Document:

Exhibit 10.32.a

 

EXECUTION COPY

 

AMENDED AND RESTATED

MASTER REPURCHASE AGREEMENT

 

Dated as of February 15,
2006

 

Between:

 

BEAR, STEARNS INTERNATIONAL LIMITED,

as Buyer

 

and

 

CAPITAL TRUST, INC.,

as Seller jointly and severally with the other Seller

 

and

 

CT BSI FUNDING CORP.,

as Seller jointly and severally with the other Seller

 

APPLICABILITY

 

From time to time the parties hereto may enter
into transactions in which Bear, Stearns International Limited (“Buyer”) may,
in its sole discretion, agree to purchase Eligible Assets from Capital Trust, Inc.
and/or CT BSI Funding Corp. (individually “Seller” and collectively “Sellers”),
with a simultaneous agreement by Buyer to transfer to Seller such Eligible
Assets at a date certain or on demand of Seller subject to and in accordance
with the exercise of Buyer’s remedies under this Agreement, against the
transfer of funds by Seller. Each such transaction shall be referred to herein
as a “Transaction” and shall be governed by this Agreement, as the same shall
be amended from time to time.

 

1.             DEFINITIONS

 

“Accelerated
Repurchase Date” shall have the meaning set forth in Section 14 of
this Agreement.

 

“Accepted Servicing
Practices” shall mean with respect to any Purchased Asset, those mortgage
or mezzanine loan servicing practices of prudent lending institutions which
service loans of the same type as such Purchased Asset in the jurisdiction
where the related underlying real estate directly or indirectly securing such
Purchased Asset is located.

 

“Act of Insolvency”
shall mean with respect to Buyer or either Seller, (i) the commencement by
such party as debtor of any case or proceeding under any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar law, or such
party seeking

 

 

the appointment of
a receiver, trustee, custodian or similar official for such party or any
substantial part of its property, or (ii) the commencement of any
such case or proceeding against such party, or another seeking such an
appointment, 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, 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 a party of a general
assignment for the benefit of creditors, or (iv) the admission in writing
by a party of such party’s inability to pay such party’s debts as they become
due.

 

“Additional Assets”
shall have the meaning set forth in Section 3(a) of this Agreement.

 

“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.

 

“Agreement” shall
mean this Amended and Restated Master Repurchase Agreement dated as of February 15,
2006, by and between Buyer and Seller.

 

“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.

 

“Authorized Representative
of Seller” shall mean the individuals, set forth on Exhibit II hereto.

 

“B Note” shall
mean the “B” noteholders interest in an “A/B” loan structure.

 

“Bailee” shall
mean an attorney, title company or other closing agent, appointed by Seller and
reasonably acceptable to Buyer, who is party to a Bailee Agreement and executes
a Trust Receipt in connection with a Table Funded Asset.

 

“Bailee Agreement”
shall mean a written agreement between Seller and a Bailee relating to the
bailment in connection with Table Funded Assets, naming Buyer as a third party
beneficiary and substantially in the form of Exhibit XIII hereto.

 

“Bear Stearns Funding
Repurchase Agreement” shall mean the Amended and Restated Master Repurchase
Agreement, dated as of August 16, 2006, between Bear, Stearns Funding, Inc.
and Capital Trust, Inc., as the same may be amended from time to
time.

 

2

 

“Business Day” shall
mean a day other than (i) a Saturday or Sunday, or (ii) a day in
which the New York Stock Exchange or banks in the State of New York are
authorized or obligated by law or executive order to be closed.

 

“Buyer” shall mean
Bear, Stearns International Limited, or any successor.

 

“Buyer’s Margin Ratio”
shall mean, with respect to any Transaction, as of any date, a percentage
agreed to by Buyer and Seller or, in the absence of any such agreement, the
percentage obtained by dividing the Purchase Price of the Purchased Assets on
the Purchase Date by the Market Value on such date for such Transaction.

 

“CDO Assets” shall
mean the aggregate of the CDO I Assets and the CDO II Assets.

 

“CDO I Assets”
shall mean Eligible Assets, as specified in the CTRE CDO 2004-1 Indenture, which
are to be designated as CDO I Assets.

 

“CDO II Assets”
shall mean Eligible Assets, as specified in the CTRE CDO 2005-1 Indenture, which
are to be designated as CDO II Assets.

 

“Collateral” shall
have the meaning set forth in Section 5 of this Agreement.

 

“Collection Account”
shall mean a segregated interest bearing account established and maintained at
the Depository, in the name of and for the benefit of Buyer pursuant to the
terms of the Depository Agreement.

 

“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.

 

“Commitment Expiration
Date” shall mean August 15, 2008.

 

“Confirmation”
shall have the meaning specified in Section 2(b) of this Agreement.

 

“Custodial Agreement”
shall mean the Custodial Agreement, dated as of December 22, 2005 among
the Custodian, Sellers and Buyer, as amended, restated, modified and in effect
from time to time.

 

“Custodial Delivery”
shall mean the form executed by Seller in order to deliver the Purchased
Asset Schedule and the Purchased Asset File to Buyer or its designee (including
the Custodian) pursuant to Section 6, a form of which is attached
hereto as Exhibit IV.

 

“Custodian” shall
mean Deutsche Bank Trust Company Americas or any successor Custodian appointed
by Buyer and Seller with the prior written consent of Seller (which consent
shall not be unreasonably withheld).

 

3

 

“Cut-off Date”
shall mean the second Business Day preceding each Remittance Date.

 

“Debt” means, with
respect to any Person at any date, all indebtedness or other obligations of
such Person in accordance with GAAP.

 

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

 

“Depository” shall
mean PNC Bank, National Association or any successor Depository appointed by
Seller and approved by Buyer, which approval shall not be unreasonably
withheld, conditioned or delayed.

 

“Depository Agreement”
shall mean the agreement governing the Collection Account between the
Depository and Buyer and Seller and their respective successors and assigns as
the same may be modified, amended or supplemented from time to time.

 

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

 

“Direction Letter”
shall mean a letter signed by Seller directing the Servicer to send all Income
with respect to the Purchased Assets, as well as any payments in respect of
associated Hedging Transactions, to the Collection Account held by the
Depository within one (1) Business Day of receipt.

 

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

 

 “Early Repurchase Date” shall have the
meaning specified in Section 2(g) of this Agreement.

 

“EBITDA” shall
mean earnings before interest, tax, depreciation and amortization.

 

“Eligible Assets”
shall mean any of the following types of assets, which assets shall not provide
for any restrictions (other than notice) on transfer to or by Buyer and
otherwise are acceptable to Buyer in the exercise of its commercially
reasonable business judgment, and are secured directly or indirectly by a
property that is a multifamily, retail, office, warehouse, industrial, or
hospitality property (or any other property type acceptable to Buyer), is
located in the United States of America, its territories or possessions, meet
all of the other requirements of this Amended and Restated Master Repurchase
Agreement, and which would not, if the same became Eligible Assets, cause the
aggregate Purchase Price of all Eligible Assets to exceed the Maximum Aggregate
Purchase Price:

 

(i)            Participation
Interests in Whole Loans, B Notes or Mezzanine Loans that are performing (i.e., current and not in monetary or material non-monetary
default such that remedies can be exercised by any

 

4

 

Person) commercial
mortgage loans secured by first liens on multifamily and commercial real
property with respect to which the ratio of loan to value as determined by
Buyer, in the exercise of its commercially reasonable judgment, for the real
property securing directly such loan (including for purposes of this
calculation, such loan and any loan senior to or pari passu
with such loan and secured, directly or indirectly, by the related property)
does not exceed the percentage stated in the Confirmation; and

 

(ii)           any other investment
presented to and approved by Buyer in its sole discretion which does not conform to
the criteria set forth in clause (i) above and which Buyer elects in its
sole discretion to purchase, in which case the criteria for the ratio of total
loan to value and any modifications to the Maximum Aggregate Purchase Price
with respect to such asset, shall be set forth in the related Confirmation for
the Transaction under which such asset is purchased by Buyer.

 

An Eligible Asset must
have the related Purchased Asset File segregated and held by the Custodian. Participation
Interests in non-performing loans and loans secured by undeveloped land, coop
shares and construction loans are not eligible for inclusion as Eligible
Assets.

 

“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 Agreement 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 that is a member of any group of
organizations (i) described in Section 414(b) or (c) of the
Code of which Seller is a member and (ii) solely for purposes of potential
liability under Section 302(c)(l1) of ERISA and Section 412(c)(ll) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which
Seller is a member.

 

“Event of Default”
shall have the meaning set forth in Section 13 of this Agreement.

 

“Exit Fee” shall
have the meaning specified in Section 2(g).

 

“Filings” shall
have the meaning specified in Section 5 of this Agreement.

 

“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

 

5

 

Person with
jurisdiction exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

 

“Hedging Transactions”
shall mean, with respect to any or all of the Purchased Assets, 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, with Buyer or its Affiliates as counterparties or one or more other
counterparties acceptable to Buyer.

 

 “Income” shall mean, with respect to
any Eligible Asset at any time, any principal (including any principal
prepayments) thereof and all interest, dividends or other distributions thereon
and with respect to any associated Hedging Transaction, all proceeds thereof.

 

“Indemnified Amounts”
and “Indemnified Parties” shall have the meaning specified in Section 19
of this Agreement.

 

“Intercreditor
Agreement” shall mean the agreement between Seller and the holder of a
senior participation interest in the related Eligible Asset.

 

“LIBOR” shall
mean, unless otherwise agreed to by the parties hereto, the rate per annum
(rounded upwards, if necessary, to the next 1/100th of 1%) calculated on each
Pricing Rate Determination Date for the next Pricing Rate Period as equal to
the rate for U.S. dollar deposits for a one month period which appears on
Telerate Page 3750 as of 10:00 am, New York City time, on such Pricing
Rate Determination Date; provided, however, that if such rate does not appear on Telerate Page 3750,
“LIBOR” determined on each Pricing Rate Determination Date for the next Pricing
Rate Period shall mean a rate per annum equal to the rate at which U.S. dollar
deposits are offered in immediately available funds in the London Interbank
Market to the London office of National Westminster Bank, Plc (or its
successors) by leading banks in the Eurodollar market at 10:00 a.m., New
York City time, on the Pricing Rate Determination Date. “Telerate Page 3750”
means the display designated as “Page 3750” on the Associated Press-Dow
Jones Telerate Service (or such other page as may replace Page 3750
on the Associated Press-Dow Jones Telerate Service or such other service as may be
nominated by the British Bankers’ Association as the information vendor for the
purpose of displaying British Banker’s Association interest settlement rates
for U.S. Dollar deposits). LIBOR determined on the basis of the rate displayed
on Telerate Page 3750 in accordance with the provisions hereof shall be
subject to corrections, if any, made in such rate and displayed by the
Associated Press-Dow Jones Telerate Service within one (1) hour of the
time when such rate is first displayed by such Service.

 

“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 LIBOR .

 

6

 

“Margin Call”
shall have the meaning set forth in Section 3(a) of this Agreement.

 

“Margin Deficit”
shall have the meaning set forth in Section 3(a) of this Agreement.

 

“Market Value”
shall mean, with respect to any Purchased Assets, as of any relevant date, the
market value for such Purchased Assets on such date, as determined by Buyer in
the exercise of its commercially reasonable judgment exercised in good faith
and may be determined on each Business Day during the term of this
Agreement, or less frequently from time to time if Buyer elects in its sole
discretion. Any provision hereof to the contrary notwithstanding, a Market
Value of zero shall, unless otherwise determined by Buyer in its sole
discretion, be assigned to (i) any Purchased Asset that has been
delinquent for at least sixty (60) days, (ii) any Purchased Asset released
by the Custodian for more than 10 Business Days other than with the consent of
Buyer or (iii) any Purchased Asset has become a specially serviced loan as
defined in the applicable servicing agreement.

 

“Maximum Aggregate
Purchase Price”  shall mean the sum
of the Maximum Committed Aggregate Purchase Price and the Maximum CDO Aggregate
Purchase Price.

 

“Maximum CDO Aggregate
Purchase Price” shall mean $50,000,000 less the aggregate Purchase Price
for CDO Assets owed to Bear Stearns Funding, Inc. under the Bear Stearns
Funding Repurchase Agreement.

 

“Maximum Committed Aggregate
Purchase Price” shall mean $150,000,000 less the aggregate amount owed, excluding
the aggregate Purchase Price for CDO Assets, to Bear Stearns Funding, Inc.
under the Bear Stearns Funding Repurchase Agreement; provided, however,
that for the purposes of calculating the Purchase Fee hereunder, the Maximum
Committed Aggregate Purchase Price shall be deemed to be as provided in Section 2(e) hereof.

 

“MERS” shall mean
the Mortgage Electronic Registration Systems, Inc.

 

“MERS Underlying Asset”
shall mean an Underlying Asset that is registered with MERS.

 

“Mezzanine Loan”
shall mean a loan secured by pledges of substantially all of the equity
ownership interests in entities that own directly or indirectly multifamily and
commercial properties.

 

“Mezzanine Loan
Documents” shall mean any and all documents required in connection with the
financing of a Mezzanine Loan.

 

“Mezzanine Note”
shall mean a note evidencing Mezzanine Loan indebtedness.

 

“Modified Debt”
shall mean Debt reduced by (i) amounts of liabilities resulting from the
sale of participation interests, (ii) liabilities
resulting from consolidation of Debt associated with securitizations where
Seller has no recourse obligation for the Debt and

 

7

 

which Debt was not issued by Seller or its subsidiaries and (iii) liabilities
resulting from the consolidation of vehicles managed by Seller or a Subsidiary
of Seller where Seller has less than a 50% equity interest.

 

“Modified Recourse Debt”
shall mean Debt reduced by (i) amounts of liabilities resulting from the
sale of participation interests, (ii) liabilities resulting from
consolidation of Debt associated with securitizations where Seller has no
recourse obligation for the Debt and (iii) liabilities resulting from the
consolidation of vehicles managed by Seller or a Subsidiary of Seller where
Seller has less than a 50% equity interest.

 

“Moody’s” shall
mean Moody’s Investor Service, Inc. or any successor thereto.

 

“Mortgage” shall
mean a mortgage, deed of trust, deed to secure debt or other instrument,
creating a valid and enforceable first priority lien on or a first priority
ownership interest in an estate in fee simple in real property or a financeable
leasehold interest in real property, and in each case, the improvements thereon,
securing a mortgage note or similar evidence of indebtedness.

 

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

 

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

 

“Multiemployer Plan”
shall mean a multiemployer plan defined as such in Section 3(37) of ERISA
to which contributions have been, or were required to have been, made by Seller
or any ERISA Affiliate and which is covered by Title IV of ERISA.

 

“Net Worth” shall
mean with respect to any Person at any date, the excess of the total assets
over total liabilities of such Person on such date, each to be determined in
accordance with GAAP consistent with those applied in the preparation of the
most recent audited financial statements.

 

“New Asset” shall
mean any asset that Seller proposes to be included as an Eligible Asset.

 

“Non-Usage Fee”
shall have the meaning specified in Section 2(h) herein.

 

“Originated Asset”
shall mean any asset that is an Eligible Asset and whose Purchased Asset
Documents were prepared by or on behalf of Seller or Buyer.

 

“Outstanding Purchase
Price” shall mean, with respect to any Transaction, the original Purchase
Price reduced by all principal payments and paydowns received by Buyer (other
than payments with respect to accrued Price Differential) and plus any
additional amounts advanced by Buyer with respect to the related Eligible
Assets.

 

8

 

“Participation
Agreement” shall mean the agreement creating the Participation Interest in
the related Whole Loan, Mezzanine Loan or B Note.

 

“Participation
Certificate” shall mean a certificate evidencing a Participation Interest.

 

“Participation
Interest” shall mean an undivided interest in a Whole Loan, a Mezzanine
Loan or a B Note and which is senior to, junior to or pari passu with other
interests created pursuant to the related Participation Agreement.

 

“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 by Seller or any
ERISA Affiliate during the five year period ended prior to the date of this
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 this 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, other than a
Multiemployer Plan.

 

“Pre-Existing Asset”
shall mean any asset that is an Eligible Asset and is not an Originated Asset.

 

“Preliminary Due
Diligence Package” shall mean with respect to any New Asset, a summary
memorandum outlining the proposed transaction, including potential transaction
benefits and material underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a reasonable buyer would
consider material, together with due diligence information relating to the New
Asset to be provided by Seller to Buyer pursuant to this Agreement, including,
but not limited to:

 

With respect to each
Eligible Asset:

 

(i)            the
Underlying Loan Information;

 

(ii)           description
of the property or properties;

 

(iii)          description
of the borrower, including experience with other projects (real estate owned)
and net worth and liquidity statements if available. In the event that such
statements are not available, evidence of the credit strength of the borrower
acceptable to Buyer;

 

(iv)          description
of the ownership structure of the borrower (including, without limitation,
independent director(s)/member(s));

 

(v)           term sheet
outlining the transaction generally, including description of existing or
proposed senior debt;

 

9

 

(vi)          debt
service coverage and loan to value ratios;

 

(vii)         Seller’s
relationship with the Borrower, if any;

 

(viii)        with
respect to any New Asset that is a Pre-Existing Asset, a list that specifically
and expressly identifies any Purchased Asset Documents that relate to such New
Asset but are not in Seller’s possession;

 

(ix)           sufficient
information to permit Buyer to satisfy itself, in its sole discretion, that the
statements set forth in Exhibit VI or Exhibit VII to this Agreement
are materially correct;

 

(x)            asset
summary books which include, to the extent provided to Seller, the following:

 

(A)          loan detail and asset
description, including market information on competing properties, terrorism
and other insurance coverage;

 

(B)           map, photo;

 

(C)           current rent roll;

 

(D)          historical, current and
pro forma cash flow and operating information;

 

(E)           appraisal,
environmental, engineering summary;

 

(F)           information relating to
valuation, security or underwriting issues, special or unique loan features and
structural issues;

 

(xi)           Securitization
Documents, Intercreditor Agreements, if any, and Participation Agreements;

 

(xii)          legal
opinions delivered with respect to the Eligible Asset in Seller’s possession;
and

 

(xiii)         closing
binder in respect of the Purchased Asset (or if not yet prepared, an execution
copy of the Participation Agreement).

 

“Price Differential”
shall mean, 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 Outstanding 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
Repurchase Date (reduced by any amount of such Price Differential previously
paid by Seller to Buyer with respect to such Transaction).

 

10

 

“Pricing Rate”
shall mean, for any Pricing Rate Period with respect to any Transaction, an
annual rate equal to LIBOR for such Pricing Rate Period plus the relevant spread
for such Transaction as determined pursuant to the Side Letter and indicated on
the applicable Confirmation.

 

“Pricing Rate
Determination Date” shall mean in the case of the first Pricing Rate Period
with respect to any Transaction, the first day on which the Pricing Rate Period
begins.

 

“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 month in
which the Purchase Date occurs and (b) in the case of any subsequent
Pricing Rate Period, the period commencing on the first calendar day of each
month and ending on and including the last calendar day of such month; 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 Assets, any payment or prepayment of
principal or any proceeds of redemption which are applied to principal and
received by the Depository in respect thereof.

 

“Property” shall
mean the real property securing repayment of the debt evidenced by a Mortgage
Note.

 

“Purchase Agreement”
shall mean the agreement pursuant to which Seller acquired the Purchased Asset.

 

“Purchase Date”
shall mean the date on which Eligible Assets are to be transferred by Seller to
Buyer.

 

“Purchase Fee”
shall have the meaning specified in Section 2(e).

 

“Purchase Price”
shall mean, with respect to any Purchased Assets, the price at which such
Purchased Assets are sold by Seller to Buyer on the applicable Purchase Date as
set forth in the Side Letter or the Confirmation, as applicable.

 

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

 

“Purchased Asset File”
shall mean the documents specified as the “Purchased Asset File” in Section 6(b),
together with any additional documents and information required to be delivered
to Buyer or its designee (including the Custodian) pursuant to this Agreement.

 

“Purchased Asset
Schedule” shall mean a schedule of Purchased Assets attached to each
Trust Receipt and Custodial Delivery containing information substantially
similar to the Underlying Loan Information.

 

11

 

“Purchased Assets”
shall mean (i) with respect to any Transaction, the Eligible Assets sold
by Seller to Buyer in such Transaction until such Eligible Assets are
repurchased by Seller pursuant to this Agreement and (ii) with respect to
the Transactions in general, all Eligible Assets sold by Seller to Buyer and
any Additional Assets delivered by Seller to Buyer pursuant to Section 3(a) of
this Agreement until (x) such Eligible Assets are repurchased by Seller
pursuant to this Agreement or (y) such Additional Assets are re-delivered to
Seller by Buyer pursuant to Section 3 of this Agreement.

 

“Remittance Date”
shall mean the eleventh (11th) calendar day of each month, or the
next succeeding Business Day, if such calendar day shall not be a Business Day
or such other day of the month as shall be agreed upon by both Buyer and
Seller.

 

“Repurchase Date”
shall mean the date on which Seller is to repurchase the Purchased Assets from
Buyer, which shall be the date specified in the related Confirmation or
determined by application of the provisions hereof.

 

“Repurchase Price”
shall mean, with respect to any Purchased Assets as of any date, the price at
which such Purchased Assets are to be transferred from Buyer to Seller upon
termination of the related Transaction; such price will be determined in each
case as the sum of the Outstanding Purchase Price of such Purchased Assets and
the accrued but unpaid Price Differential with respect to such Purchased Assets
as of the date of such determination.

 

“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.

 

“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.

 

“Securitization
Document” shall mean, with respect to any Eligible Assets, any pooling and
servicing agreement or other agreement governing the issuance and
administration of such Eligible Asset.

 

“Seller” and “Sellers”
shall mean Capital Trust, Inc., a Maryland corporation, and CT BSI Funding
Corp., a Delaware corporation, individually and collectively as applicable and
in all cases jointly and severally.

 

“Servicing Agreement”
has the meaning specified in Section 21(b).

 

“Servicing Records”
has the meaning specified in Section 21(b).

 

“Side Letter” shall
mean the letter dated as of February 15, 2006, by and between Buyer and
Seller.

 

“Standard &
Poor’s” shall mean Standard & Poor’s Ratings Services, a Division
of The McGraw-Hill Companies, Inc.

 

12

 

“Subsidiary” shall
mean, with respect to Seller, an entity that is wholly owned or controlled by
Seller but excluding any vehicles where Seller has less than a 50% equity
interest.

 

“Supplemental Due
Diligence List” shall mean, with respect to any New Assets, information or
deliveries concerning the New Assets that Buyer shall reasonably request in
addition to the Preliminary Due Diligence Package.

 

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

 

“Table Funded Asset”
shall mean a Purchased Asset, designated in the related Confirmation as a Table
Funded Asset, where the Purchased Asset File is in the custody of the Bailee or
en route to the Custodian.

 

“Title Policy”
shall have the meaning specified in paragraph 8 of Exhibit VI.

 

“Transaction
Conditions Precedent” shall have the meaning specified in Section 2(b) of
this Agreement.

 

“Transaction Documents”
shall mean, collectively, this Agreement, the Custodial Agreement, the
Servicing Agreement, the Side Letter, the Subordination Agreement and all
Confirmations executed pursuant to this Agreement in connection with specific
Transactions.

 

“Trust Receipt”
shall mean a trust receipt issued by Custodian to Buyer confirming the
Custodian’s possession of certain Purchased Asset Files which are the property
of and held by Custodian for the benefit of Buyer (or any other holder of such
trust receipt).

 

“UCC” shall have
the meaning specified in Section 5 of this Agreement.

 

“Underlying Asset”
shall mean the Whole Loan, B Note, Mezzanine Loan or other asset approved by
Buyer that underlies a Participation Interest.

 

“Underlying Loan
Information” shall mean, with respect to each Purchased Asset, the
information substantially in the form set forth in Exhibit IX
attached hereto.

 

“Underwriting Issues”
shall mean, with respect to any New Assets 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 commercially reasonable care and diligence under the
circumstances, would be considered a materially “negative” factor (either
separately or in the aggregate with other information), or a material defect in
loan documentation or closing deliveries (such as any absence of any material
Purchased Asset Document(s)), to a commercially

 

13

 

reasonable
institutional Buyer in determining whether to originate or acquire the New
Assets in question.

 

“Undrawn Available
Amount” shall mean the excess of the maximum drawable amount of a Purchased
Asset (as agreed to by Buyer and Seller) over the aggregate Purchase Price of
such Purchased Asset (calculated on an asset-by-asset basis).

 

“Whole Loan” shall
mean a commercial mortgage loan or note secured by a first lien on multifamily
and commercial real property.

 

2.             INITIATION;
CONFIRMATION; REVOLVING TRANSACTIONS; TERMINATION; FEES

 

(a)           On
or after the date hereof and prior to the Commitment Expiration Date and
subject to the terms and conditions set forth in this Agreement (including,
without limitation, the “Transaction Conditions Precedent” specified in Section 2(b) of
this Agreement), an agreement to enter into a Transaction shall be made in
writing at the initiation of Seller as provided below; provided,
however, that entering into any
Transaction shall be in Buyer’s sole and absolute discretion and that the
aggregate Repurchase Price (excluding the Price Differential with respect to
the Purchased Assets as of the date of determination) for all Transactions
shall not exceed the Maximum Aggregate Purchase Price. Seller shall give Buyer
written notice of each proposed Transaction and Buyer shall inform Seller
of its determination with respect to any assets proposed to be sold to Buyer by
Seller solely in accordance with Exhibit X attached hereto. Buyer shall
have the right to review all Eligible Assets proposed to be sold to Buyer in
any Transaction and to conduct, at its own expense, its own due diligence
investigation of such Eligible Assets as Buyer determines. Upon receipt of all
Diligence Materials and other required documentation, Buyer shall complete its
due diligence review and financial modeling with respect to the assets proposed
to be sold to Buyer by Seller. Buyer shall be entitled to make a determination,
in the exercise of its sole discretion, that it shall not purchase any or all
of the assets proposed to be sold to Buyer by Seller, such determination to be
made in accordance with Exhibit X attached hereto. On the Purchase Date
for the Transaction which shall be not less than one (1) Business Day
following the approval of an Eligible Asset by Buyer in accordance with Exhibit X
hereto, the Purchased Assets shall be transferred to Buyer or its agent against
the transfer of the Purchase Price in immediately available funds to an account
designated by Seller. To the extent Buyer enters into a Transaction with Seller
with respect to a Purchased Asset which is an Eligible Asset of the type
described in Clause (ii) of the definition thereof (i.e.,
such Eligible Asset does not satisfy the characteristics described in clause (i) of
the definition thereof), then such asset shall be deemed to be an Eligible
Asset for all purposes of this Agreement.

 

(b)           Upon
agreeing to enter into a Transaction hereunder, provided each of the
Transaction Conditions Precedent (as hereinafter defined) shall have been
satisfied (or waived by Buyer), Buyer shall promptly deliver to Seller a
written confirmation substantially in the form of Exhibit I attached
hereto of each Transaction (a “Confirmation”). In the absence of execution and
delivery by Buyer of a Confirmation for a proposed Transaction, Buyer shall
under no circumstance be deemed to have agreed to enter into such Transaction. Such
Confirmation shall describe the Purchased Asset(s) (and, in this connection,
shall set forth (a) the name of the counterparty with respect to the
Purchased Asset, (b) a description (including the date) of the

 

14

 

loan agreement or other document, agreement or instrument
pursuant to which the related Purchased Asset is made or governed, and (c) the
initial or then outstanding principal amount of the related Purchased Asset)
which shall be the subject of the proposed Transaction, shall identify Buyer
and Seller, and shall set forth (i) the Purchase Date, (ii) the
Purchase Price for such Purchased Asset(s), (iii) the Repurchase Date, (iv) the
Pricing Rate applicable to the Transaction and (v) any additional terms or
conditions not inconsistent with this Agreement. 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 Side Letter,
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. For purposes of this Section 2(b), the “Transaction Conditions
Precedent” shall be deemed to have been satisfied with respect to any proposed
Transaction if:

 

(1)           no Default
or Event of Default under this Agreement shall have occurred and be continuing
as of the Purchase Date for such proposed Transaction;

 

(2)           Seller
shall have certified to Buyer in writing the acquisition cost of such Purchased
Assets (including therein reasonable supporting documentation required by
Buyer, if any);

 

(3)           the representations
and warranties made by Seller in any of the Transaction Documents shall be true
and correct in respect of the Eligible Asset in question in all material
respects as of the Purchase Date for such Transaction;

 

(4)           Buyer
shall have received the Diligence Materials and completed to Buyer’s
satisfaction its due diligence review and financial modeling with respect to the
assets proposed to be sold to Buyer by Seller;

 

(5)           Buyer or
the Custodian on behalf of Buyer shall have received the applicable Transaction
documents and other documents and opinions specified in Section 6 of this
Agreement. The Custodian shall have delivered a trust receipt satisfactory to
Buyer no later than 3 p.m. on the Purchase Date;

 

(6)           Buyer
shall have determined, in accordance with the applicable provisions of Section 2(a) of
this Agreement, that the assets proposed to be sold to Buyer by Seller in such
Transaction are Eligible Assets;

 

(7)           none of
the following shall have occurred and be continuing:

 

(i)            an event
or events shall have occurred resulting in the effective absence of a “securities
market” for securities backed by mortgage loans; or

 

(ii)           there
shall have occurred a material adverse change in the “repo market” or
comparable “lending market”.

 

15

 

If any of the events in this subparagraph (7) shall
occur, Buyer agrees to reimburse Seller for the Purchase Fee on a pro rata
basis;

 

(8)           the
purchase by Buyer from Seller of the Purchased Assets which are not CDO Assets shall
be completed prior to the Commitment Expiration Date and the aggregate of the
Purchase Prices for all Transactions shall not exceed the Maximum Aggregate
Purchase Price; and

 

(9)           on or
prior to the Purchase Date for the initial Transaction hereunder and from time
to time thereafter as Buyer shall reasonably request, Seller shall have
delivered to Buyer an opinion of Seller’s counsel, in form and substance
reasonably acceptable to Buyer, addressing the matters set forth at Exhibit XII.

 

Notwithstanding anything to the contrary contained in
this Agreement, in no event shall any Transaction hereunder be consummated
until such time as Buyer has received all of the following, each in form and
substance reasonably satisfactory to Buyer: (i) the fully executed
Custodial Agreement and related Trust Receipt; (ii) a Depository Agreement
with respect to the Collection Account executed by the Depository; (iii) such
legal opinions as Buyer may reasonably require; (iv) a Direction
Letter, (v) Seller’s organizational documents, to the extent not delivered
as of the date hereof, and (vi) an executed Subordination Agreement, a
fully executed Side Letter and the Servicing Agreement.

 

(c)           Each
Confirmation shall be executed by Seller and Buyer and, together with this
Agreement, shall be conclusive evidence of the terms of the Transaction(s)
covered thereby.

 

(d)           Seller
may, at its option so long as an Event of Default shall not have occurred and
be continuing, increase or decrease the Outstanding Purchase Price with respect
to any Transaction subsequent to the Purchase Date; provided, however,
that such action on the part of Seller shall not be permitted if it would
create a Margin Deficit.

 

(e)           Seller
shall pay Buyer on or prior to the initial Purchase Date a one-time, up front
amount (the “Purchase Fee”) as set forth in the Side Letter; provided, however,
that solely for purposes of calculating the Purchase Fee hereunder, the Maximum
Committed Aggregate Purchase Price shall be deemed to be $75,000,000.

 

(f)            Each
Transaction entered into between Buyer and Seller shall remain outstanding from
the initial Purchase Date until the earlier of the Repurchase Date or the
Commitment Expiration Date. The spread over LIBOR stated in the related
Confirmation for each Transaction will not change for such Transaction until August 15,
2008.

 

(g)           Seller
shall be entitled to terminate a Transaction and repurchase any or all of the
Purchased Assets from Buyer on two (2) Business Days’ notice on any
Business Day prior to the Repurchase Date (an “Early Repurchase Date”).

 

If Seller terminates any
Transaction pursuant to the preceding sentence, then, except as provided below,
Seller shall pay to Buyer a termination fee (the “Exit Fee”) on the Early
Repurchase Date. The Exit Fee shall be calculated as the product of (i) the
Outstanding Purchase Price and (ii) the following amount: (A) if the
Early Repurchase Date is less than one

 

16

 

year from the
Repurchase Date, no Exit Fee will be payable, (B) if the Early Repurchase
Date is at least one year but less than two years from the Repurchase Date, [****],
and (C) if the Early Repurchase Date is at least two years from the
Repurchase Date, [****]. Additionally:

 

(i)            No
Exit Fee will be payable for the early repurchase of Purchased Assets resulting
from (a) the sale of the underlying assets to Buyer, or any of its
Affiliates, (b) the sale of the underlying assets to Buyer, or any of its
Affiliates, under a Amended and Restated Master Repurchase Agreement, (c) the
sale of the underlying assets to a securitization vehicle for which Buyer, or
any of its Affiliates, are acting in a lead or co-lead manager or co-manager role,
(d) maturity of the underlying loan, (e) contractual defaults by
either party to the underlying loan documents and agreements, (f) any
paydowns, prepayments or defaults on the Purchased Assets, (g) any roll of
a Purchased Asset into a new Transaction, (h) pay-offs resulting from a
margin call or Market Value calculation dispute between Seller and Buyer
including, without limitation, for a Margin Call in accordance with Section 13(ix) hereof,
(i) Seller’s Termination of a Transaction in response to a demand by Buyer
pursuant to Section 2(i) hereof or (j) in the event additional costs
are imposed by Buyer pursuant to Section 2(j) hereof and Seller elects to
terminate a transaction or transactions as a result thereof.

 

(ii)           Additional
Purchased Assets acceptable to Buyer may be substituted and no Exit Fee
will be payable in connection with such substitutions. No other substitutions
will be exempt from payment of the Exit Fee.

 

(iii)          No
Exit Fee will be payable for the early repurchase of any Purchased Asset which
is a CDO I Asset or a CDO II Asset.

 

Such notice shall set forth the Early Repurchase Date
and shall identify with particularity the Purchased Assets to be repurchased on
such Early Repurchase Date.

 

(h)           In
the event that an Undrawn Available Amount exists at the end of any calendar
quarter, Seller shall remit to Buyer a non-usage fee (the “Non-Usage Fee”)
reasonably promptly upon written notice from Buyer to Seller that such Undrawn
Available Amount exists. The Non-Usage Fee shall be calculated as the product
of (i) the Undrawn Available Amount and (ii) [****] divided by 360
for each day such Undrawn Available Amount exists during such calendar quarter.

 

(i)            If
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by any Governmental Authority or
compliance by Buyer with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority having
jurisdiction over Buyer made subsequent to the date hereof:

 

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

 

****Material
omitted pursuant to a request for confidential treatment under Rule 24b-2.
Material filed separately with the Securities Exchange Commission.

 

17

 

(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 hereunder;

 

and the result of any of the foregoing is to increase
the cost to Buyer, by an amount which Buyer deems to be material, 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 promptly pay Buyer, upon its demand, any additional amounts
necessary to compensate Buyer for such increased cost or reduced amount
receivable which is actually incurred by Buyer. If Buyer becomes entitled to
claim any additional amounts pursuant to this Section 2(i), it shall
promptly notify Seller of the event by reason of which it has become so
entitled. In the event that Seller elects to terminate a Transaction in
response to a demand by Buyer pursuant to this Section 2(i), no Exit Fee
with respect to such termination shall be due by Seller and the Purchase Fee
relating to that Transaction shall be refunded on a pro rata basis. 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 this Agreement and the repurchase by
Seller of any or all of the Purchased Assets.

 

(j)            If
Buyer shall have 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 or shall have the effect of reducing the rate of return on Buyer’s
or such corporation’s capital as a consequence of its obligations hereunder to
a level below that which Buyer or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
Buyer to be material, then from time to time, 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 which is actually
incurred by Buyer. 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 this Agreement
and the repurchase by Seller of any or all of the Purchased Assets.

 

(k)           Any
provision hereof to the contrary notwithstanding, Seller shall pay all
reasonable fees and expenses of Buyer (including all reasonable legal fees)
associated with the purchase of any Eligible Asset under this Agreement and
shall pay the fees and expenses of counsel to Buyer in connection with the
preparation and execution of this Agreement and all other Transaction
Documents.

 

(l)            Any
provision hereof to the contrary notwithstanding, Transactions entered into
hereunder shall be at the sole discretion of Buyer. Buyer is not required to
enter into any Transaction and Buyer may, in its sole discretion, reject for
inclusion in any Transaction any Eligible Assets offered for sale hereunder by
Seller.

 

18

 

(m)          In
the event that the Repurchase Date in respect of the CDO Assets occurs more
than six (6) months after the related Purchase Date, the pricing terms set
forth in the Side Letter relating to the CDO Assets shall no longer be
applicable and the pricing terms set forth for all other Eligible Assets shall
apply to such CDO Assets; provided, however, that such CDO Assets
shall still be included in any calculation of the Maximum CDO Aggregate
Purchase Price.

 

3.             MARGIN
MAINTENANCE

 

(a)           If
at any time the product of the aggregate Market Value of all Purchased Assets
and Buyer’s Margin Ratio shall be less than the aggregate outstanding
Repurchase Price for such Purchased Assets, (a “Margin Deficit”), then Buyer may by
notice to Seller (a “Margin Call”) require Seller to transfer to Buyer (A) cash
or (B) Additional Assets acceptable to Buyer in its sole and absolute
discretion (such cash or Additional Assets paid by Seller to Buyer are herein
referred to as “Additional Assets”), so that the sum of cash plus the product
of (i) the aggregate Market Value of the Purchased Assets and such
Additional Assets and (ii) Buyer’s Margin Ratio shall at least equal the
aggregate outstanding Repurchase Price. Any cash received by Buyer pursuant to
a Margin Call shall be applied to reduce the Outstanding Purchase Price. Seller’s
failure to cure any Margin Deficit as required by the preceding sentence prior
to expiration of one (1) Business Day after notice shall constitute an
Event of Default under the Transaction Documents and shall entitle Buyer to
exercise its remedies under Section 14 of this Agreement (including,
without limitation, the liquidation remedy provided for in Section 14(iv) of
this Agreement).

 

(b)           If
any Margin Call is given by Buyer under Section 3(a) of this Agreement,
Seller shall transfer cash or Additional Assets as provided in Section 3(a) by
no later than one (1) Business Day after the giving of such notice. Notice
required pursuant to Section 3(a) of this Agreement may be given
by any means, including by telephone, telecopier or email transmission. The
failure of Buyer on any one or more occasions, to exercise its rights under Section 3(a) of
this Agreement shall not constitute a waiver of such default or change or alter
the terms and conditions to which this Agreement is subject or limit the right
of Buyer or Seller to do so at a later date. Buyer and Seller agree that any
failure or delay by Buyer to exercise its rights under Section 3(a) of
this Agreement shall not limit such party’s rights under this Agreement or
otherwise existing by law or in any way create additional rights for such
party.

 

(c)           If
at any time the product of the aggregate Market Value of all Purchased Assets
and Buyer’s Margin Ratio shall be greater than the aggregate outstanding
Repurchase Price for such Purchased Assets (a “Margin Excess”), then Seller may by
notice to Buyer require Buyer to transfer to Seller (1) cash or (2) Purchased
Assets that become subject to this Agreement as Additional Assets so that the
product of (i) the aggregate Market Value of the Purchased Assets and such
Additional Assets and (ii) Buyer’s Margin Ratio shall not exceed the
aggregate outstanding Repurchase Price. In no event shall any Purchased Assets
that did not become subject to this Agreement in the form of Additional
Assets be released from the lien of this Agreement due to a Margin Excess.

 

(d)           If
any notice is given by Seller under Section 3(c) of this Agreement,
Buyer shall transfer cash or Additional Assets as provided in Section 3(c) by
no later than one (1) Business Day after the giving of such notice. Notice
required pursuant to

Section 3(c) of this Agreement

 

19

 

may be given by any means, including by
telephone, telecopier or email transmission. Buyer and Seller agree that any
failure or delay by Seller on any one or more occasions to exercise its rights
under Section 3(c) of this Agreement shall not constitute a waiver of
such rights or limit such party’s rights under Section 3(c) of this
Agreement or otherwise existing by law or in any way create additional rights
for such party. In addition, in no event shall Buyer be required to create a
Margin Deficit in order to comply with Section 3(d) of this
Agreement.

 

(e)           Any
cash transferred to Buyer pursuant to Section 3(a) of this Agreement
shall be used to reduce the Repurchase Price.

 

(f)            If
any representation or warranty within this Agreement is in fact not accurate,
then notwithstanding any of the knowledge qualifiers, Buyer has the right to
mark the asset to market with such frequency as deemed prudent in accordance
with this Section 3.

 

4.             INCOME
PAYMENTS AND PRINCIPAL PAYMENTS

 

(a)           The
Collection Account shall be established at the Depository concurrently with the
execution and delivery of this Agreement by Seller and Buyer. Buyer shall have
sole dominion and control over the Collection Account. Seller shall instruct
the servicer to deposit all Income in respect of the Purchased Assets, as well
as any payments in respect of associated Hedging Transactions, into the
Collection Account within one (1) Business Day of receipt. The amounts on
deposit in the Collection Account shall be remitted by the Depository in
accordance with the Depository Agreement and the applicable provisions of
Sections 4(b), 4(c), 4(d), 4(e) and 14 of this Agreement. Seller shall
direct the servicer to remit all payments to Depository until such time as
Buyer directs the borrower otherwise. If any payments are made by the borrower
to Seller after the Purchase Date, or in the event that Seller receives any
payments in respect of associated Hedging Transactions after the Purchase Date,
Seller shall wire such payments to the Collection Account with the Depository
within one (1) Business Day of receipt.

 

(b)           So
long as an Event of Default hereunder shall not have occurred and be continuing
and so long as such action would not result in the creation of a Margin
Deficit, all Income received by the Depository in respect of the Purchased
Assets and the associated Hedging Transactions shall be paid to Seller on the
Business Day next following the Business Day on which such funds are deposited
in the Collection Account.

 

(c)           So
long as no Event of Default shall have occurred and be continuing, and in the
event that a Margin Deficit exists with respect to the Purchased Assets, then
until Seller cures such Margin Deficit, all Income received by the Depository
in respect of the Purchased Assets and the associated Hedging Transactions
shall be applied by the Depository on the Business Day next following the
Business Day on which such funds are deposited in the Collection Account as
follows:

 

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

 

(ii)           second, to transfer cash to Buyer, so that the product of
the aggregate Market Value of the Purchased Assets (including any Additional

 

20

 

Assets) and Buyer’s Margin Ratio will at least equal the aggregate
Outstanding Purchase Price; and

 

(iii)          third, to remit to Seller the remainder, if any.

 

(d)           If
an Event of Default shall have occurred and be continuing, all Income
(including all Principal Payments) received by the Depository in respect of the
Purchased Assets and the associated Hedging Transactions shall be applied by
the Depository on the Business Day next following the Business Day on which
such funds are deposited in the Collection Account as follows:

 

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

 

(ii)           second, to make a payment to Buyer on account of the
Outstanding Purchase Price of the Purchased Assets until the Outstanding
Purchase Price for all of the Purchased Assets has been reduced to zero; and

 

(iii)          third, to remit to Buyer an amount equal to any costs or
expenses due and owing by Seller as of such Business Day; and

 

(iv)          fourth, to remit to Seller the remainder.

 

(e)           Buyer
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all amounts held by Buyer
against any other obligations at any time owing to Buyer, or an Affiliate of
Buyer to or for the credit or the account of Seller against any of or all the
obligations of Seller now or hereafter existing under this Agreement
irrespective of whether or not Buyer shall have made any demand under this
Agreement (and without prior notice to Seller) and although such obligations may be
unmatured, whereupon such obligations owing by Buyer or its Affiliates to
Seller shall, to the extent (and only to the extent) of such set off actually
made by Buyer, be discharged. The rights of Buyer under this Section are
in addition to other rights and remedies (including other rights of setoff)
which Buyer may have.

 

5.             SECURITY
INTEREST

 

Buyer and Seller intend
that all Transactions hereunder be sales to Buyer of the Purchased Assets and
not loans from Buyer to Seller secured by the Purchased Assets. However, in the
event any such Transaction is deemed to be a loan, Seller hereby pledges all of
its right, title, and interest in, to and under and grants a first priority
lien on, and security interest in, all of the following property, whether now
owned or hereafter acquired, now existing or hereafter created and wherever
located (collectively, the “Collateral”) to Buyer to secure the payment and
performance of all amounts or obligations owing to Buyer pursuant to this
Agreement and the related documents described herein:

 

(a)                                  the
Purchased Assets, including those identified in the Confirmations, Servicing
Agreements, Servicing Records, Hedging Transactions, insurance relating to the

 

21

 

Purchased Assets, and all “deposit accounts” (as defined in the UCC,
including, without limitation, collection and escrow accounts) relating to the
Purchased Assets;

 

(b)           the
Collection Account and all monies from time to time on deposit in the
Collection Account;

 

(c)           all “general
intangibles” (including “payment intangibles”), “accounts,” “chattel paper,” “documents”
and “instruments” as defined in the UCC relating to or constituting any and all
of the foregoing;

 

(d)           all “supporting
obligations” and “letter of credit rights” as defined in the UCC relating to or
constituting any and all of the foregoing;

 

(e)                                  all
replacements, substitutions or distributions on or proceeds, payments, Income
and profits of, tort claims, insurance claims and other rights to payments, and
records (but excluding any financial models or other proprietary information)
and files relating to any and all of any of the foregoing; and

 

(f)            all
proceeds of the foregoing.

 

Buyer’s security interest
in the Collateral shall terminate only upon termination of a Transaction with
respect to such Collateral under this Agreement and the documents delivered in
connection herewith and therewith. For purposes of the grant of the security
interest pursuant to this Section 5 of this Agreement, this Agreement
shall be deemed to constitute a security agreement under the Uniform Commercial
Code as in effect in any applicable jurisdiction (the “UCC”). Buyer shall have
all of the rights and may exercise all of the remedies of a secured
creditor under the UCC and the other laws of any applicable jurisdiction,
including the State of New York. In furtherance of the foregoing, (i) Buyer
shall cause to be filed as a protective filing with respect to the Purchased
Assets and as a UCC filing with respect to the security interests granted in
this Section 5 (i) a UCC financing statement in the form of Schedule 1-A
attached hereto (to be filed in the filing office indicated therein), (ii) amendments
to such UCC financing statement in the form of Schedule 1-B attached
hereto and having attached to each such UCC financing statement amendment a
description of the Purchased Assets which identifies the Purchased Assets by
setting forth (a) the name of the borrower with respect to each Purchased
Asset, (b) the Participation Agreement (including the date) or other
document, agreement or instrument pursuant to which each Purchased Asset was
made or is governed, and (c) the initial or then outstanding principal
amount of each Purchased Asset, and (iii) such other UCC filings, in such
locations as may be necessary to perfect and maintain perfection and
priority of the outright transfer and the security interest granted hereby and,
in each case, continuation statements and any amendments thereto (collectively,
the “Filings”), and shall forward copies of such Filings to Seller upon
completion thereof, and (b) 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 Assets and
the security interest deemed granted hereunder and in the Purchased Assets and
the rights

 

22

 

and remedies of
Buyer with respect to the Purchased Assets (including the payments of any fees
and taxes required in connection with the execution and delivery of the
Agreement).

 

6.             PAYMENT,
TRANSFER AND CUSTODY

 

(a)           On
the Purchase Date for each Transaction, ownership of the Purchased Assets shall
be transferred to Buyer or its designee (including the Custodian) against the
simultaneous transfer of the Purchase Price in immediately available funds to
an account of Seller specified in the Confirmation relating to such Transaction.
Buyer shall have the right to request Seller to provide an officer’s
certificate of Seller with respect to any copy of a document required to be
delivered certifying that to its knowledge such represents a true and correct
copy of the original.

 

(b)           On
or before each Purchase Date, Seller shall deliver or cause to be delivered to
Buyer or its designee the Custodial Delivery in the form attached hereto
as Exhibit IV. In connection with each sale, transfer, conveyance and
assignment of a Purchased Asset, on or prior to each Purchase Date with respect
to such Purchased Asset, Seller shall deliver or cause to be delivered and
released to the Custodian (i) the original participation certificate
representing the related Participation Interest with all applicable transfer
documents, endorsed in blank, that would be required to effect a registration
of transfer into Buyer’s name, the related Participation Agreement and (ii) to
the extent not already delivered, an original Participation Agreement. In
addition, in connection with each sale, transfer, conveyance and assignment of
a Purchased Asset, on or prior to each Purchase Date, Seller shall deliver or
cause to be delivered to Buyer copies of the following documents (collectively,
the “Purchased Asset File”) pertaining to the Underlying Assets relating to
each of the Purchased Assets identified in the related Custodial Delivery to
the extent such documents exist and are available to Seller:

 

With respect to each Underlying Asset which is a Whole
Loan or a B Note:

 

(i)            A copy of
the 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 Underlying Asset 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 Underlying Asset 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]”).

 

(ii)           A copy of
any guarantee executed in connection with the Mortgage Note (if any) together
with an officer’s certificate of Seller certifying that such represents a true
and correct copy of the original.

 

(iii)          Except
with respect to MERS Underlying Assets, a copy of the 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

 

23

 

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

 

(iv)          Copies 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
Property is located.

 

(v)           Except
with respect to MERS Underlying Assets, a copy of the original Assignment of
Mortgage, in blank, in form and substance acceptable for recording and
signed in the name of the Last Endorsee (in the event that the related
Underlying Asset 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 such Purchased Asset 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]”).

 

(vi)          Except with
respect to MERS Underlying Assets, copies 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 Property is located.

 

(vii)         Copies
of any attorney’s opinion of title and abstract of title or the original
mortgagee title insurance policy, or if the original mortgagee title insurance
policy has not been issued, the irrevocable marked commitment to issue the same
together with an officer’s certificate of Seller certifying that such represent
true and correct copies of the originals.

 

(viii)        A
copy of any security agreement, chattel mortgage or equivalent document
executed in connection with the Purchased Asset together with an officer’s
certificate of Seller certifying that such represent true and correct copies of
the originals.

 

(ix)           A copy of
any assignment of leases and rents, 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 Property is located.

 

(x)            Copies of
all intervening assignments of assignment of leases and rents, if any, or
copies thereof, with evidence of recording thereon.

 

(xi)           A copy of
the UCC financing statements, certified as true and correct by Seller, and all
necessary UCC continuation statements with evidence of

 

24

 

filing thereon or copies thereof certified by Seller to have been sent
for filing, and UCC assignments from Seller to Buyer or its designee, which UCC
assignments shall be in form and substance acceptable for filing.

 

(xii)          A
copy of any environmental indemnity agreement (if any).

 

(xiii)         A
copy of any omnibus assignment in blank (if any).

 

(xiv)        A
copy of the disbursement letter from the Mortgagor to the original mortgagee
(if any).

 

(xv)         A copy of
the Mortgagor’s certificate or title affidavit (if any).

 

(xvi)        A
survey of the Property (if any) as accepted by the title company for issuance
of the Title Policy and a copy of the Title Policy.

 

(xvii)       A
copy of the Mortgagor’s opinion of counsel (if any).

 

(xviii)      A
copy of any assignment of permits, contracts and agreements (if any).

 

(xix)         A
copy of any assignment of any interest rate cap agreement or other interest
rate protection agreement entered into by the Mortgagor or its affiliates.

 

(xx)          A copy of
the fully executed intercreditor agreement or any other agreement that
allocates assets among the parties, if any.

 

(xxi)         A
copy of any estoppel letter from the mortgagor.

 

(xxii)        A
copy of any executed servicing agreement.

 

(xxiii)       A
copy of the Purchase Agreement.

 

(xxiv)       A
copy of any loan agreement.

 

With respect to each
Underlying Asset which is a Mezzanine Loan:

 

(i)            A copy of
the original Mezzanine Note signed in connection with the Purchased Asset
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
Asset 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]”).

 

25

 

(ii)           A copy of
the original of the loan agreement and the guarantee, if any, executed in connection
with the Purchased Asset.

 

(iii)          A
copy of the original intercreditor or loan coordination agreement, if any,
executed in connection with the Purchased Asset.

 

(iv)          A copy of
the original security agreement executed in connection with the Purchased Asset.

 

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

 

(vi)          Copies of
all other documents and instruments evidencing, guaranteeing, insuring or
otherwise constituting or modifying or otherwise affecting such Purchased
Asset, or otherwise executed or delivered in connection with, or otherwise
relating to, such Purchased Asset, including all documents establishing or
implementing any lockbox pursuant to which Seller is entitled to receive any
payments from cash flow of the Underlying Asset.

 

(vii)         Except
with respect to MERS Underlying Assets, a copy of the assignment of the Underlying
Asset (in blank) from the Last Endorsee sufficient to transfer all of such Last
Endorsee’s rights, title and interest in and to the Underlying Asset.

 

(viii)        A
copy of the borrower’s opinion of counsel (if any).

 

(ix)           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
from Seller to Buyer or its designee, which UCC assignments shall be in form and
substance acceptable for filing.

 

(x)            A copy of
the pledge agreement and original certificates representing the pledged equity
interests (if any).

 

(xi)           A copy of
the Stock powers relating to each pledged equity interest, executed in blank,
if an original stock certificate is provided.

 

(xii)          A
copy of assignment of any management agreements, agreements among equity
interest holders or other material contracts.

 

(xiii)         Evidence
satisfactory to Buyer that the pledged ownership interests have been
transferred to, or otherwise made subject to a first priority security interest
in favor of, Seller.

 

26

 

(xiv)        Copies
of all loan documents and related closing documents pertaining to the closing
of the senior indebtedness incurred or owed by the owner of the real property
with respect to which the borrower of the Mezzanine Loan has pledged its
ownership interests, whether directly or indirectly through intermediate
entities, including without limitation the organizational documents of such
owner together with an officer’s certificate of Seller certifying that such
represent true and correct copies of the originals.

 

(xv)         A copy of an
assignment of any interest rate cap agreement or other interest rate protection
agreement entered into by the borrower under the Purchased Asset or its
affiliates with respect to the Purchased Asset.

 

(xvi)        A
copy of the original servicing agreement, if any, executed in connection with
the Purchased Asset.

 

(xvii)       A
copy of the Purchase Agreement.

 

(xviii)      A
copy of the borrower’s fee title insurance policy in respect of the mezzanine
loan and a copy of the related survey.

 

With respect to each
Purchased Asset which is of the type described in clause (ii) of the
definition of Eligible Asset, Seller shall deliver or cause to be delivered to
Buyer such documentation as is determined by Buyer to be necessary to
effectuate the sale, transfer, conveyance and assignment of such Purchased
Asset subject to the terms of this Agreement.

 

In addition, with respect
to each Purchased Asset, Seller shall deliver an instruction letter from Seller
to the servicer with respect to such Purchased Asset, instructing the servicer
to remit all sums required to be remitted to the holder of such Purchased Asset
under the loan documents to the Depository for deposit in the Collection
Account.

 

From time to time, Seller
shall forward to the Custodian copies of additional documents evidencing any
assumption, modification, consolidation or extension of any Purchased Asset
approved in accordance with the terms of this Agreement, and upon receipt of
any such other documents, the Custodian shall hold such other documents 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 from the recording office in time to permit copies
thereof to be delivered 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 copies of such documents to the Custodian with recording
information thereon promptly when they are received. With respect to all of the
Purchased Assets, Seller shall execute an omnibus power of attorney
substantially in the form of Exhibit V attached hereto irrevocably
appointing Buyer its attorney-in-fact with full power, after the occurrence and
during the continuation of an Event of Default to (i) complete and endorse
the Purchased Asset and any transfer documents relating thereto and (ii) take
such other steps as may be necessary or desirable to enforce Buyer’s
rights against such Purchased Assets. The Purchased Asset Files shall be
delivered by Seller to Buyer. Any Purchased Asset Files not

 

27

 

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 Asset File. 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
sale of the related Purchased Asset to Buyer. Seller or its designee shall
release its custody of the Purchased Asset File only in accordance with written
instructions from Buyer, unless such release is required as incidental to the
servicing of the Purchased Assets or is in connection with a repurchase of any Purchased
Asset by Seller.

 

(c)           Notwithstanding
the provisions of Section 6(b) above requiring the execution of the
Custodial Delivery and corresponding delivery of the Purchased Asset File to
Buyer on or prior to the related Purchase Date, with respect to each
Transaction involving a Purchased Asset which is identified in the related
Confirmation as a Table Funded Asset, Seller shall, in lieu of effectuating the
delivery of all or a portion of the Purchased Asset File on or prior to the
related Purchase Date, (i) deliver the Purchased Asset File (or the
portion thereof not then delivered to the Custodian) to Buyer on or prior to
the Purchase Date by means of delivery of the same to the Bailee, (ii) cause
the Bailee to deliver to Seller, Buyer and the Custodian by facsimile on or
before the related Purchase Date for the Transaction (A) a fully executed
Bailee Agreement and Trust Receipt issued by the Bailee thereunder, (B) the
promissory note(s) or Participation Certificate(s) in favor of Seller
evidencing the making of the Purchased Asset, with Seller’s endorsement of such
note to Buyer or original stock certificate (if certificated), (C) such
other components of the Purchased Asset File as Buyer may require on a
case by case basis with respect to the particular Transaction and (D) evidence
satisfactory to Buyer that all documents necessary to perfect Seller’s (and, by
means of assignment to Buyer on the Purchase Date, Buyer’s) interest in the
Collateral for the Purchased Asset, and (iii) not later than the third (3rd)
Business Day following the Purchase Date, deliver to Buyer the Custodial
Delivery and to the Custodian the entire Purchased Asset File.

 

(d)           Unless
an Event of Default shall have occurred and be continuing, Seller shall
exercise all voting, corporate and servicing rights with respect to the
Purchased Assets. Upon the occurrence and during the continuation of an Event
of Default, Buyer shall be entitled to exercise all voting and corporate rights
with respect to the Purchased Assets without regard to Seller’s instructions
(including, but not limited to, if an Act of Insolvency shall occur with
respect to Seller, to the extent Seller controls or is entitled to control
selection of the special servicer, Buyer may transfer such special
servicing to an entity satisfactory to Buyer).

 

7.             SALE,
TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

 

(a)           Title
to all Purchased Assets shall pass to Buyer on the applicable Purchase Date,
and Buyer shall have free and unrestricted use of all Purchased Assets. Nothing
in this Agreement or any other Transaction Document shall preclude Buyer from
engaging in repurchase or financing transactions with the Purchased Assets or
otherwise selling, transferring, pledging, repledging, hypothecating, or
rehypothecating the Purchased Assets, but no such transaction shall relieve
Buyer of its obligations to transfer the Purchased Assets to Seller pursuant to
Sections 2 or 11 of this Agreement or of Buyer’s obligation to credit or pay
Income to, or apply Income to the obligations of, Seller pursuant to Section 4
hereof.

 

28

 

(b)           Nothing
contained in this Agreement or any other Transaction Document shall obligate
Buyer to segregate any Purchased Assets delivered to Buyer by Seller. Notwithstanding
anything to the contrary in this Agreement or any other Transaction Document,
no Purchased Asset shall remain in the custody of Seller or a Subsidiary of
Seller.

 

8.             SUBSTITUTION;
SEGREGATION OF DOCUMENTS RELATING TO ELIGIBLE ASSETS

 

(a)           Substitution
of Eligible Assets is subject to satisfaction of the conditions to the
acquisition of the Purchased Assets.

 

(b)           All
documents relating to Purchased Assets in the possession of Seller shall be
segregated from other documents and securities in its possession and shall be
identified as being subject to this Agreement.

 

9.             REPRESENTATIONS

 

(a)           Buyer
and Sellers each represent and warrant, and shall on and as of the Purchase
Date of any Transaction be deemed to represent and warrant, to the other that:

 

(i)            it is
duly authorized to execute and deliver this Agreement, to enter into the
Transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance;

 

(ii)           it will
engage in such Transactions as principal (or, if agreed in writing in advance
of any Transaction by the 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, by-law or rule applicable
to it or any agreement by which it is bound or by which any of its assets are
affected.

 

(b)           Sellers
each represent and warrant to Buyer that as of the Purchase Date for the
purchase of any Purchased Assets by Buyer from either Seller and any
Transaction thereunder and as of the date of this Agreement and at all times
while this Agreement and any Transaction thereunder is in full force and
effect:

 

(i)            Organization.
Each Seller is duly organized, validly existing and in good standing under the
laws and regulations of the state of Seller’s

 

29

 

organization and is duly licensed, qualified, and in good standing in
every state where such licensing or qualification is necessary for the
transaction of such Seller’s business. 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 this Agreement and the other Transaction
Documents.

 

(ii)           Due
Execution; Enforceability. The Transaction Documents have been duly
executed and delivered by each Seller, for good and valuable consideration. The
Transaction Documents constitute the legal, valid and binding obligations of each
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.
Neither the execution and delivery of the Transaction Documents, nor
consummation by either Seller of the transactions contemplated by the
Transaction Documents (or any of them), nor compliance by either Seller with
the terms, conditions and provisions of the Transaction Documents (or any of
them) will conflict with or result in a breach of any of the terms, conditions
or provisions of (i) the formation, organizational or other governing
documents of Seller, (ii) any contractual obligation to which such party
is now a party or the rights under which have been assigned to such party or
the obligations under which have been assumed by such party or to which the
assets of such party are subject or constitute a default thereunder, or result
thereunder in the creation or imposition of any lien upon any of the assets of
such party, other than pursuant to the Transaction Documents, (iii) any
judgment or order, writ, injunction, decree or demand of any court applicable
to such party, or (iv) any applicable Requirement of Law. Seller has all
necessary licenses, permits and other consents from Governmental Authorities
necessary to acquire, own and sell the Purchased Assets and for the performance
of its obligations under the Transaction Documents.

 

(iv)          Litigation;
Requirements of Law. There is no action, suit, proceeding, investigation,
or arbitration pending or, to the best knowledge of Seller, threatened against either
Seller or any of its assets, nor is there any action, suit, proceeding,
investigation, or arbitration pending or, to the best knowledge of Seller,
threatened against either Seller which may result in any material adverse
change in the business, operations, financial condition, properties, or assets
of such Seller, or which may have an adverse effect on the validity of the
Transaction Documents or the Purchased Assets 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.

 

30

 

(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
Purchased Assets pursuant to any of the Transaction Documents.

 

(vi)          Good
Title to Purchased Assets. Immediately prior to the purchase of any
Purchased Assets by Buyer from Seller, such Purchased Assets are free and clear
of any lien, encumbrance or impediment to transfer (including any “adverse
claim” as defined in Section 8-102(a)(l) of the UCC), and Seller is the
record and beneficial owner of and has good and marketable title to and the
right to sell and transfer such Purchased Assets to Buyer and, upon transfer of
such Purchased Assets to Buyer, Buyer shall be the owner of such Purchased
Assets free of any adverse claim (other than any adverse claims or liens
created by Buyer). In the event the related Transaction is recharacterized as a
secured financing of the Purchased Assets, the provisions of this 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 Assets and Buyer
shall have a valid, perfected first priority security interest in the Purchased
Assets.

 

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

 

(viii)        Representations
and Warranties Regarding Purchased Assets; Delivery of Purchased Asset File.
Seller represents and warrants to Buyer that each Purchased Asset sold
hereunder and each pool of Purchased Assets sold in a Transaction hereunder, as
of each Purchase Date for a Transaction conform to the applicable
representations and warranties set forth in Exhibit VIII. It is understood
and agreed that the representations and warranties set forth in Exhibit VIII
and such other representations and warranties as are made by Seller to Buyer
with respect to the Underlying Assets, if any (including, without limitation,
any representations and warranties made by Seller pursuant to Section 9(d) hereof),
shall survive delivery of the respective Purchased Asset File to Buyer or its
designee (including the Custodian). Seller or its designee is in possession of
a complete, true and accurate Purchased Asset File with respect to each
Purchased Asset, except for such documents as have been delivered to Buyer. Any
provision hereof to the contrary notwithstanding, Buyer’s remedy for a breach
of this representation and warranty with respect to any Purchased Asset shall
be to mark such Purchased Asset to market; provided, however,
that in the event that a breach of this representation and warranty causes a
breach of some other covenant of Seller hereunder (such as to maintain adequate
margin), then Buyer shall be entitled to exercise all rights and remedies
granted to it hereunder.

 

(ix)           Adequate
Capitalization: No Fraudulent Transfer. Each 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. Each Seller is generally able to pay, and as
of the date hereof is paying, its debts as they come due. Neither Seller has
become, or is presently,

 

31

 

financially insolvent nor will either Seller be made insolvent by
virtue of such 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. Neither Seller has entered into any
Transaction Document or any Transaction pursuant thereto in contemplation of
insolvency or with intent to hinder, delay or defraud any creditor.

 

(x)            Consents.
No consent, approval or other action of, or filing by Seller with, any
Governmental Authority or any other Person is required to authorize, or is
otherwise required in connection with, the execution, delivery and performance
of any of the Transaction Documents (other than consents, approvals and filings
that have been obtained or made, as applicable).

 

(xi)           Ownership.
Each Seller is a publicly held corporation.

 

(xii)          Organizational
Documents. Seller has delivered to Buyer certified copies of its formation,
organizational and other governing documents, together with all amendments
thereto.

 

(xiii)         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 Assets and (ii) no agreements on the part of
Seller to issue, sell or distribute the Purchased Assets.

 

(xiv)        Federal
Regulations. Seller is not (A) required to register as an “investment
company,” or a company “controlled by an investment company,” under 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.

 

(xv)         Taxes.
Each Seller has filed or caused to be filed all tax returns which to the knowledge
of Seller would be delinquent if they had not been filed on or before the date
hereof and has paid all taxes shown to be due and payable on or before the date
hereof on such returns or on any assessments made against it or any of its
property 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.

 

(xvi)        ERISA.
Seller does not have any Plans.

 

(xvii)       Judgments/Bankruptcy.
Except as disclosed in writing to Buyer, there are no judgments in excess of
$10,000,000 against either Seller 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.

 

32

 

(xviii)      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 to Seller’s knowledge 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.

 

(xix)         Financial
Information. All financial data concerning Seller and to Seller’s knowledge
the Purchased Assets 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 to Seller’s knowledge the Purchased Assets, or in the
results of operations of Seller, which change is reasonably likely to have in a
material adverse effect on Seller.

 

(xx)          Chief
Executive Office. On the date of this Agreement, Seller’s chief executive
office and principal place of business is located at 410 Park Avenue, 14th
Floor, New York, New York 10022. The location where Seller keeps its books and
records, including all computer tapes and records relating to the Eligible
Assets is its chief executive office.

 

(xxi)         Purchase
Agreement Representations and Warranties. Seller has provided Buyer with a
copy of the Purchase Agreement (to the extent applicable) containing
representations and warranties made to Seller by the party designated as seller
under such Purchase Agreement.

 

(xxii)        Loan
to Value Ratio. The combined loan to value ratio of any Underlying Asset
and any senior liens on a related Property shall not at any time exceed the
requirements set forth in the Side Letter.

 

(c)           On
the Purchase Date for any Transaction, Seller shall be deemed to have made all
of the representations set forth in Section 9(b) of this Agreement as
of such Purchase Date.

 

(d)           Seller
agrees to make to Buyer the representations and warranties regarding each
Purchased Asset that were made to Seller in connection with Seller’s
acquisition of such Purchased Asset.

 

10.           NEGATIVE
COVENANTS OF SELLER

 

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

 

(a)           take
any action which would directly or indirectly impair or adversely affect Buyer’s
title to or security interest in the Purchased Assets;

 

33

 

(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 Assets (or any of them) to any Person other than Buyer, or engage in
repurchase transactions or similar transactions with respect to the Purchased
Assets or Underlying Assets (or any of them) with any Person other than Buyer;

 

(c)           create,
incur or permit to exist any lien, encumbrance or security interest in or on
the Purchased Assets or Underlying Assets, except as described in Section 5
of this Agreement;

 

(d)           consent
or assent to any amendment or supplement to, or termination of, any
Securitization Document, any note, loan agreement, mortgage or guaranty
relating to the Purchased Assets or Underlying Assets or other material
agreement or instrument relating to the Purchased Assets other than in
accordance with Section 6(c);

 

(e)           use
any of the Purchase Price for any Purchased Asset either directly or indirectly
to acquire any security, as that term is defined in Regulation T of the
Regulations of the Board of Governors of the Federal Reserve System, or take
any action that might cause any Transaction to violate any regulation of the
Federal Reserve Board;

 

(f)            after
the occurrence and during the continuation of any Default or Event of Default,
make any distribution, payment on account of, or set apart assets for any
equity or ownership interest of Seller, or 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 to any equity or
ownership interest of Seller, either directly or indirectly, whether in cash or
property or in obligations of Seller; provided, that the foregoing shall not
restrict Seller from making distributions, from assets other than the Purchased
Assets, required to maintain Seller’s status under the Code as a real estate
investment trust (“REIT”) within the meaning of Section 856 through
860 of the Code, in the event Seller then qualifies as a REIT under the Code;

 

(g)           file
a UCC financing statement, with respect to a Purchased Asset or Underlying
Asset, or an amendment or termination statement with respect to a UCC financing
statement with respect to a Purchased Asset or Underlying Asset, except as
approved by Buyer in each instance;

 

(h)           enter
into Transactions for which the Purchased Assets are CDO Assets which would
cause the aggregate of the Purchase Prices for such CDO Assets to exceed the
Maximum CDO Aggregate Purchase Price; or

 

(i)            enter
into Transactions for which Purchased Assets other than the CDO Assets which
would cause the aggregate of the Purchase Prices for such Assets to exceed the
Maximum Committed Aggregate Purchase Price.

 

34

 

11.           AFFIRMATIVE
COVENANTS OF SELLER

 

(a)           Seller
shall promptly notify Buyer of any material adverse change in its business
operations and/or financial condition; provided, however, that nothing in this Section 11 shall relieve
Seller of its obligations under this Agreement.

 

(b)           Seller
shall provide Buyer with copies of such documents as Buyer may reasonably
request evidencing the truthfulness of the representations set forth in Section 9.

 

(c)           Seller
(1) shall defend the right, title and interest of Buyer in and to the
Purchased Assets against, and take such other action as is necessary to remove,
the liens, security interests, claims and demands of all Persons (other than
security interests by or through Buyer) and (2) shall, at Buyer’s request,
take all action necessary to ensure that Buyer will have a first priority
security interest in the Purchased Assets subject to any of the Transactions in
the event such Transactions are recharacterized as secured financings.

 

(d)           Seller
shall notify Buyer and the Depository of the occurrence of any Default or Event
of Default with respect to Seller as soon as possible but in no event later
than the second (2nd) Business Day after obtaining actual knowledge of such
event.

 

(e)           Seller
shall promptly (and in any event not later than two (2) Business Days
following receipt) deliver to Buyer (i) any notice of the occurrence of an
event of default under or report received by or required to be delivered by
Seller pursuant to the Securitization Documents; (ii) any notice of
transfer of servicing under the Securitization Documents and (iii) any
other information with respect to the Purchased Assets as may be
reasonably requested by Buyer from time to time.

 

(f)            Seller
will permit Buyer (at Buyer’s cost) or its designated representative to inspect
Seller’s records with respect to the Purchased Assets and the conduct and
operation of its business related thereto upon reasonable prior written notice
from Buyer or its designated representative, at such reasonable times and with
reasonable frequency, and to make copies of extracts of any and all thereof,
subject to the terms of any confidentiality agreement between Buyer and Seller.

 

(g)           If
Seller shall at any time become entitled to receive or shall receive any
rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for the Purchased Assets, or otherwise in respect thereof, Seller
shall accept the same as Buyer’s agent, hold the same in trust for Buyer and
deliver the same forthwith to Buyer in the exact form received, duly
endorsed by Seller to Buyer, if required, together with an undated bond power
covering such certificate duly executed in blank to be held by Buyer hereunder
as additional collateral security for the Transactions. If any sums of money or
property so paid or distributed in respect of the Purchased Assets shall be
received by Seller, Seller shall, until such money or property is paid or
delivered to Buyer, hold such money or property for the benefit of Buyer, as
additional collateral security for the Transactions.

 

(h)           At
any time from time to time upon request of Buyer, at the sole expense of
Seller, Seller will promptly and duly execute and deliver such further
instruments and documents and take such further actions as Buyer may reasonably
request for the purposes of obtaining or

 

35

 

preserving the full benefits of this Agreement including
the first priority security interest granted hereunder and of the rights and
powers herein granted (including, among other things, filing such Uniform Commercial
Code financing statements as Buyer may reasonably request). If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument, negotiable document,
certificated security or chattel paper, such note, instrument, document,
security or chattel paper shall be immediately delivered to Buyer, duly
endorsed in a manner satisfactory to Buyer, to be held as Collateral pursuant
to this Agreement, and the documents delivered in connection herewith. Seller
hereby irrevocably authorizes Buyer at any time and from time to time to file in
any filing office in any jurisdiction any initial financing statements and
amendments thereto that (1) indicate the Collateral (i) as all
Purchased Assets, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the UCC or such
jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (2) contain any other information required by part 5 of Article 9
of the UCC for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether Seller is an organization,
the type of organization and any organization identification number issued to
Seller, and (ii) in the case of a financing statement filed as a fixture
filing or indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates. Seller
agrees to furnish any such information to Buyer promptly upon request. Seller
also ratifies its authorization for Buyer to have filed in any jurisdiction any
initial financing statements or amendments thereto if filed prior to the date
hereof.

 

(i)            Seller
shall provide Buyer with the following financial and reporting information:

 

(i)            Within 60
days after the last day of the first three fiscal quarters in any fiscal year,
Seller’s unaudited consolidated statements of income and statements of changes
in cash flow for such quarter and balance sheets as of the end of such quarter
(which statements and balance sheets shall separately break out the statements
of income and changes in cash flow and balance sheets of Seller), in each case
presented in Seller’s usual form as previously approved by Buyer;

 

(ii)           Within 120
days after the last day of its fiscal year, Seller’s audited consolidated
statements of income and statements of changes in cash flow for such year and
balance sheets as of the end of such year (which statements and balance sheets
shall separately break out the statements of income and changes in cash flow
and balance sheets of Seller), in each case presented in Seller’s usual form as
previously approved by Buyer;

 

(iii)          Within
60 days after the last day of each calendar quarter in any fiscal year, an
officer’s certificate from Seller addressed to Buyer certifying that, as of
such calendar month, (x) Seller is in compliance with all of the terms,
conditions and requirements of this Agreement, and (y) no Event of Default
exists;

 

(iv)          Within 60
days after the last day of each calendar month in any fiscal year, any and all
property level financial information with respect to the

 

36

 

Purchased Assets that is in the possession of Seller or an Affiliate,
or such other information as may be mutually determined and agreed upon in
writing by both Buyer and Seller, including, without limitation, rent rolls and
income statements; and

 

(v)           Within 5
business days of receipt by Seller, a monthly reporting package with respect to
the Underlying Assets containing all information set forth on Exhibit III
attached hereto; provided, however, that if such information is
not received by Seller, it shall have no obligation under this clause (v).

 

(j)            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.

 

(k)           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.

 

(l)            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 on its assets and on the Purchased Assets that, in each case,
in any manner would create any lien or charge upon the Purchased Assets, except
for any such taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided in accordance with GAAP.

 

(m)          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 Assets are held
not less than fifteen (15) Business Days prior to taking any such action.

 

(n)           Seller
will maintain records with respect to the Purchased Assets and the conduct and
operation of its business with no less a degree of prudence than if the
Purchased Assets 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 Assets and the
conduct and operation of its business.

 

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

 

(p)           Seller
hereby covenants and agrees that all interest and original issue discount
received or accrued with respect to the Purchased Assets shall be treated as
portfolio interest within the meaning of Sections 871(h) and 881(c) of
the Internal Revenue Code, as amended,

 

37

 

and no amount will be required to be deducted from any
remittance on the Purchased Assets on account of withholding tax or otherwise.

 

(q)           Seller
shall notify Buyer in writing of any proposed extension or material
modification of any Purchased Asset not less than ten (10) Business Days
prior to taking any such action and shall reasonably provide Buyer with any
documentation required for such Purchased Asset to be modified or extended
after any such action has been taken.

 

(r)            Seller
shall pay all reasonable and actually incurred expenses (including the
reasonable fees and expenses of counsel to Buyer) of Buyer in connection with
the negotiation and documentation of this Agreement.

 

(s)           Seller
shall be solely responsible for the fees and expenses of Custodian.

 

(t)            Seller
shall, and shall cause each entity servicing any Purchased Assets to, promptly
notify Buyer in writing of any payment in full or reasonably anticipated
payment in full of a Purchased Asset.

 

12.           [RESERVED]

 

13.           EVENTS
OF DEFAULT

 

Each of the following
shall constitute an “Event of Default” under this Agreement:

 

(i)            either (A) the
Transaction Documents shall for any reason not cause, or shall cease to cause,
Buyer to be the owner free of any adverse claim of any of the Purchased Assets,
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 Assets;

 

(ii)           in the
event that Buyer or any of its Affiliates is a party to any Hedging Transaction
and a default or breach occurs thereunder on the part of Seller which
results in the early termination of such Hedging Transaction or otherwise is not
cured within the cure period for such default or breach provided under the
terms and conditions of such Hedging Transaction;

 

(iii)          failure
of Buyer to receive no later than one (1) Business Day following any
Remittance Date the accrued, but unpaid Price Differential (less any amount of
such Price Differential previously paid by Seller to Buyer) (including, without
limitation, in the event the Income paid or distributed on or in respect of the
Purchased Assets is insufficient to make such payment and Seller does not make
such payment or cause such payment to be made);

 

(iv)          failure of
Buyer to receive the Repurchase Price for any Purchased Assets on the date the
same is due under this Agreement (whether on the Repurchase Date, Early
Repurchase Date or otherwise as provided herein);

 

38

 

(v)           failure of
a Seller to make any other payment (i.e., a payment
of a type not specified in any other clause of this Section 13) owing to
Buyer which has become due, whether by acceleration or otherwise under the
terms of this Agreement which failure is not remedied within the applicable
period in the case of a failure pursuant to Section 3 or three Business
Days in the case of any other such failure;

 

(vi)          any
governmental, regulatory, or self-regulatory authority shall have taken any
action to remove, limit, restrict, suspend or terminate the rights, privileges,
or operations of a Seller, which suspension has a material adverse effect on
the financial condition or business operations of a Seller, taken as a whole;

 

(vii)         Buyer
shall have determined, in good faith, (A) that there has been a material
adverse change in the corporate structure with respect to Seller (including,
without limitation, any breach of the provisions of Section 12 hereof) or
financial condition or creditworthiness, taken as a whole, of a Seller; (B) that
a Seller will not meet or has breached any of its obligations under any
Transaction pursuant to any of the Transaction Documents; or (C) that a
material adverse change in the financial condition of a Seller may occur
due to the pendency of a material legal action against a Seller;

 

(viii)        an
Act of Insolvency shall have occurred with respect to either Seller;

 

(ix)           any (A) representation
or warranty made by a Seller shall have been incorrect or untrue in any
material respect when made or repeated or deemed to have been made or repeated;
provided, however that Buyer’s remedy for a breach of a representation and
warranty with respect to any Purchased Asset shall be to mark such Purchased
Asset to market; or (B) covenant made by a Seller shall have been breached
in a material respect;

 

(x)            a final
judgment by any competent court in the United States of America for the payment
of money in an amount greater than $10,000,000 shall have been rendered against
a Seller, and remained undischarged or unpaid for a period ninety (90) days,
during which period execution of such judgment is not effectively stayed;

 

(xi)           a Seller
or Buyer shall breach or fail to perform any of the terms, covenants,
obligations or conditions of this Agreement, and such breach or failure to perform is
not remedied within twenty (20) days, provided that any failure to comply with Section 11(j)
must be cured within 5 days (unless otherwise specifically referred to in this
definition of “Event of Default”);

 

(xii)          a
Seller shall have defaulted, such default having not previously occurred,
(beyond applicable notice and cure period) or failed to perform under any
other note, indenture, loan agreement, guaranty, swap agreement or any other

 

39

 

contract, agreement or transaction to which it is a party, which
default (A) involves the failure to pay an obligation in excess of
$5,000,000, or (B) permits the acceleration of the maturity of obligations
in excess of $5,000,000 by any other party to or beneficiary of such note,
indenture, loan agreement, guaranty, swap agreement or other contract agreement
or transaction, or a Seller shall breach any covenant or condition, shall fail
to perform, admits its inability to perform or state its intention not to
perform its obligations under any Transaction or in respect of any
repurchase agreement, reverse repurchase agreement, securities contract or
derivative transaction with any party;

 

(xiii)         Seller
at any time fails to maintain a ratio of Seller’s EBITDA to its interest
expense coverage of more than 1.2x;

 

(xiv)        the
Debt to Net Worth ratio of Seller at any time exceeds 30:1;

 

(xv)         the ratio of
Modified Debt to Net Worth exceeds 10:1; or

 

(xvi)        the
ratio of Modified Recourse Debt to Net Worth exceeds 5:1.

 

All of the financial
tests and covenants in this Agreement will be measured based on the
consolidated position of Capital Trust, Inc. and its Subsidiaries.

 

Any provision hereof to
the contrary notwithstanding, an Event of Default on the part of either
Seller hereunder shall be deemed to be an Event of Default by both Sellers.

 

14.           REMEDIES

 

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

 

(i)            At the
option of Buyer, exercised by written notice to either 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 with respect to either Seller), the
Repurchase Date for all Transactions hereunder (for both Sellers) 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”).

 

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

 

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

 

(B)           to the extent permitted
by applicable law, the Pricing Rate with respect to each Transaction
(determined as of the Accelerated Repurchase Date) shall be the Pricing Rate

 

40

 

prior to the date
of the Event of Default plus 200 basis points; and

 

(C)           the Custodian shall,
upon the request of Buyer, deliver to Buyer all instruments, certificates and
other documents then held by the Custodian relating to the Purchased Assets,

 

(iii)          Unless
Seller has tendered the Repurchase Price, upon the occurrence and during the
continuance of an Event of Default which has not previously occurred with
respect to Seller (with respect to which Buyer has not agreed to forbearance or
accepted a workout arrangement), Buyer may (A) immediately sell, at a
public or private sale at such price or prices as Buyer may deem
satisfactory any or all of the Purchased Assets or (B) in its sole
discretion elect, in lieu of selling all or a portion of such Purchased Assets,
to give Seller credit for such Purchased Assets in an amount equal to the
Market Value of such Purchased Assets against the aggregate unpaid Repurchase
Price for such Purchased Assets and any other amounts owing by Seller under the
Transaction Documents. Notwithstanding the definition of “Market Value” set
forth in Section 1 herein, for purposes of this Section 14(iii), as
to any Purchased Asset that has been delinquent for at least sixty (60) days,
Buyer shall determine a market value for such Purchased Asset in good faith. The
proceeds of any disposition of Purchased Assets effected pursuant to this Section 14(iii) shall
be applied, (w) first, to the costs and expenses,
including legal expenses, incurred by Buyer in connection with Seller’s
default; (x) second, to the Repurchase Price;
and (y) third, to any other outstanding
obligation of Seller to Buyer or its Affiliates.

 

(iv)          The parties
recognize that it may not be possible to purchase or sell all of the
Purchased Assets on a particular Business Day, or in a transaction with the
same purchaser, or in the same manner because the market for such Purchased
Assets may not be liquid. In view of the nature of the Purchased Assets,
the parties agree that liquidation of a Transaction or the Purchased Assets
does 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 Assets, and nothing contained herein shall (A) obligate
Buyer to liquidate any Purchased Assets on the occurrence and during the
continuance of an Event of Default or to liquidate all of the Purchased Assets
in the same manner or on the same Business Day or (B) constitute a waiver
of any right or remedy of Buyer or its Affiliates.

 

(v)           Seller
shall be liable to Buyer for the amount of all 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, and any other actual
out-of-pocket loss, damage, cost or expense directly arising or resulting from
the occurrence of an Event of Default with respect to Seller.

 

41

 

(vi)          Buyer shall
have, in addition to its rights and remedies under the Transaction Documents,
all of the rights and remedies provided by applicable federal, state, foreign,
and local laws (including, without limitation, if the Transactions are
recharacterized as secured financings, the rights and remedies of a secured
party under the UCC, 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. Without limiting the generality of the foregoing,
Buyer shall be entitled to set off the proceeds of the liquidation of the
Purchased Assets 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.

 

(vii)         Buyer
may exercise any or all of the remedies available to Buyer immediately
upon the occurrence of an Event of Default with respect to Seller (with respect
to which Buyer has not agreed to forbearance or accepted a workout arrangement)
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.

 

(viii)        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 Assets, 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.

 

(ix)           To the
extent that applicable law imposes duties on Buyer to exercise remedies in a
commercially reasonable manner, Seller acknowledges and agrees that it is not
commercially unreasonable for Buyer (i) to fail to incur expenses
reasonably deemed significant by Buyer to prepare the Purchased Assets for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Purchased Assets to be disposed of,
or to obtain or, if not required by other law, to fail to obtain governmental
or third party consents for the collection or disposition of the Purchased
Assets to be collected or disposed of, (iii) to fail to exercise
collection remedies against Persons obligated on the Purchased Assets or to
remove liens on or any adverse claims against the Purchased Assets, (iv) to
exercise collection remedies against Persons obligated on the Purchased Assets
directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of the Purchased Assets through
publications or media of general circulation, whether or not the Purchased
Assets are of a specialized nature, (vi) to contact other Persons, whether
or not in the same business as Seller, for expressions of interest in acquiring
all or any portion of such Purchased Assets, (vii) to hire one or more
professional

 

42

 

auctioneers to assist in the disposition of the Purchased Assets,
whether or not the Purchased Assets are of a specialized nature, (viii) to
dispose of the Purchased Assets by utilizing internet sites that provide for
the auction of assets of the types included in the Purchased Assets or that
have the reasonable capacity of doing so, or that match buyers and sellers of
assets, (ix) to dispose of assets in wholesale rather than retail markets,
(x) to disclaim disposition warranties, such as title, possession or quiet
enjoyment, (xi) to purchase, at Buyer’s expense, insurance or credit
enhancements to insure Buyer against risks of loss, collection or disposition
of the Purchased Assets or to provide to Buyer a guaranteed return from the
collection or disposition of the Purchased Assets, or (xii) to the extent
deemed appropriate by Buyer, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist Buyer in the
collection or disposition of any of the Purchased Assets. Seller acknowledges
that the purpose of this Section 14(ix) is to provide non-exhaustive
indications of what actions or omissions by Buyer would not be commercially
unreasonable in Buyer’s exercise of remedies against the Purchased Assets and
that other actions or omissions by Buyer shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 14(ix).
Without limitation upon the foregoing, nothing contained in this Section 14(ix) shall
be construed to grant any rights to Seller or to impose any duties on Buyer
that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this Section 14(ix).

 

(x)            Buyer
shall not be required to make any demand upon, or pursue or exhaust any of its
rights or remedies against, Seller, any other obligor, guarantor, pledgor or
any other Person with respect to the payment of the obligations of Seller
hereunder or to pursue or exhaust any of its rights or remedies with respect to
any Purchased Assets therefor or any direct or indirect guarantee thereof. Buyer
shall not be required to marshal the Purchased Assets or any guarantee of the
obligations of Seller hereunder or to resort to the Purchased Assets or any
such guarantee in any particular order, and all of its rights hereunder or
under any other document or instrument executed in connection herewith shall be
cumulative. To the extent it may lawfully do so, Seller absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against Buyer, any valuation, stay, appraisement, extension,
redemption or similar laws and any and all rights or defenses it may have
as a surety now or hereafter existing which, but for this provision, might be
applicable to the sale of any Purchased Assets made under the judgment, order
or decree of any court, or privately under the power of sale conferred by this
Agreement, or otherwise.

 

(xi)           Seller
hereby appoints Buyer as attorney-in-fact of Seller for the purpose, after the
occurrence and during the continuance of an Event of Default, of carrying out
the provisions of this Agreement and taking any action and executing or
endorsing any instruments that Buyer may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest.

 

43

 

15.           NOTICES
AND OTHER COMMUNICATIONS

 

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, (d) by telecopier (with answerback acknowledged) or (e) by
email, provided that such telecopied or emailed notice must also be delivered
by one of the means set forth in (a), (b) or (c) above, to the
address specified below 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:

 

	
  if to Buyer:

  	
  Bear, Stearns
  International Limited

  
	
   

  	
  c/o Bear,
  Stearns & Co. Inc.

  
	
   

  	
  383 Madison
  Avenue

  
	
   

  	
  New York, New
  York 10179

  
	
   

  	
  Attn:

  	
  Eileen Albus

  
	
   

  	
  Telephone:

  	
  (212) 272-7502

  
	
   

  	
  Fax:

  	
  (212) 272-2053

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sidley Austin Brown & Wood LLP

  
	
   

  	
  787 Seventh Avenue

  
	
   

  	
  New York, New York 10019

  
	
   

  	
  Attn:

  	
  Michael P. Peck

  
	
   

  	
  Telephone:

  	
  (212) 839-5576

  
	
   

  	
  Fax:

  	
  (212) 839-5599

  
	
   

  	
   

  	
   

  
	
  if to Capital Trust, Inc.:

  	
  Capital Trust, Inc.

  
	
   

  	
  410 Park Avenue

  
	
   

  	
  14th Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  Geoffrey Jervis

  
	
   

  	
  Telephone:

  	
  (212) 655-0247

  
	
   

  	
  Fax:

  	
  (212) 655-0044

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Paul, Hastings, Janofsky & Walker LLP

  
	
   

  	
  75 East 55th Street

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  Robert J. Grados, Esq.

  
	
   

  	
  Telephone:

  	
  (212) 318-6923

  
	
   

  	
  Fax:

  	
  (212) 230-7830

  
	
   

  	
   

  	
   

  

 

44

 

	
  if to CT BSI Funding
  Corp.:

  	
  CT BSI Funding Corp.

  
	
   

  	
  410 Park Avenue

  
	
   

  	
  14th Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  Geoffrey Jervis

  
	
   

  	
  Telephone:

  	
  (212) 655-0247

  
	
   

  	
  Fax:

  	
  (212) 655-0044

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Paul, Hastings, Janofsky & Walker LLP

  
	
   

  	
  75 East 55th Street

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  Robert J. Grados, Esq.

  
	
   

  	
  Telephone:

  	
  (212) 318-6923

  
	
   

  	
  Fax:

  	
  (212) 230-7830

  

 

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,
(d) in the case of telecopier, upon receipt of answerback confirmation or (e) in
the case of email, at the time such email was sent, provided that such
telecopied or emailed 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.

 

16.           NON-ASSIGNABILITY

 

(a)           The
rights and obligations of the parties under the Transaction Documents and under
any Transaction shall not be assigned by either party without the prior written
consent of the other party; provided, however, that Buyer may assign its rights and
obligations under the Transaction Documents and/or under any Transaction to an
Affiliate, without the prior written consent of Seller so long as that
Affiliate has a Net Worth at least equal to that of Buyer as of the Purchase
Date; and provided further, however, that upon the
occurrence and during the continuation of an Event of Default, the
non-defaulting party shall have an unfettered right to assign its rights and
obligations without the consent of the defaulting party.

 

(b)           The
transferring party pursuant to subsection (a) above shall be
responsible for the payment of all fees and expenses relating to such transfer
of its rights and obligations.

 

(c)           Buyer
shall be entitled to issue one or more participation interests with respect to
any or all of the Transactions.

 

(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 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.

 

45

 

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

 

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

 

(b)           Each
party irrevocably and unconditionally (i) 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 this
Agreement or relating in any way to this Agreement or any Transaction under
this Agreement and (ii) waives, to the fullest extent it may effectively
do so, any 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.

 

(c)           Each
party hereby irrevocably waives, to the fullest extent they may effectively
do so, the defense of an inconvenient forum to the maintenance of such action
or proceeding and irrevocably consent to the service of any summons and
complaint and any other process by the mailing via certified mail, return
receipt requested 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 17 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
OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED
HEREUNDER OR THEREUNDER.

 

18.           NO
RELIANCE

 

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:

 

(a)           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.

 

(b)           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.

 

46

 

(c)           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;

 

(d)           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;

 

(e)           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.

 

19.           INDEMNITY

 

Seller hereby agrees to
indemnify Buyer, Buyer’s designee and each of its officers, directors,
employees and agents (“Indemnified Parties”) from and against any and all
liabilities, obligations, actual, out-of-pocket losses, actual, out-of-pocket
damages, actual, out-of-pocket 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 Assets or in
connection with any of the transactions contemplated by this Agreement and the
documents delivered in connection herewith, other than income taxes, franchise
taxes or other similar taxes of Buyer), actual, out-of-pocket fees, actual,
out-of-pocket costs, actual, out-of-pocket expenses (including reasonable
attorneys’ fees and disbursements) or disbursements (all of the foregoing,
collectively “Indemnified Amounts”) which may at any time (including,
without limitation, such time as this 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, this 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
Assets 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, the Truth in Lending Act and/or the Real
Estate Settlement Procedures Act, 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 Asset
for any sum owing thereunder, or to enforce any provisions of any Purchased
Asset, Seller will save, indemnify and hold Buyer harmless from and against all
expense (including, without limitation, reasonable attorneys’ fees and
expenses), 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 and the enforcement or the preservation of Buyer’s
rights under this Agreement or any Transaction

 

47

 

contemplated
hereby, including without limitation the reasonable fees and disbursements of
its counsel. Seller hereby acknowledges that, the obligation of Seller
hereunder is a recourse obligation of Seller.

 

20.           DUE
DILIGENCE

 

Seller acknowledges that
Buyer has the right, at its own cost and expense except as provided in the
fourth sentence of this Section 20, to perform reasonable continuing
due diligence reviews with respect to the Purchased Assets and the related
Underlying Assets for purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or otherwise,
and Seller agrees that upon reasonable 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 Asset Files,
Servicing Records and any and all documents, records, agreements, instruments
or information relating to such Purchased Assets and Underlying Assets in the
possession or under the control of Seller, any other servicer or subservicer
and/or the Custodian. Seller also shall make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Purchased Asset Files, the Purchased Assets and Underlying
Assets. Without limiting the generality of the foregoing, Seller acknowledges
that Buyer may enter into Transactions with Seller based solely upon the
information provided by Seller to Buyer and the representations, warranties and
covenants contained herein, and that Buyer, at its option, has the right at any
time to conduct a partial or complete due diligence review on some or all of
the Purchased Assets and Underlying Assets. Any provision hereof to the
contrary not withstanding and except as provided in the following sentence with
respect to the underwriting of Purchased Assets by Buyer or its designee,
Seller shall pay the initial $7,500 (per Underlying Asset) of the reasonable
costs and expenses of Buyer and its counsel incurred in connection with that
portion of its due diligence review intended to satisfy it that the statements
set forth in Exhibit VI and/or Exhibit VII, as applicable, are true
and correct with respect to each Underlying Asset. Buyer may underwrite
such Purchased Assets and Underlying Assets itself or, at its own cost and
expense, engage a third party underwriter to perform such underwriting. Seller
agrees to reasonably cooperate with Buyer and any third party underwriter in
connection with such underwriting, including, but not limited to, providing
Buyer and any third party underwriter with access to any and all documents,
records, agreements, instruments or information relating to such Purchased
Assets and Underlying Assets in the possession, or under the control, of
Seller.

 

21.           SERVICING

 

To the extent it has
control over the servicing of the Purchased Assets and/or the Underlying
Assets, Seller agrees as follows:

 

(a)           Notwithstanding
the purchase and sale of the Purchased Assets hereby, Seller shall continue to
cause the Purchased Assets and the Underlying Assets to be serviced for the
benefit of Buyer and, if Buyer shall exercise its rights to pledge or
hypothecate the Purchased Assets prior to the Repurchase Date pursuant to Section 7,
Buyer’s assigns. Seller shall service or cause the servicer to service the
Purchased Assets and the Underlying Assets in accordance with Accepted
Servicing Practices approved by Buyer and maintained by other prudent mortgage
lenders with respect to assets similar to the Purchased Assets and the
Underlying Assets.

 

48

 

(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 Assets and the Underlying Assets
(the “Servicing Records”) so long as the Purchased Assets are subject to this
Agreement. Seller grants Buyer a security interest in all servicing fees and
rights of Seller relating to the Purchased Assets and all Servicing Records to
secure the obligation of Seller or its designee to service in conformity with
this Section and any other obligation of Seller to Buyer. 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)           Seller
shall provide to Buyer on a monthly basis, or more frequently at the request of
Buyer, any and all information that is pertinent or related to the assessment
and valuation of Underlying Assets that are included in Purchased Assets, as or
when received or available from Seller. Such information includes, but is not
limited to, property operating statements, rent rolls, financial statements and
other financial reports for each Purchased Asset, as well as any other
information or events affecting the interests in or valuation of the Purchased
Assets.

 

(d)           Upon
the occurrence and continuance of an Event of Default, Buyer may, in its sole
discretion, (i) sell its right to the Purchased Assets and the related
Underlying Assets on a servicing released basis or (ii) terminate Seller
or any sub-servicer of the Purchased Assets and the related Underlying Assets
with or without cause, in each case without payment of any termination fee.

 

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

 

(f)            Seller
shall cause any sub-servicers engaged by Seller to execute a letter agreement
with Buyer acknowledging Buyer’s security interest and agreeing that it shall
deposit all Income with respect to the Purchased Assets in the Collection
Account.

 

(g)           To
the extent permitted under the servicing agreement the payment of servicing
fees shall be subordinate to payment of amounts outstanding under any
Transaction and this Agreement.

 

(h)           The
servicer and Seller may not enter into any modification or extension
agreement without the written consent or approval of Buyer.

 

22.           WIRE
INSTRUCTIONS

 

(a)           Any
amounts to be transferred by Buyer to either Seller hereunder shall be sent by
wire transfer in immediately available funds

 

49

 

(i)            to the
account of Seller at:

 

	
  Bank: JPMorgan Chase
  Bank

  
	
  Acct. No.:
  230254632

  
	
  ABA #:
  021-000021

  
	
  Acct. Name:
  Capital Trust, Inc.

  
	
  Corporate
  Account

  
	
  Attn: John Warch
  (212) 655-0225

  

 

(ii)           or to an
account designated by Seller in writing, provided that such designation is made
by at least two Authorized Representatives of the Seller.

 

(b)           Any
amounts to be transferred by Seller to Buyer hereunder shall be sent by wire
transfer in immediately available funds to the account of Buyer at:

 

Acct.:  For the A/C of Bear Stearns MBS, FNB Chicago

Acct. No.:  5801230

ABA No.:  071000013

Attn:  Eileen Albus

 

(c)           Amounts
other than the Purchase Price for a Purchased Asset received after 3:00 p.m.,
New York City time, on any Business Day shall be deemed to have been paid and
received on the next succeeding Business Day.

 

23.           CONFIDENTIALITY

 

Each of the parties
acknowledges that this Agreement, the Custodial Agreement and the terms of each
Transaction (including information disclosed in due diligence) are confidential
in nature and each such party agrees that, unless an Event of Default shall
occur and be continuing, or as otherwise directed by a court or regulatory
entity of competent jurisdiction or as may be required by federal or state
law (which determination as to federal or state law shall be based upon written
advice of counsel), it shall limit the distribution of such documents and the
disclosure of such information to its officers, employees, attorneys,
accountants, investors and agents as required in order to conduct its business
with the other parties hereto. Notwithstanding the foregoing, Buyer shall be
permitted to provide a copy of this Agreement and the Custodial Agreement, and
shall be permitted to describe the terms of each Transaction, in connection
with the re-hypothecation of the Eligible Assets subject to the terms of this
Agreement. This Section shall not apply to information which has entered
the public domain through means other than a breach of the foregoing covenant
by the party seeking to distribute such documents or which the other party has
given written permission to disclose.

 

Seller hereby
acknowledges and agrees that any and all information concerning Seller (the “Information”)
that is furnished by Seller to Buyer and any of its Affiliates may be used
and relied upon by any other of Buyer’s Affiliates without any liability to
Seller to the extent such information is obtained by Buyer or an Affiliate from
another of its Affiliates without any liability to Seller, provided,
however, that no Information will be
used by a Buyer or an Affiliate in violation of federal or state securities
laws.

 

50

 

Seller further
acknowledges and agrees that any confidentiality agreement that may now or
hereafter exist between Seller and Buyer or an Affiliate shall not preclude the
disclosure of any Information between or among Buyer and any of its Affiliates.

 

24.           SINGLE
TRANSACTION

 

Buyer and Seller
acknowledge that, and have entered hereunto 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 (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.

 

25.           JOINT
AND SEVERAL LIABILITY OF SELLERS

 

Each Seller agrees to be jointly
and severally liable for the obligations of each Seller hereunder and all
representations, warranties, covenants and agreements made by or on behalf of
each Seller in the Agreement or in any exhibit hereto or any document,
instrument or certificate delivered pursuant hereto shall be deemed to have
been made by each Seller, jointly and severally. Each Seller further agrees
that, notwithstanding any right of Buyer to investigate fully the affairs of a
Seller and notwithstanding any knowledge of facts determined or determinable by
Buyer, Buyer has the right to rely fully on the representations, warranties,
covenants and agreements of each Seller contained in the Agreement and upon the
accuracy of any document, instrument, certificate or exhibit given or
delivered hereunder. The joint and several obligation of each Seller hereunder
is absolute, unconditional, irrevocable, present and continuing and, with
respect to any payment to be made to Buyer, is a guaranty of payment (and not
of collectability) and is in no way conditional or contingent upon the
continued existence of the other Sellers and is not and will not be subject to
any setoffs. Any notice or other communication provided to a Seller pursuant
hereto shall be deemed to have been given each Seller and failures to be sent
any notice or communication contemplated hereby shall not relieve a Seller from
its joint and several liability for the obligations of each Seller hereunder.

 

26.           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 any of the foregoing, the failure to give a notice pursuant to Section 3(a) hereof
will not constitute a waiver of any right to do so at a later date.

 

51

 

27.           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 subsection (a) of this Section 27, 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 Section 27, Seller shall be
deemed 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 which would affect, in any
material respect, Seller’s ability to perform its obligations hereunder.

 

28.           NO
PERSONAL LIABILITY; FURTHER ASSURANCES; MISCELLANEOUS

 

(a)           None
of the officers, members, shareholders or directors of Seller shall be liable
for the payment or performance of Seller hereunder.

 

(b)           Seller
agrees that, from time to time upon the prior written request of Buyer, it
shall (i) execute and deliver such further documents, provide such
additional information and reports and perform such other acts as Buyer may reasonably
request in order to insure compliance with the provisions hereof (including,
without limitation, compliance with the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act) Act of 2001) and to fully effectuate the purposes of this
Agreement and (ii) provide such opinions of counsel concerning matters
relating to this Agreement as Buyer may reasonably request; provided,
however, that nothing in this Section 28(b) shall be construed
as requiring Buyer to conduct any inquiry or decreasing Seller’s responsibility
for its statements, representations, warranties or covenants hereunder.

 

(c)           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.

 

(d)           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
this Agreement, Buyer shall have all rights and remedies of a secured party
under the Uniform Commercial Code.

 

52

 

(e)           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

 

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

 

(g)           Without
limiting the rights and remedies of Buyer under the Transaction Documents. Seller
shall pay Buyer’s reasonable out-of-pocket costs and expenses, including the
reasonable fees and expenses of accountants, attorneys and advisors, incurred
in connection with the preparation, negotiation, execution and consummation of,
and any amendment, supplement or modification to, the Transaction Documents and
the Transactions thereunder up to $5,000. Seller agrees to pay Buyer on demand
all costs and expenses (including reasonable expenses for legal services of
every kind) of any subsequent enforcement of any of the provisions hereof, or
of the performance by Buyer of any obligations of Seller in respect of the
Purchased Assets, or any actual or attempted sale, or any exchange,
enforcement, collection; compromise or settlement in respect of any of the
Purchased Assets and for the custody, care or preservation of the Purchased
Assets (including insurance costs) and defending or asserting rights and claims
of Buyer in respect thereof, by litigation or otherwise. In addition, Seller
agrees to pay Buyer on demand all reasonable costs and expenses (including
reasonable expenses for legal services) incurred in connection with the
maintenance of the Collection Account and registering the Purchased Assets in
the name of Buyer or its nominee. All such expenses shall be recourse
obligations of Seller to Buyer under this Agreement.

 

(h)           Each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
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
this Agreement.

 

(i)            The
parties acknowledge and agree that although they intend to treat each
Transaction as a sale of the Purchased Assets, in the event that such sale
shall be recharacterized as a secured financing, this Agreement shall also
serve as a security agreement with respect to Buyer’s rights in the Collateral.
In order to secure and to provide for the prompt and unconditional repayment of
the Repurchase Price and the performance of its obligations under this
Agreement, Seller hereby pledges to Buyer and hereby grants to Buyer a first
priority security interest in all of its rights in the Collateral referred to
in Section 5 hereof. Buyer may without Seller’s execution, consent or
approval, and Seller hereby covenants that it shall at Buyer’s request duly
execute any Form UCC financing statements as may be required by Buyer
in order to perfect its security interest created hereby in such rights and
obligations granted above, it being agreed that Seller shall pay any and all
fees required to file such financing statements.

 

(j)            This
Agreement contains 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.

 

53

 

(k)           The
parties understand that this 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 this Agreement and that it is satisfied with its legal counsel
and the advice received from it.

 

(l)            Should
any provision of this 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 this
Agreement.

 

(m)          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.

 

(n)           Any
notice, acknowledgment, statement or certificate (including, without
limitation, any Confirmation) given by Buyer to any Seller shall be effective
as, and shall be deemed to be, a notice, acknowledgment, statement or certificate
given to each and every Seller. Buyer may, without necessity of any inquiry,
rely solely upon any notice, acknowledgment, statement or certificate of any of
(1) any Seller or (2) any authorized representative of Seller set
forth on Exhibit II or otherwise designated by any Seller from time to
time, as constituting the joint and several statement and certificate of Seller
fully authorized by Seller. Any disbursements of funds to Seller provided for
in Section 4 of this Agreement or otherwise in this Agreement or the
Transaction Documents shall be deemed properly made to Seller if disbursed to
any Seller or its designee.

 

29.           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.

 

54

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the 15th day of February,
2006.

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  BEAR, STEARNS INTERNATIONAL

  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David S. Marren

  	
   

  
	
   

  	
  Name:  David
  S. Marren

  
	
   

  	
  Title:  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  CAPITAL TRUST, INC.

  
	
   

  	
  (jointly and severally with the other Seller)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Klopp

  	
   

  
	
   

  	
  Name:  John R.
  Klopp

  
	
   

  	
  Title:  President
  and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELLER

  
	
   

  	
   

  
	
   

  	
  CT BSI FUNDING CORP.

  
	
   

  	
  (jointly and severally with the other Seller)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Klopp

  	
   

  
	
   

  	
  Name:  John R.
  Klopp

  
	
   

  	
  Title:  President
  and CEO

  
					

 

 

EXHIBITS

 

	
  EXHIBIT I

  	
   

  	
  Confirmation Statement — Bear, Stearns International
  Limited

  
	
   

  	
   

  	
   

  
	
  EXHIBIT II

  	
   

  	
  Authorized Representatives of Sellers

  
	
   

  	
   

  	
   

  
	
  EXHIBIT III

  	
   

  	
  Monthly Reporting Package

  
	
   

  	
   

  	
   

  
	
  EXHIBIT IV

  	
   

  	
  Form of Custodial Delivery

  
	
   

  	
   

  	
   

  
	
  EXHIBIT V

  	
   

  	
  Form of Power of Attorney

  
	
   

  	
   

  	
   

  
	
  EXHIBIT VI

  	
   

  	
  Due Diligence Review Regarding Each Underlying Asset
  Which Is a Whole Loan or B Note

  
	
   

  	
   

  	
   

  
	
  EXHIBIT VII

  	
   

  	
  Due Diligence Review Regarding Each Underlying Asset
  Which Is a Mezzanine Loan

  
	
   

  	
   

  	
   

  
	
  EXHIBIT VIII

  	
   

  	
  Representations and Warranties Regarding Each
  Participation Interest and the Related Underlying Asset

  
	
   

  	
   

  	
   

  
	
  EXHIBIT IX

  	
   

  	
  Underlying Loan Information

  
	
   

  	
   

  	
   

  
	
  EXHIBIT X

  	
   

  	
  Transaction Procedure

  
	
   

  	
   

  	
   

  
	
  EXHIBIT XI

  	
   

  	
  Ownership Chart for each Seller

  
	
   

  	
   

  	
   

  
	
  EXHIBIT XII

  	
   

  	
  Form of Opinion of Counsel to Sellers

  
	
   

  	
   

  	
   

  
	
  EXHIBIT XIII

  	
   

  	
  Form of Bailee Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1-A

  	
   

  	
  Form of UCC Financing Statement

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1-B

  	
   

  	
  Form of UCC Financing Statement Amendment

  

 

 

EXHIBIT I

 

CONFIRMATION STATEMENT

BEAR, STEARNS INTERNATIONAL LIMITED

 

Ladies and Gentlemen:

 

Bear, Stearns
International Limited, is pleased to deliver our written Confirmation of our
agreement to enter into the Transaction pursuant to which Bear, Stearns
International Limited, shall purchase from you the Purchased Assets identified
in the Amended and Restated Master Repurchase Agreement between Bear, Stearns
International Limited (the “Buyer”) and Capital Trust, Inc., a Maryland
corporation, and CT BSI Funding Corp., a Delaware Corporation (each a “Seller”
with joint and several liability for the obligations of the other Seller), dated
as of February 15, 2006 (the “Agreement”; capitalized terms used herein
without definition have the meanings given in the Agreement), as follows below
and on the attached Schedule 1 :

 

	
  Purchase Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Purchased Assets:

  	
   

  	
  As identified on attached Schedule 1

  
	
   

  	
   

  	
   

  
	
  Aggregate Principal Amount of Purchased Assets

  	
   

  	
  As identified on attached Schedule 1

  
	
   

  	
   

  	
   

  
	
  Repurchase Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Purchase Price:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Pricing Rate:

  	
   

  	
  one month LIBOR plus
           %

  [             ]

  
	
   

  	
   

  	
   

  
	
  Buyer’s Margin Ratio:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Original Principal Amount:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Current Principal Amount:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Original Market Value:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Due Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name and address for communications:

  	
   

  	
  Buyer: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: 

  
	
   

  	
   

  	
  Telephone: 

  
	
   

  	
   

  	
  Telecopy:

  

 

I-1

 

	
   

  	
   

  	
  Seller:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Capital Trust, Inc.]

  [CT BSI Funding Corp.]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: 

  
	
   

  	
   

  	
  Telephone: 

  
	
   

  	
   

  	
  Telecopy:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEAR, STEARNS INTERNATIONAL LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  AGREED AND ACKNOWLEDGED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  , a 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
   

  
										

 

I-2

 

Schedule 1 to Confirmation
Statement

 

Purchased Assets:

 

Aggregate Principal Amount:

 

I-3

 

EXHIBIT II

 

AUTHORIZED REPRESENTATIVES OF
SELLERS

 

	
  Name

  	
   

  	
  Specimen Signature

  
	
   

  	
   

  	
   

  
	
  John R. Klopp

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Stephen D. Plavin

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Geoffrey G. Jervis

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Jeremy FitzGerald

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Peter S. Ginsberg

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Thomas C. Ruffing

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  John E. Warch

  	
   

  	
   

  

 

II-1

 

EXHIBIT III

 

MONTHLY REPORTING PACKAGE

 

Name:

 

Loan Number:

 

Borrower Name:

 

Property Address:

 

Property City:

 

Property State:

 

Property County:

 

Property Zip:

 

Lien Position:

 

Adjustment Type:

 

Property Type:

 

Occupancy:

 

Loan Purpose:

 

Original Coupon:

 

Current Coupon:

 

Original Balance:

 

Current Balance:

 

Outstanding Senior Debt**:

 

Original Accrued P&I:

 

Current Accrued Interest:

 

Origination Date:

 

First Payment Date:

 

Maturity Date:

 

Date Next Due:

 

Original Term:

 

Original Amortization Term:

 

Product Type:

 

Balloon Flag:

 

Original LTV:

 

Combined Current LTV**:

 

III-1

 

Original Appraisal:

 

Original Spread:

 

Payment Frequency:

 

Servicing Fee:

 

Prepayment Penalty Period:

 

Prepayment Penalty Description:

 

Index Type:

 

Rounding Factor:

 

Convertible:

 

New Amortization Flag:

 

Negative Amortization Cap:

 

Periodic Payment Cap:

 

Margin:

 

Maximum Life Rate:

 

Minimum Life Rate:

 

Initial Periodic Rate Cap:

 

Subsequent Periodic Rate Cap:

 

First Rate Adjustment Date:

 

First Payment Adjustment Date:

 

Next Rate Adjustment Date:

 

Next Payment Adjustment Date:

 

Rate Adjustment Period:

 

Payment Adjustment Period:

 

Interest Paid To:

 

Interest Paid Through Date:

 

III-2

 

EXHIBIT IV

 

FORM OF CUSTODIAL DELIVERY

 

On this         
of           , 200  ,
Capital Trust, Inc., a Maryland corporation, and CT BSI Funding Corp., a
Delaware Corporation (each a “Seller” with joint and several liability for the
obligations of the other Seller), as Sellers under that certain Amended and
Restated Master Repurchase Agreement, dated as of February 15, 2006 (the “Repurchase
Agreement”) between Seller and Bear, Stearns International Limited (“Buyer”),
does hereby deliver to Deutsche Bank Trust Company Americas, as custodian (“Custodian”),
as custodian under that certain Custodial Agreement, dated as of February 15,
2006, between Buyer and Custodian, the Purchased Asset Files with respect to
the Purchased Assets to be purchased by Buyer pursuant to the Repurchase
Agreement, which Purchased Assets are listed on the Purchased Asset Schedule attached
hereto and which Purchased Assets shall be subject to the terms of the
Custodial Agreement on the date hereof.

 

With respect to the
Purchased Asset Files delivered hereby, for the purposes of issuing the Trust
Receipt, the Custodian shall review the Purchased Asset Files to ascertain
delivery of the documents listed in Section 3 to the Custodial Agreement.

 

Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Custodial Agreement.

 

IN WITNESS WHEREOF, Seller
has caused its name to be signed hereto by its officer thereunto duly
authorized as of the day and year first above written.

 

 

	
   

  	
   

  	
  , a

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  
							

 

IV-1

 

EXHIBIT V

 

FORM OF POWER OF ATTORNEY

 

“Know All Men by These
Presents, that Capital Trust, Inc., a Maryland corporation, and CT BSI
Funding Corp., a Delaware Corporation (each a “Seller” with joint and several
liability for the obligations of the other Seller), does each hereby appoint
Bear, Stearns International Limited (“Buyer”), its attorney-in-fact to act in
Seller’s name, place and stead in any way which Seller could do with respect to
(i) complete and endorse the Purchased Asset and any transfer documents
relating thereto and (ii) the enforcement of Seller’s rights under the
Purchased Assets purchased by Buyer pursuant to the Amended and Restated Master
Repurchase Agreement, dated as of February 15, 2006 (the “Amended and
Restated Master Repurchase Agreement”), between Seller and Buyer and to take
such other steps as may be necessary or desirable to enforce Buyer’s
rights against such Purchased Assets, the related Purchased Asset Files and the
Servicing Records to the extent that Seller is permitted by law to act through
an agent.

 

TO INDUCE ANY THIRD PARTY
TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY
EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT
REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY
UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OR SUCH REVOCATION OR TERMINATION
SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER ON ITS OWN BEHALF AND
ON BEHALF OF SELLER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY
SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE
AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE
PROVISIONS OF THIS INSTRUMENT.

 

Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the Amended
and Restated Master Repurchase Agreement.

 

IN WITNESS WHEREOF Seller
has caused this Power of Attorney to be executed this 15th day of February,
2006.

 

	
   

  	
  CAPITAL TRUST, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CT BSI FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

V-1

 

EXHIBIT VI

 

DUE DILIGENCE REVIEW

REGARDING EACH UNDERLYING ASSET

WHICH IS A WHOLE LOAN OR B NOTE

 

1.             Purchased
Asset Schedule and Underlying Loan Information. The information set
forth in the Purchased Asset Schedule and the Underlying Loan Information
is complete, true and correct in all material respects.

 

2.             Ownership
of Purchased Assets. Each Purchased Asset is a participation interest in a
whole loan. Immediately prior to the transfer to Buyer of the Purchased Assets,
Seller had good and marketable title to, and was the sole owner of, each
Purchased Asset. Seller has full right, power and authority to transfer and
assign each of the Purchased Assets to or at the direction of Buyer and has
validly and effectively conveyed (or caused to be conveyed) to Buyer or its
designee all of Seller’s legal and beneficial interest in and to the Purchased
Assets free and clear of any and all pledges, liens, charges, security
interests, participation interests and/or other encumbrances. The sale of the
Purchased Assets to Buyer or its designee does not require Seller to obtain any
governmental or regulatory approval or consent that has not been obtained.

 

3.             Payment
Record. No scheduled payment of principal and interest under any Purchased
Asset was 30 days or more past due as of the Purchase Date without giving
effect to any applicable grace period, and no Purchased Asset was 30 days or
more delinquent in the twelve-month period immediately preceding the Purchase Date.

 

4.             Lien;
Valid Assignment. The Mortgage related to and delivered in connection with
each Purchased Asset constitutes a valid and, subject to the exceptions set
forth in paragraph 13 below, enforceable first priority lien upon the related
Property, prior to all other liens and encumbrances and there are no liens or
encumbrances pari passu with the lien of the Mortgage, except for (a) the
lien for current real estate taxes and assessments not yet due and payable, (b) covenants,
conditions and restrictions, rights of way, easements and other matters that
are of public record and/or are referred to in the related lender’s title
insurance policy, (c) exceptions and exclusions specifically referred to
in such lender’s title insurance policy, and (d) other matters to which
like properties are commonly subject, none of which matters referred to in
clause (b), (c) or (d) individually or in the aggregate materially
interferes with the security intended to be provided by such Mortgage or the
marketability or current use of the Property or the current ability of the
Property to generate operating income sufficient to service the Underlying
Asset debt (the foregoing items (a) through (d) being herein referred
to as the “Permitted Encumbrances”). The related assignment of such Mortgage
executed and delivered in favor of Buyer is in recordable form and
constitutes a legal, valid and binding assignment, sufficient to convey to the
assignee named therein all of the assignor’s right, title and interest in, to
and under such Mortgage. Such Mortgage, together with any separate security
agreements, chattel mortgages or equivalent instruments, establishes and
creates a valid and, subject to the exceptions set forth in paragraph 13 below,
enforceable security interest in favor of the holder thereof in all of the
related Mortgagor’s personal property used in, and reasonably necessary to
operate the related Property. A Uniform Commercial Code financing
statement has been filed and/or recorded in all places necessary to perfect a
valid security interest in such personal

 

VI-1

 

property, and such
security interest is a first priority security interest, subject to any prior
purchase money security interest in such personal property and any personal
property leases applicable to such personal property. Notwithstanding the
foregoing, no representation is made as to the perfection of any security
interest in rents or other personal property to the extent that possession or
control of such items or actions other than the filing of Uniform Commercial
Code financing statements are required in order to effect such perfection.

 

5.             Assignment
of Leases and Rents. The assignment of leases and rents (“Assignment of
Leases”) set forth in the Mortgage (or in a separate instrument) and related to
and delivered in connection with each Purchased Asset establishes and creates a
valid, subsisting and, subject to the exceptions set forth in paragraph 13
below, enforceable first priority perfected lien and together with the
Mortgage, first priority perfected security interest in the related Mortgagor’s
interest in all leases, subleases, licenses or other agreements pursuant to
which any person is entitled to occupy, use or possess all or any portion of
the real property subject to the related Mortgage, and each assignor thereunder
has the full right to assign the same. The related assignment of any Assignment
of Leases, not included in a Mortgage, executed and delivered in favor of Buyer
is in recordable form and constitutes a legal, valid and binding
assignment, sufficient to convey to the assignee named therein all of the
assignor’s right, title and interest in, to and under such Assignment of Leases.
If an Assignment of Leases exists with respect to any Mortgage Loan (whether as
part of the related Mortgage or separately), then the related Mortgage or
related Assignment of Leases, subject to applicable law, provides for, upon an
event of default under the Mortgage Loan, the appointment of a receiver for the
collection of rents or for the related mortgagee to enter into possession to
collect the rents or for rents to be paid directly to the mortgagee.

 

6.             Mortgage
Status; Waivers and Modifications. In the case of each Mortgage Loan, (a) no
Mortgage has been satisfied, canceled, rescinded or subordinated in whole or in
material part, (b) the related Property has not been released from the
lien of such Mortgage, in whole or in material part, (c) no instrument has
been executed that would effect any such satisfaction, cancellation,
subordination, rescission or release except for any partial reconveyances of
portions of the real property that do not materially adversely affect the value
of the property, and (d) no Mortgagor has been released from its
obligations under the related Mortgage in whole or in material part. None of
the terms of any Mortgage Note, Mortgage or Assignment of Leases have been
impaired, waived, altered or modified in any respect, except by written
instruments, all of which are included in the related Mortgage File.

 

7.             Condition
of Property; Condemnation. Except as set forth in an engineering report
prepared in connection with the origination of the related Purchased Asset and
dated not more than 12 months prior to the Purchase Date, each Property is free
and clear of any damage that would materially and adversely affect its value as
security for the related Purchased Asset (normal wear and tear excepted). Seller
has received no notice, and has no knowledge, of any pending or threatened
proceeding for the condemnation of all or any material portion of any Property.
As of the date of the origination of each Underlying Asset (based on surveys
and/or title insurance obtained in connection with the origination of the
Underlying Assets) (a) all of the improvements on the related Property
which were considered material in determining the appraised value of the
Property lay wholly within the boundaries and building restriction lines of
such property, except for encroachments that are insured against by the Title
Policy referred to in

 

VI-2

 

paragraph 8 herein or
that do not materially and adversely affect the value, principal use, or
marketability of such Property, and (b) no improvements on adjoining
properties encroached upon such Property so as to materially and adversely
affect the value, principal use, or marketability of such Property, except
those encroachments that are insured against by the Title Policy referred to in
paragraph 8 herein.

 

8.             Title
Insurance. Each Property is covered by an American Land Title Association
(or an equivalent form thereof approved for use in the applicable
jurisdiction) lender’s title insurance policy (the “Title Policy”) in the
original principal amount of the related Underlying Asset after all advances of
principal. Each Title Policy insures that the related Mortgage is a valid first
priority lien on such Property, subject only to the exceptions stated therein
(or a preliminary title policy with escrow instructions or a marked up title
insurance commitment on which the required premium has been paid exists which
is binding on the title insurer and which evidences that such Title Policy will
be issued). Each Title Policy (or, if it has yet to be issued, the coverage to
be provided thereby) is in full force and effect, all premiums thereon have
been paid, insures the originator of the Mortgage Loan, its successors and
assigns and (i) no material claims have been made thereunder and no claims
have been paid thereunder and (ii) was issued by a title insurance company
qualified at origination to do business in the jurisdiction in which the
Property is located to the extent such qualification was required in order for
the Title Policy to be enforceable. No holder of the related Mortgage has done,
by act or omission, anything that would materially impair the coverage under
such Title Policy. Immediately following the transfer and assignment of the
related Purchased Asset to Buyer, such Title Policy (or, if it has yet to be
issued, the coverage to be provided thereby) will inure to the benefit of Buyer
without the consent of or notice to the insurer. Such Title Policy contains no
exclusion for, or it affirmatively insures (unless the related Property is
located in a jurisdiction where such affirmative insurance is not available),
the following: (a) access to a public road; and (b) that if a survey
was reviewed or prepared in connection with the origination of the related
Mortgage Loan, the area shown on such survey is the same as the property
legally described in the related Mortgage.

 

9.             No
Holdbacks. The proceeds of each Underlying Asset have been fully disbursed
and there is no obligation for future advances with respect thereto. With
respect to each Underlying Asset, any and all requirements as to completion of
any on-site or off-site improvement and as to disbursements of any funds
escrowed for such purpose that were to have been complied with on or before the
Purchase Date have been complied with, or any such funds so escrowed have not
been released.

 

10.           Mortgage
Provisions. The Mortgage Note or Mortgage for each Underlying Asset,
together with applicable state law, contains customary and enforceable
provisions for comparable mortgaged properties similarly situated (subject to
the exceptions set forth in paragraph 13) such as to render the rights and
remedies of the holder thereof adequate for the practical realization against
the related Property of the principal benefits of the security intended to be
provided thereby, including, without limitation, foreclosure or similar
proceedings as applicable for the jurisdiction in which the related Property is
located.

 

11.           Buyer
under Deed of Trust. If any Mortgage is a deed of trust, (a) a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving

 

VI-3

 

under such Mortgage, and (b) no
fees or expenses are payable to such trustee by Seller, Buyer or any transferee
thereof except in connection with a trustee’s sale after default by the related
Mortgagor or in connection with any full or partial release of the related
Property or related security for the related Underlying Asset.

 

12.           Environmental
Conditions. With respect to each Property (a) an environmental site
assessment (or an update of a previous assessment) was performed by an
independent third party environmental consultant with respect to each Property
in connection with the origination of the related Underlying Asset, (b) a
report of each such assessment (an “Environmental Report”) is dated no earlier
than 12 months prior to the Purchase Date and has been delivered to Buyer, and (c) there
is no violation of applicable environmental laws and regulations with respect
to, or any material and adverse environmental condition or circumstance
affecting any Property that was not disclosed in such report. Each Mortgage
requires the related Mortgagor to comply with all applicable federal, state and
local environmental laws and regulations. Where such Environmental Report
disclosed a violation of applicable environmental laws and regulations or the
existence of a material and adverse environmental condition or circumstance
affecting any Property, (i) a party not related to the Mortgagor was
identified as the responsible party for such condition or circumstance, (ii) the
related Mortgagor was required either to provide additional security and/or to
obtain an operations and maintenance plan or (iii) the related Mortgagor
provided evidence satisfactory to the originator of such Mortgage Loan that
applicable federal, state or local governmental authorities would not take any
action, or require the taking of any action, in respect of such violation,
condition or circumstance. The related Purchased Asset Documents contain provisions
pursuant to which the related Mortgagor or a principal of such Mortgagor has
agreed to indemnify the mortgagee for damages resulting from violations of any
applicable Environmental Laws.

 

13.           Loan
Document Status. Each Mortgage Note, Mortgage and other agreement that
evidences or secures an Underlying Asset and that was executed by or on behalf
of the related Mortgagor is the legal, valid and binding obligation of the
maker thereof (subject to any non-recourse provisions contained in any of the foregoing
agreements and any applicable state anti-deficiency or market value limit
deficiency legislation), enforceable in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors’ rights generally,
and by general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and there is no valid defense,
counterclaim or right of offset or rescission available to the related
Mortgagor with respect to such Mortgage Note, Mortgage or other agreements.

 

14.           Insurance.
Each Property is, and is required pursuant to the related Mortgage to be,
insured by (a) an all risk insurance policy issued by an insurer meeting
the requirements of such Underlying Asset providing coverage against loss or
damage sustained by reason of fire, lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, aircraft, vehicles and smoke,
and, to the extent required as of the date of origination by the originator of
such Underlying Asset consistent with its normal commercial mortgage lending
practices, against other risks insured against by persons operating like
properties in the locality of the Property in an amount not less than the
lesser of the principal balance of the related Underlying Asset and 100% of the
replacement cost (not allowing reduction in insurance

 

VI-4

 

proceeds for
depreciation) of the Property, and not less than the amount necessary to avoid
the operation of any co-insurance provisions with respect to the Property; (b) a
business interruption or rental loss insurance policy; providing coverage for
at least twelve months (other than for manufactured housing communities) and
for eighteen months of coverage if the Property is a special purpose property
or if the Mortgage Loan is in excess of $25 million; (c) a flood insurance
policy (if any portion of the Property is located in an area identified by the
Federal Emergency Management Agency as having special flood hazards) and (d) a
comprehensive general liability insurance policy in amounts as are generally
required by commercial mortgage lenders, and in any event not less than $1
million per occurrence. Such insurance policy contains a standard mortgagee
clause that names the holder of the Mortgage, its successors and assigns as
mortgagee as an additional insured in the case of liability insurance policies
or as a loss payee in the case of property insurance policies. Such insurance
policy is not terminable (nor may the amount of coverage provided
thereunder be reduced) without prior written notice to the holder of the
Mortgage, and no such notice has been received, including any notice of nonpayment
of premiums, that has not been cured. Each Mortgage obligates the related
Mortgagor to maintain all such insurance and, upon such Mortgagor’s failure to
do so, authorizes the holder of the Mortgage to purchase and maintain such
insurance at the Mortgagor’s cost and expense and to seek reimbursement
therefor from such Mortgagor. Other than as set forth in paragraph 17(h) hereof,
each Mortgage provides that casualty insurance proceeds will be applied either
to the restoration or repair of the related Property or to the reduction or
defeasance of the principal amount of the Underlying Asset.

 

15.           Taxes
and Assessments. There are no delinquent or unpaid taxes or assessments
(including assessments payable in future installments), or other outstanding charges
affecting any Property which are or may become a lien of priority equal to
or higher than the lien of the related Mortgage. For purposes of this
representation and warranty, real property taxes and assessments shall not be
considered unpaid until the date on which interest and/or penalties would be
first payable thereon.

 

16.           Mortgagor
Bankruptcy. No Mortgagor, non-recourse carve-out guarantor or tenant
physically occupying 25% or more (by square feet) of the net rentable area of a
Property is a debtor in any state or federal bankruptcy or insolvency
proceeding.

 

17.           Leasehold
Estate. Each Property consists of the related Mortgagor’s fee simple estate
in real estate or, if the related Underlying Asset is secured in whole or in part by
the interest of a Mortgagor as a lessee under a ground lease of a Property (a “Ground
Lease”), by the related Mortgagor’s interest in the Ground Lease but not by the
related fee interest in such Property (the “Fee Interest”). With respect to any
Underlying Asset secured by a Ground Lease but not by the related Fee Interest:

 

a.             Such Ground Lease or
a memorandum thereof has been duly recorded; such Ground Lease (or the related
estoppel letter or lender protection agreement between Seller and related
lessor) permits the current use of the Property and permits the interest of the
lessee thereunder to be encumbered by the related Mortgage and does not
restrict the use of the related Property by such lessee, its successors or
assigns in a manner that would adversely effect the security provided by the
related Mortgage by

 

VI-5

 

limiting in any
way its current use; and there has been no material change in the terms of such
Ground Lease since the origination of the related Underlying Asset, with the
exception of material changes reflected in written instruments that are a part of
the related Mortgage File;

 

b.             The lessee’s interest
in such Ground Lease is not subject to any liens or encumbrances superior to,
or of equal priority with, the related Mortgage, other than the related Fee
Interest and Permitted Encumbrances;

 

c.             The Mortgagor’s
interest in such Ground Lease is assignable to Buyer and is further assignable
by Buyer, its successors and assigns upon notice to, but without the consent
of, the lessor thereunder (or, if such consent is required, it has been
obtained prior to the Purchase Date) and, in the event that it is so assigned,
is further assignable by Buyer and its successors and assigns upon notice to,
but without the need to obtain the consent of, such lessor. If required by the
Ground Lease, the lessor has received notice of the lien of the related
Mortgage in accordance with the provisions of the Ground Lease;

 

d.             In connection with
the origination of such Mortgage Loan, the related ground lessor provided an
estoppel to the originator confirming that the related Mortgagor was not then
in default under such Ground Lease. The Ground Lease provides that no material
amendment to the Ground Lease is effective against the mortgagee under such
Mortgage Loan unless the mortgagee has consented thereto. Such Ground Lease is
in full force and effect, and Seller and any servicer acting on Seller’s behalf
have received no notice that an event of default has occurred thereunder or
that the Ground lease has terminated, and there exists no condition that, but
for the passage of time or the giving of notice, or both, would result in an
event of default under the terms of such Ground Lease;

 

e.             Such Ground Lease, or
an estoppel letter or other agreement, (A) requires the lessor under such
Ground Lease to give notice of any default by the lessee to the mortgagee,
provided that the mortgagee has provided the lessor with notice of its lien in
accordance with the provisions of such Ground Lease to the extent such Ground
Lease requires such notice, further (B) provides that no notice of
termination given under such Ground Lease (including rejection of such Ground
Lease in a bankruptcy proceeding) is effective against the holder of the
Mortgage unless a copy of such notice has been delivered to such holder and the
lessor has offered to enter into a new lease with such holder on terms that do
not materially vary from the economic terms of the Ground Lease;

 

f.              A mortgagee is
permitted a reasonable opportunity (including, where necessary, sufficient time
to gain possession of the interest of the lessee under such Ground Lease by
foreclosure or otherwise if possession is necessary to effect a cure) to cure
any default under such Ground Lease,

 

VI-6

 

which is curable
after the receipt of notice of any such default, before the lessor thereunder may terminate
such Ground Lease;

 

g.             Such Ground Lease has
an original term (including any extension options set forth therein which,
under all circumstances, may be exercised, and will be enforceable, by the
mortgagee if it takes possession of such leasehold interest) which extends not
less than twenty years beyond the stated maturity date of the related
Underlying Asset and ten years beyond the amortization period for the related
Underlying Asset;

 

h.             Under the terms of
such Ground Lease and the related Mortgage, taken together, any related
insurance proceeds or condemnation award other than in respect of a total loss
will be applied either to the repair or restoration of all or part of the
related Property, with the mortgagee or a trustee appointed by it having the
right to hold and disburse such proceeds as the repair or restoration
progresses (except in such cases where a provision entitling another party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender for conduit programs), or
to the payment or defeasance of the outstanding principal balance of the
Underlying Asset together with any accrued interest thereon;

 

i.              Such Ground Lease
does not impose any restrictions on subletting which would be viewed as
commercially unreasonable by prudent commercial mortgage lenders in the lending
area where the Property is located and such Ground Lease contains a covenant
that the ground lessor is not permitted, in the absence of an uncured default,
to disturb the possession, interest or quiet enjoyment of the lessee thereunder
for any reason or in any manner which would materially adversely affect the
security provided by the related Mortgage; and

 

j.              Such Ground Lease
provides, or the lessor has otherwise agreed, that such Ground Lease may not
be amended or modified or any such amendment or modification will not be
effective against the mortgagee without the prior written consent of the
mortgagee under such Underlying Asset any such action without such consent is
not binding on such mortgagee, its successors and assigns, provided such
mortgagee has provided the ground lessor with notice of its lien in accordance
with the terms of the Ground Lease.

 

18.           Escrow
Deposits. All escrow deposits and payments (including capital improvements,
environmental remediation reserves and other reserve deposits, if any) relating
to each Underlying Asset that are, as of the Purchase Date, required to be
deposited or paid to the lender under the terms of the related Mortgage Loan
documents have been so deposited or paid and, to the extent of any remaining
balances of such escrow deposits, are in the possession or under the control of
Seller or its agents (which shall include the applicable servicer of the
Mortgage Loan). Any and all material requirements under each Mortgage Loan as
to completion

 

VI-7

 

of any material
improvements and as to disbursement of any funds escrowed for such purpose,
which requirements were to have been complied with on or before the Purchase
Date, have been complied with in all material respects or, if and to the extent
not so complied with, the escrowed funds (or an allocable portion thereof) have
not been released except in accordance with the terms of the related loan
documents.

 

19.           LTV
Ratio. The gross proceeds of each Underlying Asset to the related Mortgagor
at origination did not exceed the non-contingent principal amount of the
Underlying Asset and either: (a) such Underlying Asset is secured by an
interest in real property having a fair market value (i) at the date the
Underlying Asset was originated at least equal to 80 percent of the original
principal balance of the Underlying Asset or (ii) at the Purchase Date at
least equal to 80 percent of the principal balance of the Underlying Asset on
such date; provided that for purposes hereof, the fair market value of the real
property interest must first be reduced by (x) the amount of any lien on the
real property interest that is senior to the Underlying Asset and (y) a
proportionate amount of any lien that is in parity with the Underlying Asset
(unless such other lien secures an Underlying Asset that is
cross-collateralized with such Underlying Asset, in which event the computation
described in clauses (a)(i) and (a)(ii) of this paragraph 19 shall be
made on a pro rata basis in accordance with the fair market values of the
Properties securing such cross-collateralized Underlying Assets; or (b) substantially
all the proceeds of such Underlying Asset were used to acquire, refinance,
improve or protect the real property which served as the only security for such
Underlying Asset (other than a recourse feature or other third party credit
enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(l)(ii)).

 

20.           Qualified
Mortgage; Underlying Asset Modifications. Each Mortgage Loan is a “qualified
mortgage” within the meaning of Section 860G(a)(3) of the Code and
Treasury regulation section 1.860G-2(a) (but without regard to the rule in
Treasury regulation section 1.860G-2(f)(2)). Any Underlying Asset that was
“significantly modified” prior to the Purchase Date for the related Purchased
Asset so as to result in a taxable exchange under Section 1001 of the Code
either (a) was modified as a result of the default or reasonably
foreseeable default of such Underlying Asset or (b) satisfies the
provisions of either clause (a)(i) of paragraph 19 (substituting the date
of the last such modification for the date the Underlying Asset was originated)
or clause (a)(ii) of paragraph 19, including the proviso thereto.

 

21.           Advancement
of Funds by Seller. No holder of a Purchased Asset has advanced funds or
induced, solicited or knowingly received any advance of funds from a party
other than the owner of the related Property, directly or indirectly, for the
payment of any amount required by such Purchased Asset.

 

22.           No
Mechanics’ Liens. As of the date of the Mortgage, and to the actual
knowledge of Seller as of the Purchase Date, each Property is free and clear of
any and all mechanics’ and materialmen’s liens that are prior or equal to the
lien of the related Mortgage, and no rights are outstanding that under law
could give rise to any such lien that would be prior or equal to the lien of
the related Mortgage except, in each case, for liens insured against by the
Title Policy referred to herein or otherwise bonded.

 

VI-8

 

23.           Compliance
with Usury Laws. Each Underlying Asset complied with, or is exempt from,
all applicable usury laws in effect at its date of origination.

 

24.           Cross-collateralization;
Cross-default. No Underlying Asset is cross-collateralized or
cross-defaulted with any loan other than one or more other Underlying Assets.

 

25.           Releases
of Property. Except as described in the next sentence, no Mortgage Note or
Mortgage requires the mortgagee to release all or any material portion of the
related Property from the lien of the related Mortgage except upon payment in
full or defeasance of all amounts due under the related Underlying Asset. The
Mortgages relating to those Underlying Assets identified on the Purchased Asset
Schedule require the mortgagee to grant releases of portions of the
related Properties upon (a) the satisfaction of certain legal and
underwriting requirements and (b) except where the portion of the Property
permitted to be released was not considered by, Seller to be material in the
underwriting of the Underlying Asset, either (1) the payment of a release
price set forth therein and prepayment consideration in connection therewith or
(2) the partial defeasance of such Underlying Asset.

 

No Underlying
Asset permits the release or substitution of collateral if such release or
substitution (a) would create a “significant modification” of such
Underlying Asset within the meaning of Treas. Reg. § 1.1001 3 or (b) would
cause such Underlying Asset not to be a “qualified mortgage” within the meaning
of Section 860G(a)(3) of the Code (without regard to clauses (A)(i) or
(A)(ii) thereof).

 

26.           No
Equity Participation or Contingent Interest. No Underlying Asset contains
any equity participation by the lender or provides for negative amortization or
for any contingent or additional interest in the form of participation in
the cash flow of the related Property, or is convertible by its terms into an
equity ownership interest in the related Property or the related Mortgagor,
except that, in the case of an ARD Loan, such Mortgage Loan provides that,
during the period commencing on or about the related anticipated repayment date
and continuing until such Mortgage Loan is paid in full, (a) additional
interest shall accrue and may be compounded monthly and (b) a portion
of the cash flow generated by such Property will be applied each month to pay
down the principal balance thereof in addition to the principal portion of the
related monthly payment.

 

27.           No
Material Default. There exists no monetary default and there exists no
material non-monetary default, breach, violation or event of acceleration (and
no event which, with the passage of time or the giving of notice, or both,
would constitute any of the foregoing) under the documents evidencing or
securing the Underlying Asset, in any such case to the extent the same
materially and adversely affects the value of the Underlying Asset and the
related Property. Neither the Mortgage Loan Seller nor any servicer acting on
its behalf has issued any notice of default, breach or violation related to the
Mortgage Loan, accelerated the Mortgage Loan or commenced judicial or
non-judicial foreclosure proceedings with respect to the Mortgage Loan.

 

28.           Inspections.
Seller (or if Seller is not the originator, the originator of the Underlying
Asset) has inspected or caused to be inspected each Property in connection
with, and during the 12 month period prior to, the origination of the related
Underlying Asset.

 

VI-9

 

29.           Local
Law Compliance. Based on due diligence considered reasonable by prudent
commercial mortgage lenders in the lending area where each Property is located
the improvements located on or forming part of each Property complies in
all material respects with applicable zoning laws and ordinances, or
constitutes a legal non-conforming use or structure or, if any such improvement
does not so comply and does not constitute a legal non-conforming use or
structure, such non-compliance and failure does not materially and adversely
affect (i) the value of the related Property as determined by the
appraisal performed at origination or (ii) the principal use of the
Property as of the date of the origination of such Mortgage Loan. As of the
date of origination, with respect to each legal non-conforming use or
structure, the originator determined based on due diligence considered
reasonable by prudent commercial mortgage lenders in the lending area where the
subject Property is located that if a casualty occurred at that time, the
Property could have been restored or repaired to such an extent that the use or
structure of the restored or repaired property would be substantially the same
use or structure, or law and ordinance insurance has been obtained, or a
holdback was established and the Mortgagor is required to cause the Property to
become a conforming use or structure.

 

30.           Junior
Liens. None of the Underlying Assets permits the related Property to be
encumbered by any lien junior to or of equal priority with the lien of the
related Mortgage without the prior written consent of the holder thereof or the
satisfaction of debt service coverage or similar criteria specified therein. Each
Underlying Asset contains a “due on sale” clause that provides for the
acceleration of the payment of the unpaid principal balance of the Underlying
Asset if, without the prior written consent of the holder of the Underlying
Asset, the related Property, or any material portion thereof, or a controlling
interest in the direct or indirect ownership interests in the Mortgagor is
directly or indirectly transferred, sold or pledged.

 

31.           Actions
Concerning Underlying Assets. To the knowledge of Seller, there are no
actions, suits, governmental investigations or proceedings pending or
threatened before any court, governmental authority, administrative agency or
arbitrator concerning any Underlying Asset or related Mortgagor or Property
that, if determined adversely to the Underlying Asset, Mortgagor, or Property,
would adversely affect title to the Underlying Asset or the validity or
enforceability of the related Mortgage or that might materially and adversely
affect the value of the Property, the current ability of the Property to
generate net operating income to service the Mortgage Loan, the principal
benefit of the security intended to be provided for the Underlying Asset, or
the current use of the Property.

 

32.           Servicing.
The servicing and collection practices used by Seller and any servicer of the
Mortgage Loan have been in all material respects legal, proper and prudent and
have met customary industry standards for servicing of commercial Underlying
Assets for conduit programs.

 

33.           Licenses
and Permits. As of the date of origination of each Underlying Asset, the related
Mortgagor was in possession of all material licenses, permits and franchises
required by applicable law for the ownership and operation of the related
Property as it was then operated and, as of the Purchase Date, the Mortgage
Loan Seller has no written notice that the related Mortgagor was not in
possession of such licenses, permits and franchises or that such licenses,
permits and franchises have not otherwise been issued. The Mortgage Loan
requires

 

VI-10

 

the related Property to
be in material compliance with laws and regulations applicable to the Property,
in each case to the extent required by law.

 

34.           Assisted
Living Facility Regulation. If any Property is operated as an assisted
living facility (a) the related Mortgagor and operator, if different, is
in compliance in all material respects with all federal and state laws
applicable to the use and operation of the related Property and (b) if the
operator of the Property participates in Medicare or Medicaid programs, the
facility is in compliance in all material respects with the requirements for
participation in such programs.

 

35.           Non-Recourse
Exceptions. The related Mortgage Loan documents contain provisions
providing for recourse against the related Mortgagor, a principal of such
Mortgagor or an entity controlled by a principal of such Mortgagor, or a
natural person, for damages sustained in connection with the Mortgagor’s (i) fraud,
(ii) intentional misrepresentation, (iii) misappropriation or misapplication
of rents or amounts due lender, insurance proceeds or condemnation proceeds, (iv) voluntary
bankruptcy, (v) failure to obtain prior consent to any encumbrance of the
pledged equity under the Mezzanine Loan Documents and (vi) willful
misconduct resulting in waste of a Property. The related Mortgage Loan
documents contain provisions pursuant to which the related Mortgagor, a
principal of such Mortgagor or an entity controlled by a principal of such
Mortgagor, or a natural person, has agreed to indemnify the mortgagee for
damages resulting from violations of any applicable environmental covenants.

 

36.           Single
Purpose Entity. The Mortgagor on each Underlying Asset was, as of the
origination of the Underlying Asset, a Single Purpose Entity. For this purpose,
a “Single Purpose Entity” shall mean an entity, other than an individual, whose
organizational documents provide substantially to the effect that it was formed
or organized solely for the purpose of owning and operating one or more
Properties securing the Underlying Assets and prohibit it from engaging in any
business unrelated to such Property or Properties, and whose organizational
documents further provide, or which entity represented in the related
Underlying Asset documents, substantially to the effect that it does not have
any assets other than those related to its interest in and operation of such
Property or Properties, or any indebtedness other than as permitted by the
related Mortgage or the other related Underlying Asset documents, that it has
its own books and records and accounts separate and apart from any other
person, that it will not guarantee or assume the debts of any other person,
that it will not commingle assets with affiliates, and that it will not
transact business with affiliates except on an arm’s length basis.

 

Each Mortgagor of an Underlying Asset is an entity
which has represented in connection with the origination of the Underlying
Asset, or whose organizational documents as of the date of origination of the
Underlying Asset provide that so long as the Underlying Asset is outstanding it
will have at least one independent director. There are
Insolvency/Non-Consolidation opinions with respect to the Pledgor and all of
the assumptions made in each such opinion are true and correct.

 

37.           Separate
Tax Parcels. Each Property constitutes one or more complete separate tax
lots or is subject to an endorsement under the related title insurance policy.

 

VI-11

 

38.           Defeasance.
Each Underlying Asset containing provisions for defeasance of mortgage
collateral either (i) requires the prior written consent of, and
compliance with the conditions set by, the holder of the Underlying Asset, or (ii) requires
that (A) defeasance may not occur prior to the time permitted by
applicable “real estate mortgage investment conduit” rules and regulations
(if applicable), (B) the replacement collateral consist of U.S.
governmental securities in an amount sufficient to make all scheduled payments
under the Mortgage Note when due, (C) independent public accountants
certify that the collateral is sufficient to make such payments, (D) counsel
provide an opinion that Buyer has a perfected security interest in such
collateral prior to any other claim or interest, and (E) all costs and
expenses arising from the defeasance of the mortgage collateral shall be borne
by the Mortgagor.

 

39.           Operating
or Financial Statement. The related Purchased Asset Documents require the
related Mortgagor to furnish to the mortgagee at least quarterly and annually
an operating statement and rent roll (if there is more than one tenant) with
respect to the related Property and at least annually financial statements of
the Mortgagor.

 

40.           Letters
of Credit. No Underlying Asset consists of or is secured by a Letter of
Credit.

 

41.           Security
Interests in Hospitality Properties. If any Property securing a Mortgage
Loan is operated as a hospitality property then (a) the security
agreements, financing statements or other instruments, if any, related to the
Mortgage Loan secured by such Property establish and create a valid and
enforceable (subject to the exceptions set forth in Paragraph 13 above) first
priority security interest in all items of personal property owned by the
related Borrower which are material to the conduct in the ordinary course of
the Borrower’s business on the related Property, subject only to purchase money
security interests, personal property leases and security interests to secure
revolving lines of credit and similar financing; and (b) one or more Uniform Commercial
Code financing statements covering such personal property have been filed or
recorded (or have been sent for filing or recording) wherever necessary to
perfect under applicable law such security interests (to the extent a security
interest in such personal property can be perfected by the filing of a Uniform Commercial
Code financing statement under applicable law).

 

42.           Prepayment
Premiums. Prepayment Premiums payable with respect to each Mortgage Loan,
if any, constitute “customary prepayment penalties” within meaning of Treasury
Regulation Section 1.860G-1(b)(2).

 

43.           Assignment
of Collateral. There is no material collateral securing any Mortgage Loan
that has not been assigned to the Mortgagee.

 

44.           Fee
Simple or Leasehold Interests. The interest of the related Borrower in the
Property securing each Mortgage Loan includes a fee simple and/or leasehold
estate or interest in real property and the improvements thereon.

 

45.           Appraisals.
An appraisal of the related Property was conducted in connection with the
origination of the Mortgage Loan, which appraisal is signed by an appraiser,
who had no interest, direct or indirect, in the Property or the Borrower or in
any loan made on

 

VI-12

 

the security thereof, and
whose compensation is not affected by the approval or disapproval of the
Mortgage Loan; in connection with the origination of the Mortgage Loan, each
appraiser has represented in such appraisal or in a supplemental letter that
the appraisal satisfies the requirements of the “Uniform Standards of
Professional Appraisal Practice” as adopted by the Appraisal Standards Board of
the Appraisal Foundation.

 

46.           No
Capital Contributions. The mortgagee has no obligation to make any capital
contributions to the related Borrower under the Mortgage Loan.

 

47.           Due
Dates and Grace Periods. The related Mortgage or Mortgage Note provides for
Monthly Payments to be made on the first day of each month (“Due Date”) and a
grace period for Monthly Payments no longer than ten (10) days from the
related Due Date.

 

48.           Terrorism
Insurance. With respect to each Mortgage Loan, the related all risk
insurance policy and business interruption policy did not as of the date of
origination of the Mortgage Loan, and does not as of the date hereof,
specifically exclude acts of terrorism from coverage. With respect to each of
the Mortgage Loans, the related Mortgage Loan documents do not expressly waive
or prohibit the mortgagee from requiring coverage for acts of terrorism or
damages related thereto, except to the extent that any right to require such
coverage may be limited by commercially reasonable availability.

 

49.           Fraud.
No Borrower is guilty of defrauding or making an intentional material misrepresentation
to the Mortgage Loan Seller in connection with the origination of the Mortgage
Loan.

 

50.           Transfers
and Pledges. The Mezzanine Loan Collateral consists of the pledge of all of
the ownership interests of the Mortgagor. Transfer and pledge restrictions
under the Mezzanine Loan Documents apply to name of sponsoring entity,
borrower, principal, Mortgagor, mortgage principal and any affiliated manager
or any shareholder, partner, member, non-member manager, any direct or indirect
legal or beneficial owner of, Mortgagor, mortgage principal, principal,
borrower, any guarantor, any affiliated manager, or any pledgor, and affiliated
franchisor or any non-member manager.

 

51.           Management
Agreement. The Management Agreement is in full force and effect and there
is no default thereunder by any party thereto and no event has occurred that,
with the passage of time and/or the giving of notice, would constitute a
default thereunder.

 

52.           Illegal
Activity. No portion of any Property has been or will be purchased with
proceeds of any illegal activity.

 

53.           Embargoed
Person. With respect to each Underlying Asset, (a) none of the funds
or other assets of Mortgagor, Mezzanine Borrower, Principal and Guarantor
constitute property of, or are beneficially owned, directly or indirectly, by
any person, entity or government subject to trade restrictions under U.S. law,
including but not limited to, the International Emergency Economic Powers Act,
50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App.
1 et seq., and any Executive Orders or regulations promulgated thereunder with
the result that the investment in Borrower, Principal or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the
Mortgage Loan or Underlying Asset made by the

 

VI-13

 

Lender is in violation of
law (“Embargoed Person”); (b) no Embargoed Person has any interest of any
nature whatsoever in Mortgagor, Mezzanine Borrower, Principal or Guarantor, as
applicable, with the result that the investment in Mortgagor, Mezzanine
Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Mortgage Loan or Underlying Asset is
in violation of law; and (c) none of the funds of Mortgagor, Mezzanine
Borrower, Principal or Guarantor, as applicable, have been derived from any
unlawful activity with the result that the investment in Mortgagor, Mezzanine
Borrower, Principal or Guarantor, as applicable (whether directly or indirectly),
is prohibited by law or the Mortgage Loan or Underlying Asset is in violation
of law.

 

54.           Franchise
Agreement. The Franchise Agreement and the License granted thereby are in
full force and effect and there is no default thereunder by any party thereto and
no event has occurred that, with the passage of time and/or giving of notice,
would constitute a default thereunder. Mortgagor has all rights to use the
License granted under the Franchise Agreement.

 

55.           Lockbox.
Any agreements executed in connection with the creation of a Collection Account
create a valid and continuing security interest (as defined in the Uniform Commercial
Code in effect in the State of New York) in each of such Collection Accounts in
favor of Buyer, which security interest is prior to all other liens, and is
enforceable as such against creditors of and purchasers from Mortgagor. Each
Collection Account constitutes a “deposit account” within the meaning of the
Uniform Commercial Code in effect in the State of New York. Seller has
directed the Servicer to cause each Depository to agree to comply with all
written instructions originated by Buyer, without further consent by Borrower,
directing disposition of all sums at any time held, deposited or invested in
the Collection Accounts, together with any interest or other earnings thereon,
and all proceeds thereof (including proceeds of sales and other dispositions),
whether accounts, general intangibles, chattel paper, deposit accounts,
instruments, documents or securities. The Collection Accounts are not in the
name of any Person other than Mortgagor, as pledgor, or Lender, as pledgee. Seller
has not consented to the Depository complying with instructions with respect to
the Collection Account from any Person other than Buyer.

 

56.           MERS
Underlying Asset. With respect to each Mortgage Loan that is a MERS
Underlying Asset, the related Mortgagor is registered with MERS and each
assignment of the MERS Underlying Asset has been registered with MERS.

 

VI-14

 

EXHIBIT VII

 

DUE DILIGENCE REVIEW

REGARDING EACH UNDERLYING ASSET

WHICH IS A MEZZANINE LOAN

 

(1)           Mezzanine
Underlying Loan Information.  The
information set forth in the Mezzanine Loan Schedule is complete, true and
correct in all material respects.

 

(2)           No Default or Dispute Under
Mezzanine Loan Documents.  There
exists no material default, breach, violation or event of acceleration (and no
event which, with the passage of time or the giving of notice, or both, would
constitute any of the foregoing) under the documents evidencing or securing the
Mortgage Loan or Mezzanine Loan, in any such case to the extent the same
materially and adversely affects the value of the Mezzanine Loan and the
related underlying real property.

 

(3)           No Offsets, Defenses or Counterclaims.  There is no valid right of offset or
rescission, defense or counterclaim to such Mortgage Loan or Mezzanine Loan.

 

(4)           Equity Pledges.  The pledge of ownership interests securing
such Mezzanine Loan relates to all or substantially all direct or indirect
equity or ownership interests in the underlying real property owner (so that,
except for the equity interests pledged to Seller, there are no direct or
indirect equity or ownership interests in underlying real property owner or in
any constituent entity) and has been fully perfected in favor of Seller as
mezzanine lender.

 

(5)           Depository Agreement The
collection account administrator, if any, is not an Affiliate of Seller.  Mezzanine lender has a perfected security
interest in the Cash Management Agreement.

 

(6)           Enforceability.  Mortgage Lender and Mezzanine Lender can rely
on opinions from Mortgagor’s and Mezzanine Borrower’s counsel to the effect
that the Mortgage Loan and Mezzanine Loan Documents have been duly and properly
executed by the parties thereto, and each is the legal, valid and binding
obligation of the parties thereto, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).  The Mezzanine Loan is not
usurious.  Seller has fully and validly
perfected all security interests created or intended to be created pursuant to
the Mezzanine Loan Documents.

 

(7)           Waivers and Modifications.  The terms and provisions of the related
Mortgage Loan and Mezzanine Loan Documents have not been impaired, waived, altered,
supplemented, restated or modified in any material respect (other than by a
written instrument which is included in the related Mortgage Loan and Mezzanine
Loan File).

 

(8)           Valid Assignment.  The assignment of Mezzanine Loan constitutes
the legal, valid and binding assignment of such Mezzanine

 

VII-1

 

Loan from Seller
to or for the benefit of Buyer.  No
consent or approval by any third party is required for any such assignment of
such Mezzanine Loan, for Buyer’s exercise of any rights or remedies under the
assignment of Mezzanine Loan, or for Buyer’s sale or other disposition of such
Mezzanine Loan if Buyer acquires title thereto, other than consents and
approvals which have been obtained.  No
third party (including underlying real property owner and underlying real
property mortgagee) holds any “right of first refusal,” “right of first
negotiation,” “right of first offer,” purchase option, or other similar rights
of any kind on account of the occurrence of any of the foregoing.  No other impediment exists to any such
transfer.

 

(9)           Certain Representations and
Warranties.  All representations and
warranties in the Mortgage Loan and Mezzanine Loan Documents are true and
correct in all material respects.

 

(10)         Parties Authorized.  To the extent required under applicable law
as of the Purchase Date, each party to the Mezzanine Loan Documents was
authorized to do business in the jurisdiction in which the related underlying
real property is located at all times when it held the Mezzanine Loan to the
extent necessary to ensure the validity and enforceability of such Mezzanine
Loan.

 

(11)         No Advances of Funds.  No party to the Mortgage or Mezzanine Loan
Documents has advanced funds on account of any default under the Mortgage or
Mezzanine Loan Documents.

 

(12)         Servicing.  The servicing and collection practices used
by Seller for the Mezzanine Loan have complied with applicable law in all
material respects and are consistent with those employed by prudent servicers of
comparable Mezzanine Loans.

 

(13)         No Assignment.  Seller has not effectuated any transfer,
sale, assignment, hypothecation, or other conveyance of any of its rights and
obligations under any Mezzanine Loan Document, except in connection with this
Agreement.

 

(14)         No Bankruptcy.  None of the following parties is a debtor in
any state or federal bankruptcy or insolvency proceeding: Seller; underlying
real property owner; mortgage loan property owner principal/sponsor, underlying
real property mortgagee, mezzanine loan borrower, or mezzanine loan
principal/sponsor.

 

(15)         Mezzanine Loan Documents.  A complete list of all material loan
documents has been delivered by the mezzanine borrower in connection with the
Mezzanine Loan Agreement and true counterpart originals of the Mezzanine Loan
Documents and true and correct copies of the Mortgage Loan Documents have been
delivered by Seller to Buyer.

 

(16)         Ownership.  Seller is the sole owner of the Mezzanine
Loan Documents and the related rights described above and that the Mezzanine
Loan Documents and the related rights described above are not, and have not
been, pledged, nor assigned, to another party and are not otherwise encumbered
as of the execution and delivery of this Agreement.

 

(17)         Ownership of Mezzanine Loans.  Each Mezzanine Loan is a participation
interest in a whole loan.  Immediately
prior to the transfer to Buyer of the Mezzanine Loan, Seller had good and
marketable title to, and was the sole owner of, each Mezzanine Loan.  Seller has full right, power and authority to
transfer and assign the Mezzanine Loan to or at the direction of

 

VII-2

 

Buyer and has
validly and effectively conveyed (or caused to be conveyed) to Buyer or its
designee all of Seller’s legal and beneficial interest in and to the Mezzanine
Loan free and clear of any and all pledges, liens, charges, security interests,
participation interests, and/or other encumbrances.  The sale of the Mezzanine Loan to Buyer or
its designee does not require Seller to obtain any governmental or regulatory
approval or consent that has not been obtained.

 

(18)         Payment Record.  No scheduled payment of principal and
interest under any Mezzanine Loan or related Mortgage Loan was 30 days or more
past due as of the Purchase Date without giving effect to any applicable grace
period, and no Mezzanine Loan or related Mortgage Loan was 30 days or more
delinquent in the twelve-month period immediately preceding the Purchase Date.

 

(19)         Lien.  The Mortgage and Pledge related to and
delivered in connection with each Mortgage Loan and Mezzanine Loan constitutes
a valid and enforceable first priority security interest on the related
Property and pledged equity, prior to all other liens and encumbrances and
there are no liens or encumbrances pari passu with the lien of the Mortgage and
pledge.  A Uniform Commercial Code
financing statement has been filed and/or recorded in all places necessary to
perfect a valid security interest in such pledged equity, and such security
interest is a first priority security interest. 
Seller, its successors and assigns is the beneficiary of an Eagle 9
policy or a title policy endorsement insuring that the UCC financing statement
encumbering the Mezzanine Loan Collateral has been filed properly so as perfect
Mezzanine Lender’s security interest in the Mezzanine Loan Collateral.

 

(20)         Mortgage and Pledge Status; Waivers
and Modifications.  In the case of
each Mortgage and related Mezzanine Loan, (a) no pledge or related
Mortgage has been satisfied, canceled, rescinded or subordinated in whole or in
material part, (b) the related pledged equity or Property has not been
released from the lien of such pledge or Mortgage, in whole or in material
part, (c) no instrument has been executed that would effect any such
satisfaction, cancellation, subordination, rescission or release, and (d) no
pledgor or Mortgagor has been released from its obligations under the related
pledge or Mortgage in whole or in material part.  None of the terms of any note or pledge has
been impaired, waived, altered or modified in any respect, except by written
instruments, all of which are included in the related Loan File.

 

(21)         Condition of Property; Condemnation.  Except as set forth in an engineering report
prepared in connection with the origination of the related Mortgage Loan and
dated not more than 12 months prior to the Purchase date, each Property is free
and clear of any damage that would materially and adversely affect its value as
security for the related Mortgage Loan (normal wear and tear excepted).  Seller has received no notice, and has no
knowledge, of any pending or threatened proceeding for the condemnation of all
or any material portion of any Property.

 

(22)         Title Insurance.  Each Property is covered by an American Land
Title Association (or an equivalent form thereof approved for use in the
applicable jurisdiction) lender’s title insurance policy (the “Title Policy”)
in the original principal amount of the related Mortgage Loan after all
advances of principal.  Each Title Policy
insures that the related Mortgage is a valid first priority lien on such
Property, subject only to the exceptions stated therein (or a preliminary title
policy with escrow instructions or a marked up title insurance commitment on

 

VII-3

 

which the required
premium has been paid exists which is binding on the title insurer and which
evidences that such Title Policy will be issued).  Each Title Policy (or, if it has yet to be
issued, the coverage to be provided thereby) is in full force and effect, all
premiums thereon have been paid, insures the originator of the Mortgage Loan,
its successors and assigns and (i) no material claims have been made
thereunder and no claims have been paid thereunder and (ii) was issued by
a title insurance company qualified at origination to do business in the
jurisdiction in which the Property is located to the extent such qualification
was required in order for the Title Policy to be enforceable..

 

(23)         No Holdbacks.  The proceeds of each Mezzanine Loan have been
fully disbursed and there is no obligation for future advances with respect
thereto.

 

(24)         Pledge and Mortgage Provisions.  The note and pledge for each Mortgage Loan
and related Mezzanine Loan, together with applicable state law, contains
customary and enforceable provisions for comparable mortgaged properties and
equity interests similarly situated (subject to customary bankruptcy and equity
exceptions) such as to render the rights and remedies of the holder thereof
adequate for the practical realization against the related Property and pledged
equity of the principal benefits of the security intended to be provided
thereby.

 

(25)         Environmental Conditions.  With respect to each Property (a) an
environmental site assessment (or an update of a previous assessment) was
performed by an independent third party environmental consultant with respect
to each Property in connection with the origination of the related Mezzanine
Loan, (b) a report of each such assessment (an “Environmental Report”) is
dated no earlier than 12 months prior to the Purchase Date and has been
delivered to Buyer, and (c) there is no violation of applicable
environmental laws and regulations with respect to, or any material and adverse
environmental condition or circumstance affecting, any Property that was not
disclosed in such report.  Each Mortgage
requires the related Mortgagor to comply with all applicable federal, state and
local environmental laws and regulations. 
Where such Environmental Report disclosed a violation of applicable
environmental laws and regulations or the existence of a material and adverse
environmental condition or circumstance affecting any Property, (i) a
party not related to the Mortgagor was identified as the responsible party for
such condition or circumstance, (ii) the related Mortgagor was required
either to provide additional security and/or to obtain an operations and
maintenance plan or (iii) the related Mortgagor provided evidence
satisfactory to the originator of such Mortgage Loan that applicable federal,
state or local governmental authorities would not take any action, or require
the taking of any action, in respect of such violation, condition or
circumstance.  The related Mezzanine Loan
Documents contain provisions pursuant to which the related Mortgagor or a
principal of such Mortgagor has agreed to indemnify the mortgagee for damages
resulting from violations of any applicable Environmental Laws.

 

(26)         Loan Document Status.  Each Mortgage Note, Mortgage, Mezzanine Note,
Pledge and other agreement that evidences or secures a Mortgage Loan or related
Mezzanine Loan and that was executed by or on behalf of the related Mortgagor
or Pledgor is the legal, valid and binding obligation of the maker thereof (subject
to any non-recourse provisions contained in any of the foregoing agreements and
any applicable state anti-deficiency or market value limit deficiency
legislation), enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the

 

VII-4

 

enforcement of
creditors’ rights generally, and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
there is no valid defense, counterclaim or right of offset or rescission
available to the related Mortgagor or Pledgor respect to such Mortgage Note,
Mortgage, Mezzanine Note, Pledge, or other agreements.

 

(27)         Insurance.  Each Property is, and is required pursuant to
the related Mortgage to be, insured by (a) an all risk insurance policy
issued by an insurer meeting the requirements of such Mortgage Loan and, to the
extent required as of the date of origination by the originator of such
Mezzanine Loan consistent with its normal commercial mortgage lending
practices, against other risks insured against by persons operating like
properties in the locality of the Property in an amount not less than the lesser
of the principal balance of the related Mezzanine Loan and 100% of the
replacement cost (not allowing reduction in insurance proceeds for
depreciation) of the Property, and not less than the amount necessary to avoid
the operation of any co-insurance provisions with respect to the Property; (b) a
business interruption or rental loss insurance policy providing coverage for at
least twelve months (other than for manufactured housing communities) and for
eighteen months of coverage if the Property is a special purpose property or if
the Mortgage Loan is in excess of $25 million; (c) a flood insurance
policy (if any portion of the Property is located in an area identified by the
Federal Emergency Management Agency as having special flood hazards); and (d) a
comprehensive general liability insurance policy in amounts as are generally
required by commercial mortgage lenders, and in any event not less than $1
million per occurrence.  Such insurance
policy contains a standard mortgagee clause that names the holder of the
Mortgage, its successors and assigns as mortgagee as an additional insured in
the case of liability insurance policies or as a loss payee in the case of
property insurance policies.  Such
insurance policy is not terminable (nor may the amount of coverage provided
thereunder be reduced) without prior written notice to the holder of the
Mortgage, and no such notice has been received, including any notice of
nonpayment of premiums, that has not been cured.  Each Mortgage obligates the related Mortgagor
to maintain all such insurance and, upon such Mortgagor’s failure to do so,
authorizes the holder of the Mortgage to purchase and maintain such insurance
at the Mortgagor’s cost and expense and to seek reimbursement therefor from
such Mortgagor.  Each Mortgage provides
that casualty insurance proceeds will be applied either to the restoration or
repair of the related Property or to the reduction or defeasance of the
principal amount of the Mezzanine Loan.

 

(28)         Taxes and Assessments.  There are no delinquent or unpaid taxes or
assessments (including assessments payable in future installments), or other
outstanding charges affecting any Property which are or may become a lien of
priority equal to or higher than the lien of the related Mortgage.  For purposes of this representation and
warranty, real property taxes and assessments shall not be considered unpaid
until the date on which interest and/or penalties would be first payable
thereon.

 

(29)         Mortgagor Bankruptcy.  No Mortgagor, Pledgor, non-recourse carve-out
guarantor or tenant physically occupying 25% or more (by square feet) of the
net rentable area of a Property is a debtor in any state or federal bankruptcy
or insolvency proceeding.

 

(30)         Leasehold Estate.  Each Property consists of the related Mortgagor’s
fee simple estate in real estate or, if the related Mezzanine Loan is secured
in whole or in part by the interest

 

VII-5

 

of a Mortgagor as
a lessee under a ground lease of a Property (a “Ground Lease”), by the related
Mortgagor’s interest in the Ground Lease but not by the related fee interest in
such Property (the “Fee Interest”).  With
respect to any Mezzanine Loan secured by a Ground Lease but not by the related
Fee Interest:

 

(a)           Such Ground Lease or a memorandum
thereof has been duly recorded; such Ground Lease (or the related estoppel
letter or lender protection agreement between Seller and related lessor)
permits the current use of the Property and permits the interest of the lessee
thereunder to be encumbered by the related Mortgage and does not restrict the
use of the related Property by such lessee, its successors or assigns in a
manner that would adversely effect the security provided by the related
Mortgage by limiting in any way its current use; and there has been no material
change in the terms of such Ground Lease since the origination of the related
Mezzanine Loan, with the exception of material changes reflected in written
instruments that are a part of the related Mortgage File;

 

(b)           The lessee’s interest in such Ground
Lease is not subject to any liens or encumbrances superior to, or of equal
priority with, the related Mortgage, other than the related Fee Interest and
Permitted Encumbrances;

 

(c)           The Mortgagor’s interest in such
Ground Lease is assignable to Buyer and is further assignable by Buyer, its
successors and assigns upon notice to, but without the consent of, the lessor
thereunder (or, if such consent is required, it has been obtained prior to the
Purchase Date) and, in the event that it is so assigned, is further assignable
by Buyer and its successors and assigns upon notice to, but without the need to
obtain the consent of, such lessor.  If
required by the Ground Lease, the lessor has received notice of the lien of the
related Mortgage in accordance with the provisions of the Ground Lease;

 

(d)           In connection with the origination of
such Mortgage Loan, the related ground lessor provided an estoppel to the
originator confirming that the related Mortgagor was not then in default under
such Ground Lease.  The Ground Lease
provides that no material amendment to the Ground lease is effective against
the mortgagee under such Mortgage Loan unless the mortgagee has consented
thereto.  Such Ground Lease is in full
force and effect, and Seller and any servicer acting on Seller’s behalf
have  received no notice that an event of
default has occurred thereunder or that the Ground lease has terminated, and
there exists no condition that, but for the passage of time or the giving of
notice, or both, would result in an event of default under the terms of such
Ground Lease;

 

(e)           Such Ground Lease, or an estoppel
letter or other agreement, (A) requires the lessor under such Ground Lease
to give notice of any default by the lessee to the mortgagee, provided that the
mortgagee has provided the lessor with notice of its lien in accordance with
the provisions of such Ground Lease to the extent such Ground Lease requires
such notice, further (B) provides that no notice of termination given
under such Ground Lease (including rejection of such Ground Lease in a
bankruptcy proceeding) is effective against the holder of the Mortgage unless a
copy of such notice has been delivered to such holder and the lessor has
offered to enter into a new lease with such holder on terms that do not
materially vary from the economic terms of the Ground Lease;

 

VII-6

 

(f)            A mortgagee is permitted a
reasonable opportunity (including, where necessary, sufficient time to gain
possession of the interest of the lessee under such Ground Lease by foreclosure
or otherwise if possession is necessary to effect a cure) to cure any default
under such Ground Lease, which is curable after the receipt of notice of any
such default, before the lessor thereunder may terminate such Ground Lease;

 

(g)           Such Ground Lease has an original
term (including any extension options set forth therein which, under all
circumstances, may be exercised, and will be enforceable, by the mortgagee if
it takes possession of such leasehold interest) which extends not less than
twenty years beyond the stated maturity date of the related Mezzanine Loan and
ten years beyond the amortization period for the related Mezzanine Loan;

 

(h)           Under the terms of such Ground Lease
and the related Mortgage, taken together, any related insurance proceeds or
condemnation award other than in respect of a total loss will be applied either
to the repair or restoration of all or part of the related Property, with the
mortgagee or a trustee appointed by it having the right to hold and disburse
such proceeds as the repair or restoration progresses (except in such cases
where a provision entitling another party to hold and disburse such proceeds
would not be viewed as commercially unreasonable by a prudent commercial
mortgage lender for conduit programs), or to the payment or defeasance of the
outstanding principal balance of the Mezzanine Loan together with any accrued
interest thereon;

 

(i)            Such Ground Lease does not impose
any restrictions on subletting which would be viewed as commercially
unreasonable by prudent commercial mortgage lenders in the lending area where
the Property is located and such ground Lease contains a covenant that the
ground lessor is not permitted, in the absence of an uncured default, to
disturb the possession, interest or quiet enjoyment of the lessee thereunder
for any reason or in any manner which would materially adversely affect the
security provided by the related Mortgage; and

 

(j)            Such Ground Lease provides, or the lessor
has otherwise agreed, that such Ground Lease may not be amended or modified or
any such amendment or modification will not be effective against the mortgagee
without the prior written consent of the mortgagee under such Mezzanine Loan
and any such action without such consent is not binding on such mortgagee, its
successors and assigns, provided such mortgagee has provided the ground lessor
with notice of its lien in accordance with the terms of the Ground Lease.

 

(31)         Escrow Deposits.  All escrow deposits and payments (including
capital improvements, environmental remediation reserves and other reserve
deposits, if any) relating to each Mortgage Loan and related Mezzanine Loan
that are, as of the Purchase Date required to be deposited or paid to the lender
under the terms of the related Mortgage Loan Documents have been so deposited
or paid and, to the extent of any remaining balances of such escrow deposits,
are in the possession or under the control of mortgagee or its agents (which
shall include the applicable servicer of the Mortgage Loan).  Any and all material requirements under each
Mortgage Loan as to completion of any material improvements and as to
disbursement of any funds escrowed for such purpose, which requirements were to
have been complied with on or before the Purchase Date, have been complied with
in all material respects or, if and to the extent not so complied with, the
escrowed funds (or an allocable portion thereof) have not been released except
in accordance with the terms of the related loan documents.

 

VII-7

 

(32)         No Mechanics’ Liens.  As of the date of the Mortgage, each Property
is free and clear of any and all mechanics’ and materialmen’s liens that are
prior or equal to the lien of the related Mortgage, and no rights are
outstanding that under law could give rise to any such lien that would be prior
or equal to the lien of the related Mortgage except, in each case, for liens
insured against by the Title Policy referred to herein or otherwise bonded.

 

(33)         Releases of Property.  Except as described in the next sentence, no
Mortgage Note or Mortgage requires the mortgagee to release all or any material
portion of the related Property from the lien of the related Mortgage except
upon payment in full or defeasance of all amounts due under the related
Mezzanine Loan.  The Mortgages relating
to the Mezzanine Loans identified on the Mezzanine Loan Schedule require
the mortgagee to grant releases of portions of the related Mortgaged Properties
upon (a) the satisfaction of certain legal and underwriting requirements
and (b) except where the portion of the Property permitted to be released
was not considered by, Seller to be material in the underwriting of the
Mezzanine Loan, either (1) the payment of a release price set forth
therein and prepayment consideration in connection therewith or (2) the
partial defeasance of such Mezzanine Loan.

 

(34)         No Material Default.  There exists no monetary default and no
material non-monetary default, breach, violation or event of acceleration (and
no event which, with the passage of time or the giving of notice, or both,
would constitute any of the foregoing) under the documents evidencing or
securing the Mortgage Loan or the related Mezzanine Loan, in any such case to
the extent the same materially and adversely affects the value of the Mezzanine
Loan and the related Property.  Neither
the Mortgage Loan seller nor any servicer acting on its behalf has issued any
notice of default, breach or violation related to the Mortgage Loan,
accelerated the Mortgage Loan or commenced judicial or non-judicial foreclosure
proceedings with respect to the Mortgage Loan. 
Neither the Mezzanine Loan seller nor any servicer acting on its behalf
has issued any notice of default, breach or violation related to the Mezzanine
Loan, accelerated the Mezzanine Loan or commenced judicial or non-judicial
foreclosure proceedings with respect to the Mezzanine Loan.

 

(35)         Local Law Compliance. The
improvements located on or forming part of each Property complies in all
material respects with applicable zoning laws and ordinances, or constitutes a
legal non-conforming use or structure or, if any such improvement does not so
comply and does not constitute a legal non-conforming use or structure, such
non-compliance and failure does not materially and adversely affect (i) the
value of the related Property as determined by the appraisal performed at
origination or (ii) the principal use of the Property as of the date of
the origination of such Mortgage Loan. 
As of the date of origination of the Mortgage Loan, with respect to each
legal non-conforming use or structure, if a casualty occurred at that time, the
Property could have been restored or repaired to such an extent that the use or
structure of the restored or repaired property would be substantially the same
use or structure, or law and ordinance insurance has been obtained, or a
holdback was established and the Mortgagor is required to cause the Property to
become a conforming use or structure.

 

(36)         Junior Liens.  None of the Mortgage Loans or related
Mezzanine Loans permits the related Property or pledged equity to be encumbered
by any lien junior to or of equal priority with the lien of the related
Mortgage or Pledge without the prior written consent of the holder thereof or
the satisfaction of debt service coverage or similar criteria specified
therein.  The

 

VII-8

 

pledged equity is
not, and none of the Mortgaged Properties is, encumbered by any lien junior to
the lien of the related Mortgage.  Each
Mezzanine Loan contains a “due on sale” clause that provides for the
acceleration of the payment of the unpaid principal balance of the Mezzanine
Loan or Mortgage Loan if, without the prior written consent of the holder
thereof, the related Property, or any material portion thereof, or pledged
equity or a controlling interest in the direct or indirect ownership interests
in the Mortgagor is directly or indirectly transferred, sold, or pledged.

 

(37)         Actions Concerning Mezzanine Loans.  There are no actions, suits, governmental
investigations or proceedings pending or threatened before any court,
governmental authority, administrative agency or arbitrator concerning any
Mezzanine Loan or Mortgage Loan or the related pledgor or Mortgagor or pledged
equity or Property that, if determined adversely, would adversely affect title
to the Mezzanine Loan or Mortgage Loan or the validity or enforceability of the
related pledge or Mortgage or that might materially and adversely affect the
value of the pledged equity or Property, the current ability of the Property to
generate net operating income to service the Mortgage Loan, the principal
benefit of the security intended to be provided for the Mezzanine Loan or Mortgage
Loan, or the current use of the Property.

 

(38)         Servicing.  The servicing and collection practices used
by Seller and any servicer of the Mortgage Loan or related Mezzanine Loan have
been in all material respects legal, proper and prudent and have met customary
industry standards for servicing of commercial Mortgage or Mezzanine Loans.

 

(39)         Licenses and Permits.  The related Mortgagor is in possession of all
material licenses, permits and franchises required by applicable law for the
ownership and operation of the related Property as it was then operated and, as
of the Purchase Date, Seller has no written notice that the related Mortgagor
was not in possession of such licenses, permits and franchises or that such
licenses, permits and franchises have not otherwise been issued.  The Mortgage Loan requires the related
Property to be in material compliance with laws and regulations applicable to
the Property, in each case to the extent required by law.

 

(40)         Non-Recourse Exceptions.  The related Mezzanine Loan and Mortgage Loan
documents contain provisions providing for recourse against the related Pledgor
or Mortgagor, a principal of such Pledgor or Mortgagor or an entity controlled
by a principal of such Pledgor or Mortgagor, or a natural person, for damages
sustained in connection with the Pledgor’s or Mortgagor’s (i) fraud, (ii) intentional
misrepresentation, (iii) misappropriation or misapplication of rents or
amounts due lender, insurance proceeds or condemnation proceeds, (iv) voluntary
bankruptcy, (v) failure to obtain prior consent to any encumbrance of the
pledged equity under the Mezzanine Loan Documents, (vi) willful misconduct
resulting in waste of a Property.  The
related Mezzanine Loan and Mortgage Loan documents contain provisions pursuant
to which the related pledgor or Mortgagor, a principal of such pledgor or
Mortgagor or an entity controlled by a principal of such pledgor or Mortgagor,
or a natural person, has agreed to indemnify the pledgee or mortgagee for
damages resulting from violations of any applicable environmental covenants.

 

(41)         Single Purpose Entity.  The pledgor and Mortgagor on each Mezzanine
Loan and related Mortgage Loan were, as of the origination of the Mezzanine
Loan, Single Purpose

 

VII-9

 

Entities.  For this purpose, a “Single Purpose Entity”
shall mean an entity, other than an individual, whose organizational documents
provide substantially to the effect that it was formed or organized solely for
the purpose of owning the pledged equity or the Mortgaged Properties securing
the Mezzanine Loans or Mortgage Loans and prohibit it from engaging in any
business unrelated to such pledged equity or Property or Properties, and whose
organizational documents further provide, or which entity represented in the
related Mezzanine Loan or Mortgage Loan documents, substantially to the effect
that it does not have any assets other than those related to its interest in
such pledged equity or interest in and operation of such Property or Properties,
or any indebtedness other than as permitted by the related Pledge or Mortgage
or the other related Mezzanine Loan or Mortgage Loan documents, that it has its
own books and records and accounts separate and apart from any other person,
and that it holds itself out as a legal entity, separate and apart from any
other person, that it will not guarantee or assume the debts of any other
person, that it will not commingle assets with affiliates, and that it will not
transact business with affiliates except on an arm’s length basis.  Each Pledgor and Mortgagor of a Mezzanine
Loan and Mortgage Loan is an entity which has represented in connection with
the origination of the Mezzanine Loan or Mortgage Loan, or whose organizational
documents as of the date of origination of the Mezzanine Loan or Mortgage Loan
provide that so long as the Mezzanine Loan is outstanding it will have at least
one independent director.  There are
Insolvency/Non-Consolidation opinions with respect to each of the Pledgor and
Mortgagor and all of the assumptions made in each such opinion are true and
correct.

 

(42)         Separate Tax Parcels.  Each Property constitutes one or more
complete separate tax lots or is subject to an endorsement under the related
title insurance policy.

 

(43)         Operating or Financial Statements.  The related Mezzanine Loan Documents require
the related Mortgagor to furnish to the mortgagee at least quarterly and
annually an operating statement and rent roll (if there is more than one
tenant) with respect to the related Property and at least annually financial
statements of the Mortgagor.

 

(44)         Security Interests in Hospitality
Properties.  If any Property securing
a Mortgage Loan is operated as a hospitality property then (a) the
security agreements, financing statements or other instruments, if any, related
to the Mortgage Loan secured by such Property establish and create a valid and
enforceable (subject to the exceptions set forth in Paragraph 13 above) first
priority security interest in all items of personal property owned by the
related Borrower which are material to the conduct in the ordinary course of
the Borrower’s business on the related Property, subject only to purchase money
security interests, personal property leases and security interests to secure
revolving lines of credit and similar financing; and (b) one or more
Uniform Commercial Code financing statements covering such personal property
have been filed or recorded (or have been sent for filing or recording)
wherever necessary to perfect under applicable law such security interests (to
the extent a security interest in such personal property can be perfected by
the filing of a Uniform Commercial Code financing statement under applicable
law).

 

(45)         Assignment of Collateral.  There is no material collateral securing any
Mortgage Loan that has not been assigned to the Mortgagee.

 

VII-10

 

(46)         Fee Simple or Leasehold Interests.  The interest of the related Borrower in the
Property securing each Mortgage Loan includes a fee simple and/or leasehold
estate or interest in real property and the improvements thereon.

 

(47)         Assignment of Collateral.  There is no material collateral securing any
Mezzanine Loan that has not been assigned to the Mortgagee.

 

(48)         Terrorism Insurance.  With respect to each Mortgage Loan, the
related all risk insurance policy and business interruption policy did not as
of the date of origination of the Mortgage Loan, and, does not as of the date
hereof, specifically exclude acts of terrorism from coverage.  With respect to each of the Mortgage Loans,
the related Mortgage Loan documents do not expressly waive or prohibit the
mortgagee from requiring coverage for acts of terrorism or damages related thereto,
except to the extent that any right to require such coverage may be limited by
commercially reasonable availability.

 

(49)         Transfers and Pledges.  The Mezzanine Loan Collateral consists of the
pledge of all of the ownership interests of the Mortgagor.  Transfer and pledge restrictions under the
Mezzanine Loan Documents apply to the sponsoring entity, borrower, principal,
Mortgagor, mortgage principal and any affiliated manager or any shareholder,
partner, member, non-member manager, any direct or indirect legal or beneficial
owner of, Mortgagor, mortgage principal, principal, borrower, any guarantor,
any affiliated manager, or any pledgor, and affiliated franchisor or any
non-member manager.

 

(50)         Management Agreement.  The Management Agreement is in full force and
effect and there is no default thereunder by any party thereto and no event has
occurred that, with the passage of time and/or the giving of notice, would
constitute a default thereunder.

 

(51)         Illegal Activity.  No portion of any Property has been or will
be Mezzanine with proceeds of any illegal activity.

 

(52)         Embargoed Person.  With respect to each Underlying Asset, (a) none
of the funds or other assets of mortgagor, mezzanine borrower, principal and
guarantor constitute property of, or are beneficially owned, directly or indirectly,
by any person, entity or government subject to trade restrictions under U.S.
law, including but not limited to, the International Emergency Economic Powers
Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C.
App. 1 et seq., and any Executive Orders or regulations promulgated thereunder
with the result that the investment in borrower, principal or guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the
Mortgage Loan or Mezzanine Loan made by the Lender is in violation of law (“Embargoed
Person”); (b) no Embargoed Person has any interest of any nature
whatsoever in mortgagor, mezzanine borrower, principal or guarantor, as
applicable, with the result that the investment in mortgagor, mezzanine
borrower, principal or guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Mortgage Loan or Mezzanine Loan is in
violation of law; and (c) none of the funds of mortgagor, mezzanine
borrower, principal or guarantor, as applicable, have been derived from any
unlawful activity with the result that the investment in mortgagor, mezzanine
borrower, principal or guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Mortgage Loan or Mezzanine Loan is in
violation of law.

 

VII-11

 

(53)         Franchise Agreement.  The Franchise Agreement and the License
granted thereby are in full force and effect and there is no default thereunder
by any party thereto and no event has occurred that, with the passage of time
and/or giving of notice, would constitute a default thereunder.  Mortgagor has all rights to use the License
granted under the Franchise Agreement.

 

(54)         Lockbox.  Any agreements executed in connection with
the creation of a Collection Account create a valid and continuing security
interest (as defined in the Uniform Commercial Code in effect in the State of
New York) in each of such Collection Accounts in favor of Buyer, which security
interest is prior to all other liens, and is enforceable as such against
creditors of and purchasers from Mortgagor. 
Each Collection Account constitutes a “deposit account” within the
meaning of the Uniform Commercial Code in effect in the State of New York.  Seller has directed the Servicer to cause
each Depository to agree to comply with all written instructions originated by
Buyer, without further consent by Borrower, directing disposition of all sums
at any time held, deposited or invested in the Collection Accounts, together
with any interest or other earnings thereon, and all proceeds thereof
(including proceeds of sales and other dispositions), whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities.  The Collection Accounts are
not in the name of any Person other than Mortgagor, as pledgor, or Lender, as
pledgee.  Seller has not consented to the
Depository complying with instructions with respect to the Collection Account
from any Person other than Buyer.

 

(55)         Compliance with Usury and Other Laws.  The Mezzanine Loan, and, each party involved
in the origination of the Mezzanine Loan, complied as of the date of
origination with, or is exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury.  Any and all other requirements of any
federal, state or local laws applicable to the Mezzanine Loan have been
complied with.

 

(56)         Authorized to do Business.  To the extent required under applicable law,
Seller is authorized to transact and do business in each jurisdiction in which
a Mortgaged Property is located at all times when it held the Mezzanine Loan.

 

(57)         Mezzanine Loan Documents.  The Mezzanine Loan Documents contain
provisions for the acceleration of the payment of the unpaid principal balance
of the Mezzanine Loan if (A) the Mortgagor voluntarily transfers or
encumbers all or any portion of any related Mezzanine collateral, or (B) any
direct or indirect interest in Mortgagor is voluntarily transferred or
assigned, other than, in each case, as permitted under the terms and conditions
of the Mezzanine Loan Documents.

 

(58)         No Limitation on Assignability in
Mezzanine Loan Documents.  Except as
expressly stated in the Mezzanine Loan Documents, Seller’s ability to assign,
transfer and convey the Mezzanine Loan to any other person or entity is not
limited or prohibited by any provision contained in the Mezzanine Loan
Documents.

 

(59)         Collateral Secures Mezzanine Loans
Only.  The Mezzanine collateral does
not secure any mezzanine loan other than the Mezzanine Loan being transferred
and assigned to Buyer hereunder (except for Mezzanine Loans, if any, which are cross-collateralized
with other

 

VII-12

 

Mezzanine Loans
being conveyed to Buyer subsequent transferee hereunder and identified on the
Asset Schedule).

 

(60)         MERS Underlying Asset.  With respect to each Mezzanine Loan that is a
MERS Underlying Asset, the related Mortgagor is registered with MERS and each
assignment of the MERS Underlying Asset has been registered with MERS.

 

VII-13

 

EXHIBIT VIII

 

REPRESENTATIONS AND WARRANTIES
REGARDING 

EACH PARTICIPATION INTEREST AND 

THE RELATED UNDERLYING ASSET

 

1.             Validity of Documents.  The Participation Agreement and any other
agreement executed and delivered by Seller in connection with a Participation
Interest are genuine, and each is the legal, valid and binding obligation of
the maker thereof enforceable in accordance with its terms.  Seller had legal capacity to enter into the
Participation Agreement and the legal capacity to execute and deliver the
Participation Agreement, and the Participation Agreement has been duly and
properly executed by the maker thereof and any other signatory thereto.  The Participation Agreement is in full force
and effect, and the enforceability of the Participation Agreement has not been
contested by any person or entity.

 

2.             Original Terms Unmodified.  The terms of the Participation Agreement have
not been impaired, altered or modified in any material respect.

 

3.             No Defenses. 
The Participation Interest is not subject to any right of rescission,
set-off, counterclaim or defense nor will the operation of any of the terms of
the Participation Agreement, or the exercise of any right thereunder, render
the Participation Agreement unenforceable in whole or in part and no such right
of rescission, set-off, counterclaim or defense has been asserted with respect
thereto.

 

4.             No Defaults. 
There is no default, breach, violation or event of acceleration existing
under the Participation Agreement and no event has occurred which, with the
passage of time or giving of notice or both and the expiration of any grace or
cure period, would constitute a default, breach, violation or event of acceleration
thereunder.

 

5.             Delivery of Participation Documents.  The Participation Agreement has been
delivered to Buyer or the Custodian.

 

6.             No Conflicts. 
The execution, delivery and performance of the Participation Agreement
by Seller do not conflict with or constitute a default under, or result in the
creation or imposition of any lien (other than pursuant to the Participation
Agreement) under, any mortgage, deed of trust, agreement, partnership
agreement, or other agreement or instrument to which Seller is a party or to
which any of its property is subject, nor will such action result in any
violation of the provisions of any statute of any jurisdiction over Seller, and
any qualification of or with any governmental authority required for the
execution, delivery, and performance by Seller of the Participation Agreement
has been obtained and is in full force and effect.

 

7.             Participation Interest Assignable.  The Participation Interest is assignable to
Buyer.  The Participation Agreement
permits Seller and Buyer to freely sell, assign, pledge, transfer or
rehypothecate such Participation Interest subject to the terms of the
Participation Agreement.

 

VIII-1

 

8.             No Satisfaction or Prepayment of Participation Interest.  The Participation Interest has not been
satisfied, canceled, subordinated, released or rescinded, in whole or in part,
in any material respect.

 

9.             Ownership. 
Seller is the sole owner and holder of the Participation Interest.  The Participation Interest has not been
assigned or pledged by Seller, and Seller has good, indefeasible and marketable
title to the Participation Interest, and has full right, subject to the terms
of the Participation Agreement, to transfer, pledge and assign the Participation
Interest to  Buyer free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority, subject to the terms of
the Participation Agreement but subject to no interest or participation of, or
agreement with, any other party, to assign, transfer and pledge the
Participation Interest pursuant to this Agreement, and following the pledge of
the Participation Interest, Buyer will hold such Participation Interest free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest except any such security interest created
pursuant to the terms of this Agreement.

 

10.           Financial Information.  To Seller’s knowledge based upon the related participant’s
representations and warranties, all financial data, including, without
limitation the statements of cash flow and income and operating expense, that
have been delivered to Seller (i) are true, complete, and correct in all
material respects, and (ii) accurately represent the financial condition
of such participant as of the date of such reports.

 

VIII-2

 

EXHIBIT IX

 

Underlying Loan Information

 

Investment & Loan Set-Up

 

	
  I.

  	
  Investment
  Background

  
	
   

  
	
  Investment
  name and location:

  
	
  Borrower
  and principals: .

  
	
  Type of
  investment:

  
	
  CTIMCO
  deal team:

  
	
  CTIMCO
  Closing Attorney:

  
	
  Closing
  Date:

  
	
  CT
  Funding Date:

  
	
   

  
	
  Investment
  Amount:

  
	
  Premium/discount
  (% and $ amount):

  
	
  Adjusted
  gross investment commitment:

  
	
  Participants:

  
	
  Repo
  Advance Rate:

  
	
  Net CT
  investment commitment:

  
	
  Net CT
  investment funded at closing:

  
	
  Net CT
  investment unfunded commitment:

  
	
  Accrued
  interest acquired ($):

  
	
   

  
	
  II.

  	
  Rate/Term/Fees/Guarantees/Reserves

  
	
   

  	
   

  
	
  Interest
  rate (floating/fixed):

  
	
  LIBOR
  in place at CT funding date:

  
	
  LIBOR
  Floor:

  
	
  Amount
  of LIBOR Floor:

  
	
  Interest
  due date:

  
	
  Interest
  rate re-set date:

  
	
  Interest
  Accrual Period:

  
	
  1st
  Interest Payment Due Date:

  
	
  Rate if
  fixed:

  

 

IX-1

 

	
  Index
  if floating:

  
	
  Rounding
  factor for index:

  
	
  Spread
  if floating:

  
	
  Calculation
  basis:

  
	
  Pay/accrual:

  
	
  Contingent
  interest:

  
	
  Amortization:

  
	
  Stub
  Interest (days):

  
	
  Stub
  Interest ($):

  
	
  Lock
  Box:

  
	
  Servicing
  Fee:

  
	
  Special
  Servicing Fee:

  
	
  Trustee
  Servicing Fee:

  
	
  Initial
  term:

  
	
  Maturity
  date:

  
	
  Origination/Commitment
  Fee:

  
	
  Due
  Diligence Deposit:

  
	
  Application
  Fee:

  
	
  Additional
  Interest (Exit):

  
	
  Extension
  Term:

  
	
  Extended
  Maturity date:

  
	
  Additional
  Interest (Extension):

  
	
  Prepayment/Defeasance:

  
	
  Reserves:

  
	
  Initial Tax Escrow:

  Required Repairs Reserve:

  Liquidity Reserve:

  
	
  Tax
  escrows:

  
	
  Insurance
  escrows:

  
	
  Total
  Reserves:

  
	
  Payment
  Guarantee (amount):

  
	
  Guarantor:

  
	
  Guaranty
  Collateral:

  
	
  Lock-Out/Call
  Protection:

  
	
  Financial
  Reporting Requirements:

  
	
  Monthly
  Statements:

  
	
  Quarterly
  Statements:

  
	
  Annual
  Statements:

  

 

IX-2

 

	
  Annual
  Budget:

  
	
   

  
	
  III.

  	
  Seller/Repo
  Financing

  
	
   

  	
   

  
	
  Firm:

  
	
  Advance
  Rate:

  
	
  Cost of
  Financing:

  
	
  Contact:

  
	
   

  
	
  IV.

  	
  Senior
  / Junior Financing

  
	
   

  	
   

  
	
  First
  Mortgage Loan:

  
	
  Senior
  Mezzanine Loan:

  
	
  Junior
  Mezzanine Loan:

  
	
   

  
	
  V.

  	
  Summary
  of Participation Rights:

  
	
   

  	
   

  
	
  1)

  
	
   

  
	
   

  
	
  VI.

  	
  Hedging
  Information

  
	
   

  	
   

  
	
  Senior Loan
  Interest Rate Cap:

  
	
  Date of
  Agreement:

  
	
  Notional Amount:

  
	
  Strike Prices:

  
	
  Cost:

  
	
  Beneficiary:

  
	
  Counterparty:

  
	
  Placement Agent:

  
	
   

  
	
  Senior Mezzanine
  Loan Interest Rate Cap:

  
	
  Date of
  Agreement:

  
	
  Notional Amount:

  
	
  Strike Prices:

  
	
  Cost:

  

 

IX-3

 

	
  Beneficiary:

  
	
  Counterparty:

  
	
  Placement Agent:

  
	
   

  
	
  Junior Mezzanine
  Loan Interest Rate Cap:

  
	
  Date of
  Agreement:

  
	
  Notional Amount:

  
	
  Strike Prices:

  
	
  Cost:

  
	
  Beneficiary:

  
	
  Counterparty:

  
	
  Placement Agent:

  
	
   

  
	
  VII.

  	
  Non-Reimbursable
  Transaction Expenses

  
	
   

  	
  Legal Fees

  
	
   

  	
  Meals

  
	
   

  	
  Travel/Airfare

  
	
   

  	
  Insurance Review

  
	
   

  	
  Total

  

 

IX-4

 

EXHIBIT X

 

TRANSACTION PROCEDURE

 

Preliminary Approval of
New Asset Which is an Eligible Asset.

 

(a)           Seller may, from
time to time, submit to Buyer a Preliminary Due Diligence Package for Buyer’s
review and approval in order to enter into a Transaction with respect to any
New Asset that Seller proposes to be included as an Eligible Asset under this
Agreement.

 

(b)           Seller shall, with
respect to each Eligible Asset, provide Buyer with such additional information
and materials as are in the possession of, or reasonably accessible by, Seller
as will enable Buyer to satisfy itself, in its sole discretion, that the
statements set forth in Exhibit VI and/or Exhibit VII, as applicable,
are correct.

 

(c)           Buyer shall have the
right to request additional diligence materials and deliveries that Buyer shall
specify on a Supplemental Due Diligence List. 
Within five (5) Business Days after Buyer’s receipt of the
Preliminary Due Diligence Package, Buyer shall either (i) notify Seller of
the Purchase Price and the Market Value for the New Asset, subject to
documentation satisfactory to Buyer, (ii) request additional diligence
materials or (iii) deny, in Buyer’s sole and absolute discretion, Seller’s
request for a Transaction.  Within five (5) Business
Days after receipt of all additional diligence materials, Buyer shall either
approve or deny the proposal to include such Eligible Asset.

 

Final Approval of New
Asset which is an Eligible Asset.  Upon Buyer’s notification to Seller of the
Purchase Price and the Market Value for any New Asset which is an Eligible
Asset, Seller shall, if Seller desires to enter into a Transaction with respect
to such New Asset, satisfy the conditions set forth below (in addition to
satisfying the conditions precedent to obtaining each advance, as set forth in Section 2(b) of
this Agreement) as a condition precedent to Buyer’s approval of such New Asset
as an Eligible Asset, all in a manner reasonably satisfactory to Buyer and
subject to documentation satisfactory to Buyer:

 

(a)           Delivery of
Purchased Asset Documents.  Seller
shall deliver to Buyer:  (i) with
respect to a New Asset that is a Pre-Existing Asset, each of the Purchased
Asset Documents, except Purchased Asset Documents that Seller expressly and
specifically disclosed in Seller’s Preliminary Due Diligence Package were not
in Seller’s possession; and (ii) with respect to a New Asset that is an
Originated Asset, each of the Purchased Asset Documents.

 

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

 

(c)           Appraisal.  Buyer shall have received either an appraisal
approved by Buyer (or a Draft Appraisal, if Buyer approves such Draft Appraisal
in lieu of a final appraisal), each by an MAI appraiser.  If Buyer receives only a Draft Appraisal
prior to

 

X-1

 

entering into a
Transaction, Seller shall deliver an appraisal approved by Buyer by an MAI
appraiser on or before thirty (30) days after the Purchase Date.

 

(d)           Insurance.  Buyer shall have received certificates or
other evidence of insurance demonstrating insurance coverage in respect of the
Property of types, in amounts, with insurers and otherwise in compliance with
the terms, provisions and conditions set forth in the Purchased Asset
Documents.  Such certificates or other
evidence shall indicate that Seller will be named as an additional insured
under liability policies as its interest may appear and shall contain a loss
payee endorsement under casualty policies in favor of Seller with respect to the
policies required to be maintained under the Purchased Asset Documents.

 

(e)           Survey.  Buyer shall have received all surveys of the
Property that are in Seller’s possession.

 

(f)            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 title updates conducted by
search firms and/or title companies acceptable to Buyer with respect to the
Eligible Asset, Property, Seller and Mortgagor, such searches to be conducted
in each location Buyer shall designate.

 

(g)           Opinions of
Counsel.  Buyer shall have received
copies of all legal opinions in Seller’s possession with respect to the
Eligible Asset which shall be in form and substance satisfactory to Buyer.

 

(h)           Additional Real
Estate Matters.  Seller shall have
delivered to Buyer to the extent in Seller’s possession such other real estate
related certificates and documentation as may have been requested by Buyer,
such as: (i) certificates of occupancy issued by the appropriate
Governmental Authority and either letters certifying that the Property is in
compliance with all applicable zoning laws issued by the appropriate
Governmental Authority of evidence that the related Title Policy includes a zoning
endorsement and (ii) copies of all leases in effect at the Property and
estoppel certificates that were required in the origination of the applicable
loan from any ground lessor and from any tenants .

 

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

 

X-2

 

EXHIBIT XI

 

OWNERSHIP CHART FOR EACH SELLER

 

 

[TO COME]

 

XI-1

 

EXHIBIT XII

 

FORM OF OPINION OF COUNSEL
TO SELLERS

 

1.             Each
Seller is duly organized and validly existing as a corporation in good standing
under the laws of the state of its incorporation and has power and authority to
enter into and perform its obligations under this Agreement and the Custodial
Agreement.  Each Seller is duly qualified
to do business and is in good standing in each jurisdiction in which the
character of the business transacted by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on the
business, properties, assets or condition (financial or other) of each Seller
and its subsidiaries, considered as a whole.

 

2.             This
Agreement and the Custodial Agreement have each been duly authorized, executed
and delivered by each Seller, and each constitutes a valid and legally binding
obligation of each Seller enforceable against such Seller in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors’ rights generally and to general equity principles.

 

3.             No
consent, approval, authorization or order of any state or federal court or
government agency or body is required to be obtained by either Seller for the
consummation of the transactions contemplated by this Agreement or the
Custodial Agreement.

 

4.             The consummation of any of the transactions contemplated by
this Agreement and the Custodial Agreement will not conflict with, result in a
breach of, or constitute a default under the articles of incorporation or
bylaws of either Seller or the terms of any indenture or other agreement or
instrument known to us to which either Seller is party or bound, or any order
known to such counsel to be applicable to either Seller or any regulations
applicable to either Seller, of any state or federal court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
either Seller.

 

5.             There
is no pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving either Seller
or relating to the transaction contemplated by this Agreement or the Custodial
Agreement which, if adversely determined, would have a material adverse effect
on either Seller.

 

6.             Buyer
has a perfected security interest in the Purchased Assets.

 

XII-1

 

EXHIBIT XIII

 

FORM OF BAILEE AGREEMENT

 

[Capital Trust, Inc.]

[CT BSI Funding Corp.]

410 Park Avenue

14th Floor

New York, New York 10022

 

                   
    , 20    

 

Paul, Hastings, Janofsky &
Walker LLP

75 East 55th Street

New York, New York 10022

 

	
  Re:

  	
   

  	
  Bailee Agreement (the “Bailee Agreement”) in
  connection with the sale under a Amended and Restated Master Repurchase
  Agreement by Capital Trust, Inc. and CT BSI Funding Corp. (each a
  “Seller”) to Bear, Stearns International Limited (the “Buyer”)                                                                                                                          

  

 

Ladies and Gentlemen:

 

In consideration of the
mutual promises set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller, Buyer and
Paul, Hastings, Janofsky & Walker LLP (the “Bailee”) hereby agree as
follows:

 

1.             Seller
shall deliver to the Bailee in connection with any Purchased Assets delivered
to the Bailee hereunder an Identification Certificate in the form of Attachment
1 attached hereto to which shall be attached a Purchased Asset Schedule identifying
which Purchased Assets are being delivered to the Bailee hereunder.  Such Purchased Asset Schedule shall
contain the following fields of information with respect to the Underlying
Assets:  (a) the loan identifying
number; (b) the Mortgagor’s name; (c) the street address, city, state
and zip code for the applicable real property; (d) the original balance;
and (e) the current principal balance if different from the original
balance and such other information as Seller and Buyer shall require.

 

2.             On
or prior to the date indicated on the Custodial Delivery delivered by Seller
(the “Purchase Date”), Seller shall have delivered to the Bailee, as bailee for
hire, the original documents set forth on Schedule A attached hereto
(collectively, the “Purchased Asset File”) for each of the Purchased Assets
(each a “Purchased Asset” and collectively, the “Purchased Assets”) listed in Exhibit A
to Attachment 1 attached hereto (the “Purchased Asset Schedule”).

 

3.             The
Bailee shall issue and deliver to Buyer and the Custodian on or prior to the
Purchase Date by facsimile (a) in the name of Buyer, an initial trust
receipt and certification in the form of Attachment 2 attached hereto (the “Trust
Receipt”) which Trust Receipt shall state

 

XIII-1

 

that
the Bailee has received the documents comprising the Purchased Asset File as
set forth in the Custodial Delivery (as defined in that certain Custodial
Agreement dated as of December 22, 2005, among Seller, Buyer and Custodian
(as defined in Section 5 below), in addition to such other documents
required to be delivered to Buyer and/or Custodian pursuant to the Amended and
Restated Master Repurchase Agreement dated as of February 15, 2006, among
Seller and Buyer (the “Amended and Restated Master Repurchase Agreement”).

 

4.             On
the applicable Purchase Date, in the event that Buyer fails to purchase any New
Asset from Seller that is identified in the related Custodial Delivery-
Certificate, Buyer shall deliver by facsimile to the Bailee at (212) 230-7830
to the attention of Robert J. Grados, Esq., an authorization (the “Facsimile
Authorization”) to release the Purchased Asset Files with respect to the
Purchased Assets identified therein to Seller. 
Upon receipt of such Facsimile Authorization, the Bailee shall release
the Purchased Asset Files to Seller in accordance with  Seller’s instructions.

 

5.             Following
the Purchase Date, the Bailee shall forward the Purchased Asset Files to
Deutsche Bank Trust Company Americas, 1761 East St. Andrew Place, Santa Ana,
California 92705, Attention: Mortgage Custody-QT031C (the “Custodian”) by
insured overnight courier for receipt by the Custodian no later than 1:00 p.m.
on the third Business Day following the applicable Purchase Date (the “Delivery
Date”).

 

6.             From
and after the applicable Purchase Date until the time of receipt of the
Facsimile Authorization or the applicable Delivery Date, as applicable, the
Bailee (a) shall maintain continuous custody and control of the related
Purchased Asset Files as bailee for 
Buyer and (b) is holding the related Purchased Assets as sole and
exclusive bailee for Buyer unless and until otherwise instructed in writing by
Buyer.

 

7.             Seller
agrees to indemnify and hold the Bailee and its partners, directors, officers,
agents and employees harmless against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including reasonable attorney’s
fees, that may be imposed on, incurred by, or asserted against it or them in
any way relating to or arising out of this Bailee Agreement or any action taken
or not taken by it or them hereunder unless such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (other than special, indirect, punitive or consequential damages,
which shall in no event be paid by the Bailee) were imposed on, incurred by or
asserted against the Bailee because of the breach by the Bailee of its
obligations hereunder, which breach was caused by negligence, lack of good
faith or willful misconduct on the part of the Bailee or any of its partners,
directors, officers, agents or employees. 
The foregoing indemnification shall survive any resignation or removal
of the Bailee or the termination or assignment of this Bailee Agreement.

 

8.             (a) 
In the event that the Bailee fails to produce a certificate representing a
Participation Interest or a Mortgage Note, Mezzanine Note, assignment of a
Purchased Asset or any other document related to a Purchased Asset that was in
its possession within ten (10) business days after required or requested
by Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify Seller or
Buyer in accordance with the succeeding paragraph of this Section 8.

 

XIII-2

 

(b)           The Bailee agrees to indemnify and
hold Buyer and Seller, and their respective affiliates and designees harmless
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including reasonable attorney’s fees, that may be imposed
on, incurred by, or asserted against it or them in any way relating to or
arising out of a Custodial Delivery Failure or the Bailee’s negligence, lack of
good faith or willful misconduct.  The
foregoing indemnification shall survive any termination or assignment of this
Bailee Agreement.

 

9.             Seller
hereby represents, warrants and covenants that the Bailee is not an affiliate
of or otherwise controlled by Seller. 
Notwithstanding the foregoing, the parties hereby acknowledge that the
Bailee hereunder may act as Counsel to Seller in connection with a proposed
loan and Paul, Hastings, Janofsky & Walker LLP, if acting as Bailee,
has represented Seller in connection with negotiation, execution and delivery
of the Amended and Restated Master Repurchase Agreement.

 

10.           In
connection with a pledge of the Purchased Assets as collateral for an
obligation of Buyer, Buyer may pledge its interest in the corresponding
Purchased Asset Files held by the Bailee for the benefit of Buyer from time to
time by delivering written notice to the Bailee that Buyer has pledged its
interest in the identified Purchased Assets and Purchased Asset Files, together
with the identity of the party to whom the Purchased Assets have been pledged
(such party, the “Pledgee”).  Upon
receipt of such notice from Buyer, the Bailee shall mark its records to reflect
the pledge of the Purchased Assets by Buyer to the Pledgee.  The Bailee’s records shall reflect the pledge
of the Purchased Assets by Buyer to the Pledgee until such time as the Bailee
receives written instructions from Buyer that the Purchased Assets are no
longer pledged by Buyer to the Pledgee, at which time the Bailee shall change
its records to reflect the release of the pledge of the Purchased Assets and
that the Bailee is holding the Purchased Assets as custodian for, and for the
benefit of, Buyer.

 

11.           From
time to time, subject to the acceptance and approval of Buyer, Seller may
request pursuant to a request substantially in the form of Annex 6 to the
Custodial Agreement the delivery by the Custodian to the Bailee of some or all
of the Purchased Asset File for the purposes set forth in such request.  Upon receipt of the Purchased Asset File or
such portions thereof, Bailee shall hold the same as sole and exclusive bailee
for Buyer until such time as the Purchased Asset File, or such portions
thereof, are redelivered to the Custodian or to such other Persons, as
otherwise directed by Buyer, subject in either case to the provisions set forth
herein governing standards of care and indemnification and except as otherwise
provided by any document specifically amending, supplementing or modifying the
terms hereof which is executed and delivered by all parties hereto in
connection with such delivery of the Purchased Asset File, or such portions
thereof, to Bailee.  Notwithstanding anything
to the contrary contained in this Section 11, Bailee shall have the right
to deliver such Purchased Asset File, or portions thereof, to Buyer upon five (5) days’
written notice to Buyer.

 

12.           The
agreement set forth in this Bailee Agreement may not be modified, amended or
altered, except by written instrument, executed by all of the parties hereto.

 

13.           This
Bailee Agreement may not be assigned by Seller or the Bailee without the prior
written consent of Buyer.

 

XIII-3

 

14.           For
the purpose of facilitating the execution of this Bailee Agreement as herein
provided and for other purposes, this Bailee Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute and be one
and the same instrument.

 

15.           This
Bailee Agreement shall be construed in accordance with the laws of the State of
New York, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.

 

16.           Capitalized
terms used herein and defined herein shall have the meanings ascribed to them
in the Amended and Restated Master Repurchase Agreement.

 

[signatures begin on next
page]

 

XIII-4

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [CAPITIAL TRUST, INC.]

  
	
   

  	
  [CT BSI FUNDING CORP.]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
  PAUL, HASTINGS, JANOFSKY & WALKER LLP,

  	
   

  
	
  Bailee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:  Robert J. Grados

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
  BEAR, STEARNS INTERNATIONAL LIMITED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
								

 

XIII-5

 

Schedule A

 

[List of Documents in the
Purchased Asset File]

 

XIII-6

 

Attachment 1

 

IDENTIFICATION
CERTIFICATE

 

On this         
day of                      ,
2006, the undersigned corporation (the “Seller”), under that certain Bailee
Agreement of even date herewith (the “Bailee Agreement”), among Seller, Paul, Hastings,
Janofsky & Walker LLP (the “Bailee”), and Bear, Stearns International
Limited, as Buyer, does hereby instruct the Bailee to hold, in its capacity as
Bailee, the Purchased Asset Files with respect to the Purchased Assets listed
on Exhibit A hereto, which Purchased Assets shall be subject to the terms
of the Bailee Agreement as of the date hereof.

 

Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Bailee Agreement.

 

IN WITNESS WHEREOF, Seller
has caused this Identification Certificate to be executed and delivered by its
duly authorized officer as of the day and year first above written.

 

 

	
   

  	
  [CAPITAL TRUST, INC.]

  
	
   

  	
  [CT BSI FUNDING CORP.]

  
	
   

  	
  Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

XIII-7

 

Exhibit A to
Attachment 1

 

PURCHASED ASSET SCHEDULE

 

XIII-8

 

Attachment 2

 

FORM OF TRUST
RECEIPT

 

                      
    , 200  

 

Bear, Stearns
International Limited

383 Madison Avenue

New York, New York 10179

 

	
  Re:

  	
  Bailee Agreement, dated as of
                        
      , 2006 (the “Bailee Agreement”) among Capital
  Trust, Inc. and CT BSI Funding Corp. (the “Seller”), Bear, Stearns
  International Limited (the “Buyer”) and Paul, Hastings, Janofsky &
  Walker LLP (the “Bailee”)

  

 

Ladies and Gentlemen:

 

In accordance with the
provisions of Paragraph 3 of the above-referenced Bailee Agreement, the
undersigned, as the Bailee, hereby certifies that as to each Purchased Asset
described in the Purchased Asset Schedule (Exhibit A to Attachment
1), a copy of which is attached hereto, it has reviewed the Purchased Asset
File and has determined that (1) all documents listed in Schedule A
attached to the Bailee Agreement are in its possession and (ii) such
documents have been reviewed by it and appear regular on their face and relate
to such Purchased Asset, and (iii) based on its examination, the foregoing
documents on their face satisfy the requirements set forth in Paragraph 2 of the
Bailee Agreement.

 

The Bailee hereby
confirms that it is holding each such Purchased Asset File as agent and bailee
for the exclusive use and benefit of 
Buyer pursuant to the terms of the Bailee Agreement.

 

All initially capitalized
terms used herein shall have the meanings ascribed to them in the
above-referenced Bailee Agreement.

 

	
   

  	
  PAUL, HASTINGS,
  JANOFSKY &

  WALKER LLP, BAILEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Robert J.
  Grados, Esq.

  

 

XIII-9

 

SCHEDULE 1-A

 

Form of UCC Financing Statement

 

	
  Debtor:

  	
   

  	
  Secured Party:

  
	
  [Capital
  Trust, Inc.]

  	
   

  	
  Bear, Stearns
  International Limited

  
	
  [CT BSI Funding
  Corp.]

  	
   

  	
  383 Madison
  Avenue

  
	
  410 Park Avenue,
  14th Floor

  	
   

  	
  New York, New
  York 10179

  
	
  New York, New
  York 10022

  	
   

  	
   

  

 

ATTACHMENT A TO UCC FINANCING STATEMENT

 

This
filing is for protective purposes only with respect to the Purchased Assets in
case the sale of any Purchased Asset under the Repurchase Agreement is
re-characterized as a grant of a security interest in any such Purchased Asset.  Capitalized terms used herein and not
otherwise defined shall have the meanings assigned in the Repurchase Agreement
(defined below).

The
collateral covered by this financing statement is all of the Debtor’s right,
title and interest in, to and under the following property, whether now owned
or existing, hereafter acquired or arising, or in which the Debtor now or
hereafter has any rights, and wheresoever located (the “Collateral”):

 

(a)           all of the Purchased Assets including
those identified in Schedule I hereto, all Income from such Purchased
Assets and all proceeds of all of the foregoing, and

 

(b)           all Hedging Transactions relating to
Purchased Assets entered into by Seller and all proceeds thereof.

 

The
following terms shall have the following meanings.  Such definition shall be equally applicable
to the singular and plural forms of the terms defined.

 

“Buyer”
means Secured Party.

 

“Custodian”
means Deutsche Bank Trust Company Americas or any successor Custodian appointed
by Buyer.

 

“Eligible
Assets” means any of the following types of loans listed below:

 

(i)            Participation Interests
in Whole Loans, B Notes or Mezzanine Loans that are performing (i.e., current
and not in monetary or material non-monetary default such that remedies can be
exercised by any Person) commercial mortgage loans secured by first liens on
multifamily and commercial real property with respect to which the ratio of
loan to value as determined by Buyer, in the exercise of its commercially
reasonable judgment, for the real property securing directly such loan
(including for purposes of this calculation, such loan and

 

1-A-1

 

any loan senior to or
pari passu with such loan and secured, directly or indirectly, by the related
property) does not exceed the percentage stated in the Confirmation.

 

(ii)           any other investment presented to and
approved by Buyer in its sole discretion which does not conform to the criteria
set forth in clause (i) above and which Buyer elects in its sole discretion
to purchase.

 

“Hedging
Transactions” means, with respect to any or all of the Purchased Assets, 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, with Buyer or its Affiliates as counterparties or one or more
other counterparties acceptable to Buyer.

 

“Income”
means, with respect to any Purchased Asset at any time, any principal
(including any principal prepayments) thereof and all interest, dividends or
other distributions thereon and with respect to any associated Hedging
Transaction, all proceeds thereof.

 

“Person”
means 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.

 

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

 

“Purchased
Asset File” shall mean the documents specified as the “Purchased Asset File” in
Section 6(b) of the Repurchase Agreement, together with any
additional documents and information required to be delivered to Buyer or its
designee (including the Custodian) pursuant to the Repurchase Agreement.

 

“Purchased
Assets” means (i) with respect to any Transaction, the Eligible Assets
sold by Seller to Buyer in such Transaction until such Eligible Assets are
repurchased by Seller pursuant to this Agreement and (ii) with respect to
the Transactions in general, all Eligible Assets sold by Seller to Buyer and
any Additional Assets delivered by Seller to Buyer pursuant to Section 3(a) of
the Repurchase Agreement until (x) such Eligible Assets are repurchased by
Seller pursuant to the Repurchase Agreement or (y) such Additional Assets are
re-delivered to Seller by Buyer pursuant to Section 3 of the Repurchase
Agreement.

 

“Repurchase
Agreement” means that certain Amended and Restated Master Repurchase Agreement
dated as of February 15, 2006, between Bear, Stearns International Limited
and Capital Trust, Inc., and CT BSI Funding Corp., a Delaware Corporation
(each a “Seller” with joint and several liability for the obligations of the
other Seller), (together such other annexes and schedules attached thereto) as
the same may be amended, restated or otherwise modified from time to time.

 

1-A-2

 

“Seller”
means Debtor.

 

SCHEDULE 1

 

Participation
Interest, dated        issued to               
in the amount of $                 ,
in that certain Mortgage Loan [(in the original principal amount of $                     )],
dated as of          , made by                   
to                     
under and pursuant to that certain Loan Agreement dated as of                   
between                 
and                   
and secured by that certain property located in                   ,
[as such Participation Interest was assigned by                    
to Capital Trust, Inc. pursuant to that certain Assignment and Assumption
Agreement dated as of                     ].

 

1-A-3

 

SCHEDULE 1-B

 

Form of UCC Financing Statement Amendment

 

	
  Debtor:

  	
   

  	
  Secured Party:

  
	
  [Capital
  Trust, Inc.]

  	
   

  	
  Bear, Stearns
  International Limited

  
	
  [CT BSI Funding
  Corp.]

  	
   

  	
  383 Madison
  Avenue

  
	
  410 Park Avenue,
  14th Floor

  	
   

  	
  New York, New
  York 10179

  
	
  New York, New
  York 10022

  	
   

  	
   

  

 

ATTACHMENT A TO UCC FINANCING STATEMENT AMENDMENT

 

This
filing is for protective purposes only with respect to the Purchased Assets in
case the sale of any Purchased Asset under the Repurchase Agreement is
re-characterized as a grant of a security interest in any such Purchased
Asset.  Capitalized terms used herein and
not otherwise defined shall have the meanings assigned in the Repurchase
Agreement (defined below).

 

The
collateral covered by this financing statement is all of the Debtor’s right,
title and interest in, to and under the following property, whether now owned
or existing, hereafter acquired or arising, or in which the Debtor now or
hereafter has any rights, and wheresoever located (the “Collateral”):

 

(a)           all of the Purchased Assets including
those identified in Schedule I hereto, all Income from such Purchased
Assets and all proceeds of all of the foregoing, and

 

(b)           all Hedging Transactions relating to
Purchased Assets entered into by Seller and all proceeds thereof.

 

The
following terms shall have the following meanings.  Such definition shall be equally applicable
to the singular and plural forms of the terms defined.

 

“Buyer”
means Secured Party.

 

“Custodian”
means Deutsche Bank Trust Company Americas or any successor Custodian appointed
by Buyer.

 

“Eligible
Assets” means any of the following types of loans listed in (i) through (iv) below:

 

(i)            Participation Interests in Whole
Loans, B Notes or Mezzanine Loans that are performing (i.e., current and not in
monetary or material non-monetary default such that remedies can be exercised
by any Person) commercial mortgage loans secured by first liens on multifamily
and

 

1-B-1

 

commercial real property
with respect to which the ratio of loan to value as determined by Buyer, in the
exercise of its commercially reasonable judgment, for the real property
securing directly such loan (including for purposes of this calculation, such
loan and any loan senior to or pari passu with such loan and secured, directly
or indirectly, by the related property) does not exceed the percentage stated
in the Confirmation.

 

(ii)           any other investment presented to and
approved by Buyer in its sole discretion which does not conform to the criteria
set forth in clause (i) above and which Buyer elects in its sole
discretion to purchase.

 

“Hedging
Transactions” means, with respect to any or all of the Purchased Assets, 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, with Buyer or its Affiliates as counterparties or one or more
other counterparties acceptable to Buyer.

 

“Income”
means, with respect to any Purchased Asset at any time, any principal
(including any principal prepayments) thereof and all interest, dividends or
other distributions thereon and with respect to any associated Hedging
Transaction, all proceeds thereof.

 

“Person”
means 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.

 

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

 

“Purchased
Asset File” shall mean the documents specified as the “Purchased Asset File” in
Section 6(b) of the Repurchase Agreement, together with any
additional documents and information required to be delivered to Buyer or its
designee (including the Custodian) pursuant to the Repurchase Agreement.

 

“Purchased
Assets” means (i) with respect to any Transaction, the Eligible Assets
sold by Seller to Buyer in such Transaction until such Eligible Assets are
repurchased by Seller pursuant to this Agreement and (ii) with respect to
the Transactions in general, all Eligible Assets sold by Seller to Buyer and
any Additional Assets delivered by Seller to Buyer pursuant to Section 3(a) of
the Repurchase Agreement until (x) such Eligible Assets are repurchased by
Seller pursuant to the Repurchase Agreement or (y) such Additional Assets are
re-delivered to Seller by Buyer pursuant to Section 3 of the Repurchase
Agreement.

 

“Repurchase
Agreement” means that certain Amended and Restated Master Repurchase Agreement
dated as of February 15, 2006, between Bear, Stearns International Limited
and Capital Trust, Inc., and CT BSI Funding Corp., a Delaware Corporation
(each a “Seller” with joint and several liability for the obligations of the
other Seller), (together such other annexes and

 

1-B-2

 

schedules attached thereto) as the same may be amended, restated or
otherwise modified from time to time.

 

“Seller”
means Debtor.

 

SCHEDULE 1

 

Participation Interest, dated       
issued to               
in the amount of $                 ,
in that certain Mortgage Loan [(in the original principal amount of $                     )],
dated as of          , made by                   
to                     
under and pursuant to that certain Loan Agreement dated as of                   
between                 
and                   
and secured by that certain property located in                   ,
[as such Participation Interest was assigned by                    
to Capital Trust, Inc. pursuant to that certain Assignment and Assumption
Agreement dated as of                     ].

 

1-B-3Exhibit 10.32.b

 

Bear, Stearns International Limited

383 Madison Avenue

New York, New York   10179

 

February 15, 2006

 

Capital Trust, Inc.

and

CT BSI Funding Corp.

410 Park Avenue

New York, New York  10022

 

	
  Re:

  	
  Pricing Terms for Amended
  and Restated Master Repurchase Agreement, dated as of February 15, 2006,
  by and between Bear, Stearns International Limited, Capital Trust, Inc.
  and CT BSI Funding Corp.

  

 

Ladies and Gentlemen:

 

Reference is
made to the Amended and Restated Master Repurchase Agreement, dated as of February 15,
2006 (the “Agreement”), by and between Bear, Stearns International Limited (“Buyer”),
Capital Trust, Inc., and CT BSI Funding Corp. (each a “Seller” with joint
and several liability for the obligations of the other Seller), as the same may
be amended from time to time.  The
purpose of this letter agreement (the “Letter Agreement”) is to set forth
certain terms governing the circumstances under which the Buyer will enter into
Transactions pursuant to the Agreement. 
Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the Agreement.

 

1.             Buyer’s Margin Ratio:  Unless otherwise agreed by the parties (which
agreement shall be memorialized in writing in the related Confirmation), the
Purchase Price on any Purchase Date prior to the Commitment Expiration Date
shall be equal to the product of the Market Value of the Purchased Assets and
the applicable Buyer’s Margin Ratio listed in the chart below.

 

2.             Purchase Fee:  The Purchase Fee shall be a one-time, up
front amount, to be paid by Sellers on the initial Purchase Date, equal to the
product of (i) the Maximum Committed Aggregate Purchase Price and (ii) [****]
less any Purchase Fee paid under the Bear, Stearns Funding Repurchase Agreement.

 

3.             Pricing Rate:  The Pricing Rate with respect to each
Transaction shall be one month LIBOR plus the spread listed in the chart below
(unless otherwise agreed by the parties, which agreement shall be memorialized
in writing in the related Confirmation):

 

****Material omitted pursuant to a request for
confidential treatment under Rule 24b-2. 
Material filed separately with the Securities Exchange Commission.

 

 

Buyer’s Margin
Ratio and Pricing Rate Spread for CDO I and CDO II Assets

 

	
   

  	
   

  	
  CDO I Assets

  	
   

  	
  CDO II Assets

  
	
  Buyers Margin Ratio

  	
   

  	
  [****]

  	
   

  	
  [****]

  
	
  Pricing Rate
  Spread  (LIBOR plus number of 

  basis points)

  	
   

  	
  [****]

  	
   

  	
  [****]

  

 

Buyer’s Margin
Ratio and Pricing Rate Spread for Assets other than CDO I and CDO II Assets

 

	
  Combined Property/ Underlying Assets Loan
  to Value Ratio

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mezzanine
  Loans, Junior Participations & B Notes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Buyer’s
  Margin 

  Ratio 

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pricing Rate
  

  Spread (LIBOR 

  plus number of 

  basis points)

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  

 

All loan to value ratios are
determined by a third-party appraiser mutually acceptable to Buyer and Sellers.
 If an Eligible Asset is a hotel, the
Buyer’s Margin Ratio and the Pricing Rate may change as agreed to by the
parties.

 

****Material omitted
pursuant to a request for confidential treatment under Rule 24b-2.  Material filed separately with the Securities
Exchange Commission.

 

 

4.             Sellers must enter into Transactions with respect to at
least three (3) Eligible Assets within six (6) months of the initial
Purchase Date (the “Required Transactions”) in order to maintain the Buyer’s
Margin Ratios set forth above.  Buyer
shall have the right in its sole discretion to reduce the applicable Buyer’s
Margin Ratios by ten percent (10%) in the event that Sellers enter into
Transactions with respect to one (1) or two (2) Eligible Assets.

 

 5.            If
Buyer exercises its right to reduce the Buyer’s Margin Ratio as provided in
paragraph 3 above within six (6) months prior to the Commitment Expiration
Date and a Seller elects to effect an Early Repurchase Date after Buyer has
exercised such right, then no Exit Fee shall be due or payable with respect to
such Early Repurchase Date.

 

The terms of this Letter
Agreement shall supersede all prior Letter Agreements between the parties.  The terms and provisions set forth in this
Letter Agreement shall terminate upon the termination of the Agreement.  Any agreement by Buyer to extend the term of
the Agreement shall not thereby extend any of the terms and provisions set
forth herein with respect to any Transactions entered into on or after any
renewal of the Agreement, unless expressly agreed to by Buyer.

 

This Letter Agreement may be
executed in any number of counterparts, each of which counterparts shall be
deemed to be an original, and all such counterparts shall constitute one and
the same instrument.

 

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

 

 

In the event of any
inconsistency between the terms and provisions contained herein and the
Agreement, the terms and provisions of this Letter Agreement shall govern.

 

	
   

  	
  BEAR,
  STEARNS INTERNATIONAL 

  LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David S.
  Marren

  	
   

  
	
   

  	
   Name:  David S. Marren

  
	
   

  	
   Title:
   Authorized Signatory

  

 

Acknowledged
and Agreed:

 

CAPITAL TRUST,
INC.

 

	
  By:

  	
  /s/ John R.
  Klopp

  	
   

  
	
   

  	
  Name : John
  R. Klopp

  
	
   

  	
  Title:  President and CEO

  

 

CT BSI FUNDING
CORP.

 

	
  By:

  	
   /s/ John R. Klopp

  	
   

  
	
   

  	
  Name:  John R. Klopp

  
	
   

  	
  Title:  President and CEO

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