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Exhibit 10.6    
    

      

 

 
 

GRAMERCY CAPITAL CORP.
  2004 EQUITY INCENTIVE PLAN    
    

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	

1.	
 	

DEFINITIONS	
 	

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2.	
 	

EFFECTIVE DATE AND TERMINATION OF PLAN	
 	

4
	

3.	
 	

ADMINISTRATION OF PLAN	
 	

4
	

4.	
 	

SHARES AND UNITS SUBJECT TO THE PLAN	
 	

6
	

5.	
 	

PROVISIONS APPLICABLE TO STOCK OPTIONS	
 	

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6.	
 	

PROVISIONS APPLICABLE TO RESTRICTED STOCK	
 	

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7.	
 	

PROVISIONS APPLICABLE TO PHANTOM SHARES	
 	

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8.	
 	

PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS	
 	

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9.	
 	

OTHER EQUITY-BASED AWARDS	
 	

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10.	
 	

PERFORMANCE GOALS	
 	

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11.	
 	

TAX WITHHOLDING	
 	

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12.	
 	

REGULATIONS AND APPROVALS	
 	

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13.	
 	

INTERPRETATION AND AMENDMENTS; OTHER RULES	
 	

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14.	
 	

CHANGES IN CAPITAL STRUCTURE	
 	

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15.	
 	

MISCELLANEOUS	
 	

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i

 
 

Exhibit 10.6    
    

 
 

GRAMERCY CAPITAL CORP.
  
  2004 EQUITY INCENTIVE PLAN    
    

        Gramercy Capital Corp., a Maryland corporation, wishes to attract and retain qualified key employees, Directors, officers, advisors, consultants and other
personnel and encourage them to increase their efforts to make the Company's business more successful whether directly or through its Subsidiaries or other affiliates. In furtherance thereof, the
Gramercy Capital Corp. 2004 Equity Incentive Plan is designed to provide equity-based incentives to certain Eligible Persons. Awards under the Plan may be made to Eligible Persons in the form of
Options, Restricted Stock, Phantom Shares, Dividend Equivalent Rights or other forms of equity-based compensation. 

        1.    DEFINITIONS.    

        Whenever
used herein, the following terms shall have the meanings set forth below: 

        "Award,"
except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock,
Phantom Shares, Dividend Equivalent Rights and other equity-based Awards as contemplated herein. 

        "Award
Agreement" means a written agreement in a form approved by the Committee to be entered into between the Company and the Participant as provided in Section 3. An Award
Agreement may be, without limitation, an employment or other similar agreement containing provisions governing grants hereunder, if approved by the Committee for use under the Plan. 

        "Board"
means the Board of Directors of the Company. 

        "Cause"
means, unless otherwise provided in the Participant's Award Agreement, (i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect;
(ii) repeatedly failing to adhere to the directions of superiors or the Board or the written policies and practices of the Company or its Subsidiaries or its affiliates; (iii) the
commission of a felony or a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the Company or its Subsidiaries, or any affiliate thereof;
(iv) fraud, misappropriation or embezzlement; (v) acts or omissions constituting a material failure to perform substantially and adequately the duties assigned to the Participant;
(vi) any illegal act detrimental to the Company its Subsidiaries or any affiliate thereof; (vii) repeated failure to devote substantially all of the Participant's business time and
efforts to the Company or its Subsidiaries, or any affiliate thereof if required by the Participant's employment agreement; or (viii) the Participant's failure to competently perform his duties
after receiving notice from the Company or its Subsidiaries, or any affiliate thereof; specifically identifying the manner in which the Participant has failed to perform; provided, however, that, if
at any particular time the Participant is subject to an effective employment agreement with the Company (or, while the Manager or SL Green Realty Corp. is an affiliate of the Company, with the Manager
or SL Green Realty Corp., respectively), then, in lieu of the foregoing definition, "Cause" shall at that time have such meaning as may be specified in such employment agreement. 

        "Change
in Control" shall mean the happening of any of the following: 

        (i)    any
"person," including a "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding the Company or the Manager, any entity
controlling, controlled by or under common control with the Company or the Manager, any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the
Company or the Manager or any such entity, and with respect to any particular Participant, the Participant and any "group" (as such term is used in Section 13(d)(3) of the Exchange Act) of
which the Participant is a member), is or becomes the "beneficial owner" (as defined in Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of 

 

the
Company or the Manager representing 25% or more of either (A) the combined voting power of the Company's or the Manager's then outstanding securities or (B) the then outstanding
Common Stock or common stock (or other similar equity interest, in the case of a company other than a corporation) of the Manager (in either such case other than as a result of an acquisition of
securities directly from the Company or the Manager); provided, however, that, in no event shall a Change in Control be deemed to have occurred upon an initial public offering of the Common Stock or
common stock (or such other equity interest) of the Manager under the Securities Act; or 

        (ii)   any
consolidation or merger of the Company or the Manager where the shareholders of the Company or the Manager, as applicable, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares
representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent
corporation, if any); or 

        (iii)  there
shall occur (A) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a
single plan) of all or substantially all of the assets of the Company or the Manager, other than a sale or disposition by the Company or the Manager of all or substantially all of the Company's or the
Manager's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by "persons" (as defined above) in substantially the same proportion as their
ownership of the Company or the Manager, as applicable, immediately prior to such sale or (B) the approval by shareholders of the Company or the Manager, as applicable, of any plan or proposal
for the liquidation or dissolution of the Company or the Manager, as applicable; or 

        (iv)  the
members of the Board at the beginning of any consecutive 24-calendar-month period (the "Incumbent Directors") cease for any reason other than due to
death to constitute at least a majority of the members of the Board; provided that any director whose election, or nomination for election by the Company's shareholders was approved or ratified by a
vote of at least a majority of the members of the Board then still in office who were members of the Board at the beginning of such 24-calendar-month period shall be deemed to be an
Incumbent Director. 

Notwithstanding
the foregoing, (i) a Change in Control with respect to the Company or the Manager shall not be deemed to have occurred if SL Green Realty Corp. controls the Company or the
Manager, respectively, at the applicable time (provided, that, at such time, in the case of the Manager, SL Green Realty Corp. beneficially owns at least 15% of the outstanding voting or total equity
interests of the Manager, and in the case of the Company, SL Green Realty Corp. beneficially owns at least 10% of the voting or total outstanding equity interests of the Company (it being expressly
understood that the existence of the foregoing 15% and 10% levels of ownership do not establish a presumption of control by SL Green Realty Corp. for these purposes)) and a Change in Control with
respect to the Company shall not be deemed to have occurred if the Manager controls the Company, at the applicable time; and (ii) in no event shall a Change in Control be deemed to have
occurred upon an initial public offering of the common stock of the Company under the Securities Act of 1933, as amended. Notwithstanding the foregoing, if at any particular time the Participant is
subject to an effective employment agreement with the Company (or, while the Manager or SL Green Realty Corp. is an affiliate of the Company, with the Manager or SL Green Realty Corp., respectively),
then, in lieu of the foregoing definition, "Change in Control" shall at that time have such meaning as may be specified in such employment agreement. 

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        "Code"
means the Internal Revenue Code of 1986, as amended. 

        "Committee"
means the Compensation Committee of the Board. 

        "Common
Stock" means the Company's Common Stock, par value $.001 per share, either currently existing or authorized hereafter. 

        "Company"
means the Gramercy Capital Corp., a Maryland corporation. 

        "Director"
means a non-employee director of the Company or its Subsidiaries. 

        "Disability"
means, unless otherwise provided by the Committee in the Participant's Award Agreement, a disability which renders the Participant incapable of performing all of his or her
material duties for a period of at least 180 consecutive or non-consecutive days during any consecutive twelve-month period. 

        "Dividend
Equivalent Right" means a right awarded under Section 8 of the Plan to receive (or have credited) the equivalent value of dividends paid on Common Stock. 

        "Eligible
Person" means (i) a key employee, Director, officer, advisor, consultant or other personnel of the Company and its Subsidiaries or other person expected to provide
significant services (of a type expressly approved by the Committee as covered services for these purposes) to the Company or its Subsidiaries or (ii) Gramercy Capital Manager LLC, SL Green
Realty Corp., joint venture affiliates of the Company or other entities designated in the discretion of the Committee, or employees of the foregoing. In the case of grants directly or indirectly to
employees of entities described in clause (ii) of the foregoing sentence, the Committee may make arrangements with such entities in its discretion, in light of tax and other considerations. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended. 

        "Fair
Market Value" per Share as of a particular date means (i) if Shares are then listed on a national stock exchange, the closing sales price per Share on the exchange for the
last preceding date on which there was a sale of Shares on such exchange, as determined by the Committee, (ii) if Shares are not then listed on a national stock exchange but are then traded on
an over-the-counter market, the average of the closing bid and asked prices for the Shares in such over-the-counter market for the last preceding
date on which there was a sale of such Shares in such market, as determined by the Committee, or (iii) if Shares are not then listed on a national stock exchange or traded on an
over-the-counter market, such value as the Committee in its discretion may in good faith determine; provided that, where the Shares are so listed or traded, the Committee may
make such discretionary determinations where the Shares have not been traded for 10 trading days. 

        "Grantee"
means an Eligible Person granted Restricted Stock, Phantom Shares, Dividend Equivalent Rights or such other equity-based Awards as may be granted pursuant to Section 9. 

        "Incentive
Stock Option" means an "incentive stock option" within the meaning of Section 422(b) of the Code. 

        "Manager"
means GKK Manager LLC, a Delaware limited liability company. 

        "Non-Qualified
Stock Option" means an Option which is not an Incentive Stock Option. 

        "Option"
means the right to purchase, at a price and for the term fixed by the Committee in accordance with the Plan, and subject to such other limitations and restrictions in the Plan
and the applicable Award Agreement, a number of Shares determined by the Committee. 

        "Optionee"
means an Eligible Person to whom an Option is granted, or the Successors of the Optionee, as the context so requires. 

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        "Option
Price" means the price per Share, determined by the Board or the Committee, at which an Option may be exercised. 

        "Participant"
means a Grantee or Optionee. 

        "Phantom
Share" means a right, pursuant to the Plan, of the Grantee to payment of the Phantom Share Value. 

        "Phantom
Share Value," per Phantom Share, means the Fair Market Value of a Share of Class A Common Stock, or, if so provided by the Committee, such Fair Market Value to the extent
in excess of a base value established by the Committee at the time of grant. 

        "Plan"
means the Company's 2004 Equity Incentive Plan, as set forth herein and as the same may from time to time be amended. 

        "Restricted
Stock" means an award of Shares that are subject to restrictions hereunder. 

        "Retirement"
means, unless otherwise provided by the Committee in the Participant's Award Agreement, the Termination of Service (other than for Cause) of a Participant on or after the
Participant's attainment of age 65 or on or after the Participant's attainment of age 55 with five consecutive years of service with the Company and or its Subsidiaries or its affiliates. 

        "Securities
Act" means the Securities Act of 1933, as amended. 

        "Settlement
Date" means the date determined under Section 7.4(c). 

        "Shares"
means shares of Common Stock of the Company. 

        "Subsidiary"
means any corporation (other than the Company) that is a "subsidiary corporation" with respect to the Company under Section 424(f) of the Code. In the event the
Company becomes a subsidiary of another company, the provisions hereof applicable to subsidiaries shall, unless otherwise determined by the Committee, also be applicable to any company that is a
"parent corporation" with respect to the Company under Section 424(e) of the Code. 

        "Successor
of the Optionee" means the legal representative of the estate of a deceased Optionee or the person or persons who shall acquire the right to exercise an Option by bequest or
inheritance or by reason of the death of the Optionee. 

        "Termination
of Service" means a Participant's termination of employment or other service, as applicable, with the Company and its Subsidiaries. 

        2.    EFFECTIVE DATE AND TERMINATION OF PLAN.    

        The
effective date of the Plan is [            , 2004]. The Plan shall not become effective unless and until it is approved by the requisite percentage of the
holders of the Common Stock of the Company. The Plan shall terminate on, and no Award shall be granted hereunder on or after, the 10-year anniversary of the earlier of the approval of the
Plan by (i) the Board or (ii) the shareholders of the Company; provided, however, that the Board may at any time prior to that date terminate the Plan. 

        3.    ADMINISTRATION OF PLAN.    

        (a)   The
Plan shall be administered by the Committee appointed by the Board. The Committee, upon and after such time as it is covered in Section 16 of the Exchange
Act, shall consist of at least two individuals each of whom shall be a "nonemployee director" as defined in Rule 16b-3 as promulgated by the Securities and Exchange Commission
("Rule 16b-3") under the Exchange Act and shall, at such times as the Company is subject to Section 162(m) of the Code (to the extent relief from the limitation of
Section 162(m) of the Code is sought with respect to 

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Awards),
qualify as "outside directors" for purposes of Section 162(m) of the Code; provided that no action taken by the Committee (including without limitation grants) shall be invalidated
because any or all of the members of the Committee fails to satisfy the foregoing requirements of this sentence. The acts of a majority of the members present at any meeting of the Committee at which
a quorum is present, or acts approved in writing by a majority of the entire Committee, shall be the acts of the Committee for purposes of the Plan. If and to the extent applicable, no member of the
Committee may act as to matters under the Plan specifically relating to such member. Notwithstanding the other foregoing provisions of this Section 3(a), any Award under the Plan to a person
who is a member of the Committee shall be made and administered by the Board. If no Committee is designated by the Board to act for these purposes, the Board shall have the rights and responsibilities
of the Committee hereunder and under the Award Agreements. 

        (b)   Subject
to the provisions of the Plan, the Committee shall in its discretion (i) authorize the granting of Awards to Eligible Persons; and (ii) determine
the eligibility of Eligible Persons to receive an Award, as well as determine the number of Shares to be covered under any Award Agreement, considering the position and responsibilities of the
Eligible Persons, the nature and value to the Company of the Eligible Person's present and potential contribution to the success of the Company whether directly or through its Subsidiaries and such
other factors as the Committee may deem relevant. 

        (c)   The
Award Agreement shall contain such other terms, provisions and conditions not inconsistent herewith as shall be determined by the Committee. In the event that any
Award Agreement or other
agreement hereunder provides (without regard to this sentence) for the obligation of the Company or any affiliate thereof to purchase or repurchase Shares from a Participant or any other person, then,
notwithstanding the provisions of the Award Agreement or such other agreement, such obligation shall not apply to the extent that the purchase or repurchase would not be permitted under governing
state law. The Participant shall take whatever additional actions and execute whatever additional documents the Committee may in its reasonable judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on the Participant pursuant to the express provisions of the Plan and the Award Agreement. 

        (d)   The
Committee may provide, in its discretion, that (i) all stock issued hereunder be initially maintained in separate brokerage account for the Participant at a
brokerage firm selected by, and pursuant to an arrangement with, the Company; and (ii) in the case of vested Shares, the Participant may move such Shares to another brokerage account of the
Participant's choosing or request that a stock certificate be issued and delivered to him or her. 

        (e)   The
Committee, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Committee's authority and duties with respect to awards,
including, without limitation, the granting of awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Act and who are not and are not expected to
be "covered employees" within the meaning of Section 162(m) of the Code; provided, however, that the Committee may not delegate its authority and duties with respect to awards that have been,
or will be, granted to the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Credit Officer or President or any Executive Vice President of the Company. Any such
delegation by the Committee may, in the sole discretion of the Committee, include a limitation as to the amount of awards that may be awarded during the period of the delegation and may contain
guidelines as to the determination of the option exercise price, or price of other awards and the vesting criteria. The Committee may revoke or amend the terms of a delegation at any time but such
action shall not invalidate any prior actions of the Committee's delegate that were consistent with the terms of the Plan. 

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        4.    SHARES AND UNITS SUBJECT TO THE PLAN.    

        4.1    In General.    

        (a)   Subject to Section 4.2, and subject to adjustments as provided in Section 14, the total number of Shares subject to Awards granted under the Plan, in the
aggregate, may not exceed 6,250,000; provided, however, that no Award may cause the total number of Shares subject to all outstanding Awards to exceed 10% of the number of Shares outstanding at the
time of the Award. The maximum number of Shares that may underlie Awards, other than Options, granted in any one year to any Eligible Person, shall not exceed 200,000. Shares distributed under the
Plan may be treasury Shares or authorized but

unissued Shares. Any Shares that have been granted as Restricted Stock or that have been reserved for distribution in payment for Options, Phantom Shares or other equity-based Awards but are later
forfeited or for any other reason are not payable under the Plan may again be made the subject of Awards under the Plan.

 

        (b)   Shares
subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights based directly on the dividends payable with respect to Shares subject to Options or
the dividends payable on a number of Shares corresponding to the number of Phantom Shares awarded, shall be subject to the limitation of Section 4.1(a). If any Phantom Shares, Dividend
Equivalent Rights or other equity-based Awards under Section 9 are paid out in cash, then, notwithstanding the first sentence of Section 4.1(a) above (but subject to the second sentence
thereof) the underlying Shares may again be made the subject of Awards under the Plan. 

        (c)   The
certificates for Shares issued hereunder may include any legend which the Committee deems appropriate to reflect any rights of first refusal or other restrictions on
transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem appropriate. 

        (d)   No
award may be granted under the 2004 Equity Incentive Plan to any person who, assuming exercise of all options and payment of all awards held by such person, would own
or be deemed to own more than 9.8% of the outstanding shares of Common Stock. 

        4.2    Options.    

        Subject
to adjustments pursuant to Section 14, and subject to the last sentence of Section 4.1(a), Options with respect to an aggregate of no more than 6,250,000 Shares may
be granted under the Plan, or, if less, 10% of the number of Shares outstanding at the time of grant. Subject to adjustments pursuant to Section 14, in no event may any Optionee receive Options
for more than 300,000 Shares in any one year. 

        5.    PROVISIONS APPLICABLE TO STOCK OPTIONS.    

        5.1    Grant of Option.    

        Subject
to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the applicable Award Agreement: (i) determine and designate from time
to time those Eligible Persons to whom Options are to be granted and the number of Shares to be optioned to each Eligible Person; (ii) determine whether to grant Incentive Stock Options or to
grant Non-Qualified Stock Options, or both (to the extent that any Option does not qualify as an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option); provided that Incentive Stock Options may only be granted to employees; (iii) determine the time or times when and the manner and condition in which each Option shall be exercisable
and the duration of the exercise period; (iv) designate each Option as one intended to be an Incentive Stock Option or as a Non-Qualified Stock Option; and (v) determine or
impose other conditions to the grant or exercise of Options under the Plan as it may deem appropriate. 

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        5.2    Option Price.    

        The
Option Price shall be determined by the Committee on the date the Option is granted and reflected in the Award Agreement, as the same may be amended from time to time. Any particular
Award Agreement may provide for different exercise prices for specified amounts of Shares subject to the Option. 

        5.3    Period of Option and Vesting.    

        (a)   Unless
earlier expired, forfeited or otherwise terminated, each Option shall expire in its entirety upon the 10th anniversary of the date of grant or shall have such
other term (which may be shorter, but not longer, in the case of Incentive Stock Options) as is set forth in the applicable Award Agreement (except that, in the case of an individual described in
Section 422(b)(6) of the Code (relating to certain 10% owners) who is granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date of grant). The
Option shall also expire, be forfeited and terminate at such times and in such circumstances as otherwise provided hereunder or under the Award Agreement. 

        (b)   Each
Option, to the extent that the Optionee has not had a Termination of Service and the Option has not otherwise lapsed, expired, terminated or been forfeited, shall
first become exercisable according to the terms and conditions set forth in the Award Agreement, as determined by the Committee at the time of grant. Unless otherwise provided in the Award Agreement,
no Option (or portion thereof) shall ever be exercisable if the Optionee has a Termination of Service before the time at which such Option (or portion thereof) would otherwise have become exercisable,
and any Option that would otherwise become exercisable after such Termination of Service shall not become exercisable and shall be forfeited upon such termination. Notwithstanding the foregoing
provisions of this Section 5.3(b), Options exercisable pursuant to the schedule set forth by the Committee at the time of grant may be
fully or more rapidly exercisable or otherwise vested at any time in the discretion of the Committee. Upon and after the death of an Optionee, such Optionee's Options, if and to the extent otherwise
exercisable hereunder or under the applicable Award Agreement after the Optionee's death, may be exercised by the Successors of the Optionee. 

        5.4    Exercisability Upon and After Termination of Optionee.    

        (a)   Subject
to provisions of the Award Agreement, in the event the Optionee has a Termination of Service other than by the Company or its Subsidiaries for Cause, or other
than by reason of death, Retirement or Disability, no exercise of an Option may occur after the expiration of the three-month period to follow the termination, or if earlier, the expiration of the
term of the Option as provided under Section 5.3(a); provided that, if the Optionee should die after the Termination of Service, such termination being for a reason other than Disability or
Retirement, but while the Option is still in effect, the Option (if and to the extent otherwise exercisable by the Optionee at the time of death) may be exercised until the earlier of (i) one
year from the date of the Termination of Service of the Optionee, or (ii) the date on which the term of the Option expires in accordance with Section 5.3(a). 

        (b)   Subject
to provisions of the Award Agreement, in the event the Optionee has a Termination of Service on account of death or Disability or Retirement, the Option (whether
or not otherwise exercisable) may be exercised until the earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the date on which the term of the
Option expires in accordance with Section 5.3. 

        (c)   Notwithstanding
any other provision hereof, unless otherwise provided in the Award Agreement, if the Optionee has a Termination of Service by the Company for Cause, the 

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Optionee's
Options, to the extent then unexercised, shall thereupon cease to be exercisable and shall be forfeited forthwith. 

        5.5    Exercise of Options.    

        (a)   Subject
to vesting, restrictions on exercisability and other restrictions provided for hereunder or otherwise imposed in accordance herewith, an Option may be exercised,
and payment in full of the aggregate Option Price made, by an Optionee only by written notice (in the form prescribed by the Committee) to the Company specifying the number of Shares to be purchased. 

        (b)   Without
limiting the scope of the Committee's discretion hereunder, the Committee may impose such other restrictions on the exercise of Incentive Stock Options (whether
or not in the nature of the foregoing restrictions) as it may deem necessary or appropriate. 

        5.6    Payment.    

        (a)   The
aggregate Option Price shall be paid in full upon the exercise of the Option. Payment must be made by one of the following methods: 

        (i)    a
certified or bank cashier's check; 

        (ii)   subject
to Section 12(e), the proceeds of a Company loan program or third-party sale program or a notice acceptable to the Committee given as consideration under
such a program, in each case if permitted by the Committee in its discretion, if such a program has been established and the Optionee is eligible to participate therein; 

        (iii)  if
approved by the Committee in its discretion, Shares of previously owned Common Stock, which have been previously owned for more than six months, having an aggregate
Fair Market Value on the date of exercise equal to the aggregate Option Price; or 

        (iv)  by
any combination of such methods of payment or any other method acceptable to the Committee in its discretion. 

        (b)   Except
in the case of Options exercised by certified or bank cashier's check, the Committee may impose limitations and prohibitions on the exercise of Options as it
deems appropriate, including, without limitation, any limitation or prohibition designed to avoid accounting consequences which may result from the use of Common Stock as payment upon exercise of an
Option. 

        (c)   The
Committee may provide that no Option may be exercised with respect to any fractional Share. Any fractional Shares resulting from an Optionee's exercise that is
accepted by the Company shall in the discretion of the Committee be paid in cash. 

        5.7    Stock Appreciation Rights.    

        The
Committee, in its discretion, may also permit the Optionee to elect to exercise an Option by receiving a combination of Shares and cash, or, in the discretion of the Committee,
either Shares or solely in cash, with an aggregate Fair Market Value (or, to the extent of payment in cash, in an amount) equal to the excess of the Fair Market Value of the Shares with respect to
which the Option is being exercised over the aggregate Option Price, as determined as of the day the Option is exercised. 

        5.8    Exercise by Successors.    

        An
Option may be exercised, and payment in full of the aggregate Option Price made, by the Successors of the Optionee only by written notice (in the form prescribed by the Committee) to
the Company specifying the number of Shares to be purchased. Such notice shall state that the 

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aggregate
Option Price will be paid in full, or that the Option will be exercised as otherwise provided hereunder, in the discretion of the Company or the Committee, if and as applicable. 

        5.9    Nontransferability of Option.    

        Each
Option granted under the Plan shall be nontransferable by the Optionee except by will or the laws of descent and distribution of the state wherein the Optionee is domiciled at the
time of his death; provided, however, that the Committee may (but need not) permit other transfers, where the Committee concludes that such transferability (i) does not result in accelerated
U.S. federal income taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Section 422(b) of the Code, and (iii) is otherwise
appropriate and desirable. 

        5.10    Deferral.    

        Except
as provided in the Award Agreement, the Committee may establish a program under which Participants will have Phantom Shares subject to Section 7 credited upon their
exercise of Options, rather than receiving Shares at that time. 

        5.11    Certain Incentive Stock Option Provisions    

        (a)   The
aggregate Fair Market Value, determined as of the date an Option is granted, of the Common Stock for which any Optionee may be awarded Incentive Stock Options which
are first exercisable by
the Optionee during any calendar year under the Plan (or any other stock option plan required to be taken into account under Section 422(d) of the Code) shall not exceed $100,000. 

        (b)   If
Shares acquired upon exercise of an Incentive Stock Option are disposed of in a disqualifying disposition within the meaning of Section 422 of the Code by an
Optionee prior to the expiration of either two years from the date of grant of such Option or one year from the transfer of Shares to the Optionee pursuant to the exercise of such Option, or in any
other disqualifying disposition within the meaning of Section 422 of the Code, such Optionee shall notify the Company in writing as soon as practicable thereafter of the date and terms of such
disposition and, if the Company (or any affiliate thereof) thereupon has a tax-withholding obligation, shall pay to the Company (or such affiliate) an amount equal to any withholding tax
the Company (or affiliate) is required to pay as a result of the disqualifying disposition. 

        (c)   The
Option Price with respect to each Incentive Stock Option shall not be less than 100%, or 110% in the case of an individual described in Section 422(b)(6) of
the Code (relating to certain 10% owners), of the Fair Market Value of a Share on the day the Option is granted. In the case of an individual described in Section 422(b)(6) of the Code who is
granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date of grant. 

        6.    PROVISIONS APPLICABLE TO RESTRICTED STOCK.    

        6.1    Grant of Restricted Stock.    

        (a)   In
connection with the grant of Restricted Stock, whether or not performance goals (as provided for under Section 10) apply thereto, the Committee shall establish
one or more vesting periods with respect to the shares of Restricted Stock granted, the length of which shall be determined in the discretion of the Committee. Subject to the provisions of this
Section 6, the applicable Award Agreement and the other provisions of the Plan, restrictions on Restricted Stock shall lapse if the Grantee satisfies all applicable employment or other service
requirements through the end of the applicable vesting period. 

        (b)   Subject
to the other terms of the Plan, the Committee may, in its discretion as reflected by the terms of the applicable Award Agreement: (i) authorize the
granting of Restricted Stock to 

9

 

Eligible
Persons; (ii) provide a specified purchase price for the Restricted Stock (whether or not the payment of a purchase price is required by any state law applicable to the Company);
(iii) determine the restrictions applicable to Restricted Stock and (iv) determine or impose other conditions, including any applicable performance goals, to the grant of Restricted
Stock under the Plan as it may deem appropriate. 

        6.2    Certificates.    

        (a)   Unless
otherwise provided by the Committee, each Grantee of Restricted Stock shall be issued a stock certificate in respect of Shares of Restricted Stock awarded under
the Plan. Each such certificate shall be registered in the name of the Grantee. Without limiting the generality of Section 4.1(c), the certificates for Shares of Restricted Stock issued
hereunder may include any legend which the Committee deems appropriate to reflect any restrictions on transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem
appropriate, and, without limiting the generality of the foregoing, shall bear a legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following
form: 

The
transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Gramercy Capital Corp. 2004 Equity Incentive
Plan and an Award Agreement entered into between the registered owner and Gramercy Capital Corp. Copies of such Plan and Award Agreement are on file in the offices of Gramercy Capital Corp., at 420
Lexington Avenue, New York, New York 10170. 

        (b)   The
Committee shall require that any stock certificates evidencing such Shares be held in custody by the Company until the restrictions hereunder shall have lapsed, and
that, as a condition of any Award of Restricted Stock, the Grantee shall have delivered to the Company a stock power, endorsed in blank, relating to the stock covered by such Award. If and when such
restrictions so lapse, the stock certificates shall be delivered by the Company to the Grantee or his or her designee as provided in Section 6.3 (and the stock power shall be so delivered or
shall be discarded). 

        6.3    Restrictions and Conditions.    

        Unless
otherwise provided by the Committee, the Shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions: 

        (i)    Subject
to the provisions of the Plan and the Award Agreements, during a period commencing with the date of such Award and ending on the date the period of forfeiture
with respect to such Shares lapses, the Grantee shall not be permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate, alienate, encumber or assign Shares of Restricted Stock
awarded under the Plan (or have such Shares attached or garnished). Subject to the provisions of the Award Agreements and clause (iii) below, the period of forfeiture with respect to Shares
granted hereunder shall lapse as provided in the applicable Award Agreement. Notwithstanding the foregoing, unless otherwise expressly provided by the Committee, the period of forfeiture with respect
to such Shares shall only lapse as to whole Shares. 

        (ii)   Except
as provided in the foregoing clause (i), below in this clause (ii) or in Section 14, or as otherwise provided in the applicable Award
Agreement, the Grantee shall have, in respect of the Shares of Restricted Stock, all of the rights of a shareholder of the Company (including the right to vote the Shares). Unless otherwise provided
in the Award Agreement, all cash dividends on Shares paid during the Restriction Period shall be paid directly to, and retained by, the Company in its own capacity, and shall not at any time be paid
over to or retained by the Grantee, whether or not the Restriction Period ends; in the event that such dividends are, notwithstanding the foregoing, erroneously paid to the Grantee, they shall be paid
by the Grantee to the Company promptly, and in no event more than three 

10

 

business
days after, they are received by the Grantee. Certificates for Shares (not subject to restrictions hereunder) shall be delivered to the Grantee or his or her designee promptly after, and only
after, the period of forfeiture shall lapse without forfeiture in respect of such Shares of Restricted Stock. 

        (iii)  Except
as otherwise provided in the applicable Award Agreement, if the Grantee has a Termination of Service by the Company and its Subsidiaries for Cause, or by the
Grantee for any reason, during the applicable period of forfeiture, then (A) all Shares still subject to restriction shall thereupon, and with no further action, be forfeited by the Grantee,
and (B) the Company shall pay to the Grantee as soon as practicable (and in no event more than 30 days) after such termination an amount equal to the lesser of (x) the amount paid
by the Grantee for such forfeited Restricted Stock as contemplated by Section 6.1, and (y) the Fair Market Value on the date of termination of the forfeited Restricted Stock. 

        7.    PROVISIONS APPLICABLE TO PHANTOM SHARES.    

        7.1    Grant of Phantom Shares.    

        Subject
to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the applicable Award Agreement: (i) authorize the granting of Phantom
Shares to Eligible Persons and (ii) determine or impose other conditions to the grant of Phantom Shares under the Plan as it may deem appropriate. 

        7.2    Term.    

        The
Committee may provide in an Award Agreement that any particular Phantom Share shall expire at the end of a specified term. 

        7.3    Vesting.    

        Phantom
Shares shall vest as provided in the applicable Award Agreement. 

        7.4    Settlement of Phantom Shares.    

        (a)   Each
vested and outstanding Phantom Share shall be settled by the transfer to the Grantee of one Share; provided that, the Committee at the time of grant may provide
that a Phantom Share may be settled (i) in cash at the applicable Phantom Share Value, (ii) in cash or by transfer of Shares as elected by the Grantee in accordance with procedures
established by the Committee or (iii) in cash or by transfer of Shares as elected by the Company. 

        (b)   Phantom
Shares shall be settled with a single-sum payment by the Company; provided that, with respect to Phantom Shares of a Grantee which have a common
Settlement Date, the Committee may permit the Grantee to elect in accordance with procedures established by the Committee to receive installment payments over a period not to exceed 10 years. 

        (c)   (i) Unless
otherwise provided in the applicable Award Agreement, the "Settlement Date" with respect to a Phantom Share is the first day of the month to follow the
date on which the Phantom Share vests; provided that a Grantee may elect, in accordance with procedures to be established by the Committee, that such Settlement Date will be deferred as elected by the
Grantee to the first day of the month to follow the Grantee's Termination of Service, or such other time as may be permitted by the Committee. Unless otherwise determined by the Committee, elections
under this Section 7.4(c)(i) must be made at least six months before, and in the year prior to the year in which, the Settlement Date would occur in the absence of such election. 

        (ii)   Notwithstanding
Section 7.4(c)(i), the Committee may provide that distributions of Phantom Shares can be elected at any time in those cases in which the Phantom
Share Value 

11

 

is
determined by reference to Fair Market Value to the extent in excess of a base value, rather than by reference to unreduced Fair Market Value. 

        (iii)  Notwithstanding
the foregoing, the Settlement Date, if not earlier pursuant to this Section 7.4(c), is the date of the Grantee's death. 

        (d)   Notwithstanding
the other provisions of this Section 7, in the event of a Change in Control, the Settlement Date shall be the date of such Change in Control and
all amounts due with respect to Phantom Shares to a Grantee hereunder shall be paid as soon as practicable (but in no event more than 30 days) after such Change in Control, unless such Grantee
elects otherwise in accordance with procedures established by the Committee. 

        (e)   Notwithstanding
any other provision of the Plan, a Grantee may receive any amounts to be paid in installments as provided in Section 7.4(b) or deferred by the
Grantee as provided in Section 7.4(c) in the event of an "Unforeseeable Emergency." For these purposes, an "Unforeseeable Emergency," as determined by the Committee in its sole discretion, is a
severe financial hardship to the Grantee resulting from a sudden and unexpected illness or accident of the Grantee or "dependent," as defined in Section 152(a) of the Code, of the Grantee, loss
of the Grantee's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Grantee. The circumstances that will
constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved: 

        (i)    through
reimbursement or compensation by insurance or otherwise, 

        (ii)   by
liquidation of the Grantee's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or 

        (iii)  by
future cessation of the making of additional deferrals under Section 7.4 (b) and (c). 

Without
limitation, the need to send a Grantee's child to college or the desire to purchase a home shall not constitute an Unforeseeable Emergency. Distributions of amounts because of an Unforeseeable
Emergency shall be permitted to the extent reasonably needed to satisfy the emergency need. 

        7.5    Other Phantom Share Provisions.    

        (a)   Rights
to payments with respect to Phantom Shares granted under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, garnishment, levy, execution, or other legal or equitable process, either voluntary or involuntary; and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, attach or garnish, or levy or execute on any right to payments or other benefits payable hereunder, shall be void. 

        (b)   A
Grantee may designate in writing, on forms to be prescribed by the Committee, a beneficiary or beneficiaries to receive any payments payable after his or her death and
may amend or revoke such designation at any time. If no beneficiary designation is in effect at the time of a Grantee's death, payments hereunder shall be made to the Grantee's estate. If a Grantee
with a vested Phantom Share dies, such Phantom Share shall be settled and the Phantom Share Value in respect of such Phantom Shares paid, and any payments deferred pursuant to an election under
Section 7.4(c) shall be accelerated and paid, as soon as practicable (but no later than 60 days) after the date of death to such Grantee's beneficiary or estate, as applicable. 

        (c)   The
Committee may establish a program under which distributions with respect to Phantom Shares may be deferred for periods in addition to those otherwise contemplated by 

12

 

foregoing
provisions of this Section 7. Such program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee,
provisions under which Participants may select from among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee. 

        (d)   Notwithstanding
any other provision of this Section 7, any fractional Phantom Share will be paid out in cash at the Phantom Share Value as of the Settlement Date. 

        (e)   No
Phantom Share shall be construed to give any Grantee any rights with respect to Shares or any ownership interest in the Company. Except as may be provided in
accordance with Section 8, no provision of the Plan shall be interpreted to confer upon any Grantee any voting, dividend or derivative or other similar rights with respect to any Phantom Share. 

        7.6    Claims Procedures.    

        (a)   To
the extent that the Plan is determined by the Committee to be subject to the Employee Retirement Income Security Act of 1974, as amended, the Grantee, or his
beneficiary hereunder or authorized representative, may file a claim for payments with respect to Phantom Shares under the Plan by written communication to the Committee or its designee. A
claim is not considered filed until such communication is actually received. Within 90 days (or, if special circumstances require an extension of time for processing, 180 days, in which
case notice of such special circumstances should be provided within the initial 90-day period) after the filing of the claim, the Committee will either: 

        (i)    approve
the claim and take appropriate steps for satisfaction of the claim; or 

        (ii)   if
the claim is wholly or partially denied, advise the claimant of such denial by furnishing to him a written notice of such denial setting forth (A) the
specific reason or reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which the denial is based and, if the denial is based in whole or in part on any rule of
construction or interpretation adopted by the Committee, a reference to such rule, a copy of which shall be provided to the claimant; (C) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of the reasons why such material or information is necessary; and (D) a reference to this Section 7.6 as the provision
setting forth the claims procedure under the Plan. 

        (b)   The
claimant may request a review of any denial of his claim by written application to the Committee within 60 days after receipt of the notice of denial of such
claim. Within 60 days (or, if special circumstances require an extension of time for processing, 120 days, in which case notice of such special circumstances should be provided within
the initial 60-day period) after receipt of written application for review, the Committee will provide the claimant with its decision in writing, including, if the claimant's claim is not
approved, specific reasons for the decision and specific references to the Plan provisions on which the decision is based. 

        8.    PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.    

        8.1    Grant of Dividend Equivalent Rights.    

        Subject
to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the Award Agreements, authorize the granting of Dividend Equivalent Rights to
Eligible Persons based on the regular cash dividends declared on Common Stock, to be credited as of the dividend payment dates, during the period between the date an Award is granted, and the date
such Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalent Rights shall be converted to cash or additional Shares by such formula and at such time and subject
to such limitation as may be determined by the Committee. With respect to Dividend Equivalent Rights granted with respect to Options intended to be qualified performance- 

13

 

based
compensation for purposes of Section 162(m) of the Code, such Dividend Equivalent Rights shall be payable regardless of whether such Option is exercised. If a Dividend Equivalent Right is
granted in respect of another Award hereunder, then, unless otherwise stated in the Award Agreement, in no event shall the Dividend Equivalent Right be in effect for a period beyond the time during
which the applicable portion of the underlying Award is in effect. 

        8.2    Certain Terms.    

        (a)   The
term of a Dividend Equivalent Right shall be set by the Committee in its discretion. 

        (b)   Unless
otherwise determined by the Committee, except as contemplated by Section 8.4, a Dividend Equivalent Right is exercisable or payable only while the
Participant is an Eligible Person. 

        (c)   Payment
of the amount determined in accordance with Section 8.1 shall be in cash, in Common Stock or a combination of the both, as determined by the Committee. 

        (d)   The
Committee may impose such employment-related conditions on the grant of a Dividend Equivalent Right as it deems appropriate in its discretion. 

        8.3    Other Types of Dividend Equivalent Rights.    

        The
Committee may establish a program under which Dividend Equivalent Rights of a type whether or not described in the foregoing provisions of this Section 8 may be granted to
Participants. For example, and without limitation, the Committee may grant a dividend equivalent right in respect of each Share subject to an Option or with respect to a Phantom Share, which right
would consist of the right (subject to Section 8.4) to receive a cash payment in an amount equal to the dividend distributions paid on a Share from time to time. 

        8.4    Deferral.    

        The
Committee may establish a program under which Participants (i) will have Phantom Shares credited, subject to the terms of Sections 7.4 and 7.5 as though directly applicable
with respect thereto, upon the granting of Dividend Equivalent Rights, or (ii) will have payments with respect to Dividend Equivalent Rights deferred. In the case of the foregoing
clause (ii), such program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under which
Participants may select from among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee. 

        9.    OTHER EQUITY-BASED AWARDS    

        The
Board shall have the right to grant other Awards based upon the Common Stock having such terms and conditions as the Board may determine, including, without limitation, the grant of
shares
based upon certain conditions, the grant of securities convertible into Common Stock and the grant of stock appreciation rights. 

        10.    PERFORMANCE GOALS.    

        The
Committee, in its discretion, (i) may establish one or more performance goals as a precondition to the issuance or vesting of Awards, and (ii) provide, in connection
with the establishment of the performance goals, for predetermined Awards to those Participants (who continue to meet all applicable eligibility requirements) with respect to whom the applicable
performance goals are satisfied. In the case of any grant intended to qualify as performance based compensation under Section 162(m) of the Code (including, for these purposes, grants
constituting performance based compensation, as determined without regard to certain shareholder approval and disclosure 

14

 

requirements
by virtue of an applicable transition rule), the Committee shall establish goals intended to be performance goals as contemplated by Section 162(m) and the regulations thereunder. 

        11.    TAX WITHHOLDING.    

        11.1    In General.    

        The
Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding determined by the Committee to be required by law. Without limiting the
generality of the foregoing, the Committee may, in its discretion, require the Participant to pay to the Company at such time as the Committee determines the amount that the Committee deems necessary
to satisfy the Company's obligation to withhold federal, state or local income or other taxes incurred by reason of (i) the exercise of any Option, (ii) the lapsing of any restrictions
applicable to any Restricted Stock, (iii) the receipt of a distribution in respect of Phantom Shares or Dividend Equivalent Rights or (iv) any other applicable income-recognition event
(for example, an election under Section 83(b) of the Code). 

        11.2    Share Withholding.    

        (a)   Upon
exercise of an Option, the Optionee may, if approved by the Committee in its discretion, make a written election to have Shares then issued withheld by the Company
from the Shares otherwise to be received, or to deliver previously owned Shares, in order to satisfy the liability for such withholding taxes. In the event that the Optionee makes, and the Committee
permits, such an election, the number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date
of exercise sufficient to satisfy the applicable withholding taxes. Where the exercise of an Option does not give rise to an obligation by the Company to withhold federal, state or local income or
other taxes on the date of exercise, but may give rise to such an obligation in the future, the Committee may, in its discretion, make such arrangements and impose such requirements as it deems
necessary or appropriate. 

        (b)   Upon
lapsing of restrictions on Restricted Stock (or other income-recognition event), the Grantee may, if approved by the Committee in its discretion, make a written
election to have Shares withheld by the Company from the Shares otherwise to be released from restriction, or to deliver previously owned Shares (not subject to restrictions hereunder), in order to
satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such an election, the number of Shares so withheld or delivered shall have an
aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes. 

        (c)   Upon
the making of a distribution in respect of Phantom Shares or Dividend Equivalent Rights, the Grantee may, if approved by the Committee in its discretion, make a
written election to have amounts (which may include Shares) withheld by the Company from the distribution otherwise to be made, or to deliver previously owned Shares (not subject to restrictions
hereunder), in order to satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such an election, any Shares so withheld or delivered shall
have an aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes. 

        11.3    Withholding Required.    

        Notwithstanding
anything contained in the Plan or the Award Agreement to the contrary, the Participant's satisfaction of any tax-withholding requirements imposed by the
Committee shall be a condition precedent to the Company's obligation as may otherwise be provided hereunder to provide Shares to the Participant and to the release of any restrictions as may otherwise
be provided hereunder, as applicable; and the applicable Option, Restricted Stock, Phantom Shares or Dividend Equivalent Rights shall be forfeited upon the failure of the Participant to satisfy such 

15

 

requirements
with respect to, as applicable, (i) the exercise of the Option, (ii) the lapsing of restrictions on the Restricted Stock (or other income-recognition event) or
(iii) distributions in respect of any Phantom Share or Dividend Equivalent Right. 

        12.    REGULATIONS AND APPROVALS.    

        (a)   The
obligation of the Company to sell Shares with respect to an Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including
all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee. 

        (b)   The
Committee may make such changes to the Plan as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain tax
benefits applicable to an Award. 

        (c)   Each
grant of Options, Restricted Stock, Phantom Shares (or issuance of Shares in respect thereof) or Dividend Equivalent Rights (or issuance of Shares in respect
thereof), or other Award under Section 9 (or issuance of Shares in respect thereof), is subject to the requirement that, if at any time the Committee determines, in its discretion, that the
listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of Options, Shares of Restricted Stock, Phantom Shares, Dividend Equivalent Rights, other Awards or
other Shares, no payment shall be made, or Phantom Shares or Shares issued or grant of Restricted Stock or other Award made, in whole or in part, unless listing, registration, qualification, consent
or approval has been effected or obtained free of any conditions in a manner acceptable to the Committee. 

        (d)   In
the event that the disposition of stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act, and is not
otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required under the Securities Act, and the Committee may require any individual receiving Shares
pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that such Shares are acquired for investment only and not with a view to distribution
and that such Shares will be disposed of only if registered for sale under the Securities Act or if there is an available exemption for such disposition. 

        (e)   Notwithstanding
any other provision of the Plan, the Company shall not be required to take or permit any action under the Plan or any Award Agreement which, in the
good-faith determination of the Company, would result in a material risk of a violation by the Company of Section 13(k) of the Exchange Act. 

        13.    INTERPRETATION AND AMENDMENTS; OTHER RULES.    

        The
Committee may make such rules and regulations and establish such procedures for the administration of the Plan as it deems appropriate. Without limiting the generality of the
foregoing, the Committee may (i) determine the extent, if any, to which Options, Phantom Shares or Shares (whether or not Shares of Restricted Stock) or Dividend Equivalent Rights shall be
forfeited (whether or not such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan and the Award Agreements hereunder, with such interpretations to be conclusive and
binding on all persons and otherwise accorded the maximum deference permitted by law, provided that the Committee's interpretation shall not be entitled to deference on and after a Change in Control
except to the extent that such interpretations are made exclusively by members of the Committee who are individuals who served as Committee members before the Change in Control; and (iii) take
any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof. In the event of any
dispute or disagreement as to the 

16

 

interpretation
of the Plan or of any rule, regulation or procedure, or as to any question, right or obligation arising from or related to the Plan, the decision of the Committee, except as provided in
clause (ii) of the foregoing sentence, shall be final and binding upon all persons. Unless otherwise expressly provided hereunder, the Committee, with respect to any grant, may exercise its
discretion hereunder at the time of the Award or thereafter. The Board may amend the Plan as it shall deem advisable, except that no amendment may adversely affect a Participant with respect to an
Award previously granted unless such amendments are required in order to comply with applicable laws; provided, however, that the Plan may not be amended without shareholder approval in any case in
which amendment in the absence of shareholder approval would cause the Plan to fail to comply with any applicable legal requirement or applicable exchange or similar rule. 

        14.    CHANGES IN CAPITAL STRUCTURE.    

        (a)   If
(i) the Company or its Subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares,
sale of all or substantially all of the assets or stock of the Company or its Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock
combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its Subsidiaries, or any distribution to holders of Common Stock other than cash
dividends, shall occur or (iii) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of the outstanding Awards, then: 

        (x)   the
maximum aggregate number of Shares which may be made subject to Options and Dividend Equivalent Rights under the Plan, the maximum aggregate number and kind of
Shares of Restricted Stock that may be granted under the Plan, the maximum aggregate number of Phantom Shares and other Awards which may be granted under the Plan may be appropriately adjusted by the
Committee in its discretion; and 

        (y)   the
Committee may take any such action as in its discretion shall be necessary to maintain each Participants' rights hereunder (including under their Award Agreements)
with respect to Options, Phantom Shares and Dividend Equivalent Rights (and, as appropriate, other Awards under Section 9), so that they are substantially proportionate to the rights existing
in such Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9) prior to such event, including, without limitation, adjustments in (A) the number of
Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9) granted, (B) the number and kind of shares or other property to be distributed in respect of
Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9 as applicable), (C) the Option Price and Phantom Share Value, and (D) performance-based
criteria established in connection with Awards; provided that, in the discretion of the Committee, the foregoing clause (D) may also be applied in the case of any event relating to a Subsidiary
if the event would have been covered under this Section 14(a) had the event related to the Company. 

To
the extent that such action shall include an increase or decrease in the number of Shares (or units of other property then available) subject to all outstanding Awards, the number of Shares (or
units) available under Section 4 shall be increased or decreased, as the case may be, proportionately, as may be determined by the Committee in its discretion. 

        (b)   Any
Shares or other securities distributed to a Grantee with respect to Restricted Stock or otherwise issued in substitution of Restricted Stock shall be subject to the
restrictions and requirements imposed by Section 6, including depositing the certificates therefor with the Company together with a stock power and bearing a legend as provided in
Section 6.2(a). 

        (c)   If
the Company shall be consolidated or merged with another corporation or other entity, each Grantee who has received Restricted Stock that is then subject to
restrictions imposed by 

17

 

Section 6.3(a)
may be required to deposit with the successor corporation the certificates, if any, for the stock or securities or the other property that the Grantee is entitled to receive by
reason of ownership of Restricted Stock in a manner consistent with Section 6.2(b), and such stock, securities or other property shall become subject to the restrictions and requirements
imposed by Section 6.3(a), and the certificates therefor or other evidence thereof shall bear a legend similar in form and substance to the legend set forth in Section 6.2(a). 

        (d)   If
a Change in Control shall occur, then the Committee, as constituted immediately before the Change in Control, may make such adjustments as it, in its discretion,
determines are necessary or appropriate in light of the Change in Control, provided that the Committee determines that such adjustments do not have an adverse economic impact on the Participant as
determined at the time of the adjustments. 

        (e)   The
judgment of the Committee with respect to any matter referred to in this Section 13 shall be conclusive and binding upon each Participant without the need for
any amendment to the Plan. 

        15.    MISCELLANEOUS.    

        15.1    No Rights to Employment or Other Service.    

        Nothing
in the Plan or in any grant made pursuant to the Plan shall confer on any individual any right to continue in the employ or other service of the Company or its Subsidiaries or
interfere in any way with the right of the Company or its Subsidiaries and its shareholders to terminate the individual's employment or other service at any time. 

        15.2    Right of First Refusal; Right of Repurchase.    

        At
the time of grant, the Committee may provide in connection with any grant made under the Plan that Shares received hereunder shall be subject to a right of first refusal pursuant to
which the Company shall be entitled to purchase such Shares in the event of a prospective sale of the Shares, subject to such terms and conditions as the Committee may specify at the time of grant or
(if permitted by the Award Agreement) thereafter, and to a right of repurchase, pursuant to which the Company shall be entitled to purchase such Shares at a price determined by, or under a formula set
by, the Committee at the time of grant or (if permitted by the Award Agreement) thereafter. 

        15.3    No Fiduciary Relationship.    

        Nothing
contained in the Plan (including without limitation Sections 7.5(c) and 8.4), and no action taken pursuant to the provisions of the Plan, shall create or shall be construed to
create a trust of any kind, or a fiduciary relationship between the Company or its Subsidiaries, or their officers or the Committee, on the one hand, and the Participant, the Company, its Subsidiaries
or any other person or entity, on the other. 

        15.4    No Fund Created.    

        Any
and all payments hereunder to any Participant under the Plan shall be made from the general funds of the Company (or, if applicable, a Participating Company), no special or separate
fund shall be established or other segregation of assets made to assure such payments, and the Phantom Shares (including for purposes of this Section 15.4 any accounts established to facilitate
the implementation of Section 7.4(c)) and any other similar devices issued hereunder to account for Plan obligations do not constitute Common Stock and shall not be treated as (or as giving
rise to) property or as a trust fund of any kind; provided, however, that the Company may establish a mere bookkeeping reserve to meet its obligations hereunder or a trust or other funding vehicle
that would not cause the Plan to be deemed to be funded for tax purposes or for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. The obligations of the 

18

 

Company
under the Plan are unsecured and constitute a mere promise by the Company to make benefit payments in the future and, to the extent that any person acquires a right to receive payments under
the Plan from the Company, such right shall be no greater than the right of a general unsecured creditor of the Company. (If any affiliate of the Company is or is made responsible with respect to any
Awards, the foregoing sentence shall apply with respect to such affiliate.) Without limiting the foregoing, Phantom Shares and any other similar devices issued hereunder to account for Plan
obligations are solely a device for the measurement and determination of the amounts to be paid to a Grantee under the Plan, and each Grantee's right in the Phantom Shares and any such other devices
is limited to the right to receive payment, if any, as may herein be provided. 

        15.5    Notices.    

        All
notices under the Plan shall be in writing, and if to the Company, shall be delivered to the Board or mailed to its principal office, addressed to the attention of the Board; and if
to the Participant, shall be delivered personally, sent by facsimile transmission or mailed to the Participant at the address appearing in the records of the Company. Such addresses may be changed at
any time by written notice to the other party given in accordance with this Section 15.5. 

        15.6    Exculpation and Indemnification.    

        The
Company shall indemnify and hold harmless the members of the Board and the members of the Committee from and against any and all liabilities, costs and expenses incurred by such
persons as a result of any act or omission to act in connection with the performance of such person's duties, responsibilities and obligations under the Plan, to the maximum extent permitted by law. 

        15.7    Captions.    

        The
use of captions in this Plan is for convenience. The captions are not intended to provide substantive rights. 

        15.8    Governing Law.    

        THE
PLAN SHALL BE GOVERNED BY THE LAWS OF MARYLAND WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS 

19

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Exhibit 10.6

GRAMERCY CAPITAL CORP. 2004 EQUITY INCENTIVE PLAN

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Exhibit 10.6

GRAMERCY CAPITAL CORP. 2004 EQUITY INCENTIVE PLANQuickLinks
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Exhibit 10.7    
    

 

MASTER REPURCHASE AGREEMENT

by and among

[BUYER]

as Buyer,

and

[                                      ]

and

[                                      ],

as the Sellers

Dated as of July            , 2004  

 

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	ARTICLE I
	

APPLICABILITY
	

Section 1.01	
 	

Purchase and Sale	
 	

1
	

ARTICLE II
	

DEFINITIONAL PROVISIONS
	

Section 2.01	
 	

Definitions	
 	

1
	Section 2.02	 	Other Definitional Provisions; Determinations by Buyer	 	22
	

ARTICLE III
	

INITIATION; TERMINATION
	

Section 3.01	
 	

Conditions Precedent to Initial Transaction	
 	

22
	Section 3.02	 	Conditions Precedent to all Transactions.	 	24
	Section 3.03	 	Transaction Mechanics; Related Matters	 	26
	Section 3.04	 	Repurchases	 	27
	Section 3.05	 	Extension of Facility Termination Date; Increase of Maximum Amount	 	28
	Section 3.06	 	Payment of Price Differential	 	29
	

ARTICLE IV
	

MARGIN MAINTENANCE
	

Section 4.01	
 	

Margin Adjustments	
 	

30
	Section 4.02	 	Margin Correction Deadline	 	30
	

ARTICLE V
	

INCOME PAYMENTS; REQUIREMENTS OF LAW
	

Section 5.01	
 	

Income Payments	
 	

31
	Section 5.02	 	Requirements of Law	 	32
	

ARTICLE VI
	

SECURITY INTEREST
	

Section 6.01	
 	

Security Interest	
 	

33
	Section 6.02	 	Release of Security Interest	 	34
	

ARTICLE VII
	

PAYMENT, TRANSFER AND CUSTODY
	

Section 7.01	
 	

Payment, Transfer and Custody	
 	

34
	

ARTICLE VIII
	

SELLER REPRESENTATIONS AND WARRANTIES
	

Section 8.01	
 	

Seller Representations and Warranties	
 	

35
	 	 	 	 	 

i

 

	

ARTICLE IX
	

SELLER COVENANTS
	

Section 9.01	
 	

Seller Covenants	
 	

41
	

ARTICLE X
	

EVENTS OF DEFAULT; REMEDIES
	

Section 10.01	
 	

Events of Default	
 	

48
	Section 10.02	 	Remedies	 	50
	

ARTICLE XI
	

SERVICING
	

Section 11.01	
 	

Seller Covenants	
 	

52
	Section 11.02	 	Seller as Servicer	 	52
	Section 11.03	 	Third Party Servicer	 	52
	Section 11.04	 	Event of Default	 	52
	Section 11.05	 	Modification	 	53
	Section 11.06	 	Inspection	 	53
	

ARTICLE XII
	

MISCELLANEOUS
	

Section 12.01	
 	

Indemnification and Expenses	
 	

53
	Section 12.02	 	Single Agreement	 	55
	Section 12.03	 	Notices and Other Communications	 	55
	Section 12.04	 	Entire Agreement; Severability	 	55
	Section 12.05	 	Assignments and Participations; Hypothecation of Purchased Assets	 	55
	Section 12.06	 	Governing Law	 	56
	Section 12.07	 	Submission to Jurisdiction; Venue; Waiver of Jury Trial	 	56
	Section 12.08	 	No Waiver; Remedies Cumulative	 	57
	Section 12.09	 	Intent	 	58
	Section 12.10	 	Joint and Several Liability	 	58
	Section 12.11	 	Periodic Due Diligence Review	 	60
	Section 12.12	 	Buyer's Appointment as Attorney-in-Fact	 	60
	Section 12.13	 	Legal Matters	 	61
	Section 12.14	 	Confidentiality	 	62
	Section 12.15	 	Conflicts	 	62
	Section 12.16	 	Right of Set-off	 	62
	Section 12.17	 	Treatment of Certain Information	 	63
	Section 12.18	 	Increased Costs, Illegality, Etc.	 	63

ii

 

	SCHEDULES
 
	 	 

	Schedule 1(a)	 	Representations and Warranties Re: Purchased Assets Consisting of Whole Loans
	Schedule 1(b)	 	Representations and Warranties Re: Purchased Assets Consisting of Junior Interests
	Schedule 1(c)	 	Representations and Warranties Re: Purchased Assets Consisting of Mezzanine Loans
	Schedule 1(d)	 	Representations and Warranties Re: Purchased Assets Consisting of Preferred Equity
	Schedule 1(e)	 	Representations and Warranties Re: Purchased Assets Consisting of CMBS
	Schedule 1(f)	 	Representations and Warranties Re: Purchased Assets Consisting of RMBS
	Schedule 1(g)	 	Representations and Warranties Re: Purchased Assets Consisting of Non-Controlling Interests
	Schedule 2	 	Wiring Instructions
	Schedule 3	 	Controlled Accounts
	Schedule 4	 	Insurance
	Schedule 5	 	Subsidiaries
	 	 	 
	EXHIBITS
 
	 	 

	Exhibit A	 	Form of Transaction Request
	Exhibit B	 	Form of Confirmation
	Exhibit C	 	UCC Filing Jurisdictions
	Exhibit D	 	Form of Margin Deficit Notice
	Exhibit E	 	Form of Servicer Notice
	Exhibit F	 	Form of Custodial Agreement
	Exhibit G	 	Form of Account Control Agreement
	Exhibit H	 	Form of Release Letter(s)
	Exhibit I	 	Form of Libor Period Election Notice
	Exhibit J	 	Form of Compliance Certificate
	Exhibit K	 	Form of Purchased Asset Data Summary
	Exhibit L	 	Form of Guarantee Agreement
	Exhibit M	 	Form of Pledge and Security Agreement

iii

 
 

MASTER REPURCHASE AGREEMENT    
    

        MASTER REPURCHASE AGREEMENT, dated as of July            , 2004 (as amended, restated, supplemented or otherwise modified and
in effect from time to time,
this "Agreement"), by and among [BUYER] ("Buyer"),
[Seller], a [            ] ("[            ]") and [ADDITIONAL SELLER], a
[            ] ("[            ]", together with [            ],
collectively, the "Sellers", each, a "Seller"). 

 
 

ARTICLE I
  
  APPLICABILITY    
    

        Section
1.01    Purchase and Sale.    Subject to the terms and conditions hereof, from time to time during the
Purchase Period (as defined below) Buyer may, upon request of a Seller, enter into transactions (or a series of transactions) with such Seller in which such Seller transfers certain Mortgage Assets
(as defined below) to Buyer in a sales transaction against the transfer of funds by Buyer representing the purchase price for such Mortgage Assets, with a simultaneous agreement by Buyer to transfer
to such Seller such Mortgage Assets in a repurchase transaction to occur on a date certain, which shall not be later than the Facility Termination Date (as defined below), against the transfer of
funds by such Seller representing the repurchase price for such Mortgage Assets. Each such transaction shall be referred to herein as a "Transaction" and shall be governed by this Agreement, unless
otherwise agreed in writing. 

 
 

ARTICLE II
  
  DEFINITIONAL PROVISIONS    
    

        Section
2.01    Definitions.    

        (a)   As
used herein, the following terms shall have the following meanings (all terms defined in this Section 2.01 or in other provisions of this Agreement in the singular
shall have the same meanings when used in the plural and vice versa). Terms otherwise not defined herein shall have the meanings assigned thereto in the Custodial Agreement.
"Accepted Servicing Practices": With respect to any Mortgage Asset, those mortgage servicing practices of prudent lending institutions which service
Mortgage Assets of the same type as such Mortgage Asset in the jurisdiction where the related Mortgaged Property is located. 

        "Account Control Agreement": An Account Control Agreement, substantially in the form attached as  Exhibit H hereto, among the Sellers, Buyer and the Bank.

        "Acquisition Facility": That certain Acquisition Repurchase Agreement, dated as of [            ], by and among
[            ], as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time. 

        "Act of Insolvency": With respect to any Person, (i) the filing of a petition, commencing, or authorizing the commencement of any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be
commenced by another which is consented to, not timely contested or results in entry of an order for relief; (ii) the seeking or consenting to the appointment of a receiver, trustee, custodian or
similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or
authority having the jurisdiction to do so; (iv) the making of a general assignment for the benefit of creditors; (v) the admission by such Person of its inability to pay its debts or discharge its
obligations as they become due or mature; or (vi) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken
any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management
of such Person or to curtail its authority in the conduct of the business of such Person. 

 

        "Additional Purchased Assets": The meaning specified in Section 4.01 of this Agreement. 

        "Affiliate": Any (A) entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding
voting securities of the debtor, other than an entity that holds such securities (i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or (ii) solely to
secure a debt, if such entity has not in fact exercised such power to vote; (B) corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or
held with power to vote, by the debtor, or by an entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor,
other than an entity that holds such securities (i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or (ii) solely to secure a debt, if such entity has not
in fact exercised such power to vote; (C) person whose business is operated under a lease or operating agreement by a debtor, or person substantially all of whose property is operated under an
operating agreement with the debtor; or (D) entity that operates the business or substantially all of the property of the debtor under a lease or operating agreement. 

        "Agreement": The meaning assigned thereto in the introductory paragraph hereof. 

        "ALTA": The American Land Title Association. 

        "Allocated Underlying Debt": With respect to an Underlying Mortgaged Property, any senior or pari
passu Indebtedness secured directly or indirectly by such Underlying Mortgaged Property, including, without limitation, any preferred equity interest or mezzanine debt that is
senior to, or pari passu with, the related Mortgage Asset in right of payment or priority. 

        "Asset Schedule and Exception Report": The meaning assigned thereto in the Custodial Agreement. 

        "Asset Value": As of any date of determination for each Eligible Asset, with respect to a Mortgage Asset of a certain Class and the
applicable Type of Underlying Mortgaged Property, the least of (x) the product of the Book Value of such Mortgage Asset, plus or minus, in each case, the net value of any Interest Rate Protection
Agreement (to the extent the applicable Seller's interest in such Interest Rate Protection Agreement has been assigned to Buyer and so long as Buyer has a perfected first priority security interest
therein) in effect in respect of such Mortgage Asset times the Purchase Rate applicable thereto, (y) the product of the Market Value of such Mortgage
Asset, plus or minus, in each case, the net value of any Interest Rate Protection Agreement (to the extent the applicable Seller's interest in such Interest Rate Protection Agreement has been assigned
to Buyer and so long as Buyer has a perfected first priority security interest therein) in effect in respect of such Mortgage Asset times the Purchase
Rate applicable thereto and (z) if the LTV for an Underlying Mortgaged Property (including the principal amount of a Mortgage Asset) is greater than the Maximum LTV for such Underlying Mortgaged
Property, the product of (i) that portion of the principal amount of such Mortgage Asset, which when added to the Allocated Underlying Debt for such Underlying Mortgaged Property, would result in an
LTV for such Underlying Mortgaged Property that would equal the Maximum LTV for such Mortgaged Property times (ii) the Purchase Rate applicable to such
Mortgage Asset. As of each date of determination, the Purchase Rate shall take into account all adjustments applicable thereto
pursuant to the proviso set forth at the end of the definition thereof and the following additional limitations on Asset Value shall apply: 

        (a)   the
aggregate Asset Value of the Mortgage Assets shall be reduced to the extent that application of the Sub-Limit to the Underlying Properties securing Mortgage Assets
at any time results in breach of the Sub-Limit (such reduction to be determined by the Buyer by reference to the Mortgage Assets secured by the Underlying Properties that give rise to breach of the
Sub-Limit), unless waived in writing by Buyer in its sole and absolute discretion; and 

        (b)   unless
otherwise specifically agreed by Buyer in the related Confirmation, the Asset Value shall be deemed to be zero with respect to each Mortgage Asset (i) in respect
of which there is a 

2

 

material
breach of a representation and warranty set forth in Schedule 1(a) - 1(g) (as applicable) which has not been cured by the applicable Seller in
accordance with the terms of this Agreement (and any applicable cure period set forth in this Agreement has expired) or waived in writing by Buyer (assuming each representation and warranty is made as
of the date the Asset Value is determined), (ii) in respect of which the Mortgage Asset File (subject to the requirements of the Custodial Agreement) has not been delivered to the Custodian at least
seven (7) Business Days prior to the Purchase Date, (iii) which has been released from the possession of the Custodian under the Custodial Agreement to Seller for a period in excess of twenty (20)
calendar days, (iv) upon the occurrence of any Act of Insolvency with respect to any co-participant or any other Person having an interest in such Mortgage Asset or any related Underlying Mortgaged
Property which is senior to, or pari passu with, in right of payment or priority the rights of Buyer in such Mortgage Asset, and (v) which is determined
by Buyer not to be an Eligible Asset. 

Notwithstanding
any other provision herein, Sellers agree that to the extent any Seller fails to deliver any reports required hereunder with respect to the Mortgage Asset and/or Underlying Mortgaged
Property, such failure will adversely affect the Asset Value of such Mortgage Asset, and to the extent that such failure to deliver reports causes Buyer to determine in its good faith that it is
unable to accurately determine the Asset Value of such Mortgage Asset, the Asset Value shall be deemed to be zero. 

        "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. 

        "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 Buyer. 

        "Bank": The meaning assigned thereto in the Account Control Agreement. 

        "Book Value": With respect to any Mortgage Asset at any time, an amount, as certified by the applicable Seller, equal to the lesser of (x)
the face or par amount of such Mortgage Asset and (y) the price which such Seller paid for such Mortgage Asset plus any additional capital advanced by such Seller in respect of such Mortgage Asset,
less, in either case, an amount equal to the sum of all principal paydowns paid in respect of such Mortgage Asset and realized losses or other write downs recognized relating to such Mortgage Asset. 

        "Breakage Costs": The meaning assigned thereto in Section 3.06(b). 

        "Business Day": (i) For all purposes other than as covered by clause (ii) below, any day on which commercial banks are open for business
in New York and Minnesota, solely with respect to the Custodial Agreement (or such other state where a successor custodian has its principal place of business), and (ii) with respect to all notices
and determinations in connection with, and payments of principal and interest on, any Transaction, the Pricing Rate applicable to which is based upon the Eurodollar Rate, any day on which commercial
banks are open in each of New York and London. 

        "Buyer": The meaning assigned thereto in the introductory paragraph hereof. 

        "Capitalized Lease Obligations": Obligations under a lease that are required to be capitalized for financial reporting purposes in
accordance with GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on the balance sheet prepared in accordance with
GAAP of the applicable Person as of the applicable date. 

        "Capital Stock": Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent equity ownership interests in a 

3

 

Person
which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, and any and all warrants or options to purchase any
of the foregoing. 

        "Change of Control": The occurrence of any of the following events: (a) prior to an internalization of management by Parent, if GKK
Manager LLC is no longer the manager of Parent, (b) after such time
as Parent is internally managed, any "person" or "group" (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a percentage of the total voting power of all classes of Capital Stock of the Parent entitled to vote generally in the election of directors of 20% or more;
or (c) the Parent shall cease to own and control, of record and beneficially, directly 100% of each class of outstanding Capital Stock of each Seller. Notwithstanding the foregoing, neither Buyer nor
any other Person shall be deemed to approve or to have approved any internalization of management as a result of this definition or any other provision herein. 

        "Class": With respect to a Mortgage Asset, such Mortgage Asset's classification as one of the following: Whole Loan, Junior Interest,
Mezzanine Loan, Preferred Equity, CMBS, RMBS or Non-Controlling Interest. 

        "CMBS": Pass-through certificates representing beneficial ownership interests in one or more first lien mortgage loans secured by
commercial and/or multifamily properties. 

        "Code": The Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. 

        "Collection Account": The account set forth on Schedule 3 established by Seller on behalf
of Buyer and subject to an Account Control Agreement, into which all Income shall be deposited. 

        "Confirmation": The meaning specified in Section 3.03(c). 

        "Consolidated Adjusted EBITDA": For any period, determined with respect to any Person(s) on a consolidated basis, an amount equal to the
sum of (a) net income (or loss) of such Person(s) 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 such Person(s)), in accordance with GAAP, plus the following (but only to the extent actually included in determination of such net income (or loss)): (i) depreciation and
amortization expense, (ii) interest expense, (iii) income tax expense and (iv) extraordinary or non-recurring gains and losses; plus (b) each such
Person's pro rata share of Consolidated Adjusted EBITDA of its Unconsolidated Affiliates. Consolidated Adjusted EBITDA will be adjusted to remove all impact of FIN 46 and FAS 140 to the extent of
related transfers to special purpose entities in connection with bona fide securitizations of Mortgage Assets. 

        "Consolidated Interest Expense": For any period, determined without duplication with respect to any Person(s) on a consolidated basis, the
amount of total interest expense incurred (in accordance with GAAP), including capitalized or accruing interest (but excluding interest funded under a construction
loan), plus each such Person's pro rata share of Interest Expense from Joint Venture investments and Unconsolidated Affiliates. 

        "Consolidated Tangible Net Worth": As of a particular date, 

        (a)   all
amounts which would be included under capital (or any like caption) on a consolidated balance sheet of any Person(s) at such date determined in accordance with GAAP,  less

        (b)   (i)
amounts owing to such Person(s) from any Affiliates thereof (other than "arm's length" loans to SLG), or from officers, employees, partners, members, directors,
shareholders or 

4

 

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)], (iii) prepaid taxes and/or expenses and (iv) the value of any Mortgage Asset which, after its Purchase Date, becomes REO Property. 

        "Consolidated 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 (other than "arm's length" loans to SLG), 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. 

        "Consolidated Total Indebtedness": At any time, without duplication, all amounts of Indebtedness and Contingent Liabilities of any
Person(s) and all Subsidiaries thereof determined on a consolidated basis, plus the pro rata share of Indebtedness and Contingent Liabilities of Unconsolidated Affiliates of such Person(s). 

        "Contingent Liabilities": Means with respect to any Person(s) and all Subsidiaries thereof (without duplication): (i) liabilities and
obligations (including any Guarantee Obligations) of such Persons in respect of "off-balance sheet arrangements" (as defined in the SEC Off-Balance Sheet Rules) which would be required to be, or
customarily would be, disclosed in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of a Form 10-Q or Form 10-K (or their equivalents) which any such
Person (or any Affiliate thereof) is required to file with the Securities and Exchange Commission (or any Governmental Authority substituted therefore) other than bona fide securitization transactions
which fall into this category solely as a result of the application of FAS 140 or FIN 46, (ii) any obligation (including, without limitation, any Guarantee Obligation) whether or not required to be
disclosed in the footnotes to any 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 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, Securities Act Release No. 33-8182, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR pts. 228, 229 and 249). 

5

 

        "Contractual Obligation": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its property is bound. 

        "Controlled Accounts": A collective reference to the Collection Account and the Operating Account. 

        "Custodial Agreement": A custodial agreement, substantially in the form attached as Exhibit
G hereto, by and among the Sellers, Buyer and the Custodian, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time. 

        "Custodian": Wells Fargo Bank, N.A. and its successors in interest, as custodian under the Custodial Agreement, and any successor
Custodian under the Custodial Agreement. 

        "Debt Service Coverage Ratio" or "DSCR": With respect to any Mortgage Asset, as of any
date of determination, each of (a) the In Place DSCR and (b) the Stabilized DSCR of such Mortgage Asset at such time. 

        "Default": Any of the events specified in Section 10.01, whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied. 

        "Defaulted Mortgage Asset": Any Mortgage Asset (a) which is sixty (60) days or more delinquent in the payment of principal, interest, fees
or other amounts payable under the terms of the related Mortgage Asset documents (including, without limitation, any Preferred Equity which has not been current pay during such period), (b) for which
there is a material breach of the representations and warranties set forth on Schedules 1(a) - 1(g), as applicable, hereto having a Material Adverse
Effect on such Mortgage Asset, or (c) for which there is a non-monetary default under the related Mortgage Asset documents. 

        "Delinquent Mortgage Asset": A Mortgage Asset which is thirty (30) or more days, but less than sixty (60) days, delinquent in the payment
of principal, interest, fees or other amounts payable under the terms of the related Mortgage Asset documents (including, without limitation, any Preferred Equity which has not been current pay during
such period). 

        "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": With respect to any Derivatives Contract, after taking into account the effect of any legally enforceable
netting agreement relating to such Derivatives Contract, (a) for any date on or after the date such Derivatives Contract has 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 Contract, as
determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Derivatives Contract (which may include Buyer). 

6

 

        "Dollars" and "$": Freely transferable lawful money of the United States of America. 

        "Due Diligence Review": The performance by Buyer of any or all of the reviews permitted under Section 12.11 with respect to any or all of
the Mortgage Assets, as reasonably desired by Buyer from time to time. 

        "Effective Date": The first date upon which all of the conditions precedent set forth in Section 3.01 shall have been satisfied. 

        "Election Notice": An irrevocable notice substantially in the form of Exhibit J hereto
specifying the Eurodollar Period which the applicable Seller has selected in respect of any Transaction. 

        "Electronic Transmission": The delivery of information in an electronic format acceptable to the applicable recipient thereof. 

        "Eligible Asset": A Mortgage Asset which as of any date of determination: 

        (a)   is
not a Defaulted Mortgage Asset or Delinquent Mortgage Asset; 

        (b)   is
not a construction loan or a construction note of any sort (which shall not, in and of itself, preclude Mortgage Assets that include renovation, rehabilitation or
expansion components which will be completed within twelve (12) months of the related Purchase Date); 

        (c)   has
been approved by Buyer in its sole discretion; and 

        (d)   in
the case of a Whole Loan, is evidenced by an original Mortgage Note; 

provided, that (i) "Eligible Asset" shall not include any Mortgage Asset consisting of Preferred Equity or a first loss debt instrument (other than
CMBS) which represents (a) less than 5.0% of the total debt capitalization of the related Underlying Mortgaged Property or (b) more than 15% of the equity capitalization of the related Underlying
Mortgaged Property, (ii) notwithstanding the foregoing and any Mortgage Asset's failure to conform to any of the criteria set forth above, Buyer may, in its sole discretion, designate in writing any
such non-compliant Mortgage Asset an Eligible Asset and (iii) Eligible Assets (other than CMBS or RMBS) that are pari passu investments with third
parties must provide that (a) the applicable Seller or the Parent retains the majority ownership or joint control with respect to customary major decisions for the particular type of Eligible Asset
and retains notice and cure rights with respect to all material issues related thereto, (b) provided that Buyer meets any applicable financial and other criteria required by the applicable
documentation for a holder of such Eligible Asset and (c) any other participant or co-investor must meet customary "qualified institutional lender" criteria on the related transfer date. 

        "Environmental Law": Any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, employee health and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. §
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act,
42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
§ 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et
seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time. 

        "Equity Interest": With respect to any Person, any share of capital stock of (or other ownership 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 or profit interests in) such Person, any security convertible
into or exchangeable for any share of capital stock of (or other 

7

 

ownership
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. 

        "ERISA": The Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement, and to any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor. 

        "ERISA Affiliate": Any person (as defined in Section 3(g) of ERISA which, together with the Borrower would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code. 

        "Escrow Instruction Letter": The meaning assigned thereto in the Custodial Agreement. 

        "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 the related Repurchase Date and the first Payment Date after such Purchase Date, and (ii) thereafter, each period commencing on 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 Payment Date that is one-month, two-months, three-months or six-months
thereafter, in each case as specified by Seller in an Election Notice delivered to Buyer not less than three (3) Business Days prior to the last day of then-current Eurodollar Period with respect
thereto; provided, that Seller may not select a Eurodollar Period longer than one-month if the last day of such Eurodollar Period occurs after the
Facility Termination Date and, in the event that the Buyer has not received an Election Notice by the date which is three (3) Business days prior to the last day of then-current Eurodollar Period with
respect thereto, the applicable Seller shall be deemed to have selected a one-month Eurodollar Period, or (z) the Facility Termination Date. 

        "Eurodollar Rate": With respect to any outstanding Transaction, the rate per annum equal to the rate for deposits in Dollars for a period
equal to the applicable Eurodollar Period which appears on page 3750 of the Telerate Screen at or about 9:00 a.m., New York City 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), and if such rate shall not be so quoted, the average rate per annum
at which three (3) mutually acceptable banks are offered Dollar deposits at or about 8:00 a.m., New York City time, on such date by prime banks in the interbank eurodollar market where the eurodollar
and foreign currency exchange operations in respect of its Transactions are then being conducted for delivery on such day for a period of thirty (30) days and in an amount comparable to the amount of
the Transactions to be outstanding on such day. The Eurodollar Rate shall be reset by Buyer as described above and Buyer's determination of Eurodollar Rate shall be conclusive upon the parties absent
manifest error on the part of Buyer. 

        "Event of Default": The meaning specified in Section 10.01. 

        "Facility Termination Date": the Initial Termination Date, or such later date as may by in effect pursuant to Section 3.05(a) hereof, or
such earlier date on which this Agreement shall terminate in accordance with the provisions hereof (including, without limitation, Section 3.05(c)) or by operation of law. 

        "Federal Funds Rate": Shall mean for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/1000 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on such day; provided that (a) if such day 

8

 

is
not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such Business Day, the Federal Funds Rate for such day shall be the average of the quotations for such day for such transactions received by Wachovia Bank, National
Association from three Federal funds brokers of recognized standing and reputation reasonably selected by Wachovia Bank, National Association. 

        "Fee Letter": That certain Fee Letter, dated July [            ], 2004, among the Sellers and Buyer, as the
same may be amended, supplemented or otherwise modified from time to time. 

        "Funds From Operation" or "FFO": For a given period, (a) Net Income of the REIT and its
Subsidiaries for such period (before extraordinary and non-recurring items), minus (or plus) (b) gains (or losses) from debt restructuring and sales of property during such period, plus (c)
depreciation and amortization of real and personal property assets for such period, plus (d) without duplication, income from unconsolidated partnerships and joint ventures, determined in each case in
accordance with GAAP. 

        "FHLMC": Federal Home Loan Mortgage Corporation, or any successor thereto. 

        "Final Purchase Date": The earlier of (a) July [            ], 2005;  provided, that upon written request of
all of the Sellers delivered to Buyer no earlier than 120 days and no later than ninety (90) days prior to such
date, and so long as on such date no event which has a Material Adverse Effect and no Default or Event of Default, or any default under any other Repurchase Document, shall have occurred and then be
continuing, Buyer may in its sole discretion agree to extend the Final Purchase Date, for a period not to exceed 364 days, by giving written notice to the Sellers of such extension and of the new
Final Purchase Date determined by Buyer; provided, that any failure by Buyer to deliver any such notice of extension to the Sellers shall be deemed to be Buyer's determination not to extend the Final
Purchase Date and (b) the Facility Termination Date. 

        "FNMA": Federal National Mortgage Association, or any successor thereto. 

        "Foreclosed Loan": A Mortgage Asset with respect to which the Underlying Mortgaged Property has been foreclosed upon by the applicable
Seller. 

        "GAAP": Generally accepted accounting principles as in effect from time to time in the United States. 

        "GNMA": Government National Mortgage Association, or any successor thereto. 

        "Governing Documents": As to any Person, its articles or certificate of incorporation and by-laws, its partnership agreement, its
certificate of formation and operating agreement, and/or the other organizational or governing documents of such Person. 

        "Governmental Authority": Any government (or any political subdivision or jurisdiction thereof), court, bureau, agency or other
governmental authority having jurisdiction over the Borrower, the Administrative Agent or any Bank, as applicable, or any of their respective businesses, operations or properties. 

        "Ground Lease": A ground lease containing the following terms and conditions: (a) a remaining term (exclusive of any unexercised extension
options) of thirty (30) years or more from the Purchase Date of the Mortgage Asset; (b) the right of the lessee to mortgage and encumber its interest in the leased property without the consent of the
lessor or with such consent given; (c) the obligation of the lessor to give the holder of any mortgage lien on such leased property written notice of any defaults on the part of the lessee and
agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable transferability
of the lessee's interest under such lease, including ability to sublease; and 

9

 

(e) such
other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease. 

        "Ground Lease Asset": A Mortgage Asset the Underlying Mortgaged Property for which is secured or supported in whole or in part by a Ground
Lease. 

        "Guarantee": As to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or
in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by
agreement to keep-well another Person, to purchase assets, goods, securities or services, or to agree to take-or-pay arrangement or otherwise). The amount of any Guarantee of a Person shall be deemed
to be 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 as determined by such Person in good faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have correlative meanings. 

        "Guarantee Agreement": A Guarantee Agreement, substantially in the form attached as Exhibit
M hereto, made by in favor of Buyer by the Parent and its operating partnership, as the same may be amended, restated, supplemented or otherwise modified and in effect from
time to time. Recourse under the Guarantee Agreement shall be limited to 10% of the greater of the outstanding aggregate Purchase Price and the total capitalization of the Sellers and shall include a
joint and several recourse carve out in favor of Buyer and the same financial covenants as are applicable to Parent under the Acquisition Facility and the Liquidity Facility. 

        "Guarantee Obligation": 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 an obligation 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 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 terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning. 

        "Guarantors": The meaning assigned thereto in the Guarantee Agreement. 

        ["In Place DSCR": With respect to any Mortgage Asset, as of any date of determination, the ratio of (x) (i) Net Cash Flow plus
(ii) debt service reserves actually held back or funded into Seller controlled accounts subject to the Seller's exclusive dominion and control, plus (iii) at Buyer's sole discretion, third party
credit enhancements, to (y) the debt service on the Mortgage Asset calculated using (i) the greater of (A) the required amortization for the first 12 months of the remaining term of the Mortgage Asset
or (B) hypothetical 30-year amortization schedule for the first 12 months of the remaining term of the Mortgage Asset, and (ii) an interest rate equal to the actual interest rate (in the case of a
fixed interest rate Eligible Asset) or the lesser of (i) the highest applicable strike price of any LIBOR cap contract for such 12-month period (plus the spread) or (ii) the average interest rate for 

10

 

such
12 month period using the applicable "forward LIBOR curve", plus 50 basis points over the spread.] 

        "Income": With respect to any Mortgage Asset at any time, all collections and proceeds on or in respect of the Mortgage Assets, including,
without limitation, any principal thereof then payable and all interest or other distributions payable thereon less any related servicing fee(s) charged by Servicer. 

        "Indebtedness": For any Person, 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, contingent interest, and 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, or (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; (c) Capitalized Lease Obligations of
such Person; (d) all reimbursement obligations of such Person under any letters of credit or acceptances (whether or not the same have been presented for payment); (e) all "off-balance sheet
arrangements" of such Person other than bona fide securitization transactions; (f) 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; (g) all obligations of such Person in respect of any keep well arrangements, credit enhancements, contingent or future funding obligations under any Purchased Asset or any
obligation senior to the Purchased Asset, unfunded interest reserve amount under any Purchased Asset or any obligation that is senior to the Purchased 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 Interests (other than Mandatory Redeemable Stock)); (h) 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; (i) 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)); (j) 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 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; and (k) such Person's pro rata share of the Indebtedness of any
Unconsolidated Affiliate of such Person. 

        "Independent Director" or "Independent Manager": With respect to any Seller, a natural
Person who is not at the time of initial appointment as an Independent Director or Independent Manager, 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 or Independent Manager, (i) a director (other than Independent Director of such Seller), manager (other than Independent Manager of such Seller),
officer, trustee, employee, partner, member, attorney or counsel of such Seller or any of its Affiliates; (ii) a creditor, customer, supplier or other person who derives any of its purchases or
revenues from its activities with such Seller or any of its Affiliates; (iii) a natual Person controlling or under common control with any Person that would be excluded from serving as an Independent
Director or Independent Manager under (i) or (ii), above; or (iv) a member of the immediate family of a natural Person excluded from serving as an Independent Director or Independent Manager under (i)
or (ii), above. 

        "Initial Termination Date": July [            ], 2007. 

11

 

        "Interest Rate Protection Agreement": With respect to any or all of the Purchased Assets, any futures contract, options related contract,
short sale of US Treasury securities or any interest rate swap, cap, floor or collar agreement or any other similar arrangement providing for protection against fluctuations in interest rates or the
exchange of nominal interest obligations, either generally or under specific contingencies and acceptable to Buyer. 

        "Investment": With respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, whether
by means of (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty or credit enhancement of
Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any binding commitment or
option to make an Investment in any other Person shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in any
Wachovia Facility document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment. 

        "Joint Venture": The meaning specified in the Liquidity Facility. 

        "Junior Interest": (a) A junior participation interest in a performing commercial real estate loan or (b) a "B-note" in an "A/B structure"
in a performing commercial real estate loan, for which the combined DSCR is not less than that set forth in the related Confirmation, taking into account, in the calculation of the LTV and the DSCR of
such Junior Interest, any senior or pari passu Indebtedness secured directly or indirectly by the applicable Underlying Mortgaged Property (including,
if applicable, any Preferred Equity). 

        "Junior Interest Note": The original executed promissory note, certificate (whether participation or otherwise) or other tangible evidence
of a Junior Interest. 

        "Late Payment Fee": The meaning specified in Section 3.06(a). 

        "Lien": Any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority
or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed
under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing). 

        "Liquidity Facility": That certain Credit Agreement, dated as of July [            ], 2004, among Gramercy
Capital Corp. and its operating partnership, as borrowers, the financial institutions from time to time parties thereto, [            ], as administrative agent, and
Wachovia Capital Markets, LLC, as sole lead arranger and sole book manager, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time. 

        "Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Asset, at the time of
determination, the ratio of (a) the outstanding principal amount of such Mortgage Asset at such time plus the amount of any Allocated Underlying Debt for such Mortgage Asset at such time to (b) the
lesser of (i) the appraised value of the related Underlying Mortgaged Property, as determined by reference to the third-party appraisal, meeting the standards required by FIRREA, of such Underlying
Mortgaged Property, with such appraised value being subject to adjustment by Buyer in its sole discretion, and (ii) the purchase price of such Underlying Mortgaged Property. 

12

 

        "Management Contract": That certain Management Contract, dated as of July [            ], 2004, between
[            ] and [            ], as the same may be amended, restated, supplemented or otherwise modified and in effect from
time to time. 

        "Manager": The meaning assigned thereto in the Management Contract. 

        "Mandatory Redeemable Stock": With respect to any Seller or 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
mandatorily redeemable, 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
Interests), (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 an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity Interests); in each case, on or prior to the Facility Termination Date or the maturity
date of the Acquisition Facility or the Liquidity Facility. 

        "Margin Correction Deadline": The time, determined in accordance with Section 4.02 of this Agreement, as the time by which all transfers,
repurchases and payments elected to be made by the Sellers pursuant to a Margin Deficit Notice shall be completed. 

        "Margin Deficit": At any time and with respect to any Mortgage Asset subject to a Transaction then outstanding, the amount, if any, by
which (a) the Repurchase Price for such Mortgage Asset exceeds the Asset Value of such Mortgage Asset (the value of any applicable Interest Rate Protection Agreements shall be taken into account when
making any such calculations) or (b) the aggregate Repurchase Price of all Mortgage Assets subject to Transactions then outstanding exceeds the Maximum Amount. 

        "Margin Deficit Notice": A written notice, substantially in the form attached as Exhibit E
hereto, which requires the Sellers to correct a Margin Deficit in accordance with Article IV of this Agreement. 

        "Margin Stock": The meaning provided in Regulations U and X of the Board of Governors of the Federal Reserve System. 

        "Market Value": As of any date in respect of any Mortgage Asset, the price at which such Mortgage Asset could readily be sold (which price
shall in no event be greater than the outstanding principal amount (or equivalent term for "par" for Mortgage Assets with no principal amount) of such Mortgage Asset), as determined by Buyer in its
sole discretion exercised in good faith by (i) reference to the market value of the Underlying Mortgaged Property, which shall be determined by a third-party appraisal of the Underlying Mortgaged
Property (which appraisal may, at the election of Buyer, be the appraisal in place at the time such Mortgage Asset is sold to the Buyer hereunder), as such determination of the market value of the
Underlying Mortgaged Property may be adjusted by Buyer in its sole discretion exercised in good faith, and (ii) taking into account such other criteria as Buyer deems appropriate in its good faith,
including, without limitation, current market conditions (including,
without limitation, current interest rates and spreads), credit quality, liquidity of position, eligibility for CDO execution, subordination, delinquency status and aging, which price, in each case,
may be determined to be zero. 

        "Material Adverse Effect": A material adverse effect on (a) the Property, business, operations, financial condition or prospects of
Seller, (b) the ability of Seller to perform its obligations under any of the Repurchase Documents to which it is a party, (c) the validity or enforceability of any of the Repurchase Documents, (d)
the rights and remedies of Buyer under any of the Repurchase Documents, (e) the timely payment of any amounts payable under the Repurchase Documents, or (f) the Asset Value, rating (if applicable) or
liquidity of any or all of the Purchased Assets. 

13

 

        "Materials of Environmental Concern": Any toxic mold, any 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. 

        "Maximum Amount": $250,000,000 or such greater amount as Buyer may determine in accordance with Section 3.05(b) hereof. 

        "Maximum LTV": With respect to any Purchased Asset at any time, the Loan-to-Value Ratio for the related Underlying Mortgaged Property set
forth in the related Confirmation under the heading "Maximum LTV" and for the Class and Type of such Mortgage Asset. 

        "Mezzanine Loan": A performing mezzanine loan secured by pledges of all the Capital Stock of a Mortgagor [or that portion of
the Capital Stock that includes the general partnership, managing member or other controlling interest (including, without limitation, the sole right to take title to and sell the related Underlying
Mortgaged Property)] that owns income producing commercial real estate which is a Type of Mortgaged Property and for which the combined DSCR is not less than that set forth in the related
Confirmation, taking into account, in the calculation of the LTV and the DSCR of such Mezzanine Loan, any senior or pari passu Indebtedness secured
directly or indirectly by the applicable Underlying Mortgaged Property, including, without limitation, any preferred equity interest or mezzanine debt that is senior to, or  pari passu with, the related
Mortgage Asset in right of payment or priority. 

        "Mezzanine Note": The original executed promissory note, certificate or other tangible evidence of Mezzanine Loan indebtedness. 

        "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 and other property and rights incidental thereto. 

        "Mortgage Asset": Any Whole Loan, Junior Interest, Mezzanine Loan, Preferred Equity, CMBS, RMBS or Non-Controlling Interest (i) the
Underlying Mortgaged Property for which is included in the categories for Types of Mortgaged Property, and (ii) which the Custodian has been instructed to hold for Buyer pursuant to the Custodial
Agreement listed on a Confirmation. In no event shall "Mortgage Asset" include any REO Property, distressed debt or any equity class issued by a CDO or CLO vehicle. 

        "Mortgage Asset Documents": The meaning assigned thereto in the Custodial Agreement. 

        "Mortgage Asset File": The meaning assigned thereto in the Custodial Agreement. 

        "Mortgage Note": The original executed promissory note or other evidence of the indebtedness of a Mortgagor with respect to a commercial
mortgage loan. 

        "Mortgaged Property": The real property (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 all other collateral securing repayment of the debt evidenced by a Mezzanine Note, a Junior Interest
Note or a Mortgage Note or, in the case of Preferred Equity, all such real property owned, and all other collateral pledged in favor of the holder of such Preferred Equity, by the issuer of such
Preferred Equity.

        "Mortgagee": The record holder of a Mortgage Note secured by a Mortgage. 

        "Mortgagor": The obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor
thereunder. 

14

 

        "Multiemployer Plan": A multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to
be made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA. 

        ["Net Cash Flow": With respect to any Underlying Mortgaged Property, for any period, the underwritten net cash flow calculated
in accordance with Buyer's customary criteria for commercial mortgage properties; provided, in all cases, that Net Cash Flow shall be subject to such
adjustments as Buyer deems appropriate in accordance with its underwriting guidelines for commercial mortgaged properties.] 

        "Net Income": With respect to any Person for any period, the net income of such Person for such period as determined in accordance with
GAAP. 

        "Non-Consolidation Opinion": A "non-consolidation" opinion of outside counsel to Seller in form and substance satisfactory to Buyer. 

        "Non-Controlling Interest": An interest in any Whole Loan, Junior Interest or Mezzanine Loan which represents less than a majority of the
interests, and which does not represent a controlling position, in such Mortgage Asset, but which is pari passu or senior in right of payment and
priority to any other interests in such Mortgage Asset; provided, that such interest vests the holders thereof with approval or veto rights over
customary major decisions concerning the Mortgage Asset and the related Underlying Mortgaged Property. 

        "Nonrecourse Indebtedness": 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 recourse liability (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. 

        "Operating Account": The account of Seller described on Schedule 3 hereto. 

        "Parent": Gramercy Capital Corp., a Maryland corporation. 

        "Payment Calculation Date": The tenth (10th) day of each month. 

        "Payment Date": The fifteenth (15th) calendar day of each month, or if any such day is not a Business Day, the immediately
succeeding Business Day. 

        "PBGC": The Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. 

        "Periodic Advance Repurchase Payment": The meaning specified in Section 3.06(a). 

        "Person": Any individual, limited liability company, partnership, joint venture, firm, corporation, association, trust or other enterprise
or any government or political subdivision or any agency, department or instrumentality thereof. 

        "Plan": Any pension plan as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation
to contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which the Borrower, or a
Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. 

        "Pledge and Security Agreement": A Pledge and Security Agreement, substantially in the form attached as Exhibit
N hereto, made by [            ] in favor of Buyer, as amended, restated, supplemented or otherwise modified and in effect from time to time. 

        "Post-Default Rate": In respect of any day a Transaction is outstanding or any other amount under this Agreement or any other Repurchase
Document that is not paid when due to Buyer at the stated Repurchase Date or otherwise when due (a "Post-Default Day"), a rate per annum 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 Pricing Rate  plus 500 basis points on such Post-Default Day.

15

  

        "Preferred Dividends": For any period and without duplication, all Restricted Payments paid or accrued during such period on Preferred
Securities issued by any Seller or any Subsidiary thereof. Preferred Dividends shall not include dividends or distributions paid or payable (a) solely in Equity Interests (other than Mandatory
Redeemable Stock) payable to holders of such class of Equity Interests; (b) to any Seller or any Subsidiary thereof; 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": A performing current pay preferred equity position (with a put or synthetic maturity date structure replicating a debt
instrument) evidenced by a stock share certificate or other similar ownership certificate representing the entire equity ownership interest in entities that own income producing commercial real estate
for which the underwritten DSCR is not less than that set forth in the related Confirmation, taking into account, in the calculation of the LTV and the DSCR of such Preferred Equity, any senior or  pari passu Indebtedness secured directly or indirectly by the applicable Underlying Mortgaged Property, including, without limitation, any preferred
equity interest or mezzanine debt that is senior to, or pari passu with, the related Mortgage Asset in right of payment or priority. 

        "Preferred Securities": With respect to any Person, Equity Interests 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": With respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the
applicable Pricing Rate in effect from time to time for such Transaction to the Purchase Price (decreased by any amounts previously paid by the applicable Seller to Buyer hereunder in respect of the
Purchase Price component of the Repurchase Price of such Mortgage Asset) for such Transaction on each day during the period commencing on (and including) the Purchase Date for such Transaction and
ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by the applicable Seller to Buyer with respect to such Transaction). 

        "Pricing Rate": With respect to a Mortgage Asset of a certain Class and the applicable Type of Underlying Mortgaged Property, at any date
of determination a rate per annum equal to the sum of (a) the Eurodollar Rate applicable on such date plus (b) the Pricing Spread for such Mortgage
Asset applicable on such date as set forth in the related Confirmation. 

        "Pricing Spread": The point spreads set forth in the related Confirmation corresponding to both the Classes of Mortgage Assets and the
Types of Underlying Mortgaged Property set forth therein; provided, that, (i) with respect to each Transaction comprised of more than one (1) Type of
Mortgage Asset, the Pricing Spread shall be based upon the Type of Underlying Mortgaged Property on a componentized basis and the weighted average Pricing Spread of the related components as of any
date of determination, (ii) in the event that such Transaction is comprised of Mortgage Assets each with a corresponding Book Value, the Pricing Spread shall be based upon the Type of Underlying
Mortgaged Property as of any date of determination and (iii) the Pricing Spread will vary in accordance with the Purchase Rate selected by Seller in the related Confirmation. All such reductions and
any other adjustments to the Pricing Rate shall be determined by Buyer in its sole discretion and shall be conclusive and binding absent manifest error. 

        "Prime Rate": The prime rate announced to be in effect from time to time by Buyer as its prime rate. The prime rate is not intended to be
the lowest general rate of interest charged by Buyer to its customers. 

        "Property": Any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible. 

16

 

        "Properties": The meaning in Section 8.01(x). 

        "Purchase Agreement": Any purchase agreement by and between Seller and any third party, including without limitation, any Affiliate of
Seller, pursuant to which Seller has purchased assets subsequently sold to Buyer hereunder. 

        "Purchase Date": With respect to each Transaction, the date on which the related Mortgage Assets are transferred by Seller to Buyer or its
designee (including the Custodian), which date shall in no event be after the Final Purchase Date. 

        "Purchase Period": The period from and including the Effective Date to and including the Final Purchase Date. 

        "Purchase Price": On each Purchase Date, the price at which the respective Mortgage Assets are transferred by Seller to Buyer or its
designee (including the Custodian), which shall equal the Asset Value for such Mortgage Assets on the Purchase Date. 

        "Purchase Rate": With respect to a Mortgage Asset of a certain Class and the applicable Type of Underlying Mortgaged Property, the
"Purchase Rate" set forth in the applicable column in the related Confirmation; provided, however, that (i) in the event any DSCR criteria applicable to
a Mortgage Asset is not satisfied and Buyer nevertheless elects to enter into, or continue, a Transaction in respect of such Mortgage Asset, the applicable Purchase Rate shall be reduced to the level
at which all applicable DSCR criteria are satisfied, (ii) if, on any date after the one-year anniversary of the Effective Date, the total number of Mortgage Assets is fewer than five (5), then on such
date (and again on each one-year anniversary of such date) the Purchase Rate applicable to each Mortgage Asset shall be reduced by 5.0% (e.g., from 65% to 60%) and (iii) notwithstanding anything
herein to the contrary, if a Purchased Asset consisting of Preferred Equity or an interest in Preferred Equity has not been repurchased within 360 days of the related Purchase Date then on such date
the Purchase Rate applicable to each Mortgage Asset shall be reduced by 5.0% (e.g., from 65% to 60%). 

        "Purchased Assets": The Mortgage Assets sold by Seller to Buyer in a Transaction hereunder. The term "Purchased Assets" shall include
Additional Purchased Assets delivered pursuant to Article IV hereof. 

        "Purchased Items": The meaning specified in Section 6.01. 

        "Qualified Servicer" shall mean any nationally recognized commercial mortgage loan servicer (other than ORIX Capital Markets LLC or any of
its Affiliates) rated at least "Css2" (or equivalent successor rating) by Fitch, Inc., or any successor to Fitch, Inc. and on the approved master servicer list or special servicer list of Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. 

        "Ratings Agencies": Each of Fitch Ratings, Inc., Moody's Investors Services, Inc. or Standard and Poor's Ratings Services, a division of
the McGraw-Hill Companies, Inc., or their successors in interest, and such nationally recognized statistical rating agencies as may be designated by Buyer from time to time. 

        "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 modified and supplemented and in effect from time to time. 

        "REMIC": A real estate mortgage investment conduit, within the meaning of Section 860D(a) of the Code. 

        "REMIC Provisions": Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of subchapter M of Chapter 1 of the Code, and related provisions, and regulations (including any applicable proposed regulations) and rulings promulgated thereunder, as the
foregoing may be in effect from time to time. 

17

 

        "REIT": A Person satisfying the conditions and limitations set forth in Section 856(b) and 856(c) of the Code which are necessary to
qualify such Person as a "real estate investment trust", as defined in Section 856(a) of the Code. 

        "Release Letter": A letter substantially in the form of Exhibit I hereto (or such other
form acceptable to Buyer). 

        "REO Property": Any real property acquired by a 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, other than those events as to which the thirty day notice period is waived under Sections .21, .22, .23, .26,
..27 or .28 of PBGC Reg. ! 4043. 

        "Repurchase Date": The date on which the applicable Seller is to repurchase the Purchased Assets from Buyer, which date shall not be later
than the Facility Termination Date and, unless otherwise specified in the related Confirmation, shall be the Facility Termination Date; provided, that
the Repurchase Date for Purchased Assets consisting of Preferred Equity shall not be later than the date that is 360 days after the Purchase Date therefor. 

        "Repurchase Documents": This Agreement, the Custodial Agreement, the Account Control Agreement, the Pledge and Security Agreement, all
Servicing Agreements (if any), all Interest Rate Protection Agreements (if any), the Guarantee Agreement and the Fee Letter. 

        "Repurchase Obligations": The meaning specified in Section 6.01(b). 

        "Repurchase Price": The price at which Purchased Assets are to be transferred from Buyer or its designee (including the Custodian) to the
applicable 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 and the Price Differential as of the date of such determination, decreased by all cash,
Income and Periodic Advance Repurchase Payments (including Late Payment Fees, if any) actually received by Buyer for its own account, and increased by all other costs, fees or other amounts payable to
Buyer by such Seller under any Repurchase Document. 

        "Requirement of Law": As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority (including, without limitation, those relating to environmental
standards and controls), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 

        "Responsible Officer": As to any Person, the chief executive officer, the chief financial officer, the chief accounting officer, the
treasurer or the chief operating officer of such Person. 

        "Restricted Payment": (a) Any dividend or other distribution, direct or indirect, on account of any Equity Interest of any Seller or any
Subsidiary thereof 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 any Seller or any Subsidiary thereof 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 Interests of any Seller or any Subsidiary thereof now or
hereafter outstanding. 

        "RMBS": Publicly offered, SEC registered pass-through certificates representing beneficial ownership interests in one or more first lien
mortgage loans secured by residential properties which are rated "AAA" (or equivalent) by any two Rating Agencies. 

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        "SEC": The Securities and Exchange Commission, or any successor thereto. 

        "Security Agreement": With respect to any Mortgage Asset, any contract, instrument or other document related to security for repayment or
payment thereof (other than the related Mortgage and Mezzanine Note), executed by the Mortgagor or other applicable party (in the case of a Mezzanine Loan or Preferred Equity) and/or others in
connection with such Mortgage Asset, including without limitation, any security agreement, guaranty, title insurance policy, hazard insurance policy, chattel mortgage, letter
of credit or certificate of deposit or other pledged accounts, and any other documents and records relating to any of the foregoing. 

        "Seller" and "Sellers": The meanings assigned thereto in the introductory paragraph
hereof. 

        "Seller Asset Schedule": The meaning assigned thereto in the Custodial Agreement. 

        "Seller-Related Obligations": With respect to any Seller, any obligations of such Seller hereunder and under any other arrangement between
such Seller or an Affiliate of such Seller on the one hand and Buyer or an Affiliate of Buyer on the other hand (including, without limitation, the Acquisition Facility and the Liquidity Facility). 

        "Servicer": The meaning specified in Section 11.03. 

        "Servicer Account": Any account established by Servicer in connection with the servicing of the Mortgage Assets. 

        "Servicer Notice": A notice from the Sellers, as applicable, to the Servicer, substantially in the form attached as  Exhibit F hereto. 

        "Servicing Agreement": The meaning specified in Section 11.03. 

        "Servicing File": With respect to each Mortgage Asset, the file retained by Seller consisting of originals of all documents in the
Mortgage Asset File which are not delivered to the Custodian and copies of all documents in the Mortgage Asset File set forth in Section 2.01 of the Custodial Agreement. 

        "Servicing Records": The meaning specified in Section 11.02. 

        "SLG": SL Green Realty Corp., a Maryland corporation. 

        "Stabilized DSCR": [With respect to any Mortgage Asset, as of any date of determination, the ratio of (x) Net Cash Flow
(calculated using the projected Net Cash Flow at the
maturity of the Mortgage Asset, annualized) to (y) debt service due using the applicable refinance constant (for the related Underlying Mortgaged Property then being [used by the Rating
Agencies] and the projected outstanding balance of such Mortgage Asset] 

        "Sub-Limit": The composition of Mortgage Assets transferred to Buyer shall at all times meet the following sublimit caps, and no Asset
Value shall be ascribed to any Mortgage Assets: 

        (a)   to
the extent that the Asset Value ascribed to Mortgage Assets, the Classes of which consist of Mezzanine Loans, Junior Interests and Preferred Equity, collectively,
would exceed 75% of the Maximum Amount; 

        (b)   to
the extent that the Asset Value ascribed to Mortgage Assets, the Class of which consists of Preferred Equity, would exceed 15% of the Maximum Amount; 

        (c)   to
the extent that the Asset Value ascribed to Mortgage Assets, the Class of which consists of RMBS, would exceed 10% of the Maximum Amount; 

        (d)   to
the extent that the Asset Value ascribed to Mortgage Assets, the Class of which consists of Non-Controlling Interests, would exceed 15% of the Maximum Amount; 

19

 

        (e)   to
the extent that the Asset Value ascribed to Mortgage Assets, the Type of which consists of hotels, nursing homes or other non-traditional property types (as
determined by Buyer), would exceed 20% of the a Maximum Amount; 

        (f)    to
the extent that the Asset Value ascribed to Mortgage Assets which are Ground Lease Assets, would exceed 50% of the Maximum Amount; 

        (g)   to
the extent that the weighted average Purchase Rate of all Mortgage Assets would exceed 85.0%; and 

        (h)   to
the extent that the weighted average LTV of all Mortgage Assets multiplied by the weighted average Purchase Rate of all Mortgage Assets would exceed 80.0%. 

        "Subsidiary": With respect to any Person, any corporation, partnership, limited liability company or other entity (heretofore, now or
hereafter established) 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 (without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts of
which are consolidated with those of such Person pursuant to GAAP. 

        "Tax Based Accounting Principles": With respect to any Person, those generally accepted tax accounting principles and practices which are
recognized as such in the United States for the purposes of complying with filing and reporting obligations under the Code, and which are consistently applied for all periods, after the date hereof,
so as to properly and fairly reflect the financial position of such Person. 

        "Test Period": Any fiscal quarter, commencing with the fiscal quarter ending on September 30, 2004. 

        "Transaction": The meaning specified in Section 1.01. 

        "Transaction Request": The meaning specified in Section 3.03(a). 

        "True Sale Opinion": A "true sale" opinion of outside counsel to Seller in form and substance satisfactory to Buyer. 

        "Trust Receipt": A trust receipt issued by the Custodian to Buyer confirming the Custodian's possession of certain Mortgage Asset Files
which are held by the Custodian for the benefit of Buyer or the registered holder of such trust receipt. 

        "Type": With respect to a Mortgaged Property, such Mortgaged Property's classification as one of the following: (a) multifamily, (b)
retail, (c) office, (d) industrial, (e) hotel, (f) student housing, (g) medical office product, (h) self-storage or (i) nursing home. 

        "UCC Financing Statement": A financing statement on Form UCC-1 or the proper national UCC form, naming Buyer as "Secured Party" and Seller
as "Debtor" and describing the Purchased Items. 

        "Unconsolidated Affiliates": With respect to any Person, any other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on
the consolidated financial statements of such Person. 

        "Underlying Mortgage Loan": With respect to any Junior Interest, Mezzanine Loan, Preferred Equity, CMBS, RMBS or Non-Controlling Interest,
a mortgage loan made in respect of the related Underlying Mortgaged Property. 

20

 

        "Underlying Mortgaged Property": In the case of any: 

        (a)   Whole
Loan, the Mortgaged Property securing such Whole Loan; 

        (b)   Junior
Interest, the Mortgaged Property securing such Junior Interest (if the Junior Interest is of the type described in clause (a) of the definition thereof), or the
Mortgaged Property securing the Mortgage Loan in which such Junior Interest represents a junior participation (if the Junior Interest is of the type described in clause (b) of the definition thereof); 

        (c)   Mezzanine
Loan, the Mortgaged Property that is owned by the Person the Capital Stock of which is pledged as collateral security for such Mezzanine Loan; 

        (d)   Preferred
Equity, the income producing commercial real estate owned by the entity whose equity ownership interest is represented by such Preferred Equity; 

        (e)   CMBS,
the Mortgaged Property securing the mortgage loans related to such security; 

        (f)    RMBS,
the Mortgaged Property securing the mortgage loans related to such security; and 

        (h)   Non-Controlling
Interest, the Mortgaged Property related to the applicable mortgage asset which the Non-Controlling Interest represents an interest in. 

        "Underlying Obligor": Individually and collectively, as the context may require, the obligor or obligors under a Mortgage Asset, including
any Person that has not signed the related Mortgage Note but owns an interest in the related Underlying Mortgaged Property, which interest has been encumbered to secure such Mortgage Asset. 

        "Underwriting Package": An internal document or credit committee memorandum (redacted to protect confidential information) setting forth
all material information relating to a Mortgage Asset, prepared by a Seller for its evaluation of such Mortgage Asset, to include at a minimum the data required in the relevant Confirmation. In
addition, (a) with respect to each Mortgage Asset which does not consist of RMBS and CMBS, the Underwriting Package shall include, to the extent applicable, (i) a copy of the appraisal, (ii) the
current occupancy report (including tenant stack and rent roll), (iii) a minimum of two (2) years of property level financial statements to the extent available, (iv) current financial statement of
the obligor, if any, on the commercial mortgage loan, if available, (vi) the Mortgage Asset File, (vii) all third party reports and agreed upon procedures, any letters and reports (whether drafts or
final forms), site inspection reports, market studies and any other diligence conducted by Seller relating to such Mortgage Asset, (viii) aging of all accounts receivable and accounts payable, (ix)
copies of all transaction documentation and (x) such further documents or information as Buyer may request; 

        (b)   with
respect to each Mortgage Asset which consists of RMBS, the Underwriting Package shall include, to the extent applicable, (i) the related prospectus, (ii) all
distribution date statements issued in respect thereof during the immediately preceding 12 months (or, if less, since the date such RMBS was issued) and (iii) any other information delivered to
certificate holders in respect of such RMBS during the immediately preceding 6 months; 

        (c)   with
respect to any Mortgage Asset which consists of CMBS, the Underwriting Package shall include, 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 Seller in connection with its acquisition of such CMBS, (iii) all
distribution date statements issued in respect thereof during the immediately preceding 12 months (or, if less, since the date such CMBS was issued), (iv) all monthly CSMA reporting packages issued in
respect of such CMBS during the immediately preceding 12 months (or, if less, since the date such CMBS was issued), (v) all Rating Agency pre-sale reports and (vi) all asset summaries and any other
due diligence materials, including, without limitation, reports prepared by third parties, provided to Seller in connection with its acquisition of such CMBS. 

21

 

        "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 law, the perfection, the effect of perfection or nonperfection, or the priority of the security interest in any Purchased Items 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, effect of perfection or nonperfection, or priority. 

        "Wachovia Facility": Any of this Agreement, the Liquidity Facility or the Acquisition Facility. 

        "Whole Loan" A performing first priority commercial real estate whole loan for which the underwritten DSCR is not less than that set forth
in the related Confirmation as determined by Buyer after taking into account any reserves and any other adjustments which Whole Loan includes, without limitation, (i) a Mortgage Note and related
Mortgage, and (ii) all right, title and interest of Seller in and to the Mortgaged Property covered by such Mortgage. The Whole Loan LTV and DSCR must take into account any senior or  pari passu
Indebtedness secured directly or indirectly by the applicable Underlying Mortgaged Property, including, without limitation, any preferred
equity interest or mezzanine debt that is senior to, or pari passu with, the related Mortgage Asset in right of payment or priority. 

        Section
2.02    Other Definitional Provisions; Determinations by Buyer.    

        (a)   All
references to, and calculations required to be made in respect of, any principal and/or interest associated with any Mortgage Asset, shall, with respect to Mortgage
Assets consisting of Preferred Equity, be deemed to refer, respectively, to the face amount of such Preferred Equity and the preferred return or yield (however such terms are denominated, as set forth
in the related Mortgage Asset documents), whether payable or accrued. 

        (b)   As
used herein, and any certificate or other document made or delivered pursuant hereto, accounting terms relating to a Seller not defined in Section 2.01, and
accounting terms partly defined in Section 2.01, to the extent not defined, shall have the respective meanings given to them under GAAP. 

        (c)   The
words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section, schedule and exhibit references are to this Agreement unless otherwise specified. 

        (d)   The
meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 

        (e)   All
matters to be determined by Buyer in its sole discretion hereunder shall be determined by Buyer in its sole discretion exercised in good faith. 

 
 

ARTICLE III
  
    INITIATION; TERMINATION    
    

        Section
3.01    Conditions Precedent to Initial Transaction.    Buyer's agreement to enter into the initial
Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from the
Sellers payment of an amount equal to all fees and expenses payable hereunder and pursuant to the Fee 

22

 

Letter,
and all of the following documents, each of which shall be satisfactory in form and substance to Buyer and its counsel: 

        (a)   The
following Repurchase Documents, as well as certain other documents, delivered to Buyer: 

        (i)    Master Repurchase Agreement.    This Master Repurchase Agreement duly completed and executed by each of the
parties hereto; 

        (ii)    Custodial Agreement.    The Custodial Agreement, duly executed and delivered by each of the parties thereto; 

        (iii)    Account Control Agreement.    The Account Control Agreement, duly executed and delivered by each of the
parties thereto; 

        (iv)    Interest Rate Protection Agreements.    All Interest Rate Protection Agreements required pursuant to Section
9.01(u), duly executed and delivered by each of the parties thereto; 

        (v)    Guarantee Agreement.    The Guarantee Agreement, duly executed and delivered by the Guarantors; 

        (vi)    Pledge and Security Agreement.    The Pledge and Security Agreement, substantially in the form attached hereto
as Exhibit N, duly executed and delivered by each of the parties thereto; 

        (vii)    Consents and Waivers.    Any and all consents and waivers applicable to any Seller or to the Mortgage Assets; 

        (viii)    UCC Financing Statement.    UCC Financing Statements naming each Seller as "Debtor" and Buyer as "Secured
Party" and describing as "Collateral" the Purchased Items and any other documents necessary or requested by Buyer to perfect the security interests granted by the Sellers in favor of Buyer under this
Agreement or any other Repurchase Document; 

        (b)    Opinions of Counsel.    An opinion or opinions of outside counsel to the Sellers, which opinion or opinions
shall be satisfactory in form and substance to Buyer and shall include general issues of formation and enforceability with respect to each Seller, first priority perfected security interest with
respect to the Purchased Assets, a Non-Consolidation Opinion and a True Sale Opinion, and such other issues as requested by Buyer; 

        (c)    Organizational Documents.    A good standing certificate and certified copies of the charter and by-laws (or
equivalent documents) of each Seller and of all corporate or other authority for each Seller with respect to the execution, delivery and performance of the Repurchase Documents and each other document
to be delivered by such Seller from time to time in connection herewith (and Buyer may conclusively rely on such certificate until it receives notice in writing from the applicable Seller to the
contrary); 

        (d)    Servicing Agreement.    With respect to any Eligible Asset to be purchased hereunder on the related Purchase
Date which is not serviced by Seller, Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a
Servicer Notice, fully executed by Seller and Servicer; 

        (e)    Fees and Expenses.    Buyer shall have received payment from the Sellers of an amount equal to the amount of
actual costs and expenses, including, without limitation, the fees and expenses of counsel to Buyer, incurred by Buyer 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; and 

        (f)    Other Documents.    Buyer shall have received all such other and further documents, documentation and legal
opinions as Buyer in its sole discretion shall reasonably require. 

23

 

        Section
3.02    Conditions Precedent to all Transactions.    Buyer'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)    the
applicable Seller shall have delivered a Confirmation via Electronic Transmission in accordance with the procedures set forth in Section 3.03, and Buyer shall have
determined that the Mortgage Asset described in such Confirmation is an Eligible Asset, shall have approved the purchase of the Mortgage Asset to be included in such Transaction in its sole and
absolute discretion and shall have obtained all necessary internal credit approvals for such Transaction; 

        (b)    no
Default or Event of Default shall have occurred and be continuing under this Agreement, the Guarantee Agreement or any other Repurchase Document and no event shall
have occurred which has, or would reasonably be expected to have, a Material Adverse Effect; 

        (c)    Buyer
shall have received a certificate of a Responsible Officer of the applicable Seller, substantially in the form of Exhibit
K hereto, (i) showing in detail the calculations demonstrating that, after giving effect to the requested Transaction, no Margin Deficit shall then exist, (ii) stating that, to
the best of such Responsible Officer's knowledge, since the date of the certificate most recently delivered pursuant to Section 9.01(b)(ii), the applicable Seller has observed or performed all of its
covenants and other agreements in all material respects, and satisfied in all material respects, every condition, contained in this Agreement and the related documents to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate, (iii) describing all interests of such Seller's
Affiliates in any Underlying Mortgaged Property related to any proposed Mortgage Asset (including without limitation, any lien, encumbrance or other debt or equity position or other interest in the
Underlying Mortgaged Property that is senior or junior to, or pari passu with, the proposed Mortgage Asset in right of payment or priority) and (iv)
showing in detail the calculations supporting such Responsible Officer's certification of the applicable Seller's compliance with the requirements of Sections 9.01(f) and 9.01(l)-(n); 

        (d)    both
immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the
applicable Seller in Section 8.01 and in Schedules 1(a)-1(h), as applicable, 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 (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); 

        (e)    subject
to Buyer's right to perform one or more Due Diligence Reviews pursuant to Section 12.11, Buyer shall have completed its due diligence review of the Mortgage
Asset File and the Underwriting Package for each Purchased Asset, and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as
Buyer in its sole discretion deems appropriate to review and such review shall be satisfactory to Buyer in its sole discretion and Buyer has consented in writing to the related Mortgage Asset becoming
a Purchased Asset; provided, that if Buyer's diligence review of the Mortgage Asset File requires the delivery of a mortgage file or the equivalent,
Seller shall have the benefit of such delayed delivery provisions as are customary in pooling and servicing agreements (e.g., while a promissory note (or analogous document directly evidencing the
obligation) must be delivered as a condition of closing, an ancillary document or estoppel may be delivered within a reasonable timeframe thereafter); 

        (f)    with
respect to any Eligible Asset to be purchased hereunder on the related Purchase Date which is not serviced by the applicable Seller or an Affiliate thereof, the
applicable Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a Servicer Notice, fully
executed by such Seller and the Servicer; 

24

 

        (g)    Buyer
shall have received all fees and expenses of counsel to Buyer as required hereunder and/or by the Fee Letter and Section 12.01 and, to the extent Seller is
required hereunder to reimburse Buyer for such amounts, Buyer shall have received the costs and expenses incurred by it 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 Buyer's
option, may be withheld from the sale proceeds of any Transaction hereunder; 

        (h)    no
Margin Deficit shall exist, either immediately prior to or after giving effect to the requested Transaction, and 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 Buyer 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 Buyer not being able to
finance Mortgage Assets through the "repo market" or "lending market" with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or 

        (ii)    an
event or events shall have occurred resulting in the effective absence of a "securities market" for securities backed by Mortgage Assets or an event or events shall
have occurred resulting in Buyer not
being able to sell securities backed by Mortgage Assets at prices which would have been reasonable prior to such event or events; 

        (i)    Buyer
shall have received from the Custodian on each Purchase Date an Asset Schedule and Exception Report with respect to each Purchased Asset, dated the Purchase Date,
duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day; 

        (j)    Buyer
shall have received from the applicable Seller a Release Letter covering each Eligible Asset to be sold to Buyer; 

        (k)    prior
to the purchase of any Mortgage Asset acquired (by purchase or otherwise) by the applicable Seller from any Affiliate of such Seller, Buyer shall have received a
Non-Consolidation Opinion and a True Sale Opinion; 

        (l)    Buyer
shall not have reasonably determined that the introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement
of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions; 

        (m)    the
initial Purchase Price specified in a Confirmation for a Mortgage Asset shall not be less than $3,000,000 and increments of $100,000 thereafter;  provided, that two (2) Confirmations per calendar month
may specify an initial Purchase Price in an amount greater than $1,000,000 and less than
$3,000,000. 

        (n)    the
Repurchase Date for such Transaction is not later than the Facility Termination Date; 

        (o)    the
applicable Seller shall have taken such other action as Buyer shall have reasonably requested in order to transfer the Purchased Assets pursuant to this Agreement
and to perfect all security interests granted under this Agreement or any other Repurchase Document in favor of Buyer with respect to the Purchased Assets; 

        (p)    the
weighted average Purchase Rate of all Mortgage Assets shall not exceed 85.0%; 

        (q)    the
weighted average LTV of all Mortgage Assets multiplied by the weighted average Purchase Rate of all Mortgage Assets shall not exceed 80.0%; and 

25

 

        (r)    Buyer
shall have received all such other and further documents, documentation and legal opinions (including, without limitation, opinions regarding the perfection of
Buyer's security interests) as Buyer in its reasonable discretion shall reasonably require. 

        Each
Confirmation delivered by any Seller hereunder shall constitute a certification by such Seller that all the conditions set forth in this Section 3.02 with respect to such Seller
have been satisfied, waived or is not applicable (both as of the date of such notice or request and as of the date of such purchase). 

        Section
3.03    Transaction Mechanics; Related Matters.    (a)    During the Purchase Period, in the sole
discretion of Buyer, Buyer may from time to time purchase from a Seller certain Eligible Assets. A Seller shall request a Transaction by delivering to Buyer (with a copy to the Custodian) via
Electronic Transmission a request in the form of Exhibit A attached hereto (a "Transaction Request").
Each such Transaction Request shall describe the Mortgage Assets proposed to be purchased in a Seller Asset Schedule and set forth (i) the proposed Purchase Date (which date, notwithstanding any
extension of the Facility Termination Date which may occur in accordance with Section 3.05, shall not be later than the Final Purchase Date), (ii) the proposed Purchase Price, (iii) the proposed
Repurchase Date, (iv) the Pricing Rate applicable to the Transaction, (v) the applicable Class and Type for each Mortgage Asset for which Seller is requesting the Transaction and (vi) any additional
terms or conditions not inconsistent with this Agreement and shall be accompanied by the Underwriting Package with respect to each Mortgage Asset. In the event of any conflict between the terms of
such Confirmation and this Agreement, the terms of this Agreement shall prevail. 

        (b)    Upon
receipt of the complete Underwriting Package, Buyer shall notify the applicable Seller of its approval or disapproval of each proposed Mortgage Asset within ten
(10) Business Days after such receipt; provided, that with respect to any Transaction Request pertaining to a pool consisting of more than three (3)
proposed Mortgage Assets, Buyer may notify the applicable Seller of its approval or disapproval of such proposed Mortgage Assets after such ten (10) Business Day period, provided such notice is given
as soon as practicable after the expiration of such period. Notwithstanding any other provision hereunder, the fact that Buyer has conducted or has failed to conduct any partial or complete
examination or any other due diligence review of any Purchased Asset shall in no way affect any rights Buyer (or any of its successors) may have hereunder or otherwise with respect to any
representations or warranties or other rights hereunder, including without limitation, the right to determine at any time that such Purchased Asset is not an Eligible Asset. 

        (c)    On
the Purchase Date for each Mortgage Asset approved by Buyer, the applicable Seller shall forward to Buyer via Electronic Transmission, a confirmation of each
Transaction, substantially in the
form of Exhibit B attached hereto (a "Confirmation"). The Confirmation shall specify any additional
terms or conditions of the Transaction not inconsistent with this Agreement or as otherwise agreed to by Buyer. In the event that the terms of the related Confirmation are inconsistent with the terms
of this Agreement, this Agreement shall supersede the Confirmation with respect to the inconsistent terms only; provided,  however, that the Confirmation
and this Agreement shall be construed to be cumulative to the extent possible. Upon receipt of the Confirmation, Buyer
shall evidence its agreement to enter into the requested Transaction by its signature thereon and return such Confirmation to the Seller. Any Confirmation executed by Buyer shall be deemed to have
been received by the applicable Seller on the date such executed Confirmation is actually received by such Seller. 

        (d)    At
least seven (7) Business Days prior to the requested Purchase Date, the Mortgage Asset Documents pertaining to each Mortgage Asset to be purchased by Buyer shall be
delivered to the Custodian in accordance with the Custodial Agreement. 

        (e)    Except
as set forth in Section 3.04, each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and the
applicable Seller with respect to the Transaction to which the Confirmation relates, and the applicable Seller's acceptance of the 

26

 

related
proceeds shall constitute such 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. 

        (f)    On
the Repurchase Date, termination of a Transaction will be effected by transfer to the applicable Seller or its designee of the Purchased Assets and receipt of the
Repurchase Price by Buyer. To the extent a net amount is owed to one party, the other party shall pay such amount to such party. Buyer shall direct Custodian to deliver the related Mortgage Files to
the applicable Seller or its designee at such Seller's expense on the Repurchase Date. 

        (g)    In
no event shall a Transaction be entered into when any Margin Deficit exists or when any Default or Event of Default has occurred and is continuing, when the
Repurchase Date for such Transaction would be later than the Facility Termination Date or to the extent that after giving effect to such Transaction the aggregate Repurchase Price of all Mortgage
Assets subject to Transactions then outstanding would exceed the Maximum Amount. 

        (h)    Pursuant
to Section 3.01(b) of the Custodial Agreement, the Custodian shall deliver to Buyer and the applicable Seller an Asset Schedule and Exception Report with
respect to the Eligible Assets which the applicable Seller has requested Buyer purchase on such Purchase Date, and no later than 12:00 p.m., New York City time, on each Purchase Date, the Custodian
shall deliver to Buyer a Trust Receipt in respect of all such Eligible Assets purchased by Buyer on such Purchase Date. Subject to the provisions of this Article III, the Purchase Price for each
Eligible Asset will be made available to the
applicable Seller by Buyer transferring the aggregate amount of such Purchase Price in accordance with the wiring instructions set forth in respect of such Seller on Schedule
2. 

        Section
3.04    Repurchases.    

        (a)    Optional Repurchases.    Subject to the payment of any LIBOR breakage costs and any other fee or payment then
due in accordance with terms hereof, the applicable Seller may repurchase Purchased Assets, without penalty or premium (other than any fees payable), in whole on any date and in part on any date so
long as no Margin Deficit, Default or Event of Default shall have occurred and then be continuing. If the applicable Seller intends to make any such repurchase, such Seller shall give one (1) Business
Day's prior written notice thereof to Buyer, which notice shall specifically identify any Purchased Assets to be repurchased in whole. The Repurchase Price specified in any such notice shall be due
and payable on the date specified therein, and, upon payment thereof, such amount shall be applied (i) with respect to Purchased Assets being repurchased in whole, subject to Section 3.04(c), to the
Repurchase Price of the Purchased Assets identified by the Seller and (ii) with respect to repurchases made in part, pro rata to the Repurchase Price of all Purchased Assets. 

        (b)    Mandatory Repurchases. 

          (i)  In
the event that the Facility Termination Date is extended in accordance with Section 3.05(a), in addition to any other amounts due and payable at any time pursuant to
this Agreement or any other Repurchase Document, the Sellers shall make equal quarterly payments, beginning on the date occurring three (3) calendar months after the Initial Termination Date (or if
such date is not a Business Day, on the immediately preceding Business Day), in a total amount equal to the aggregate Repurchase Price outstanding as of the Initial Termination Date, unless the
aggregate Repurchase Price is paid in full prior to such quarterly payments being due. 

         (ii)  In
the event that the weighted average Purchase Rate of all Mortgage Assets exceeds 85.0%, the Sellers shall repurchase such Mortgage Assets as Buyer shall have
determined are necessary so that the weighted average Purchase Rate of all Mortgage Assets does not exceed 85.0%; provided,  however, that, so long as no
Default or Event of Default has occurred, if a Seller specifically notifies Buyer in writing prior to Buyer purchasing a
particular Mortgage Asset that purchasing such Mortgage Asset will cause the weighted average Purchase Rate to exceed 85.0% 

27

 

and
Buyer approves and purchases such Mortgage Asset, Sellers shall not be required to repurchase any Mortgage Assets based solely on the increased weighted average Purchase Rate caused by the
purchase of such Mortgage Asset. Notwithstanding the foregoing, nothing in this subsection shall in any way impair Buyer's ability to issue a Margin Deficit Notice and require satisfaction of any
Margin Deficit in the manner and within the time frames as provided in this Agreement. 

        (iii)  In
the event that the product of the weighted average LTV of all Mortgage Assets multiplied by the weighted average Purchase Rate of all Mortgage Assets exceeds 80.0%,
the Sellers shall repurchase such Mortgage Assets as Buyer shall have determined are necessary so that the weighted average LTV of all Mortgage Assets multiplied by the weighted average Purchase Rate
of all Mortgage Assets does not exceed 80.0%. 

        Section
3.05    Facility Termination Date; Maximum Amount.    

        (a)    Extension of Facility Termination Date.    Upon written request of all of the Sellers delivered to Buyer at
least ninety (90) days, but in no event earlier than 120 days, prior to the Initial Termination Date, and so long as no event which has a Material Adverse Effect and no Margin Deficit, Default or
Event of Default, or any default under any other Repurchase Document, shall have occurred and be continuing on the Initial Termination Date, Buyer may in its sole discretion agree to extend the
Facility Termination Date, for a period not to exceed 364 days, by giving written notice to the Sellers of such extension and of the new Facility Termination Date determined by Buyer and the dates and
amounts of the payments required to be made under Section 3.04(b); provided, that (i) any failure by Buyer to deliver any such notice of extension to
the Sellers shall be deemed to be Buyer's determination not to extend the Facility Termination Date, (ii) in no event shall the Facility Termination Date be extended beyond either the fourth
(4th) year anniversary of the Effective Date or the Final Purchase Date and (iii) in no event shall the Facility Termination Date be extended unless, as of the Initial Termination Date,
(A) the Parent shall be listed on a national securities exchange and (B) Buyer shall have received payment of an amount equal to the Extension Fee (as defined in the Fee Letter). 

        (b)    Increase of Maximum Amount.    So long as the Maximum Amount shall not have been reduced in accordance with
Section 3.05(c), upon written request of all of the Sellers delivered to Buyer at least thirty (30) days, but in no event earlier than ninety (90) days, prior to the date that is the eighteen (18)
month anniversary of the Effective Date, Buyer may, in its sole discretion, agree to increase the Maximum Amount to an amount equal to $350,000,000, or such lesser amount as agreed to by Buyer in its
sole discretion, by giving written notice to the Sellers of such increase and the Maximum Amount determined by Buyer after giving effect thereto;  provided, that (i) any failure by Buyer to deliver such
notice of increase to the Sellers shall be deemed to be Buyer's determination not to increase
the Maximum Amount and (ii) the Maximum Amount shall not be increased unless Buyer shall have received all appropriate internal credit approvals and it is expressly understood and agreed that Buyer
has not received, requested or otherwise sought, and Buyer has no obligation at any time to request or otherwise seek, any such approval. 

        (c)    Reduction of Maximum Amount; Acceleration of Facility Termination Date.    The Maximum Amount may be reduced
from time to time at the election of all of the Sellers upon thirty (30) days advance written notice to Buyer; provided, that (i) any such reduction
shall be in a minimum amount of $10,000,000 and a whole multiple of $1,000,000 in excess thereof, (ii) no Default of Event of Default shall exist immediately after giving effect to any such reduction,
and (iii) no Margin Deficit shall exist immediately after giving effect to any such reduction (and to any payments made contemporaneously therewith). In the event that the Maximum Amount is, or is at
any time requested by the Sellers to be, less than $100,000,000, the Maximum Amount may be reduced to $0 at the election of Buyer upon five (5) days advance written notice to the Sellers, whereupon
the Facility Termination Date shall be 

28

 

deemed
to have occurred and all amounts outstanding under the this Agreement and the other Repurchase Documents shall be then due and payable. 

        (d)    No Obligation to Extend Facility Termination Date or Increase Maximum Amount.    Notwithstanding any other
provision of this Section 3.05 or otherwise herein, neither Buyer nor any of its Affiliates shall be under any obligation to extend the Facility Termination Date or increase the Maximum Amount. 

        Section
3.06    Payment of Price Differential.    

        (a)    Notwithstanding
that the Sellers and Buyer intend that the Transactions hereunder be sales to Buyer of the Purchased Assets, the Sellers shall pay to Buyer an amount
equal to the accrued Price Differential of each Transaction through but not including the Payment Calculation Date (each such payment, a "Periodic Advance Repurchase
Payment") on each Payment Date less any portion thereof previously paid, if any. Buyer shall deliver to the Sellers, via Electronic Transmission, notice of the required
Periodic Advance Repurchase Payment, and a detailed calculation thereof, on or prior to the fifth (5th) Business Day preceding each Payment Date. If the Sellers fail to make all or part
of the Periodic Advance Repurchase Payment by 5:00 p.m., New York City time, on the Payment Date, the Sellers shall be obligated to pay to Buyer (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 Buyer. 

29

  

        (b)   If any Seller repurchases Purchased Assets on a day other than the last day of the Eurodollar Period applicable to the related Transaction, all of the Sellers shall
jointly and severally indemnify Buyer and hold Buyer harmless from any actual losses, costs and/or expenses which Buyer sustains or incurs arising from the reemployment of funds obtained by Buyer
hereunder or from fees payable to terminate the deposits from which such funds were obtained ("Breakage Costs"), in each case for the remainder of the
applicable Eurodollar Period. Buyer shall deliver to the Sellers a statement setting forth the amount and basis of determination of any Breakage Costs in reasonable detail, it being agreed that such
statement and the method of its calculation shall be conclusive and binding upon the Sellers absent manifest error. This Section 3.06(b) shall survive termination of this Agreement and repurchase of
all Purchased Assets subject to Transactions hereunder. 

 
 

ARTICLE IV
  
  MARGIN MAINTENANCE    
    

        Section
4.01    Margin Adjustments.    (a) If at any time the Repurchase Price for any Purchased Asset exceeds the
Asset Value of such Purchased Asset, then Buyer may, by delivery to the Sellers of a Margin Deficit Notice, require the Sellers to, at the Sellers' option, no later than the Margin Correction
Deadline, (i) sell to Buyer for no additional consideration (by transfer to Buyer or its designee, including the Custodian) additional Eligible Assets ("Additional Purchased
Assets"), (ii) repurchase Purchased Assets at the Repurchase Price, (iii) make a payment in reduction of the Repurchase Price or (iv) choose any combination of the foregoing,
so that, after giving effect to such transfers, repurchases and payments, the Repurchase Price for such Purchased Asset does not exceed the Asset Value thereof. 

        (b)   If
at any time the aggregate Repurchase Price of all Mortgage Assets subject to Transactions then outstanding exceeds the Maximum Amount, then Buyer may, by delivery to
the Sellers of a Margin Deficit Notice, require the Sellers to, no later than the Margin Correction Deadline, (i) repurchase Purchased Assets at the Repurchase Price, (ii) make a payment in reduction
of the Repurchase Price or (iii) choose any combination of the foregoing, so that, after giving effect to such repurchases and payments, the aggregate Repurchase Price of all Mortgage Assets subject
to Transactions then outstanding does not exceed the Maximum Amount. 

        (c)   Except
as contemplated by Section 4.02(a) or (b) as a repurchase payment or as otherwise agreed in writing by Buyer, all cash transferred to Buyer pursuant to this
Section 4.01 shall be deposited in the account set forth in Section 7.01 hereof and shall be deemed to reduce the aggregate Repurchase Price with respect to all outstanding Transactions. 

        (d)   Buyer's
election, in its sole and absolute discretion, not to deliver a Margin Deficit Notice at any time a such a notice is permitted to be delivered by Section 4.01(a)
or 4.01(b) shall not in any way limit or impair Buyer's right to deliver a Margin Deficit Notice at any other time such a notice is permitted to be delivered by Section 4.01(a) or 4.01(b). 

        Section
4.02    Margin Correction Deadline.    (a) Subject to Section 4.02(b), all transfers, repurchases and payments
to be made by the Sellers in satisfaction of any Margin Deficit Notice delivered pursuant to Section 4.01(a) or 4.01(b) shall be completed no later than the time that is twenty-four (24) hours after
such notice is first received by any Seller (or if such time is not during a Business Day, then no later than the same time on the next Business Day). 

        (b)   Notwithstanding
the foregoing, the deadline for completion of any repurchases or payments to be made in satisfaction of any Margin Deficit Notice delivered pursuant to
Section 4.01(a) in respect of any Mortgage Asset (other than RMBS) shall be extended to 12:00 p.m., New York City time, on the fifteenth (15th) Business Day following the date on which
the applicable Margin Deficit Notice was first 

30

 

received
by any Seller; provided, that no later than the time that is twenty-four (24) hours after such notice is first received by any Seller (or if
such time is not during a Business Day, then no later than the same time on the next Business Day), Buyer shall have received payment of an amount equal to the Margin Deficit, which amount shall be
held by Buyer as cash collateral and not applied to the reduction of the aggregate Repurchase Price so long as all of the following conditions are satisfied: (i) no Default of Event of Default has
occurred and is continuing, (ii) no Eligible Asset in respect of which such repurchase or payment is to be made is in any monetary or non-monetary default or is otherwise a Delinquent Mortgage Asset,
(iii) the Sellers are making diligent and good faith efforts to effect the necessary repurchase or payment, (iv) no cash flow shall be distributed in any manner by any Seller except to Buyer or into
the Collection Account (and the Parent, including its Affiliates, shall not be entitled to, and shall not receive, from any Seller any fees, compensation or other payments of any kind until all
repurchases and payments necessary to be made in satisfaction of the Margin Deficit Notice shall have been completed), and (v) the Sellers provide to Buyer, on a periodic basis, a summary of all
efforts to be made by the Sellers to effect the necessary repurchase or payment. Notwithstanding anything herein to the contrary, in the event any Seller fails to correct a Margin Deficit within
twenty-four (24) hours following receipt by a Seller of a Margin Deficit Notice, the provisions of this Section 4.02(b) shall not prohibit, prevent or restrict, in any manner, Buyer from selling the
Purchased Asset which is subject to the Margin Deficit and retaining the proceeds of such sale, to the extent the related sale price is at least equal to the Repurchase Price of such Purchased Asset.
If Buyer sells such Purchased Asset for an amount at least equal to the Repurchase Price pursuant to the immediately preceding sentence, the Margin Deficit with respect to such Purchased Asset will
not, in and of itself, be deemed to be an Event of Default. Buyer shall report the status of the sale of any Purchased Assets which are subject to a Margin Deficit to Sellers every other Business Day
during the fifteen-day period following the delivery of a Margin Deficit Notice by Buyer to Sellers with respect to such Purchased Assets. 

 
 

ARTICLE V
  
  INCOME PAYMENTS; REQUIREMENTS OF LAW    
    

        Section
5.01    Income Payments.    Subject to the conditions set forth below, the Sellers shall be entitled to
receive an amount equal to all Income paid or distributed on or in respect of the Purchased Assets that is not otherwise received by any Seller, to the full extent it would be so entitled if the
Mortgage Assets had not been sold to Buyer. Notwithstanding the foregoing, each Seller hereby agrees to instruct each applicable trustee, Servicer or other party acting as paying agent with respect to
the related Eligible Asset, to transfer all Income with respect to the Purchased Asset directly to Buyer for deposit into the Collection Account within two (2) Business Days after receipt thereof. On
each Payment Date, any amounts on deposit in the Collection Account in respect of a Purchased Asset shall be applied as follows: first, to the payment
of all fees, expenses, and other obligations then due to Buyer and/or its Affiliates pursuant to this Agreement, other than the Pricing Differential and Repurchase Price on the Purchased Assets;  second,
to the payment of accrued and unpaid Pricing Differential on such Purchased Asset; third, to pay
the Repurchase Price for such Purchased Asset then subject to a request to repurchase in accordance with the terms of Section 3.04; and fourth, to the
Operating Account, for such purposes as the applicable Seller shall determine in its sole discretion; provided, that if a Margin Deficit, Default or
Event of Default has occurred and is continuing, amounts on deposit in the Collection Account shall not be transferred to the Operating Account but shall remain in the Collection Account. All
investment income received with respect to the amount in the Collection Account shall be held by Buyer for the account of Sellers, subject to Buyer's liens on such amounts created under the Repurchase
Documents, and shall be paid to the Operating Account in the priority stated above, provided all amounts due and payable to Buyer or its Affiliates under the terms of the Repurchase Documents have
been timely paid. 

31

 

        Section
5.02    Requirements of Law.    (a) In the event that Buyer shall at any time have determined (which
determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any Requirement of Law (other than with respect to any amendment made to Buyer's
certificate of incorporation and by-laws or other organizational or governing documents) or any change in the interpretation or application thereof or compliance by Buyer with any request or directive
(whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: 

          (i)  shall
subject Buyer to any tax of any kind whatsoever with respect to this Agreement or any Transaction (excluding net income taxes) or change the basis of taxation of
payments to Buyer in respect thereof; 

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

        (iii)  shall
impose on Buyer any other condition; 

and
the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems in good faith to be material, of entering, continuing or maintaining any Transaction or to
reduce any amount due or owing hereunder in respect thereof by an amount which Buyer determines in good faith to be material, then, in any such case, the Sellers shall promptly pay Buyer such
additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable. 

        (b)   In
the event that Buyer shall at any time have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto)
that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made to Buyer's certificate of incorporation and by-laws or other organizational or governing
documents) regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on Buyer's or such
corporation's capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into
consideration Buyer's or such corporation's policies with respect to capital adequacy) by an amount deemed by Buyer in good faith to be material, then from time to time, the Sellers shall promptly pay
to Buyer such additional amount or amounts as will compensate Buyer for such reduction. 

        (c)   All
payments made by any Seller to Buyer shall be free and clear of, and without deduction or withholding for, any taxes;  provided, however, that if any Seller
shall be required by law to deduct or withhold any taxes from any
sums payable to Buyer, then such Seller shall (A) make such deductions or withholdings and pay such amounts to the relevant authority in accordance with applicable law, (B) pay to Buyer the sum that
would have been payable had such deduction or withholding not been made, and (C) at the time the Price Differential is paid, pay to Buyer all additional amounts as specified by Buyer to preserve the
after-tax yield Buyer would have been received had such tax not been imposed. 

        (d)   If
Buyer becomes entitled to claim any additional amounts pursuant to this Section 5.02, it shall promptly notify each affected Seller of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable pursuant to this Section 5.02 submitted by Buyer to an affected Seller shall be conclusive in the absence of manifest error. 

32

 

 
 

ARTICLE VI
  
  SECURITY INTEREST    
    

        Section
6.01    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 referred to as (the "Purchased Items"): all Mortgage Assets,
all rights under each Purchase Agreement (but not the obligations thereunder), all Mortgage Asset Files, including without limitation all promissory notes, all Servicing Records relating to the
Mortgage Assets, all Servicing Agreements relating to the Mortgage Assets and any other collateral pledged or otherwise relating to such Mortgage Assets, together with all files, documents,
instruments, surveys, certificates, correspondence, appraisals, computer programs, computer storage media, accounting records and other books and records relating thereto, all mortgage guaranties and
insurance (issued by governmental agencies or otherwise) and any mortgage insurance certificate or other document evidencing such mortgage guaranties or insurance relating to any Mortgage Asset, all
servicing fees to which such the applicable Seller is entitled and servicing and other rights relating to the Mortgage Assets, all Servicer Accounts established pursuant to any Servicing Agreement and
all amounts on deposit therein, from time to time, all Purchase Agreements or other agreements or contracts relating to, constituting, or otherwise governing, any or all of the foregoing to the extent
they relate to the Purchased Assets including the right to receive principal and interest payments with respect to the Purchased Assets and the right to enforce such payments, the Controlled Accounts
and all monies and investment property from time to time on deposit in, or credited to, the Controlled Accounts, all Interest Rate Protection Agreements, if any, all "general intangibles", "accounts",
"chattel paper", "deposit accounts", "instruments" and "investment property" as defined in the UCC relating to or constituting any and all of the foregoing, and any and all replacements,
substitutions, distributions on or proceeds of any and all of the foregoing. 

        (b)   The
Sellers and Buyer intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to the applicable Seller secured by the
Purchased Assets. However, in order to preserve Buyer's rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the
performance by each Seller of all of such Seller's obligations to Buyer hereunder and the Transactions entered into hereunder ("Repurchase Obligations")
and Seller-Related Obligations, each Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items and the Purchased Assets
to Buyer to secure the Repurchase Obligations and Seller-Related Obligations, including without limitation the repayment of all amounts owing to Buyer hereunder. Each Seller agrees to mark its
computer records and files to the extent practicable to evidence the interests granted to Buyer hereunder. All Purchased Items shall secure the payment of all obligations of each Seller now or
hereafter existing under this Agreement, including, without limitation, each 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 any and all other amounts owing to Buyer hereunder. 

        (c)   Pursuant
to the Custodial Agreement, the Custodian shall hold the Mortgage Asset Files as exclusive bailee and agent for Buyer pursuant to the terms of the Custodial
Agreement and shall deliver to Buyer Trust Receipts each to the effect 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)   With
respect to any portion of the Purchased Items which consist of "securities" or "security entitlements" (as defined in the UCC), (x) in the case of any security
represented by a "security certificate" (within the meaning of the UCC), the Custodian shall hold such security certificate, registered in the name of the Custodian or indorsed to the Custodian in
blank (in the case of a security 

33

 

in
"registered form" (within the meaning of the UCC)) and (y) in the case of a security entitlement, cause the relevant "securities intermediary" (as defined in the UCC) to indicate by book-entry the
credit thereof to a "securities account" (as defined in the UCC), as to which the Custodian is the "entitlement holder" (as defined in the UCC). 

        (e)   In
addition to and without limiting the generality of the foregoing, each Seller hereby grants to Buyer a security interest in each Interest Rate Protection Agreement
relating to any Purchased Assets. 

        Section
6.02    Release of Security Interest.    Upon satisfaction of the Repurchase Obligations and the Seller-
Related Obligations, Buyer shall reconvey the Purchased Assets to the applicable Seller and release its security interest therein. 

 
 

ARTICLE VII
  
  PAYMENT, TRANSFER AND CUSTODY    
    

        Section
7.01    Payment, Transfer and Custody.    (a) Unless otherwise mutually agreed in writing, all transfers of
funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer, in accordance with the wiring instructions set
forth on Schedule 2 hereto, not later than 3:00 p.m., New York City time, on the date on which such payment shall become due (and each such
payment made after such time shall be deemed to have been made on the next succeeding Business Day). Each Seller acknowledges that it has no rights of withdrawal from the foregoing account. 

        (b)   On
the Purchase Date for each Transaction, ownership of the Purchased Assets shall be transferred to Buyer or its designee (including the Custodian) against the
simultaneous transfer of the Purchase Price by Buyer to Seller, in accordance with the wiring instructions set forth on Schedule 2 hereto, not later
than 6:00 p.m., New York City time, simultaneously with the delivery by the Custodian to the Buyer of the Trust Receipts with respect to the Purchased Assets relating to each Transaction. The
applicable Seller hereby sells, transfers, conveys and assigns to Buyer or its designee (including the Custodian), subject to the terms of this Agreement, all the right, title and interest of such
Seller in and to the Purchased Assets together with all right, title and interest in and to the proceeds of any related Purchased Items. 

        (c)   In
connection with such sale, transfer, conveyance and assignment, on or prior to each Purchase Date, the Sellers shall deliver or cause to be delivered and released to
Buyer or its designee (including the Custodian) the documents identified in the Custodial Agreement. 

        (d)   Any
Mortgage Asset Files not delivered to Buyer or its designee (including the Custodian) are and shall be held in trust by the applicable Seller or its designee for the
benefit of Buyer as the owner thereof. The applicable Seller or its designee shall maintain a copy of the Mortgage Asset File and the originals of the Mortgage Asset File not delivered to Buyer or its
designee (including the Custodian). The possession of the Mortgage Asset File by the applicable Seller or its designee is at the will of Buyer for the sole purpose of servicing the related Purchased
Asset, and such retention and possession by such Seller or its designee is in a custodial capacity only. Each Mortgage Asset File retained or held by the applicable Seller or its designee shall be
segregated on such Seller's books and records, to the extent possible, from the other assets of such Seller or its designee and the books and records of such Seller or its designee shall be marked
appropriately to reflect clearly the sale of the related Purchased Asset to Buyer. The applicable Seller or its designee shall release its custody of the Mortgage Asset File only in accordance with
written instructions from Buyer, 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 such Seller. 

34

 

 
 

ARTICLE VIII
  
  SELLER REPRESENTATIONS AND WARRANTIES    
    

        Section
8.01    Seller Representations and Warranties.    Each Seller represents and warrants to Buyer that as of the
Purchase Date for the purchase of any Purchased Assets by Buyer from such Seller and as of the date of this Agreement and any Transaction hereunder and, except where any such representation or
warranty is expressly stated to have been made as of a specific date, at all times while the Repurchase Documents and any Transaction hereunder is in full force and effect: 

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

        (b)    Solvency.    Neither the Repurchase Documents nor any Transaction thereunder are entered into in contemplation
of insolvency or with intent to hinder, delay or defraud any of Seller's creditors. The transfer of the Mortgage Assets subject hereto and the obligation to repurchase such Mortgage Assets is not
undertaken with the intent to hinder, delay or defraud any of Seller's creditors. As of the Repurchase Date, Seller is not insolvent within the meaning of 11 U.S.C. Section 101(32) or any successor
provision thereof and the transfer and sale of the Mortgage Assets pursuant hereto and the obligation to repurchase such Mortgage Asset (i) will not cause the liabilities of Seller to exceed the
assets of Seller, (ii) will not result in Seller having unreasonably small capital, and (iii) will not result in debts that would be beyond Seller's ability to pay as the same mature. Seller received
reasonably equivalent value in exchange for the transfer and sale of the Purchased Assets and Purchased Items subject hereto. No petition in bankruptcy has been filed against Seller in the last ten
(10) years, and Seller has not in the last ten (10) years made an assignment for the benefit of creditors or taken advantage of any Debtors Relief Laws. 

        (c)    No Broker.    (i) Seller has not engaged the services of, or otherwise dealt with, any broker, investment
banker, agent, or other person, except for Buyer (or an Affiliate of Buyer) in connection with this Agreement or any other Repurchase Document or any Transaction or other matter related thereto and
(ii) no brokerage commission or other similar compensation is payable in connection with this Agreement or any other Repurchase Document or any Transaction or other matter related thereto. 

        (d)    Ability to Perform.    Seller does not believe, nor does it have any reason or cause to believe, that it cannot
perform each and every covenant contained in the Repurchase Documents applicable to it to which it is a party. 

        (e)    No Margin Deficit; No Defaults.    No Margin Deficit exists and no Default or Event of Default has occurred and
is continuing hereunder. 

        (f)    Legal Name, Good Standing; Organizational Identification Number; Authority, Qualification to do Business; Compliance with
Law.    

          (i)  [Seller]'s
exact legal name is [        ]; [Additional Seller]'s exact legal name is
[        ]. [Seller] is a [limited liability company/corporation], duly organized, validly existing and in good standing
under the laws of the State of [        ]; [Additional Seller] is a [limited liability company/corporation], duly
organized, validly existing and in good standing under the laws of the State of [            ]. 

         (ii)  [Seller]'s
organizational identification number is [        ]; [Additional Seller]'s
organizational identification number is [            ]. 

        (iii)  Seller
has the requisite corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage. Seller is qualified to do business and is in good 

35

 

standing
in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify could not be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect. 

        (iv)  Seller
is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect. 

        (g)    Financial Condition; No Material Adverse Change.    Seller has heretofore furnished to Buyer a copy of its most
recent quarterly balance sheet and the related statement of income and cash flows, certified by a Responsible Officer of the Parent to be true and correct; such financial statements are true and
correct, fairly present the consolidated financial condition of Seller and its Subsidiaries as of such date and have been prepared in accordance with Tax Based Accounting Principles. Since the date of
the most recent financial statements delivered to Buyer, no change having a Material Adverse Effect has occurred. 

        (h)    No Litigation.    As of the date of this Agreement and as of the Purchase Date for the purchase of any
Purchased Assets hereunder, there are no actions, suits, investigations or legal, equitable, arbitration or administrative proceedings pending, or to the knowledge of Seller threatened, against Seller
as to which there is a reasonable possibility of an adverse determination that would have a Material Adverse Effect. To the extent the representations and warranties in this Section 8.01 shall be
remade as of any date subsequent to the date hereof, Seller shall be deemed to represent that as of such subsequent date, there are no actions, suits, investigations or legal, equitable, arbitration
or administrative proceedings pending, or to the knowledge of Seller, threatened, against Seller which have not been disclosed to
Buyer in writing and as to which there is a reasonable possibility of an adverse determination that would have a Material Adverse Effect. 

        (i)    No Conflicts or Consents.    Neither the execution and delivery of this Agreement and the other Repurchase
Documents by Seller, nor the consummation of any of the transactions by it herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof,
will contravene or conflict with any provision of law, statute, or regulation to which Seller is subject or any material judgment, license, order, or permit applicable to Seller or contravene or
conflict with or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of Seller pursuant to the terms of any indenture, mortgage,
deed of trust, or other agreement or instrument to which Seller is a party or by which Seller may be bound, or to which Seller may be subject, other than Liens created pursuant to the Repurchase
Documents. No consent, approval, authorization, or order of any court or Governmental Authority or third party is required in connection with the execution and delivery by Seller of the Repurchase
Documents to which it is a party or to consummate the transactions contemplated hereby or thereby which has not already been obtained. 

        (j)    Authorization, Power and Enforceability.    Seller has all necessary corporate or other power, authority and
legal right to execute, deliver, and perform under this Agreement and each of the other Repurchase Documents executed by it; Seller is duly authorized to execute, deliver, and perform under this
Agreement and the other Repurchase Documents to which it is a party and is and will continue to be duly authorized to perform under this Agreement and such other Repurchase Documents; and each
Repurchase Document has been duly executed and delivered by Seller, as applicable, and constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its
terms. 

        (k)    Governmental Approvals.    No order, consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (i) the execution, delivery and performance of any Repurchase
Document to which Seller is or will be a party, (ii) the legality, validity, binding effect or enforceability of any such Repurchase Document against Seller or (iii) the consummation of the 

36

 

transactions
contemplated by this Agreement (other than the filing of certain financing statements in respect of certain security interests). 

        (l)    Use of Proceeds; Margin Regulations.    All proceeds of each Transaction shall be used by Seller for purposes
permitted under Seller's Governing Documents, provided that no part of the proceeds of any Transaction will be used by Seller to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. Neither the entering into of any Transaction nor the use of any proceeds thereof will violate, or be inconsistent with, any provision of
Regulation T, U or X of the Board of Governors of the Federal Reserve System. 

        (m)    Taxes.    Seller and each Subsidiary thereof has filed all required federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes (including mortgage recording taxes), assessments, fees, and other governmental charges payable
by it, or with respect to any of their properties, which have become due, and income or franchises have been paid prior to the time that such taxes could give rise to a lien thereon or are being
contested in good faith by appropriate proceedings and appropriate reserves therefor have been established in accordance with GAAP. Seller and each Subsidiary thereof has paid, or has provided
adequate reserves (in the good faith judgment of the management of Seller) for the payment of, all federal, state and foreign income taxes applicable for all prior fiscal years and for the current
fiscal year to date. There is no material action, suit, proceeding, investigation, audit or claim now pending or, to the knowledge of Seller, threatened by any authority regarding any taxes relating
to Seller or any Subsidiary thereof which is material or not being contested in good faith. Neither Seller nor any Subsidiary thereof has entered into any agreement or waiver or been requested to
enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes, or is aware of any circumstances that would cause the taxable years or other
taxable periods of Seller or any Subsidiary thereof not to be subject to the normally applicable statute of limitations. 

        (n)    Government Regulation.    Neither Seller nor any Subsidiary thereof is (i) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended; (ii) a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (iii) subject to any other federal or state law
or regulation which purports to restrict or regulate its ability to borrow money. 

        (o)    Purchased Assets.    

          (i)  As
of the date hereof, Seller has not assigned, pledged, or otherwise conveyed or encumbered any Mortgage Asset (or any interest therein) to any other Person, and
immediately prior to the sale of such Mortgage Asset to Buyer, Seller was the sole owner of such Mortgage Asset and had good and marketable title thereto, free and clear of all Liens, in each case
except for Liens to be released simultaneously with the sale to Buyer hereunder. 

         (ii)  The
provisions of this Agreement and the related Confirmation are effective to either constitute a sale of Purchased Items to Buyer or to create in favor of Buyer a
legal, valid and enforceable security interest in all right, title and interest of Seller in, to and under the Purchased Items. 

        (iii)  Upon
receipt by the Custodian of each Mezzanine Note or Junior Interest Note, endorsed in blank by a duly authorized officer of Seller, either a purchase shall have
been completed by Buyer of such Mezzanine Note or Junior Interest Note, as applicable, or Buyer shall have a valid and fully perfected first priority security interest in all right, title and interest
of Seller in the Purchased Items described therein. 

37

 

        (iv)  Each
of the representations and warranties made in respect of the Purchased Assets pursuant to Schedule
1(a)—1(g), as applicable, are true, complete and correct. 

         (v)  Upon
the filing of financing statements on Form UCC-1 naming Buyer as "Secured Party", Seller as
"Debtor" and describing the Purchased Items, in the jurisdictions and recording offices listed on Exhibit
D attached hereto, the security interests granted hereunder in that portion of the Purchased Items which can be perfected by filing under the Uniform Commercial Code will
constitute fully perfected security interests under the Uniform Commercial Code in all right, title and interest of Seller in, to and under such Purchased Items. 

        (vi)  Upon
execution and delivery of the Account Control Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest
in, the "investment property" and all "deposit accounts" (each as defined in the Uniform Commercial Code) comprising Purchased Items. 

        (p)    Principal Place of Business; Location of Records; Federal Tax ID.    The principal places of business of the
Sellers are located at [            ]. All of the books and records of the Sellers are and will be kept at [            ] and will
continue to be
at such location (unless the Sellers notify Buyer in writing at least thirty (30) days prior to the date of any change). [Seller]'s federal taxpayer's identification number is
[            ]. [Additional Seller]'s federal taxpayer's identification number is [            ]. 

        (q)    Interest Rate Protection Agreements.    Seller has entered into all Interest Rate Protection Agreements
required pursuant to Section 9.01(u) and to the actual knowledge of Seller, as of the date of this Agreement and as of the Purchase Date for the purchase of any Purchased Assets subject to an Interest
Rate Protection Agreement, each such Interest Rate Protection Agreement is in full force and effect in accordance with its terms and no default or event of default exists thereunder. 

        (r)    Servicing Agreements.    Seller has delivered to Buyer all Servicing Agreements pertaining to the Mortgage
Assets and to the actual knowledge of Seller, as of the date of this Agreement and as of the Purchase Date for the purchase of any Purchased Assets subject to a Servicing Agreement, each such
Servicing Agreement is in full force and effect in accordance with its terms and no default or event of default exists thereunder. 

        (s)    True and Complete Disclosure.    The information, reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of Seller to Buyer 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 (other than with respect to the Mortgage Assets), when taken as a whole, do not contain any untrue statement of material fact or 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. All written information furnished after the date hereof by or on behalf of
Seller to Buyer in connection with this Agreement and the other Repurchase Documents and the transactions contemplated hereby (other than with respect to the Mortgage Assets) 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. There is no fact known
to a Responsible Officer of Seller, after due inquiry, that would reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Repurchase Documents or in a
report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby. 

        (t)    No Plan Assets.    Seller is not an "employee benefit plan," as defined in Section 3(3) of ERISA, subject to
Title I of ERISA, and none of the assets of Seller constitutes or will constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Seller is
not a "governmental plan" within the meaning of Section 3(32) of ERISA and (b) transactions by or with Seller are not subject to state statutes regulating investment of, and fiduciary obligations 

38

 

with
respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Internal Revenue Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Agreement. 

        (u)    No Reliance.    Seller has made its own independent decisions to enter into 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. Seller is not relying upon any advice from Buyer as to any aspect of the Repurchase Documents or any Transaction, including without limitation, the legal, accounting or tax treatment of
such Transactions. 

        (v)    Patriot Act.    Seller is in compliance, in all material respects, with the (i) the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or
executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No part of the
proceeds of any Transaction will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. 

        (w)    Insurance.    As of the date of this Agreement and as of the Purchase Date for the purchase of any Purchased
Assets hereunder, Seller has, with respect to its properties and business, insurance covering the risks, in the amounts, with the deductible or other retention amounts, and with the carriers, listed
on Schedule 4, which insurance meets the requirements of Section 9.01(w). 

        (x)    Environmental Matters.    As of the date of this Agreement and as of the Purchase Date for the purchase of any
Purchased Assets hereunder: 

          (i)  To
the best knowledge of Seller, no properties owned or leased by Seller and no properties formerly owned or leased by Seller, its predecessors, or any former
subsidiaries or predecessors thereof (the "Properties"), contain, or have previously contained, any Materials of Environmental Concern in amounts or
concentrations which constitute or constituted a violation of, or reasonably could be expected to give rise to liability under, Environmental Laws; 

         (ii)  To
the best knowledge of Seller, Seller is in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Laws which reasonably
would be expected to interfere with the continued operations of Seller; 

        (iii)  Seller
has not received any notice of violation, alleged violation, non-compliance, liability or potential liability under any Environmental Law, nor does Seller have
any actual knowledge that any such notice will be received or is being threatened; 

        (iv)  To
the best knowledge of Seller, Materials of Environmental Concern have not been transported or disposed by Seller in violation of, or in a manner or to a location
which reasonably would be expected to give rise to liability under, any applicable Environmental Law, nor has Seller generated, treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that reasonably would 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 Seller, threatened, under any Environmental Law which Seller 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 

39

 

or
governmental or administrative actions, outstanding under any Environmental Law to which Seller is a party; 

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

       (vii)  to
the best knowledge of Seller, 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 Seller. 

        (y)    Insider.    Seller is not an "executive officer," "director," or "person who directly or indirectly or acting
through or in concert with one or more persons owns, controls, or has the power to vote more than 10% of any class of voting securities" (as those terms are defined in 12 U.S.C. ! 375(b) or in
regulations promulgated pursuant thereto) of Buyer, of a bank holding company of which Buyer is a subsidiary, or of any subsidiary, of a bank holding company of which Buyer is a subsidiary, of any
bank at which Buyer maintains a correspondent account or of any lender which maintains a correspondent account with Buyer. 

        (z)    Office of Foreign Assets Control.    Seller is not a person (i) whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) who engages in any dealings or transactions prohibited by Section 2 of such executive order, or to the best of Seller's knowledge, is otherwise
associated with any such person in any manner violative of Section 2 of such executive order, or (iii) on the current list of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other U.S. Department of Treasury's Office of Foreign Assets Control regulation or executive order. 

        (aa)    Certain Tax Matters.    Seller represents and warrants, and 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 Seller determines to take any action inconsistent with such intention, it will promptly notify Buyer. If Seller so notifies Buyer, Seller acknowledges and agrees that Buyer may treat each
Transaction as part of a transaction that is subject to United States Treasury Department Regulation
Section 301.6112-1, and Buyer will maintain the lists and other records required by such Treasury Regulation. 

        (bb)    Fiscal Year.    The fiscal year of Seller is the calendar year. 

        (cc)    Agreements.    Seller is not a party to any agreement or instrument or subject to any restriction which could
reasonably be expected to have any Material Adverse Effect. Seller is not in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by which Seller is bound. Seller has no material financial obligation under any agreement or instrument to which Seller is
a party or by which Borrower is otherwise bound, other than (a) obligations incurred in the ordinary course of Seller's business and (b) obligations under the Repurchase Documents. 

40

 

 
 

ARTICLE IX
  
  COVENANTS    
    

        Section
9.01    Seller Covenants.    On and as of the date of this Agreement and each Purchase Date and until this
Agreement is no longer in force with respect to any Transaction, each Seller covenants that: 

        (a)    Financial Statements.    Seller shall deliver or cause to be delivered to Buyer: 

          (i)  as
soon as available and in any event within thirty (30) days after the end of each fiscal quarter of the Parent, the unaudited consolidated balance sheets of the
Parent and its consolidated Subsidiaries (and, to the extent available, for each Seller) as at the end of such period and the related unaudited consolidated statements of income and retained earnings
and of cash flows for the Parent and its consolidated Subsidiaries (and, to the extent available, for each Seller) for such period and the portion of the fiscal year through the end of such period,
accompanied by a schedule of all contingent funding obligations and hedging positions of the Parent and its consolidated Subsidiaries (and, to the extent available, for each Seller) and a certificate
of a Responsible Officer, 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 Parent and its consolidated Subsidiaries (and, to the extent
applicable, for each Seller) 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 Parent, the audited consolidated balance sheets of the Parent and
its consolidated Subsidiaries (and, to the extent available, for each Seller) as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash
flows for the Parent and its consolidated Subsidiaries (and, to the extent available, for each Seller) for such year, 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 Parent and its consolidated Subsidiaries (and, to the extent
applicable, for each Seller) as at the end of, and for, such fiscal year in accordance with GAAP, and a certificate of such accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any Default or Event of Default; 

        (iii)  (A)
with respect to each Mortgage Asset (not including RMBS) originated or master serviced by an Affiliate of Seller or Buyer, as soon as available, but in any event
not later than sixty (60) days after the end of each fiscal quarter of Seller, the rent roll, operating statement and aging of accounts receivable and accounts payable for each Underlying Mortgaged
Property and (B) with respect to each Mortgage Asset not originated or master serviced by an Affiliate of Seller or Buyer, Seller shall use its good faith efforts to deliver as soon as practicable,
the rent roll, operating statement and aging of accounts receivable and accounts payable for each Underlying Mortgaged Property; 

        (iv)  with
respect to each Mortgage Asset (not including RMBS), as soon as available, but in any event not later than sixty (60) days after the end of each fiscal quarter of
Seller, a report detailing projections of Seller with respect to such Mortgage Asset for the following six (6) month period, which shall include, in any event, a description of Seller's internal risk
rating, tenant ratings, tenant KMV ratings (if applicable) and/or surveillance of such Mortgage Asset; 

41

 

         (v)  with
respect to each Mortgage Asset to the extent received by any Seller from the obligor under any Mortgage 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 obligor; 

        (vi)  with
respect to each Mortgage Asset that is CMBS, RMBS, or a Junior Interest or which is a Non-Controlling Interest in any of the foregoing, as soon as available but in
any event not later than thirty (30) days after receipt thereof, (i) the related monthly securitization report, if any, and (ii) within thirty (30) days after the end of each month, a copy of the
standard monthly exception report, prepared by
Seller in the ordinary course of its business in respect of the related Mortgage Asset or Underlying Mortgaged Property; 

       (vii)  from
time to time such other information regarding the financial condition, operations, or business of Seller as Buyer may reasonably request; and 

      (viii)  as
soon as reasonably possible, and in any event within thirty (30) days after a Responsible Officer of Seller knows, or with respect to any Plan to which Seller or
any Subsidiary thereof makes direct contributions, has reason to believe, that any of the events or conditions specified below with respect to any Plan has occurred or exists, a statement signed by a
senior financial officer of Seller setting forth details respecting such event or condition and the action, if any, that Seller or its ERISA Affiliate proposes to take with respect thereto (and a copy
of any report or notice required to be filed with or given to PBGC by Seller or an ERISA Affiliate with respect to such event or condition): 

        (A)  any
Reportable Event, or and any request for a waiver under Section 412(d) of the Code or any successor provision thereof for any Plan; 

        (B)  the
distribution under Section 4041(c) of ERISA or any successor provision thereof of a notice of intent to terminate any Plan or any action taken by Seller or an ERISA
Affiliate to terminate any Plan; 

        (C)  the
institution by PBGC of proceedings under Section 4042 of ERISA or any successor provision thereof for the termination of, or the appointment of a trustee to
administer, any Plan; and 

        (D)  the
adoption of an amendment to any Plan that would result in the loss of tax exempt status of the trust of which such Plan is a part if Seller or an ERISA Affiliate
fails to provide timely security to such Plan in accordance with the provisions of Section 401(a)(29) of the Code or Section 307 of ERISA or any successor provision thereof. 

        (b)    Certificates; Other Information.    Seller shall furnish to Buyer: 

          (i)  concurrently
with the delivery of the financial statements referred to in Sections 9.01(a)(ii) above, a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination necessary therefore no knowledge was obtained of any Default or Event of Default caused by a failure to comply with the
requirements of Section 9.01(l)-(n), except as specified in such certificate; 

         (ii)  concurrently
with the delivery of the financial statements referred to in Section 9.01(a) above and with the delivery of each Confirmation, a certificate of a
Responsible Officer substantially in the form of Exhibit K hereto (i) stating that, to the best of such Responsible Officer's knowledge, Seller
during such period has observed or performed all of its covenants and other agreements in all material respects, and satisfied every material condition, contained in this Repurchase Agreement and the
related documents to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate,
(ii) showing in detail the calculations supporting such Responsible Officer's certification of Seller's compliance with the requirements of Sections 9.01(l)- 

42

 

(n)
and (iii) showing in detail the calculations projected with respect to the requirements of Sections 9.01(l)-(n) for the upcoming period of four (4) fiscal quarters; 

        (iii)  as
soon as available, but in any event not later than ninety (90) days after the end of each fiscal year of Seller, a copy of the projections of the Sellers and the
Parent of the operating budget and cash flow budget of the Sellers and the Parent for the succeeding fiscal year, such projections to be accompanied by a certificate of a Responsible Officer
certifying that such projections have been prepared in good faith based upon reasonable assumptions; 

        (iv)  promptly
upon receipt thereof, copies of all reports submitted to Seller by independent certified public accountants in connection with each annual, interim or special
audit of the books and records of Seller made by such accountants, including, without limitation, any management letter commenting on Seller's internal controls submitted by such accountants to
management in connection with their annual audit; 

         (v)  within
thirty (30) days of the end of each calendar quarter, a quarterly report, which report shall include, among other items, (1) a summary of Seller's delinquency and
loss experience with respect to Mortgage Assets serviced by Seller, any Servicer or any designee of either, and (2) operating statements and the occupancy status of such Mortgaged Property and other
property level information, plus any such additional reports as Buyer may reasonably request with respect to Seller or any Servicer's servicing portfolio or pending originations of Mortgage Assets; 

        (vi)  within
fifteen (15) days after the same are sent, copies of all financial statements and reports which Seller sends to its stockholders, and within fifteen (15) days
after the same are filed, copies of all financial statements and reports which Seller may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental
Authority; 

       (vii)  no
later than the 15th day of each month, with respect to each Purchased Asset, a Purchased Asset Data Summary, substantially in the form of  Exhibit L, properly completed; and 

      (viii)  promptly,
any report or material notice received by Seller with respect to any Purchased Asset and such additional financial and other information as Buyer may from
time to time reasonably request. 

        (c)    Litigation.    Seller will promptly, and in any event within ten (10) Business Days after service of process on
any of the following, give to Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened in
writing) or other legal or arbitrable proceedings affecting Seller or any Subsidiary thereof or affecting any of the Property of any of them before any Governmental Authority that (i) questions or
challenges the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim or claims in an
aggregate amount greater than $1,000,000 (not covered by insurance), or (iii) which, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse
Effect. 

        (d)    Existence, etc.    Seller shall: 

          (i)  continue
to engage in business of the same general type as now conducted by it or otherwise as approved by Buyer prior to the date hereof and maintain and preserve its
legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses
held by Seller and of Seller's status as a "qualified transferee" (however denominated) under all documents which govern the Purchased Assets);  provided, that nothing in this Section 9.01(d)(i)
shall prohibit any transaction expressly permitted under Section 9.01(e); 

         (ii)  comply
with all Contractual Obligations and with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without
limitation, all 

43

 

environmental
laws) if failure to comply with such requirements would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect; 

        (iii)  keep
adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied; 

        (iv)  not
(i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure, each as described in Section 8.01(f)
or (ii) change its jurisdiction of organization, unless it shall have provided Buyer thirty (30) days' prior written notice of such change and shall have first taken all action required by Buyer for
the purpose of perfecting or protecting the lien and security interest of Buyer established hereunder; 

         (v)  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; and 

        (vi)  permit
representatives of Buyer, upon reasonable notice (unless a Default shall have occurred and is continuing, in which case, no prior notice shall be required),
during normal business hours, to examine, copy (at Buyer's expense) and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by Buyer. 

        (e)    Prohibition of Fundamental Changes; Fiscal Year and Accounting Method.    Seller 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), sell all or substantially all of its assets or
acquire or form any Subsidiaries (other than the Subsidiaries set forth on Schedule 5 hereto);  provided, that Seller may merge or consolidate with (A)
any wholly owned subsidiary of such Seller or (B) any other Person if Seller is the surviving
corporation, in either case, as long as, after giving effect thereto, no Default or Event of Default would exist hereunder. Seller shall not change its respective fiscal year or method of accounting
without the consent of Buyer and Seller shall give Buyer at least fifteen (15) days prior written notice of any such requested change, which notice shall include a detailed explanation of the changes
intended to be made and pro forma financial statements demonstrating the impact thereof. 

        (f)    Margin Deficit.    If at any time there exists a Margin Deficit, the Sellers shall cure same in accordance with
Section 4.01. 

        (g)    Notices.    Seller shall give notice to Buyer: 

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

         (ii)  with
respect to any Purchased Asset, promptly upon receipt by Seller of any principal prepayment (in full or partial) of such Purchased Asset; 

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

        (iv)  promptly
upon receipt of notice or knowledge by or of Seller of (i) any material default related to any Purchased Item, (ii) any Lien or security interest on, or claim
asserted against, any Purchased Item or (iii) any event or change in circumstances which would reasonably be expected to have a Material Adverse Effect. 

44

 

Each
notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of Seller setting forth details of the occurrence referred to therein and stating what action Seller
has taken or proposes to take with respect thereto. 

        (h)    Transactions with Affiliates.    Seller may enter into any transaction with an Affiliate;  provided that such transaction is
disclosed in writing in advance to Buyer and such transaction is upon fair and reasonable terms no less favorable to
Seller than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate; provided,  further, that in no event shall
Seller transfer to Buyer hereunder any Mortgage Asset acquired by Seller from an Affiliate of Seller unless a Non-
Consolidation Opinion and a True Sale Opinion have been delivered to Buyer prior to such sale. 

        (i)    Limitation on Liens.    Immediately upon notice to 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 Buyer) on the Purchased Items, Seller will defend the Purchased Items against, and will take such other action
as is necessary to remove, any Lien, security interest or claim on or to the Purchased Items (other than any security interest created under this Agreement), and Seller will defend the right, title
and interest of Buyer in and to any of the Purchased Items against the claims and demands of all persons whomsoever. 

        (j)    Limitations on Indebtedness, Guarantees and Contingent Liabilities.    Seller shall not create, incur, assume
or suffer to exist any Indebtedness, Guarantees or Contingent Liabilities, except Indebtedness of such Seller to Buyer or an Affiliate of Buyer. 

        (k)    Limitation on Distributions.    Seller 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 Seller, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller, except, so
long as no Default, Event of Default or Margin Deficit shall have occurred and be continuing, Seller may make such payments solely to the extent necessary to preserve the status of the Parent as a
REIT and to make payments subject to the following restrictions: (1) during the first year following the Effective Date of this Agreement, Seller may make payments in an amount equal to (a) 103% of
FFO only if a dividend payment is made to reimburse certain original shareholders for expenses associated with the capitalization of Parent, or (b) 100% of FFO if no such
dividend payment is made, and (2) after the first year following the Effective Date, Seller may make payments in an amount equal to 100% of FFO. 

        (l)    Weighted Average of Purchase Rate and LTV.    No Seller shall permit (i) the weighted average Purchase Rate of
all Mortgage Assets to exceed 85.0% or (ii) the weighted average LTV of all Mortgage Assets multiplied by the weighted average Purchase Rate of all Mortgage Assets to exceed 80.0%. 

        (m)    Interest Coverage.    Seller shall not permit, during any Test Period, the ratio of (i) the sum of Consolidated
Adjusted EBITDA of all Sellers at any time such Test Period to (ii) Consolidated Interest Expense of all Sellers at any time such Test Period to be less than 1.50 to 1.00. 

        (n)    Maintenance of Ratio of Consolidated Total Indebtedness to Consolidated Total Assets.    Seller shall not
permit the ratio of Consolidated Total Indebtedness of all Sellers to Consolidated Total Assets of all Sellers at any time to be greater than 0.85 to 1.00. 

        (o)    Positive Net Income.    Seller's Net Income shall be positive at all times following the first anniversary of
the Effective Date of this Agreement. 

        (p)    Servicer; Servicing Tape.    Seller shall cause each Servicer to provide to Buyer and to the Custodian via
Electronic Transmission, a remittance report on a monthly basis by no later than the 15th day of each month (the "Reporting Date")
containing servicing information, including without limitation 

45

 

those
fields reasonably requested by Buyer from time to time, on a loan-by-loan basis and in the aggregate, with respect to the Purchased Assets serviced hereunder by Seller or any Servicer for the
month (or any portion thereof) prior to the Reporting Date (such remittance report, an "Asset Tape"). To the extent it has control, Seller shall not
cause or permit any Mortgage Assets to be serviced by any servicer other than a Qualified Servicer. 

        (q)    Required Filings.    Seller shall promptly provide Buyer with copies of all material documents which Seller or
any Subsidiary of Seller is required to file with any regulatory body in accordance with its regulations. 

        (r)    Remittance of Prepayments.    Seller shall remit or cause to be remitted to Buyer, with sufficient detail via
Electronic Transmission to enable Buyer to appropriately identify the Mortgage Asset to which any amount remitted applies, all full or partial principal prepayments on any Purchased Asset that Seller
or
Servicer has received no later than five (5) Business Days following the date such prepayment was received. 

        (s)    Custodial Agreement and Account Control Agreement.    Seller shall maintain each of the Custodial Agreement and
Account Control Agreement in full force and effect and shall not amend or modify either of the Custodial Agreement or the Account Control Agreement or waive compliance with any provisions thereunder
without the prior written consent of Buyer. 

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

        (u)    Escrow Imbalance.    Seller shall, no later than five (5) Business Days after learning (from any source) of any
material imbalance in any escrow account, fully and completely correct and eliminate such imbalance including, without limitation, depositing its own funds into such account to eliminate any
overdrawal or deficit. 

        (v)    Hedging.    Seller shall enter into Interest Rate Protection Agreement(s) selected by Seller and acceptable to
Buyer with respect to all Purchased Assets which have a fixed rate of interest or yield and are intended for securitization and Seller shall enter into such other Interest Rate Protection Agreement(s)
with respect to any or all of the Purchased Assets as Buyer may from time to time request. Seller shall take all such steps as Buyer deems necessary to perfect the security interest granted in each
Interest Rate Protection Agreement pursuant to Section 6.01(e) of this Agreement. 

        (w)    Separateness.    Seller shall (a) own no assets, and will not engage in any business, other than the assets and
transactions specifically contemplated by this Agreement, which assets and transactions specifically contemplated by this Agreement shall include, without limitation, the origination, acquisition,
ownership, management, servicing, administration, operation, collection, enforcement, development, improvement, leasing, exchange, participation, securitization, sale, transfer and other disposition
of all of any portion of the Purchased Assets (including the Underlying Mortgaged Property and any business interests related thereto), personal property necessary for and used or to be used in
connection with its ownership or operation of the Purchased Assets (including the Underlying Mortgaged Property and any business interests related thereto) or any portion thereof, cash, its interest
under any associated Interest Rate Protection Agreement, this Agreement, and any and all agreements, documents, insurance policies, reports and other instruments in any way relating to the Purchased
Assets (including the Underlying Mortgaged Property and any business interests related thereto) or any portion thereof; (b) not incur any indebtedness or obligation, secured or unsecured, direct or
indirect, absolute or contingent (including guaranteeing any obligation), other than (i) pursuant to this Agreement, and under the agreements, documents, insurance policies, reports and other
instruments evidencing, securing or in any other way related to the Purchased Assets (including the Underlying 

46

 

Mortgaged
Property and any business interests related thereto), (ii) in connection with customary representations, warranties, indemnities and agreements in connection with the origination,
acquisition, ownership, management, servicing, administration, operation, collection, enforcement, financing, development, improvement, leasing, exchange, participation, securitization, sale, transfer
or other disposition of the Purchased Assets (including the Underlying Mortgaged Property and any business interests related thereto), and (iii) under zoning and other governmental regulations, rules,
prohibitions and ordinances and existing and proposed covenants, easements and other matters of public record governing, burdening, benefiting or otherwise affecting any real property constituting or
underlying any of the Purchased Assets (including the Underlying Mortgaged Property and any business interests related thereto); (c) not make any loans or advances to any third party, and shall not
acquire obligations or securities of its affiliates; (d) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets; (e) comply with the
provisions of its organizational documents; (f) do all things necessary to observe organizational formalities and to preserve its existence, and will not amend, modify or otherwise change its
organizational documents, or suffer same to be amended, modified or otherwise changed, without the prior written consent of Buyer, not to unreasonably withheld; (g) maintain 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 as in effect from time to time or as a matter of law) and file its own tax returns (except to the extent that either consolidation is required or permitted under applicable law or it is a tax
disregarded entity not required to file tax returns under applicable law); (h) be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its
Affiliates as a division or part of the other and shall maintain and utilize separate invoices and checks; (i) maintain adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated business operations; (j) not engage in or suffer any change of ownership, dissolution, winding up, liquidation, consolidation or merger in
whole or in part, except as otherwise permitted in accordance herewith; (k) not commingle its funds or other assets with those of any Affiliate or any other Person; (l) maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or any other Person; (m) not and will not hold itself out to be
responsible for the debts or obligations of any other Person; (n) shall not, without the vote of 100% of the Board of Directors or Board of Managers of Seller (including, without limitation, each of
the
Independent Director(s) or Independent Manager(s)), (i) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding with respect to Seller; institute any
proceedings under any applicable insolvency law or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally with respect to Seller; (ii) seek
or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for Seller or a substantial portion of its properties; or (iii) make any
assignment for the benefit of Seller's creditors; and (o) shall have at least one (1) Independent Director or Independent Manager. 

        (x)    Maintenance of Property; Insurance.    Seller shall keep all property useful and necessary in its business in
good working order and condition; 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 insured against in the same general area by companies engaged in the same or a similar business, and furnish to Buyer, upon written request, full information as to the insurance carried. 

        (y)    Compliance with Laws.    Seller shall comply in all material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws, and all federal securities laws) except where the necessity of compliance therewith
is contested in good faith by appropriate proceedings. 

47

 

        (z)    ERISA.    Seller shall, and shall cause each of its Subsidiaries to, comply in all material respects with all
requirements of ERISA applicable with respect to each Plan. 

        (aa)    Investments.    Neither Seller nor any Affiliate thereof shall acquire or maintain any right or interest in
any Purchased Asset or Underlying Mortgaged Property that is senior to or pari passu with the rights and interests of Buyer therein under this Agreement
and the other Repurchase Documents. 

        (bb)    Payment of Obligations.    Seller shall pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its obligations of whatever nature (including, without limitation, all amounts necessary to preserve the value of, and Seller's and Buyer's rights in,
the Purchased Assets), 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 Seller, or its Subsidiaries, as the case may be. 

        (cc)    Margin Regulations.    No part of the proceeds of any Transaction hereunder shall be used for any purpose
which violates, or would be inconsistent with, the provisions of Regulation T, U or X. 

        (dd)    Limitation on Lines of Business.    Seller shall not enter into any business, either directly or through any
Subsidiary, except for those businesses in which Seller and its Subsidiaries are engaged on the date of this Agreement. 

        (ee)    Payment of Breakage Costs.    Seller shall pay Buyer, within one (1) Business Day after any request therefor
from Buyer, for all Breakage Costs at any time sustained or incurred by Buyer. 

        (ff)    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 Event of Default or Default if such action is taken or condition exists. 

 
 

ARTICLE X
  
  EVENTS OF DEFAULT; REMEDIES    
    

        Section
10.01    Events of Default.    If any of the following events (each, an "Event of
Default") occur, each Seller and Buyer shall have the rights set forth in Section 10.02, as applicable: 

48

  

        (a)   any Seller shall default in the payment of any Repurchase Price due or any amount under Section 5.01 when due (whether at stated maturity, upon acceleration or at
mandatory or optional prepayment); or 

        (b)   the
Sellers shall fail to cure any Margin Deficit in accordance with Section 4.01; or 

        (c)   any
Seller shall default in the payment of any other amount payable by it hereunder or under any other Repurchase Document after written notification by Buyer of such
default, and such default shall have continued unremedied for five (5) Business Days; or 

        (d)   any
representation, warranty or certification made or deemed made herein or in any other Repurchase Document by any Seller or any certificate furnished to Buyer pursuant
to the provisions hereof or thereof or any material information with respect to the Mortgage Assets furnished in writing by on behalf of any Seller shall prove to have been false or misleading in any
material respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1, which shall be
considered solely for the purpose of determining the Asset Value of the Purchased Assets, unless (i) the applicable Seller shall have made any such representations and warranties with actual
knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined in good faith by Buyer in its sole discretion to
be materially false or misleading on a regular basis); or 

        (e)   any
Seller shall fail to comply with the requirements of Sections 9.01(c)—(dd), or (except as otherwise set forth in Sections 10.01(a),
10.01(b), 10.01(c), or 10.01(d)) any Seller shall fail to observe or perform any other covenant or agreement contained in this Agreement or any other Repurchase Document and such failure to observe or
perform shall continue unremedied for a period of ten (10) Business Days after actual knowledge by the applicable Seller or receipt of written notice from the Buyer;  provided, however that to the extent such failure to observe or perform relates to such Seller's failure
to deliver reports required under Sections 9.01(a)(iii) or 9.01(b)(v)(2) and neither such Seller nor its Affiliates have received such reports, and such Seller has used commercially reasonable
best efforts to obtain such reports as and when required hereunder, such failure shall not be deemed to be an Event of Default unless such failure shall have been on a consistent or frequent basis
(which determination shall be made in Buyer's reasonable discretion); or 

        (f)    a
final judgment or judgments for the payment of money in excess of $1,000,000 in the aggregate shall be rendered against any Seller by one or more courts,
administrative tribunals or other bodies 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 

        (g)   an
Act of Insolvency shall have occurred with respect to any Seller or any of Affiliate thereof; or 

        (h)   the
Custodial Agreement, the Account Control Agreement or any Repurchase Document or a replacement therefor acceptable to Buyer shall for whatever reason be terminated
by Seller or cease to be in full force and effect (other than due to causes solely within the control of Buyer or Custodian), or the enforceability thereof shall be contested by any Seller; or 

        (i)    any
Seller shall grant, or suffer to exist, any Lien on any Purchased Item (except any Lien in favor of Buyer); or the Purchased Items shall not have been sold to Buyer,
or the Liens contemplated hereby shall cease or fail to be first priority perfected Liens on any Purchased Items in favor of Buyer (other than by result of any action or inaction by the Buyer) or
shall be Liens in favor of any Person other than Buyer; or 

        (j)    any
Seller shall be in default under (i) any Indebtedness of such Seller which default (1) involves the failure to pay a matured obligation, or
(2) permits the acceleration of the maturity of 

49

 

obligations
by any other party to or beneficiary with respect to such Indebtedness, if the aggregate amount of the Indebtedness in respect of which such default or defaults shall have occurred is at
least $1,000,000, or (ii) any other material contract to which such Seller is a party which default (1) involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary of such contract if the aggregate amount of such obligations is at least $500,000; or 

        (k)   (i) any
Seller or an ERISA Affiliate shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any material "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in
favor of the PBGC or a Plan shall arise on the assets of any Seller or any ERISA Affiliate, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of
Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) any Seller
or any ERISA Affiliate shall, or in the reasonable opinion of Buyer is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan
or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or 

        (l)    the
Pledge and Security Agreement shall cease to create a valid and perfected security interest in favor of Buyer in the Capital Stock of any Seller, or any Seller shall
so assert; or 

        (m)  any
Change of Control shall occur; or 

        (n)   the
Management Contract shall be amended to increase the amount of compensation required to be paid to the Manager thereunder, or the Management Contract shall be
otherwise materially amended to the detriment of Parent, or the Manager shall be terminated, in any case without the prior written consent of Buyer; or 

        (o)   any
default shall have occurred under the Guarantee Agreement. 

        Section
10.02    Remedies.    (a) If an Event of Default shall have occurred and be continuing, the following
rights and remedies are available to Buyer. 

        (i)    At
the option of Buyer, exercised by written notice to the Sellers (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the
occurrence of an Act of Insolvency of any Seller), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur. Buyer shall (except upon
the occurrence of an Act of Insolvency of any Seller) give notice to the Sellers of the exercise of such option as promptly as practicable. 

        (ii)   If
Buyer exercises or is deemed to have exercised the option referred to in Section 10.02(a)(i), 

        (A)  (i) all
of the Sellers' obligations in respect of such Transactions to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date,
and to pay all other amounts owed by the Sellers hereunder, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by
Buyer and applied to the aggregate unpaid Repurchase Prices and any other amounts owed by the Sellers hereunder or under any other Repurchase Document, and (iii) each Seller shall immediately
deliver to Buyer any Purchased Assets subject to such Transactions then in such Seller's possession or control; 

50

 

        (B)  from
and after the exercise or deemed exercise of such option, to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction
shall be determined by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option
to but excluding the date of payment of the Repurchase Price, (x) the Post-Default Rate to (y) the Repurchase Price for such Transaction as of the Repurchase Date (decreased as of any
day by (i) any amounts actually in the possession of Buyer pursuant to clause (C) of this subsection, (ii) any proceeds from the sale of Purchased Assets applied to the Repurchase
Price pursuant to Section 10.02(a)(iv), and (iii) any amounts applied to the Repurchase Price pursuant to Section 10.02(a); and 

        (C)  all
Income actually received by Buyer pursuant to Section 5.01 (excluding any Late Payment Fees paid pursuant to Section 3.06(a)) shall be applied to the
aggregate unpaid Repurchase Price owed by the applicable Seller. 

        (iii)  Upon
the occurrence and during the continuance of one or more Events of Default, Buyer shall have the right to obtain physical possession of the Servicing Records
(subject to the provisions of the Custodial Agreement) and all other files of the applicable Seller relating to the Purchased Assets and all documents relating to the Purchased Assets which are then
or may thereafter come into the possession of such Seller or any third party acting for such Seller and such Seller shall deliver to Buyer such assignments as Buyer shall request and Buyer shall have
the right to appoint any Person to act as Servicer for the Purchased Assets. Buyer shall be entitled to specific performance of all agreements of the Sellers contained in the Repurchase Documents. 

        (iv)  At
any time on the Business Day following written notice to the Sellers (which notice may be the written notice given under Section 10.02(a)(i)), in the event
the Sellers have not repurchased all Purchased Assets, Buyer 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
Buyer may deem satisfactory any or all Purchased Assets subject to such Transactions hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Price and any other amounts owing by
the Sellers hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give the Sellers credit for such Purchased Assets in an amount equal
to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by the Sellers hereunder. The
proceeds of any disposition of Purchased Assets shall be applied first to the costs and expenses incurred by Buyer in connection with any Seller's
default; second to costs of related covering and/or related hedging transactions; third to the aggregate
Repurchase Price; and fourth to any other outstanding obligation of any Seller to Buyer or its Affiliates under this Agreement. 

        (v)   Each
Seller agrees that Buyer may seek to obtain an injunction or an order of specific performance to compel such Seller to fulfill any of its obligations as set forth
in Article XI, if such Seller fails or refuses to perform its obligations as set forth therein. 

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

        (vii) Buyer
shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. 

        (b)   Buyer
may exercise one or more of the remedies available to Buyer immediately upon and during the continuance of an Event of Default and, except to the extent provided
in Sections 10.02(a)(i) and 10.02(a)(iv), at any time thereafter without notice to any Seller. All rights and 

51

 

remedies
arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have. 

        (c)   Buyer
may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller hereby expressly waives any defenses such Seller might
otherwise have to require Buyer to enforce its rights by judicial process. Each Seller also waives any defense (other than a defense of payment or performance) such Seller might otherwise have arising
from the use of nonjudicial process, enforcement and sale of all or any portion of the Purchased Items, or from any other election of remedies. Each Seller recognizes that nonjudicial remedies are
consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm's-length. 

        (d)   To
the extent permitted by applicable law each Seller shall be liable to Buyer for interest on any amounts owing by such Seller hereunder, from the date such Seller
becomes liable for such amounts hereunder until such amounts are (i) paid in full or (ii) satisfied in full by the exercise of Buyer's rights hereunder. Interest on any sum payable by
any Seller to Buyer under this Section 10.02(d) shall be at a rate equal to the Post-Default Rate. 

 
 

ARTICLE XI
  
    SERVICING    
    

        Section
11.01    Seller Covenants.    Each Seller covenants to cause the servicing of the Mortgage Assets to be
maintained in conformity with Accepted Servicing Practices and in a manner at least equal in quality to the servicing such Seller would provide for Mortgage Assets which it owns. 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 (iii) the transfer of servicing approved by Buyer in accordance with the terms of this Agreement. 

        Section
11.02    Seller as Servicer.    If the Mortgage Assets are serviced an Affiliate of any Seller, each Seller
agrees that, until the repurchase of a Mortgage Asset on a Repurchase Date for a Mortgage Asset, Buyer is the owner of all servicing records, including but not limited to any and all servicing
agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history
records, and any other records relating to or evidencing the servicing of such Mortgage Asset (the "Servicing Records"). Each Seller covenants to
safeguard such Servicing Records and to deliver them promptly to Buyer or its designee (including the Custodian) at Buyer's request. 

        Section
11.03    Third Party Servicer.    If any Mortgage Assets are serviced by a person other than an Affiliate of
the Sellers (such third party, the "Servicer"), (i) the Sellers shall, in accordance with Section 3.02(g), provide to Buyer a copy of the
servicing agreement, which shall be in form and substance reasonably acceptable to Buyer (the "Servicing Agreement") and Sellers shall require each
Servicing Agreement to contain provisions relating to the delivery of information and reports as will enable each Seller to comply with its obligations under this Agreement as and when required
hereunder, and (ii) each Seller hereby irrevocably assigns to Buyer, and Buyer's successors and assigns, all of such Seller's right, title and interest in, to and under, and the benefits of, each
Servicing Agreement pertaining to any Mortgage Assets. Each Seller agrees that no Person shall assume the servicing obligations with respect to any Mortgage Assets as successor to the Servicer unless
such successor is a Qualified Servicer. Buyer hereby agrees that upon the repurchase of any Mortgage Asset, Buyer shall assign back to the applicable Seller all of Buyer's right, title and interest
in, to and under, and the benefits of, any Servicing Agreement pertaining to such Mortgage Asset. 

        Section
11.04    Event of Default.    If the servicer of the Mortgage Assets is a Seller or an Affiliate of a Seller,
upon the occurrence and during the continuance of an Event of Default, Buyer shall have 

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the
right to terminate such Seller or Affiliate as servicer of the Mortgage Assets and transfer servicing to its designee, at no cost or expense to Buyer, at any time thereafter. If the servicer of
the Mortgage Assets is not a Seller, Buyer shall have the right, as contemplated in the applicable Servicer Notice, upon the occurrence of an Event of Default, to terminate any applicable Servicing
Agreement and transfer servicing to its designee, at no cost or expense to Buyer, it being agreed that the Sellers will pay any and all fees required to terminate such Servicing Agreement and to
effectuate the transfer of servicing to the designee of Buyer. 

        Section
11.05    Modification.    After the Purchase Date, until the repurchase of any Mortgage Asset, no Seller will
have any right to modify or alter the terms of such Mortgage Asset and no Seller will have any obligation or right to repossess such Mortgage Asset or substitute another Mortgage Asset, in each case
except as provided in the Custodial Agreement. 

        Section
11.06    Inspection.    In the event that any Seller or any Affiliate thereof is servicing the Mortgage
Assets, such Seller or Affiliate shall permit Buyer to inspect such Seller's or Affiliate's servicing facilities, as the case may be, for the purpose of satisfying Buyer that such Seller or Affiliate,
as the case may be, has the ability to service the Mortgage Assets as provided in this Agreement. 

 
 

ARTICLE XII
  
    MISCELLANEOUS    
    

        Section
12.01    Indemnification and Expenses.    (a) Each Seller jointly and severally, agrees to indemnify
and hold harmless Buyer and each of its Affiliates and Subsidiaries and their present and former respective officers, directors, employees, agents, advisors and other representatives (each, an
"Indemnified Party") from and against any and all claims, damages, losses, liabilities, costs, and expenses (including, without limitation, attorneys'
fees and disbursements) ("Costs") that may be incurred by or asserted or awarded against any Indemnified Party, in each case relating to or arising out
of this Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, except to the extent such claim, damage, loss, liability, cost, or expense is found in a final, non
appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. Costs subject to this Section 12.01 shall include
but not be limited to Costs incurred in connection with the violation of any Environmental Law, the correction of any environmental condition or the removal of any Materials of Environmental Concern,
in each case in any way affecting Seller's or any of its Affiliates' properties or any of the Mortgage Assets. Without limiting the generality of the foregoing, each Seller agrees to hold any
Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Mortgage Assets relating to or arising out of any violation or alleged violation of any law,
rule or regulation, except to the extent such claim, damage, loss, liability, cost, or expense is found in a final, non appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 12.01 applies, such
indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Seller, its directors, shareholders or creditors or 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. Each Seller agrees not to assert any claim against any Indemnified Party,
or any of their respective directors, officers, employees, attorneys, agents, and advisers, on any theory of liability, for special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Repurchase Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of any Transaction. In any suit, proceeding or action brought
by an Indemnified Party in connection with any Mortgage Asset for any sum owing thereunder, or to enforce any provisions of any Mortgage 

53

 

Asset,
each Seller will 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 or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by any Seller of any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or its successors from any Seller. Each Seller also agrees to reimburse an Indemnified Party as and when billed by such
Indemnified Party for all the Indemnified Party's costs and expenses incurred in connection with the enforcement or the preservation of Buyer's rights under this Agreement, any other Repurchase
Document or any transaction contemplated hereby or thereby, including without limitation the fees and disbursements of its counsel. 

        (b)   Each
Seller shall, whether or not any transaction contemplated hereby is consummated: (i) pay as when billed by Buyer, and in any event within three (3) days
after demand from Buyer, all reasonable out-of-pocket costs and expenses (including, without limitation, all actual and reasonable fees and disbursements of outside legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, and any reasonable fees and expenses associated with travel or other costs relating to any appraisals or examinations conducted in
connection with any Transactions or any proposed Purchased Assets, and the amount of such costs and expenses shall, until paid, bear interest at the greater of (x) 5.25%  per annum in excess of the
Prime Rate in effect from time to time or (y) 0.50% per annum in
excess of the Federal Funds Rate in effect from time to time (or at such greater rate plus 6.00%, at any time the Post-Default Rate is applicable to any Transaction)) (A) of Buyer in connection
with the development, preparation, execution and delivery of, and any amendment, supplement or modification to, this Agreement, any other Repurchase Document or any other documents prepared in
connection herewith or therewith and the documents and instruments referred to herein and therein (including, without limitation, all reasonable fees, disbursements and expenses of Cadwalader,
Wickersham & Taft LLP and/or other counsel incurred as of the date of this Agreement, which amount shall be deducted from the Purchase Price paid for the first Transaction hereunder) and
(B) of Buyer in connection with the enforcement of this Agreement and the other Repurchase Documents and any amendment, waiver or consent relating hereto or thereto and the documents and
instruments referred to herein and therein; (ii) pay and hold Buyer harmless from and against any and all present and future stamp, documentary, issue, sales and use, value added, property and
other similar taxes (other than taxes imposed on net income) with respect to the matters described in foregoing clause (i) and hold Buyer harmless from and against any and all liabilities with respect
to or resulting from any delay or omission to pay such taxes; and (iii) indemnify each Indemnified Party from and hold each of them harmless against any and all Costs incurred by any of them as
a result of, or arising out of, or in any way related to, or by reason of, the entering into and/or performance of this Agreement or any other Repurchase Document or the use of the proceeds of any
Transaction hereunder or the consummation of any transactions contemplated herein or in any other Repurchase Document, including, without limitation, (A) the reasonable out of pocket due
diligence, inspection, appraisals, testing and review costs and expenses incurred by Buyer with respect to Mortgage Assets submitted by any Seller for purchase under this Agreement, including, but not
limited to, those actual out of pocket costs and expenses incurred by Buyer pursuant to Sections 11.01 through 11.06 and Section 12.11, (B) the reasonable fees and disbursements
of counsel incurred in connection therewith and (C) any environmental liabilities with respect to any real estate or other assets held by any Seller or any of its Affiliates (but excluding any
such Costs to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 

        (c)   Without
prejudice to the survival of any other agreement of any Seller hereunder, the agreements and obligations of each Seller contained in this Section 12.01
shall survive the repayment of all amounts owing to Buyer by the Sellers under the Repurchase Documents and the termination of the commitment of Buyer hereunder. 

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        Section
12.02    Single Agreement.    Each Seller and Buyer 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 that each has been
entered into in consideration of the other Transactions. Accordingly, each of the Sellers and Buyer
agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in
respect of any other Transaction hereunder, (iii) that payments, deliveries, and other transfers made by either of them 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 and (iv) to promptly provide notice to the other after any such set off or application. 

        Section
12.03    Notices and Other Communications.    Except as otherwise expressly permitted by this Agreement, all
notices, requests and other communications provided for herein and under the Custodial Agreement (including without limitation any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including without limitation by email, telex or telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this
Agreement and except for notices given under Article III (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted by
Electronic Transmission or telecopy (upon receipt of confirmation) or personally delivered or, in the case of a mailed notice, upon receipt. 

        Section
12.04    Entire Agreement; Severability.    This Agreement together with the other Repurchase Documents and
the Account Control Agreement constitute the entire understanding among the Sellers and Buyer with respect to the subject matter it covers and shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase transactions involving Purchased Assets. By acceptance of this Agreement, the Sellers and Buyer acknowledge that they have not made, and
are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 

        Section 12.05    Assignments and Participations; Hypothecation of Purchased Assets.    

        (a)   No
Seller may assign any of its rights or obligations under this Agreement without the prior written consent of Buyer, not to be unreasonably withheld or delayed, and
any attempt by any Seller to assign any of its rights or obligations under this Agreement without the prior written consent of Buyer shall be null and void. Buyer may upon notice to the Sellers and
without consent of any Seller, sell to one or more banks, financial institutions or other entities ("Participants") participating interests in any
Transaction, its interest in the Purchased Assets, or any other interest of Buyer under this Agreement. Buyer may, at any time and from time to time, assign to any Person (an
"Assignee" and together with Participants, each a "Transferee" and collectively, the
"Transferees") all or any part of its rights and interest in the Purchased Assets, or any other interest of Buyer under this Agreement;  provided, that
(i) unless Buyer is assigning all of its rights and interests in the Purchased Assets and under this Agreement, in which case
there shall be no minimum transfer amount, each such assignment shall be in a minimum of amount of $5,000,000 and (ii) so long as no Default or Event of Default exists and so long as all Margin
Deficits are timely satisfied in accordance with Article IV hereof, (A) Buyer shall not assign all or any part of its rights and interest in the Purchased Assets, or any other interest
of Buyer under this Agreement, to the extent that, after giving effect to such assignment, Buyer is no 

55

 

longer
the "lead" financial institution under this Agreement or any Person other than Buyer is agent for the financial institutions parties hereto and (B) Buyer shall not assign all or any part
of its rights and interest in the Purchased Assets, or any other interest of Buyer under this Agreement, except to an Assignee which is a commercial bank, savings and loan association, pension fund,
insurance company, investment bank or other similar financial institution or intermediary. Each Seller agrees to cooperate with Buyer in connection with any such assignment, transfer or sale of
participating interest and to enter into such restatements of, and amendments, supplements and other modifications to, this Agreement in order to give effect to such assignment, transfer or sale. 

        (b)   Title
to all Purchased Assets and Purchased Items shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets. Nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets and Purchased Items or otherwise selling, pledging, repledging, transferring, hypothecating, or rehypothecating
the Purchased Assets and Purchased Items, all on terms that Buyer may determine in its sole discretion; provided,  however, that Buyer shall transfer the
Purchased Assets to the applicable Seller on the applicable Repurchase Date free and clear of any pledge, Lien,
security interest, encumbrance, charge or other adverse claim on any of the Purchased Assets. Nothing contained in this Agreement shall obligate the Buyer to segregate any Purchased Assets or
Purchased Items transferred to Buyer by any Seller. 

        SECTION 12.06    GOVERNING LAW.    THIS
AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

        SECTION 12.07    SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL.    

        (A)  ANY LEGAL ACTION OR PROCEEDING AGAINST ANY SELLER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER REPURCHASE DOCUMENT TO WHICH SUCH SELLER IS A PARTY
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, SUCH SELLER HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH SELLER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH SELLER AT ITS ADDRESS AS DESIGNATED IN ACCORDANCE WITH
SECTION 12.03 OF THIS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF BUYER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY SELLER IN ANY OTHER JURISDICTION.

        (B)  EACH SELLER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER REPURCHASE DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

        (C)  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY OF THE OTHER REPURCHASE DOCUMENTS OR ANY  

56

 

 DEALINGS, COURSE OF DEALINGS, COURSE OF CONDUCT BETWEEN THEM, OR ANY STATEMENTS (WHETHER ORAL OR WRITTEN) OR OTHER ACTIONS OF ANY PARTY, RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY, INCLUDING, WITHOUT LIMITATION, ANY ACTION OF BUYER RELATING TO THE ADMINISTRATION OF THE TRANSACTIONS OR THE ENFORCEMENT OF THE REPURCHASE DOCUMENTS, AND
NONE OF THE PARTIES HERETO WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.

        (D)  EXCEPT AS PROHIBITED BY LAW, EACH SELLER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH SELLER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF BUYER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT BUYER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.

        (E)  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON
THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

        (F)  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER REPURCHASE DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO ANY TRANSACTION ENTERED INTO
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

        Section
12.08    Amendments; Waivers; Remedies Cumulative.    Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by each of the Sellers and Buyer. Any provision of this Agreement may be waived by
Buyer; provided, that no failure or delay on the part of Buyer in exercising any right, power or privilege hereunder or under any other Repurchase
Document and no course of dealing with respect to any right, power or privilege hereunder or under any other Repurchase Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Repurchase Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other Repurchase Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which Buyer
would otherwise have. No notice to or demand on any Seller in any case shall entitle any Seller to any other or further notice or demand in similar or other circumstances or constitute a waiver of the
rights of Buyer to any other or further action in any circumstances without notice or demand. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing. 

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        Section
12.09    Intent.    (a) The parties recognize that each Transaction is not 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
sub-limit of Purchased Assets subject to such Transaction or the term of such Transaction would render such definition applicable), or 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 applicable). 

        (b)   It
is understood that either party's right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder or to exercise any other remedies
pursuant to Section 10.02 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. 

        (c)   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). 

        (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). 

        Section
12.10    Joint and Several Liability.    

        (a)   Each
Seller hereby acknowledges and agrees that such Seller shall be jointly and severally liable to Buyer to the maximum extent permitted by applicable law for all
representations, warranties, covenants, obligations and indemnities of all of the Sellers hereunder. 

        (b)   Each
Seller hereby agrees that, to the extent another Seller shall have paid more than its proportionate share of any payment made hereunder, such 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 clause shall in no respect limit the obligations and liabilities of any Seller to Buyer, 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 Buyer, the paying Seller shall not be entitled to be subrogated to any of the rights of
Buyer against any other Seller or any collateral security or guarantee or right of offset held by Buyer, 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 Buyer by the Sellers 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 Buyer,
segregated from other funds of the paying Seller, and shall, forthwith upon receipt by the paying Seller, be turned over to Buyer in the exact form received by the paying Seller (duly indorsed by the
paying Seller to Buyer, if required), to be applied against amounts owing to Buyer by the Sellers under the Repurchase Documents, whether matured or unmatured, in such order as Buyer may determine. 

        (c)   Each
Seller shall remain obligated under this Section 12.10 notwithstanding that, without any reservation of rights against such Seller and without notice to or
further assent by such Seller, any demand by Buyer for payment of any amounts owing to Buyer by any other Seller under the Repurchase Documents may be rescinded by Buyer and any the payment of any
such amounts may be continued, and the liability of any other party upon or for any part thereof, or any collateral security or 

58

 

guarantee
therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or
released by Buyer, and this Agreement and the other Repurchase Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Buyer for the payment of amounts owing to Buyer by the
Sellers under the Repurchase Documents may be sold, exchanged, waived, surrendered or released. Buyer shall not have any obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for amounts owing to Buyer by the Sellers under the Repurchase Documents, or any property subject thereto. When making any demand hereunder against any Seller, Buyer may, but shall be
under no obligation to, make a similar demand on any other Seller, and any failure by Buyer to make any such demand or to collect any payments from any other Seller, or any release of such other
Seller shall not relieve any Seller in respect of which a demand or collection is not made or the Sellers not so released of their obligations or liabilities hereunder, and shall not impair or affect
the rights and remedies, express or implied, or as a matter of law, of Buyer against the Sellers. For the purposes hereof "demand" shall include the commencement and continuance of any legal
proceedings. 

        (d)   Each
Seller waives any and all notice of the creation, renewal, extension or accrual of any amounts at any time owing to Buyer by any other Seller under the Repurchase
Documents and notice of or proof of reliance by Buyer upon such Seller or acceptance of the obligations of such Seller under this Section 12.10, and all such amounts, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the obligations of the Sellers under this Section 12.10; and all
dealings between the Sellers, on the one hand, and Buyer, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the obligations of the Sellers
under this Section 12.10. Each Seller waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon such Seller with respect to any amounts at any
time owing to Buyer by such Seller under the Repurchase Documents, other than such notices as are expressly required to be given under this Agreement or any of the other Repurchase Documents. Each
Seller understands and agrees that it shall continue to be liable under this Section 12.10 without regard to (a) the validity, regularity or enforceability of any other provision of this
Agreement or any other Repurchase Document, any amounts at any time owing to Buyer by the Sellers under the Repurchase Documents, or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by Buyer, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available
to or be asserted by any Seller against Buyer, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Sellers) which constitutes, or might be construed to constitute,
an equitable or legal discharge of the Sellers for any amounts owing to Buyer by the Sellers under the Repurchase Documents, or of the Sellers under this Agreement, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any Seller, Buyer may, but shall be under no obligation to, pursue such rights and remedies as it may have against such Seller or any
other Person or against any collateral security or guarantee related thereto or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect
any payments from such Seller or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of such Seller or any such
other Person or any such collateral security, guarantee or right of offset, shall not relieve Seller of any liability hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of Buyer against Seller. 

        (e)   Anything
herein or in any other Repurchase Document to the contrary notwithstanding, the maximum liability of any Seller hereunder in respect of the liabilities of the
other Sellers under this Agreement and the other Repurchase Documents shall in no event exceed the amount which can be guaranteed by such Seller under applicable federal and state laws relating to the
insolvency of debtors. 

59

 

        Section
12.11    Periodic Due Diligence Review.    Each Seller acknowledges that Buyer has the right to perform
continuing due diligence reviews with respect to the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and
such Seller agrees that upon reasonable (but no less than three (3) Business Day's) prior notice unless an Event of Default shall have occurred and be continuing, in which case no notice is required,
to any Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Asset Files and any and all
documents, records, agreements, instruments or information relating to such Purchased Assets
in the possession or under the control of any Seller and/or the Custodian. Each Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Mortgage Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, each Seller acknowledges that Buyer may purchase Mortgage Assets from the
applicable Seller based solely upon the information provided by such Seller to Buyer in the respective Seller Asset Schedule and the representations, warranties and covenants contained herein, and
that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets purchased in a Transaction, including without
limitation ordering new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Purchased Asset. Buyer may underwrite
such Purchased Assets itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Each Seller agrees to cooperate with Buyer and any third party underwriter in
connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with reasonable access to any and all documents, records, agreements, instruments or
information relating to such Purchased Assets in the possession, or under the control, of such Seller. The Sellers shall pay all out-of-pocket costs and expenses (including fees and expenses of
counsel, if any) incurred by Buyer in connection with Buyer's activities pursuant to this Section 12.11 ("Due Diligence Costs");  provided that, in the
event that a Default or an Event of Default shall have occurred, the Sellers shall reimburse Buyer for all Due Diligence Costs for
any and all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with any due diligence review conducted by the Buyer pursuant to this Section 12.11 following the
occurrence and during the continuation of such Default or Event of Default. 

        Section
12.12    Buyer's Appointment as Attorney-in-Fact.    (a) Following the occurrence and during the
continuance of an Event of Default, each Seller hereby irrevocably constitutes and appoints Buyer and any officer or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact (coupled with an interest) with full irrevocable power and authority in the place and stead of such Seller and in the name of such Seller or in its own name, from time to time in
Buyer's discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably
necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Seller hereby gives Buyer the power and right, on behalf of such
Seller, without assent by, but with written notice to, such Seller, to do the following: 

        (i)    in
the name of such Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any mortgage insurance or with respect to any other Purchased Items and to file any claim or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due under any such mortgage insurance or with respect to any other Purchased Items whenever payable; 

        (ii)   to
pay or discharge taxes and Liens levied or placed on or threatened against the Purchased Items; 

60

 

        (iii)  (A) to
direct any party liable for any payment under any Purchased Items to make payment of any and all moneys due or to become due thereunder directly to Buyer
or as Buyer shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or
arising out of any Purchased Items; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Purchased Items; (D) to commence
and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Items or any proceeds thereof and to enforce any other right in
respect of any Purchased Items; (E) to defend any suit, action or proceeding brought against such Seller with respect to any Purchased Items; (F) to settle, compromise or adjust without
such Seller's consent any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and
(G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Purchased Items as fully and completely as though Buyer were the absolute owner
thereof for all purposes, and to do, at Buyer's option and such Seller's expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize
upon the Purchased Items and Buyer's Liens thereon and to effect the intent of this Agreement, all as fully and effectively as such Seller might do; 

        (iv)  to
direct the actions of the Custodian with respect to the Purchased Items under the Custodial Agreement; and 

        (v)   to
execute, from time to time, in connection with any sale provided for in Section 10.02, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Purchased Items. 

        Each
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by the express terms hereof. This power of attorney is a power coupled with an interest and
shall be irrevocable. 

        (b)   The
powers conferred on Buyer hereunder are solely to protect Buyer's interests in the Purchased Items and Purchase Assets and shall not impose any duty upon it to
exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees
or agents shall be responsible to any Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct. 

        Section
12.13    Legal Matters.    (a) If there is any conflict between the terms of this Agreement or any
Transaction entered into hereunder and the Custodial Agreement, this Agreement shall prevail. 

        (b)   This
Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart. 

        (c)   The
captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of
this Agreement. 

        (d)   Each
Seller hereby acknowledges that: 

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

        (ii)   Buyer
has no fiduciary relationship to any Seller; and 

        (iii)  no
joint venture exists between Buyer and any Seller. 

61

 

        Section 12.14    Confidentiality.    Each Seller and Buyer hereby acknowledge and agree that all information
regarding the terms set forth in any of the Repurchase Documents or the Transactions contemplated thereby (the "Confidential Terms") shall be kept
confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel,
auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws including, without limitation, federal securities laws
applicable to any Seller or any Affiliate thereof, (ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, or (iii) in the event of a
Default or an Event of Default Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Assets or otherwise to enforce or
exercise Buyer's rights hereunder; provided, that nothing herein shall prevent any party from disclosing any such information (i) to any other
party to this Agreement, (ii) to any Transferee or potential Transferee which agrees to comply with the provisions of this Section, or (iii) to its Affiliates, employees, directors,
agents, attorneys, accountants and other professional advisors or other Persons deemed necessary or appropriate in the reasonable judgment of the disclosing party, in each case who are made aware of
and instructed to comply with the provisions of this Section 12.14; and, provided, further, that
no disclosure made with respect to any Repurchase Document shall include a copy of such Repurchase Document to the extent that a summary would suffice in lieu thereof and in the event that it is
necessary for a copy of any Repurchase Document to be disclosed, any specific terms set forth in such Repurchase Document with respect to fees, pricing, advance rates and the like shall be redacted
therefrom prior to disclosure of such Repurchase Document. The provisions set forth in this
Section shall survive the termination of this Agreement for a period of one year following such termination. 

        Section
12.15    Conflicts.    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. 

        Section
12.16    Right of Set-off.    In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of such rights, each Seller hereby grants to Buyer a right of offset, to secure repayment of all amounts owing to Buyer by the Sellers under the Repurchase
Documents, upon any and all monies, securities, collateral or other property of such Seller and the proceeds therefrom, now or hereafter held or received by Buyer or any entity under the control of
Buyer and their respective successors and assigns (including, without limitation, branches and agencies of Buyer, wherever located), for the account of such Seller, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all deposits (general or specified) and credits of such Seller at any time existing. Buyer is hereby authorized at any time and
from time to time upon the occurrence and during the continuance of an Event of Default, without notice to any Seller, to offset, appropriate, apply and enforce such right of offset against any and
all items hereinabove referred to against any amounts owing to Buyer by the Sellers under the Repurchase Documents, irrespective of whether Buyer shall have made any demand hereunder and although such
amounts, or any of them, shall be contingent or unmatured and regardless of any other collateral securing such amounts. Each Seller shall be deemed directly indebted to Buyer in the full amount of all
amounts owing to Buyer by the Sellers under the Repurchase Documents, and Buyer shall be entitled to exercise the rights of offset provided for above. ANY AND ALL RIGHTS TO REQUIRE BUYER TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE AMOUNTS OWING TO BUYER BY THE SELLERS UNDER THE REPURCHASE DOCUMENTS, PRIOR TO EXERCISING ITS RIGHT OF OFFSET WITH RESPECT
TO SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY SELLER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY EACH SELLER. 

62

 

        Section
12.17    Treatment of Certain Information.    Notwithstanding anything to the contrary contained herein 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 Repurchase
Agreement 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. 

        Section
12.18    Increased Costs, Illegality, Etc.    (a) In the event that Buyer shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto): 

        (i)    on
any date that, by reason of any changes arising after the date of this Agreement affecting the interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable Pricing Rate on the basis provided for in the definition of Eurodollar Rate; or 

        (ii)   at
any time, that Buyer shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Transaction because of
(x) any change since the date of this Agreement in any applicable law or governmental rule, regulation, order or request (whether or not having the force of law) (or in the interpretation or
administration thereof and including the introduction of any new law or governmental rule, regulation, order or request), such as, for example, but not limited to, (A) a change in the basis of
taxation of payments to Buyer in respect of any amounts payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or profits of Buyer imposed by the
jurisdiction in which its principal office is located) or (B) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent
covered by Section 12.18(c) and/or (y) other circumstances arising after the date hereof, affecting Buyer or the interbank Eurodollar market or the position of Buyer in such market; or 

        (iii)  at
any time that the entering into or continuance of any Transaction, the Pricing Rate applicable to which is based upon the Eurodollar Rate, has been made
(x) unlawful by any law or governmental rule, regulation or order, (y) impossible by compliance by Buyer with any governmental request (whether or not having force of law) or
(z) impracticable as a result of a contingency occurring after the date of this Agreement which materially and adversely affects the interbank Eurodollar market; 

then,
and in any such event, Buyer shall promptly give notice thereof (by telephone confirmed in writing) to the Sellers. Thereafter (x) in the case of clause (i) above, Transactions,
the Pricing Rate applicable to which is based upon the Eurodollar Rate, shall no longer be available until such time as Buyer notifies the Sellers that the circumstances giving rise to such notice by
Buyer no longer exist, and any Transaction Request or Election Notice that is pending shall be deemed rescinded by the applicable Seller, and (y) in the case of clause (ii) above, the
Sellers shall pay to Buyer, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as Buyer in its sole
discretion shall determine) as shall be required to compensate Buyer for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts
owed to Buyer, showing the basis for the calculation thereof, submitted to the Sellers by Buyer shall, absent manifest error, be final and conclusive and binding on all the parties hereto). 

        (b)   If
Buyer determines at any time that any applicable law or governmental rule, regulation, order or request (whether or not having the force of law) adopted after the
date hereof concerning capital adequacy, or any change in interpretation or administration thereof by any governmental authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by Buyer based on the existence of Buyer's obligations hereunder, then the Sellers shall pay to Buyer, upon its written demand therefor,
such additional 

63

 

amounts
as shall be required to compensate Buyer for the increased cost to Buyer as a result of such increase of capital. In determining such additional amounts, Buyer will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable and consistent with its policies and the policies of its holding company with respect to capital adequacy,  provided that Buyer's
determination of compensation owing under this Section 12.18(b) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Buyer, upon determining that any additional amounts will be payable pursuant to this Section 12.18(b), will give prompt written notice thereof to the Sellers,
which notice shall show the basis for calculation of such additional amounts, although the failure to give any such notice shall not, subject to Section 12.18(d), release or diminish any of the
Seller's obligations to pay or cause the payment of additional amounts pursuant to this Section 12.18(b). 

        (c)   In
the event that Buyer shall determine (which determination shall, absent manifest error, be final and conclusive and binding on all the parties hereto) at any time
that by reason of Regulation D Buyer is required to maintain reserves in respect of any liabilities during any period that it has a Transaction, the Pricing Rate applicable to which is based upon the
Eurodollar Rate, outstanding (each such period, a "Eurocurrency Reserve Period"), then Buyer shall promptly give notice (by telephone confirmed in
writing) to the Sellers of such determination specifying the additional amounts required to indemnify Buyer against the cost of maintaining such reserves (such written notice to provide a computation
of such additional amounts), and the Sellers shall directly pay to Buyer such specified amounts as additional interest at the time that it is otherwise required to pay interest in respect of such
Transaction or, if later demanded by Buyer, promptly on demand. Buyer agrees that if it gives notice to the Sellers of the existence of a Eurocurrency Reserve Period, it shall promptly notify the
Sellers of any termination thereof, at which time the Sellers shall cease to be obligated to pay additional Price Differential to Buyer pursuant to the first sentence of this Section 12.18(c)
until such time, if any, as a subsequent Eurocurrency Reserve Period shall occur. 

[SIGNATURES
FOLLOW] 

64

        IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above. 

	 	SELLERS
	

 	
[SELLER]
	

 	

By:	
 	

 
	 	 	 	

	 	 	 	Name:
	 	 	 	Title:
	

 	

 	
 	
Address for Notices:

[                              ]
	

 	

 	
 	

Attn:
	 	 	 	Telecopier No.:
	 	 	 	 
	 	 	 	 
	

 	
[ADDITIONAL SELLER]
	

 	

By:	
 	

 
	 	 	 	

	 	 	 	Name:
	 	 	 	Title:
	

 	

 	
 	
Address for Notices:

[                              ]
	

 	

 	
 	

Attn:
	 	 	 	Telecopier No.:
	 	 	 	 
	 	 	 	 
	

 	
BUYER
	

 	
[BUYER]
	

 	

By:	
 	

 
	 	 	 	

	 	 	 	Name:
	 	 	 	Title:
	

 	

 	
 	
Address for Notices:

301 South College Street

Charlotte, North Carolina 28288

Attn:

Telecopier No.:

QuickLinks

Exhibit 10.7

TABLE OF CONTENTS

MASTER REPURCHASE AGREEMENT

ARTICLE I APPLICABILITY

ARTICLE II DEFINITIONAL PROVISIONS

ARTICLE III INITIATION; TERMINATION

ARTICLE IV MARGIN MAINTENANCE

ARTICLE V INCOME PAYMENTS; REQUIREMENTS OF LAW

ARTICLE VI SECURITY INTEREST

ARTICLE VII PAYMENT, TRANSFER AND CUSTODY

ARTICLE VIII SELLER REPRESENTATIONS AND WARRANTIES

ARTICLE IX COVENANTS

ARTICLE X EVENTS OF DEFAULT; REMEDIES

ARTICLE XI SERVICING

ARTICLE XII MISCELLANEOUS

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