Document:

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Exhibit 4.4

FORM OF

CERTIFICATE OF DETERMINATION OF

POWERS, PREFERENCES AND RIGHTS

OF

6.5% SERIES A NON-CUMULATIVE

EXCHANGEABLE PREFERRED STOCK

OF

FREMONT INVESTMENT & LOAN

          The undersigned, [name] and [name], the [title] and [title], respectively, of FREMONT
INVESTMENT & LOAN, a California industrial banking corporation (the “Corporation”), do
hereby certify:

          FIRST: The Second Amended and Restated Articles of Incorporation of the Corporation authorize
the issuance of [•] shares of preferred stock, par value $[•] per share (the “Preferred
Stock”), issuable from time to time in one or more series, and authorize the Board of Directors
of the Corporation to fix the number of shares constituting any such series, and to determine or
alter the dividend rights, dividend rate, conversion rights, voting rights, right and terms of
redemption (including sinking fund provisions), the redemption price or prices and the liquidation
preference of any wholly unissued series of such Preferred Stock, and the number of shares
constituting any such series.

          SECOND: The Board of Directors of the Corporation did duly adopt the resolutions attached
hereto as Exhibit A and incorporated herein by reference authorizing and providing for the creation
of a series of Preferred Stock to be known as “6.5% Series A Non-Cumulative Exchangeable Preferred
Stock” consisting of [•] shares, none of the shares of such series having been issued.

          We further declare under penalty of perjury under the laws of the State of California that the
matters set forth in this certificate are true and correct of our own knowledge.

          IN WITNESS WHEREOF, the undersigned have executed this certificate this [•] day of [•], 2007.

	 	 	 	 	 
	 	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 	 	 
	 	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT A

RESOLUTION OF THE BOARD OF DIRECTORS

OF FREMONT INVESTMENT & LOAN

ESTABLISHING

6.5% SERIES A NON-CUMULATIVE

EXCHANGEABLE PREFERRED STOCK

          RESOLVED that pursuant to the authority conferred upon the Board of Directors (the “Board
of Directors”) of Fremont Investment & Loan (the “Corporation”) by Article [•] of the
Articles of Incorporation, there is hereby established a series of the authorized Preferred Stock
of the Corporation having a par value of $[•] per share, which series shall be designated “6.5%
Series A Non-Cumulative Exchangeable Preferred Stock” (the “Series A Preferred Stock”),
shall consist of [•] shares and shall have the following rights, preferences and privileges:

     Section 1. Designation and Rank. The Series A Preferred Stock shall be superior and
prior in rank to all classes of common stock, par value $[•] per share (the “Common
Stock”), of the Corporation, and to all other classes and series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding other than the Series A Preferred
Stock and any other class or series of equity securities of the Corporation that is expressly
designated as ranking on a parity with (the “Parity Stock”) or senior to (the “Senior
Stock”) the Series A Preferred Stock as to either or both of dividend rights and rights upon
liquidation, winding up or dissolution of the Corporation. The Series A Preferred Stock shall be
junior to all creditors of the Corporation.

     Section 2. Dividends.

     (a) The holders of the then outstanding shares of Series A Preferred Stock will be entitled to
receive cash dividends at the annual rate of 6.5% (the “Applicable Rate”) of the
Liquidation Preference per share of the Series A Preferred Stock, payable quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year (“Dividend Payment Dates”) in
respect of the immediately preceding calendar quarter (each a “Quarterly Dividend Period”),
commencing on [•], 2007; provided that if any such payment date is not a Business Day then
such dividend shall be payable on the next Business Day. Such dividends shall be payable only
when, as and if declared by the Board of Directors and shall be non-cumulative. The cash dividends
provided for in this Section 1(a) are hereinafter referred to as “Base Dividends.”

     (b) If Base Dividends at the Applicable Rate on the Series A Preferred Stock for two (2)
consecutive Quarterly Dividend Periods remain unpaid through the 5th day following the
Dividend Payment Date for the last of such consecutive Quarterly Dividend Periods, the holders of
the Series A Preferred Stock will thereupon have the right to vote as a separate class to elect two
special directors to the Board of Directors (less the number of directors which Investor is then
entitled to elect pursuant to a Governance Provision, but in addition to the then authorized number
of directors), and at each succeeding annual meeting of stockholders of the Corporation thereafter
until such right is terminated as hereinafter provided. Thereafter, upon payment in full of all
dividends

 

 

for two (2) consecutive Quarterly Dividend Periods, the holders of Series A Preferred Stock
will be divested of such voting rights (unless and until the Corporation shall thereafter again
fail to so pay Base Dividends at the Applicable Rate on the Series A Preferred Stock for two (2)
Quarterly Dividend Periods) and the term of such special directors will thereupon terminate.

     (c) No dividends or distributions shall be paid or declared or set aside during such fiscal
year for payment or other distribution of assets upon the Common Stock or any other capital stock
of the Corporation ranking junior to the Series A Preferred Stock as to dividends or as to
distributions of assets upon Liquidation (“Junior Stock”) (other than in shares of, or
warrants or rights to acquire, solely Junior Stock) unless, at the date of such dividend or
distribution (the “Distribution Date”), all Base Dividends at the Applicable Rate on the
Series A Preferred Stock have been or are contemporaneously declared in full and sums set aside in
trust with a bank or trust company for the payment thereof for the shorter of the duration of the
following periods: (i) the period from the date of issuance of the Series A Preferred Stock through
the Distribution Date, and (ii) the period covering the immediately preceding eight Quarterly
Dividend Periods and for the elapsed portion of the then-current Quarterly Dividend Period through
the Distribution Date.

     (d) While any shares of Series A Preferred Stock remain outstanding, no shares of Common Stock
or any other class or series of Junior Stock shall be redeemed, retired, purchased or otherwise
acquired during such fiscal year for any consideration (or any payment made to or available for a
sinking fund for the redemption of any such shares) by the Corporation or any Subsidiary of the
Corporation (except by conversion into or exchange solely for Junior Stock).

     (e) Without the unanimous approval of the entire Board of Directors, no dividends or
distributions shall be paid on outstanding shares of Common Stock in an amount that, when added to
all prior dividends and distributions paid on Common Stock during the then-current and immediately
preceding Quarterly Dividend Periods, exceeds the product of nine (9) multiplied by the
total amount of dividends and distributions paid by the Corporation on the Series A Preferred Stock
in respect of the Quarterly Dividend Period immediately preceding the Distribution Date and the
elapsed portion of the then-current Quarterly Dividend Period through the Distribution Date.

     (f) The amount of Base Dividends per share of Series A Preferred Stock for any full Quarterly
Dividend Period shall be computed by multiplying the Applicable Rate by the Liquidation Preference
per share and dividing the result by four. Base Dividends payable on the shares of Series A
Preferred Stock for any period less than a full Quarterly Dividend Period shall be computed on the
basis of a 360-day year of twelve 30-day months and the actual number of days elapsed for any
period less than one month.

     Section 3. Liquidation Preference.

     (a) In the event of a liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary (a “Liquidation”), the holders of the Series A Preferred

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Stock then outstanding shall be entitled to receive out of the available assets of the
Corporation, whether such assets are stated capital or surplus of any nature, an amount on such
date equal to $9.00 per share of Series A Preferred Stock (the “Liquidation Preference”)
plus the amount of any declared but unpaid Base Dividends as of such date, calculated pursuant to
Section 1. Such payment shall be made before any payment shall be made or any assets distributed
to the holders of Common Stock or any other class or series of Junior Stock. Following payment to
the holders of the Series A Preferred Stock of the full preferential amounts described in the first
sentence of this Section 2(a), the remaining assets (if any) of the Corporation available for
distribution to stockholders of the Corporation shall be distributed, subject to the rights of the
holders of shares of any other series of Preferred Stock ranking prior to the Common Stock as to
distributions upon Liquidation, pro rata among the holders of the Common Stock and any other shares
of capital stock of the Corporation ranking on a parity with the Common Stock as to distributions
upon Liquidation. If upon any Liquidation, the assets available for payment of the Liquidation
Preference plus the amount of any declared but unpaid Base Dividends are insufficient to permit the
payment to the holders of the Series A Preferred Stock of the full preferential amounts described
in this paragraph, then all the remaining available assets shall be distributed among the holders
of the then outstanding Series A Preferred Stock pro rata according to the number of then
outstanding shares of Series A Preferred Stock held by each holder thereof.

     (b) Any securities to be delivered to the holders of the Series A Preferred Stock pursuant to
this Section 2 as a consequence of a Liquidation shall be valued at their Fair Market Value.

     Section 4. Redemption by Corporation.

     (a) At any time after the two-year anniversary of the Reset Date, if the Closing Price of FGC
Common Stock is at least 130% of the Exchange Price for any period of 20 consecutive trading days,
the Corporation may, upon thirty (30) days notice, redeem some or all of the then outstanding
shares of Series A Preferred Stock for cash at a redemption price equal to the Liquidation
Preference for such shares plus the amount of any declared but unpaid Base Dividends as of such
date.

     (b) In order to exercise its right of optional redemption, the Corporation shall, not less
than thirty (30) days prior to the redemption date, give to each holder of record of the Series A
Preferred Stock, at such holder’s address as it shall appear upon the stock register of the
Corporation on such date, notice by first class mail, postage prepaid. Each such notice of
redemption shall be irrevocable and shall specify the date that is the redemption date, the
redemption price, the identification of the shares to be redeemed, the place or places of payment
and that payment will be made upon presentation and surrender of the certificate(s) evidencing the
shares of Series A Preferred Stock to be redeemed. If fewer than all of the outstanding shares of
Series A Preferred Stock are to be redeemed, the number of shares to be redeemed shall be selected
by the Board of Directors pro rata or by lot or by any other method the Board of Directors
considers fair and appropriate.

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     (c) Notwithstanding anything in this Section 4 to the contrary, the holders of shares of
Series A Preferred Stock called for redemption shall have the right to exchange such shares
pursuant to Section 5 hereof until 5:00 p.m., New York City time, on the Business Day immediately
preceding the redemption date. From and after the redemption date (unless the Corporation defaults
in paying the redemption price of the shares called for redemption), dividends on the shares of
Series A Preferred Stock so called for redemption shall cease to accrue, and all rights of the
holders thereof as stockholders of the Corporation (except the rights to receive from the
Corporation the redemption price) shall cease.

     (d) The Corporation shall not redeem, retire or repurchase any shares of its Common Stock
prior to the exchange or redemption of the Series A Preferred Stock.

     Section 5. Voting Rights. Except as otherwise provided by applicable law, the holders
of outstanding shares of the Series A Preferred Stock will not have any voting rights.

     Section 6. Certain Definitions. The following terms shall have the following
respective meanings herein:

     “Articles of Incorporation” means the Second Amended and Restated Articles of
Incorporation of the Corporation.

     “Base Dividends” has the meaning assigned to it in Section 2(a) hereof.

     “Board of Directors” means the Board of Directors of the Corporation.

     “Business Day” means any day that is not a Saturday or Sunday or a day on which banks
are required or permitted to be closed in the State of New York.

     “Closing Price” means, for each trading day, the last reported sale price regular way
on the principal national securities exchange on which the Common Stock is then listed or admitted
for trading or, if the Common Stock is not listed on a national securities exchange, the average of
the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by FGC for that purpose.

     “Common Stock” has the meaning assigned to it in Section 1 hereof.

     “Corporation” has the meaning assigned to it in the introductory paragraph.

     “Distribution Date” has the meaning assigned to it in Section 2(c) hereof.

     “Exchange and Shareholder Rights Agreement” means the form of Exchange and Shareholder
Rights Agreement by and among the Corporation, FGC and the Investor attached hereto as Annex A.

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     “Exchange Price” has the meaning assigned to it in the Exchange and Shareholder Rights
Agreement.

     “Fair Market Value” means the amount which a willing buyer would pay a willing seller
in an arms-length transaction, as determined in good faith by the Board of Directors.

     “FGC” means Fremont General Corporation, a Nevada corporation.

     “FGC Common Stock” means the common stock, par value $1.00 per share, of FGC.

     “Governance Provision” means Sections 3(a)(1), 3(a)(2) and 3(a)(3) of any exchange and
shareholder rights agreement with the Corporation, in substantially the form of the Exchange and
Shareholder Rights Agreement, as may be amended from time to time (or any equivalent provisions
therein).

     “Governmental Entity” means any national, federal, state, municipal, local,
territorial, foreign or other government or any department, commission, board, bureau, agency,
regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral
body or public or private tribunal.

     “Investment Agreement” means the Investment Agreement, dated as of May ___, 2007, by
and among the Corporation, FGC and the Investor.

     “Investor” means Hunter’s Glen/Ford, Ltd., a Texas limited partnership, or any
Affiliate thereof which has assumed its obligations under the Investment Agreement.

     “Junior Stock” has the meaning assigned to it in Section 2(b) hereof.

     “Liquidation” has the meaning assigned to it in Section 3(a) hereof.

     “Liquidation Preference” has the meaning assigned to it in Section 3(a) hereof.

     “Original Issue Date” means the date on which the Series A Preferred was issued by the
Bank pursuant to the Investment Agreement.

     “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association, corporation, institution,
public benefit corporation, Governmental Entity or other entity.

     “Preferred Stock” means the preferred stock, par value $9.00 per share, authorized for
issuance from time to time in one or more series by the Corporation pursuant to the Articles of
Incorporation.

     “Series A Preferred Stock” has the meaning assigned to it in the introductory
paragraph hereof.

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     “Subsidiary” of any Person means any corporation, association, trust, limited
liability company, partnership, joint venture or other business association or entity (i) at least
50% of the outstanding voting securities of which are at the time owned or controlled, directly or
indirectly, by such Person; or (ii) with respect to which such Person possesses, directly or
indirectly, the power to direct or cause the direction of the affairs or management.

     Section 7. Reissuance. Shares of Series A Preferred Stock that have been issued and
reacquired in any manner, including shares redeemed, shall (upon compliance with any applicable
provisions of the laws of the State of California) have the status of authorized and unissued
shares of the class of Preferred Stock undesignated as to series and may be redesignated and
reissued as part of any series of Preferred Stock; provided that no such issued and
reacquired shares of Series A Preferred Stock shall be reissued or sold as Series A Preferred
Stock.

     Section 8. Dividend Received Deduction.

     For federal income tax purposes, the Corporation shall report distributions on the Series A
Preferred Stock as dividends, to the extent of the Corporation’s current and accumulated earnings
and profits (as determined for federal income tax purposes).

     Section 9. Amendment.

     This Certificate of Determination may not be amended (whether by merger or otherwise) without
the consent of the holders of a majority of the shares of Series A Preferred Stock.

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ANNEX A

[EXCHANGE AND SHAREHOLDER RIGHTS AGREEMENT]

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Exhibit 10.1

LOAN PARTICIPATION AGREEMENT

     THIS LOAN PARTICIPATION AGREEMENT (this “Agreement”), is made and entered into as of this
                     day of                     , 2007, by and between                      FREMONT INVESTMENT & LOAN, a
California Industrial Bank (“A Participant”), and                      [iSTAR SPE], a
                     (“B Participant”), with reference to the following:

     A. Fremont Investment & Loan, a California industrial bank (“Fremont”) has made a number of
Loans (hereinafter defined) as described on the Mortgage Loan Schedule attached hereto as
Exhibit A (the “Mortgage Loan Schedule”). Fremont and iStar Financial Inc. (“iStar”) have
entered into an Asset Purchase Agreement (the “Purchase Agreement”) with respect to the Loans and
certain other assets of Fremont. Pursuant to the Purchase Agreement, Fremont has transferred or
will transfer legal and equitable title to the Loans to B Participant.

     B. As partial payment of the purchase price provided for in the Purchase Agreement, iStar has
agreed to transfer to A Participant, on the terms and conditions hereinafter set forth, a seventy
percent (70%) participation interest in the Loans and the Loan Documents (as hereinafter defined).

     C. A Participant and B Participant desire to memorialize their respective agreements relating
to such participation interest and the servicing and repayment of the Loans by entering into this
Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and agreements hereinafter contained
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, A Participant and B Participant hereby agree as follows:

     1. DEFINITIONS.

     A. Incorporation of Definitions. Any term not expressly defined herein but which is
defined in one or more Loan Agreements (as hereafter defined) shall have the definition ascribed to
such term in the applicable Loan Agreement or in the Loan Agreements generally or the comparable
term for such concept if not so defined in a particular Loan Agreement.

     B. Defined Terms. In addition to those terms defined in the foregoing recitals and in
the other provisions of this Agreement, for purposes of this Agreement, unless the context clearly
requires otherwise, the following terms shall have the meanings and definitions hereinafter
respectively set forth:

     (i) A Participation. The term “A Participation” or “A Participation Interest”
shall mean the legal and beneficial ownership interest at any time of A Participant in the
Loans and in the Loan Documents and the Collateral relating thereto as
specified in this Agreement. As of the date hereof, the outstanding principal balance
associated with the A Participation is $                    . The A Participation will decrease (but not
below zero) on account of all payments of principal to A Participant made under Sections
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     (ii) A Participant Interest Rate. The term “A Participation Interest Rate”
shall mean an interest rate per annum equal to one and one-half percent (1.5%) plus LIBOR.

     (iii) Affiliate. The term “Affiliate” shall mean, with respect to any specific
entity, any other entity that directly, or indirectly through one or more of its
intermediaries, controls, is controlled by, or is under the common control with, such
specified entity.

     (iv) Acquiring Lender. The term “Acquiring Lender” shall have the meaning set
forth in Section 12B hereof.

     (v) Asset Management Fee. The term “Asset Management Fee” shall have the
meaning set forth in Section 7I hereof.

     (vi) B Participation. The term “B Participation” or “B Participation Interest”
shall mean the legal and beneficial ownership interest at any time of the Loans, the Loan
Documents, the Collateral relating thereto and all proceeds thereof other than the portion
of such assets allocated to the A Participation as specified in this Agreement. The B
Participation includes all Borrower Reimbursable Costs made by B Participant not reimbursed
by or on behalf of the applicable Borrower plus accrued and unpaid interest thereon
calculated at the Interest Rate applicable to the Loan in question and all Post-Acquisition
Costs made by B Participant plus interest thereon calculated at the Interest Rate applicable
to the Loan in question.

     (vii) Borrower. The term “Borrower” shall mean the borrower with respect to a
Loan.

     (viii) Borrower Reimbursable Costs. The term “Borrower Reimbursable Costs”
shall mean, collectively, any and all out-of-pocket fees, costs, expenses and indemnified
amounts incurred by B Participant at any time which a Borrower is obligated to pay or to
reimburse to B Participant pursuant to the applicable Loan Agreement or any other Loan
Documents, including, without limitation, the costs and expenses described in the Loan
Agreements (generally in Section 9.3), Protective Advances and the actual, out-of-pocket
costs and expenses incurred by B Participant in connection with its obligations under this
Agreement.

     (ix) Business Day. The term “Business Day” shall mean a weekday on which both
A Participant and B Participant are open for the transaction of normal business.

     (x) Costs. The term “Costs” shall mean either Borrower Reimbursable Costs or
Post-Acquisition Costs, or both, as the context may require.

     (xi) Date-Down Endorsement. The term “Date-Down Endorsement” shall mean an
endorsement to the Title Policy which is in form and content acceptable to B Participant and
which in any case (a) dates down the effective date of the Title Policy to the date on which
the applicable Disbursement it covers is made, (b) increases the

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liability limit of the
Title Policy by an amount equal to the principal amount of such Disbursement, and (c)
contains no new exceptions to title except those approved by B Participant.

     (xii) Declaration. The term “Declaration” shall mean a Condominium
Declaration.

     (xiii) Default Rate. The term “Default Rate” shall mean the default interest
rate prescribed in a Note.

     (xiv) Disbursement. The term “Disbursement” shall mean any advance or
disbursement of proceeds of a Loan, whether for principal or interest (without duplication),
made by B Participant pursuant to the applicable Loan Agreement or Note after the date
hereof.

     (xv) Effective Date. The term “Effective Date” shall mean the date set forth
on the signature page hereof.

     (xvi) Enforcement Action. The term “Enforcement Action” shall mean the
commencement of the exercise of any of the following remedies against any Borrower, any
Guarantor or any other Person: (a) acceleration of the maturity of any liability or
obligation of any Borrower or any Guarantor; (b) commencement of any litigation or
proceeding, including the commencement of any foreclosure proceeding, the exercise of any
power of sale, the sale by advertisement, obtaining of a receiver or taking of any other
remedial action with respect to, or the enforcement of any remedy against, any Project or
any of the property or assets of any Borrower or any Guarantor; (c) filing or joining in the
filing of any petition against any Borrower or any Guarantor of any Insolvency Proceeding or
any other commencement of an Insolvency Proceeding; (d) entering upon, taking possession of,
exercising control over or taking title (legal or equitable) to any Project or taking of a
deed or assignment in lieu of foreclosure; or (e) any legal action or proceeding, pursuant
to any Mezzanine Intercreditor Agreement; provided, however, that “Enforcement Action” shall
not include any draw under any letter of credit or certificate of deposit held under the
Loan Documents, provided that such draw is permitted under the terms of the Loan Documents.

     (xvii) Entitlement. The term “Entitlement” shall mean any final zoning,
platting, site plan or other applicable development approval or permit from any Governmental
Agency having jurisdiction relating to the development, ownership or operation of any
Project or the construction of any Renovations, including, without limitation, a conditional
use permit or a building permit.

     (xviii) Form W-8BEN Certification. The term “Form W-8BEN Certification” shall have the
meaning set forth in Section 28 hereof.

     (xix) Form W-8ECI Certification. The term “Form W-8ECI Certification” shall have the
meaning set forth in Section 28 hereof.

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     (xx) Fremont Insolvency Proceeding. The term “Fremont Insolvency Proceeding”
shall mean any proceeding under Title 11 of the United States Code (11 U.S.C. §§101 et seq.)
or any other insolvency, liquidation, reorganization or other similar proceeding concerning
Fremont, any regulatory receivership proceeding, any action for the dissolution of Fremont,
any proceeding (judicial or otherwise) concerning the application of the assets of Fremont,
for the benefit of its creditors, the appointment of or any proceeding seeking the
appointment of a trustee, receiver or other similar custodian for all or any substantial
part of the assets of Fremont or any other action concerning the adjustment of the debts of
Fremont or the cessation of business by Fremont.

     (xxi) Guarantors. The term “Guarantors” shall mean, collectively, the
guarantors of all or any portion of any Loan or all or any of any Borrower’s obligations set
forth and described in the Loan Documents.

     (xxii) Holdbacks. The term “Holdbacks” shall have the meaning set forth in the
Notes.

     (xxiii) In Balance. The term “In Balance” shall mean at the time of
determination that each Holdback is “in balance” in accordance with the terms of a Note.

     (xxiv) Insolvency Proceeding. The term “Insolvency Proceeding” shall mean any
proceeding under Title 11 of the United States Code (11 U.S.C. §§101 et seq.) or any other
insolvency, liquidation, reorganization or other similar proceeding concerning any Borrower
or any Guarantor, any action for the dissolution of any Borrower or any Guarantor, any
proceeding (judicial or otherwise) concerning the application of the assets of any Borrower
or any Guarantor, for the benefit of their respective creditors, the appointment of or any
proceeding seeking the appointment of a trustee, receiver or other similar custodian for all
or any substantial part of the assets of any Borrower or any Guarantor or any other action
concerning the adjustment of the debts of any Borrower or any Guarantor or the cessation of
business by any Borrower, except following a sale, transfer or other disposition of all or
substantially all of the assets of any Borrower in a transaction, if any, permitted under
the Loan Documents.

     (xxv) Interest Holdback. The term “Interest Holdback” shall mean the Holdback
for Interest as defined in a Note.

     (xxvi) Interest Rate. The term “Interest Rate” shall mean the rate at which
the outstanding principal balance of a Loan bears interest, as more particularly set forth
in a Note, including, without limitation, the Default Rate if applicable.

     (xxvii) Lenders. The term “Lender” shall mean any one of A Participant, B
Participant and any other Person who has acquired or subsequently acquires from A
Participant or B Participant an interest in the Loans, whether as a participant or a
co-lender, and the term “Lenders” shall mean A Participant, B Participant and such other
Person(s), collectively. Any subparticipant of A Participant or B Participant in
accordance with the terms of this Agreement is expressly excluded from being a
“Lender.” As of the Effective Date, A Participant and B Participant are the only Lenders.

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     (xxviii) LIBOR. The term “LIBOR” shall mean a floating interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the London Interbank
Offered Rate (LIBOR) with a one month maturity as reported in the Money Rates column or
section of The Wall Street Journal published on the second full Business Day preceding the
first day of a calendar month.

     (xxix) Loan and Loans. The term “Loan” shall mean an individual Loan. The
term “Loans” shall mean the Loans listed on the Mortgage Loan Schedule, including
participation interests and co-lending interests in Loans, as applicable.

     (xxx) Loan Agreement. The term “Loan Agreement” shall mean a Loan and Security
Agreement, made by and between a Borrower and Fremont, as assigned to B Participant,
together with all Modifications thereto.

     (xxxi) Loan Documents. The term “Loan Documents” shall mean all documents,
agreements, certificates, instruments and other writings now or hereafter executed by or
delivered or caused to be delivered by any Borrower, any Guarantors or any Mezzanine Lender
to or for the benefit of Lenders, evidencing, creating, guaranteeing or securing, or
otherwise executed or delivered in respect of, all or any part of a Loan or evidencing any
transaction contemplated thereby, and all Modifications thereto.

     (xxxii) Mezzanine Borrower. The term “Mezzanine Borrower” shall mean the
Borrower under a Mezzanine Loan related to a Loan.

     (xxxiii) Mezzanine Intercreditor Agreement. The term “Mezzanine Intercreditor
Agreement” shall mean any intercreditor agreement, recognition agreement or similar
agreement between Fremont and a Mezzanine Lender, as assigned to B Participant.

     (xxxiv) Mezzanine Lender. The term “Mezzanine Lender” shall mean the lender
under a Mezzanine Loan.

     (xxxv) Mezzanine Lender Loan Purchase. The term “Mezzanine Lender Loan
Purchase” shall have the meaning set forth in Section 12H hereof.

     (xxxvi) Mezzanine Loan. The term “Mezzanine Loan” shall mean a mezzanine loan
related to a Loan.

     (xxxvii) Mezzanine Loan Documents. The term “Mezzanine Loan Documents” shall
mean all documents, agreements, certificates, instruments and other writings now or
hereafter executed by or delivered or caused to be delivered by a Borrower, a Mezzanine
Borrower or any Guarantors to or for the benefit of Mezzanine Lender, evidencing, creating,
guaranteeing or securing all or any part of the Mezzanine Loan or evidencing any transaction
contemplated thereby, and all Modifications thereto.

     (xxxviii) Minimum Sales Price. The term “Minimum Sales Price” shall mean, for
each Condo Unit, a sales price of not less than the minimum sales price for such

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Condo Unit
set forth in the applicable Loan Agreement, generally on Exhibit D thereto, plus all
charges for upgrades, in accordance with such Loan Agreement.

     (xxxix) Modification. The term “Modification” shall mean any extension,
renewal, substitution, replacement, supplement, amendment or modification of any agreement,
certificate, document, instrument or other writing, whether or not contemplated in the
original agreement, document or instrument, which either (x) was executed and delivered to B
Participant prior to the Effective Date or (y) is made on or after the Effective Date in
accordance with this Agreement.

     (xl) Mortgage File. The term “Mortgage File” shall have the meaning set forth
in Section 10A hereof.

     (xli) Net Collections. The term “Net Collections” shall mean net proceeds from
the sale of the Collateral, after payment of any necessary and ordinary expenses incurred by
B Participant or the Ownership Entity in connection therewith, including, without
limitation, attorneys’ fees, costs of sale and all unpaid Asset Management Fees, Borrower
Reimbursable Costs and Post-Acquisition Costs.

     (xlii) Note. The term “Note” shall mean the promissory note evidencing a Loan
executed by a Borrower as maker in favor of Fremont as payee and endorsed to B Participant
and any other promissory note or notes hereafter evidencing a Loan, and all Modifications to
the foregoing.

     (xliii) Ownership Entity. The term “Ownership Entity” shall have the meaning
seth forth in Section 6C hereof.

     (xliv) Participation Certificate. The term “Participation Certificate” shall
have the meaning set forth in Section 2A hereof.

     (xlv) Permitted Transferee. The term “Permitted Transferee” shall mean any of
the following: (a) any Lender or any Affiliate of a Lender; provided that the
payment and performance of the obligations of such Affiliate under this Agreement are
guarantied by such Lender to the other Lender(s) in a manner satisfactory to such other
Lender(s); (b) an Affiliate of B Participant which has a net worth in excess of Two Hundred
Million Dollars ($200,000,000) at the time of the Transfer in question; (c) an investment
partnership or opportunity fund which has a net worth in excess of Two Hundred Million
Dollars ($200,000,000) at the time of the Transfer in question and is controlled or managed
by or under common control or management with any Lender; (d) any of the following entities
which has a net worth in excess of Two Hundred Million Dollars ($200,000,000) at the time of
the Transfer in question, (A) a federal or state chartered commercial bank or trust company
or federal or state chartered savings and loan association or insurance company organized
and existing under the laws of the United States, or any state thereof, (B) a foreign bank
or a branch office of a foreign bank, (C) a foreign or domestic pension fund, (D) a
foundation, college or university, (E)
a nationally recognized commercial credit corporation, (F) a domestic real estate
investment trust having an investment grade senior debt rating from a nationally

6

 

recognized
rating agency, (G) an investment bank having an investment grade senior debt rating from a
nationally recognized rating agency, or (H) an opportunity fund, investment partnership,
hedge fund or similar fund which is organized under the laws of one of the United States and
is controlled by an entity that constitutes a Permitted Transferee; or (e) an entity wholly
owned by any one of the entities described in clauses (a) through (d) above
and the obligations of which under this Agreement are guarantied by any such owning entity
described in any of such clauses (a) through (d) or by the A Participant or
the B Participant, as the case may be.

     (xlvi) Post-Acquisition Costs. The term “Post-Acquisition Costs” shall mean,
collectively, any and all reasonable out-of-pocket fees, costs, expenses and indemnified
amounts incurred by B Participant, on behalf of the Ownership Entity, from and after the
acquisition of title to any or all of the Collateral for a Loan by foreclosure, by deed in
lieu of foreclosure, by power of sale or by sale pursuant to the Uniform Commercial Code in
accordance with the Loan Documents, in connection with performing its obligations and duties
under this Agreement, including, without limitation, any and all expenses related to the
preservation, operation and management of the Collateral, but expressly excluding any and
all Borrower Reimbursable Costs.

     (xlvii) Protective Advance. The term “Protective Advance” shall mean an
advance made by B Participant in order to cover any and all reasonable expenses necessary to
protect or preserve the value of the Collateral securing a Loan and the priority of the
liens and security interests created by the Loan Documents relating thereto, including
without limitation taxes, insurance premiums, payment of ground rent, the costs of
prevention of waste, repairs, and maintenance, and foreclosure expenses and legal fees and
expenses relating thereto.

     (xlviii) REO Budget. The term “REO Budget” shall have the meaning set forth in
Section 7A hereof.

     (xlix) Sales Guidelines. The term “Sales Guidelines” shall have the meaning
set forth in Section 7A hereof.

     (l) Security Instrument. The term “Security Instrument” shall mean the
Mortgage and Fixture Filing, Deed of Trust and Fixture Filing, Deed to Secure Debt and
Fixture Filing or Indemnity Deed of Trust and Fixture Filing, executed by a Borrower (or
guarantor, if an indemnity deed of trust is used) in favor of Fremont, and assigned to B
Participant, to secure a Borrower’s liabilities and obligations under a Note and other Loan
Documents and all Modifications thereto.

     (li) Servicing Standards. The term “Servicing Standards” shall have the
meaning set forth in Section 5 hereof.

     (lii) Single Purpose Entity. The term “Single Purpose Entity” shall mean an
entity meeting the requirements of Exhibit C.

     (liii) Sources and Uses Schedule. The term “Sources and Uses Schedule” shall
mean, collectively, the Sources and Uses Schedule attached as an Exhibit to a Note

7

 

and
further described therein, as amended or replaced from time to time in accordance with the
terms of the related Loan Agreement and Note.

     (liv) Tax Code. The term “Tax Code” shall mean the United States Internal
Revenue Code of 1986, as amended.

     (lv) Third Party Intercreditor Agreement. The term “Third Party Intercreditor
Agreement” shall mean each participation agreement and co-lending agreement entered into by
Fremont, and assigned to B Participant, in connection with a Loan.

     (lvi) Third Party Rights. The term “Third Party Rights” shall have the meaning
set forth in Section 12I hereof.

     (lvii) Transfer Supplement. The term “Transfer Supplement” shall have the
meaning set forth in Section 12B hereof.

     (lviii) Transferring Lender. The term “Transferring Lender” shall have the
meaning set forth in Section 12B hereof.

     (lix) Uniform Commercial Code. The term “Uniform Commercial Code” shall mean,
with respect to each discrete element or category of the personal property Collateral, the
applicable Uniform Commercial Code.

     2. PARTICIPATION INTERESTS.

     A. Acquisition. Pursuant to the Purchase Agreement, B Participant hereby conveys,
transfers and assigns to A Participant and A Participant hereby acquires and takes from B
Participant the A Participation Interest. The A Participation Interest hereby acquired by A
Participant is evidenced by that certain Participation Certificate executed and delivered to A
Participant by B Participant on the Effective Date in the form of Exhibit B attached hereto
(a “Participation Certificate”).

     B. Nature of Participation. B Participant shall participate with A Participant in the
ownership, disbursement, debt service and payment of the Loans, in the Loan Documents, in the
Collateral and in the proceeds thereof, including, without limitation, in the acquired Collateral
listed on Exhibit A-1, with each Lender having its respective interest therein. The interests of
the Lenders shall, subject to Sections 3, 4, 7 and 8 hereof, be of
equal priority. A Participant shall have an undivided ownership interest in the Loans, in the Loan
Documents, in the Collateral for the Loans and in the proceeds thereof, including, without
limitation, in the acquired Collateral listed on Exhibit A-1, which shall at any time be equal to
the A Participation. A Participant hereby acknowledges that A Participant is participating in the
ownership of the Loans and that A Participant and B Participant are not investing in a common
business enterprise with each other. Except for the original Notes (and with respect to a Loan for
which a participation certificate rather than a Note has been issued, any original participation
certificates) which will be held by a custodian as set forth in Section 2C, all of the Loan
Documents and Mortgage Files shall be
delivered to B Participant (or any subservicer), and B Participant shall hold all of the Loan
Documents as custodian for the Lenders.

8

 

     C. B Participant as Lender of Record; Third Parties. Notwithstanding the
Participation Interest in favor of A Participant created by this Agreement, B Participant shall be
and remain the lender of record under the Loans, retaining the Loans and the Loan Documents in B
Participant’s own name. B Participant shall be, and hereby is, authorized to deal with all third
parties, including, without limitation, Borrowers, Mezzanine Lenders and other parties to Third
Party Intercreditor Agreements. A Participant hereby authorizes any third party, without inquiry
as to whether any action by B Participant is authorized hereunder, to deal with B Participant
concerning the Loan in the same manner as if A Participant’s Participation Interest therein were
not outstanding. As between A Participant and B Participant, nothing in the foregoing shall modify
any obligation of A Participant to B Participant or of B Participant to A Participant set forth in
this Agreement. B Participant may perform any of its obligations under this Agreement by or
through its Affiliates, agents, employees or attorneys, provided that the costs and fees of
such Affiliates, agents, employees or attorneys shall be borne exclusively by B Participant unless
such costs and fees constitute, for purposes of this Agreement, either (i) Borrower Reimbursable
Costs, in which case B Participant shall only look to Borrower for reimbursement therefor pursuant
to the Loan Documents and which shall otherwise be paid in accordance with the terms of this
Agreement, or (ii) Post-Acquisition Costs, in which case such Post-Acquisition Costs shall be paid
in accordance with the applicable provisions of this Agreement. All communications with Borrowers
shall be made by and through B Participant, and A Participant shall not communicate directly with
any Borrower, Guarantors or any of their respective principals, or any property manager or leasing
agent or any broker for the Collateral or any part thereof, regarding this Agreement or A
Participant’s Participation Interest, or cause any Borrower to be involved in or affected by any
dispute between A Participant and B Participant. Notwithstanding the foregoing, Lenders shall
notify Borrowers in writing, promptly following the Effective Date, of the existence of the
Participation Interest.

     D. Backup Security Interest. It is the intention of the parties hereto that the
conveyance of the A Participation contemplated by this Agreement shall constitute a conveyance,
transfer and assignment of an undivided beneficial interest in the Loans (and all Loan Documents
related thereto) and the proceeds thereof from B Participant to A Participant and that such
beneficial interest in the Loans of B Participant shall not be part of A Participant’s estate in
the event of the filing of a bankruptcy petition by or against A Participant under any bankruptcy
law. In the event that, notwithstanding the intent of the parties hereto, the conveyance, transfer
and assignment contemplated hereby is not recognized as such, this Agreement shall constitute a
security agreement under applicable law, and, in furtherance thereof B Participant shall be deemed
to have granted, and does hereby grant, to A Participant a security interest in the Loans for the
benefit of A Participant and its assignees as security for B Participant’s obligations hereunder,
which pledge will be perfected by the possession of the promissory notes and participation
certificates with respect to the Loans on behalf of A Participant by a financial institution agreed
to by the Lenders.

     3. FUNDING OF DISBURSEMENTS. All Disbursements under any Loan that are to be advanced
to or for the account of Borrowers pursuant to the Loan Documents after the
date hereof shall be funded by B Participant and not by A Participant, in the manner set forth
below:

9

 

     A. Disbursements for Interest. Notwithstanding the fact that any or all of the other
conditions to a Disbursement set forth in the Loan Documents may not have been satisfied with
respect to a Loan for a particular calendar month, so long as there is then no Event of Default
with respect to such Loan, and a Date-Down Endorsement (dated as of the date of the funding) is
obtained in connection therewith, B Participant shall fund, from the applicable Interest Holdback
and in accordance with the Loan Agreement and Loan Documents, without further direction from the
applicable Borrower, on the first (1st) day of each calendar month during the term of
this Agreement, all accrued interest on the Loans. Notwithstanding the foregoing, B Participant
shall have no obligation to fund interest from the Interest Holdback if B Participant has
determined to take an Enforcement Action, if the Interest Holdback is exhausted or if B Participant
has made a non-recoverability decision under Section 5K. Interest that would be payable to
B Participant under Section 4 may be disbursed to B Participant by book entry, and all interest
disbursed from the Interest Holdback, whether in cash or by book entry, shall be added to the
principal balance of the applicable Note.

     B. Disbursements for Construction and Other Holdbacks. B Participant agrees to
disburse Loan proceeds from the Holdbacks (other than the Interest Holdback) in accordance with and
subject to the terms and conditions of the applicable Loan Agreement and Loan Documents and the
terms and conditions of this Agreement.

     C. Disbursements for Borrower Reimbursable Costs. If a Borrower Reimbursable Cost is
to be paid from the proceeds of the Loan and if the applicable Loan Documents authorize debiting
the Loan or Borrower Reimbursable Cost without specific authorization from the applicable Borrower,
then, B Participant shall fund to itself such Borrower Reimbursable Cost without any specific
consent or authorization from the applicable Borrower or A Participant to the extent permitted by
the Loan Documents on the same basis as any other Disbursement made hereunder.

     D. Payment Procedure. All payments by a Lender to the other Lender shall be made in
accordance with the procedure set forth in Section 8 hereof.

     E. Compliance by Borrower with Loan Documents. The advancement of a Disbursement by B
Participant to or for the account of a Borrower shall not be deemed or construed to constitute a
representation or a waiver by B Participant with respect to a Borrower or a Borrower’s compliance
with the Loan Documents.

     F. Duty To Fund. Nothing in this Section 3 shall relieve B Participant of its
obligation to fund each Disbursement when and as required by the Loan Documents and this Agreement;
provided, however, that in no event shall B Participant’s total exposure for a particular Loan
principal be required to exceed the maximum current commitment for such Loan set forth on
Exhibit E, as same may be changed through a Modification.

     4. INTEREST. A Participant shall be entitled to interest on the A Participation at
the A Participant Interest Rate, and, subject to the provisions of Section 8B hereof, A
Participant
shall be entitled to be paid such interest to the extent of interest available in any calendar
month under Section 3A, and from interest paid in cash by Borrowers or Guarantors, and B
Participant shall receive all other interest, fees and charges (other than repayment of principal)
paid with

10

 

respect to the Notes and Loans in any calendar month, including Default Interest, all
prepayment fees, premiums and charges, exit fees, per unit exit fees, extension fees, late fees,
and other loan fees and assumption fees. If with respect to any calendar month there are
insufficient funds available from the sources described in the first sentence of this section to
pay interest to A Participant for such month, such unpaid interest shall accrue at the A
Participant Interest Rate until paid.

     5. SERVICING OBLIGATIONS OF B PARTICIPANT. B Participant shall administer and service
the Loans in accordance with the Loan Documents and the terms of this Agreement. B Participant
shall supervise and coordinate the making of all Disbursements pursuant to the Loan Documents and,
except as otherwise set forth in this Agreement, B Participant shall have the power and duty to
make decisions under, and to enforce and to perform in accordance with, the Loan Documents in
connection with loan administration, inspections, review of financial data and other matters
involved in the administration and servicing of the Loans. Without limiting the generality of the
foregoing, B Participant shall administer and service the Loan in accordance with the provisions of
Section 5A (collectively, the “Servicing Standards”):

     A. Servicing of Loan by B Participant. B Participant shall service the Loans, on
behalf of the A Participant and B Participant, with the same care, skill and diligence that B
Participant exercises in servicing similar loans for its account alone (assuming an arms’ length
relationship with the borrowers under such other loans and without regard to any other lending or
banking relationship with such borrowers or any of their respective Affiliates or any entities
controlled by some or all of the principals of such borrowers) and in accordance with all
applicable regulatory servicing requirements, subject to the specific rights and obligations set
forth herein. In no event shall B Participant be obligated to violate applicable laws or the terms
of any Loan Documents. Without limiting the generality of the foregoing, B Participant’s servicing
obligations hereunder shall include the following:

     (i) B Participant shall discharge in a timely manner each and every obligation which
the Loan Documents provide is to be performed by the lender thereunder, either on its own
behalf or on behalf of A Participant;

     (ii) B Participant shall incur costs (including Protective Advances) in accordance with
the provisions of this Agreement and the Loan Documents; and

     (iii) Subject to the provisions of this Agreement, B Participant shall in all other
respects be responsible for the administration of the Loans.

     B. Books and Records. B Participant shall at all times keep proper books of account
and records regarding the Loans and the Lenders’ interests in the Loans. Such books and records
shall be available for inspection by A Participant or its representatives and agents at the office
of B Participant described in Section 19 hereof at all reasonable times during B
Participant’s normal business hours on any Business Days, in each instance upon ten (10) Business
Days’ prior notice
to B Participant. In addition, upon request by A Participant, B Participant, at the sole cost
and expense of A Participant, shall promptly send copies (the number of copies of which shall be
reasonable) of such books and records to A Participant.

11

 

     C. Collection of Payments; Interest Holdback; Direct Payment of Fees. Subject to the
provisions of this Agreement, B Participant shall have the exclusive right and obligation to
collect any and all sums (including, without limitation, interest payable by Borrowers directly and
interest advanced from any Interest Holdback, as described in Section 3B hereof) due or
collectible in connection with the Loans, including, without limitation, by making a draw under any
letter of credit or certificate of deposit held by B Participant, provided that such draw is
permitted by the terms of the Loan Documents.

     D. Allocation of Expenses. B Participant shall use commercially reasonable efforts to
recover from Borrowers and, to the extent of any guaranty for same, Guarantors, all Borrower
Reimbursable Costs incurred by B Participant. To the extent not reimbursed by a Borrower or
Guarantor pursuant to the foregoing, B Participant shall advance any Borrower Reimbursable Costs.
Such advanced Borrower Reimbursable Costs shall bear interest at the applicable Interest Rate and
shall be paid to B Participant, along with such accrued interest, first from any repayment thereof
by the applicable Borrower thereof and then from principal payments on the affected Loan before any
distribution of principal to Lenders with respect to such Loan. Each Lender shall be solely
responsible for any taxes, breakage costs, swaps or other hedge agreements, any regulatory
requirements (including capital adequacy requirements and LIBOR requirements) that are specific or
personal to such Lender as an entity.

     E. B Participant’s Duty To Advise A Participant; Delivery of Default Notices. B
Participant shall deliver to A Participant such information relating to the Loans as A Participant
may reasonably request from time to time; provided, however, that to the extent A
Participant requests information which is dependent on B Participant obtaining such information
from a Borrower, Guarantor or other third party, it shall not be a breach by B Participant
hereunder if B Participant fails to provide such information to A Participant because a Borrower,
Guarantor or other third party has failed to provide such information to B Participant. B
Participant shall also use its commercially reasonable efforts to promptly advise A Participant of
any matter of which B Participant becomes aware relating to the Loans, any of the Collateral, or
any Borrower that, in B Participant’s commercially reasonable judgment, materially and adversely
affects the interests of the Lenders hereunder. B Participant shall deliver to A Participant a
copy of any written notices of default sent to a Borrower or Guarantor.

     F. Limitation on B Participant’s Liability. Neither B Participant nor any of its
officers, directors, employees, attorneys or agents shall be liable for any action taken or omitted
to be taken by them or any one of them under or in connection with the Loans, the Collateral or any
portion thereof or this Agreement, except for B Participant’s gross negligence, willful misconduct
or material breach of this Agreement. B Participant shall incur no liability to A Participant by
acting in good faith upon any notice, consent, certificate or other instrument or writing
(including telegram, cable, telex, e-mail or telecopy) reasonably believed by B Participant to be
genuine and to have been signed or sent by the proper party.

     G. Releases of Collateral. B Participant is hereby authorized, as agent for and in
the name of A Participant and B Participant and without any further consents or authorizations of A
Participant, to (i) consent to the subordination of the lien of the Security Instrument to any
Declaration to the extent required by the Loan Documents or by law, (ii) grant partial releases of
any individual Condo Units to the extent allowed by the Loan Documents, and (iii) grant partial

12

 

releases of the condominium common areas so long as such partial releases are effected in
substantial compliance with all of the pertinent requirements and conditions of the Loan Documents.
B Participant is further authorized to release or assign any lien granted to or held by B
Participant upon any Collateral upon payment of any Loan in full and satisfaction in full of all of
the Secured Obligations with respect to a Loan and upon termination of this Agreement.

     H. Servicing and Loan Administration Decisions.

     (i) B Participant Decisions. B Participant shall have full power and
authority, acting alone or through sub-servicers (it being understood that use of a
subservicer will not release B Participant of its obligations under this Agreement), to do
or cause to be done any and all things in connection with the servicing and administration
of the Loans that it may deem necessary or desirable, may make all servicing decisions in
its sole and absolute discretion, subject to the Servicing Standards, including, without
limitation, the following:

     (a) (i) Modify or amend in any material respect any of the Loan Documents,
(ii) waive any of the Lenders’ material rights thereunder, (iii) waive any material
condition to any Borrower’s right to receive Disbursements, insurance proceeds,
condemnation awards or other sums pursuant to the Loan Documents or to the
completion of the Renovations or any restoration following a casualty or
condemnation or to the entering into of any Condo Purchase Agreement or to closing
any sale of any Condo Unit or obtaining a partial release in connection therewith,
(iv) determine if any Holdback is In Balance, and (v) grant any material approvals
or determinations with respect to Cost Savings, or modifications of or reallocations
within the Sources and Uses Schedule.

     (b) Forgive or reduce the Indebtedness of a Borrower under any of the Loan
Documents (including interest at the Default Rate and late fees), increase the
Indebtedness (including the Protective Advances (subject to the limitations
contained herein)) evidenced by the Notes or any of the other Loan Documents, and
permit the Loan Documents to secure any indebtedness other than the Indebtedness.

     (c) Reduce the Interest Rate under, or modify the maturity date of, any Note.

     (d) Release or approve a transfer or encumbrance of any of the Collateral or
accept substitute collateral for the Loan or agree to reduce any of the Condo
Minimum Sales Prices or the Condo Release Prices.

     (e) Release any party or parties now or hereafter liable for the payment of the
Loan or the performance of any other obligation relating thereto, including, without
limitation, in connection with any guaranty or any environmental indemnity.

     (f) Permit the Collateral, or any portion thereof or any interest therein, or
the beneficial ownership of Borrower, or any portion thereof, to be conveyed or

13

 

transferred to any other person or persons or permit the Indebtedness, or any
portion thereof, to be assumed by any other person or persons.

     (g) Cancel or agree to the termination of any of the Loan Documents.

     (h) Approve any change order which would materially alter the use, type or
construction quality of the Collateral or reduce the number of Condo Units set forth
in the Condo Plan or any other Material Change Order.

     (i) Consent to any agreement in any Insolvency Proceeding relating to any Loan,
any Borrower, any Guarantor, or any Collateral, including, without limitation,
voting for a plan of reorganization. Notwithstanding the foregoing, B Participant
may take any and all actions reasonably necessary to obtain relief from any stay
imposed as part of (or seek dismissal of) any Insolvency Proceeding relating to any
Loan, any Borrower, any Guarantor or any Collateral.

     (j) Consent to any direct or indirect transfers or pledges of the ownership
interests in any Borrower, any change in management of any Borrower (or its
permitted successors and assigns), any material change in the organizational
documents of any Borrower or any Mezzanine Borrower (or any successor manager), or
any transfers of the equity interests of any Mezzanine Borrower (or any successor
manager).

     (k) Approve any material modification, extension or termination of any Lease to
the extent such material modification, extension or termination requires Lender’s
consent pursuant to the terms of the Loan Documents.

     (l) Subordinate the liens of the Security Instrument or any other Loan
Document.

     (m) Consent to any senior or subordinate financing affecting Borrower or the
Collateral, or any mezzanine financing affecting Borrower or any direct or indirect
member of Borrower.

     (n) Waive any material default under the Loan Documents.

     (o) Consent to material alterations of the Condo Plans or any material physical
alterations of the Collateral.

     (p) Settle, or consent to the settlement of, (1) any insurance claim or (2) any
condemnation claim.

     (q) Consent to the application of condemnation awards or insurance proceeds for
any purpose for the restoration of any Project in accordance with the terms of the
Loan Documents or application to the Secured Obligations.

     (r) Materially amend, or waive any material provision of, any Mezzanine
Intercreditor Agreement or Third Party Intercreditor Agreement,

14

 

consent to any
material amendment to, or waiver of any material obligation under, any Mezzanine
Loan Documents, and make all decisions with respect to the Loans under any
Intercreditor Agreement and Third Party Intercreditor Agreement.

     (s) Consent to any change in any Project that would result in the termination
or unavailability of any material Entitlement, franchise, license or approval for
the Project contemplated by the Loan Documents.

     (t) Take any Enforcement Action.

     (u) Sell any Loan to a third party, free of the participation interests created
hereunder, that is considered by B Participant to be expensive or time consuming to
service or to present unusual servicing difficulties in comparison to the average
Loans in the portfolio, or credit impaired or likely to become credit impaired, so
long as the Net Collections of such sale are distributed as set forth in Section
7D hereof or otherwise sell any Loan with the consent of A Participant, such
consent not to be unreasonably withheld.

     (v) Accept a deed in lieu or in aid of foreclosure.

     (w) If applicable, approve a Mezzanine Loan on the terms set forth in the Loan
Agreement and enter into a Mezzanine Intercreditor Agreement in connection
therewith.

     (x) If the applicable Loan is subject to a Third Party Intercreditor Agreement
with any entity other than Affiliate of B Participant, exercise any buy-sell rights,
redemption rights or similar rights.

     I. Reporting. B Participant shall furnish A Participant, on the fifteenth day of each
month (or the first Business Day thereafter) a report on the Loans in the form set forth on
Exhibit F.

     J. Servicing Fees Payable to B Participant. B Participant shall perform its loan
servicing obligations and exercise its rights under this Agreement at no cost or expense to A
Participant other than B Participant’s reasonable, actual, out-of-pocket costs and expenses
incurred in connection with its loan servicing obligations and rights hereunder, which shall be
advanced by B Participant, bear interest at the Interest Rate for the applicable Loan and be repaid
from any principal payments on the affected Loan before any distribution of principal to Lenders
with respect to the Loan.

     K. Nonrecoverability. Notwithstanding anything to the contrary contained herein, in
no event shall B Participant be obligated to advance any Borrower Reimbursable Cost, interest
payments with respect to a Loan, Protective Advance or Post-Acquisition Cost if B Participant
determines, in its sole discretion, that such amount, when combined with all previous such advances
for such Loan, would not ultimately be recoverable from insurance proceeds, condemnation proceeds,
liquidation proceeds or proceeds from the sale of such Loan or Collateral.

15

 

     6. DEFAULTS; ACQUISITION OF COLLATERAL.

     A. Notice of Default to Other Lender. Each Lender shall give prompt telephonic and
written notice to the other Lender of any material default by a Borrower under any of the Loan
Documents of which the first Lender acquires knowledge, whether such knowledge is acquired by
reason of notice or otherwise. Each Lender shall promptly forward to the other Lender copies of
any and all notices, correspondence and other materials that may be sent to or received by the
first Lender in connection with any such default by a Borrower.

     B. Discretion of B Participant in Responding to Defaults of Borrower. Upon the
occurrence of an Event of Default under any of the Loan Documents, B Participant shall determine
the response to such default and course of action with respect to such default, and B Participant
shall have no such duty to consult with A Participant, including, without limitation, (i) the
selection of attorneys to be used in connection with any action, whether judicial or otherwise, to
protect the respective interests of the Lenders in the Loan and the Collateral, (ii) the
declaration and recording of a notice of such default and the acceleration of the maturity of the
Loan, (iii) the institution of proceedings to foreclose the Loan Documents securing the Loan
pursuant to the power of sale contained therein or through a judicial action, (iv) the institution
of proceedings against any Guarantor, (v) the acceptance of a deed in lieu of foreclosure, (vi) the
purchase of the real property Collateral at a foreclosure sale or trustee’s sale or the purchase of
the personal property Collateral at a Uniform Commercial Code sale, and (vii) the institution or
continuation of proceedings to obtain a deficiency judgment against such Borrower or any Guarantor.

     C. Acquisition of Collateral. If title to any or all of the Collateral is now owned
or hereafter acquired by B Participant by foreclosure, by deed in lieu of foreclosure, by power of
sale or by sale pursuant to the Uniform Commercial Code, or otherwise, title to all such Collateral
so acquired shall be held in the name of a limited liability company or such other entity as may be
approved by the B Participant (the “Ownership Entity”) (whether already in existence or formed by B
Participant for such purpose), in which B Participant or its wholly-owned subsidiary or Affiliate
shall be the sole managing member and in which B Participant (or its wholly-owned subsidiary or
Affiliate) shall have a membership interest and A Participant shall have a membership interest that
allows it to receive interest and principal payments in accordance with Sections 4 and
7D hereof. The purposes of the Ownership Entity shall be to hold the Collateral pending
sale, complete construction of such Project, sell any Condo Units, and operate the Collateral as
efficiently as possible in order to minimize financial loss to the Lenders and to sell the
Collateral as promptly as practicable in a way designed to minimize financial loss to the Lenders.
If so determined by B Participant, in its sole discretion, B Participant may cause its interest in
any Ownership Entity, but not that of the A Participant, to be
held through a Taxable REIT Subsidiary (as defined in the Tax Code) with respect to B
Participant, and B Participant shall have the right to make the necessary elections under the Tax
Code. Nothing in this Section 6C or anything else in this Agreement shall be deemed to
affirmatively require B Participant to acquire all or any portion of the Collateral in the event of
significant environmental contamination thereof.

     D. Management and Disposition of Acquired Collateral; Expenses. All decisions
concerning the management and maintenance of the Collateral acquired by the Ownership Entity

16

 

shall
be made in the manner set forth in Section 7 hereof. During the period that the Collateral
acquired by any Ownership Entity is subject to A Participant’s and B Participant’s Participation
interests, all expenses shall be funded by B Participant (to the extent not payable out of
revenues) and shall accrue interest at the Interest Rate.

     7. ASSET MANAGEMENT OBLIGATIONS OF B PARTICIPANT. After foreclosure of the Security
Instrument or acceptance of a deed in lieu of foreclosure or acquisition of the Collateral by power
of sale or pursuant to the Uniform Commercial Code, B Participant shall serve as asset manager for
the acquired Collateral and shall manage such Collateral in accordance with the Servicing Standards
and Section 7F, subject to the specific rights and obligations set forth herein. B
Participant shall perform such asset management obligations at no cost or expense to the Lenders
other than the Asset Management Fees payable to B Participant by the Lenders pursuant to
Section 7I hereof and reimbursement for the reasonable expenses referred to in Section
7D hereof that are advanced or incurred by B Participant in connection with its obligations
under this Section 7 in accordance with said Section 7D. B Participant may
perform, at no additional cost to Lenders, any of its obligations hereunder by or through its
Affiliates, agents, employees or attorneys (but the B Participant shall remain liable therefor). B
Participant shall supervise and coordinate the construction, ownership, management, leasing and
preservation of the Collateral as well as all other matters involved in the administration and
preservation of the Collateral. Without limiting the generality of the foregoing, B Participant
shall administer the Collateral in accordance with the following:

     A. Management of Collateral by B Participant. B Participant’s asset management
obligations hereunder, in its capacity as the manager of the Ownership Entity, shall include the
following:

     (i) B Participant shall cause the Ownership Entity to retain property management and
leasing firms and other agents and contractors.

     (ii) B Participant shall cause the Ownership Entity to prepare, or cause to be
prepared, quarterly operating statements, quarterly financial statements and annual income
tax returns for the Collateral and the Ownership Entity, all in accordance with generally
accepted accounting principles consistently applied in the United States.

     (iii) B Participant shall cause the Ownership Entity to prepare, or cause to be
prepared, (y) annual operating and capital budgets for the operation of the Collateral and,
if construction of the Project is not yet completed, a construction budget (“REO Budget”),
and (z) sales reports, progress reports and other similar types of reports customary for
entities of the same type as the Ownership Entity, and B Participant shall
cause the agents and contractors described in subsection (i) above to comply
with the REO Budget.

     (iv) B Participant shall cause the Ownership Entity to distribute monthly reports to
the Lenders reflecting any net operating income (less reasonable reserves as set forth in
the REO Budget) from the Collateral.

17

 

     (v) If required because the Project has not been completed, or if set forth in the REO
Budget, B Participant shall cause the Ownership Entity to enter into contracts for the
completion and maintenance of the Project, including contracts with the general contractor,
the Project architect and the major subcontractors.

     (vi) B Participant shall cause the Ownership Entity to enter into and consummate
contacts for the sale of Condo Units pursuant to parameters determined by B Participant,
which parameters need not require a minimum selling price for any such Condo Unit greater
than the Condo Minimum Sales Price for such Condo Unit. The guidelines described in this
Section 7A(vi) shall collectively be referred to herein as the “Sales Guidelines”.

     (vii) Following acquisition of the Collateral as provided herein, B Participant (A)
shall have the right but not the obligation to terminate the property manager or the
exclusive sales agent (if any) and (B) shall have the sole right to hire and terminate
property managers, sales agents and, if the Project is not then fully complete at the time
in question, contractors, architects and other design and construction professionals and
consultants.

     (viii) B Participant shall cause the Ownership Entity to maintain property, casualty
and liability insurance that is materially similar to the insurance required to be provided
by Borrower immediately prior to the acquisition of the Collateral and materially similar to
the insurance customarily maintained for similar properties in the relevant market.

     (ix) B Participant shall cause the Ownership Entity to use its reasonable efforts to
sell the Collateral to an unaffiliated third party for cash within three (3) years after the
date of the Ownership Entity’s acquisition of the Collateral.

     (x) B Participant shall cause the Ownership Entity to hire legal counsel when necessary
or desirable.

     B. Books and Records. B Participant shall cause the Ownership Entity at all times to
keep proper books of account and records regarding the Collateral. Such books and records shall be
available for inspection by A Participant or its representatives and agents at the office of
Participant described in Section 19 hereof at all reasonable times during B Participant’s
normal business hours and on any Business Day upon not less than ten (10) Business Days’ prior
notice to Participant; further, upon request by A Participant, B Participant, at the sole cost and
expense of A Participant, shall promptly send copies (the number of which shall be reasonable) of
such books and records to A Participant.

     C. Collection of Revenue. Subject to the terms of this Agreement, B Participant shall
have the exclusive right and obligation to collect any and all revenues generated by the Collateral
(including proceeds from the sale of Condo Units), deposit such revenues into an interest bearing
account for the benefit of the Lenders, and pay all Post-Acquisition Costs from such revenues. All
such revenues shall be distributed at the times and in the manner provided in Section 7D
hereof.

18

 

     D. Allocation of Expenses. B Participant shall use its reasonable efforts to recover
from the operation of the Collateral all reasonable expenses incurred by B Participant in
connection with the management of the Collateral in accordance with this Agreement. No less
frequently than once each calendar month, subject to the immediately preceding sentence of this
Section 7D, all net cash flow from the Collateral shall be distributed in the following
order:

     (i) First, to pay unpaid Post-Acquisition Costs incurred in accordance with this
Agreement in connection with the preservation, operation and management of the Collateral,
and any unpaid Borrower Reimbursable Costs for the affected Loan, together with interest
thereon at the Interest Rate for the affected Loan.

     (ii) Second, to pay any unpaid Asset Management Fees, in accordance with this
Agreement.

     (iii) Third, to fund such reserves for the payment of real property taxes, insurance
premiums and the like and operating expenses and capital expenditures, and in such amounts,
as are set forth in the REO Budget.

     (iv) Fourth, to be applied, along with all other amounts received on the other Loans
except for principal repayments, as set forth in Section 4.

     (v) Fifth, with respect to any Net Collections received under Section 7H,
seventy percent (70%) to A Participant and thirty percent (30%) to B Participant.

     E. B Participant’s Duty To Advise A Participant. In addition to the requirements of
Section 7A hereof, after acquisition of the Collateral, B Participant shall deliver to A
Participant such monthly reports relating to the Collateral as A Participant may reasonably
request. B Participant shall also use its reasonable efforts promptly to advise A Participant of
any matter of which B Participant becomes aware relating to any of the Collateral that, in B
Participant’s reasonable judgment, materially affects the interests of the Lenders hereunder.

     F. Standard of Care. B Participant shall exercise the same degree of care in the
management of the Collateral that B Participant would exercise if such Collateral were being held
by B Participant for its own account alone, and B Participant shall manage the Collateral in
accordance with all applicable regulatory requirements. Neither B Participant nor any of its
officers, directors, employees, attorneys or agents shall be liable for any action taken or omitted
to be taken by them or any one of them under this Agreement or in connection with the Collateral or
any portion thereof, except for gross negligence, willful misconduct or material breach of this
Agreement. B Participant shall incur no liability to A Participant by acting in good faith upon
any notice, consent, certificate or other instrument or writing (including telegram,
cable, telex or telecopy) reasonably believed by B Participant to be genuine and to have been
signed or sent by the proper party.

19

 

     G. Post Acquisition Major Decisions. Subject to the standard of care set forth in
Section 7F above, B Participant may take all of the following actions, without consultation
with or approval of A Participant:

     (i) Enter into any capital transaction, including the sale, transfer or release of a
portion of the Collateral or purchase money financing in connection with the sale of a
portion of the Collateral (the sale, transfer or release of all or substantially all of the
Collateral shall be governed by the provisions of Section 7H hereof).

     (ii) Incur indebtedness for borrowed money.

     (iii) Authorize capital improvements and physical or structural changes to the
Collateral.

     (iv) Authorize any easements or other changes to title, other than recordation of the
Declaration or substantially similar declaration of condominium, subordination of the lien
of the Security Instrument to the Declaration or such substantially similar declaration, and
the recording of documents contemplated therein.

     (v) Settle any insurance claim and settle any condemnation awards.

     (vi) Execute any written release of a Borrower, any Guarantor, any Mezzanine Lender, or
any other party now or hereafter liable for the payment of a Loan or the performance of any
other obligation relating thereto, including in connection with any Guaranty, any
Environmental Indemnity, or the Mezzanine Intercreditor Agreement, or amend in any way any
Mezzanine Intercreditor Agreement or Third Party Intercreditor Agreement or enter into any
other agreement with a Mezzanine Lender.

     (vii) Enter into any lease for the Collateral or any new property management agreement
relating to the Project, or approve any modification to a Lease, property management
agreement, exclusive sales agreement, architect’s agreement, construction agreement, or
other material agreements relating to the Project.

     (viii) Obtain any insurance for the Ownership Entity or the Collateral consistent with
insurance customarily maintained for similar properties in the relevant market except as
required by applicable Law after submission of the Project to a condominium form of
ownership.

     (ix) Make any changes in the Ownership Entity’s accounting methods (from generally
accepted accounting principles consistently applied) or make any tax elections (including an
election to have the Ownership Entity taxed as a “pass-through” entity).

     (x) Make expenditures for any REO Budget line item.

     (xi) Permit any change in the Project that would result in the termination or
unavailability of any material Entitlement, franchise, license or approval for the Project
as contemplated by the Loan Documents.

20

 

     (xii) Enter into any financing affecting the Collateral or the Ownership Entity.

     (xiii) Institute any new Enforcement Action against a Borrower, any Guarantor or any
other Person.

     H. Sale of Collateral. If the B Participant elects to accept a written offer from an
unaffiliated third party for the sale of the Collateral, B Participant shall proceed to final
documentation and shall use reasonable efforts to effect the sale. Net Collections shall be
applied in the order of priority set forth in Section 7D hereof, and B Participant shall
wire transfer to A Participant, within five (5) Business Days after B Participant’s receipt,
seventy percent (70%) of the Net Collections received by B Participant after first deducting
therefrom any sums required by the purchase agreement (i) to be held back in order to cover
post-closing re-prorations and/or (ii) to be deposited into escrow in order to cover the Ownership
Entity’s contingent liabilities, if any, under the purchase agreement for representations and
warranties that survive the closing. Upon release to the Ownership Entity of any amounts referred
to in clauses (i) or (ii) above, B Participant shall send A Participant 70% thereof.

     I. Asset Management Fee and Other Compensation Payable to B Participant. In
consideration of B Participant’s performing its obligations under this Section 7, the
Lenders shall pay to B Participant, in lieu of any servicing fees, a monthly asset management fee
(the “Asset Management Fee”) in an amount equal to one-twelfth of 0.25% multiplied by the
outstanding, principal balance of the affected Loan or the outstanding principal balance
immediately prior to foreclosure. The Asset Management Fee shall be payable monthly in advance to
B Participant, from the revenues generated by the Collateral, and B Participant is hereby
authorized to deduct the Asset Management Fee from such revenues generated by the Collateral in
accordance with Section 7D hereof. To the extent such fee is not paid from revenues
generated from the Collateral, such fee shall be advanced by B Participant as a Protective Advance
or Post-Acquisition Cost, such amount shall accrue interest at the Interest Rate for the applicable
Loan and shall be paid to B Participant on a monthly basis or at the time of sale of the Collateral
before any distribution of Net Collections to Lenders in accordance with Section 7D hereof.

     J. Participant REIT Compliance. A Participant acknowledges it has been advised by B
Participant that B Participant is a REIT or owned by REIT and that the manner in which mortgaged
property taken through foreclosure or other means is managed could subject the REIT to a 100% tax
on its net income from “prohibited transactions” such as the sale of inventory. A Participant
further acknowledges that it has been advised by B Participant that there is an election that the
REIT can make for foreclosure property that can allow it to avoid having prohibited transaction
income, but only if the property is managed in accordance with the rules for that election. Any
such election and the attendant tax return filings shall be the sole responsibility of B
Participant, and A Participant shall have no responsibility or liability in connection therewith.
B Participant acknowledges that A Participant does not have expertise in this area. B Participant
shall be solely responsible for determining the specifics of how to comply with the REIT provisions
of the Tax Code. A Participant shall have no obligation to determine how to comply with the
relevant Tax Code provisions. B Participant shall only comply with the REIT provisions of the Code
to the extent such compliance is reasonable, practical, and consistent with the terms of this
Agreement. A Participant shall have no

21

 

obligations under this Section 7J. B Participant’s specific approval shall be
required for continued construction on the property except as otherwise permitted under this
Agreement, for the engagement of a manager for the property other than a third party manager not
affiliated with A Participant or B Participant, for any sales or business plan that entails a
holding period of more than 3 years for the property and for any leasing of the property except in
accordance with this Agreement. This Section 7J shall terminate from and after the date on
which the B Participant is no longer wholly or partially owned by a REIT.

     8. PAYMENTS.

     A. Application of Principal and Certain Other Payments by A Participant. If after the
Effective Date B Participant receives principal payments (except to the extent such payments are
entitled to be retained by B Participant as expressly provided herein) under a Loan then after
payment of any Borrower Reimbursable Costs with respect to such Loan, B Participant shall forward
to A Participant on the fifteenth (15) day of each month (or if the fifteen (15th) day is not a
Business Day, the immediately following Business Day of the month) A Participant’s seventy percent
(70%) interest in such principal payments received in the prior calendar month, and B Participant
shall retain the remainder of such payments received in the prior calendar month. Payments which
are not received in immediately available funds shall not be deemed to have been received by B
Participant until B Participant shall have fully collected such principal payments. B Participant
shall not be required to remit to A Participant any amount not actually collected by B Participant.
If B Participant receives reimbursements for Borrower Reimbursable Costs (including Protective
Advances) from a Borrower, B Participant shall first use such funds to reimburse itself for
Borrower Reimbursable Costs (and any accrued and unpaid interest thereon). If B Participant
receives any insurance proceeds or condemnation payments under a Loan, which funds are not used to
repair, rebuild or restore the related Project in accordance with the terms of the Loan Documents,
or if there are insurance or condemnation proceeds that have not been disbursed following such
repair, restoration or rebuilding, then, subject to the terms of the Loan Documents, after payment
of any unreimbursed Borrower Reimbursable Expenses and Protective Advances, B Participant shall
forward to A Participant on the fifteenth (15th) day of each month (or if the fifteen (15th) day is
not a Business Day, the immediately following Business Day of the month) following receipt, A
Participant’s seventy percent (70%) interest in such proceeds or payments, and B Participant shall
retain the remainder of such payments. All payments of principal, insurance and condemnation
proceeds received by A Participant shall be used to reduce the principal amount of the A
Participation.

     B. Application of Other Payments. Each payment received by B Participant on account
of a Loan other than payments described in Section 8A above, , whether received directly from a
Borrower or any other Person liable for the payment of all or any portion of such Loan shall be
applied as follows: first, to B Participant’s Borrower Reimbursable Costs and other permitted Loan
costs payable to B Participant (and accrued and unpaid interest thereon); second, described in
Section 4.

22

 

     9. REPRESENTATIONS OF B PARTICIPANT TO A PARTICIPANT.

     A. Representations and Warranties. In addition to any representations of and
warranties of B Participant set forth in the Purchase Agreement, B Participant hereby represents
and warrants to A Participant, as of the Effective Date, as follows:

     (i) Ownership of Participation Interest. Upon the Effective Date, B Participant
will be the owner of the B Participation; B Participant has not sold, transferred,
hypothecated or otherwise disposed of all or any portion of the Participation Interest; and
B Participant has acquired the B Participation for its own account for the purpose of
investment and not with a view to, or for sale in connection with, any distribution thereof,
provided, however, that B Participant has the full right to grant participations in
the B Participation and to assign its interest in the B Participation, subject to and in
accordance with Section 12 hereof.

     (ii) Authorization. B Participant has received all authorizations of such
other bodies or Persons as are necessary to authorize (i) B Participant’s execution and
delivery of this Agreement, and (ii) the consummation by B Participant of the transactions
contemplated hereby, and all such authorizations remain in full force and effect.

     (iii) Relationship Between B Participant and Borrowers. B Participant is not a
partner or joint venturer with any Borrower, nor is B Participant an agent of any Borrower,
or vice versa; and, except as set forth in the Loan Documents or as otherwise disclosed to A
Participant in writing, B Participant has no interest whatsoever in any Borrower or, except
pursuant to this Agreement, any of the Collateral.

     (iv) Contravention. Neither the execution and delivery of this Agreement nor
consummation by B Participant of the transactions contemplated hereby nor compliance by B
Participant with the terms, conditions and provisions herein set forth (or any of them) will
conflict with or result in a breach of any of the material terms, conditions or provisions
of (a) any material contractual obligation to which B Participant is now a party or the
terms of the Loan Documents, (b) any judgment or order, writ, injunction, decree or demand
of any court applicable to B Participant, or (c) any applicable requirement of law in any
material respect.

     (v) Brokers. B Participant has not dealt with any broker, investment banker,
agent (excluding counsel), or other Person who may be entitled to any commission or
compensation in connection with the sale of the Loans to B Participant.

     B. No Warranty of Payment. The representations and warranties of B Participant set
forth in Section 9A hereof or otherwise contained in this Agreement shall in no event be
construed as a warranty or guarantee by B Participant as to (i) future payments by any Borrower or
Guarantor, (ii) any Borrower’s or any Guarantor’s future compliance with or performance of any of
the terms and conditions contained in the Loan Documents, or (iii) the collectibility of the Loans.
B Participant does not warrant or guaranty to A Participant that Fremont has transferred and
assigned the Loans and the Loan Documents with good title or without any encumbrances.

23

 

     10. REPRESENTATIONS OF A PARTICIPANT TO B PARTICIPANT.

     A. Representations and Warranties. As used in this Section 10, “A
Participant’s knowledge” and words of similar import shall mean the current, actual knowledge,
without any duty of inquiry or investigation, of A Participant’s asset managers responsible for the
administration of the Loans. In addition to the representations and warranties of Fremont set
forth in the Purchase Agreement, A Participant hereby represents and warrants to B Participant, as
of the Effective Date, as follows:

     (i) Authorization. A Participant has received all such authorizations of A
Participant’s board of directors and such other bodies or Persons as are necessary to
authorize (i) A Participant’s execution of this Agreement, and (ii) the consummation by A
Participant of the transactions contemplated hereby, and all such authorizations remain in
full force and effect.

     (ii) Relationship Between A Participant and Borrowers. A Participant is not a
partner or joint venturer with any Borrower, nor is A Participant an agent of any Borrower,
or vice versa; and, except as set forth in the Loan Documents or as otherwise disclosed to B
Participant in writing, A Participant has no interest whatsoever in any Borrower or, except
pursuant to this Agreement, any of the Collateral.

     (iii) No Cross-Default or Cross-Collateralization. No Loan is cross-defaulted
with any other loan from A Participant and the Collateral does not secure any other loan
from A Participant.

     (iv) Brokers. A Participant has not dealt with any broker, investment banker,
agent (excluding counsel) or other Person who may be entitled to any commission or
compensation in connection with the sale of the Loans to B Participant.

     (v) Contravention. Neither the execution and delivery of this Agreement nor
consummation by A Participant of the transactions contemplated hereby nor compliance by A
Participant with the terms, conditions and provisions herein set forth (or any of them) will
conflict with or result in a breach of any of the material terms, conditions or provisions
of (a) any material contractual obligation to which A Participant is now a party or the
terms of the Loan Documents, (b) any judgment or order, writ, injunction, decree or demand
of any court applicable to A Participant, or (c) any applicable requirement of law in any
material respect.

     (vi) Solvency. As of the Effective Date and after giving effect to the
consummation of the transactions contemplated by this Agreement, A Participant: (a) owns
and will own assets the fair saleable value of which are (1) greater than the total amount
of liabilities (including contingent obligations) of A Participant, and (2) greater than the
amount that will be required to pay the probable liabilities of A Participant’s then
existing debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to A Participant; (b) has capital that is not
insufficient in relation to its business as presently conducted or any contemplated or
undertaken transaction; and (c) does not intend to incur and does not

24

 

believe that it will incur debts beyond its ability to pay such debts as they become
due. A Participant has not entered into this Agreement or the transactions contemplated
under this Agreement with the actual intent to hinder, delay, or defraud any creditor.

     B. No Warranty of Payment. The representations and warranties of A Participant set
forth in Section 10A hereof or otherwise contained in this Agreement shall in no event be
construed as a warranty or guarantee by A Participant as to (i) future payments by any Borrower or
Guarantor, (ii) any Borrower’s or Guarantor’s future compliance with or performance of any of the
terms and conditions contained in the Loan Documents, or (iii) the collectibility of any Loan.

     11. RELATIONSHIP BETWEEN LENDERS. It is expressly understood and agreed that, with
respect to this Agreement and the transactions contemplated hereby, as between themselves the
Lenders shall occupy the status of, act as and be considered independent contractors and neither
Lender shall in any event be considered an agent, creditor, partner or employee of the other
Lender, it being the intent of the Lenders that this Agreement shall not constitute nor be
construed to create a security agreement or partnership or joint venture of any kind between A
Participant and B Participant. Neither Lender shall have a fiduciary relationship of any kind with
the other Lender, and nothing in this Agreement, whether express or implied, is intended or shall
be construed to impose upon either Lender any obligations with respect to the transactions
contemplated hereby except as expressly set forth herein. No REMIC election shall be made in
respect of any of the Loans.

     12. ASSIGNMENT; OTHER LOANS BY LENDERS; PURCHASE BY MEZZANINE LENDER.

     A. In General, No Assignment. Except as otherwise provided in Section 21
hereof with respect to B Participant’s right to use an Affiliate to perform one or more of its
obligations under this Agreement, or as otherwise provided in this Section 12 with respect
to each Lender’s right to sell sub-participation interests in the Loans or assign its entire
interest in this Agreement, or as otherwise expressly provided in this Agreement, neither Lender
shall sell participations in its participation interest or assign this Agreement, or any rights
hereunder, to any other Person whomsoever, without the prior written consent of the other Lender,
which consent may be given or withheld in the other Lender’s reasonable discretion. Any such sale,
sub-participation or assignment without the consent of the other Lender shall be absolutely void
and of no force or effect whatsoever. Notwithstanding anything to the contrary contained in this
Agreement, neither B Participant nor A Participant shall sell, transfer or assign any interest in a
Loan or any servicing in the Loans if such sale, assignment or transfer is not permitted under the
related Loan Agreement. B Participant may not assign its rights and obligations as servicer (other
than to an Affiliate and without relief from B Participant’s servicing obligations hereunder
without the prior written consent of A Participant). Subject to the foregoing, this Agreement
shall be binding on and shall inure to the benefit of A Participant and B Participant and their
respective successors and permitted assigns.

     B. Assignments. Notwithstanding Section 12A, either Lender (a “Transferring
Lender”) may, in the ordinary course of its business and in accordance with applicable Law, at any
time assign all or a portion of its rights and obligations under this Agreement (including,

25

 

without limitation, all of its commitment to make Disbursements) to the other Lender, any
Affiliate of the other Lender or to a Permitted Transferee (each an “Acquiring Lender”), subject to
the following provisions:

     (i) If B Participant is the Transferring Lender, such assignment shall be of the entire
interest of such Transferring Lender’s rights and obligations under this Agreement, the
Loans, the Loan Agreements and the other Loan Documents. If A Participant (or any assignee
of A Participant) is the Transferring Lender, such assignment shall be of the entire
interest or a portion of the interest of such Transferring Lender’s rights and obligations
under this Agreement, the Loans, the Loan Agreements and the other Loan Documents, provided
that in no event may there be more than ten (10) owners of the A Participation and the
holders of the A Participation shall designate in writing one entity as the directing holder
of such interest with full power and authority to bind all of the other holders for all
purposes of this Agreement. B Participant may fully rely on all consents, approvals and
other determinations made by such directing holder..

     (ii) Such assignment shall be made pursuant to a Transfer Supplement in substantially
the form attached hereto as Exhibit D, duly completed, with such immaterial changes
thereto as the Transferring Lender and the transferee shall agree upon (a “Transfer
Supplement”).

     (iii) Any transfer to a Person which is not (a) a Lender, (b) an Affiliate of a Lender,
or (c) otherwise a Permitted Transferee shall require the prior written consent of B
Participant if such transfer is by A Participant, or by A Participant if such transfer is by
B Participant, which consent may be withheld by A Participant and B Participant its
reasonable discretion.

     (iv) If B Participant is the Transferring Lender, then such assignment shall be subject
to the A Participation and all of A Participant’s rights under this Agreement.

     C. Assignment Procedures. In order to effect any such assignment the Transferring
Lender and the Acquiring Lender shall execute and deliver to B Participant, with a copy to A
Participant (if the Transferring Lender is B Participant) a duly completed Transfer Supplement;
and, upon receipt thereof, B Participant shall accept such Transfer Supplement. Upon such
execution, delivery and acceptance, from and after the close of business at B Participant’s office
in New York, New York, on the Transfer Effective Date specified in such Transfer Supplement:

     (i) The Acquiring Lender shall be a party hereto and, to the extent provided in such
Transfer Supplement, shall have the rights and obligations of a Lender hereunder.

     (ii) The Transferring Lender thereunder shall be released from its obligations under
this Agreement and shall cease to be a party to this Agreement from and after the Transfer
Effective Date specified in such Transfer Supplement.

     D. Tax Treatment. No assignment shall be effective if, in the judgment of that Lender
which is not the Transferring Lender (based upon an opinion of counsel or as otherwise determined
by such Lender in its reasonable discretion), such assignment would otherwise cause

26

 

this participation arrangement to be a “taxable mortgage pool” under the Tax Code or otherwise
be taxable as a corporation.

     E. Release of Obligations. Upon the consummation of the purchase and sale of the
Transferring Lender’s interest in the Loans as aforesaid, the Transferring Lender shall be released
from all obligations and liabilities under this Agreement and the Loan Documents arising on or
after the consummation of the sale contemplated by this Section 12.

     F. Other Loans by A Participant or B Participant; Conflicts of Interest. B
Participant shall have the right in the future to enter into additional credit arrangements and/or
lending relationships with some or all of Borrowers, Borrowers’ principals or any Affiliates
thereof, provided that (i) the entering into of such additional credit arrangements and/or
lending relationships is not prohibited by the Loan Documents and (ii) such other credit
arrangements are not cross-defaulted with any Loan or cross-collateralized with any of the
Collateral. Nothing contained in this Agreement shall limit or preclude the right of B Participant
to exercise any rights or remedies available to it with respect to any such arrangements or
relationships. In addition, A Participant and B Participant recognize that if a future dispute or
controversy should arise between them regarding the subject matter of this Agreement, and such
dispute or controversy occurs at a time when such other lending relationships have been established
by either or both of the Lenders, then either Lender may potentially claim that the other Lender
has been induced by improper or conflicting motivations to make administrative decisions regarding
the Loan which are not in the best interests of the Lender asserting the claim, but which may
instead have been calculated to protect or advance the position of the accused Lender in its
overall relationship with Borrower or its principals or Affiliates. Finally, both Lenders
acknowledge that such a claim would be impossible, as a practical matter, to disprove or refute
even if untrue, and both Lenders have determined for that reason to acknowledge and assume the
risks that are inherent in the circumstances described above. Accordingly, subject to the proviso
at the end of this sentence, each Lender hereby approves all such business relationships in which
the other Lender may choose to participate, and hereby agrees for the benefit of the other Lender
that, if any dispute or controversy should hereafter arise between them regarding or in any way
relating to the Loans, such Lender shall not assert or raise against the other Lender any claim or
defense based upon any alleged conflict of interest or improper disregard by the other Lender of
the best interests of the first Lender due in whole or in part to a desire to protect or advance a
greater or conflicting interest of the sort described above, and any and all such claims and
defenses are hereby expressly waived and released absolutely and forever; provided that the
foregoing acknowledgments, agreements and waivers shall not (i) diminish the Lenders’ duties to
comply with their obligations set forth herein, including, without limitation, B Participant’s
obligation hereunder to comply with the Servicing Standards, or (ii) otherwise apply to a breach of
this Agreement by either Lender.

     G. Sharing of Payments. Except as otherwise expressly set forth herein (including,
without limitation, with respect to costs and expenses due and payable solely to B Participant),
neither Lender shall obtain any payment or payments (whether voluntary or involuntary, through the
exercise of any right of set-off or otherwise) to be applied on account of its Participation
interest unless such payment or payments shall be shared by both Lenders in accordance with the
terms of this Agreement. If any such payment or payments are rescinded, set aside or otherwise
recovered by or on behalf of the person or entity from whom the payment or payments are

27

 

received, or by or for the creditors of such person or entity, then any such payment or
payments made to the other Lender pursuant to the preceding sentence shall be returned to the
Lender against whom such recovery is made.

     H. Purchase of Affected Loan by Mezzanine Lender. The Lenders hereby acknowledge and
agree that if there is a Mezzanine Lender, the Mezzanine Lender may have the right, under certain
circumstances, to purchase, in whole but not in part, one or more of the Loans in accordance with
the terms of the applicable Mezzanine Intercreditor Agreement (the “Mezzanine Lender Loan
Purchase”). Notwithstanding anything to the contrary contained in this Agreement, A Participant
agrees that B Participant shall have the right, without any further consent from A Participant, to
sell the entire affected Loan (including, without limitation, A Participant’s interest in the
affected Loan) to Mezzanine Lender (or its designee) in accordance with the terms of the Mezzanine
Intercreditor Agreement (and by such agreement, A Participant agrees that B Participant has the
full power and authority to sell the entire affected Loan in accordance with the terms of the
Mezzanine Intercreditor Agreement). In connection with such Mezzanine Lender Loan Purchase, each
Lender shall have a right to the amounts due and payable to such Lender under this Agreement from
the loan purchase price provided for in the Mezzanine Intercreditor Agreement, payable in
accordance with the provisions of Section 8 hereof. In connection with the Mezzanine
Lender Loan Purchase, and in time for the closing of such sale, A Participant shall (i) cause its
interest in the affected Loan to be free and clear of all liens and encumbrances thereon, and upon
the written request of B Participant, shall promptly deliver a written representation to B
Participant that its interest in the affected Loan is so free and clear, and (ii) deliver to B
Participant any original Loan Documents held by A Participant, or any of Borrower’s funds escrowed
with A Participant in connection with the Loan.

     I. Exercise of Buy-Sell and Redemption Rights under Third Party Intercreditor
Agreements. The Lenders hereby acknowledge and agree that pursuant to certain of the Third
Party Intercreditor Agreements, the other parties (and B Participant) may have the right, under
certain circumstances, to initiate buy-sell and redemption procedures in accordance with the terms
of the applicable Third Party Intercreditor Agreement (the “Third Party Rights”). Notwithstanding
anything to the contrary contained in this Agreement, A Participant agrees that B Participant shall
have the right, without any further consent from A Participant, to elect to buy or sell or to
redeem or accept a redemption of, the entire affected Loan (including, without limitation, A
Participant’s interest in the affected Loan) to or from such third party not affiliated with B
Participant in accordance with the terms of the Third Party Intercreditor Agreement (and by such
agreement, A Participant agrees that B Participant has the full power and authority to elect to buy
or sell or to redeem or accept a redemption of the affected Loan in accordance with the terms of
the applicable Third Party Intercreditor Agreement). In connection with such Third Party Rights,
each Lender shall have a right to the amounts due and payable to such Lender under this Agreement
from the purchase or redemption price provided for in the Third Party Intercreditor Agreement,
payable in accordance with the provisions of Section 8 hereof. In connection with the
Third Party Rights, if the action taken is to sell the Loan or accept a redemption of the Loan, and
in time for the closing of such sale, A Participant shall (i) cause its interest in the affected
Loan to be free and clear of all liens and encumbrances thereon, and upon the written request of B
Participant, shall promptly deliver a written representation to B Participant that its interest in
the affected Loan is so free and clear, and (ii) deliver to B Participant any original Loan
Documents held by A Participant, or any of Borrower’s funds

28

 

escrowed with A Participant in connection with the Loan. If B Participant elects to purchase
or redeem the portion of the affected Loan not owed by B Participant, B Participant shall fund the
purchase by means of a Protective Advance, and such Protective Advance shall bear interest at the
Interest Rate for the affected Loan.

     13. LENDERS’ TITLE INSURANCE. The Lenders hereby acknowledge and agree that the Title
Policy insuring the lien of the Security Instrument securing the Loan which is required by the Loan
Documents was issued in favor of A Participant as the only insured thereunder; and has been or will
be endorsed to reflect B Participant as the only insured, but that A Participant shall share in B
Participant’s interest therein, including any recovery thereunder, in accordance with the terms of
this Agreement.

     14. TERMINATION. At such time as the outstanding principal amount of the A
Participation has been reduced to zero, A Participant shall have no further rights or remedies
under this Agreement or with respect to the Loans.

     15. NO THIRD PARTY BENEFICIARY. This Agreement is made for the sole benefit of A
Participant and B Participant and their respective permitted successors and permitted assigns and
no other Person or Persons (including, without limitation, Borrower and any other Lender) shall
have any rights or remedies under or by reason of this Agreement.

     16. LEGAL FEES RELATING TO THIS AGREEMENT. No party to this Agreement shall be
responsible for the payment of the legal fees or expenses incurred by the other party hereto in
connection with the negotiation and execution of this Agreement or any subsequent modifications or
supplements hereto.

     17. LITIGATION EXPENSES. If any lawsuit or proceeding is brought by any party hereto
to enforce the terms of this Agreement, the unsuccessful party or parties to any such lawsuit or
proceeding shall pay to the party or parties prevailing therein all of such prevailing party’s or
parties’ court costs and reasonable legal fees and costs incurred in the prosecution or defense of
such lawsuit or proceeding.

     18. BROKERAGE COMMISSIONS AND FINDER’S FEES. Each party to this Agreement hereby
warrants to the other party hereto that the warranting party has had no dealings with any agent,
broker or finder in connection with the negotiation of this Agreement, and each party hereto hereby
agrees to indemnify, defend and hold the other party hereto harmless from and against any and all
losses, costs, liabilities or expenses for any compensation, commission, charge or fee claimed by
any such agent, broker or finder with respect to this Agreement or the creation of the interests in
the Loan pursuant to the provisions hereof.

     19. NOTICES. All notices, requests, demands and consents of any kind which either of
the parties hereto may be required or may desire to serve upon the other party hereto in connection
with this Agreement shall be in writing and shall be delivered (as an alternative to personal
service) by registered or certified mail, or by recognized overnight courier service. Any such
notice, request, demand or consent so to be served by registered or certified mail, or recognized
overnight courier service, shall be delivered with all applicable delivery charges thereon fully
prepaid and shall be addressed to the party so to be served as follows:

29

 

	 	If to A Participant:             	 	Fremont Investment & Loan

2727 East Imperial Highway

Brea, California 92821

Attn: Commercial Real Estate Asset Management
	 
	 	with a copy to: 	 	Fremont Investment & Loan

2425 Olympic Boulevard

3rd Floor — East

Santa Monica, California 90404

Attn: Alec G. Nedelman, Esq.
	 
	 	with a copy to  	 	Alan Faigin
	 
	 	 	 	________________________________________________
	 
	 	 	 	________________________________________________
	 
	 	 	 	________________________________________________
	 
	 	If to Participant: 	 	iStar Financial Inc.

1114 Avenue of the Americas

27th Floor

New York, New York 10036

Attn: Chief Operating Officer
	 
	 	with a copy to:  	 	iStar Financial Inc

1114 Avenue of the Americas

27th Floor

New York, New York 10036

Attn: Nina B. Matis, Esq.

          General Counsel
	 
	 	with a copy to:  	 	iStar Asset Services Inc.

180 Glastonbury Boulevard

Suite 201

Glastonbury, Connecticut 06033

Attn: President
	 
	 	with a copy to:  	 	Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1600

Chicago, Illinois 60661

Attn: Marcia W. Sullivan, Esq.

Katten Reference: 208972-664

Service of any such notice, request, demand or consent so made by mail or courier shall be deemed
complete on the date of actual delivery as shown by the addressee’s registry or certification
receipt, as applicable, or at the expiration of the third (3rd) Business Day after the
date of dispatch, whichever is earlier in time. Any of the parties hereto may from time to time,
by notice in writing served upon the other parties as aforesaid, designate a different mailing

30

 

address to which or a different person to whose attention all such notices, requests, demands and
consents are thereafter to be addressed.

     20. ENTIRE AGREEMENT. This Agreement and the Purchase Agreement contain the entire
agreement between A Participant and B Participant with respect to the subject matter hereof and
supersede any and all other prior agreements, whether oral or written.

     21. PERFORMANCE BY B PARTICIPANT AFFILIATE. At B Participant’s option, any
obligations to be performed by B Participant hereunder may be performed by an Affiliate of B
Participant. In the event B Participant elects at any time upon notice to A Participant during the
term of this Agreement to use such Affiliate, at B Participant’s sole cost and expense and without
reimbursement from A Participant or deduction from any amounts paid by any Borrower that would
otherwise be payable to A Participant, (a) B Participant shall cause every item or document that is
required hereunder to be delivered, assigned, submitted or supplied to B Participant to name such
Affiliate in lieu of B Participant where appropriate and shall further cause every such item or
document to be delivered, assigned, submitted or supplied to such Affiliate and (b) A Participant
shall cooperate with B Participant to do so. Notwithstanding B Participant’s election to use such
Affiliate as described above, B Participant shall remain liable for the payment and performance of
all of its obligations under this Agreement.

     22. COUNTERPARTS. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original but all of which together shall constitute but one and
the same agreement.

     23. SECTION HEADINGS. The headings of the several sections and paragraphs hereof are
included only for convenience of reference and are not intended to govern or aid in the
construction of any provision of the several sections and paragraphs hereof.

     24. GOVERNING JURISDICTION. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

     25. TIME OF ESSENCE. Time is hereby declared to be of the essence of this Agreement
and of every part hereof.

     26. RIGHT TO SPECIFIC PERFORMANCE. BOTH LENDERS HEREBY ACKNOWLEDGE AND AGREE THAT THE
DAMAGES TO BE INCURRED BY ANY ONE LENDER, AS THE CASE MAY BE, AS A RESULT OF THE OTHER LENDER’S
DEFAULT AS DESCRIBED ABOVE WILL BE DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN, THAT DAMAGES WILL
NOT BE AN ADEQUATE REMEDY AND, THEREFORE, THAT IT IS BOTH NECESSARY AND APPROPRIATE FOR THE REMEDY
OF SPECIFIC PERFORMANCE TO BE AVAILABLE TO THE NON-DEFAULTING PARTY.

     27. REGISTER. The B Participant shall maintain a register in which ownership of each
Participation is recorded. B Participant and any agent of the B Participant may treat as the owner
of a Participation the person in whose name such Participation is registered on the register on any
applicable date for the purpose of receiving payments of principal of and interest and other
amounts under such Participation and on any other date for all other purposes whatsoever,

31

 

and none of B Participant nor any agent of B Participant shall be affected by notice to the
contrary.

     28. WITHHOLDING. Each Lender (and any assignee) must certify to B Participant that it
is either (i) a corporation organized under the laws of the United States or any State thereof (or
a subsidiary of such a corporation, the separate existence of which is disregarded for federal
income tax purposes) or (ii) entitled to complete exemption from United States withholding tax
imposed on or with respect to any payments to be made to it hereunder in respect of any extensions
of credit made pursuant to any Loan Agreement (x) under an applicable provision of a tax convention
to which the United States is a party or (y) because it is acting through a branch, agency or
office in the United States and any payment to be received by it hereunder is effectively connected
with a trade or business in the United States. On or prior to the first date that any payment is
to be made to an Acquiring Lender hereunder, or at such other times as required by United States
law or as B Participant reasonably request, (i) if it is a corporation organized under the laws of
the United States or any State thereof (or a subsidiary of such a corporation, the separate
existence of which is disregarded for federal income tax purposes) it shall deliver to B
Participant a written statement attesting that it is a corporation so organized and (ii) if it is
not a corporation organized under the laws of the United States or any State thereof it shall
deliver to B Participant two accurate and complete original signed copies of either (x) Internal
Revenue Service Form W-8ECI (or successor form) certifying that all payments to be made to it
hereunder will be effectively connected to a United States trade or business (the “Form W-8ECI
Certification”) or (y) Internal Revenue Service Form W-8BEN (or successor form) certifying that it
is entitled to the benefits of a provision of a tax convention to which the United States is a
party which completely exempts from United States withholding tax all payments to be made to it
hereunder (the “Form W-8BEN Certification”). In addition, if Lender previously filed a Form W-8BEN
Certification it will deliver to B Participant a new Certification prior to the first payment date
falling in the third year following the previous filing of such certification; and if it previously
filed a Form W-8ECI Certification it will deliver to B Participant, each time upon request, a new
Form W-8ECI Certification prior to the first payment date occurring in each of its subsequent
taxable years. Each Lender agrees to deliver to B Participant such other or supplemental forms as
may at any time be required as a result of changes in applicable law or regulation in order to
confirm or maintain in effect its entitlement to exemption from U.S. withholding tax on any
payments hereunder. B Participant may withhold and pay to applicable governmental authorities any
withholding tax required from distributions to Lenders, and no payments to any Lender shall be
required to be grossed-up as a consequence of such withholding. If any withholding amounts are
required to be advanced on behalf of any Lender that is a non-U.S. person, such Lender shall
promptly upon written notice reimburse the Lender making such advance for the withheld amount.

(Signatures Appear on Next Page(s))

32

 

     IN WITNESS WHEREOF, the parties hereto have caused this Loan Participation Agreement to be
executed as of the day and year first above written.

	 	 	 	 	 
	 	“A PARTICIPANT”

FREMONT INVESTMENT & LOAN, a 
California Industrial
Bank,
 

	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	
“B PARTICIPANT”

 	 
	 	
 	 
	 	
 	 
	 	

By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Effective Date: ___________, 2007

S-1

 

JOINDER

     iStar Financial Inc., a Maryland corporation (“iStar”), hereby agrees that, subject to the
terms and conditions of the Participation Agreement, to the extent that B Participant has not
funded any Disbursement, Borrower Reimbursable Cost or Post Acquisition Cost as and when required
by the Participation Agreement, that it will fund such Disbursement, Borrower Reimbursable Cost or
Post Acquisition Cost.

	 	 	 	 	 
	iStar Financial Inc.

 	 	 
	By:  	 	 	 
	 	Its: 	 	 	 
	 	 	 	 
	 

S-1

 

EXHIBIT A

MORTGAGE LOAN SCHEDULE

A-1

 

EXHIBIT A-1

REO PROPERTY

A-2

 

EXHIBIT B

PARTICIPATION CERTIFICATE

     This Participation Certificate is evidence that a participation interest, as hereinafter
specified, in the Loan and the Loan Documents relating thereto pursuant to the terms of that
certain Loan Participation Agreement (the “Agreement”) dated as of                     , 2007, by and between
[                                        ] (“A Participant”) and [
                                        ] (“B Participant”), has been acquired
by A Participant for the consideration herein shown and is now held by A Participant, as follows:

	 	 	 
	Total Outstanding Principal Balance of A Participation:

	 	$                                        

	 	 	 	 	 
	 	[                                                            ]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Effective Date of this Certificate:                     , 2007

B-1

 

EXHIBIT C

SINGLE PURPOSE ENTITY

C-1

 

EXHIBIT D

FORM OF TRANSFER SUPPLEMENT

     THIS TRANSFER SUPPLEMENT, dated as of the date specified in Item I of Schedule I
hereto, among the Transferring Lender specified in Item 2 of Schedule I hereto (the
“Transferring Lender”), the Purchasing Lender specified in Item 3 of Schedule I hereto (the
“Purchasing Lender”) and the Non-Transferring Lender specified in Item 4 of Schedule I
hereto (the “Non-Transferring Lender”), is made and entered into with reference to the following:

Recitals:

     A. This Transfer Supplement is being executed and delivered in accordance with Section
12B of that certain Loan Participation Agreement, dated for reference purposes only as of
                     ___, 2007, between                                      as A Participant and
                                   , as B
Participant (collectively, the “Lenders”) (as the same may be amended, modified or supplemented
from time to time, collectively the “Participation Agreement”). Initially capitalized terms used
herein without definition shall have the meanings specified in the Participation Agreement.

     B. The Purchasing Lender (if it is not already a Lender) wishes to become a Lender under the
Participation Agreement and have assigned to it all of the Transferring Lender’s rights and
obligations under the Loan Documents.

     C. The Transferring Lender is selling and assigning to the Purchasing Lender, and the
Purchasing Lender is purchasing and assuming, all of the Transferring Lender’s rights and
obligations under the Loan Documents, including, without limitation, the Transferring Lender’s
commitments to make the Loan owing to it and the Note held by it (the “Transferring Lender’s
Interests”).

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. Transfer Effective Notice. Upon receipt by the Non-Transferring Lender of four (4)
counterparts of this Transfer Supplement (to each of which is attached a fully completed
Schedule I and Schedule II, and each of which has been executed by the Transferring
Lender and by the Purchasing Lender), the Non-Transferring Lender will transmit to the Transferring
Lender and the Purchasing Lender a transfer effective notice substantially in the form of
Schedule III to this Transfer Supplement (a “Transfer Effective Notice”). The date on
which the transfer effected by this Transfer Supplement shall become effective (the “Transfer
Effective Date”), shall be the date on which the Purchasing Lender becomes the owner of record the
Transferring Lender’s Participation on the register maintained by the B Participant. From and
after the close of business at B Participant’s office on the Transfer Effective Date, the
Purchasing Lender shall be a Lender under the Participation Agreement for all purposes thereof
having the interest in the Transferring Lender’s Interests reflected in this Transfer Supplement.

D-1

 

     2. Purchase Price; Sale. At or before 12:00 o’clock noon, local time at the
Transferring Lender’s office specified in Schedule III, on the Transfer Effective Date, the
Purchasing Lender shall pay to the Transferring Lender, in immediately available funds, an amount
equal to the purchase price, as agreed upon between the Transferring Lender and the Purchasing
Lender (the “Purchase Price”), for the Transferring Lender’s Interests. Effective upon receipt by
the Transferring Lender of the Purchase Price from the Purchasing Lender, the Transferring Lender
hereby irrevocably sells, assigns and transfers to the Purchasing Lender, without recourse,
representation or warranty (express or implied) except as set forth in Section 5 hereof,
and the Purchasing Lender hereby irrevocably purchases, takes and assumes from the Transferring
Lender, the Transferring Lender’s Interests. The Transferring Lender shall promptly notify the
Non-Transferring Lender of the receipt of the Purchase Price from the Purchasing Lender (the
“Purchase Price Receipt Notice”).

     3. Principal, Interest and Fees. All principal payments, interest, fees and other
amounts that would otherwise be payable from and after the Transfer Effective Date to or for the
account of the Transferring Lender in respect of the Transferring Lender’s Interests shall,
instead, be payable to or for the account of the Purchasing Lender.

     4. Further Assurances. At any time and from time to time upon the written request of
any party to this Transfer Supplement, each other party hereto will execute and deliver such
further documents and do such further acts and things as such requesting party may reasonably
request in order to effect the purposes of this Transfer Supplement.

     5. Certain Representations and Agreements. By executing and delivering this Transfer
Supplement, the Transferring Lender and the Purchasing Lender confirm to and agree with each other
and the Non-Transferring Lender as follows:

     5.1 The Purchasing Lender confirms that it has made such review, analysis and decision to
acquire an interest in the Loans independently and without reliance upon the Non-Transferring
Lender, the Transferring Lender or any other Lender.

     5.2 The Purchasing Lender, independently and without reliance upon the Non-Transferring
Lender, the Transferring Lender or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, will make its own decisions to take or not take action under
or in connection with any Loan Agreement, any other Loan Document or the Participation Agreement.

     5.3 The Purchasing Lender shall perform in accordance with its terms all of the obligations
which by the terms of the Participation Agreement are required to be performed by it as a Lender.

     [Other representations to be agreed to by Purchasing Lender and Transferring Lender.]

     6. Schedule II. Schedule II hereto sets forth administrative information with
respect to the Purchasing Lender.

D-2

 

     7. Governing Law. This Transfer Supplement shall be governed by, construed and
enforced in accordance with the laws of the State of New York, without regard to principles of
choice of law.

     8. Counterparts. This Transfer Supplement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall constitute but one and the
same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Transfer Supplement to be executed by
their respective duly authorized officers on Schedule I hereto as of the date set forth in
Item I of Schedule I hereto.

(Signatures)

D-3

 

SCHEDULE I TO TRANSFER SUPPLEMENT

COMPLETION OF INFORMATION AND

SIGNATURES FOR TRANSFER SUPPLEMENT

	     Re:	 	 	Participation Agreement, dated                     , 2007 between                                     , a
                                         and                  , a
                                         (as the same may be amended,
modified or supplemented from time to time, the “Loan Agreement”).

	 	 	 
	Item I (Date of Assignment Supplement):

	 	[Insert date of Assignment Supplement]
	Item 2 (Transferring Lender):

	 	[Insert name of Transferring Lender]
	Item 3 (Purchasing Lender):

	 	[Insert name of Purchasing Lender]
	Item 4 (Non-Transferring Lender):

	 	[Insert name of Non-Transferring Lender]

Item 5 (Signatures of Parties to Transfer Supplement):

	 	 	 	 	 
	 	[Name of Transferring Lender], as Transferring Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 
	 	[Name of Purchasing Lender], as Purchasing Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 

CONSENTED TO AND ACKNOWLEDGED:

(consent not required only if transfer to a party that is (i) a Lender already, (ii) an Affiliate
of a Lender, or (iii) Permitted Transferee, or consent under Section 12 of the Loan Participation
Agreement is not otherwise required)

                                                            ,

Non-Transferring Lender

	 	 	 	 	 
	By:  
	 

	 	 
	 	Name:  
	 

	 	 
	 	Title:  
	 	 	 
	 

	 	 

	 	 

D-I-1

 

SCHEDULE II TO TRANSFER SUPPLEMENT

LIST OF LENDING OFFICES, ADDRESSES

FOR NOTICES AND COMMITTED AMOUNTS

[Name of Purchasing Lender]

Outstanding amount of [A Participation] [B Participation]            $                                        

	 	 	 	 	 	 
	Administrative Information for Purchasing Lender:	 	 
	 
	 	 	 	 	 
	Address for Notices:
	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	Attention: 	 
	 	 
	 
	 	 	 	 	 
	Telephone:
	 	 	 	 	 
	Facsimile:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 
	Lending Office:
	 	 	 	 	 
	 

	 	 

	 	 

D-II-1

 

SCHEDULE III TO TRANSFER SUPPLEMENT

TRANSFER EFFECTIVE NOTICE

	To: 	 	[Insert Name of Borrower, Transferring

Lender and Purchasing Lender]

     The undersigned, as a Lender under the Loan Participation Agreement dated as of                     
___, 2007, by and between [                                        ] and [                    ] (collectively, the “Lenders
”)
(as the same may be amended, modified or supplemented from time to time, the “Participation
Agreement”), acknowledges receipt of four executed counterparts of a completed Transfer Supplement,
dated                     , 20___, from [name of Transferring Lender] to [name of Purchasing Lender] (the
”Transfer Supplement”). Terms defined in the Transfer Supplement are used herein as therein
defined.

     1. Pursuant to the Transfer Supplement, you are advised that the Transfer Effective Date will
be                                         , 20__. [Insert fifth Business Day following date of Transfer Effective Notice
or other date agreed to among the Transferring Lender, the Purchasing Lender, and the
Non-Transferring Lender.]

     2. The Transfer Supplement provides that the Purchasing Lender is to pay its Purchase Price to
the Transferring Lender or before 12:00 o’clock noon, local time at the Transferring Lender’s
lending office specified in Schedule II to the Transfer Supplement, on the Transfer
Effective Date in immediately available funds.

	 	 	 	 	 
	 	Very truly yours,

[Insert name of Non-Transferring Lender]

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 

D-III-1

 

	 	 	 	 	 

EXHIBIT E

LOAN INFORMATION

Attached.

E-1

 

EXHIBIT F

FORM OF

REPORT ON LOANS

F-1

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