Document:

Exhibit 10.1

EXECUTION
VERSION

Second Amended and Restated
Master Repurchase Agreement 

Bond Market Association
September 1996 Version

Dated as of:  June 28, 2007

Between: Goldman
Sachs Mortgage Company (“Buyer”) and Gramercy Warehouse Funding II LLC and GKK
Trading Warehouse II, LLC (collectively, “Seller”)

1.              Applicability

This Agreement amends and restates that certain
Amended and Restated Master Repurchase Agreement dated October 13, 2006,
between Gramercy Warehouse Funding II LLC, GKK Trading Warehouse II, LLC and
Goldman Sachs Mortgage Company, which agreement amended and restated that
certain Master Repurchase Agreement dated January 3, 2005, between Gramercy
Warehouse Funding II LLC and Goldman Sachs Mortgage Company (as such agreement
was amended from time to time, the “Original Agreement”). From time to time the
parties hereto may enter into transactions in which one party (“Seller”) agrees
to transfer to the other (“Buyer”) securities or other assets (“Securities”)
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer
to transfer to Seller such Securities at a date certain or on demand, against
the transfer of funds by Seller. Each such transaction shall be referred to
herein as a “Transaction” and, unless otherwise agreed in writing, shall be
governed by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto and in any other annexes identified herein or
therein as applicable hereunder.

2.              Definitions

(a)          “Act
of Insolvency”, with respect to any party, (i) the commencement by such party
as debtor of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, moratori­um, dissolution, delinquency or similar
law, or such party seeking the appointment or election of a receiver,
conservator, trustee, custodian or similar official for such party or any
substantial part of its property, or the convening of any meeting of creditors
for purposes of commencing any such case or proceeding or seeking such an
appointment or election, (ii) the commence­ment of any such case or proceeding
against such party, or another seeking such an appoint­ment or election, or the
filing against a party of an application for a protective decree under the
provisions of the Securities Investor Protection Act of 1970, which (A) is
consented to or not timely contested by such party, (B) results in the entry of
an order for relief, such an appoint­ment or election, the issuance of such a
protective decree or the entry of an order having a sim­ilar effect, or (C) is
not dismissed within 15 days, (iii) the making by such party of a general
assignment for the benefit of creditors, or (iv) the admission in writing by
such party of such party’s inability to pay such party’s debts as they become
due;

(b)         “Additional
Purchased Securities”, Securities provided by Seller to Buyer pursuant to
Paragraph 4 (a) hereof,

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(c)          “Buyer’s
Margin Amount”, with respect to any Transaction as of any date, the amount
obtained by application of the Buyer’s Margin Percentage to the Repurchase
Price for such Transaction as of such date;

(d)         “Buyer’s
Margin Percentage”, with respect to any Transaction as of any date, a
percentage (which may be equal to the Seller’s Margin Percentage) agreed to by
Buyer and Seller or, in the absence of any such agreement, the percentage
obtained by dividing the Market Value of the Purchased Securities on the
Purchase Date by the Purchase Price on the Purchase Date for such Transaction;

(e)          “Confirmation”,
the meaning specified in Paragraph 3(b) hereof;

(f)            “Income”,
with respect to any Security at any time, any principal thereof and all
interest, dividends or other distributions thereon;

(g)         “Margin
Deficit”, the meaning specified in Paragraph 4(a) hereof;

(h)         “Margin
Excess”, the meaning specified in Paragraph 4(b) hereof;

(i)             “Margin
Notice Deadline”, the time agreed to by the parties in the relevant
Confirmation, Annex I hereto or otherwise as the deadline for giving notice
requiring same-day satisfac­tion of margin maintenance obligations as
provided in Paragraph 4 hereof (or, in the absence of any such agreement, the
deadline for such purposes established in accordance with market practice);

(j)             “Market
Value”, with respect to any Securities as of any date, the price for such
Securities on such date obtained from a generally recognized source agreed to
by the parties or the most recent closing bid quotation from such a source,
plus accrued Income to the extent not included therein (other than any Income
credited or transferred to, or applied to the obligations of, Seller pursuant
to Paragraph 5 hereof) as of such date (unless contrary to market practice for
such Securities);

(k)          “Price
Differential”, with respect to any Transaction as of any date, the aggregate
amount obtained by daily application of the Pricing Rate for such Transaction
to the Purchase Price for such Transaction on a 360 day per year basis for the
actual number of days during the period commencing on (and including) the
Purchase Date for such Transaction and ending on (but excluding) the date of
determination (reduced by any amount of such Price Differential previously paid
by Seller to Buyer with respect to such Transaction);

(1)          “Pricing
Rate”, the per annum percentage rate for determination of the Price
Differential;

(m)       “Prime
Rate”, the prime rate of U.S. commercial banks as published in The Wall Street
Journal (or, if more than one such rate is published, the average of such
rates);

(n)         “Purchase
Date”, the date on which Purchased Securities are to be transferred by Seller
to Buyer;

(o)         “Purchase
Price”, (i) on the Purchase Date, the price at which Purchased Securities are
transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and
Seller agree oth­erwise, such price increased by the amount of any cash
transferred by Buyer to Seller pur­suant to Paragraph 4(b) hereof and decreased
by the amount of any cash

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transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or
applied to reduce Seller’s obligations under clause (ii) of Paragraph 5 hereof;

(p)         “Purchased
Securities”, the Securities transferred by Seller to Buyer in a Transaction
here­under, and any Securities substituted therefor in accordance with
Paragraph 9 hereof. The term “Purchased Securities” with respect to any
Transaction at any time also shall include Additional Purchased Securities
delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities
returned pursuant to Paragraph 4(b) hereof;

(q)         “Repurchase
Date”, the date on which Seller is to repurchase the Purchased Securities from
Buyer, including any date determined by application of the provisions of
Paragraph 3(c) or 11 hereof;

(r)            “Repurchase
Price”, the price at which Purchased Securities are to be transferred from
Buyer to 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;

(s)          “Seller’s
Margin Amount”, with respect to any Transaction as of any date, the amount
obtained by application of the Seller’s Margin Percentage to the Repurchase
Price for such Transaction as of such date;

(t)            “Seller’s
Margin Percentage”, with respect to any Transaction as of any date, a
percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by
Buyer and Seller or, in the absence of any such agreement, the percentage
obtained by dividing the Market Value of the Purchased Securities on the
Purchase Date by the Purchase Price on the Purchase Date for such Transaction.

3.              Initiation;
Confirmation; Termination

(a)          An
agreement to enter into a Transaction may be made orally or in writing at the
initia­tion of either Buyer or Seller. On the Purchase Date for the
Transaction, the Purchased Securities shall be transferred to Buyer or its
agent against the transfer of the Purchase Price to an account of Seller.

(b)         Upon
agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as
shall be agreed, shall promptly deliver to the other party a written
confirmation of each Transaction (a “Confirmation”). The Confirmation shall
describe the Purchased Securities (including CUSIP number, if any), identify
Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price,
(iii) the Repurchase Date, unless the Transaction is to be terminable on
demand, (iv) the Pricing Rate or Repurchase Price applicable to the
Transaction, and (v) any additional terms or conditions of the Transaction not
inconsistent with this Agreement. The Confirmation, together with this Agreement,
shall constitute conclusive evidence of the terms agreed between Buyer and
Seller with respect to the Transaction to which the Confirmation relates,
unless with respect to the Confirmation specific objection is made promptly
after receipt thereof. In the event of any conflict between the terms of such
Confirmation and this Agreement, this Agreement shall prevail.

(c)          In
the case of Transactions terminable upon demand, such demand shall be made by
Buyer or Seller, no later than such time as is customary in accordance with
market prac­tice, by telephone or otherwise on or prior to the business day on
which such termination will be effective. On the date specified in such demand,
or on the date fixed for termina­tion in the case of Transactions having a fixed
term, termination of

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the Transaction will be effected by transfer to Seller or its agent of
the Purchased Securities and any Income in respect thereof received by Buyer
(and not previously credited or transferred to, or applied to the obligations
of, Seller pursuant to Paragraph 5 hereof) against the transfer of the
Repurchase Price to an account of Buyer.

4.              Margin Maintenance

(a)          If
at any time the aggregate Market Value of all Purchased Securities subject to
all Transactions in which a particular party hereto is acting as Buyer is less
than the aggre­gate Buyer’s Margin Amount for all such Transactions (a “Margin
Deficit”), then Buyer may by notice to Seller require Seller in such
Transactions, at Seller’s option, to transfer to Buyer cash or additional
Securities reasonably acceptable to Buyer (“Additional Purchased Securities”),
so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or
exceed such aggregate Buyer’s Margin Amount (decreased by the amount of any
Margin Deficit as of such date arising from any Transactions in which such
Buyer is acting as Seller).

(b)         If
at any time the aggregate Market Value of all Purchased Securities subject to
all Transactions in which a particular party hereto is acting as Seller exceeds
the aggregate Seller’s Margin Amount for all such Transactions at such time (a “Margin
Excess”), then Seller may by notice to Buyer require Buyer in such
Transactions, at Buyer’s option, to transfer cash or Purchased Securities to
Seller, so that the aggregate Market Value of the Purchased Securities, after
deduction of any such cash or any Purchased Securities so transferred, will
thereupon not exceed such aggregate Seller’s Margin Amount (increased by the
amount of any Margin Excess as of such date arising from any Transactions in
which such Seller is acting as Buyer).

(c)          If
any notice is given by Buyer or Seller under subparagraph (a) or (b) of this
Paragraph at or before the Margin Notice Deadline on any business day, the
party receiving such notice shall transfer cash or Additional Purchased
Securities as provided in such subpara­graph no later than the close of
business in the relevant market on such day. If any such notice is given after
the Margin Notice Deadline, the party receiving such notice shall transfer such
cash or Securities no later than the close of business in the relevant market
on the next business day following such notice.

(d)         Any
cash transferred pursuant to this Paragraph shall be attributed to such
Transactions as shall be agreed upon by Buyer and Seller.

(e)          Seller
and Buyer may agree, with respect to any or all Transactions hereunder, that
the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b)
of this Paragraph may be exercised only where a Margin Deficit or Margin
Excess, as the case may be, exceeds a specified dollar amount or a specified
percentage of the Repurchase Prices for such Transactions (which amount or
percentage shall be agreed to by Buyer and Seller prior to entering into any
such Transactions).

(f)            Seller
and Buyer may agree, with respect to any or all Transactions hereunder, that
the respective rights of Buyer and Seller under subparagraphs (a) and (b) of
this Paragraph to require the elimination of a Margin Deficit or a Margin
Excess, as the case may be, may be exercised whenever such a Margin Deficit or
Margin Excess exists with respect to any single Transaction hereunder
(calculated without regard to any other Transaction outstanding under this
Agreement).

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5.              Income Payments

Seller shall be entitled to receive an amount equal to all Income paid
or distributed on or in respect of the Securities that is not otherwise
received by Seller, to the full extent it would be so entitled if the
Securities had not been sold to Buyer. Buyer shall, as the parties may agree
with respect to any Transaction (or, in the absence of any such agreement, as
Buyer shall rea­sonably determine in its discretion), on the date such Income
is paid or distributed either (i) transfer to or credit to the account of
Seller such Income with respect to any Purchased Securities subject to such
Transaction or (ii) with respect to Income paid in cash, apply the Income
payment or payments to reduce the amount, if any, to be transferred to Buyer by
Seller upon termination of such Transaction. Buyer shall not be obligated to
take any action pursuant to the preceding sentence (A) to the extent that such
action would result in the cre­ation of a Margin Deficit, unless prior thereto
or simultaneously therewith Seller transfers to Buyer cash or Additional
Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an
Event of Default with respect to Seller has occurred and is then continuing at
the time such Income is paid or distributed.

6.            Security Interest

Although the parties intend that all Transactions hereunder be sales
and purchases and not loans, in the event any such Transactions are deemed to
be loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Securities with respect to all Transactions hereunder and all Income thereon
and other proceeds thereof.

7.            Payment and Transfer

Unless otherwise mutually agreed, all transfers of funds hereunder
shall be in immediately available funds. All Securities transferred by one
party hereto to the other party (i) shall be in suitable form for transfer or
shall be accompanied by duly executed instruments of transfer or assignment in
blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book-entry system of
a Federal Reserve Bank, or (iii) shall be transferred by any other method
mutually acceptable to Seller and Buyer.

8.            Segregation of
Purchased Securities

To the extent required by applicable law, all Purchased Securities in
the possession of Seller shall be segregated from other securities in its
possession and shall be identified as subject to this Agreement. Segregation
may be accomplished by appropriate identification on the books and records of
the holder, including a financial or securities intermediary or a clearing
corpo­ration. All of Seller’s interest in the Purchased Securities shall pass
to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller,
nothing in this Agreement shall pre­clude Buyer from engaging in repurchase
transactions with the Purchased Securities or other­wise selling, transferring,
pledging or hypothecating the Purchased Securities, but no such transaction
shall relieve Buyer of its obligations to transfer Purchased Securities to
Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to
credit or pay Income to, or apply Income to the obligations of, Seller pursuant
to Paragraph 5 hereof.

Required Disclosure for Transactions in Which the
Seller Retains Custody of the Purchased Securities

Seller is not permitted
to substitute other securities for those subject to this Agreement and
therefore must keep Buyer’s securities segregated at all times unless in this
Agreement Buyer grants Seller the right to substitute other securities. If
Buyer grants

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the right to substitute, this means that Buyer’s securities will likely
be commingled with Seller’s own securities during the trading day. Buyer is
advised that during any trading day that Buyer’s securities are commingled with
Seller’s securities, they [will]* [may]** be subject to liens granted by Seller
to [its clearing bank]* [third parties]” and may be used by Seller for
deliveries on other securities transactions. Whenever the securities are
commingled, Seller’s ability to resegregate substitute securities for Buyer
will be subject to Seller’s ability to satisfy [the clear­ing] * [any]** lien
or to obtain substitute securities.

*                       Language to
be used under 17 C.F.R, §403.4 (e) if Seller is a government securities broker
or dealer other than a financial institution.

**                Language
to be used under 17 C.F.R. §403.5 (d) if Seller is a financial institution.

9.            Substitution

(a)          Seller
may, subject to agreement with and acceptance by Buyer, substitute other
Securities for any Purchased Securities. Such substitution shall be made by
transfer to Buyer of such other Securities and transfer to Seller of such
Purchased Securities. After substitution, the substituted Securities shall be
deemed to be Purchased Securities.

(b)         In
Transactions in which Seller retains custody of Purchased Securities, the
parties expressly agree that Buyer shall be deemed, for purposes of
subparagraph (a) of this Paragraph, to have agreed to and accepted in this
Agreement substitution by Seller of other Securities for Purchased Securities;
provided, however, that such other Securities shall have a Market Value at
least equal to the Market Value of the Purchased Securities for which they are
substituted.

10.       Representations

Each of Buyer and Seller represents and warrants to the other that (i)
it is duly authorized to execute and deliver this Agreement, to enter into
Transactions contemplated hereunder and to perform its obligations hereunder
and has taken all necessary action to authorize such exe­cution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing, in the form of an annex hereto or otherwise, in advance of
any Transaction by the other party hereto, as agent for a disclosed principal),
(iii) the person signing this Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such disclosed principal), (iv) it has
obtained all authorizations of any governmental body required in connection
with this Agreement and the Transactions hereunder and such autho­rizations are
in full force and effect and (v) the execution, delivery and performance of
this Agreement and the Transactions hereunder will not violate any law,
ordinance, charter, by­law or rule applicable to it or any agreement by which
it is bound or by which any of its assets are affected. On the Purchase Date
for any Transaction Buyer and Seller shall each be deemed to repeat all the
foregoing representations made by it.

11.       Events of Default

In the event that (i) Seller fails to transfer or Buyer fails to purchase
Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to
repurchase or Buyer fails to transfer Purchased Securities upon the applicable
Repurchase Date, (iii) Seller or Buyer fails to com­ply with Paragraph 4
hereof, (iv) Buyer fails, after one business day’s notice, to comply with
Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or
Buyer, (vi) any representation made by Seller or Buyer shall have been
incorrect or untrue in any material respect when made or repeated or deemed to
have been made or repeated,

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or (vii) Seller or Buyer shall admit to the other its inability to, or
its intention not to, perform any of its oblig­ations hereunder (each an “Event
of Default”):

(a)          The
nondefaulting party may, at its option (which option shall be deemed to have
been exercised immediately upon the occurrence of an Act of Insolvency),
declare an Event of Default to have occurred hereunder and, upon the exercise
or deemed exercise of such option, the Repurchase Date for each Transaction
hereunder shall, if it has not already occurred, be deemed immediately to occur
(except that, in the event that the Purchase Date for any Transaction has not
yet occurred as of the date of such exercise or deemed exercise, such Transaction
shall be deemed immediately canceled). The nondefaulting party shall (except
upon the occurrence of an Act of Insolvency) give notice to the defaulting
party of the exercise of such option as promptly as practicable.

(b)         In
all Transactions in which the defaulting party is acting as Seller, if the
nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, (i) the defaulting party’s
obligations in such Transactions to repurchase all Purchased Securities, at the
Repurchase Price therefor on the Repurchase Date deter­mined in accordance with
subparagraph (a) of this Paragraph, shall thereupon become immediately due and
payable, (ii) all Income paid after such exercise or deemed exercise shall be retained
by the nondefaulting party and applied to the aggregate unpaid Repurchase
Prices and any other amounts owing by the defaulting party hereunder, and (iii)
the defaulting party shall immediately deliver to the nondefaulting party any
Purchased Securities subject to such Transactions then in the defaulting party’s
posses­sion or control.

(c)          In
all Transactions in which the defaulting party is acting as Buyer, upon tender
by the nondefaulting party of payment of the aggregate Repurchase Prices for
all such Transactions, all right, title and interest in and entitlement to all
Purchased Securities subject to such Transactions shall be deemed transferred
to the nondefaulting party, and the defaulting party shall deliver all such
Purchased Securities to the nondefaulting party.

(d)         If
the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, the nondefaulting party,
without prior notice to the defaulting party, may:

(i)             as
to Transactions in which the defaulting party is acting as Seller, (A)
immediately sell, in a recognized market (or otherwise in a commercially
reasonable manner) at such price or prices as the nondefaulting party may
reasonably deem satisfactory, any or all Purchased Securities subject to such
Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase
Prices and any other amounts owing by the defaulting party hereunder or (B) in
its sole discretion elect, in lieu of selling all or a portion of such Purchased
Securities, to give the defaulting party credit for such Purchased Securities
in an amount equal to the price therefor on such date, obtained from a
generally recognized source or the most recent closing bid quotation from such
a source, against the aggregate unpaid Repurchase Prices and any other amounts
owing by the defaulting party hereunder; and

(ii)          as
to Transactions in which the defaulting party is acting as Buyer, (A)
immediately purchase, in a recognized market (or otherwise in a commercially
reasonable man­ner) at such price or prices as the nondefaulting party may
reasonably deem satisfac­tory, securities (“Replacement Securities”) of the
same

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class and amount as any Purchased Securities that are not delivered by
the defaulting party to the nondefault­ing party as required hereunder or (B)
in its sole discretion elect, in lieu of purchas­ing Replacement Securities, to
be deemed to have purchased Replacement Securities at the price therefor on
such date, obtained from a generally recognized source or the most recent
closing offer quotation from such a source.

Unless otherwise provided in Annex 1, the parties acknowledge and agree
that (1) the Securities subject to any Transaction hereunder are instruments
traded in a recognized market, (2) in the absence of a generally recognized
source for prices or bid or offer quo­tations for any Security, the
nondefaulting party may establish the source therefor in its sole discretion
and (3) all prices, bids and offers shall be determined together with accrued
Income (except to the extent contrary to market practice with respect to the
rel­evant Securities).

(e)          As
to Transactions in which the defaulting party is acting as Buyer, the
defaulting party shall be liable to the nondefaulting party for any excess of
the price paid (or deemed paid) by the nondefaulting party for Replacement
Securities over the Repurchase Price for the Purchased Securities replaced
thereby and for any amounts payable by the defaulting party under Paragraph 5
hereof or otherwise hereunder.

(f)            For
purposes of this Paragraph 11, the Repurchase Price for each Transaction
hereunder in respect of which the defaulting party is acting as Buyer shall not
increase above the amount of such Repurchase Price for such Transaction
determined as of the date of the exercise or deemed exercise by the
nondefaulting party of the option referred to in sub­paragraph (a) of this
Paragraph.

(g)         The
defaulting party shall be liable to the nondefaulting party for (i) the amount
of all reasonable legal or other expenses incurred by the nondefaulting party
in connection with or as a result of an Event of Default, (ii) damages in an
amount equal to the cost (including all fees, expenses and commissions) of
entering into replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and
(iii) any other loss, damage, cost or expense directly arising or resulting
from the occurrence of an Event of Default in respect of a Transaction.

(h)         To
the extent permitted by applicable law, the defaulting party shall be liable to
the non­defaulting party for interest on any amounts owing by the defaulting
party hereunder, from the date the defaulting party becomes liable for such
amounts hereunder until such amounts are (i) paid in full by the defaulting
party or (ii) satisfied in full by the exercise of the nondefaulting party’s
rights hereunder. Interest on any sum payable by the default­ing party to the
nondefaulting party under this Paragraph 11(h) shall be at a rate equal to the
greater of the Pricing Rate for the relevant Transaction or the Prime Rate.

(i)             The
nondefaulting party shall have, in addition to its rights hereunder, any rights
other­wise available to it under any other agreement or applicable law.

12.       Single Agreement

Buyer and Seller acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in reliance upon
the fact that, all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other. Accordingly,
each of Buyer and Seller agrees

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(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 Transactions hereunder and (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.

13.       Notices and Other
Communications

Any and all notices, statements, demands or other communications
hereunder may be given by a party to the other by mail, facsimile, telegraph,
messenger or otherwise to the address specified in Annex 11 hereto, or so sent
to such party at any other place specified in a notice of change of address
hereafter received by the other. All notices, demands and requests hereunder
may be made orally, to be confirmed promptly in writing, or by other
communication as specified in the preceding sentence.

14.       Entire Agreement;
Severability

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

15.       Non-assignability;
Termination

(a)          The rights and
obligations of the parties under this Agreement and under any Transaction shall
not be assigned by either party without the prior written consent of the other
party, and any such assignment without the prior written consent of the other
party shall be null and void. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. This Agreement may be terminated
by either party upon giving written notice to the other, except that this
Agreement shall, notwithstanding such notice, remain applicable to any
Transactions then outstanding.

(b)         Subparagraph (a) of this
Paragraph 15 shall not preclude a party from assigning, charging or otherwise
dealing with all or any part of its interest in any sum payable to it under
Paragraph 11 hereof.

16.       Governing Law

This Agreement shall be
governed by the laws of the State of New York without giving effect to the
conflict of law principles thereof.

17.       No Waivers, Etc.

No express or implied
waiver of any Event of Default by either party shall constitute a waiver of any
other Event of Default and no exercise of any remedy hereunder by any party
shall constitute a waiver of its right to exercise any other remedy hereunder.
No modification or waiver of any provision of this Agreement and no consent by
any party to a departure herefrom shall be effective unless and until such
shall be in writing and duly executed by both of the parties hereto. Without
limitation on an of the foregoing, the failure to give a notice pursuant to
Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so
at a later date.

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18.       Use of Employee Plan Assets

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

(b)         Subject to the last
sentence of subparagraph (a) of this Paragraph, any such Transaction shall
proceed only if Seller furnishes or has furnished to Buyer its most recent
available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.

(c)          By entering into a
Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent
to Buyer that since the date of Seller’s latest such financial statements,
there has been no material adverse change in Seller’s financial condition which
Seller has not dis­closed to Buyer, and (ii) to agree to provide Buyer with
future audited and unaudited statements of its financial condition as they are
issued, so long as it is a Seller in any out­standing Transaction involving a
Plan Party.

19.       Intent

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

(b)         It is understood that
either party’s right to liquidate Securities delivered to it in connec­tion
with Transactions hereunder or to exercise any other remedies pursuant to
Paragraph 11 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 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 11 “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).

 10
 

20.       Disclosure Relating to
Certain Federal Protections

The parties acknowledge
that they have been advised that:

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

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

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

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 11
 

 

	
  

  	
   

  	
  GOLDMAN SACHS MORTGAGE COMPANY,

  
	
   

  	
   

  	
  a New York limited liability partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: Goldman Sachs Real Estate Funding

  Corp.,

  
	
   

  	
   

  	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRAMERCY WAREHOUSE FUNDING II LLC,

  
	
   

  	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:  GRAMERCY INVESTMENT

  TRUST, a Maryland real estate investment

  trust, its sole member and manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GKK CAPITAL LP, a Delaware 

  limited partnership, its sole 

  shareholder

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GRAMERCY CAPITAL

  CORP., a Maryland 

  corporation, its general 

  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GKK TRADING WAREHOUSE II LLC,

  
	
   

  	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:  GRAMERCY INVESTMENT 

  TRUST, a Maryland real estate investment 

  trust, its sole member and manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GKK CAPITAL LP, a Delaware 

  limited partnership, its sole 

  shareholder

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GRAMERCY CAPITAL

  CORP., a Maryland 

  corporation, its general 

  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its:

  
														

 

 12Exhibit 10.2

EXECUTION VERSION

ANNEX I to 

SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

(GOLDMAN
SACHS MORTGAGE COMPANY)

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  APPLICABILITY; OTHER APPLICABLE ANNEXES

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  ADDITIONAL AND SUBSTITUTE DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  INITIATION; CONFIRMATION; TERMINATION; FEES

  	
  19

  
	
   

  	
   

  	
   

  
	
  4.

  	
  MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS

  	
  27

  
	
   

  	
   

  	
   

  
	
  5.

  	
  INCOME PAYMENTS AND PRINCIPAL PAYMENTS

  	
  27

  
	
   

  	
   

  	
   

  
	
  6.

  	
  CAUTIONARY SECURITY INTEREST

  	
  29

  
	
   

  	
   

  	
   

  
	
  7.

  	
  PAYMENT, TRANSFER AND CUSTODY

  	
  30

  
	
   

  	
   

  	
   

  
	
  8.

  	
  CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE
  PURCHASED LOANS

  	
  37

  
	
   

  	
   

  	
   

  
	
  9.

  	
  RESERVED

  	
  37

  
	
   

  	
   

  	
   

  
	
  10.

  	
  REPRESENTATIONS

  	
  37

  
	
   

  	
   

  	
   

  
	
  11.

  	
  NEGATIVE COVENANTS OF SELLER

  	
  40

  
	
   

  	
   

  	
   

  
	
  12.

  	
  AFFIRMATIVE COVENANTS OF SELLER

  	
  41

  
	
   

  	
   

  	
   

  
	
  13.

  	
  SINGLE-PURPOSE ENTITY

  	
  45

  
	
   

  	
   

  	
   

  
	
  14.

  	
  EVENTS OF DEFAULT; REMEDIES

  	
  46

  
	
   

  	
   

  	
   

  
	
  15.

  	
  SINGLE AGREEMENT

  	
  50

  
	
   

  	
   

  	
   

  
	
  16.

  	
  NOTICES AND OTHER COMMUNICATIONS

  	
  51

  
	
   

  	
   

  	
   

  
	
  17.

  	
  NON-ASSIGNABILITY

  	
  51

  
	
   

  	
   

  	
   

  
	
  18.

  	
  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
  JURY TRIAL

  	
  52

  
	
   

  	
   

  	
   

  
	
  19.

  	
  NO RELIANCE; DISCLAIMERS

  	
  52

  
	
   

  	
   

  	
   

  
	
  20.

  	
  INDEMNITY AND EXPENSES

  	
  54

  
	
   

  	
   

  	
   

  
	
  21.

  	
  DUE DILIGENCE

  	
  55

  
	
   

  	
   

  	
   

  
	
  22.

  	
  SERVICING

  	
  55

  
	
   

  	
   

  	
   

  
	
  23.

  	
  TREATMENT FOR TAX PURPOSES

  	
  56

  
	
   

  	
   

  	
   

  
	
  24.

  	
  INTENT

  	
  56

  
	
   

  	
   

  	
   

  
	
  25.

  	
  MISCELLANEOUS

  	
  57

  

 

 i
 

 

	
  SCHEDULE 1

  	
  Purchase Percentages and Applicable Spreads

  	
  1-1

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  Purchased Loan Information

  	
  2-1

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT I

  	
  Form of Confirmation

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT II

  	
  Authorized Representatives of Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT III

  	
  Form of Custodial Delivery Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT IV-1

  	
  Form of Power of Attorney to Buyer

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT IV-2

  	
  Form of Power of Attorney to Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT V

  	
  Representations and Warranties Regarding Purchased
  Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT VI

  	
  Form of Blocked Account Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT VII

  	
  Form of Bailee Agreement

  	
   

  

 

 ii

Supplemental Terms and Conditions

This Annex I forms a part of the Second Amended
and Restated Master Repurchase Agreement dated as of June 28, 2007 by and among
Gramercy Warehouse Funding II LLC and GKK Trading Warehouse II LLC, each as
seller, and Goldman Sachs Mortgage Company, as buyer (together with Annex I,
the “Agreement”) and amends and restates that certain Amended and
Restated Master Repurchase Agreement dated October 13, 2006 by and among the
Seller and Buyer (as such agreement may have been amended from time to time,
the “Original Agreement”). 
Capitalized terms used in this Annex I without definition shall
have the respective meanings assigned to such terms in the Agreement.  This Annex I is intended to supplement
the Agreement and shall, wherever possible, be interpreted so as to be
consistent with the Agreement; however, in the event of any conflict or
inconsistency between the provisions of this Annex I, on the one hand, and
the provisions of the Agreement, on the other, the provisions of this
Annex I shall govern and control. 
All references in the Agreement and in this Annex I to “the Agreement”
shall be deemed to mean and refer to the Agreement, as supplemented and
modified by this Annex I or as otherwise modified after the date hereof.

1.                                      APPLICABILITY;
OTHER APPLICABLE ANNEXES

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

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

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

Annex II – Names and Addresses for Communications
Between Parties.

2.                                      ADDITIONAL
AND SUBSTITUTE DEFINITIONS

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

(i)                                     “Additional
Purchased Securities”;

(ii)                                  “Buyer’s
Margin Amount”;

(iii)                               “Buyer’s
Margin Percentage”;

(iv)                              “Margin
Notice Deadline”;

(v)                                 “Prime
Rate”;

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

(vii)                           “Seller’s
Margin Percentage”.

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

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

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

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

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

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

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

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

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

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

 2
 

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

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

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

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

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

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

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

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

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

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

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

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

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

 3
 

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

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

“Approved Bank”
shall mean any bank, savings and
loan association, savings institution, trust company or national banking
association subject to state and/or federal supervision.

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

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

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

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

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

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

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

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

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

 4
 

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

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

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

“Capital Stock” shall mean, 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
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.

“Cash and Cash Equivalents”
(i) cash, (ii) direct obligations of the United States Government,
including, without limitation, treasury bills, notes and bonds,
(iii) interest bearing or discounted obligations of Federal agencies and
entities sponsored by any Governmental Authority or pools of such instruments
offered by Approved Banks and dealers, including without limitation, Federal
Home Loan Mortgage Corporation participation sale certificates, Government
National Mortgage Association modified pass-through certificates, Federal
National Mortgage Association bonds and notes, and Federal Farm Credit System
securities, (iv) time deposits, Domestic and Eurodollar certificates of
deposit, bankers’ acceptances, commercial paper rated at least A-1 by
S&P and P-1 by Moody’s and/or guaranteed by a Person with an Aa1
rating by Moody’s, an AA- rating by S&P or better rated credit,
floating rate notes, other money market instruments and letters of credit each
issued by Approved Banks (provided that the same shall cease to be a “Cash
or Cash Equivalent” if at any time any such bank shall cease to be an Approved
Bank), (v) obligations of domestic corporations, including, without
limitation, commercial paper, bonds, debentures and loan participations, each
of which is rated at least AA– by S&P and/or Aa1 by Moody’s and/or
guaranteed by a Person with an Aa1 rating by Moody’s and/or an AA- rating
by S&P or better rated credit, (vi) obligations issued by states and
local governments or their agencies, rated at least MIG-1 by Moody’s
and/or SP-l by S&P and/or guaranteed by an irrevocable letter of
credit of an Approved Bank (provided that the same shall cease to be a “Cash
or Cash Equivalent” if at any time any such bank shall cease to be an Approved
Bank), (vii) repurchase agreements with major banks and primary government
security dealers fully secured by the U.S. Government or agency collateral
equal to or exceeding the principal amount on a daily basis and held in
safekeeping, and (viii) real estate loan pool participations, guaranteed
by a Person with an AA- rating given by S&P or Aa1 rating given by
Moody’s or better rated credit.

“Change of Control” shall mean the occurrence
of any of the following events:

(i)                                     prior
to an internalization of management by Parent, if GKK Manager LLC is no longer
the manager of Parent;

(ii)                                  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 be or have the right to be (whether by
means of warrants, options or otherwise), or shall become or obtain rights
(whether by means of warrants, options or otherwise) 

 5
 

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;

(iii)                               the Parent shall cease
to own and control, of record and beneficially, directly 100% of each class of
outstanding Capital Stock of each Seller;

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

(v)                                 a
majority of the members of the board of directors of Parent changes during any
twelve (12) month period after the date hereof; or

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

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.

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

“Consolidated Adjusted EBITDA” shall mean, for
any period, determined with respect to any Person(s) on an aggregate basis, an
amount equal to the sum of (a) net income (or loss) of such Person(s) for such
period determined on an aggregate 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 (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, (iv) extraordinary or non-recurring gains and losses and less
(v) any non-cash reserve activity; 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 and
related extensions of credit in connection with bona fide lendings made by such
Person as lender.

“Consolidated Interest Expense” shall mean, for
any period, determined without duplication with respect to any Person(s) on an
aggregate 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 Unconsolidated Affiliates.

“Consolidated Leverage Ratio” shall mean, with
respect to the Guarantors as of any date, the ratio of:

(i)                                     Consolidated
Total Indebtedness of the Guarantors (calculated on an aggregate basis  after including each Guarantor’s pro-rata share of the
Indebtedness and Contingent Liabilities of any off

 6
 

balance sheet
securitization vehicles issued by each such Guarantor or any of their
respective Subsidiaries, Affiliates or Unconsolidated Affiliates, other than
any Unconsolidated Affiliates that are securitization vehicles that qualify as
QSPEs) to

(ii)                                  Consolidated
Total Assets of the Guarantors (calculated on an aggregate basis after
including each Guarantor’s pro-rata share of the then-current fair market value
of each Guarantor’s interests in any of the assets of any off balance sheet
securitization vehicles managed by any such Guarantor or any of their
respective Subsidiaries, Affiliates or Unconsolidated Affiliates, other than
any Unconsolidated Affiliates that are securitization vehicles that qualify as
QSPEs).

“Consolidated Total Assets” shall mean, at any
time, an amount equal to the aggregate book value of (a) all assets owned by
any Person(s) (on an aggregate basis) and (b) the proportionate share of assets
owned by Unconsolidated Affiliates 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 Hedging Transactions
specifically related to the Purchased Loans)] and (iii) prepaid taxes and/or
expenses.

“Consolidated Total Indebtedness” shall mean,
at any time, without duplication, all Indebtedness and Contingent Liabilities
of any Person(s) and all Subsidiaries thereof determined on an aggregate basis,
plus the pro rata share of Indebtedness and Contingent Liabilities of
Unconsolidated Affiliates of such Person(s).

“Contingent Liabilities” shall mean, 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 extensions of credit in connection
with bona fide lendings made by such Person as lender and 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 

 7
 

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).

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

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

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

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

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

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

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

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

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

“Derivatives Contract” shall mean, 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.

 8
 

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” shall mean,
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 be Buyer).

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

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

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

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

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

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

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

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

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

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

(iii)                               senior subordinate
participation interests (or a senior subordinate promissory note that is, in
effect, similar in nature to a senior subordinate participation interest) in
performing First Mortgage Loans that also secures a senior promissory note (or
senior interest) in such loan 

 9
 

and may also secure a
junior subordinate promissory note (or junior subordinate interest) in such
loan (“Senior First Mortgage B Notes”).

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

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

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

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

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

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

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

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

 10
 

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

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

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

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

“Financial Covenant Compliance Certificate”
shall mean an Officer’s Certificate to be delivered by the Parent within 45
days after the end of each fiscal quarter confirming that:

(i)                                     as
of the fiscal quarter most recently ended,

(a)                                    the
Interest Coverage Ratio equal to exceeds 1.35 to 1.00;

(b)                                   the
Consolidated Leverage Ratio does not exceed 0.90 to 1.00;

(c)                                    the
Total Liabilities Ratio does not exceed 0.85 to 1.00;

(d)                                   the
Fixed Charge Coverage Ratio equals or exceeds 1.25 to 1.00;

(e)                                    the
Guarantors Tangible Net Worth is equal to or greater than the sum of (i) $400,000,000
and (ii) 75% of the net proceeds from the issuance by any Guarantor or any
Subsidiary thereof of any capital stock of any class (whether in a public
offering or a private placement) subsequent to the date of this Agreement; and

(ii)                                  at
all times during such fiscal quarter,

(a)                                    the
Net Income of the Guarantors (calculated on an aggregate basis) was a positive
amount;

(b)                                   the
Liquidity of the Guarantors (calculated on an aggregate basis) was not less
than $15,000,000; and

(c)                                    no
Guarantor has incurred any Indebtedness in excess of the Maximum Guarantor Debt
Amount.

“Financial Covenants” means each of the
requirements set forth in clauses (i) and (ii) of the definition of Financial
Covenant Compliance Certificate.

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

 11
 

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

“Fitch” means Fitch Inc.

“Fixed Charge Coverage Ratio” shall mean, with
respect to the Guarantors and for any period, the Consolidated Adjusted EBITDA
of the Guarantors for such period (calculated on an aggregate basis after
adding back all applicable Incentive Fees), divided by the Fixed Charges of the
Guarantors (calculated on an aggregate basis) for the same period.

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

“Future Advance Facility Amount” shall mean an
amount equal to $100,000,000 (as the same may be adjusted from time to time in
accordance with Section 3(f)(ii)) or such lessor amount after giving effect to
the exercise by Seller of its conversion as provided in Section 3(s), such
lesser amount with respect to which Seller has not elected to exercise the
option described in Section 3(s).

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

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

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

“Guarantee Obligation” shall mean, 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.

 12
 

“Guarantors” means Parent, GKK Capital LP, a
Delaware limited partnership (and any successor thereof), Gramercy Investment
Trust, a Maryland real estate investment trust (and any successor thereto), and
GKK Trading Corp., a Delaware corporation (and any successor thereto).

“Guaranty” shall mean that certain Amended and
Restated Guaranty dated as of the date of this Agreement, made by Guarantors in
favor of Buyer, as the same may be amended, supplemented or otherwise modified
from time to time.

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

“Incentive Fees” shall mean the payments due to
the Holders of Class B Units pursuant to the terms of the version of Section
5.01C of the Agreement of Limited Partnership of GKK Capital LP dated August 2,
2004 that is in effect on the date of this Agreement.

“Indebtedness” shall mean, 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) Capital 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 Loan or any obligation senior to
the Purchased Loan, unfunded interest reserve amount under any Purchased Loan
or any obligation that is senior to the Purchased Loan, 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 

 13
 

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.

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

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

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

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

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

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

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

“Interest Coverage Ratio” shall mean the ratio
of Consolidated Adjusted EBITDA to Consolidated Interest Expense.

“Investment” shall mean, 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 this 

 14
 

Agreement, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

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

	
  LIBOR

  
	
  1 - Reserve Requirement

  

 

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

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

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

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

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

“Liquidity” shall mean, for any Person and any
date of determination, the sum of such Person’s Cash, Cash Equivalents and
actual borrowing availability under any credit facilities (including under this
Agreement so long as no Default or Event of Default is then continuing), as of
such date of determination.

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

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

“Management Contract” That certain Management Contract, dated as
of August 20, 2004, between Parent and GKK Manager LLC, as the same may be
amended, restated, supplemented or otherwise modified and in effect from time
to time.

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“Mandatory Redeemable
Stock” means, with respect to any Person 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.

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

“Maximum Guarantor Debt Amount” means, with respect to any Guarantor, the sum
of:  (i) $300,000,000 with respect to
future funding obligations under the Purchased Loans or similar loans acquired
by the Sellers, which future funding obligations shall exclude (A) the then
current Future Facility Amount, (B) all amounts committed for future fundings
under the Third Amended and Restated Master Repurchase Agreement (dated as of
October 13, 2006) between Wachovia Bank, National Association, Gramercy
Warehouse Funding I LLC, GKK Trading Warehouse I, LLC and GKK 450 LEX LLC, net
of any equity portions thereof which must be funded by any Guarantor or any
Affiliates or Subsidiaries of any Guarantor, and (C) the amount of all such
future funding obligations that are then-currently and exclusively allocated or
budgeted by any Guarantor or any Affiliate or Subsidiary of any Guarantor,
either as interest reserves or for the acquisition of additional Eligible
Assets, in either case also net of any equity portions thereof which must be
funded by any Guarantor or any Affiliates or Subsidiaries of any Guarantor,
(ii) such Guarantor’s obligations under this Agreement, (iii) customary and
standard trade payables incurred by such Guarantor in the ordinary course of
business, provided that (A) the aggregate amount of any such outstanding trade
payables shall at no time exceed $500,000, and (B) any such trade payable
amounts shall be paid by such Guarantor within sixty (60) days of when they
were incurred, (iv) fees payable under the Management Contract as in effect on
the date hereof, (v) similar guarantee obligations with respect to other credit
or repurchase facilities which provide financing for other Subsidiaries or
Affiliates of such Guarantor (other than Sellers under the documents related to
any of the transactions contemplated by the Agreement), but only if such
guarantee obligations are pari passu in
class and right with the obligations to Buyer under the Agreement  (vi) the then-current outstanding balance of
all unpaid obligations of any Guarantor under that certain First Amended and
Restated Credit Agreement dated as of June    , 2007, among GKK
Capital LP, as borrower, Keybank National Association, as agent, the banks
party thereto and Keybanc Capital Markets, as sole lead manager and arranger,
but in no event shall the total amount of all obligations outstanding under
such credit agreement exceed an amount equal to $225,000,000.

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

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

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

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

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

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

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

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

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

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

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

“Non-Recourse Indebtedness” shall mean 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.

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

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

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

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

“Plan” shall mean an employee benefit or other
plan established or maintained during the five year period ended prior to the
date of the Agreement or to which Seller or any ERISA Affiliate makes, is
obligated to make or has, within the five year period ended prior to the date
of the Agreement, been required to make contributions and that is covered by
Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.

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

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

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

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

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

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

(ii)                                  current
rent roll, if applicable;

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

(iv)                              indicative
interest coverage ratios;

(v)                                 indicative
loan-to-value ratio;

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

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

(a)                                  engineering
and structural reports;

(b)                                 current
Appraisal;

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

(d)                                 seismic
reports; and

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

(viii)                        documents evidencing such New
Loan, or current drafts thereof, including, without limitation, underlying debt
and security documents, guaranties, underlying borrower’s organizational
documents, warrant agreements, loan and collateral pledge agreements, and
intercreditor agreements, as applicable;

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

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

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

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

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

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

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

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

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

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

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

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

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

“QSPE” shall mean a qualified special purpose
entity for purposes of FAS 140.

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

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

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

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

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

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“REO Property” shall mean any real property
acquired by a Seller, including a Mortgaged Property acquired through
foreclosure of a Purchased Loan or by deed in lieu of such foreclosure.

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

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

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

“Reserve Requirement” shall mean, with respect
to any Pricing Rate Period, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect during such
Pricing Rate Period (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other governmental authority having
jurisdiction with respect thereto) dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in Regulation D of such Board of Governors) maintained by Buyer.

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

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

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

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

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

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

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

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

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

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

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

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

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

(v)           subordinates
the lien priority of the Purchased Loan or the payment priority of the
Purchased Loan other than subordinations expressly required under the then
existing terms and conditions of the Purchased Loan (provided, however,
the foregoing shall not preclude the execution and delivery of subordination,
nondisturbance and attornment agreements with tenants, subordination to tenant
leases, easements, plats of subdivision and condominium declarations and
similar instruments which in the commercially reasonable judgment of Seller do
not materially adversely affect the rights and interest of the holder of the
Purchased Loan in question);

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

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

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

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

“Single-Purpose Entity” shall mean a
Person, other than an individual, which is formed or organized solely for the
purpose of holding, directly or indirectly and subject to this Agreement and
the Securities Repurchase Agreement, the Purchased Loans and the Portfolio
Securities, does not engage in any business unrelated to the Purchased Loans
and the Portfolio Securities, does not have any assets other than the Purchased
Loans and the Portfolio Securities or any indebtedness other than as permitted
by the Agreement and the Securities Repurchase Agreement, has its own separate
books and records and its own accounts, in each case which are separate and
apart from the books and records and accounts of any other Person, holds itself
out as being a Person, separate and apart from any other Person and provides in
its partnership agreement or limited liability company agreement (as applicable)
for the inclusion of at least one Independent Director.  If  the
foregoing entity is a limited partnership or limited liability company, its

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partnership agreement or
limited liability company agreement (as applicable) shall provide that that the
dissolution and winding up or bankruptcy or insolvency filing of such
partnership or limited liability company shall require the unanimous consent of
all partners or members (including the affirmative vote of the independent
directors) and if the foregoing entity is a single-member limited liability
company whose single member is not itself a Single-Purpose Entity, its limited
liability company agreement shall provide that upon the occurrence of any event
that causes its sole member to cease to be a member during the term of this
Agreement, at least one of its independent directors shall automatically be
admitted as the sole member and shall preserve and continue the existence of
the entity without dissolution.

“SLG” shall mean SL Green Realty Corp., a
Maryland corporation.

“Special Dividend Distributions” shall mean any
cash distributions, to the extent necessary to eliminate taxes pursuant to
Sections 857(b)(3) and 4981 of the Internal Revenue Code.

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

“Subsidiary” shall mean,
with respect to any Person, any corporation, partnership or other entity of
which at least a majority of the securities or other ownership interests having
by the terms thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such corporation,
partnership or other entity (irrespective of whether or not at the time
securities or other ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person.

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

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

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

“Tangible Net Worth” shall mean, with respect
to any Person and any date of determination and calculated on a consolidated
basis, (i) 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 (ii) (a) amounts owing to such
Person(s) from any Affiliates thereof, or from officers, employees, partners,
members, directors, shareholders or other Persons similarly affiliated with
such Person(s) or their respective Affiliates, (b) intangible assets (other
than Hedging Transactions specifically 

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related to the Purchased
Loans), (c) prepaid taxes and/or expenses and (d) the value of any Purchased
Loan which becomes an REO Property.

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

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

“Total Liabilities Ratio” shall mean, with
respect to the Guarantors as of any date of determination, the ratio of
(a) the Total Indebtedness of the Guarantors (after deducting the total
amount of all Trust Preferred Securities from the Consolidated Total
Indebtedness of the Guarantors) to (b) the Consolidated Total Assets of
the Guarantors.

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

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

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

“Transaction Documents” shall mean,
collectively, the Agreement (including this Annex I and any other annexes and
schedules attached to the Agreement), the Blocked Account Agreement, the
Custodial Agreement, the Fee Letter, the Servicing Agreement, all Transfer
Documents, all Confirmations executed pursuant to this Annex I in connection
with specific Transactions and all other documents executed in connection
herewith and therewith.

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

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

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

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

 24
 

Commercial
Code as in effect in such other jurisdiction for purposes of the provisions of
this Annex I relating to such perfection or effect of perfection or
non-perfection.

“Unconsolidated Affiliates” shall mean, 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.

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

3.                                      INITIATION;
CONFIRMATION; TERMINATION; FEES

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

(a)           Seller may, from time to time, prior
to the Facility Termination Date, request that Buyer enter into a Transaction
with respect to one or more New Loans. 
Seller shall initiate each request by submitting a Preliminary Due
Diligence Package for Buyer’s review and approval.  Notwithstanding anything to the contrary
herein, Buyer shall have no obligation to consider for purchase any proposed
Transaction that has an aggregate Repurchase Price (excluding the Price
Differential with respect to the Purchased Loans as of the date of
determination) that when combined with all Purchased Loans which have not been
repurchased by Seller hereunder exceeds the Facility Amount.  Buyer shall have the right to review all New
Loans proposed to be sold to Buyer in any Transaction and to conduct its own
due diligence investigation of such New Loans as Buyer determines is reasonably
necessary.  Seller agrees to promptly
reimburse Buyer for its Diligence Fees upon request for payment or
reimbursement thereof.  Notwithstanding
any provision to the contrary herein or any other Transaction Document, Buyer
shall be entitled to make a determination, in its sole and absolute discretion,
whether a New Loan qualifies as an Eligible Loan and whether to reject any or
all of the New Loans proposed to be sold to Buyer by Seller.  Buyer shall have no obligation to consider
for purchase any New Loans proposed by Seller after the original Facility
Termination Date or during the Facility Extension Period (if applicable).

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

 25
 

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

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

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

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

(iv)          Insurance.  Buyer shall have received certificates or
other evidence of insurance detailing insurance coverage in respect of the
related Eligible Property or Properties of types (including but not limited to
casualty, general liability and terrorism insurance coverage (consistent with
market standard requirements)), in amounts, with insurers and otherwise in
compliance with the terms, provisions and conditions set forth in the Purchased
Loan Documents and otherwise reasonably satisfactory to Buyer.  Such certificates or other evidence shall
indicate that Seller (or as to a New Loan that is a participation interest, the
lead lender on the related whole loan in which Seller is a participant) will be
named as an additional insured as its interest may appear and shall contain a
loss payee endorsement in favor of such additional insured with respect to the
policies required to be maintained under the Purchased Loan Documents.

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

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

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

 26
 

(viii)        Title Policy.

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

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

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

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

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

 27
 

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

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

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

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

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

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

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

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

 28
 

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

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

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

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

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

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

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

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

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

 29
 

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

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

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

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

(iii)          Seller shall pay to Buyer on the Early
Repurchase Date, an amount equal to the sum of the Repurchase Price for such
Transaction, all Costs and any other amounts payable by Seller and outstanding
under the Agreement (including, without limitation, Section 3(m) of this Annex
I) with respect to such Transaction against transfer to Seller or its agent of
the related Purchased Loan.

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

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

(j)            In lieu of repaying the Repurchase
Price, in whole or in part, with respect to the Transactions when and as
otherwise required or permitted by the Agreement, Seller may elect to deposit
any such amount (the “Early Repurchase Deposit”) with Buyer (the date of
such deposit, the “Early

 30
 

Repurchase Deposit
Funding Date”) until such date as the application of the Early
Repurchase Deposit towards the Repurchase Price would not cause Buyer to incur
the costs described in Section 3(m) hereof (the “Early Repurchase Deposit
Application Date”).  The Early
Repurchase Deposit shall be held in an interest-bearing account controlled by
Buyer and, at Buyer’s option, shall be accompanied by a payment (as estimated
by Buyer) equal to the difference between the interest earned on the Early
Repurchase Deposit and the Price Differential that will accrue on a portion of
the relevant Transaction equal to the Early Repurchase Deposit during the
period from the Early Repurchase Deposit Funding Date to the Early Repurchase
Deposit Application Date.

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

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

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

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

 31
 

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

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

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

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

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

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

(q)           The facility under the Agreement
shall terminate on September 13, 2009, unless extended as provided herein.
Provided that (i) no Event of Default has occurred and is continuing and (ii)
Seller

 32
 

shall have paid to Buyer the applicable fees in
accordance with the Fee Letter, Seller may elect by written notice not later
than 45 days prior to such Facility Termination Date to extend the Facility
Termination Date for a period ending on the Remittance Date that is six months
after the initial Facility Termination Date (such period, the “Facility
Extension Period”).  During the
Facility Extension Period, the Applicable Spread with respect to each
Transaction shall be increased as set forth in Schedule 1.  On each Remittance Date during the Facility
Extension Period, Seller shall be obligated to pay the Extended Repurchase
Monthly Amount, in addition to payments in respect of the accrued Price
Differential and any other amounts due and payable under this Agreement, which
shall be applied to reduce the Repurchase Price of each Purchased Loan pro
rata.

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

(s)           Upon written request by the Seller at
any time, all or a portion of the then remaining Future Advance Facility Amount
may be converted and added to the Facility Amount. Following such conversion
the Future Advance Facility Amount shall be reduced by the amount so converted.

4.                                      MANDATORY
PAYMENT OR DELIVERY OF ADDITIONAL ASSETS

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

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

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

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5.                                      INCOME
PAYMENTS AND PRINCIPAL PAYMENTS

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

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

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

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

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

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

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

 34
 

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

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

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

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

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

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

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

(iv)          fourth,
to Seller, the remainder.

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

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

6.                                      CAUTIONARY
SECURITY INTEREST

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

(a)           Buyer and Seller intend that all
Transactions hereunder be sales to Buyer of the Purchased Loans for all
purposes (other than for U.S. Federal, state and local income or franchise tax
purposes) and not loans from Buyer to Seller secured by the Purchased
Loans.  However, in the event any
Transaction is deemed to
be a loan, Seller shall be deemed to have pledged to Buyer as security for the

 35
 

performance by Seller of its obligations under such
Transaction and shall be deemed to have granted to Buyer a security interest in
(i) the Blocked Account, (ii) all of the Purchased Loans, (iii) all “general
intangibles,” “accounts” and “chattel paper” as defined in the UCC relating to
or constituting any and all of the foregoing, (iv) all Income from the
Purchased Loans and (v) all replacements, substitutions or distributions on or
proceeds, payments and profits of, and records and files relating to, any and
all of the foregoing (excluding any Margin Excess Advances).

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

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

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

7.                                      PAYMENT,
TRANSFER AND CUSTODY

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

(a)           Subject to the terms and conditions
of the Agreement, on the Purchase Date for each Transaction, ownership of the
Purchased Loans and all rights thereunder shall be transferred to Buyer or its
designee (including the Custodian) against the simultaneous transfer of the
Purchase Price to an account of Seller specified in the Confirmation relating
to such Transaction.  On the Purchase
Date for the first Transaction, Buyer will provide Seller with a power of
attorney, substantially in the form attached as Exhibit IV-2 hereto, in
recordable form, allowing Seller to administer, operate and service such
Purchased

 36
 

Loans.  Provided
no Event of Default beyond any applicable cure period shall have occurred and
be continuing, the power of attorney shall be binding upon Buyer and Buyer’s
successors and assigns.

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

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

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

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

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

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

(E)           The original Assignment of Mortgage
to Buyer for each Purchased Loan, in form and substance acceptable for
recording and signed in the name of the Last

 37
 

Endorsee (in the event
that the Purchased Loan was acquired by the Last Endorsee in a merger, the
signature must be in the following form: 
“[Last Endorsee], successor by merger to [name of predecessor]”; in the
event that the Purchased Loan was acquired or originated while doing business
under another name, the signature must be in the following form: “[Last
Endorsee], formerly known as [previous name]”).

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

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

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

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

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

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

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

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

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

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

 38
 

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

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

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

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

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

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

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

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

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

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

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

 39
 

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

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

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

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

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

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

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

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

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

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

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

 40
 

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

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

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

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

(O)          If the pledged equity interests are
not certificated, evidence (which may be an Officer’s Certificate confirming
such circumstances or in the form of an executed instruction to register such
pledge by the mezzanine borrower and acknowledgment by the entity in which such
pledged equity interests are held) that the pledged equity interests have been
transferred to, or otherwise made subject to a first priority security interest
in favor of, Seller.

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

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

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

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

 41
 

(c)           From time to time, Seller shall
forward to the Custodian additional original documents or additional documents
evidencing any assumption, modification, consolidation or extension of a
Purchased Loan approved in accordance with the terms of the Agreement, and upon
receipt of any such other documents, the Custodian shall hold such other
documents on behalf of Buyer and as Buyer shall request from time to time.  With respect to any documents which have been
delivered or are being delivered to recording offices for recording and have
not been returned to Seller in time to permit their delivery hereunder at the
time required, in lieu of delivering such original documents, Seller shall
deliver to Buyer a true copy thereof with an officer’s certificate certifying
that such copy is a true, correct and complete copy of the original, which has
been transmitted for recordation.  Seller
shall deliver such original documents to the Custodian promptly when they are
received.  With respect to all of the
Purchased Loans delivered by Seller to Buyer or its designee (including the
Custodian), Seller shall execute an omnibus power of attorney substantially in
the form of Exhibit IV-1 attached hereto irrevocably appointing Buyer its
attorney-in-fact with full power to (i) complete and record any Assignment of
Mortgage, (ii) complete the endorsement of any Mortgage Note or Mezzanine Note
and (iii) take such other steps as may be necessary or desirable to enforce
Buyer’s rights against any Purchased Loans and the related Purchased Loan Files
and the Servicing Records.  Buyer shall
deposit the Purchased Loan Files representing the Purchased Loans, or cause the
Purchased Loan Files to be deposited directly, with the Custodian to be held by
the Custodian on behalf of Buyer.  The
Purchased Loan Files shall be maintained in accordance with the Custodial
Agreement.  Any Purchased Loan Files not
delivered to Buyer or its designee (including the Custodian) are and shall be
held in trust by Seller or its designee for the benefit of Buyer as the owner
thereof.  Seller or its designee shall
maintain a copy of the Purchased Loan File and the originals of the Purchased
Loan File not delivered to Buyer or its designee.  The possession of the Purchased Loan File by
Seller or its designee is at the will of Buyer for the sole purpose of
servicing the related Purchased Loan, and such retention and possession by
Seller or its designee is in a custodial capacity only.  The books and records (including, without
limitation, any computer records or tapes) of Seller or its designee shall be
marked appropriately to reflect clearly the transfer, subject to the terms and
conditions of the Agreement, of the related Purchased Loan to Buyer.  Seller or its designee (including the
Custodian) shall release its custody of the Purchased Loan File only in
accordance with written instructions from Buyer, unless such release is
required as incidental to the servicing of the Purchased Loans or is in
connection with a repurchase of any Purchased Loan by Seller or is pursuant to
the order of a court of competent jurisdiction.

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

(i)            Transaction Documents.

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

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

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

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

 42

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

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

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

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

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

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

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

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

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

9.                                      RESERVED.

10.                               REPRESENTATIONS

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

(a)           Seller represents and warrants to
Buyer that as of the Purchase Date for the purchase of any Purchased Loan by
Buyer from Seller and any Transaction thereunder and as of the date of the

 43
 

Agreement and at all times while the Agreement and any
Transaction thereunder is in full force and effect:

(i)            Organization.  Seller is duly organized, validly existing
and in good standing under the laws and regulations of the state of Seller’s
organization and is duly licensed, qualified, and in good standing in every
state where such licensing or qualification is necessary for the transaction of
Seller’s business, except where lack of such licenses or qualifications would
not be reasonably likely to result in a Material Adverse Effect.  Seller has the power to own and hold the
assets it purports to own and hold, and to carry on its business as now being
conducted and proposed to be conducted, and has the power to execute, deliver,
and perform its obligations under the Agreement and the other Transaction
Documents.

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

(iii)          Non-Contravention; Consents.  Neither the execution and delivery of the
Transaction Documents, nor consummation by Seller of the transactions
contemplated by the Transaction Documents (or any of them), nor compliance by
Seller with the terms, conditions and provisions of the Transaction Documents
(or any of them) will (x) conflict with or result in a breach or violation of
any of the terms, conditions or provisions of any judgment or order, writ,
injunction, decree or demand of any court applicable to Seller, or (y) result
in the creation or imposition of any lien or any other encumbrance upon any of
the assets of Seller, other than pursuant to the Transaction Documents.  Seller has all necessary licenses, permits
and other consents from Governmental Authorities necessary to acquire, own and
sell the Portfolio Loans and for the performance of its obligations under the
Transaction Documents except where the failure to have any such license, permit
or consent would not be reasonably likely to result in a Material Adverse
Effect.

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

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

(vi)          Good Title to Purchased Loans.  Immediately prior to the purchase of any
Purchased Loans by Buyer from Seller, such Purchased Loans are free and clear
of any lien, security interest, claim, option, charge, encumbrance or
impediment to transfer (including any “adverse claim” as defined in Section
8-102(a)(1) of the UCC but excluding any liens or encumbrances to be released
simultaneously with the sale to Buyer hereunder), and are not subject to any
rights of setoff, any prior sale, transfer, assignment, or participation by
Seller or

 44
 

any agreement by Seller
to assign, convey, transfer or participate, in whole or in part, and Seller is
the sole legal record and beneficial owner of and owns and has the right to
sell and transfer such Purchased Loans to Buyer and, upon transfer of such
Purchased Loans to Buyer, Buyer shall be the owner of such Purchased Loans
(other than for U.S. Federal, state and local income and franchise tax
purposes) free of any adverse claim, subject to Seller’s rights pursuant to the
Agreement.  In the event the related
Transaction is recharacterized as a secured financing of the Purchased Loans and
with respect to the security interests granted in Sections 6(a) and 6(c), the
provisions of the Agreement are effective to create in favor of Buyer a valid
security interest in all rights, title and interest of Seller in, to and under
the Purchased Loans and the collateral specified in Sections 6(a) and 6(c),
Buyer shall have a valid, perfected and enforceable first priority security
interest in the Purchased Loans and such other collateral, subject to no lien
or rights of others other than as granted herein.

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

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

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

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

 45
 

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

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

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

(xiv)        ERISA.  Neither Seller nor any ERISA Affiliate
(a) sponsors or maintains any Plans or (b) makes any contributions to
or has any liabilities or obligations (direct or contingent) with respect to
any Plans. Seller does not, and would not be deemed to, hold Plan Assets and
the consummation of the transactions contemplated by the Agreement will not
constitute or result in any non-exempt prohibited transaction under Section 406
of ERISA, Section 4975 of the Code or substantially similar provisions under
any other federal, state or local laws, rules or regulations.

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

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

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

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

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

 46
 

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

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

11.                               NEGATIVE
COVENANTS OF SELLER

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

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

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

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

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

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

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

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

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

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

 47
 

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

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

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

12.                               AFFIRMATIVE
COVENANTS OF SELLER

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

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

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

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

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

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

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

 48
 

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

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

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

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

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

(i)            the Monthly Statement;

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

(iii)          the Quarterly Report;

(iv)          the Financial Covenant Compliance
Certificate;

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

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

 49
 

event or circumstance has
occurred that is reasonably likely to result in a Material Adverse Effect;

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

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

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

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

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

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

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

(k)           Seller shall observe, perform and
satisfy all the terms, provisions, covenants and conditions required to be
observed, performed or satisfied by it, and shall pay when due all costs, fees
and expenses required to be paid by it, under the Transaction Documents.  Seller shall pay and discharge all taxes,
levies, liens and other charges, if any, on its assets and on the Purchased
Loans that, in each case, in any manner would create any lien or charge upon
the Purchased Loans, except for any such taxes as are

 50
 

being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided in accordance with GAAP.

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

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

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

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

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

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

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

(s)           In the event that the Seller has
entered into or shall enter into or amend a repurchase agreement, warehouse
facility, credit facility or other similar arrangement with any person which by
its terms provides more favorable terms with respect to any financial
covenants, including without limitation covenants covering the same or similar
subject matter as that set forth in the Financial Covenant Compliance Certificate
(a “More Favorable Agreement”), the terms of this Agreement shall be
deemed automatically amended to include such more favorable terms contained in
such More Favorable Agreement, provided that if the more favorable terms are
under an agreement that contains financial terms more favorable to Seller than
the financial terms set forth in this Agreement, Buyer shall not be entitled to
such more favorable terms unless Buyer also agrees to such more favorable
financial terms.

13.                               SINGLE-PURPOSE
ENTITY

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

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

 51
 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(r)            It shall not maintain any employees.

14.                               EVENTS
OF DEFAULT; REMEDIES

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

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

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

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

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

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

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

 53
 

Buyer shall not be
required to provide notice in the event of a failure by Seller to repurchase on
the Repurchase Date;

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

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

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

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

(x)            Guarantor shall have defaulted or failed
to perform under any note, indenture, loan agreement, guaranty, swap agreement
or any other contract, agreement or transaction to which it is a party, and
which default (A) involves the failure to pay a matured obligation in excess of
$10,000,000, or (B) involving an obligation of at least $10,000,000 is a
monetary default or a material non-monetary default and results in acceleration
or permits the acceleration of the obligation by any other party to or
beneficiary of such note, indenture, loan agreement, guaranty, swap agreement
or other contract agreement or transaction; provided, however,
that any such default, failure to perform or breach shall not constitute an
Event of Default if Guarantor cures such default, failure to perform or breach,
as the case may be, within the grace period, if any, provided under the
applicable agreement;

(xi)           the Guarantors shall fail to satisfy
any of the Financial Covenants as of any applicable date of determination;

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

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

(xiv)        an “event of default” beyond any
applicable notice and cure period shall have occurred under (A) the Securities
Repurchase Agreement, (B) any repurchase facility or loan

 54
 

facility entered into by
Seller and Buyer or any affiliate thereof or (C) any facility with Buyer or any
affiliate thereof in which Seller is a guarantor; or

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

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

(i)            At the option of Buyer, exercised by
written notice to Seller (which option shall be deemed to have been exercised,
even if no notice is given, immediately upon the occurrence of an Act of
Insolvency), the Repurchase Date for each Transaction hereunder shall, if it
has not already occurred, be deemed immediately to occur (the date on which
such option is exercised or deemed to have been exercised being referred to
hereinafter as the “Accelerated Repurchase Date”) (and any Transaction
for which the related Purchase Date has not yet occurred shall be canceled).

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

(A)          Seller’s obligations hereunder to
repurchase all Purchased Loans shall become immediately due and payable on and
as of the Accelerated Repurchase Date and all Income deposited in the Blocked
Account shall be retained by Buyer and applied to the aggregate unpaid
Repurchase Price and any other amounts owing by Seller hereunder; and

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

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

(iii)          Buyer may, after ten (10) days notice
to Seller of Buyer’s intent to take such action (provided that no such notice
shall be required in the circumstances set forth in Section 9-611(d) of the
UCC), (A) immediately sell, at a public or private sale in a commercially
reasonable manner and at such price or prices as Buyer may reasonably deem
satisfactory any or all of the Purchased Loans or (B) in its sole discretion
elect, in lieu of selling all or a portion of such

 55
 

Purchased Loans, to give
Seller credit for such Purchased Loans in an amount equal to the Market Value
of such Purchased Loans against the aggregate unpaid Repurchase Price for such
Purchased Loans and any other amounts owing by Seller under the Transaction
Documents.  The proceeds of any
disposition of Purchased Loans effected pursuant to this Section 14(b)(iii)
shall be applied, (v) first, to the costs and expenses incurred by Buyer in
connection with Seller’s default; (w) second, to costs of cover and/or Hedging
Transactions, if any; (x) third, to the Repurchase Price; (y) fourth, to any
other outstanding obligation of Seller to Buyer or its Affiliates pursuant to
the Transaction Documents, and (z) the balance, if any, to Seller.

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

(v)           Seller shall be liable to Buyer for
the amount of all reasonable expenses, including reasonable legal fees and
expenses, actually incurred by Buyer in connection with or as a consequence of
an Event of Default with respect to Seller, (B) all costs incurred in
connection with covering transactions or Hedging Transactions (including short
sales) or entering into replacement transactions (C) all damages, losses,
judgment costs and expenses of any kind which may be imposed on, incurred by or
asserted against Buyer relating to or arising out of such Hedging Transactions
or covering transactions and (D) any other loss, damage, cost or expense
directly arising or resulting from the occurrence of an Event of Default with
respect to Seller.

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

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

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

(ix)           Buyer shall have, in addition to its
rights and remedies under the Transaction Documents, all of the rights and
remedies provided by applicable federal, state, foreign, and local

 56
 

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

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

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

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

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

15.                               SINGLE
AGREEMENT

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

16.                               NOTICES
AND OTHER COMMUNICATIONS

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

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

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17.                               NON-ASSIGNABILITY

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

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

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

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

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

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

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

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

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

 58
 

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

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

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

19.                               NO
RELIANCE; DISCLAIMERS

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

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

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

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

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

 59
 

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

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

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

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

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

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

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

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

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

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20.                               INDEMNITY
AND EXPENSES

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

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

21.                               DUE
DILIGENCE

Seller acknowledges that Buyer has the right to
perform continuing due diligence reviews with respect to the Purchased Loans,
for purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or determining or re-determining the Asset Base
for purposes of Section 4 of this Annex I, or otherwise, and Seller agrees that
Buyer, at its option, has the right at any

 61
 

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

22.                               SERVICING

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

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

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

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

(e)           Seller shall cause Servicer and any
sub-servicers engaged by Seller to execute a letter agreement with Buyer
acknowledging Buyer’s security interest in the Purchased Loans and the
Servicing

 62
 

Agreements and agreeing that each such sub-servicer
shall deposit all Income with respect to the Purchased Loans in the Blocked
Account, all in such manner as shall be reasonably acceptable to Buyer.

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

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

23.                               TREATMENT
FOR TAX PURPOSES

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

24.                               INTENT

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

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

25.                               MISCELLANEOUS

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

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

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

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

 63
 

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

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

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

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

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

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

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

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

 64
 

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

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

	
  

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  GOLDMAN SACHS MORTGAGE COMPANY,

  
	
   

  	
  a New York limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Goldman Sachs Real Estate Funding Corp.,
  its

  
	
   

  	
   

  	
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  GRAMERCY WAREHOUSE FUNDING II LLC, a

  
	
   

  	
  Delaware limited liability company, as a Seller

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  Gramercy Investment Trust, a Maryland real

  estate investment trust, its sole member and

  manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GKK TRADING WAREHOUSE II LLC, a

  
	
   

  	
  Delaware limited liability company, as a Seller

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  By: GKK Trading Corp., its sole member and

  manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

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

 66
 

 

	
  GRAMERCY CAPITAL CORP.,

  
	
  a Maryland
  corporation

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

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

  
	
   

  
	
  WELLS
  FARGO BANK, N.A., as Custodian

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

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

  
	
   

  
	
  WELLS
  FARGO BANK, N.A., as Bank

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
					

 

 67

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