4 Duties of the Seller.

(a) Duties. The Seller shall take or cause to be taken all such actions as may
be necessary or advisable to collect all Income and all other amounts due or
recoverable with respect to the Purchased Items from time to time, all in
accordance with Applicable Laws, with reasonable care and diligence, and in
accordance with the standard set forth in Subsection 6.1(b) of this Agreement.

(b) Purchaser’s Rights. Notwithstanding anything to the contrary contained
herein, the exercise by the Purchaser of its rights hereunder shall not release
the Seller from any of its duties or responsibilities with respect to the
Purchased Items. The Purchaser shall not have any obligation or liability with
respect to any Purchased Items, nor shall any of them be obligated to perform
any of the obligations of the Seller hereunder.
 
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Section 6.5 Authorization of the Seller.

(a) The Purchaser hereby authorizes the Seller (including any successor thereto)
to take any and all reasonable steps in its name and on its behalf necessary or
desirable and not inconsistent with the sale of the Purchased Items to the
Purchaser, to collect all amounts due under any and all Purchased Items,
including, without limitation, endorsing checks and other instruments
representing Income, executing and delivering any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Purchased Items and, after
the delinquency of any Purchased Item and to the extent permitted under and in
compliance with Applicable Law, to commence proceedings with respect to
enforcing payment thereof, to the same extent as the Seller could have done if
it had continued to own such Purchased Items. The Purchaser shall furnish the
Seller (and any successors thereto) with any powers of attorney and other
documents necessary or appropriate to enable the Seller to carry out its
servicing and administrative duties hereunder and shall cooperate with the
Seller to the fullest extent in order to ensure the collectability of the
Purchased Items. In no event shall the Seller be entitled to make the Purchaser
a party to any litigation without the Purchaser’s express prior written consent.

(b) Subject to all other rights of the Purchaser contained herein, after an
Event of Default has occurred and is continuing, at the direction of the
Purchaser, the Seller shall take such action as the Purchaser may deem necessary
or advisable to enforce collection of the Purchased Items; provided, however,
subject to all other rights of the Purchaser contained herein, the Purchaser
may, at any time that an Event of Default has occurred and is continuing, notify
any Borrower with respect to any Purchased Items of the assignment of such
Purchased Items to the Purchaser and direct that payments of all amounts due or
to become due be made directly to the Purchaser or any servicer, collection
agent or lock-box or other account designated by the Purchaser and, upon such
notification and at the expense of the Seller, the Purchaser may enforce
collection of any such Purchased Items and adjust, settle or compromise the
amount or payment thereof.

(c) With respect to each Purchased Asset and to the extent not otherwise
specifically addressed otherwise in this Agreement, (i) prior to an Event of
Default, the Seller (and any Servicer or PSA Service on its behalf) shall not
exercise any material rights of a holder of a Purchased Item under any document
or agreement governing such Purchased Items (including amendments,
modifications, waivers and alterations of any of the material terms of any
Purchased Item) that affects the Market Value of such Purchased Item without
first consulting with the Purchaser prior to taking any action and, in the event
the Purchaser and the Seller cannot agree on a course of action, the Seller
shall take only those actions as agreed to by the Purchaser, and, (ii) after an
Event of Default, the Seller shall not exercise any rights of a holder of such
Purchased Items under any document or agreement governing such Purchased Items
without the prior written consent of the Purchaser.

Section 6.6 Event of Default.

If the servicer of the Purchased Items is the Seller, upon the occurrence of an
Event of Default, the Purchaser shall have the right to terminate the Seller as
the servicer of the Purchased Items and transfer servicing to its designee, at
no cost or expense to the Purchaser, at any time thereafter. If the servicer of
the Purchased Items is not the Seller, the Purchaser shall have the right, as
contemplated in the applicable Servicer Redirection Notice, upon the occurrence
of an Event of Default, to terminate any applicable Servicing Agreement and any
Pooling and Servicing Agreement to the extent the PSA Servicer signed a Servicer
Redirection Notice and to transfer servicing to the Purchaser or the Purchaser’s
designee, at no cost or expense to the Purchaser, it being agreed that the
Seller will pay any and all fees required to terminate such Servicing Agreements
and Pooling and Servicing Agreements and to effectuate the transfer of servicing
to the designee of the Purchaser. The Seller shall fully cooperate and shall
cause all Servicers and applicable PSA Servicers to fully cooperate with the
Purchaser in transferring the servicing of the Purchased Items to the
Purchaser’s designee.
 
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Section 6.7 Inspection.

In the event the Seller or its Affiliates are servicing the Purchased Items, the
Seller shall permit the Purchaser to inspect the Seller’s or its Affiliate’s
servicing facilities, books and records and related documents and information,
as the case may be, for the purpose of satisfying the Purchaser that the Seller
or its Affiliates, as the case may be, have the ability to service and are
servicing the Purchased Items as provided in this Agreement. If a Servicer or
PSA Servicer is servicing a Purchased Item, the Seller shall cooperate with the
Purchaser in causing each Servicer and PSA Servicer to permit inspections of the
Servicer’s and PSA’s facilities, books and records and related documents and
information related to the Purchased Items.

Section 6.8 Payment of Certain Expenses by Servicer.

The Seller and any Servicer will be required to pay all expenses incurred by
them in connection with their activities under the Repurchase Documents,
including fees and disbursements of independent accountants, Taxes imposed on
the Seller or the Servicers, expenses incurred in connection with payments and
reports pursuant to the Repurchase Documents, and all other fees and expenses
not expressly stated under the Repurchase Documents for the account of the
Seller. The Seller shall be required to pay all reasonable fees and expenses
owing to any bank or trust company in connection with the maintenance of the
Collection Account, the Securities Account and all other collection, reserve or
lock-box accounts related to the Purchased Items. The Seller shall be required
to pay such expenses for its own account and shall not be entitled to any
payment therefor other than the Servicing Fee.

Section 6.9 Pooling and Servicing Agreements.

Notwithstanding the other provisions of this Section 6.9, to the extent the
Purchased Items (or portions thereof) are serviced by a PSA Servicer (other than
the Seller or any Servicer) under a Pooling and Servicing Agreement, (a) the
standards for servicing those Purchased Items shall be those set forth in the
applicable Pooling and Servicing Agreement, (b) the Seller shall enforce its
rights and interests under such agreements for and on behalf of the Purchaser,
(c) the Seller shall instruct the applicable PSA Servicer to deposit all Income
received in respect of the Purchased Items into the Collection Account in
accordance with Subsection 5.1(e), (d) prior to an Event of Default, the Seller
shall not take any action or fail to take any action or consent to any action or
inaction under any Pooling and Servicing Agreement where the effect of such
action or inaction would prejudice the interests of the Purchaser, (e) the
Seller will not consent to any change or modification to any Pooling and
Servicing Agreement, including, without limitation, any payment dates, interests
rates, fees, payments of principal or interest, maturity dates, restrictions on
Indebtedness or any monetary term or release any Borrower, guarantor or
collateral without the prior written consent of the Purchaser, and,
(f) following an Event of Default, the Purchaser shall be entitled to exercise
any and all rights of the Seller under such Pooling and Servicing Agreements as
such rights relate to the Purchased Items. In addition, with respect to a CMBS
Security, the Seller shall not exercise any material rights of a holder of a
CMBS Security under any other document or agreement governing such CMBS Security
without the prior written consent of the Purchaser.
 
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Section 6.10 Servicer Default.

Any material breach by any Seller of the obligations contained in Article VI of
this Agreement shall constitute a “Servicer Default”.

Section 6.11 Servicer.

The Seller shall not permit or cause the Purchased Items to be serviced by a
third party other than pursuant to the Servicing Agreements or the Pooling and
Servicing Agreements or, if not serviced thereunder, by any Servicer other than
a Servicer expressly approved in writing by the Purchaser (including those
pre-approved Servicers set forth on Schedule 6 hereto).

ARTICLE VII

[RESERVED]

ARTICLE VIII

SECURITY INTEREST

Section 8.1 Security Interest.

(a) Each of the following items or types of property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located, is
hereinafter collectively referred to as the Purchased Items (the “Purchased
Items”): (A) all Purchased Assets; (B) all Income and Cash Collateral, if any;
(C) all Mortgage Loan Documents; (D) all Mortgage Asset Files, including,
without limitation, all promissory notes, notes, certificates, instruments,
negotiable documents, Security Agreements, chattel mortgages and all other loan,
security or other documents relating to such Purchased Items, together with all
files, documents, instruments, surveys, certificates, correspondence,
appraisals, licenses, contracts, computer programs, computer storage media,
accounting records and other books and records relating thereto; (E) all
collateral, security interests, rights and other interests under or with respect
to each Purchased Item; (F) all Purchase Agreements and the collateral, security
interests, rights and other interests thereunder; (G) all mortgage guaranties
and insurance (issued by governmental agencies or otherwise) and any mortgage
insurance certificate, policy or other document evidencing such mortgage
guaranties or insurance relating to any Purchased Items and all claims, payments
and proceeds thereunder; (H) all servicing fees to which the Seller is entitled
and servicing and other rights relating to the Purchased Items; (I) all
Servicing Agreements, Servicing Records and Servicing Files with respect to the
Purchased Items and the rights and interests of the Seller thereunder or with
respect thereto; (J) all Servicer Accounts established pursuant to any Servicing
Agreement, Pooling and Servicing Agreement or otherwise with respect to the
Purchased Items and all amounts on deposit therein from time to time related to
the Purchased Items; (K) all Pooling and Servicing Agreements relating to the
Purchased Items and all rights of the Seller thereunder or with respect thereto;
(L) all other agreements, instruments or contracts relating to, constituting, or
otherwise governing, any or all of the foregoing to the extent they relate to
the Purchased Items, including the right to receive principal and interest
payments and any related fees, breakage fees, late fees and penalties with
respect to the Purchased Items and the right to enforce such payments;
(M) insurance policies, certificates of insurance, insurance proceeds and the
rights to enforce payment of insurance proceeds, in each case to the extent they
relate to the Purchased Items; (N) the Collection Account and all monies, cash,
deposits, securities or investment property from time to time on deposit in the
Collection Account; (O) the Securities Account and all monies, cash, deposits,
securities or investment property from time to time on deposit in the Securities
Account; (P) any collection account, escrow account, reserve account, collateral
account or lock-box account related to the Purchased Items to the extent of any
Seller’s or the holder’s interest therein, including all moneys, cash, deposits,
securities or investment property from time to time on deposit therein;
(Q) rights of the Seller under any letter of credit, guarantee or other credit
support or enhancement related to the Purchased Items; (R) any Interest Rate
Protection Agreements relating to the Purchased Assets, including all payments
due to the Seller, the Guarantor or any Affiliates of the foregoing thereunder;
(S) all purchase or take-out commitments relating to or constituting any of the
foregoing; (T) all collateral, however defined, under any of the agreements
between a Borrower or an Affiliate on the one hand and the Seller on the other
hand; (U) all “general intangibles”, “accounts”, “chattel paper”, “deposit
accounts”, “securities accounts”, “instruments”, “securities”, “financial
assets”, “uncertified securities”, “securities entitlements” and “investment
property” as defined in the Uniform Commercial Code as in effect from time to
time relating to or constituting any and all of the foregoing; and (V) any and
all replacements, substitutions, conversions, distributions on or proceeds of,
from or on any and all of the foregoing; provided, however, none of the
foregoing Purchased Items shall include any obligations; provided,
further, however, notwithstanding the foregoing, (i) no account, instrument,
chattel paper or other obligation or Property of any kind due from, owed by, or
belonging to, a Person described in the definition of Prohibited Person or (ii)
any lease in which the lessee is a Person described in the definition of
Prohibited Person, shall be collateral under the Repurchase Documents.
 
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(b) The Purchaser and the Seller intend that the Transactions hereunder be sales
to the Purchaser of the Purchased Assets and not loans from the Purchaser to the
Seller secured by the Purchased Assets. However, in order to preserve the
Purchaser’s rights under this Agreement in the event that a court or other forum
recharacterizes the Transactions hereunder as loans and as security for (A) the
repayment of the Aggregate Unpaids and performance by the Seller of all of the
Seller’s obligations to the Purchaser hereunder and under the Repurchase
Documents and the Transactions entered into hereunder (collectively, the
“Repurchase Obligations”), (B) the Seller-Related Obligations and (C) all
expenses and charges, legal or otherwise, incurred in collecting or enforcing,
realizing on or protecting any security for, the Repurchase Obligations and/or
the Seller-Related Obligations (the amounts described in the foregoing
clauses A-C are collectively referred to as the “Obligations”), (a) the Seller
hereby assigns, pledges and grants a security interest in all of its right,
title and interest in, to and under the Purchased Items to the Purchaser (on
behalf of the Purchaser and the Swap Counterparty) to secure the Obligations,
(b) it is the express intent of the parties that conveyance of the Purchased
Items be deemed a pledge of the Purchased Items by the Seller to the Purchaser
(on behalf of the Purchaser and the Swap Counterparty) to secure a debt or other
obligation of the Seller, and (c) (i) this Agreement shall also be deemed to be
a security agreement within the meaning of Article 9 of the UCC of the
applicable jurisdiction; (ii) the conveyance provided for herein shall be deemed
to be a grant by the Seller to the Purchaser (on behalf of the Purchaser and the
Swap Counterparty) of a security interest in all of the Seller’s right, title
and interest in and to the Purchased Items; (iii) the assignment by the
Purchaser (on behalf of the Purchaser and the Swap Counterparty) of the interest
of the Purchaser as contemplated herein shall be deemed to be an assignment of
any security interest created hereunder; (iv) the possession by the Purchaser or
any of its agents, including, without limitation, the Custodian, of the Mortgage
Loan Documents, the Purchased Items and such other items of Property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be possession by the secured party for purposes of perfecting the
security interest pursuant to the UCC; and (v) notifications to Persons (other
than the Purchaser and the Swap Counterparty) holding such Property, and
acknowledgments, receipts or confirmations from Persons (other than the
Purchaser and the Swap Counterparty) holding such Property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured party for the
purpose of perfecting such security interest under the UCC and Applicable Law.
The assignment, pledge and grant of security interest contained herein shall be,
and the Seller hereby represents and warrants to the Purchaser and the Swap
Counterparty that it is, a first priority perfected security interest. All
Purchased Items shall secure the payment of all Obligations now or hereafter
existing, including, without limitation, the Seller’s obligation to repurchase
Purchased Assets, or if such obligation is so recharacterized as a loan, to
repay such loan for the Repurchase Price and to pay the Aggregate Unpaids and
any and all other Obligations. For the avoidance of doubt and not by way of
limitation of the foregoing, (A) each Purchased Item, including all Income
related thereto, secures the obligations of each Seller with respect to all
other Transactions and the obligations with respect to all other Purchased
Items, including those Purchased Assets that are junior in priority to the
Purchased Item in question, (B) an Event of Default by any Seller is a default
by all Sellers and the Purchaser may pursue its remedies in connection therewith
against any of the Purchased Items and/or against the assets and Properties of
any or all Sellers, and (C) if an Event of Default has occurred and is
continuing, no Purchased Item will be released from the Purchaser’s Lien or
transferred to the Seller until the Obligations are indefeasibly paid in
full. All references in this Agreement and the other Repurchase Documents to the
Purchaser as the secured party or the rights of the Purchaser as the secured
party shall be deemed to include the Swap Counterparty as a secured party and
the rights of the Swap Counterparty as a secured party. The Swap Counterparty
hereby designates and appoints the Purchaser as its agent and bailee hereunder
and under the other Repurchase Documents and takes such actions as agent and
bailee on behalf of the Swap Counterparty and to exercise such powers as are
delegated to the Purchaser by the terms of this Agreement, together with such
powers as are reasonably incidental thereto. Notwithstanding the foregoing,
during the time that VFCC is a purchaser under the VFCC Repurchase Facility, the
Indebtedness of the Seller under the Obligations shall be full recourse to the
Seller. Notwithstanding anything contained herein to the contrary, during the
time that VFCC is a purchaser under the VFCC Repurchase Facility, there will be
no sharing of payments or other amounts with or from VFCC.
 
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(c) Pursuant to the Custodial Agreement, the Custodian shall hold the Mortgage
Asset Files as exclusive bailee pursuant to the terms of the Custodial Agreement
and shall deliver the Trust Receipts (along with completed Mortgage Asset File
Checklists attached thereto) to the Purchaser (with a copy to the Seller), each
such Trust Receipt to reflect that the Custodian has reviewed such Mortgage
Asset Files in the manner and to the extent required by the Custodial Agreement
and identifying any deficiencies in such Mortgage Asset Files as so reviewed.

(d) The assignment under this Section 8.1 does not constitute and is not
intended to result in the creation or an assumption by the Purchaser of any
obligation of the Seller or any other Person in connection with any or all of
the Purchased Items or under any agreement or instrument relating thereto.
Anything herein to the contrary notwithstanding, (i) the Seller shall remain
liable under the Purchased Items to the extent set forth therein to perform all
of their duties and obligations thereunder to the same extent as if the
Repurchase Documents had not been executed, (ii) the exercise by the Purchaser
of any of its rights under, in or to the Purchased Items shall not release the
Seller from any of its duties or obligations under the Purchased Items unless
such parties effectuate a transfer of such Purchased Items to the Purchaser
after any Event of Default hereunder but only to the extent of the obligations
and duties so transferred, and (iii) the Purchaser shall not have any
obligations or liability under the Purchased Items by reason of the Repurchase
Documents or otherwise, nor shall the Purchaser be obligated to perform any of
the obligations or duties of the Seller or any other Person thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.

Section 8.2 Release of Lien on Purchased Assets.

Except as otherwise provided in a Repurchase Document, at such time as any
Purchased Asset is repurchased in accordance with this Agreement, and the
Repurchase Price and all other amounts due with respect thereto have been paid
in full, the Purchaser shall release its interest in such Purchased Asset and
any related Purchased Items; provided, that, the Purchaser will make no
representation or warranty, express or implied, with respect to any such
Purchased Asset or Purchased Items in connection with such release (other than
with respect to Liens created by the Purchaser), and any transfer of such
Purchased Items shall be without recourse to or the expense of the Purchaser.
 
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Section 8.3 Further Assurances.

The provisions of Section 13.11 of this Agreement shall apply to the security
interest granted under Section 8.1 of this Agreement as well as to the
Transactions hereunder.

Section 8.4 Remedies.

Upon the occurrence of an Event of Default, the Purchaser shall have, with
respect to the security interest in the Purchased Items granted pursuant to
Section 8.1 of this Agreement, and in addition to all other rights and remedies
available to the Purchaser under this Agreement, the Repurchase Documents and
other Applicable Law, all rights and remedies of a secured party upon default
under the UCC.

Section 8.5 Purchaser’s Duty of Care.

Except as herein provided in this Section 8.5 of this Agreement, Purchaser’s
(or, on its behalf, the Custodian) sole duty with respect to the Purchased Items
shall be to use reasonable care in the custody, use, operation and preservation
of the Purchased Items in its possession or control. The Purchaser shall incur
no liability to the Seller, the Guarantor or any other Person for any act of
government, act of God or other such destruction in whole or in part or
negligence or wrongful act of custodians or agents selected by and supervised by
Purchaser with reasonable care, or Purchaser’s failure to provide adequate
protection or insurance for the Purchased Items. Purchaser shall have no
obligation to take any action to preserve any rights of the Seller in any of the
Purchased Items against prior parties, and the Seller hereby agrees to take such
action. The Seller shall defend the Purchased Items against all such claims and
demands of all Persons (other than claims and demands resulting from interests
created by Purchaser), at all times, as are adverse to Purchaser. Purchaser
shall have no obligation to realize upon any Purchased Item, except through
proper application of any distributions with respect to the Purchased Items made
directly to Purchaser or its agent(s). So long as Purchaser (or the Custodian,
on the Purchaser’s behalf) shall act in good faith in its handling of the
Purchased Items, each of the Seller and the Guarantor hereby waives the defense
of impairment of the Purchased Items by Purchaser.

ARTICLE IX

[RESERVED]
 
ARTICLE X

EVENTS OF DEFAULT

Section 10.1 Events of Default.

Each of the following events shall be an Event of Default (“Event of Default”)
hereunder:

(a) the aggregate Repurchase Price for all Transactions outstanding on any day
exceeds the Maximum Amount and the same continues unremedied for two (2)
Business Days after notice from the Purchaser; or
 
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(b) a Servicer Default occurs and is continuing and the same continues
unremedied for twenty (20) calendar days; or

(c) an Insolvency Event relating to the Seller, the Guarantor or the Pledgor
shall have occurred, or any Insolvency Event shall have occurred with respect to
any Affiliate of the Seller, the Guarantor or the Pledgor and the same affects,
impacts or impairs (A) any Lien, right or other interest of the Purchaser under
any of the Repurchase Documents or (B) the Seller’s, the Guarantor’s or the
Pledgor’s performance, or ability to perform, its obligations, duties or
agreements under any of the Repurchase Documents; or

(d) the Seller, the Guarantor or the Pledgor shall become required to register
as an “investment company” within the meaning of the 40 Act or the arrangements
contemplated by the Repurchase Documents shall require registration as an
“investment company” within the meaning of the 40 Act; or

(e) there shall exist any event or occurrence that has caused or resulted in a
Material Adverse Effect with respect to clauses (a), (b), (c) or (d) of the
definition of Material Adverse Effect; or

(f) (A) any Repurchase Document, or any Lien or security interest granted
thereunder, shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of the Seller, the Guarantor or the Pledgor, (B) the
Seller, the Guarantor, the Pledgor, or any other Person shall, directly or
indirectly, contest in any manner the effectiveness, validity, binding nature or
enforceability of any Repurchase Document or any Lien or security interest
thereunder, (C) the Purchased Items shall not have been sold to the Purchaser,
or the Liens contemplated under the Repurchase Documents shall cease or fail to
be first priority perfected Liens on any Purchased Items or the Pledged
Collateral or shall be Liens in favor of any Person other than the Purchaser or
(D) the Seller, the Guarantor, the Pledgor or any of their Affiliates shall
grant, or suffer to exist, any Lien on any Purchased Item or the Pledged
Collateral (except Permitted Liens); or

(g) the Seller, the Guarantor or the Pledgor shall have failed to observe or
perform in any material respect any of the covenants or agreements of the
Seller, the Guarantor or the Pledgor set forth in this Agreement or the other
Repurchase Documents to which the Seller, the Guarantor or the Pledgor is a
party and the same continues unremedied for a period of twenty (20) calendar
days after the earlier to occur of (A) the date on which written notice of such
failure requiring the same to be remedied shall have been given to the Seller,
the Guarantor or the Pledgor by the Purchaser, and (B) the date on which the
Seller, the Guarantor or the Pledgor becomes aware thereof; or

(h) any representation, warranty or certification made by the Seller, the
Guarantor or the Pledgor in this Agreement or any Repurchase Document or in any
certificate or other document or agreement delivered pursuant to this Agreement
or any Repurchase Document (in each case other than the eligibility criteria
contained in Schedule 1 to this Agreement unless the Seller shall have affirmed
or confirmed any such criteria with actual knowledge that it was not satisfied
in any material respect) shall prove to have been incorrect in any material
respect when made or deemed made and the same continues unremedied for a period
of twenty (20) calendar days after the earlier to occur of (A) the date on which
written notice of such failure requiring the same to be remedied shall have been
given to the Seller, the Guarantor or the Pledgor by the Purchaser, and (B) the
date on which the Seller, the Guarantor or the Pledgor becomes aware thereof; or

(i) (A) the Seller, the Guarantor or the Pledgor shall have failed to make any
payment due with respect to any material Indebtedness in excess of
(1) $5,000,000 in the case of the Guarantor and the Pledgor, and (2) $1,000,000
in the case of the Seller (in each case including, without limitation, recourse
debt), any Guarantee Obligations or any material Contractual Obligation in
excess of $5,000,000 in the case of the Guarantor and the Pledgor, and
$1,000,000 in the case of the Seller, to which the Seller, the Guarantor or the
Pledgor as applicable, is a party, or a default or an event or condition shall
have occurred that would permit acceleration of any of the foregoing whether or
not such event or condition has been waived, (B) the Seller, the Guarantor or
the Pledgor shall be in default of any monetary obligation with respect to any
Seller-Related Obligation (other than the Swap Documents) or (C) the Seller, the
Guarantor or the Pledgor shall be in default with respect to any obligation
under the Swap Documents; or

(j) (A) the Seller shall default in the payment of (1) any Repurchase Price due
(including, without limitation, pursuant to Article II of the Agreement) or
(2) any amount due under Section 2.8 of this Agreement or any other provision of
this Agreement or the Repurchase Documents when due (whether at stated maturity,
upon acceleration or at mandatory or optional prepayment), or (B) the failure of
the Seller, the Guarantor, the Pledgor, any Affiliate of the forgoing, any
Servicer, any PSA Servicer or any other Person to timely deposit to the
Collection Account all Income as required by Subsection 5.1(e) of this Agreement
or the failure of the Seller to deposit or credit to the Securities Account any
uncertificated CMBS Security and related Purchased Items required to be
deposited or credited to such account; or
 
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(k) the Seller shall have failed to pay any Margin Deficit due under Section 2.7
of this Agreement by the Margin Correction Deadline; or

(l) the Seller, the Guarantor or the Pledgor shall default in the payment of any
other amount payable by it hereunder or under any other Repurchase Document
after notification by the Purchaser of such default, and such default shall have
continued unremedied for two (2) Business Days; or

(m) a final non-appealable judgment or judgments for the payment of money in
excess of (1) $5,000,000 in the case of the Guarantor and the Pledgor, and
(2) $1,000,000 in the case of the Seller, in the aggregate shall be rendered
against the Seller, the Guarantor or the Pledgor, as applicable, by one (1) or
more courts, administrative tribunals or other bodies or any Governmental
Authority having jurisdiction, and the same shall not be satisfied, discharged
(or provision shall not be made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within thirty (30) days from the date
of entry thereof; or

(n) the Seller, the Guarantor, the Pledgor or an ERISA Affiliate shall engage in
a non-exempt prohibited transaction (as defined in Section 406 of ERISA or
Section 4975 of the Code); or

(o) the Seller fails to repurchase Purchased Assets on the applicable Repurchase
Date, including, without limitation the Facility Maturity Date, and to pay all
amounts due in connection therewith; or

(p) NRFC Sub-REIT Corp. shall cease to own directly 100% of the issued and
outstanding Equity Interest of the Seller; or

(q) the Seller, the Guarantor or the Pledgor shall admit its inability to, or
its intentions not to, perform its obligations, covenants or agreements under
any Repurchase Document or admit that it is not Solvent; or

(r) the Seller, the Guarantor or the Pledgor shall merge or consolidate into any
entity, and such entity is, in the Purchaser’s reasonable opinion, materially
weaker in its financial condition (in the aggregate) than such Person pre-merger
or consolidation; or
 
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(s) any Seller and/or any Guarantor fails to comply with or violates in any
respect Section 2.16 to the Agreement or any related provisions contained in the
Fee Letter and the same continues unremedied for a period of (a) two (2)
Business Days, with respect to any monetary obligation, and (b) in all other
cases, five (5) Business Days, after notice from the Purchaser.

Section 10.2 Remedies.

(a) If an Event of Default occurs, the following rights and remedies are
available to the Purchaser:

(i) At the option of the Purchaser, exercised by written notice to the Seller
(which option shall be deemed to have been exercised, even if no notice is
given, immediately upon the occurrence of an Insolvency Event of the Seller, the
Guarantor, the Pledgor or, subject to Subsection 10.1(c) of this Agreement, any
of their Affiliates), the Repurchase Date for each Transaction hereunder, if it
has not already occurred, shall be deemed immediately to occur (except that, in
the event that the Purchase Date for any Transaction has not yet occurred as of
the date of such exercise or deemed exercise, such Transaction shall be deemed
immediately cancelled without any liability to the Purchaser). The Purchaser
shall (except upon the occurrence of an Insolvency Event of the Seller, the
Guarantor, the Pledgor or, subject to Subsection 10.1(c) of this Agreement, any
of their Affiliates) give notice to the Seller of the exercise of such option as
promptly as practicable.

(ii) If the Purchaser exercises or is deemed to have exercised the option
referred to in Subsection 10.2(a)(i) of this Agreement,

(A) (1) the Seller’s obligations in such Transactions to repurchase all
Purchased Items, at the Repurchase Price therefor on the Repurchase Date, and,
without duplication, to pay the Aggregate Unpaids and all other Obligations
hereunder and under the other Repurchase Documents, shall thereupon become
immediately due and payable, (2) all Income paid after such exercise or deemed
exercise shall be retained by the Purchaser and applied to the aggregate unpaid
Repurchase Price, the Aggregate Unpaids and any other Obligations, and (3) the
Seller shall immediately deliver to the Purchaser any Purchased Items subject to
such Transactions then in the Seller’s possession or control; and

(B) all Income actually received by the Purchaser pursuant to Section 2.8 of
this Agreement (excluding any Late Payment Fees paid pursuant to Section 2.5 of
this Agreement) shall be applied to the aggregate unpaid Repurchase Price and
Aggregate Unpaids and any other Obligations, in such order as the Purchaser
shall determine in its discretion.

(iii) Upon the occurrence of one or more Events of Default, and subject to
Section 6.9 of this Agreement, the Purchaser shall have the right to obtain
physical possession of the Servicing Records (subject to the provisions of the
Custodial Agreement), the Servicing Files, the Servicing Agreements and all
other files of the Seller or any third party acting for the Seller relating to
the Purchased Items and all documents relating to the Purchased Items which are
then or may thereafter come into the possession of the Seller or any third party
acting for the Seller, and the Seller shall deliver to the Purchaser such
assignments as the Purchaser shall request (all of the foregoing being at the
expense of the Seller), and the Purchaser shall have the right to appoint any
Person to act as the Servicer for the Purchased Assets.
 
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(iv) At any time after the second (2nd) Business Day following notice to the
Seller (which notice may be the notice given under Subsection 10.2(a)(i) of this
Agreement), in the event the Seller have not repurchased all Purchased Items,
the Purchaser may (A) immediately sell, without demand or further notice of any
kind, at a public or private sale and at such price or prices as the Purchaser
may deem reasonably satisfactory any or all Purchased Items subject to such
Transactions hereunder and apply the proceeds thereof to the aggregate unpaid
Repurchase Price, the Aggregate Unpaids and all other Obligations, or (B) in its
discretion, elect, in lieu of selling all or a portion of such Purchased Items,
to give the Seller credit for such Purchased Items in an amount equal to the
Market Value (as determined by the Purchaser in its discretion but subject to
good faith) of the Purchased Items against the aggregate unpaid Repurchase
Price, the Aggregate Unpaids and all other Obligations. The proceeds of any
disposition of Purchased Items shall be applied first to the costs and expenses
incurred by the Purchaser in connection with the Seller’s default; second to the
costs of related covering and/or related hedging transactions; third to the
Repurchase Price; fourth to the Aggregate Unpaids and any other Obligations; and
fifth, to the Seller.

(v) Each party hereto agrees that the other party may obtain an injunction or an
order of specific performance to compel such other party to fulfill any of its
obligations as set forth in the Repurchase Documents if such other party fails
or refuses to perform its obligations as set forth therein.

(vi) The Seller shall be liable to the Purchaser, payable as and when incurred
by the Purchaser, for (A) the amount of all reasonable actual out-of-pocket
expenses, including legal or other expenses incurred by the Purchaser in
connection with or as a consequence of an Event of Default, and (B) all
reasonable costs incurred in connection with hedging or covering transactions.

(vii) The Purchaser shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or Applicable Law.

(b) The Purchaser may exercise one or more of the remedies available to the
Purchaser immediately upon the occurrence of an Event of Default and, except to
the extent provided in Subsection 10.2(a)(i) and 10.2(a)(iv) of this Agreement,
at any time thereafter without notice to the Seller. All rights and remedies
arising under this Agreement and the other Repurchase Documents, as amended from
time to time, are cumulative and not exclusive of any other rights or remedies
that the Purchaser may have.

(c) The Purchaser may enforce its rights and remedies hereunder without prior
judicial process or hearing, and the Seller and the Guarantor hereby expressly
waives any defenses the Seller, the Guarantor or the Pledgor might otherwise
have to require the Purchaser to enforce its rights by judicial process. The
Seller and the Guarantor also waives any defense (other than a defense of
payment or performance) the Seller, the Guarantor and/or the Pledgor might
otherwise have arising from the use of non-judicial process, enforcement and
sale of all or any portion of the Purchased Items, or from any other election of
remedies. The Seller, the Guarantor and the Pledgor recognize that non-judicial
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.

(d) To the extent permitted by Applicable Law, the Seller shall be liable to the
Purchaser for interest on any amounts owing by the Seller hereunder, from the
date the Seller becomes liable for such amounts hereunder until such amounts are
(i) paid in full by the Seller or (ii) satisfied in full by the exercise of the
Purchaser’s rights hereunder. Interest on any sum payable by the Seller to the
Purchaser under this Subsection 10.2(d) shall accrue interest from and after the
date of the Event of Default and while such Event of Default is continuing at a
rate equal to the Post-Default Rate.
 
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(e) In addition to the rights under this Section 10.2, during the continuance of
an Event of Default, the Purchaser shall no longer be obligated to enter into
any additional Transactions pursuant to any outstanding Confirmation and the
Purchaser shall have the following additional rights if an Event of Default
exists:

(i) The Purchaser, the Seller and the Guarantor agree and acknowledge that the
Purchased Assets constitute collateral that may decline rapidly in value.
Accordingly, notwithstanding anything to the contrary in this Agreement, the
Purchaser shall not be required to give notice to the Seller or the Guarantor
prior to exercising any remedy in respect of an Event of Default. If no prior
notice is given, the Purchaser shall give notice to the Seller of the remedies
effected by the Purchaser promptly thereafter. The Purchaser shall act in good
faith in exercising its rights pursuant to this Subsection 10.2(e).

(ii) The Purchaser may, in its discretion, elect to hold any Purchased Asset for
its own account and earn the related interest on the full face amount thereof.

(f) Notwithstanding anything contained in the Repurchase Documents to the
contrary, neither the Seller, the Guarantor, the Pledgor nor any other Person
shall be permitted to cure an Event of Default after the acceleration of any of
the Obligations.

(h) Subject to Subsections 2.15, 13.3, 13.4(d), and 13.10 and other similar
provisions contained in the Repurchase Documents, the Seller and the Guarantor
shall have all remedies available to them at law or equity for any breach of
this Agreement by the Purchaser.

Section 10.3 Determination of Events of Default.

In making a determination as to whether an Event of Default has occurred, the
Purchaser shall be entitled to rely on reports published or broadcast by media
sources believed by the Purchaser to be generally reliable and on information
provided to it by any other sources believed by it to be generally reliable,
provided that the Purchaser reasonably and in good faith believes such
information to be accurate.

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ARTICLE XI

INDEMNIFICATION

Section 11.1 Indemnification by the Seller.

(a) The Seller agrees to hold the Purchaser, the Swap Counterparty and their
Affiliates and the Purchaser’s, the Swap Counterparty’s and their Affiliates’
officers, directors, shareholders, partners, members, owners, employees, agents,
attorneys, Affiliates and advisors (each an “Indemnified Party” and collectively
the “Indemnified Parties”) harmless from and indemnify any Indemnified Party
against all out-of-pocket liabilities, out-of-pocket losses, out-of-pocket
damages, judgments, out-of-pocket costs, out-of-pocket expenses, penalties or
fines of any kind that may be imposed on, incurred by or asserted against such
Indemnified Party (collectively, the “Indemnified Amounts”) in any way relating
to, arising out of or resulting from (i) the Facility, this Agreement, the
Repurchase Documents, the Mortgage Loan Documents, any Purchased Item, the
Pledged Collateral and any other collateral for the Facility or any transaction
or Transaction contemplated hereby or thereby, or any amendment, supplement,
extension or modification of, or any waiver or consent under or in respect of,
this Agreement, the Repurchase Documents, the Mortgage Loan Documents, any
Purchased Item, the Pledged Collateral and any other collateral for the
Facility, or any transaction or Transaction contemplated hereby or thereby,
(ii) any Mortgage Asset, any Purchased Item, any Pledged Collateral or any other
collateral for the Facility, (iii) any violation or alleged violation of,
non-compliance with or liability under any Applicable Law (including, without
limitation, violation of securities laws and Environmental Laws), (iv) ownership
of, Liens on, security interests in or the exercise of rights and/or remedies
under the Repurchase Documents, the Mortgage Loan Documents, the Purchased
Items, the Pledged Collateral, any other collateral for the Facility, the
Underlying Mortgaged Property, any other related Property or collateral or any
part thereof or any interest therein or receipt of any Income or rents, (v) any
accident, injury to or death of any person or loss of or damage to property
occurring in, on or about any Underlying Mortgaged Property, any other related
Property or collateral or any part thereof, the Purchased Items or on the
adjoining sidewalks, curbs, parking areas, streets or ways, (vi) any use, nonuse
or condition in, on or about, or possession, alteration, repair, operation,
maintenance or management of, any Underlying Mortgaged Property, any other
related Property or collateral or any part thereof or on the adjoining
sidewalks, curbs, parking areas, streets or ways, (vii) any failure on the part
of the Seller, the Guarantor or the Pledgor to perform or comply with any of the
terms of the Mortgage Loan Documents, the Repurchase Documents, the Purchased
Items, the Pledged Collateral or any other collateral for the Facility,
(viii) performance of any labor or services or the furnishing of any materials
or other property in respect of the Underlying Mortgaged Property, any other
related Property or collateral, the Purchased Items or any part thereof,
(ix) any claim by brokers, finders or similar Persons claiming to be entitled to
a commission in connection with any lease or other transaction involving any
Underlying Mortgaged Property, any other related Property or collateral, the
Purchased Items or any part thereof or the Repurchase Documents, (x) any Taxes
including, without limitation, any Taxes attributable to the execution,
delivery, filing or recording of any Repurchase Document, any Mortgage Loan
Document or any memorandum of any of the foregoing, (xi) any Lien or claim
arising on or against the Underlying Mortgaged Property, any other related
Property or collateral, the Pledged Collateral, the Purchased Items or any part
thereof under any Applicable Law or any liability asserted against the Purchaser
with respect thereto, (xii) the claims of any lessee or any Person acting
through or under any lessee or otherwise arising under or as a consequence of
any leases with respect to any Underlying Mortgaged Property, related Property
or collateral, or any claims of a Borrower, (xiii) any civil penalty or fine
assessed by OFAC against, and all reasonable costs and expenses (including
counsel fees and disbursements) incurred in connection with the defense thereof,
by any Indemnified Party as a result of conduct of the Seller, the Pledgor or
the Guarantor that violates any sanction enforced by OFAC, (xiv) any and all
Indemnified Amounts arising out of, attributable or relating to, accruing out
of, or resulting from (1) a past, present or future violation or alleged
violation of any Environmental Laws in connection with any Property or
Underlying Mortgaged Property by any Person or other source, whether related or
unrelated to the Seller, the Pledgor, the Guarantor or any Borrower, (2) any
presence of any Materials of Environmental Concern in, on, within, above, under,
near, affecting or emanating from any Property or Underlying Mortgaged Property,
(3) the failure to timely perform any Remedial Work, (4) any past, present or
future activity by any Person or other source, whether related or unrelated to
the Seller, the Pledgor, the Guarantor or any Borrower in connection with any
actual, proposed or threatened use, treatment, storage, holding, existence,
disposition or other release, generation, production, manufacturing, processing,
refining, control, management, abatement, removal, handling, transfer or
transportation to or from any Property or Underlying Mortgaged Property of any
Materials of Environmental Concern at any time located in, under, on, above or
affecting any Property or Underlying Mortgaged Property, (5) any past, present
or future actual Release (whether intentional or unintentional, direct or
indirect, foreseeable or unforeseeable) to, from, on, within, in, under, near or
affecting any Property or Underlying Mortgaged Property by any Person or other
source, whether related or unrelated to the Seller, the Guarantor, the Pledgor
or any Borrower, (6) the imposition, recording or filing or the threatened
imposition, recording or filing of any Lien on any Property or Underlying
Mortgaged Property with regard to, or as a result of, any Materials of
Environmental Concern or pursuant to any Environmental Law, or (7) any
misrepresentation or inaccuracy in any representation or warranty in any
material respect or material breach or failure to perform any covenants or other
obligations pursuant to this Agreement, the other Repurchase Documents or any of
the Mortgage Loan Documents or relating to environmental matters in any way
including, without limitation, under any of the Mortgage Loan Documents or
(xv) any of the Seller’s, the Guarantor’s and/or any of their Affiliate’s
conduct, activities, actions and/or inactions in connection with, relating to or
arising out of any of the foregoing clauses of this Subsection 11(a), that, in
each case, results from anything other than any Indemnified Party’s gross
negligence, bad faith or willful misconduct. Without limiting the generality of
the foregoing, the Seller agrees to hold any Indemnified Party harmless from and
indemnify such Indemnified Party against all Indemnified Amounts with respect to
all Purchased Items and Mortgage Assets relating to or arising out of any
violation or alleged violation of, noncompliance with or liability under any
Applicable Law (including, without limitation, securities laws and Environmental
Laws) that, in each case, results from anything other than such Indemnified
Party’s gross negligence or willful misconduct. In any suit, proceeding or
action brought by an Indemnified Party in connection with any Purchased Item,
the Pledged Collateral or any other collateral for the Facility for any sum
owing thereunder, or to enforce any provisions of any Purchased Item, the
Pledged Collateral or any other collateral for the Facility, the Seller shall
save, indemnify and hold such Indemnified Party harmless from and against all
expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction of liability whatsoever of the account
debtor, obligor or Borrower thereunder arising out of a breach by the Seller,
the Guarantor, the Pledgor or an Affiliate of any of the foregoing 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, obligor or
Borrower or its successors from the Seller, the Guarantor, the Pledgor or an
Affiliate of any of the foregoing. The Seller also agrees to reimburse an
Indemnified Party as and when billed by such Indemnified Party for all such
Indemnified Party’s costs, expenses and fees incurred in connection with the
enforcement or the preservation of such Indemnified Party’s rights under this
Agreement, the Repurchase Documents, the Mortgage Loan Documents and any
transaction or Transaction contemplated hereby or thereby, including, without
limitation, the reasonable fees and disbursements of its counsel. In the case of
an investigation, litigation or other proceeding to which the indemnity in this
Subsection 11.1(a) applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by the Seller, the
Guarantor, the Pledgor and/or any of their officers, directors, shareholders,
employees or creditors, an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not any
transaction contemplated hereby is consummated.
 
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(b) Any amounts subject to the indemnification provisions of this Section 11.1
shall be paid by the Seller to the Indemnified Party within thirty (30) Business
Days following such Person’s demand therefor. For the avoidance of doubt, an
Indemnified Party may seek payment of any Indemnified Amount at any time and
regardless of whether a Default or an Event of Default then exists or is
continuing.

(c) The obligations of the Seller under this Article XI shall survive the
termination of this Agreement until the expiration of the applicable statute of
limitations.

Section 11.2 After-Tax Basis.

Indemnification under Section 11.1 shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the receipt of the indemnity provided hereunder, including
the effect of such tax or refund on the amount of tax measured by net income or
profits that is or was payable by the Indemnified Party.

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ARTICLE XII

[RESERVED]

ARTICLE XIII

MISCELLANEOUS 

Section 13.1 Amendments and Waivers.

No amendment, waiver or other modification of any provision of this Agreement
shall be effective without the written agreement of each of the Seller, the
Purchaser, the Guarantor and the Swap Counterparty to the extent the proposed
amendment, waiver or other modification materially and adversely affects the
Swap Counterparty. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

Section 13.2 Notices and Other Communications.

All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered,
as to each party hereto, at its address set forth under its name on the
signature pages of this Agreement or at such other address as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, upon receipt, or in the case
of (a) notice by telex, when telexed against receipt of answer back, or (b)
notice by facsimile copy, when verbal communication of receipt is obtained.
Neither the Seller, the Guarantor nor the Pledgor shall be entitled to any
notices of any nature whatsoever from the Purchaser except with respect to
matters for which this Agreement or the Repurchase Documents specifically and
expressly provide for the giving of notice by the Purchaser to the Seller, the
Guarantor and/or the Pledgor and, except with respect to matters for which the
Seller, the Guarantor or the Pledgor is not, pursuant to Applicable Law,
permitted to waive the giving of notice.

Section 13.3 Set-offs.

In addition to any rights and remedies of the Purchaser provided by this
Agreement, the Repurchase Documents and by Applicable Law, the Purchaser shall
have the right, without prior notice to the Seller or the Guarantor, any such
notice being expressly waived by the Seller and the Guarantor to the extent
permitted by Applicable Law, upon any amount becoming due and payable by the
Seller to the Purchaser hereunder, under the Repurchase Documents or otherwise
(whether at the stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all monies and other property
of the Seller, any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any and all other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, and in each case at any
time held or owing by the Purchaser or any Affiliate thereof to or for the
credit or the account of the Seller. The Purchaser agrees promptly to notify the
Seller and the Guarantor after any such set-off and application made by the
Purchaser, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The Seller and the Guarantor hereby
waive any right of setoff it may have or to which it may be entitled under this
Agreement from time to time against the Purchaser or its assets.
 
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Section 13.4 No Waiver; Etc.

(a) Upon the occurrence and during the continuance of an Event of Default, the
Purchaser shall have, with respect to the security interest in the Purchased
Assets granted pursuant to Article VIII of this Agreement, and in addition to
all other rights and remedies available to the Purchaser under this Agreement or
other Applicable Law, all rights and remedies of a secured party upon default
under the UCC.

(b) The Seller and the Guarantor agree, to the full extent that it may lawfully
so agree, that neither it nor anyone claiming through or under it will set up,
claim or seek to take advantage of any appraisement, valuation, stay, extension
or redemption law now or hereafter in force in any locality where any Purchased
Items may be situated in order to prevent, hinder or delay the enforcement or
foreclosure of this Agreement, or the absolute sale of any of the Purchased
Items or any part thereof, or the final and absolute putting into possession
thereof, immediately after such sale, of the purchasers thereof, and the Seller
and the Guarantor, each for itself and all who may at any time claim through or
under it, hereby waives, to the full extent that it may be lawful so to do, the
benefit of all such laws and any and all right to have any of the properties or
assets constituting the Purchased Items marshaled upon any such sale, and agrees
that the Purchaser or any court having jurisdiction to foreclose the security
interests granted in this Agreement may sell the Purchased Items as an entirety
or in such parcels as the Purchaser or such court may determine.

(c) No failure on the part of the Purchaser to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right or remedy hereunder preclude
any further exercise thereof or the exercise of any other right. The rights and
remedies herein provided are cumulative and not exclusive of any rights and
remedies provided by Applicable Law. Application of the Post-Default Rate or
increased Pricing Spread after a Default or Event of Default shall not be deemed
to constitute a waiver of any Default or Event of Default or any rights or
remedies of the Purchaser under this Agreement, any other Repurchase Documents
or Applicable Law, or a consent to any extension of time for the payment or
performance of any obligation with respect to which the Post-Default Rate or
increase in Pricing Spread after an Event of Default may be invoked.

(d) In the event that a claim or adjudication is made that the Purchaser has
acted unreasonably or unreasonably delayed acting in any case where by
Applicable Law or under this Agreement or the other Repurchase Documents it has
an obligation to act reasonably or promptly, the Purchaser shall not be liable
for any punitive, consequential, indirect or special damages in connection
therewith or any other breach or default by the Purchaser, and the Seller’s and
the Guarantor’s sole remedies shall be limited to commencing an action seeking
injunctive relief, actual damages or declaratory judgment.

Section 13.5 Binding Effect.

This Agreement shall be binding upon and inure to the benefit of the Purchaser,
the Swap Counterparty, the Seller and the Guarantor and their respective
successors and permitted assigns.

Section 13.6 Governing Law; Consent to Jurisdiction; Waiver of Objection to
Venue.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF). EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK.
EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
 
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Section 13.7 Jurisdiction; Waiver of Jury Trial.

(a) EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION
OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES
HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

Section 13.8 Costs, Expenses and Taxes.

(a) The Seller agrees to pay as and when billed by the Purchaser all of the
reasonable out-of-pocket costs and expenses incurred by the Purchaser in
connection with the development, preparation, execution and delivery of, and any
amendment, supplement, renewal, extension or modification to or waiver of, this
Agreement, the Repurchase Documents, any Transaction hereunder and any other
documents and agreements prepared in connection herewith or therewith. The
Seller agrees to pay as and when billed by the Purchaser all of the reasonable
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 and out-of-pocket
expenses of counsel for the Purchaser with respect thereto and with respect to
advising the Purchaser as to its respective rights and remedies under this
Agreement, the Repurchase Documents and the other documents to be delivered
hereunder or in connection herewith, (ii) all costs and expenses, if any
(including reasonable counsel fees and expenses) incurred by the Purchaser in
connection with the enforcement of this Agreement, the Repurchase Documents and
the other documents to be delivered hereunder or thereunder or in connection
herewith or therewith and (iii) all the due diligence, inspection, audit,
testing, review, recording, travel, lodging or other administrative costs and
expenses incurred by the Purchaser with respect to such Person’s review,
consideration and purchase or proposed purchase of any Mortgage Asset, any
Purchased Asset or any Purchased Item under this Agreement and the other
Repurchase Documents (including any costs necessary or incidental to the
execution of any Transaction under this Agreement), including, but not limited
to, those costs and expenses incurred by the Purchaser and reimbursable by the
Seller pursuant to Subsection 11.1(a) of this Agreement.
 
(b) The Seller shall pay on demand any and all stamp, sales, excise and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement, the Repurchase
Documents or the other documents to be delivered hereunder or thereunder or the
funding or maintenance of Transactions hereunder.
 
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(c) The Seller shall pay on demand all other reasonable costs, expenses and
Taxes (excluding income, franchise and similar taxes) incurred by the Purchaser
(“Other Costs”), including, without limitation, all reasonable costs and
expenses incurred by the Purchaser in connection with periodic audits of the
Seller’s, the Guarantor’s, the Pledgor’s or any Servicer’s books and records.

Section 13.9 Legal Matters.

(a) In the event of any conflict between the terms of this Agreement, any other
Repurchase Document and any Confirmation, the documents shall control in the
following order of priority: first, the terms of the Confirmation shall prevail,
then the terms of this Agreement shall prevail, and then the terms of the other
Repurchase Documents shall prevail.

(b) Each of the Seller and the Guarantor hereby acknowledges that:

(i) it has been advised by counsel of its choosing in the negotiation, execution
and delivery of the Repurchase Documents;

(ii) it has no fiduciary relationship with the Purchaser (including under any
Repurchase Document); and

(iii) no joint venture exists with the Purchaser.

Section 13.10 Recourse.

No recourse under or with respect to any obligation, covenant or agreement
(including, without limitation, the payment of any fees or any other
obligations) of the Purchaser, the Seller or the Guarantor as contained in this
Agreement or any other Repurchase Document entered into by any such party
pursuant hereto or thereto or in connection herewith or therewith shall be had
against any administrator of the Purchaser, the Seller, the Pledgor or the
Guarantor or any incorporator, Affiliate, owner, member, partner, stockholder,
officer, director, employee, agent or attorney of the Purchaser, the Seller, the
Pledgor or the Guarantor, or of any such administrator, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise; it being expressly agreed and understood that the
agreements of the Purchaser, the Seller, the Pledgor and the Guarantor contained
in this Agreement and all of the other agreements, instruments and documents
entered into by any such party pursuant hereto or thereto or in connection
herewith or therewith are, in each case, solely the corporate obligations of the
Purchaser, the Seller, the Pledgor and the Guarantor, and that no personal
liability whatsoever shall attach to or be incurred by any administrator of the
Purchaser, the Seller, the Pledgor or the Guarantor or any incorporator, owner,
member, partner, stockholder, Affiliate, officer, director, employee, agent or
attorney of the Purchaser, the Seller, the Pledgor or the Guarantor, or of any
such administrator, as such, or any other of them, under or by reason of any of
the obligations, covenants or agreements of the Purchaser, the Seller, the
Pledgor or the Guarantor contained in this Agreement, the Repurchase Documents
or in any other such instruments, documents or agreements, or that are implied
therefrom, and that any and all personal liability of every such administrator
of the Purchaser, the Seller, the Pledgor and the Guarantor and each
incorporator, owner, member, partner, stockholder, Affiliate, officer, director,
employee, agent or attorney of the Purchaser, the Seller, the Pledgor and the
Guarantor, or of any such administrator, or any of them, for breaches by the
Purchaser, the Seller, the Pledgor or the Guarantor of any such obligations,
covenants or agreements, which liability may arise either at common law or at
equity, by statute or constitution, or otherwise, is hereby expressly waived as
a condition of and in consideration for the execution of this Agreement. The
provisions of this Section 13.10 shall survive the termination of this Agreement
until the expiration of the applicable statute of limitations.
 
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Section 13.11 Protection of Right, Title and Interest; Further Action Evidencing
Transactions.

(a) The Seller agrees that, from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
the Purchaser may reasonably request in order to perfect, protect or more fully
evidence the Transactions hereunder and the security interest granted in the
Purchased Items, or to enable the Purchaser to exercise and enforce its rights
and remedies hereunder, under any Repurchase Document or under any Purchased
Item.

(b) If the Seller fails to perform any of its obligations hereunder, the
Purchaser may (but shall not be required to) perform, or cause performance of,
such obligation; and the Purchaser’s reasonable costs and expenses incurred in
connection therewith shall be payable by the Seller. The Seller irrevocably
appoints the Purchaser as its attorney-in-fact and authorizes the Purchaser to
act on behalf of the Seller to file financing statements necessary or desirable
in the Purchaser’s discretion to perfect and to maintain the perfection and
priority of the security interest in the Purchased Items. This appointment is
coupled with an interest and is irrevocable.

Section 13.12 Term of this Agreement

This Agreement, including, without limitation, the Seller’s, the Guarantor’s,
and the Pledgor’s representations, agreements, covenants, obligations and duties
set forth herein, creates and constitutes the continuing obligation of the
parties hereto in accordance with its terms and shall remain in full force and
effect until the Obligations are paid in full; provided, however,
notwithstanding the repayment in full of the Obligations and/or the termination
of this Agreement, the indemnification and payment provisions of Article XI, the
provisions of Subsections 2.5(b), 2.13, 2.14, 13.7, 13.8, 13.10 and 13.13, and
any other provision that by its terms expressly survives termination, shall each
be continuing and shall survive any termination of this Agreement until the
expiration of the statute of limitations applicable thereto. This Agreement and
the other Repurchase Documents shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Obligations is rescinded or must otherwise be restored
or returned by the Purchaser as a preference, fraudulent conveyance or otherwise
under any Insolvency Law, all as though such payment had not been made; provided
that in the event payment of all or any part of the Obligations is rescinded or
must be restored or returned, all reasonable costs and expenses (including,
without limitation, any reasonable legal fees and disbursements) incurred by the
Purchaser in defending and enforcing such reinstatement shall be deemed to be
included as a part of the Obligations.

Section 13.13 Confidentiality.

(a) Each of the Purchaser, the Seller, the Guarantor, the Pledgor and their
Affiliates shall maintain and shall cause each of its employees, officers,
directors, managers, partners, owners, agents, members and shareholders to
maintain the confidentiality of this Agreement, the Repurchase Documents and all
information with respect to the other parties, including all information
regarding the business of such other parties obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that the Purchaser, the Seller, the Guarantor, the
Pledgor and their respective employees, officers, directors, managers, partners,
owners, agents, members and shareholders may (i) disclose such information to
its external accountants, attorneys, investors, potential investors, advisors
and the agents of such Persons (“Excepted Persons”) who have a need to know such
information; provided, however, that each Excepted Person shall, as a condition
to any such disclosure, agree that such information shall be used solely in
connection with such Excepted Person’s evaluation of, or relationship with, the
Purchaser, the Seller, the Guarantor, the Pledgor and their Affiliates, (ii)
disclose such information as is required by Applicable Law, and (iii) disclose
this Agreement, the Repurchase Documents and such information in any suit,
action, proceeding or investigation (whether in law or in equity or pursuant to
arbitration) involving this Agreement, the Repurchase Documents or any Interest
Rate Protection Agreement for the purpose of defending itself, reducing its
liability, or protecting or exercising any of its claims, rights, remedies or
interests under or in connection with this Agreement, the Repurchase Documents
or any Interest Rate Protection Agreement. It is understood that the financial
terms that may not be disclosed except in compliance with this Section 13.13
include, without limitation, all fees and other pricing terms, and all Events of
Default and priority of payment provisions.
 
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(b) Anything herein to the contrary notwithstanding, each of the Purchaser, the
Seller, the Guarantor and the Pledgor hereby consents to the disclosure of any
nonpublic information with respect to it (i) to any other party, (ii) to any
permitted prospective or actual assignee, participant or pledgee of any of them
, or (iii) to any officers, directors, employees, agents, outside accountants
and attorneys of any of the foregoing, provided each such Person is informed of
the confidential nature of such information. In addition, the Purchaser, the
Seller and the Guarantor may disclose any such nonpublic information as required
pursuant to any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or not
having the force or effect of law).

(c) Notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known; (ii) disclosure of any and all information (A) if
required to do so by any Applicable Law, (B) to any Government Authority having
or claiming authority to regulate or oversee any respects of the Purchaser’s,
the Seller’s, the Guarantor’s or the Pledgor’s business or that of their
Affiliates, (C) pursuant to any subpoena, civil investigative demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which the Purchaser, the Seller, the Guarantor, the Pledgor or an officer,
director, employer, shareholder, owner, member, partner, agent, employee or
Affiliate of the Purchaser, the Seller, the Guarantor or the Pledgor is a party,
(D) in any preliminary or final offering circular, registration statement or
contract or other document approved in advance by the Purchaser, the Seller or
the Guarantor, as applicable, or (E) to any Affiliate, independent or internal
auditor, agent, employee or attorney of any custodian appointed by the
Purchaser, the Seller or the Guarantor having a need to know the same, provided
that such custodian advises such recipient of the confidential nature of the
information being disclosed; or (iii) any other disclosure authorized by the
Purchaser, the Seller, the Guarantor or the Pledgor.

(d) Notwithstanding anything to the contrary contained herein, the Repurchase
Documents or in any related document, all Persons may disclose to any and all
Persons, without limitation of any kind, the federal income tax treatment of any
of the transactions contemplated by this Agreement, the Repurchase Documents or
any other related document, any fact relevant to understanding the federal tax
treatment of such transactions and all materials of any kind (including opinions
or other tax analyses) relating to such federal income tax treatment.

(e) Notwithstanding anything to the contrary contained herein or in any
Repurchase Document, Guarantor and any Affiliate of Guarantor shall be entitled
to disclose any and all terms of any Repurchase Document (including the public
filing thereof) if the Guarantor, in its sole discretion, deems it necessary or
appropriate under the rules or regulations of the Securities and Exchange
Commission and/or the New York Stock Exchange.
 
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Section 13.14 Execution in Counterparts.

(a) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts (including by facsimile), each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.

(b) Each provision of this Agreement shall be valid, binding and enforceable to
the fullest extent permitted by Applicable Law. In case any provision in or
obligation, duty, covenant or agreement under this Agreement or the other
Repurchase Documents shall be invalid, illegal or unenforceable in any
jurisdiction (either in its entirety or as applied to any Person, fact,
circumstance, action or inaction), the validity, legality and enforceability of
the remaining provisions, obligations, duties, covenants and agreements, or of
such provision, obligation, duty, covenant or agreement in any other
jurisdiction or as applied to any Person, fact, circumstance, action or
inaction, shall not in any way be affected or impaired thereby.

(c) This Agreement and any other Repurchase Document executed in connection
herewith contain the final and complete integration of all prior expressions by
the parties hereto and thereto with respect to the subject matter hereof and
thereof and shall constitute the entire agreement among the parties hereto and
thereto with respect to the subject matter hereof and thereof, superseding all
prior oral or written understandings.

Section 13.15 Entire Agreement; Severability.

This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.

Section 13.16 Non-assignability; Termination.

(a) The Purchaser may at any time and without the permission of, but with
contemporaneous notice to, the Seller, sell, assign, transfer, pledge or grant a
security interest or sell a participation interest in, its rights and interests
under the Repurchase Documents (or any portion thereof) to any Person; provided,
however, that (i) if the Purchaser is assigning or selling a participation
interest in more than 50% of the Maximum Amount to a Person that is not a
Pre-Approved Purchaser and there is no Default or Event of Default, then the
Seller must first approve such assignment or participation (which approval shall
not be unreasonably withheld, conditioned or delayed), (ii) provided there is no
Event of Default, the Purchaser will retain control over decisions relating to
waivers and consents (including, without limitation, Market Value
determinations, margin calls, term extensions and approval of Eligible Assets)
expressly contemplated under the Repurchase Documents and (iii) assignments by
the Purchaser shall be in a minimum amount of $5,000,000 unless the Purchaser is
assigning all of its remaining interests under this Agreement. The parties to
any such assignment, grant or sale of participation interest shall execute and
deliver to the Purchaser, for its acceptance and recording in its books and
records, such agreement or document as may be satisfactory to such parties and
the Purchaser. Notwithstanding anything contained in this Section 13.16 to the
contrary, after an Event of Default that is continuing, the Purchaser may sell
any Purchased Asset (or portion thereof) without the consent of the Seller in
accordance with the Purchaser’s exercise of remedies under this Agreement.

(b) The Seller agrees to cooperate with the Purchaser at the Purchaser’s cost in
connection with any such sale, assignment, transfer, pledge or participation and
to enter into such restatements of, and amendments, supplements and other
modifications to, the Repurchase Documents in order to give effect to such
assignment, transfer or sale.
 
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(c) The Seller shall not assign or delegate, or grant or transfer any interest
in, or permit any Lien to exist upon, the Seller’s rights, obligations or duties
under this Agreement or the Repurchase Documents without the prior written
consent of the Purchaser (which consent may be withheld in the Purchaser’s
discretion). Any attempt by the Seller to assign any of its rights or
obligations under this Agreement without the prior written consent of the
Purchaser (which consent may be withheld in the Purchaser’s discretion) shall be
null and void.

Section 13.17 Single Agreements.

Purchaser and Seller acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of the Seller and the Guarantor agrees (i) to perform all of
its obligations in respect of each Transaction hereunder, and that a default in
the performance of any such obligations shall constitute a default by it in
respect of all Transactions hereunder, and (ii) that payments, deliveries and
other transfers made by it or others on its behalf in respect of any Transaction
shall be deemed to have been made in consideration of payments, deliveries and
other transfers in respect of any other Transactions hereunder, and the
obligations to make any such payments, deliveries and other transfers may be
applied against each other and netted.

Section 13.18 Disclosure Relating to Certain Federal Protections.

The parties acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;

(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and

(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable; and

(d) in the case of Transactions in which one of the parties is an “insured
depository institution” as that term is defined in Section 1813(c)(2) of
Title 12 of the United States Code, funds held by the financial institution
pursuant to a Transaction hereunder are not a deposit and therefore are not
insured by the Federal Deposit Insurance Corporation, the Savings Association
Insurance Fund or the Bank Insurance Fund, as applicable.
 
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Section 13.19 Intent.

(a) 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 insofar as the type of Purchased Assets subject to such
Transaction or the term of such Transaction would render such definition
inapplicable) and a “Securities Contract” as that term is defined in Section 741
of Title 11 of the United States Code, as amended (except insofar as the type of
Purchased Assets subject to such Transaction would render such definition
inapplicable).

(b) The parties agree and acknowledge that if a party hereto is an “Insured
Depository Institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a
“Qualified Financial Contract,” as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of Purchased
Assets subject to such Transaction would render such definition inapplicable).

(c) It is understood and agreed that this Agreement constitutes a “Master
Netting Agreement” as that term is defined in Section 101 of Title 11 of the
United States Code.

(d) It is understood that this Agreement constitutes a “Netting Contract” as
defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment
obligation under any Transaction hereunder shall constitute a “Covered
Contractual Payment Entitlement” or “Covered Contractual Payment Obligation”,
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a “Financial Institution” as that term is defined in
FDICIA or regulations promulgated thereunder).

(e) It is understood that any party’s right to liquidate Purchased Assets
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Section 10.2 is a contractual right to liquidate such
Transaction as described in Sections 555, 559 and 561 of Title 11 of the United
States Code, as amended.

Section 13.20 Review of Due Diligence and Books and Records.

Each of the Seller and the Guarantor acknowledge that the Purchaser has the
right to perform continuing due diligence reviews with respect to the Purchased
Items and the Seller and the Guarantor for purposes of verifying compliance with
the representations, warranties, covenants, agreements and specifications made
hereunder, under the Repurchase Documents or otherwise, and each of the Seller
and the Guarantor agree that, upon reasonable (but no less than one (1) Business
Day’s) prior notice, unless an Event of Default shall have occurred, in which
case no notice is required, to the Seller or the Guarantor, as applicable, the
Purchaser or its authorized representatives shall be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the books
and records of the Seller and the Guarantor, the Mortgage Asset Files and any
and all documents, records, agreements, instruments or information relating to
the Purchased Items in the possession or under the control of the Seller, the
Guarantor, and/or the Custodian. Each of the Seller and the Guarantor also shall
make available to the Purchaser a knowledgeable financial or accounting officer
for the purpose of answering questions respecting the Seller, the Guarantor, the
Mortgage Asset Files and the Purchased Items. Each of the Seller and the
Guarantor shall also make available to the Purchaser any accountants or auditors
of the Seller and the Guarantor to answer any questions or provide any documents
as the Purchaser may require. The Seller and the Guarantor shall also cause each
of the Servicers and PSA Servicers (to the extent permitted under the applicable
Pooling and Servicing Agreement) to cooperate with the Purchaser by permitting
the Purchaser to conduct due diligence reviews of files of each such Servicer
and PSA Servicer. Without limiting the generality of the foregoing, each of the
Seller and the Guarantor acknowledge that the Purchaser may purchase Purchased
Items from the Seller based solely upon the information provided by the Seller
or the Guarantor to the Purchaser in the Seller Asset Schedule and the
representations, warranties and covenants contained herein, and that the
Purchaser, at its option, has the right at any time to conduct a partial or
complete due diligence review on some or all of the Purchased Items purchased in
a Transaction, including, without limitation, ordering new credit reports and
new appraisals on the related Underlying Mortgaged Properties and otherwise
re-generating the information used to originate such Purchased Items. The
Purchaser may underwrite such Purchased Items itself or engage a mutually agreed
upon third party underwriter to perform such underwriting. Each of the Seller
and the Guarantor agrees to cooperate with the Purchaser and any third party
underwriter in connection with such underwriting, including, but not limited to,
providing the Purchaser and any third party underwriter with access to any and
all documents, records, agreements, instruments or information relating to such
Purchased Items in the possession, or under the control, of the Seller or the
Guarantor. The Seller shall pay all out-of-pocket costs and expenses incurred by
the Purchaser in connection with the Purchaser’s activities pursuant to this
Section 13.20.
 
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Section 13.21 Use of Employee Plan Assets.

If assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by
either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so
notify the other party prior to the Transaction. The Plan Party shall represent
in writing to the other party that the Transaction does not constitute a
prohibited transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed in reliance thereon but shall not be required so to
proceed.

Section 13.22 Time of the Essence.

Time is of the essence with respect to all obligations, duties, covenants,
agreements, notices or actions or inactions of the Purchaser, the Seller and the
Guarantor under this Agreement and the other Repurchase Documents.

Section 13.23 Construction.

This Agreement shall be construed fairly as to the parties hereto and not in
favor of or against any party, regardless of which party or which party’s
counsel prepared this Agreement.

Section 13.24 Joint and Several Obligations.

(a) At all times during which there is more than one (1) Seller under this
Agreement, the liability of each Seller shall be joint and several and the joint
and several obligations of each Seller under the Repurchase Documents
(a) (i) shall be absolute and unconditional and shall remain in full force and
effect (or be reinstated) until all the Obligations shall have been paid in full
and the expiration of any applicable preference or similar period pursuant to
any bankruptcy, insolvency, reorganization, moratorium or similar law, or at law
or in equity, without any claim having been made before the expiration of such
period asserting an interest in all or any part of any payment(s) received by
the Purchaser, and (ii) until such payment has been made, shall not be
discharged, affected, modified or impaired on the happening from time to time of
any event, including, without limitation, any of the following, whether or not
with notice to or the consent of any Seller, the Guarantor or the Pledgor,
(A) the waiver, compromise, settlement, release, termination or amendment
(including, without limitation, any extension or postponement of the time for
payment or performance or renewal or refinancing) of any or all of the
obligations or agreements of any Seller, the Guarantor or the Pledgor under the
Agreement or any Repurchase Document, (B) the failure to give notice to any
Seller, the Guarantor or the Pledgor of the occurrence of an Event of Default
under any of the Repurchase Documents, (C) the release, substitution or exchange
by the Purchaser of any or all of the Purchased Items (whether with or without
consideration) or the acceptance by the Purchaser of any additional collateral
or the availability or claimed availability of any other collateral or source of
repayment or any nonperfection or other impairment of collateral, (D) the
release of any Person primarily or secondarily liable for all or any part of the
Obligations, whether by the Purchaser or in connection with any voluntary or
involuntary liquidation, dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors or similar event or proceeding affecting
any or all of any Seller, the Guarantor, the Pledgor or any other Person who, or
any of whose Property, shall at the time in question be obligated in respect of
the Obligations or any part thereof, or (E) to the extent permitted by
Applicable Law, any other event, occurrence, action or circumstance that would,
in the absence of this Section 13.24, result in the release or discharge of any
or all of any Seller from the performance or observance of any obligation,
covenant or agreement contained in the Agreement or the Repurchase Documents;
(b) each Seller expressly agrees that the Purchaser shall not be required first
to initiate any suit or to exhaust its remedies against any Seller, the
Guarantor, the Pledgor or any other Person to become liable, or against any of
the Purchased Items or the Pledged Collateral, in order to enforce this
Agreement or the Repurchase Documents and each Seller, the Guarantor and the
Pledgor expressly agree that, notwithstanding the occurrence of any of the
foregoing, each Seller shall be and remain directly and primarily liable for all
sums due under the Agreement or any of the Repurchase Documents; and, (c) on
disposition by the Purchaser of any Property encumbered by any Purchased Items,
each Seller shall be and shall remain jointly and severally liable for any
deficiency.
 
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(b) Each Seller hereby agrees that, to the extent another Seller shall have paid
more than its proportionate share of any payment made hereunder, the Seller
shall be entitled to seek and receive contribution from and against any other
Seller which has not paid its proportionate share of such payment;
provided however, that the provisions of this Section 13.24 shall in no respect
limit the obligations and liabilities of any Seller to the Purchaser, and,
notwithstanding any payment or payments made by any Seller (the “paying Seller”)
hereunder or any set-off or application of funds of the paying Seller by the
Purchaser, the paying Seller shall not be entitled to be subrogated to any of
the rights of the Purchaser against any other Seller or any collateral security
or guarantee or right of offset held by the Purchaser, nor shall the paying
Seller seek or be entitled to seek any contribution or reimbursement from the
other Seller in respect of payments made by the paying Seller hereunder, until
all amounts owing to the Purchaser by the Seller under the Repurchase Documents
are paid in full. If any amount shall be paid to the paying Seller on account of
such subrogation rights at any time when all such amounts shall not have been
paid in full, such amount shall be held by the paying Seller in trust for the
Purchaser, segregated from other funds of the paying Seller, and shall,
forthwith upon receipt by the paying Seller, be turned over to the Purchaser in
the exact form received by the paying Seller (duly indorsed by the paying Seller
to the Purchaser, if required), to be applied against amounts owing to the
Purchaser by the Seller under the Repurchase Documents, whether matured or
unmatured, in such order as the Purchaser may determine in its discretion.

Section 13.25 Swap Counterparty.

The Swap Counterparty shall be a third party beneficiary of the terms and
provisions of this Agreement and the other Repurchase Documents. Notwithstanding
anything contained herein to the contrary, all representations, warranties,
duties and covenants of the Seller and the Guarantor to or for the benefit of
the Purchaser shall also be to and for the benefit of the Swap Counterparty,
regardless of whether the same is expressly stated in each instance.

Section 13.26 Amendment and Restatement.

This Agreement amends, restates and supersedes in its entirety the Existing
Agreement. Notwithstanding the amendment and restatement of the Existing
Agreement by this Agreement: (a) each Transaction outstanding on the date hereof
under the Existing Agreement (other than those refinanced under a separate
facility) shall continue in effect as a Transaction hereunder, without any
transfer, conveyance, diminution or other modification thereto or effect thereon
occurring or being deemed to occur by reason of the amendment and restatement of
the Existing Agreement hereby and (b) the Existing Seller shall continue to be
liable to the Purchaser for (i) all “Obligations” (under and as defined in the
Existing Agreement) accrued to the date hereof under the Existing Agreement and
(ii) all agreements on the part of the Existing Seller under the Existing
Agreement to indemnify the Purchaser or any Affected Party in connection with
events or conditions arising or existing prior to the effective date of this
Agreement, including, but not limited to, those events and conditions set forth
in Section 11 thereof. This Agreement is given in substitution for the Existing
Agreement and not as payment of any of the obligations of the Existing Seller
thereunder, and is in no way intended to constitute a novation of the Existing
Agreement. Nothing contained herein is intended to amend, modify or otherwise
affect any obligation of the Existing Seller, the Guarantor or the Pledgor
existing prior to the date hereof. Upon the effectiveness of this Agreement,
each reference to the Existing Agreement in any other Repurchase Document, or
document, instrument or agreement executed and/or delivered in connection
therewith shall mean and be a reference to this Agreement unless the context
otherwise requires. Upon the effectiveness of this Agreement, the terms of this
Agreement shall govern all aspects of the Facility, including, without
limitation, the eligibility of Purchased Assets purchased under the Existing
Agreement (other than those refinanced under a separate facility) and any
settlements to be made with respect thereto. Any Existing Seller not party to
this Agreement as a Seller shall no longer be a Seller and shall not be liable
for the Obligations under this Agreement and the other Repurchase Documents.
 
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Section 13.27 Heading and Exhibits.

The headings herein are for purposes of references only and shall not otherwise
affect the meaning or interpretation of any provision hereof. The schedules and
exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.

[Remainder of Page Intentionally Left Blank.]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

      THE SELLERS: NRFC WA HOLDINGS, LLC,  
a Delaware limited liability company
 
   
   
  By:   /s/ Albert Tylis  

--------------------------------------------------------------------------------

Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NRFC WA Holdings, LLC
c/o NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

 
[Signatures Continued on the Following Page]
 

--------------------------------------------------------------------------------

      THE SELLERS (cont.): NRFC WA HOLDINGS II, LLC,  
a Delaware limited liability company
 
   
   
  By:   /s/ Albert Tylis  

--------------------------------------------------------------------------------

Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NRFC WA Holdings II, LLC
c/o NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

[Signatures Continued on the Following Page]
 

--------------------------------------------------------------------------------

      THE SELLERS (cont.): NRFC WA HOLDINGS VII, LLC,  
a Delaware limited liability company
 
   
   
  By:   /s/ Albert Tylis  

--------------------------------------------------------------------------------

Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NRFC WA Holdings VII, LLC
c/o NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

 
[Signatures Continued on the Following Page]
 

--------------------------------------------------------------------------------

      THE SELLERS (cont.): NRFC WA HOLDINGS X, LLC,  
a Delaware limited liability company
 
   
   
  By:   /s/ Albert Tylis  

--------------------------------------------------------------------------------

Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NRFC WA Holdings X, LLC
c/o NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

 
[Signatures Continued on the Following Page]
 

--------------------------------------------------------------------------------

      THE SELLERS (cont.): NRFC WA HOLDINGS XI, LLC,  
a Delaware limited liability company
 
   
   
  By:   /s/ Albert Tylis  

--------------------------------------------------------------------------------

Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NRFC WA Holdings XI, LLC
c/o NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

 
[Signatures Continued on the Following Page]
 

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      THE SELLERS (cont.): NRFC WA HOLDINGS XII, LLC,  
a Delaware limited liability company
 
   
   
  By:   /s/ Albert Tylis  

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Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NRFC WA Holdings XII, LLC
c/o NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

[Signatures Continued on the Following Page]

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      THE PURCHASER: WACHOVIA BANK, NATIONAL ASSOCIATION  
   
   
  By:   /s/ Joseph F. Cannon  

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Name: Joseph F. Cannon
Title: Vice President

 

 
Wachovia Bank, National Association
One Wachovia Center, Mail Code: NC0166
301 South College Street
Charlotte, North Carolina 28288
  Attention:
Joseph F. Cannon
  Facsimile No.: (704) 715-0066   Confirmation No.:
(704) 383-2324
  Email Address: Joe.Cannon@wachovia.com

 
[Signatures Continued on the Following Page]
 

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      THE GUARANTORS: NORTHSTAR REALTY FINANCE CORP.,  
a Maryland corporation
 
   
   
  By:   /s/ Albert Tylis  

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Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NorthStar Realty Finance Corp.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

 
[Signatures Continued on the Following Page]
 

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      THE GUARANTORS (cont.): NORTHSTAR REALTY FINANCE L.P.,  
a Delaware limited partnership,
        By:
NorthStar Realty Finance Corp., a Maryland corporation, its general partner
 
   
   
  By:   /s/ Albert Tylis  

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Name: Albert Tylis  
Title: Executive Vice President, General Counsel and Assistant Secretary

 

 
NorthStar Realty Finance L.P.
399 Park Avenue, 18th floor
New York, New York 10022
  Attention:
Andy Richardson
Al Tylis, Esq.
Daniel R. Gilbert
  Facsimile No.: (212) 547-2700   Confirmation No.:
(212) 547-2650
(212) 547-2641
(212) 547-2680
       
with a copy to:
         
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
  Attention: Robert J. Grados, Esq.   Facsimile No.: (212) 230-7830  
Confirmation No.:  (212) 318-6923

 
[Signatures Continued on the Following Page]
 

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      THE SWAP COUNTERPARTY: WACHOVIA BANK, NATIONAL ASSOCIATION,   a national
banking association  
   
   
  By:   /s/ John Miechkowski  

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Name: John Miechkowski
Title: Director

 

 
Wachovia Bank, National Association
One Wachovia Center, Mail Code: NC0166
301 South College Street
Charlotte, North Carolina 28202-0600
  Attention:
Bruce M. Young, Senior Vice President, Risk Management
  Facsimile No.: (704) 383-0575   Confirmation No.:
(704) 383-8778

 

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