10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-14788

Blackstone Mortgage Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	94-6181186
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
345 Park Avenue, 42nd Floor, New York, NY	10154
(Address of principal executive offices)	(Zip Code)

(212) 655-0220

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of outstanding shares of the registrant’s class A common stock, par value $0.01 per share, as of July 24, 2013 was 28,801,651.

Table of Contents

Part I.	Financial Information
	Item 1:	Financial Statements	2
		Consolidated Balance Sheets - June 30, 2013 (unaudited) and December 31, 2012	2
		Consolidated Statements of Operations - Three and Six Months Ended June 30, 2013 (unaudited) and 2012 (unaudited)	4
		Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2013 (unaudited) and 2012 (unaudited)	5
		Consolidated Statements of Changes in (Deficit) Equity - Six Months Ended June 30, 2013 (unaudited) and 2012 (unaudited)	6
		Consolidated Statements of Cash Flows - Six Months Ended June 30, 2013 (unaudited) and 2012 (unaudited)	7
		Notes to Consolidated Financial Statements (unaudited)	8
	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
	Item 3:	Quantitative and Qualitative Disclosures About Market Risk	51
	Item 4:	Controls and Procedures	54
Part II.	Other Information
	Item 1:	Legal Proceedings	55
	Item 1A:	Risk Factors	55
	Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	62
	Item 3:	Defaults Upon Senior Securities	62
	Item 4:	Mine Safety Disclosures	62
	Item 5:	Other Information	62
	Item 6:	Exhibits	64
	Signatures		66

Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2012 and in this report, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Website and Social Media Disclosure

We use our website (www.bxmt.com) as a channel of distribution of company information. The information we post through our website may be deemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about us when you enroll your e-mail address by visiting the “E-mail Alerts” section of our website at http://www.blackstonemortgagetrust.com/investor-relations. The contents of our website are not, however, a part of this report.

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Blackstone Mortgage Trust, Inc. and Subsidiaries

Consolidated Balance Sheets (unaudited)

June 30, 2013 and December 31, 2012

(in thousands, except per share data)

	June 30, 2013			December 31, 2012
Assets
Cash and cash equivalents	$	59,746		$	15,423
Restricted cash		21,972			14,246
Loans receivable, net		830,101			141,500
Loans held-for-sale, net		3,800			—
Loans receivable, at fair value		117,549			—
Investment in CT Legacy Asset, at fair value		—			132,000
Equity investments in unconsolidated subsidiaries		23,240			13,306
Accrued interest receivable, prepaid expenses, and other assets		30,697			5,868
Total assets	$	1,087,105		$	322,343
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	36,879		$	21,209
Secured notes		8,848			8,497
Repurchase obligations		165,239			—
Securitized debt obligations		74,472			139,184
Total liabilities		285,438			168,890
Equity:
Class A common stock, $0.10 par value, 100,000 shares authorized, 28,802 and 2,927 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively		288			293
Additional paid-in capital		1,242,892			609,002
Accumulated deficit		(530,491	)		(535,851	)
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		712,689			73,444
Non-controlling interests		88,978			80,009
Total equity		801,667			153,453
Total liabilities and equity	$	1,087,105		$	322,343

See accompanying notes to consolidated financial statements.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Consolidated Balance Sheets (unaudited)

June 30, 2013 and December 31, 2012

(in thousands)

The following presents the portion of the consolidated balances presented above attributable to consolidated variable interest entities, or VIEs. The following assets may only be used to settle obligations of these consolidated VIEs and these liabilities are only the obligations of these consolidated VIEs and they do not have recourse to the general credit of Blackstone Mortgage Trust, Inc.

	June 30, 2013		December 31, 2012
Assets
Loans receivable, net	$	77,000	$	141,500
Loans held-for-sale, net		3,800		—
Accrued interest receivable, prepaid expenses, and other assets		2,838		4,021
Total assets	$	83,638	$	145,521
Liabilities
Accounts payable, accrued expenses and other liabilities	$	155	$	88
Securitized debt obligations		74,472		139,184
Total liabilities	$	74,627	$	139,272

See accompanying notes to consolidated financial statements.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

Three and Six Months Ended June 30, 2013 and 2012

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income from loans and other investments:
Interest and related income	$	6,017		$	6,763		$	7,473		$	21,479
Less: Interest and related expenses		1,306			5,413			2,083			28,754
Income (loss) from loans and other investments, net		4,711			1,350			5,390			(7,275	)
Other expenses:
General and administrative		3,427			1,567			5,465			2,323
Total other expenses		3,427			1,567			5,465			2,323
Total other-than-temporary impairments of securities		—			—			—			—
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		—			—			—			(160	)
Net impairments recognized in earnings		—			—			—			(160	)
Recovery of provision for loan losses		—			—			—			8
Valuation allowance on loans held-for-sale		2,000			—			1,800			—
Unrealized gain on investments at fair value		4,000			—			4,000			—
Gain on extinguishment of debt		38			—			38			—
Fair value adjustment on investment in CT Legacy Asset		—			3,704			—			7,657
Gain on deconsolidation of subsidiary		—			—			—			146,380
Income from equity investments in unconsolidated subsidiaries		—			205			—			901
Income before income taxes		7,322			3,692			5,763			145,188
Income tax provision		554			—			593			301
Income from continuing operations	$	6,768		$	3,692		$	5,170		$	144,887
Loss from discontinued operations, net of tax		—			(341	)		—			(914	)
Net Income	$	6,768		$	3,351		$	5,170		$	143,973
Net income attributable to non-controlling interests		(4,020	)		(1,068	)		(5,537	)		(75,137	)
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.	$	2,748		$	2,283		($	367	)	$	68,836
Per share information:
Income (loss) from continuing operations per share of common stock:
Basic	$	0.22		$	1.15		($	0.05	)	$	30.50
Diluted	$	0.22		$	1.08		($	0.05	)	$	28.65
Loss from discontinued operations per share of common stock:
Basic	$	—		($	0.15	)	$	—		($	0.40	)
Diluted	$	—		($	0.15	)	$	—		($	0.38	)
Net income (loss) per share of common stock:
Basic	$	0.22		$	1.00		($	0.05	)	$	30.10
Diluted	$	0.22		$	0.93		($	0.05	)	$	28.27
Weighted average shares of common stock outstanding:
Basic		12,401,274			2,289,352			7,734,774			2,286,582
Diluted		12,401,274			2,442,686			7,734,774			2,435,339

See accompanying notes to consolidated financial statements.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2013 and 2012

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net income	$	6,768		$	3,351		$	5,170		$	143,973
Other comprehensive income:
Unrealized gain on derivative financial instruments		—			1,965			—			3,749
Gain on interest rate swaps no longer designated as cash flow hedges		—			—			—			2,481
Amortization of unrealized gains and losses on securities		—			(8	)		—			(765	)
Amortization of deferred gains and losses on settlement of swaps		—			—			—			(56	)
Other-than-temporary impairments of securities related to fair value adjustments in excess of expected credit losses, net of amortization		—			(174	)		—			213
Other comprehensive income		—			1,783			—			5,622
Comprehensive income	$	6,768		$	5,134		$	5,170		$	149,595
Less: Comprehensive income attributable to non-controlling interests		(4,020	)		(1,068	)		(5,537	)		(75,147	)
Comprehensive income (loss) attributable to Blackstone Mortgage Trust, Inc.	$	2,748		$	4,066		($	367	)	$	74,448

See accompanying notes to consolidated financial statements.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Consolidated Statements of Changes in (Deficit) Equity

For the Six Months Ended June 30, 2013 and 2012

(in thousands)

(unaudited)

	Class A Common Stock			Restricted Class A Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Total Blackstone Mortgage Trust, Inc. Stockholders’  (Deficit) Equity			Noncontrolling Interests			Total
Balance at January 1, 2012	$	220		$	2	$	597,049	($	40,584	)	($	667,111	)	($	110,424	)	($	18,515	)	($	128,939	)
Net income		—			—		—		—			68,836			68,836			75,137			143,973
Other comprehensive income		—			—		—		5,612			—			5,612			10			5,622
Deconsolidation of CT Legacy Asset		—			—		—		1,293			—			1,293			—			1,293
Distributions to noncontrolling interests		—			—		—		—			—			—			(7	)		(7	)
Restricted class A common stock earned, net of shares deferred		—			3		182		—			—			185			—			185
Deferred directors’ compensation		—			—		113		—			—			113			—			113
Balance at June 30, 2012	$	220		$	5	$	597,344	($	33,679	)	($	598,275	)	($	34,385	)	$	56,625		$	22,240
Balance at January 1, 2013	$	293		$	—	$	609,002	$	—		($	535,851	)	$	73,444		$	80,009		$	153,453
Net (loss) income		—			—		—		—			(367	)		(367	)		5,537			5,170
Consolidation of subsidiary		—			—		—		—			5,727			5,727			6,235			11,962
Contributions from non-controlling interests		—			—		—		—			—			—			15,000			15,000
Purchase of and distributions to non-controlling interests		—			—		—		—			—			—			(17,803	)		(17,803	)
Proceeds from offering of common stock		258			—		633,552		—			—			633,810			—			633,810
Reverse stock split		(263	)		—		263		—			—			—			—			—
Deferred directors’ compensation		—			—		75		—			—			75			—			75
Balance at June 30, 2013	$	288		$	—	$	1,242,892	$	—		($	530,491	)	$	712,689		$	88,978		$	801,667

See accompanying notes to consolidated financial statements.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2013 and 2012

(in thousands)

(unaudited)

	2013			2012
Cash flows from operating activities:
Net income	$	5,170		$	143,973
Adjustments to reconcile net income to net cash provided by operating activities:
Net impairments recognized in earnings		—			160
Recovery of provision for loan losses		—			(8	)
Valuation allowance on loans held-for-sale		(1,800	)		—
Unrealized gain on investments at fair value		(4,000	)		—
Gain on extinguishment of debt		(38	)		—
Fair value adjustment on CT Legacy Asset		—			(7,657	)
Gain on deconsolidation of subsidiary		—			(146,380	)
Income from equity investments in unconsolidated subsidiaries		—			(901	)
Distributions of income from unconsolidated subsidiaries		—			1,710
Distributions from CT Legacy Asset		—			6,634
Non-cash compensation expense		1,586			504
Amortization of premiums/discounts on loans and securities and deferred interest on loans		(434	)		(393	)
Amortization of deferred gains and losses on settlement of swaps		—			(56	)
Amortization of deferred financing costs and premiums/discounts on debt obligations		401			9,846
Loss on interest rate swaps not designated as cash flow hedges		4			2,772
Changes in assets and liabilities, net:
Deferred origination fees and other revenue		4,219			—
Accrued interest receivable		1,309			(3,785	)
Deferred income taxes		—			(1,458	)
Prepaid expenses and other assets		896			2,622
Accounts payable and accrued expenses		1,289			(1,075	)
Net cash provided by operating activities		8,602			6,508
Cash flows from investing activities:
Origination/purchase of loans receivable		(756,638	)		—
Principal collections and proceeds from securities		349			28,122
Principal collections of loans receivable		96,546			83,245
Contributions to unconsolidated subsidiaries		—			(4,030	)
Distributions from unconsolidated subsidiaries		—			677
Increase in restricted cash		(7,726	)		(2,448	)
Net cash (used in) provided by investing activities		(667,469	)		105,566
Cash flows from financing activities:
Borrowings under repurchase obligations		216,464			123,977
Repayments under repurchase obligations		(71,439	)		(58,464	)
Repayments under mezzanine loan		—			(63,000	)
Repayment of securitized debt obligations		(64,674	)		(114,768	)
Payment of deferred financing costs		(2,175	)		—
Contributions from non-controlling interests		15,000			—
Purchase of and distributions to non-controlling interests		(17,672	)		(8	)
Settlement of interest rate swaps		(6,123	)		—
Vesting of restricted class A common stock		—			(25	)
Proceeds from issuance of common stock		633,810			—
Net cash provided by (used in) financing activities		703,191			(112,288	)
Net increase (decrease) in cash and cash equivalents		44,323			(214	)
Cash and cash equivalents at beginning of period		15,423			34,818
Cash and cash equivalents at end of period	$	59,746		$	34,604
Supplemental disclosure of cash flows information
Payments of interest	($	1,434	)	($	17,105	)
Payments of income taxes	($	410	)	($	1,119	)
Supplemental disclosure of non-cash investing and financing activities
(Consolidation) deconsolidation of subsidiaries	($	38,913	)	$	122,308

See accompanying notes to consolidated financial statements.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited)

Note 1. Organization

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

We are a real estate finance company that primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. We are externally managed by BXMT Advisors L.L.C., which we refer to as our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” We are headquartered in New York City.

We conduct our operations as a real estate investment trust, or REIT, for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries. Our business is organized into two operating segments, the Loan Origination segment and the CT Legacy Portfolio segment.

On April 26, 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected on May 6, 2013 concurrently with a one-for-ten reverse stock split of our class A common stock. Except where the context indicates otherwise, all class A common stock numbers herein have been adjusted to give retroactive effect to the reverse stock split.

Note 2. Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the consolidated financial statements are presented fairly and that estimates made in preparing its consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and the related management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities and Exchange Commission.

Principles of Consolidation and Basis of Presentation

The accompanying financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, and variable interest entities, or VIEs, in which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Certain of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest, and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary, and is generally the entity with (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and therefore a further disaggregated presentation would not be more meaningful.

Our CT Legacy Partners, LLC, or CT Legacy Partners, subsidiary accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and securities investments of CT Legacy Partners at fair value on our consolidated balance sheet.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

As more fully described in Note 3, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Certain reclassifications have been made in the presentation of the prior period consolidated financial statements to conform to the June 30, 2013 presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

Revenue Recognition

Interest income from our loans receivable is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.

Cash and Cash Equivalents

Cash and cash equivalents represents cash on hand, cash held in banks and liquid investments with original maturities of three months or less. We place our cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. We may have bank balances in excess of federally insured amounts. We have not experienced, and do not expect, any losses on our demand deposits, commercial paper or money market investments.

Restricted Cash

We classify the cash balances held by CT Legacy Partners as restricted because, while these cash balances are available for use by CT Legacy Partners for operations, debt service, or other purposes, they cannot be used by us until our allocable share is distributed from CT Legacy Partners, and cannot be commingled with any of our other, unrestricted cash balances.

Loans Receivable, Provision for Loan Losses, Loans Held-for-Sale and Related Allowance

We purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment on these loans is measured by comparing the estimated fair value of the underlying collateral to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders and other factors deemed necessary by our Manager. Actual losses, if any, could ultimately differ from these estimates.

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated one through eight, which ratings are defined as follows:

1 -	Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in-place debt yield, and stable projected cash flow.
2 -	Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.
3 -	Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

4 -	Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.
5 -	Low Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 15% probability of default or principal loss.
6 -	Medium Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 33% probability of default or principal loss.
7 -	High Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 67% or higher probability of default or principal loss.
8 -	In Default: A loan which is in contractual default and/or which has a very high likelihood of principal loss.

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis and fair value less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statement of operations as a valuation allowance on loans held-for-sale.

Equity Investments in Unconsolidated Subsidiaries

Our carried interest in CT Opportunity Partners I, LP, or CTOPI is accounted for using the equity method. CTOPI’s assets and liabilities are not consolidated into our financial statements due to our determination that (i) it is not a VIE and (ii) the investors have sufficient rights to preclude consolidation by us. As such, we report our allocable percentage of the net assets of CTOPI on our consolidated balance sheet. We have deferred the recognition of income from CTOPI until cash is collected or appropriate contingencies have been eliminated and, therefore do not recognize any income from equity investments in unconsolidated subsidiaries.

Deferred Financing Costs

The deferred financing costs that are included in prepaid expenses and other assets on our consolidated balance sheets include issuance costs related to our debt obligations, and are amortized using the effective interest method, or a method that approximates the effective interest method, over the life of the related obligations.

Repurchase Obligations

We record investments financed with repurchase obligations as separate assets and the related borrowings under any repurchase agreements recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the repurchase obligations are reported separately on our consolidated statements of operations.

Interest Rate Derivative Financial Instruments

In the normal course of business, we use interest rate derivative financial instruments to manage, or hedge, cash flow variability caused by interest rate fluctuations. Specifically, we may use interest rate swaps to convert floating rate liabilities that are financing fixed rate assets into fixed rate liabilities. The differential to be paid or received on these agreements is recognized on the accrual basis as an adjustment to the interest expense related to the attendant liability. In cases where interest rate swap agreements are terminated early, any gain or loss is generally amortized over the remaining life of the hedged item. These swap agreements must be effective in reducing the variability of cash flows of the hedged items in order to qualify for the aforementioned hedge accounting treatment. Changes in the fair value of effective cash flow hedges are reflected on our consolidated financial statements through accumulated other comprehensive income (loss) and do not affect our net income (loss). To the extent a derivative does not qualify for hedge accounting, and is deemed a non-hedge derivative, the changes in its fair value are included in net income (loss).

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or the Codification, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

The “Fair Value Measurement and Disclosures” Topic of the Codification also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of

- 10 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

• Level 1 - Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

• Level 2 - Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs such as interest rates, yield curves, credit risks, and default rates.

• Level 3 - Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third parties when determining fair value and generally represent anything which does not meet the criteria of Levels 1 and 2.

Each type of asset recorded at fair value using Level 3 inputs are determined by an internal committee comprised of members of senior management of our Manager, including our chief executive officer, chief financial officer, and other senior officers.

Certain of our assets and liabilities are measured at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets and liabilities that are measured at fair value are discussed further in Note 17. Generally, loans held-for-sale, loans receivable, and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability which was recorded at fair value as of June 30, 2013 and December 31, 2012:

Loans held-for-sale: Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

Loans receivable, at fair value: Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value: CT Legacy Partners’ other assets are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans: The loans identified for impairment are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of fair value of the underlying collateral less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders and other factors deemed necessary by our Manager.

Investment in CT Legacy Asset: We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets, and then applied the proceeds to first satisfy the related repurchase facility.

We are also required by GAAP to disclose fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

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Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents: The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash: The carrying amount of restricted cash approximates fair value.

Loans receivable, net: Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors including capitalization rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders and indications of market value from other market participants.

Secured notes: These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations: These facilities were recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Securitized debt obligations: These obligations are recorded at the face value of outstanding obligations to third-parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third-party dealers.

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. Many of these requirements, however, are highly technical and complex. If we were to fail to meet these requirements, we may be subject to federal, state and local income tax on current and past income, and penalties. See Note 15 for additional information.

Accounting for Stock-Based Compensation

Stock-based compensation expense is recognized in net income using a fair value measurement method, which we determine with the assistance of a third-party appraisal firm. Compensation expense for the time vesting of stock-based compensation grants is recognized on the accelerated attribution method and compensation expense for performance vesting of stock-based compensation grants is recognized on a straight line basis.

The fair value of the performance vesting restricted class A common stock is measured on the grant date using a Monte Carlo simulation to estimate the probability of the market vesting conditions being satisfied. The Monte Carlo simulation is run approximately 100,000 times. For each simulation, the payoff is calculated at the settlement date, and is then discounted to the grant date at a risk-free interest rate. The average of the values over all simulations is the expected value of the restricted class A common stock on the grant date. The valuation is performed in a risk-neutral framework, so no assumption is made with respect to an equity risk premium. Significant assumptions used in the valuation include an expected term and stock price volatility, an estimated risk-free interest rate and an estimated dividend growth rate.

Comprehensive Income

The primary component of comprehensive income other than net income is the unrealized gains and losses on derivative financial instruments.

Earnings per Share of Common Stock

Basic earnings per share, or EPS, is computed based on the net earnings allocable to common stock and stock units, divided by the weighted average number of shares of common stock and stock units outstanding during the period. Diluted EPS is determined using the treasury stock method, and is based on the net earnings allocable to common stock and stock units, divided by the weighted average number of shares of common stock, stock units and potentially dilutive common stock options and warrants. On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. Our earnings per share disclosures have been retroactively adjusted to reflect the reverse stock split.

We have separately determined EPS and diluted EPS for income (loss) from continuing operations and for net income (loss) allocable to common stockholders. See Note 12 for additional discussion of earnings per share.

- 12 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Recent Accounting Pronouncements

In January 2013, the FASB issued Accounting Standards Update 2013-01, “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities,” or ASU 2013-01. ASU 2013-01 was developed to clarify which instruments and transactions are subject to the offsetting disclosure requirements set forth by Accounting Standards Update 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” ASU 2013-01 is effective for the first interim or annual period beginning on or after January 1, 2013, and should be applied retrospectively for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial statements.

In February 2013, the FASB issued Accounting Standards Update 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” or ASU 2013-02. ASU 2013-02 implements the previously deferred requirement to disclose reclassification adjustments into and out of accumulated other comprehensive income in either a note or on the face of the financial statements. ASU 2013-02 is effective for the first interim or annual period beginning after December 15, 2012, and should be applied prospectively. As we no longer have a balance of accumulated other comprehensive income, the adoption of ASU 2013-02 did not have a material impact on our consolidated financial statements.

In June 2013, the FASB issued Accounting Standards Update 2013-08, “Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” or ASU 2013-08. ASU 2013-08 amends the criteria for qualification as an investment company under Topic 946 of the FASB Accounting Standards Codification, or Topic 946, and requires additional disclosure by investment companies. ASU 2013-08 is effective for the first interim or annual period beginning after December 15, 2013, and should be applied prospectively. We currently consolidate CT Legacy Partners, which accounts for its operations as an investment company under Topic 946. We do not expect the adoption of ASU 2013-08 to impact CT Legacy Partners’ status as an investment company. Further, because ASU 2013-08 specifically excludes REITs from its scope, it will not otherwise impact our consolidated financial statements.

Note 3. Corporate Transactions

Blackstone Loan Warehouse Joint Venture

On May 13, 2013, we entered into a joint venture, 42-16 Partners, LLC, or 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was controlled by us and owned 16.7% by us and 83.3% by an affiliate of our Manager, and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate of our Manager using proceeds from the sale of our class A common stock and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary.

CT Legacy Partners Merger

To maintain its tax efficiency, on March 20, 2013, CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, was merged with and into CT Legacy Partners, LLC, or CT Legacy Partners, and whereby CT Legacy Partners was the surviving entity, effective as of March 22, 2013. We refer to this transaction as the Merger. As a result of the Merger, all outstanding shares of class A-1 common stock, class A-2 common stock, class B common stock, and class A preferred stock of CT Legacy REIT were converted into limited liability company shares, or LLC Shares, in CT Legacy Partners. These LLC Shares have economic and voting rights equivalent to the corresponding shares of stock of CT Legacy REIT. In addition, all outstanding shares of class B preferred stock of CT Legacy REIT were redeemed on March 21, 2013 for an aggregate $147,000, which amount is comprised of the shares’ par value, liquidation preference, and accrued dividends thereon.

As a result of the Merger, we have consolidated CT Legacy Partners as of March 20, 2013 and, therefore, the remaining legacy assets and liabilities from our comprehensive debt restructuring on March 31, 2011, which we refer to as our March 2011 Restructuring. See Note 8 and Note 12 for further discussion of CT Legacy Partners.

- 13 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Sale of Investment Management Platform

On December 19, 2012, pursuant to a purchase and sale agreement, dated as of September 27, 2012, or Purchase Agreement, by and between us and Blackstone, we completed the disposition of our investment management and special servicing business for a purchase price of $21.4 million. The sale included our equity interests in CT Investment Management Co., LLC, or CTIMCO, our related private investment fund co-investments, and 100% of the outstanding class A preferred stock of CT Legacy REIT. We refer the entire transaction as our Investment Management Business Sale. Pursuant to the terms of the Purchase Agreement, on December 19, 2012, we entered into a management agreement with our Manager, which was amended and restated as of March 26, 2013, pursuant to which we are now managed by our Manager pursuant to the terms and conditions of the management agreement. In addition, Blackstone received the right to designate two members of our board of directors, and exercised that right by designating an employee and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012. As a result of the Investment Management Business Sale, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations. See Note 14 for a further discussion of discontinued operations.

On December 19, 2012, we also closed our sale to Blackstone of 500,000 shares of our class A common stock for a purchase price of $10.0 million.

In connection with the consummation of the Investment Management Business Sale and the closing of our sale of 500,000 shares of class A common stock to Blackstone, we paid a $20.00 per share special cash dividend on December 20, 2012 to holders of record of our class A common stock at the close of business on November 12, 2012.

The assets we retained following our Investment Management Business Sale consisted primarily of: (i) cash and cash equivalents, (ii) our interests in CT Legacy Partners, a vehicle we formed to own and finance certain legacy assets that we retained in connection with a comprehensive debt restructuring in 2011, (iii) our carried interest in CTOPI, a private investment fund that was previously under our management and is now managed by an affiliate of our Manager, and (iv) our subordinated interests in certain collateral debt obligations, or CT CDOs.

CT CDO Deconsolidation

On December 19, 2012, as a result of the Investment Management Business Sale, we are no longer the collateral manager for certain collateralized debt obligations, or CT CDOs, nor the special servicer on their collateral assets. Due to the externalization of these management functions, and our lack of material economic interest in the residual equity we own in CT CDOs II and IV, we ceased to be the primary beneficiary of these entities and, therefore, discontinued the consolidation of CT CDOs II and IV, which we refer to as the CT CDO Deconsolidation. We recognized a gain of $53.9 million on the deconsolidation of CT CDOs II and IV, which was due primarily to the reversal of charges to shareholders’ equity resulting from losses previously recorded in excess of our economic interests in these non-recourse securitization vehicles.

Note 4. Cash and Cash Equivalents, Including Restricted Cash

As discussed in Note 2, we place our cash and cash equivalents, including restricted cash, with high credit quality institutions to minimize credit risk exposure. The following table outlines details of our cash and cash equivalents, including restricted cash balances as of June 30, 2013 and December 31, 2012.

			Balance as of
Asset Type	Depository	Credit Rating  (1)	June 30, 2013		December 31, 2012
Cash	Bank of America	A-1	$	59,746	$	15,423
Restricted Cash	Bank of America	A-1		21,972		14,246
Total			$	81,718	$	29,669

(1) Represents the short-term credit rating for the Bank of America, N.A. legal entity as issued by Standard & Poor’s as of May 16, 2013.

- 14 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Note 5. Loans Receivable

As of June 30, 2013, our consolidated balance sheet includes $753.1 million of loans receivable related to our Loan Originations segment and $77.0 million of loans receivable owned by CT CDO I, a consolidated securitization vehicle included in our CT Legacy Portfolio segment. See Note 19 for further discussion of our operating segments.

Activity relating to our loans receivable for the six months ended June 30, 2013 was as follows ($ in thousands):

	Gross Book Value			Provision for Loan Losses			Net Book Value
December 31, 2012	$	164,180		($	22,680	)	$	141,500
Loan originations		756,638			—			756,638
Deferred origination fees and expenses		(3,776	)		—			(3,776	)
Amortization of deferred fees and expenses		239			—			239
Loan satisfactions		(62,500	)		—			(62,500	)
Partial loan repayments		—			—			—
Reclassification to loans held-for-sale		(6,601	)		4,601			(2,000	)
June 30, 2013	$	848,180		($	18,079	)	$	830,101

As of June 30, 2013, we had unfunded commitments of $8.6 million related to one senior mortgage loan, which amounts will only be funded to finance lease-related or capital expenditures by the borrower until the commitment terminates in June 2016.

The following table details overall statistics for our loans receivable portfolio as of June 30, 2013 and December 31, 2012 ($ in thousands):

	June 30, 2013			December 31, 2012
Number of loans		13			7
Principal balance	$	851,716		$	164,180
Net book value	$	830,101		$	141,500
Wtd. Avg. cash coupon (1)		L+4.38	%		L+2.51	%
Wtd. Avg. all-in yield (1)		L+5.27	%		L+4.53	%
Wtd. Avg. maximum maturity (years) (2)		3.7			0.7

(1) All loans are floating rate loans indexed to LIBOR as of both June 30, 2013 and December 31, 2012. LIBOR was 0.19% and 0.21% as of June 30, 2013 and December 31, 2012, respectively; however, certain of our loans receivable earn interest based on a minimum LIBOR ranging from 0.20% to 1.00%. Amounts exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

- 15 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The tables below detail the types of loans in our loan portfolio, as well as the property type and geographic distribution of the properties securing these loans, as of June 30, 2013 and December 31, 2012 ($ in thousands):

	June 30, 2013					December 31, 2012
Asset Type	Net Book Value		Percentage			Net Book Value		Percentage
Senior mortgages (1)	$	753,101		91	%	$	62,500		44	%
Subordinate interests in mortgages		77,000		9			79,000		56
Total	$	830,101		100	%	$	141,500		100	%

Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	413,648		49	%	$	111,500		79	%
Hotel		162,885		20			30,000		21
Multifamily		189,557		23			—		—
Land		64,011		8			—		—
Total	$	830,101		100	%	$	141,500		100	%

Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
West	$	454,091		54	%	$	92,500		65	%
Northeast		227,034		27			27,000		19
Southeast		93,000		12			12,404		9
Midwest		48,380		6			—		—
Southwest		7,596		1			9,596		7
Total	$	830,101		100	%	$	141,500		100	%

(1) Senior mortgages include two pari passu participations in mortgages with a combined book value of $91.1 million as of June 30, 2013.

Loan risk ratings

Quarterly, our Manager evaluates our loan portfolio as described in Note 2. In conjunction with our quarterly loan portfolio review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors including risk of loss, current LTV, collateral performance, structure, exit plan, and sponsorship. Loans are rated one (less risk) through eight (greater risk), which ratings are defined in Note 2.

The following table allocates the net book value and principal balance of our loans receivable based on our internal risk ratings as of June 30, 2013 and December 31, 2012 ($ in thousands):

	Loans Receivable as of June 30, 2013						Loans Receivable as of December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1- 3		9	$	776,637	$	773,101		2	$	47,000	$	47,000
4 - 5		2		57,000		57,000		2		92,500		92,500
6 - 8		2		18,079		—		3		24,680		2,000
Total		13	$	851,716	$	830,101		7	$	164,180	$	141,500

- 16 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

In making this risk assessment, one of the primary factors we consider is how senior or junior each loan is relative to other debt obligations of the borrower. The following tables further allocate our loans receivable by both loan type and our internal risk ratings as of June 30, 2013 and December 31, 2012 ($ in thousands):

	Senior Mortgage Loans (1)
	as of June 30, 2013						as of December 31, 2012
Risk Rating	Number of  Loans		Principal Balance		Net Book  Value		Number of Loans		Principal Balance		Net Book  Value
1 - 3		8	$	756,638	$	753,101		—	$	—	$	—
4 - 5		—		—		—		1		62,500		62,500
Total		8	$	756,638	$	753,101		1	$	62,500	$	62,500

(1) Senior mortgage loans include two pari passu participations with an aggregate principal balance and net book value of $91.1 million.

	Subordinate Interests in Mortgages
	as of June 30, 2013						as of December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book  Value		Number of Loans		Principal Balance		Net Book  Value
1 - 3		1	$	20,000	$	20,000		2	$	47,000	$	47,000
4 - 5		2		57,000		57,000		1		30,000		30,000
6 - 8		2		18,079		—		3		24,680		2,000
Total		5	$	95,079	$	77,000		6	$	101,680	$	79,000

Loan impairments

We do not have any loan impairments in our Loan Origination segment. As of June 30, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one impaired subordinate interest in a mortgage loan with a gross book value of $7.5 million that is current in its interest payments and one impaired subordinate interest in a mortgage loan with a gross book value of $10.6 million that is delinquent on its contractual payments. We have taken 100% loan loss reserve on each of these loans.

As of December 31, 2012, consolidated securitization vehicles in our CT Legacy Portfolio segment had one impaired subordinate interest in a mortgage loan with a gross book value of $7.5 million that was current in its interest payments and two impaired subordinate interest in a mortgage loans with a combined gross book value of $17.2 million that was delinquent on their contractual payments. We had an aggregate 92% loan loss reserve on these loans resulting in a net book value of $2.0 million.

Generally, we have recorded loan loss reserves for all loans which are in maturity default, or otherwise have past-due principal payments. We do not have any loans in maturity default or with past-due principal payments in our Loan Origination segment. As of June 30, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one loan with a net book value of $27.0 million which was in maturity default but had no reserve recorded. We expect to collect all principal and interest due under this loan.

There was no income recorded on impaired loans during the six months ended June 30, 2013. We recorded $290,000 of income on impaired subordinate interests in mortgage loans with an average net book value of $3.3 million during the six months ended June 30, 2012. Substantially all income recorded on impaired loans during the period was received in cash.

Nonaccrual loans

We do not have any nonaccrual loans in our Loan Origination segment. Consolidated securitization vehicles in our CT Legacy Portfolio segment had subordinate interests in mortgages on nonaccrual status with an aggregate principal balance of $18.1 million and an aggregate net book value of zero as of June 30, 2013. Consolidated securitization vehicles in our CT Legacy Portfolio segment had subordinate interests in mortgages on nonaccrual status with an aggregate principal balance of $24.7 million and an aggregate net book value of $2.0 million as of December 31, 2012. In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans which are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. Accordingly, we do not have any material interest receivable accrued on nonperforming loans as of June 30, 2013 or December 31, 2012.

- 17 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Note 6. Loans Held-For-Sale

Activity relating to our loans held-for-sale for the six months ended June 30, 2013 was as follows ($ in thousands):

	Gross Book Value		Valuation Allowance			Net Book Value
December 31, 2012	$	—	$	—		$	—
Reclassification from loans receivable		6,601		(4,601	)		2,000
Valuation allowance on loans held-for-sale		—		1,800			1,800
June 30, 2013	$	6,601	($	2,801	)	$	3,800

During the first quarter of 2013, we reclassified a $6.6 million subordinate mortgage loan and its related $4.6 million reserve for loan losses to loans held-for-sale. During the six months ended June 30, 2013, we recorded a $1.8 million valuation adjustment to reflect this loan at its approximate fair value as of June 30, 2013.

Note 7. Loans Receivable, At Fair Value

We record CT Legacy Partners’ loans receivable investments at fair value, which are determined using internal financial model-based estimations. The CT Legacy Partners loans receivable portfolio included eleven loans with an aggregate principal balance of $220.7 million, which were reported at their aggregate fair value of $117.5 million as of June 30, 2013. As of December 31, 2012, there were no loans receivables at fair value because we accounted for CT Legacy Partners as a non-consolidated subsidiary. Refer to Note 3 and Note 8 for additional discussion of CT Legacy Partners. See Note 17 for further discussion of fair value and Note 19 for an allocation of our loans receivable between our operating segments.

The following table details overall statistics for CT Legacy Partners’ loans receivable, which is held at fair value as of June 30, 2013 ($ in millions):

	Loans Receivable, at Fair Value
	Floating Rate			Fixed Rate			Total
Number of loans		8			3			11
Net Book Value	$	94		$	24		$	118
Wtd. Avg. cash coupon (1)		L+3.90	%		8.14	%		4.74	%
Wtd. Avg. all-in yield (1)		L+4.64	%		8.12	%		5.34	%
Wtd. Avg. maximum maturity (years) (2)		0.6			1.4			0.8

(1) Floating rate loans are indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013; however, certain of our loans receivable earn interest based on a minimum LIBOR of 2.0%. Amounts exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

- 18 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The tables below detail the types of loans in CT Legacy Partners’ loan portfolio, as well as the property type and geographic distribution of the properties securing these loans, as of June 30, 2013 ($ in thousands):

	June 30, 2013
Asset Type	Net Book Value		Percentage
Subordinate interests in mortgages	$	49,695		42	%
Mezzanine loans		41,043		35
Senior mortgages		26,811		23
Total	$	117,549		100	%

Property Type	Net Book Value		Percentage
Hotel	$	51,761		44	%
Office		41,682		35
Other		24,106		21
Total	$	117,549		100	%

Geographic Location	Net Book Value		Percentage
Northeast	$	41,682		35	%
Northwest		24,106		21
West		14,302		12
Southeast		11,869		10
International		25,590		22
Total	$	117,549		100	%

Nonaccrual loans

In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans which are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. We do not have any material interest receivable accrued on nonperforming loans as of June 30, 2013.

The following table details our loans receivable which are on nonaccrual status as of June 30, 2013 ($ in thousands):

Non-Accrual Loans Receivable as of June 30, 2013
Asset Type	Principal Balance		Net Book  Value
Senior Mortgage Loans	$	—	$	—
Subordinate Interests in Mortgages		43,448		—
Mezzanine & Other Loans		69,146		11,869
Total	$	112,594	$	11,869

Note 8. Investment in CT Legacy Asset, at Fair Value

As a result of the merger effective on March 22, 2013, we began consolidating CT Legacy Partners and its subsidiary, CT Legacy Asset, LLC or CT Legacy Asset. Previously, we accounted for CT Legacy Asset on a non-consolidated basis, and as of December 31, 2012, our consolidated balance sheet included a net investment in CT Legacy Asset of $132.0 million. We have elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset due to our determination that the fair value of the investment in CT Legacy Asset, as a net liquidating portfolio of assets, is more meaningful and indicative of our interests in CT Legacy Asset than equity method accounting. Following its consolidation, the loans receivable and repurchase obligations of CT Legacy Partners, as well as its other assets and liabilities, are included in our consolidated balance sheet. See Note 3 for additional discussion of the consolidation of CT Legacy Partners and Note 7 and Note 10 for further discussion of CT Legacy Partners’ loan receivables and repurchase obligation, respectively.

- 19 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

CT Legacy Partners

CT Legacy Partners holds a portion of our legacy portfolio, which we had previously transferred to CT Legacy REIT (the predecessor of CT Legacy Partners) in connection with our March 2011 Restructuring. CT Legacy Partners is beneficially owned 52% by us and 48% by our former lenders. In addition, CT Legacy Partners has issued class B common shares, a subordinate class of equity which entitles its holders to receive approximately 25% of the dividends that would otherwise be payable to us on our equity interest in CT Legacy Partners, after aggregate cash distributions of $50.0 million have been paid to all other classes of common equity. Further, CT Legacy Partners has issued class A preferred shares which entitle its holder to cumulative preferred distributions in an amount generally equal to the greater of (i) 2.5% of certain of CT Legacy Partners’ assets, and (ii) $1.0 million per annum.

Our equity interest in CT Legacy Partners is comprised of 4,393,750 class A-1 common shares, 775,000 class A-2 common shares, and 118,651 class B common shares. The outstanding common shares of CT Legacy Partners are comprised of 4.4 million class A-1 common shares, 5.6 million class A-2 common shares, and 1.5 million class B common shares. The equity interests of other members of CT Legacy Partners are reflected as non-controlling interests on our consolidated balance sheet. As of June 30, 2013, CT Legacy Partners had not made any distribution payments to its common equity holders.

Note 9. Equity Investments in Unconsolidated Subsidiaries

As of June 30, 2013, our equity investments in unconsolidated subsidiaries consisted solely of our carried interest in CTOPI, a fund sponsored and managed by CTIMCO. Historically, this balance has also included our co-investments in investment management vehicles that were sponsored and managed by CTIMCO. As described in Note 3, we sold two such co-investments to an affiliate of Blackstone in December 2012 in conjunction with our Investment Management Business Sale; however, we retained 100% of our carried interest in CTOPI.

Activity relating to our equity investments in unconsolidated subsidiaries for the six months ended June 30, 2013 was as follows ($ in thousands):

	CTOPI Carried Interest  (1)
Total as of December 31, 2012	$	13,306
Incentive income allocation (2)		9,934
Total as of June 30, 2013	$	23,240

(1) The allocation of carried interest from CTOPI is net of a $1.4 million advance distribution of incentive compensation to satisfy our 2012 income tax obligation related to the allocation of taxable income in respect of our carried interest in CTOPI.

(2) We have deferred the recognition of incentive income allocated to us from CTOPI in respect of our carried interest in CTOPI, and recorded an offsetting liability as a component of accounts payable and other liabilities on our consolidated balance sheet.

Our carried interest in CTOPI entitles us to earn incentive compensation in an amount equal to 17.7% of the fund’s profits, after a 9% preferred return and 100% return of capital to the CTOPI partners. As of June 30, 2013, we had been allocated $24.6 million of incentive compensation from CTOPI based on a hypothetical liquidation of the fund at its net asset value.

Accordingly, we have recognized this allocation as an equity investment in CTOPI on our consolidated balance sheet; however, we have deferred the recognition of income until cash is collected or appropriate contingencies have been eliminated.

The CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. We refer to these distributions as CTOPI Tax Advances. During 2012, we received one such CTOPI Tax Advance of $1.4 million. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these CTOPI Tax Advances to the fund. As of June 30, 2013, our maximum exposure to loss from CTOPI was $1.4 million, the amount of CTOPI Tax Advances we have received from CTOPI.

- 20 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

CTOPI Incentive Management Fee Grants

In January 2011, we created a management compensation pool for employees equal to 45% of the CTOPI incentive management fee received by us. As of June 30, 2013, we had granted 96% of the pool to our former employees, and the remainder remained unallocated. If any awards remain unallocated at the time incentive management fees are received by us, any amounts otherwise payable to the unallocated awards will be distributed pro-rata to the plan participants then employed by an affiliate of our Manager.

Approximately 96% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) one-third on the date of grant; (ii) one-third on September 13, 2012; and (iii) the remainder vests upon our receipt of incentive management fees from CTOPI. The remaining 4% of these grants vest solely upon our receipt of incentive management fees from CTOPI or the disposition of certain investments owned by CTOPI.

Note 10. Debt Obligations

Secured Notes

In conjunction with our March 2011 Restructuring and the corresponding satisfaction of our senior credit facility and junior subordinated notes, certain wholly-owned subsidiaries of ours issued secured notes to these former creditors, which secured notes are non-recourse to us. The secured notes had an aggregate initial face value of $7.8 million and are secured by 93.5% of our equity interests in the class A-1 and class A-2 common shares of CT Legacy Partners, which represents 48.3% of the total outstanding class A-1 and class A-2 common shares of CT Legacy Partners. The secured notes mature on March 31, 2016 and bear interest at a rate of 8.2% per annum, which interest may be deferred until maturity. All distributions we receive from our equity interests in the common shares of CT Legacy Partners which serve as collateral under the secured notes must be used to pay, or prepay, interest and principal due thereunder, and only after the notes’ full satisfaction will we receive any cash flow from the common equity interests in CT Legacy Partners that serve as collateral for the notes. Any prepayment, or partial prepayment, of the secured notes will incur a prepayment premium resulting in a total payment of principal and interest under the secured notes of $11.1 million.

We had secured notes outstanding with an accreted book value of $8.8 million and $8.5 million as of June 30, 2013 and December 31, 2012, respectively.

Repurchase Obligations

During the second quarter of 2013, we entered into $1.0 billion of master repurchase agreements with four counterparties. As of June 30, 2013, we had aggregate borrowings of $165.2 million outstanding under these facilities, with a weighted-average cash coupon, excluding associated fees and expenses, of LIBOR plus 1.98% per annum and a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.5 years. The following table details the repurchase obligations outstanding as of June 30, 2013 ($ in thousands):

			Collateral Assets				Repurchase Balances
Repurchase Lender	Facility Size		Principal Balance		Net Book Value		Maximum Borrowings		Current Borrowings		Available Borrowings  (1)
Bank of America	$	250,000	$	126,300	$	125,557	$	101,040	$	46,400	$	54,640
Wells Fargo		250,000		300,000		298,533		250,000		—		250,000
Citibank		250,000		156,438		156,039		118,839		118,839		—
JP Morgan		250,000		—		—		—		—		—
Total	$	1,000,000	$	582,738	$	580,129	$	469,879	$	165,239	$	304,640

(1) Available borrowings is based on assets pledged as collateral under credit facilities as of June 30, 2013. There were two loans with an aggregate principal balance of $173.8 million as of June 30, 2013 that were not pledged under repurchase agreements, and therefore are available to be pledged as collateral in the future.

On May 21, 2013, we entered into a $250.0 million master repurchase agreement with Bank of America. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 1.75% and 3.25% depending on the attributes of the collateral loans. The initial maturity date of the facility is May 21, 2016, subject to two one-year extension options, each of which may be exercised by us. Obligations under this repurchase agreement are not recourse to us, except that we guarantee 50% of the advances related to senior collateral and 100% of the advances related to mezzanine and junior mortgage collateral.

- 21 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

On June 7, 2013, we entered into a $250.0 million, asset specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.50%. The initial maturity date of the facility is June 7, 2016, which may be extended pursuant to (i) two one-year extension options, each of which may be exercised by us, and (ii) an additional one-year extension option, contingent upon notice regarding the failure of the collateral mortgage loan to be repaid at its final maturity. We do not guarantee the obligations under this repurchase agreement.

On June 12, 2013, we entered into a $250.0 million master repurchase agreement with Citibank. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 2.25% depending on the attributes of the collateral loans. The initial facility expiration date is June 12, 2016, which may be extended annually by us. If upon the initial facility expiration date, Citibank does not extend the facility availability period, in its sole discretion, then no new advances may be drawn and all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. In either case, individual advances mature upon the maturity date of the respective collateral maturity dates. We guarantee 25% of the advances under this facility. Otherwise, obligations under this repurchase agreement are not recourse to us.

On June 28, 2013, we entered into a $250.0 million master repurchase agreement with JP Morgan. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 3.25% depending on the attributes of the collateral loans. The repurchase agreement specifies a one-year availability period, during which new advances can be made and which availability period is renewable at the discretion of JP Morgan. Maturity dates for individual advances are tied to their respective collateral loan maturity dates subject to annual renewal at our discretion. In the event that the availability period is not renewed, it is followed by a two year ‘stabilization’ period and then a ‘term out’ period, during which all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. Obligations under this repurchase agreement are not recourse to us, except that we guarantee 25% of the advances related to senior mortgage collateral and 100% of the advances related to mezzanine and junior mortgage collateral.

Each of the guarantees related to our master repurchase agreements contain the following uniform financial covenants: (i) our ratio of EBITDA to fixed charges shall be not less than 1.40 to 1.0; (ii) our tangible net worth shall not be less than $525.0 million plus 75% of the net cash proceeds of future equity issuances; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 80% of our total assets. As of June 30, 2013, we were in compliance with all applicable covenants.

The weighted average outstanding repurchase obligation balance for the three months ended June 30, 2013 was $28.3 million.

Repurchase Obligations - CT Legacy Partners

As of March 31, 2013, CT Legacy Partners was party to a repurchase facility with JP Morgan with an outstanding balance of $20.2 million. On June 5, 2013, CT Legacy Partners repaid the outstanding balance and terminated the repurchase facility. CT Legacy Partners has no outstanding debt obligations as of June 30, 2013.

- 22 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Securitized Debt Obligations

The balances of each of our consolidated securitization vehicles’ outstanding securitized debt obligations, their respective coupons and all-in effective costs, including the amortization of fees and expenses, were as follows ($ in thousands):

	June  30, 2013				December 31, 2012		June  30, 2013
Non-Recourse Securitized Debt Obligations	Principal Balance		Book Value		Book Value		Coupon  (1)			All-In Cost  (1)			Maturity Date  (2)
CT CDO I	$	74,472	$	74,472	$	91,131		1.79	%		1.79	%		July 2039
GSMS 2006-FL8A		—		—		48,053		—			—			N/A
Total/Weighted Average	$	74,472	$	74,472	$	139,184		1.79	%		1.79	%		July 2039

(1) Represents a weighted average for the facility, assuming LIBOR of 0.19% at June 30, 2013 for floating rate debt obligations.

(2) Maturity date represent the contractual maturity of the securitization trust. Repayment of securitized debt is a function of collateral cash flows which are disbursed in accordance with the contractual provisions of each trust, and is generally expected to occur prior to the maturity date above.

As of June 30, 2013, loans receivable with an aggregate book value of $80.8 million served as collateral for the non-recourse debt and equity securities issued by our consolidated securitizations vehicles. As of December 31, 2012, loans receivable with an aggregate book value of $141.5 million served as collateral for the securities issued by these same vehicles.

Our consolidated securitization vehicle, CT CDO I, is subject to interest coverage and overcollateralization tests which, when breached, provide for hyper-amortization of the senior notes by a redirection of cash flow that would otherwise have been paid to the subordinate classes, some of which are owned by us. Furthermore, CT CDO I provides for the re-classification of interest proceeds from impaired collateral as principal proceeds, which also serve to hyper-amortize the senior notes sold. As a result of collateral asset impairments and the related breaches of these interest coverage and overcollateralization tests, we currently do not receive any cash payments from CT CDO I.

Note 11. Derivative Financial Instruments

We may, in the normal course of business, enter into interest rate derivative financial instruments to manage, or hedge, cash flow variability caused by interest rate fluctuations. As of, and during the six months ended, June 30, 2013, we were not party to any such derivative financial instruments. However, our consolidated subsidiary, CT Legacy Partners, was party to five interest rate swaps which it terminated in June 2013. A gain of $136,000 resulting from the termination is included as a component of interest expense on our consolidated statements of operations for the six months ended June 30, 2013. CT Legacy Partners is no longer party to any derivative financial instruments as of June 30, 2013.

Note 12. Stockholders’ Equity

Balance Sheet Data

Stockholders’ Equity increased $639.2 million during the first six months of 2013 to $712.7 million. This increase was primarily driven by the issuance of additional shares of class A common stock. See below for further discussion on the share issuance.

- 23 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Accumulated Other Comprehensive Loss

We did not have any accumulated other comprehensive income or loss as of December 31, 2012 or June 30, 2013. The following table details the primary components of accumulated other comprehensive loss as of June 30, 2012, and significant activity for the six months ended June 30, 2012 ($ in thousands):

Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2011	($	27,423	)	$	56		($	16,578	)	$	3,361		($	40,584	)
Unrealized gain on derivative financial instruments		3,749			—			—			—			3,749
Ineffective portion of cash flow hedges (1)		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(765	)		(765	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities (2)		—			—			203			—			203
Deconsolidation of CT Legacy Assets (3)		—			—			3,879			(2,586	)		1,293
Total as of June 30, 2012	($	21,193	)	$	—		($	12,496	)	$	10		($	33,679	)
Allocation to non-controlling interest (3)														—
Accumulated other comprehensive loss as of June 30, 2012													($	33,679	)

(1) As a result of the deconsolidation of CT Legacy Assets in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Assets was reclassified to interest expense.

(2) Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments of $391,000.

(3) As further described in Note 1 above, we deconsolidated CT Legacy Assets in the first quarter of 2012. As a result, the balances of accumulated other comprehensive income related to CT Legacy Assets, including those allocable to non-controlling interests are no longer included in our consolidated financial statements.

Non-controlling Interests

The non-controlling interests included on our consolidated balance sheet represent the equity interests in CT Legacy Partners that are not owned by us, as described in Note 8. CT Legacy Partners’ outstanding common stock includes class A-1 common shares, class A-2 common shares, and subordinate class B common shares. A portion of CT Legacy Partners’ consolidated equity and results of operations are allocated to these non-controlling interests based on their pro-rata ownership of CT Legacy Partners.

- 24 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following table details the components of non-controlling interests as of June 30, 2013 ($ in thousands):

Non-controlling Interests in CT Legacy Partners as of June 30, 2013
Gross investment in CT Legacy Partners:
Restricted cash	$	21,972
Loans receivable, at fair value		117,549
Accrued interest receivable, prepaid expenses, and other assets		21,948
Accounts payable, accrued expenses and other liabilities		(485	)
	$	160,984
Equity interests owned by Blackstone Mortgage Trust, Inc.		(72,006	)
Non-controlling interests in CT Legacy Partners	$	88,978

Share and Share Equivalents

Authorized Capital

We have the authority to issue up to 200,000,000 shares of stock, consisting of 100,000,000 shares of class A common stock and 100,000,000 shares of preferred stock. Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval. In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock.

Reverse Stock Split

On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. As a result of the reverse stock split, the number of outstanding shares of our class A common stock was reduced to 2,926,651. In addition, there was a reclassification of $263,000 from the par value of our class A common stock to additional paid-in capital to reflect the impact of the reverse stock split.

Class A Common Stock and Deferred Stock Units

Holders of shares of class A common stock are entitled to vote on all matters submitted to a vote of stockholders, subject to the voting rights of any outstanding shares of preferred stock. Holders of record of shares of class A common stock on the record date fixed by our board of directors are entitled to receive such dividends as may be authorized by our board of directors and declared by us, subject to the rights of the holders of any shares of outstanding preferred stock. On May 29, 2013, we issued 25,875,000 shares of class A common stock at a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses. A total of 28,894,475 shares of class A common stock and stock units were issued and outstanding as of June 30, 2013.

In addition to our class A common stock, we also issue deferred stock units to certain members of our board of directors in lieu of cash compensation for services rendered. These deferred stock units are non-voting, but carry the right to receive dividends in the form of additional deferred stock units in an amount equivalent to the cash dividends paid to holders of shares of class A common stock.

- 25 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following table details the movement in our outstanding shares of class A common stock, restricted class A common stock, and deferred stock units for the six months ended June 30, 2013 and June 30, 2012:

	Six Months Ended June 30,
Common Stock Outstanding (1)(2)(3)	2013		2012
Beginning balance		3,016,407		2,277,344
Issuance of class A common stock		25,875,000		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		—		36,400
Issuance of deferred stock units		3,068		3,578
Ending balance		28,894,475		2,317,322

(1) Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2) Total class A common stock includes deferred stock units held by members of our board of directors of 93,000, and 66,000 as of June 30, 2013 and 2012, respectively.

(3) Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Preferred Stock

We have not issued any shares of preferred stock since we repurchased all of our previously issued and outstanding preferred stock in 2001.

Dividends

We generally intend to distribute each year substantially all of our taxable income (which does not necessarily equal net income as calculated in accordance with GAAP) to our stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

Our dividend policy remains subject to revision at the discretion of our board of directors. All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

No dividends were declared during the six months ended June 30, 2013 or 2012.

Earnings Per Share

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted average of both restricted and unrestricted class A common stock outstanding, for the three and six months ended June 30, 2013 and 2012 ($ in thousands, except share and per share amounts):

	Net Income (Loss) per Share of Common Stock (1)
	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013			2012
Net income (loss)	$	2,748	$	2,283	($	367	)	$	68,836
Weighted average shares outstanding		12,401,274		2,289,352		7,734,774			2,286,582
Warrants and options outstanding for the purchase of class A common stock		—		153,334		—			148,757
Weighted average shares outstanding, diluted		12,401,274		2,442,686		7,734,774			2,435,339
Per share amount, basic	$	0.22	$	1.00	($	0.05	)	$	30.10
Per share amount, diluted	$	0.22	$	0.93	($	0.05	)	$	28.27

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Refer to Note 19 for a breakdown of our results of operations for each of our operating segments.

- 26 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following table sets forth the calculation of basic and diluted income from continuing operations per share of class A common stock based on the weighted average of both restricted and unrestricted class A common stock outstanding, for the three and six months ended June 30, 2013 and 2012 ($ in thousands, except share and per share amounts):

	Income (Loss) from Continuing Operations per Share of Common Stock (1)
	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income from continuing operations	$	6,768		$	3,692		$	5,170		$	144,887
Net income attributable to non-controlling interests		(4,020	)		(1,068	)		(5,537	)		(75,137	)
Income (loss) from continuing operations attributable to Blackstone Mortgage Trust, Inc.	$	2,748		$	2,624		($	367	)	$	69,750
Weighted average shares outstanding		12,401,274			2,289,352			7,734,774			2,286,582
Warrants and options outstanding for the purchase of class A common stock		—			153,334			—			148,757
Weighted average shares outstanding, diluted		12,401,274			2,442,686			7,734,774			2,435,339
Per share amount, basic	$	0.22		$	1.15		($	0.05	)	$	30.50
Per share amount, diluted	$	0.22		$	1.08		($	0.05	)	$	28.67

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Refer to Note 19 for a breakdown of our results of operations for each of our operating segments.

Note 13. General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2013 and 2012 consisted of the following ($ in thousands):

	Six Months Ended June 30,
General and Administrative Expenses	2013		2012
Management fees to affiliates	$	983	$	—
Professional services		1,267		802
Operating and other costs		975		954
Subtotal		3,225		1,756
Non-cash compensation expenses
Management incentive awards plan - CT Legacy Partners (1)		1,511		181
Director stock-based compensation		75		112
Employee stock-based compensation		—		210
Subtotal		1,586		503
Expenses of consolidated securitization vehicles		654		64
Total	$	5,465	$	2,323

(1) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See below for discussion of the CT Legacy Partners management incentive awards plan.

As a result of our Investment Management Business Sale, the operating expenses related to our investment management business have been reclassified to income (loss) from discontinued operations on our consolidated statements of operations. See Note 3 for further discussion of the Investment Management Business Sale.

In conjunction with the Investment Management Business Sale, we entered into a new management agreement with our Manager, which was amended and restated as of March 26, 2013, pursuant to which our Manager earns a base management fee in an amount equal to the greater of (a) $250,000 per annum and (b) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the management agreement with our Manager. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (a) 20% and (b) the excess of (i) our Core Earnings (as defined in the management agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) over (ii) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period (or the period since the date of the first

- 27 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio.

During the six months ended June 30, 2013, we incurred $982,500 of management fees payable to our Manager, which are included in general and administrative expenses. We did not incur any incentive fees payable to our Manager during the six months ended June 30, 2013.

CT Legacy Partners Management Incentive Awards Plan

In conjunction with our March 2011 Restructuring, we created an employee pool for up to 6.75% of the distributions paid to the common equity holders of CT Legacy Partners (subject to certain caps and priority distributions). As of June 30, 2013, incentive awards for 92% of the pool were granted to our former employees, and the remainder remains unallocated. If any awards remain unallocated at the time distributions are paid, any amounts otherwise payable to the unallocated awards will be distributed pro-rata to the plan participants then employed by an affiliate of our Manager.

Approximately 82% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) 25% vests on the date of grant, (ii) 25% vests in March 2013, (iii) 25% vests in March 2014, and (iv) the remainder vests upon our receipt of distributions from CT Legacy Partners. The remaining 18% of these grants vest upon our receipt of distributions from CT Legacy Partners.

We accrue a liability for the amounts due under these grants based on the value of CT Legacy Partners and the periodic vesting of the awards granted. Accrued payables for these awards were $6.8 million and $5.3 million as of June 30, 2013 and December 31, 2012, respectively.

Note 14. Discontinued Operations

As more fully described in Note 3, we sold our investment management business, CTIMCO, to an affiliate of Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to loss from discontinued operations on our consolidated statement of operations.

The following table provides additional information on the components of discontinued operations for the six months ended June 30, 2013 and 2012 ($ in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
Discontinued Operations	2013		2012			2013		2012
Servicing fees	$	—	$	1,365		$	—	$	3,385
Management fees from affiliates		—		1,610			—		3,195
Total revenues		—		2,975			—		6,580
General and administrative expenses		—		3,173			—		6,729
Loss from discontinued operations before income taxes		—		(199	)		—		(149	)
Income tax provision		—		(143	)		—		(766	)
Loss from discontinued operations	$	—	($	341	)	$	—	($	914	)

- 28 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited)

Note 15. Income Taxes

We made an election to be taxed as a REIT, effective January 1, 2003, under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of June 30, 2013 and December 31, 2012, we were in compliance with all REIT requirements.

During the six months ended June 30, 2013, we recorded a current income tax provision of $593,000. Of the total current income tax provision, $554,000 was due to activities of taxable REIT subsidiaries. As a result of our sale of CTIMCO we no longer have any deferred tax assets or liabilities as of December 31, 2012.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our net operating losses, or NOLs, and net capital losses, or NCLs, is significantly limited by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust, Inc. As of December 31, 2012, we had net operating losses, or NOLs, of $161.5 million and net capital losses, or NCLs, of $121.4 million available to be carried forward and utilized in current or future periods. If we are unable to utilize our NOLs, they will expire in 2029. If we are unable to utilize our NCLs, $2.0 million will expire in 2013, $87.4 million will expire in 2014, $31.4 million will expire in 2015, and $618,000 will expire in 2017.

As of June 30, 2013, tax years 2009 through 2012 remain subject to examination by taxing authorities.

Note 16. Stock-Based Incentive Plans

We do not have any employees following the consummation of the Investment Management Business Sale on December 19, 2012, as described in Note 1. However, as of June 30, 2013, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors are compensated, in part, through the issuance of stock-based instruments. In addition, certain of our former employees continue to participate in the CTOPI incentive management fee grants and the CT Legacy Partners management incentive awards plan.

We had stock-based incentive awards outstanding under four benefit plans as of June 30, 2013: (i) our amended and restated 1997 non-employee director stock plan, or 1997 Plan, (ii) our 2007 long-term incentive plan, or 2007 Plan, (iii) our 2011 long-term incentive plan, or 2011 Plan, and (iv) our 2013 stock incentive plan, or 2013 Plan. No awards have been granted under our 2013 manager incentive plan, or 2013 Manager Plan, as of June 30, 2013. We refer to our 1997 Plan, our 2007 Plan, and our 2011 Plan as our Expired Plans and we refer to our 2013 Plan and 2013 Manager Plan as our Current Plans.

Our Expired Plans have expired and no new awards may be issued under them. Under our Current Plans, a maximum of 2,160,106 shares of our class A common stock may be issued to our Manager, our directors and officers, and certain employees of affiliates of our Manager. As of June 30, 2013, there were 2,158,646 shares available under the Current Plans.

Awards outstanding under these plans as of June 30, 2013 was comprised entirely of 93,000 deferred stock units granted to certain members of our board of directors in lieu of cash compensation for services and in lieu of dividends earned on previously granted stock units. Awards outstanding under Expired Plans have been adjusted to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See Note 12 for further discussion of our reverse stock split.

See Notes 9 and 13 for additional discussion of the CTOPI incentive management fee grants and the CT Legacy Partners management incentive awards plan, respectively.

- 29 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Note 17. Fair Values

Assets Recorded at Fair Value

The following table summarizes our assets that are recorded at fair value as of June 30, 2013 ($ in thousands):

			Fair Value Measurements Using
	Total Fair Value  at June 30, 2013		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Loans held-for-sale, net	$	3,800	$	—	$	—	$	3,800
Loans receivable, at fair value	$	117,549	$	—	$	—	$	117,549
Securities, at fair value (1)	$	15,461	$	—	$	1,925	$	13,536
Measured on a non-recurring basis:
Impaired loans receivable (2)	$	—	$	—	$	—	$	—

(1) Other assets, at fair value include securities and other assets carried at fair value.

(2) All impaired loans receivable have a 100% loan loss reserve and are held by consolidated securitization vehicles as of June 30, 2013.

The following table summarizes our assets that are recorded at fair value as of December 31, 2012 ($ in thousands):

			Fair Value Measurements Using
	Total Fair Value at December 31, 2012		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Investment in CT Legacy Asset	$	132,000	$	—	$	—	$	132,000
Measured on a non-recurring basis:
Impaired loans receivable (1)	$	2,000	$	—	$	—	$	2,000

(1) Impaired loans receivable have a 92% loan loss reserve and are held by consolidated securitization vehicles as of December 31, 2013.

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Loans Held-for-Sale, net		Loans Receivable, at fair value			Other assets, at  fair value (1)			Investment in CT  Legacy Assets
December 31, 2012	$	—	$	—		$	—		$	132,000
Consolidation of CT Legacy Partners		—		150,332			15,761			(132,000	)
Transfer from loans receivable, net		2,000		—			—			—
Principal paydowns		—		(36,930	)		(349	)		—
Deferred interest		—		195			—			—
Adjustments to fair value included in earnings:
Valuation allowance on loans held-for-sale		1,800		—			—			—
Unrealized gain on investments at fair value		—		3,951			49			—
June 30, 2013	$	3,800	$	117,549		$	15,461		$	—

(1) Other assets include securities and other assets carried at fair value.

The following describes the key assumptions used in arriving at the fair value of each type of asset that was recorded at fair value as of June 30, 2013 and December 31, 2012. There were no liabilities recorded at fair value as of June 30, 2013 or December 31, 2012. See Note 2 for further discussion regarding fair value measurement.

Loans held-for-sale - Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

- 30 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Loans receivable, at fair value - The following table lists the range of key assumptions for each type of loans receivable as of June 30, 2013 ($ in millions):

	Assumption Ranges for Significant				Book Value
	Unobservable Inputs (Level 3) (1)				Sensitivity to a
		Recovery			100bps Discount
Collateral Type	Discount Rate	Percentage (2)	Book Value		Rate Increase
Hotel	8% -12%	84%- 100%	$	51.7		(0.3%	)
Mixed Use / Other	10%	100%		24.1		(0.1%	)
Office	7%- 20%	69%- 100%		41.7		0.05	%
			$	117.5

(1) Excludes loans for which there is no expectation of future cash flows.

(2) Represents the proportion of the principal expected to be collected relative to the loan balance as of June 30, 2013.

Other assets, at fair value - Other assets include securities and other assets carried at fair value. As of June 30, 2013, all other assets were valued by obtaining assessments from third-party dealers.

Impaired loans receivable - Our impaired loans receivables, which are held by our consolidated securitization vehicles, include two subordinate interests in mortgage loans with an aggregate principal balance of $18.1 million. These hotel loans are in maturity default as of June 30, 2013. The range of key assumptions used for arriving at the fair value of these loans included capitalization rates between 9% and 15% and assumed occupancy rates between 75% and 83%.

Investment in CT Legacy Asset - We elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset, at December 31, 2012. We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. The key assumptions for significant unobservable inputs were: (i) a discount rate of 15% and (ii) loss severities applied to the underlying assets.

Fair Value of Financial Instruments

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. The following table details the carrying amount, face amount, and approximate fair value of the financial instruments described in Note 2. All fair value estimates, except for cash and cash equivalents, are measured using significant unobservable inputs, or Level 3 inputs, as further described above. ($ in thousands):

	June 30, 2013						December 31, 2012
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	59,746	$	59,746	$	59,746	$	15,423	$	15,423	$	15,423
Restricted cash		21,972		21,972		21,972		14,246		14,246		14,246
Loans receivable, net		830,101		851,716		827,152		141,500		164,180		133,682
Financial liabilities:
Secured notes		8,848		8,848		7,827		8,497		8,497		7,374
Repurchase obligations		165,239		165,239		165,239		—		—		—
Securitized debt obligations		74,472		74,472		51,454		139,184		139,184		89,880

- 31 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

Note 18. Transactions with Related Parties

Transactions Related to Our Manager

As further described in Note 3, in December 2012 we concluded multiple, related transactions with Blackstone and its affiliates, including: (i) the Investment Management Business Sale, (ii) the sale of 500,000 shares of our class A common stock for $20.00 per share, and (iii) the execution of a new external management agreement with our Manager. In addition, Blackstone received the right to designate two members of our board of directors, and exercised that right by designating an employee and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012.

On March 26, 2013, we amended the external management agreement with our Manager to, among other things, amend our investment guidelines to permit the investment risk management committee of our board of directors, which consists of only independent directors, to approve any proposed investment by our Manager.

As of June 30, 2013, our consolidated balance sheet included $920,000 of accrued management fees payable to our Manager. During the six months ended June 30, 2013, we paid $71,000 of management fees to our Manager. In addition, as of June 30, 2013, our consolidated balance sheet includes $382,000 of preferred distributions payable by CT Legacy Partners to an affiliate of our Manager. During the six months ended June 30, 2013, CT Legacy Partners made aggregate preferred distributions of $2.3 million to an affiliate of our Manager.

During the six months ended June 30, 2013, our consolidated securitization vehicles paid $651,000 of special servicing fees to CTIMCO, which is an affiliate of our Manager.

There may be conflicts between us and our Manager with respect to certain of the investments in the CT Legacy Partners and CTOPI portfolios where an affiliate of our Manager holds a related investment that is senior, junior, or pari passu to the investments held by these portfolios.

The management agreement with our Manager excludes from the management fee calculation our interests in CT Legacy Partners, CTOPI, and our CT CDOs, which may result in further conflicts between the economic interests of us and our Manager. Certain of our former employees are now employed by an affiliate of our Manager. See Note 13 for further discussion of the management agreement with our Manager.

On May 13, 2013, we entered into a joint venture, 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was owned 16.7% by us and 83.3% by an affiliate of our Manager, and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate our Manager using proceeds from the sale of our class A common stock and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary. We recorded a $193,000 charge to non-controlling interest as a result of the purchase of these equity interests at their fair value, rather than GAAP book value.

An affiliate of our Manager purchased 1,960,784 shares of our class A common stock as part of our stock offering on May 22, 2013. These shares were purchased for $25.50 each, the same price offered to non-affiliated purchasers. This affiliate owned class A common stock representing 8.5% of outstanding class A common stock and stock units as of July 25, 2013.

Other Related Party Transactions

In conjunction with the Investment Management Business Sale, we entered into a letter agreement with W.R. Berkley Corporation, or WRBC, pursuant to which we agreed not to undertake any offering of our class A common stock, or other equity securities, in an aggregate amount greater than $30.0 million without prior approval of a majority of the independent members of our board of directors. This approval was obtained in conjunction with our May 2013 offering of Class A common stock, and no further approval requirement remains. WRBC beneficially owned class A common stock representing approximately 1.3% of our outstanding class A common stock and stock units as of July 25, 2013, and a member of our board of directors is an employee of WRBC.

Note 19. Segment Reporting

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT

- 32 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Our Loan Origination business commenced during 2013. Accordingly, no comparable segment data exists for 2012 or any other prior period, and we have therefore not retrospectively restated our previously reported information.

The following table presents our results of operations for each segment for the three months ended June 30, 2013 ($ in thousands):

	Loan Origination			CT Legacy Portfolio			Total
Income from loans and other investments:
Interest and related income	$	1,908		$	4,109		$	6,017
Less: Interest and related expenses		168			1,138			1,306
Income from loans and other investments, net		1,740			2,971			4,711
Other expenses:
General and administrative		2,153			1,274			3,427
Total other expenses		2,153			1,274			3,427
Valuation allowance on loans held-for-sale		—			2,000			2,000
Unrealized gain on investments at fair value		—			4,000			4,000
Gain on extinguishment of debt		—			38			38
(Loss) income before income taxes		(413	)		7,735			7,322
Income tax provision		2			552			554
Net (loss) income	($	415	)	$	7,183		$	6,768
Net income attributable to non-controlling interests		—			(4,020	)		(4,020	)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	415	)	$	3,163		$	2,748

All consolidated revenues for the three months ended June 30, 2013 were generated from external domestic sources. There were no transactions between our operating segments during the six months ended June 30, 2013.

- 33 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following table presents the key components of our results of operations for each segment for the six months ended June 30, 2013 ($ in thousands):

	Loan			Legacy
	Origination			Portfolio			Total
Income from loans and other investments:
Interest and related income	$	1,908		$	5,565		$	7,473
Less: Interest and related expenses		168			1,915			2,083
Income from loans and other investments, net		1,740			3,650			5,390
Other expenses:
General and administrative		2,883			2,582			5,465
Total other expenses		2,883			2,582			5,465
Valuation allowance on loans held-for-sale		—			1,800			1,800
Unrealized gain on investments at fair value		—			4,000			4,000
Gain on extinguishment of debt		—			38			38
(Loss) income before income taxes		(1,143	)		6,906			5,763
Income tax provision		40			553			593
Net (loss) income	($	1,183	)	$	6,353		$	5,170
Net income attributable to non-controlling interests		—			(5,537	)		(5,537	)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	1,183	)	$	816		($	367	)

All consolidated revenues for the six months ended June 30, 2013 were generated from external domestic sources. There were no transactions between our operating segments during the six months ended June 30, 2013.

- 34 -

Blackstone Mortgage Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following table presents our consolidated statement of financial condition for each segment as of June 30, 2013 ($ in thousands):

	Loan Origination		Legacy Portfolio		Total
Assets
Assets:
Cash and cash equivalents	$	59,746	$	—	$	59,746
Restricted cash		—		21,972		21,972
Loans receivable, net		753,101		77,000		830,101
Loans held-for-sale, net		—		3,800		3,800
Loans receivable, at fair value		—		117,549		117,549
Equity investments in unconsolidated subsidiaries		—		23,240		23,240
Accrued interest receivable, prepaid expenses, and other assets		5,912		24,785		30,697
Total assets	$	818,759	$	268,346	$	1,087,105
Liabilities & Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	4,827	$	32,052	$	36,879
Secured notes		—		8,848		8,848
Repurchase obligations		165,239		—		165,239
Securitized debt obligations		—		74,472		74,472
Total liabilities		170,066		115,372		285,438
Equity:
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		648,693		63,996		712,689
Non-controlling interests		—		88,978		88,978
Total equity		648,693		152,974		801,667
Total liabilities and equity	$	818,759	$	268,346	$	1,087,105

Note 20. Subsequent Events

Subsequent to quarter-end, we originated an additional five loans with total commitments of $289.1 million, of which an aggregate $233.3 million was funded at closing, and we borrowed $254.0 million under existing repurchase facilities.

Also subsequent to quarter-end, we closed two additional asset-specific repurchase agreements with Wells Fargo, which provide an aggregate $91.8 million of credit. Borrowings under these agreements are not recourse to us, and are term-matched to their collateral assets.

On July 26, 2013, we amended our master repurchase agreement with Citibank to provide for a second $250.0 million tranche of potential advances. The second tranche is subject to a one year ‘availability period,’ during which new financing transactions can be initiated. All other terms, including the maturity dates, for the second tranche advances are the same as the original $250 million tranche.

Also on July 26, 2013, we filed an S-3 universal shelf registration statement with the SEC, which permits us to periodically offer various debt and equity securities to the public. Any offerings of common stock or securities convertible into common stock remain subject to the 180-day lock-up agreement we executed in conjunction with our May 2013 offering of class A common stock.

- 35 -

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December 31, 2012 and elsewhere in this quarterly report on Form 10-Q.

Introduction

We are a real estate finance company that primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. We are externally managed by BXMT Advisors L.L.C., which we refer to as our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust traded on the NYSE under the symbol “BXMT.” We are headquartered in New York City. Further information is available at www.bxmt.com.

We conduct our operations as a real estate investment trust, or REIT, for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries. Our business is organized into two operating segments; the Loan Origination segment and the CT Legacy Portfolio segment.

Recent Developments

Stock Offering, Name Change, and Reverse Stock Split

On May 29, 2013, we issued 25,875,000 shares of class A common stock for a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses. The Blackstone Group L.P., or Blackstone, purchased 1,960,784 shares of our class A common stock as part of the offering, resulting in ownership of 2,460,784 shares, or 8.5% of our class A common stock and stock units as of June 30, 2013. In addition, certain members of our board of directors, our officers, and other employees of an affiliate of our Manager purchased an aggregate of 300,688 shares our class A common stock as part of the offering under a directed share program. These shares were purchased for $25.50 each, the same price offered to non-affiliated purchasers.

On April 26, 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected on May 6, 2013 concurrently with a one-for-ten reverse stock split of our class A common stock. Except where the context indicates otherwise, all class A common stock numbers herein have been adjusted to give retroactive effect to the reverse stock split.

Blackstone Transaction

On December 19, 2012, we consummated a strategic transaction that included, among other things, disposition of our investment management and special servicing business, including CT Investment Management Co., LLC, or CTIMCO, and our related fund co-investments to an affiliate of Blackstone. In conjunction with the sale, we entered into a management agreement with an affiliate of Blackstone, which we refer to as our Manager. We refer the entire transaction as our Investment Management Business Sale. We received proceeds of $21.4 million from the Investment Management Business Sale and, in conjunction with the transaction, issued 500,000 shares of our class A common stock to an affiliate of Blackstone for a purchase price of $10.0 million.

In connection with the consummation of the Investment Management Business Sale and the closing of our sale of 500,000 shares of class A common stock to an affiliate of Blackstone, we paid a $20.00 per share special cash dividend on December 20, 2012 to holders of record of our class A common stock at the close of business on November 12, 2012.

Following the Investment Management Business Sale, we no longer have any employees and are externally managed by our Manager, an affiliate of Blackstone.

- 36 -

Book Value per Share

The following table calculates our book value per share as of June 30, 2013 and December 31, 2012 ($ in thousands, except per share amounts):

Book Value per Share (1)
	June 30, 2013		December 31, 2012
Shareholders’ equity		712,689	$	73,444
Shares:
Class A common stock		28,801,651		2,926,651
Restricted class A common stock		—		—
Stock units		92,824		89,756
Total		28,894,475		3,016,407
Book value per share	$	24.67	$	24.35

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See Note 12 to our consolidated financial statements for further discussion.

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to our CT Legacy Partners, LLC, or CT Legacy Partners, subsidiary, CT CDO I, and our equity investment in CT Opportunity Partners I, LP, or CTOPI.

The following table calculates our book value per share allocated between our two reportable segments as of June 30, 2013 ($ in thousands, except per share amounts):

Book Value per Share - Segment Allocation
	Loan Origination		Legacy Portfolio		Total
Shareholders’ equity	$	648,693	$	63,996	$	712,689
Shares:
Class A common stock		28,801,651		28,801,651		28,801,651
Stock units		92,824		92,824		92,824
Total		28,894,475		28,894,475		28,894,475
Book value per share	$	22.45	$	2.22	$	24.67

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I. Loan Origination

During the three months ended June 30, 2013, our Loan Origination segment originated $756.6 million of new loans. The majority of these loan originations, however, closed in late June, resulting in interest income of only $1.9 million during the period. Similarly, the majority of our loan portfolio was capitalized by equity capital with only $165.2 million of borrowings outstanding under repurchase facilities as of June 30, 2013. The majority of these facilities also closed in late June, resulting in interest expense of only $168,000 during the period. In the aggregate, our Loan Origination segment incurred a net loss of $415,000 driven primarily by the concentration of its loan origination activity in June, as well as general and administrative expenses.

Portfolio Overview

The following table details our loan originations activity during the three months ended June 30, 2013 ($ in thousands):

Loan Origination Activity for Three Months Ended June 30, 2013
	Number of Loans		Total Commitments		Funded Commitments		Net Book Value
Senior mortgage loans (1)		8	$	765,188	$	756,638	$	753,101

(1) Senior mortgage loans include two pari passu participations with aggregate total commitments, funded commitments, and net book value of $91.1 million.

The following table details overall statistics for our loans receivable portfolio within the Loan Origination segment as of June 30, 2013 ($ in thousands):

	June 30, 2013
Number of loans		8
Principal balance	$	756,638
Net book value	$	753,101
Wtd. Avg. cash coupon (1)		L+4.44	%
Wtd. Avg. all-in yield (1)		L+5.26	%
Wtd. Avg. maximum maturity (years) (2)		4.0

(1) All loans are floating rate loans indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013; however, certain of our loans receivable earn interest based on a minimum LIBOR ranging from 0.20% to 1.00%.

(2) Maximum maturity date assumes all extension options are executed.

The charts below detail the geographic distribution and types of properties securing these loans, as of June 30, 2013:

Refer to section IV of this Item 2 for details of our loan portfolio, on a loan-by-loan basis.

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Our Loan Origination portfolio as of June 30, 2013 was comprised entirely of floating rate mortgage loans and all of our debt financing was also floating rate, which results in a return on equity that is correlated to one-month LIBOR. Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. For instance, all other things being equal, as of June 30, 2013, a 100 basis point increase in LIBOR would increase our net income by $5.9 million per annum. The following table details our Loan Origination segment’s sensitivity to interest rates as of June 30, 2013 ($ in thousands):

Interest Rate Sensitivity - Loan Origination Segment
	June 30, 2013
Floating rate loans (1)	$	756,638
Floating rate debt (1)		(165,239	)
Net floating rate exposure	$	591,399
Net income impact from 100 bps increase in LIBOR	$	5,914

(1) All of our loans and credit facilities were indexed to one-month LIBOR as of June 30, 2013.

Asset Management and Performance

We actively manage the investments in our Loan Origination portfolio. While these investments are generally in the form of debt, we are aggressive in exercising the rights afforded to us as a lender. These rights may include collateral level budget approvals, lease approvals, loan covenant enforcement, escrow/reserve management/collection, collateral release approvals and other rights that we may negotiate.

As discussed in Note 2 to our consolidated financial statements, our Manager performs a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” (lowest risk) to “8” (highest risk). Loans that pose a higher risk of non-performance and / or loss are place on our Watch List. Watch list loans are those with an internal risk rating of “4” or higher.

As of June 30, 2013, all of the investments in the loan origination segment are performing as expected and the weighted-average risk rating of our loan portfolio is “2.3”.

Repurchase Obligations

During the second quarter of 2013, we entered into $1.0 billion of master repurchase agreements with four counterparties. As of June 30, 2013, we had aggregate borrowings of $165.2 million outstanding under these facilities, with a weighted-average cash coupon, excluding associated fees and expenses, of LIBOR plus 1.98% per annum and a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.5 years. The following table details the repurchase obligations outstanding as of June 30, 2013 ($ in thousands):

			Collateral Assets				Repurchase Balances
Repurchase Lender	Facility Size		Principal Balance		Net Book Value		Maximum Borrowings		Current Borrowings		Available Borrowings  (1)
Bank of America	$	250,000	$	126,300	$	125,557	$	101,040	$	46,400	$	54,640
Wells Fargo		250,000		300,000		298,533		250,000		—		250,000
Citibank		250,000		156,438		156,039		118,839		118,839		—
JP Morgan		250,000		—		—		—		—		—
Total	$	1,000,000	$	582,738	$	580,129	$	469,879	$	165,239	$	304,640

(1) Available borrowings is based on assets pledged as collateral under credit facilities as of June 30, 2013. There were two loans with an aggregate principal balance of $173.8 million as of June 30, 2013 that were not pledged under repurchase agreements, and therefore are available to be pledged as collateral in the future.

Refer to Note 10 to our consolidated financial statements for additional terms and details of our repurchase facilities.

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II. CT Legacy Portfolio

Our CT Legacy Portfolio consists primarily of: (i) our interests in CT Legacy Partners; (ii) our carried interest in CTOPI, a private investment fund that was previously under our management and is now managed by an affiliate of our Manager; and (iii) our subordinated interests in CT CDO I.

During the three months ended June 30, 2013, our CT Legacy Portfolio segment generated net income of $3.2 million, driven primarily by $6.0 million of positive valuation and mark-to-market adjustments on the CT Legacy Partners and CT CDO I loan portfolios. We collected $99.4 million of principal repayments on investments in our CT Legacy Portfolio Segment, which proceeds were used to (i) repay the remaining $20.2 million of CT Legacy Partners repurchase obligations, (ii) terminate all outstanding CT Legacy Partners interest rate swaps, and (iii) pay down $76.6 million of securitized debt obligations. In addition, our net investment in the CTOPI carried interest increased by $1.7 million during the three months ended June 30, 2013.

CT Legacy Partners

Portfolio Overview

Our investment in CT Legacy Partners represents our 52% equity interest in a vehicle we formed to own and finance certain assets that we retained in connection with a comprehensive debt restructuring in 2011. As of June 30, 2013, the CT Legacy Partners portfolio included loans with an aggregate principal balance of $220.7 million and securities with an aggregate face value of $117.5 million. See section IV of this Item 2 for details of the CT Legacy Partners’ loan portfolio, on a loan-by-loan basis.

The following table details the components of our gross investment in CT Legacy Partners included in our consolidated balance sheet, as well as our net investment in CT Legacy Partners after the future payments under the secured notes and management incentive awards plan as of June 30, 2013 ($ in thousands):

Blackstone Mortgage Trust’s Investment in CT Legacy Partners as of June 30, 2013
Gross investment in CT Legacy Partners:
Restricted cash	$	21,972
Loans receivable, at fair value		117,549
Accrued interest receivable, prepaid expenses, and other assets		21,948
Accounts payable, accrued expenses and other liabilities		(485	)
Noncontrolling interests		(88,978	)
	$	72,006
Secured notes, including prepayment premium (1)		(11,059	)
Management incentive awards plan, fully vested (2)		(10,867	)
Net investment in CT Legacy Partners	$	50,080

(1) Includes the full potential prepayment premium on secured notes, as described below. We carry this liability at its amortized basis of $8.8 million on our balance sheet as of June 30, 2013. The remaining interest and prepayment premium will be recognized, as applicable, over the term of the secured notes as a component of interest expense.

(2) Assumes full payment of the management incentive awards plan, as described below, based on the hypothetical GAAP liquidation value of CT Legacy Partners as of June 30, 2013. We periodically accrue a payable for the management incentive awards plan based on the vesting schedule for the awards and continued employment with an affiliate of our Manager of the award recipients. As of June 30, 2013, our balance sheet includes $6.8 million in accounts payable and accrued expenses for the management incentive awards plan.

Asset Management and Performance

The CT Legacy Partners portfolio is primarily comprised of investments which were originated in 2006 and 2007, a substantial portion of which are distressed and not expected to repay in full or, in certain cases, at all. As discussed in the loan origination section in this Item 2, our Manager performs a quarterly review of our loan portfolio and higher risk assets on our Watch List. Watch List Loans include those which are risk rated “4” or higher.

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The table below details the Watch List Loans held in CT Legacy Partners as of June 30, 2013 ($ in millions):

Watch List Loans - CT Legacy Partners (1)
	June 30, 2013
CT Legacy Partners’ loans receivables ($ / #)	$	118 / 11
Watch list loans ($ / #)	$	98 / 10
Percentage of loans on Watch List		82.9	%

(1) All values are in terms of net book value.

Repurchase Obligations

As of March 31, 2013, CT Legacy Partners was party to a repurchase facility with JP Morgan with an outstanding balance of $20.2 million. On June 5, 2013, CT Legacy Partners repaid the outstanding balance and terminated the repurchase facility. CT Legacy Partners has no outstanding debt obligations as of June 30, 2013.

Interest Rate Swap Liabilities

CT Legacy Partners was party to five interest rate swaps which it terminated in June 2013. A gain of $136,000 resulting from the termination is included as a component of interest expense on our consolidated statement of operations for the six months ended June 30, 2013. CT Legacy Partners is no longer party to any derivative financial instruments as of June 30, 2013.

Secured Notes

In conjunction with our comprehensive debt restructuring on March 31, 2011, which we refer to as our March 2011 Restructuring, and the corresponding satisfaction of our senior credit facility and junior subordinated notes, certain wholly-owned subsidiaries of ours issued secured notes to these former creditors, which secured notes are non-recourse to us. Any prepayment, or partial prepayment, of the secured notes will incur a prepayment premium resulting in a total payment of principal and interest under the secured notes of $11.1 million. Refer to Note 10 of our consolidated financial statements for further discussion of the secured notes.

CT Legacy Partners Management Incentive Awards Plan

In conjunction with our March 2011 Restructuring, we created an employee pool for up to 6.75% of the distributions paid to the common equity holders of CT Legacy Partners (subject to certain caps and priority distributions).

We accrue a liability for the amounts due under these grants based on the value of CT Legacy Partners and the periodic vesting of the awards granted. Accrued payables for these awards were $6.8 million and $5.3 million as of June 30, 2013 and December 31, 2012, respectively. Refer to Note 13 of our consolidated financial statements for further details.

CT Legacy Partners Background

On March 31, 2011, we restructured, amended, or extinguished all of our outstanding recourse debt obligations, which we refer to as our March 2011 Restructuring. Our March 2011 Restructuring involved: (i) the contribution of certain of our legacy assets to a newly formed subsidiary, CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, (the predecessor of CT Legacy Partners); (ii) the assumption of our legacy repurchase obligations by CT Legacy REIT; and (iii) the extinguishment of the remainder of our recourse obligations, our senior credit facility and junior subordinated notes. CT Legacy Partners is beneficially owned 52% by us and 48% by our former lenders. In addition, CT Legacy Partners has issued class B common shares, a subordinate class of equity which entitles its holders to receive approximately 25% of the dividends that would otherwise be payable to us on our equity interest in CT Legacy Partners, after aggregate cash distributions of $50.0 million have been paid to all other classes of common equity. Further, CT Legacy Partners has issued class A preferred shares which entitle its holder to cumulative preferred distributions in an amount generally equal to the greater of (i) 2.5% of certain of CT Legacy Partners’ assets, and (ii) $1.0 million per annum. Refer to Note 8 to our consolidated financial statements for additional details on CT Legacy Partners.

To maintain its tax efficiency, on March 20, 2013, a majority of the stockholders CT Legacy REIT voted in favor of a plan of merger, dated March 22, 2013, or the Merger, whereby CT Legacy REIT merged with and into CT Legacy Partners, effective as of March 22, 2013. Refer to Note 3 to our consolidated financial statements for further details on the Merger.

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Our economic interest in CT Legacy Partners is subject to (i) the secured notes, which are non-recourse obligations that are collateralized by certain of our equity interests in the common shares of CT Legacy Partners, (ii) incentive awards that provide for the participation in amounts earned from our retained equity interests in CT Legacy Partners, and (iii) the subordinate class B common stock of CT Legacy Partners.

Carried Interest in CTOPI

CTOPI is a private equity real estate fund that we sponsored and formed in 2007. The fund invested $491.5 million in 39 transactions between 2007 and the end of its investment period in 2012. To date, $291.8 million of these investments have been realized and $199.7 million remain outstanding (carried at 136.7% of cost) as of June 30, 2013. In conjunction with our Investment Management Business Sale, we transferred our management of CTOPI and sold our 4.6% co-investment to Blackstone. However, we retained our carried interest in CTOPI following the sale.

Our carried interest in CTOPI entitles us to earn incentive compensation in an amount equal to 17.7% of the fund’s profits, after a 9% preferred return and 100% return of capital to the CTOPI partners. We own a net 55% of the carried interest of CTOPI’s general partner; the remaining 45% is payable under incentive awards to our former employees.

As of June 30, 2013, we have been allocated a net $13.5 million of incentive compensation from CTOPI based on a hypothetical liquidation of the fund at its net asset value, and after payment of the related incentive awards. The CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. We refer to these distributions as CTOPI Tax Advances. During 2012, we received one such CTOPI Tax Advance of $1.4 million, resulting in a net asset value for our investment in CTOPI of $12.1 million as of June 30, 2013. In the event the performance of CTOPI does not ultimately result in an allocation of incentive compensation to us, we would be required to refund these CTOPI Tax Advances to the fund.

We have elected to defer the recognition of income on our carried interest in CTOPI until cash is collected or appropriate contingencies have been eliminated. As a result, our net investment in the CTOPI carried interest has a book value of zero as of June 30, 2013.

Refer to Note 9 of our consolidated financial statements for additional discussion on the CTOPI incentive management fee awards to our former employees.

Consolidated Securitization Vehicles - CT CDO I

Portfolio Overview

As of June 30, 2013, our consolidated balance sheet included an aggregate $83.6 million of assets and $74.6 million of liabilities related to CT CDO I, a highly-levered securitization vehicle that we formed in 2004.

Specifically, we own the residual debt and equity positions of CT CDO I. As a result of consolidation, our subordinate debt and equity ownership interests in these entities are not included on our balance sheet, which instead reflects both the assets held and debt issued by these entities to third-parties. Similarly, our operating results and cash flows include the gross amounts related to the assets and liabilities of these securitization vehicles, as opposed to our net economic interests in these entities.

Our economic interest in the loans receivable assets held by these entities, which are consolidated on our balance sheet, is restricted by the structural provisions of these entities, and our recovery of these assets will be limited by the entities’ distribution provisions. The liabilities of the securitization vehicles, which are also consolidated on our balance sheet, are non-recourse to us, and can only be satisfied by proceeds from each entity’s respective asset pool.

We are not obligated to provide, nor have we provided, any financial support to CT CDO I.

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The following table details the components of consolidated securitization vehicles included in our consolidated balance sheet as of June 30, 2013 ($ in thousands):

Investment in CT CDO I	June 30, 2013
Loans receivable, net	$	77,000
Loans held-for-sale, net		3,800
Accrued interest receivable, prepaid expenses, and other assets		2,838
Total assets	$	83,638
Accounts payable, accrued expenses and other liabilities	$	155
Securitized debt obligations		74,472
Total liabilities	$	74,627
Net investment in CT CDO I	$	9,011

Refer to section IV of this Item 2 for details of CT CDO I loan portfolio, on a loan-by-loan basis.

Asset Management

As discussed in the loan origination section in this Item 2, our Manager performs a quarterly review of our loan portfolio and places higher risk assets on our Watch List. Watch List Loans include those with an internal risk rating of “4” or higher.

The table below details the Watch List Loans held in consolidated securitization vehicles as of June 30, 2013 and December 31, 2012 ($ in millions):

Watch List Loans - Consolidated Securitization Vehicle (1)
	June 30, 2013			December 31, 2012
Loans in consolidated securitization vehicle ($ / #)	$	81 / 6		$	142 / 8
Watch list loans ($ / #)	$	61 / 5		$	65 / 4
Percentage loans on Watch List		75.2	%		45.6	%

(1) All values are in terms of net book value.

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III. Our Results of Operations and Liquidity

Results of Operations

Comparison of Results of Operations: Three Months Ended June 30, 2013 vs. June 30, 2012
($ in thousands, except per share amounts)
	2013			2012			$ Change			% Change
Income from loans and other investments:
Interest and related income	$	6,017		$	6,763		($	746	)		(11.0	%)
Less: Interest and related expenses		1,306			5,413			(4,107	)		(75.9	%)
Income (loss) from loans and other investments, net		4,711			1,350			3,361			249.0	%
Other expenses:
General and administrative		3,427			1,567			1,860			118.7	%
Total other expenses		3,427			1,567			1,860			118.7	%
Impairments, provisions, and valuation adjustments		6,000			3,704			2,296			62.0	%
Gain on extinguishment of debt		38			—			38			100.0	%
Income from equity investments in unconsolidated subsidiaries		—			205			(205	)		(100.0	%)
Income before income taxes		7,322			3,692			3,630			98.3	%
Income tax provision		554			—			554			100.0	%
Income from continuing operations	$	6,768		$	3,692		$	3,076			83.3	%
Loss from discontinued operations, net of tax		—			(341	)		341			(100.0	%)
Net income	$	6,768		$	3,351		$	3,417			102.0	%
Net income attributable to non-controlling interests		(4,020	)		(1,068	)		(2,952	)		276.4	%
Net income attributable to Blackstone Mortgage Trust, Inc.	$	2,748		$	2,283		$	465			20.4	%
Net income from continuing operations per share - diluted	$	0.22		$	1.15		($	0.93	)		N/A
Net income per share - diluted	$	0.22		$	1.00		($	0.78	)		N/A
Dividend per share	$	0.00		$	0.00		$	0.00			N/A
Average LIBOR		0.20	%		0.24	%		(0.0	%)		(18.3	%)

Income from loans and other investments, net

As discussed in Note 3 to our consolidated financial statements, we deconsolidated the assets and liabilities of CT CDOs II and IV in 2012. As a result of this deconsolidation and significant repayments in our CT Legacy Portfolio, interest income decreased $746,000, or 11%, and interest expense decreased by $4.1 million, or 76%, during the second quarter of 2013 compared to the second quarter of 2012. On a net basis, net interest income increased by $3.4 million as the decrease in interest income was less than the reduction in interest expense.

General and administrative expenses

General and administrative expenses primarily include our management fees, operating expenses, and various professional fees. General and administrative expenses increased by $1.9 million during the second quarter of 2013 compared to the second quarter of 2012 primarily due to (i) $920,000 of management fees to our Manager, (ii) $514,000 of special servicing fees, and (iii) various additional professional fees incurred during the second quarter of 2013. All general and administrative expenses incurred during the second quarter of 2012 related to our former investment management business have been reclassified to loss from discontinued operations.

Impairments, provisions, and valuation adjustments

During the second quarter of 2013, we recognized (i) $4.0 million of net unrealized gains on investments held by CT Legacy Partners and (ii) a $2.0 million positive valuation adjustment on CT CDO I’s loan classified as held-for-sale. During the second quarter of 2012, we recognized a $3.7 million positive fair value adjustment on our net investment in CT Legacy Asset, LLC, or CT Legacy Asset, a subsidiary of CT Legacy Partners.

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Other significant items

In December 2012, we sold our investment management business, including CTIMCO and our co-investments in CTOPI and CT High Grade Partners II, LLC. As a result, our 2013 operating results do not include any income or expense items related to our former investment management business, and the income and expense items related to our investment management business in 2012 have been reclassified to loss from discontinued operations.

During the second quarter of 2013, we recorded an income tax provision related to income generated by investments held by taxable REIT subsidiaries. We did not record any such income tax provisions during the second quarter of 2012; all income taxes related to our former investment management business have been reclassified to loss from discontinued operations.

Dividends

We did not pay any dividends on our class A common stock during the second quarter of 2013 or 2012.

Comparison of Results of Operations: Six Months Ended June 30, 2013 vs. June 30, 2012
($ in thousands, except per share amounts)
	2013			2012			$ Change			% Change
Income from loans and other investments:
Interest and related income	$	7,473		$	21,479		($	14,006	)		(65.2	%)
Less: Interest and related expenses		2,083			28,754			(26,671	)		(92.8	%)
Income (loss) from loans and other investments, net		5,390			(7,275	)		12,665			N/A
Other expenses:
General and administrative		5,465			2,323			3,142			135.3	%
Total other expenses		5,465			2,323			3,142			135.3	%
Impairments, provisions, and valuation adjustments		5,800			7,505			(1,705	)		(22.7	%)
Gain on extinguishment of debt		38			—			38			100.00	%
Gain on deconsolidation of subsidiaries		—			146,380			(146,380	)		(100.0	%)
Income from equity investments in unconsolidated subsidiaries		—			901			(901	)		(100.0	%)
Income before income taxes		5,763			145,188			(143,425	)		(96.0	%)
Income tax provision		593			301			292			97.0	%
Income from continuing operations	$	5,170		$	144,887		($	143,717	)		(96.4	%)
Loss from discontinued operations, net of tax		—			(914	)		914			(100.0	%)
Net income	$	5,170		$	143,973		($	142,803	)		(96.4	%)
Net income attributable to non-controlling interests		(5,537	)		(75,137	)		69,600			(92.6	%)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	367	)	$	68,836		($	73,203	)		(100.5	%)
Net (loss) income from continuing operations per share - diluted	($	0.05	)	$	28.65		($	28.70	)		(100.2	%)
Net (loss) income per share - diluted	($	0.05	)	$	28.27		($	28.32	)		(100.2	%)
Dividend per share	$	0.00		$	0.00		$	0.00			N/A
Average LIBOR		0.20	%		0.25	%		(0.0	%)		(19.3	%)

Income from loans and other investments, net

As discussed in Note 1 to our consolidated financial statements, we deconsolidated the assets and liabilities of CT CDOs II and IV in 2012. As a result of this deconsolidation and significant repayments in our portfolio, interest income decreased $14.0 million, or 65%, and interest expense decreased by $26.7 million, or 93%, during the first six months of 2013 compared to the first six months of 2012. Also, interest expense for 2012 included $10.2 million relating to acceleration of discount associated with an $83 million mezzanine loan obtained by CT Legacy Partners from an affiliate of Five Mile Capital Partners, LLC. On a net basis, net interest income increased by $12.7 million as the decrease in interest income was less than the reduction in interest expense.

General and administrative expenses

General and administrative expenses primarily include our management fees, operating expenses, and various professional fees. General and administrative expenses increased by $3.1 million during the first six months of 2013 compared to the first six months of 2012 primarily due to (i) $1.0 million of management fees to our Manager, (ii)

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$651,000 of special servicing fees, and (iii) a $1.3 million increase in non-cash expenses recognized under the CT Legacy Partners management incentive awards plan. All general and administrative expenses incurred during the first six months of 2012 related to our former investment management business have been reclassified to loss from discontinued operations.

Impairments, provisions, and valuation adjustments

During the first six months of 2013, we recognized (i) $4.0 million of net unrealized gains on investments held by CT Legacy Partners and (ii) a $1.8 million positive valuation adjustment on CT CDO I’s loan classified as held-for-sale. During the first six months of 2012, we recognized (i) a $7.7 million positive fair value adjustment on our net investment in CT Legacy Asset, partially offset by (ii) a $160,000 credit impairment of one of the securities held by CT CDO IV.

Other significant items

In December 2012, we sold our investment management business, including CTIMCO and our co-investments in CTOPI and CT High Grade Partners II, LLC. As a result, our 2013 operating results do not include any income or expense items related to our former investment management business, and the income and expense items related to our investment management business in 2012 have been reclassified to loss from discontinued operations.

During the first quarter of 2012, we recognized a gain of $146.4 million on the deconsolidation of CT Legacy Asset. This gain was primarily the result of a reversal of charges to GAAP equity resulting from losses previously recorded in excess of our economic interests in securitization vehicles which were consolidated by CT Legacy Asset, and therefore us.

During the first six months of 2013, we recorded an income tax provision primarily related to income generated by investments held by taxable REIT subsidiaries. During the first six months of 2012, we recorded an income tax provision primarily related to alternative minimum taxes incurred as a result of our use of net operating losses, or NOLs, to offset 2012 taxable income. All income taxes related to our former investment management business have been reclassified to loss from discontinued operations.

Dividends

We did not pay any dividends on our class A common stock during the six months ended June 30, 2013 or 2012.

Liquidity and Capital Resources

Capitalization

On May 29, 2013, we issued an additional 25,875,000 shares of class A common stock for a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriter discounts and other offering expenses. Our stockholders’ equity is comprised entirely of 28,807,651 shares of class A common stock as of June 30, 2013.

In addition, we are party to four repurchase agreements as of June 30, 2013 with each of Bank of America, Wells Fargo, Citibank, and JP Morgan, which collectively provide us with $1.0 billion of maximum available credit. As of June 30, 2013, we had aggregate borrowings of $165.2 million outstanding under these facilities, with a weighted average cash coupon, excluding associated fees and expenses, of LIBOR plus 1.98% per annum and a weighted average initial maturity, excluding extension options and term-out provisions, of 2.5 years. See Note 10 to our consolidated financial statements for additional details about our repurchase facilities.

As of June 30, 2013, our CT Legacy Portfolio’s consolidated debt obligations included our non-recourse secured notes secured only by certain of our equity interests in the common stock of CT Legacy Partners and the non-recourse securitized debt obligations of CT CDO I. See above discussion of CT Legacy Partners and the related secured notes, as well as the discussion of CT CDO I for further information.

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Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents and available borrowings under our repurchase facilities. The following table sets forth our sources of liquidity as of June 30, 2013 ($ in thousands):

	Available Liquidity as of
	June 30, 2013		December 31, 2012
Cash and cash equivalents	$	59,746	$	15,423
Available borrowings under repurchase facilities (1)		304,640		—
	$	364,386	$	15,423

(1) Represents available borrowings under repurchase facilities based on the facilities’ collateral assets as of June 30, 2013. There were two loans with an aggregate principal balance of $173.8 million as of June 30, 2013 that were not pledged under repurchase agreements, and therefore are available to be pledged as collateral in the future.

Refer to Note 10 to our consolidated financial statements for additional terms and details of our repurchase facilities.

We currently do not have access to liquidity from our CT Legacy Portfolio, including our equity interests in CT Legacy Partners, our carried interest in CTOPI, and our residual ownership interest in CT CDO I. Over the next several years, however, we do expect to realize cash recoveries from these portfolios.

Liquidity Needs

In addition to our ongoing loan origination activity, our primary liquidity needs include interest and principal payments under our $165.2 million of outstanding repurchase facilities, our $8.6 million of unfunded loan commitments, dividend distributions to our shareholders, and operating expenses.

We did not declare any dividends during the six months ended June 30, 2013. However, as a result of our election to be taxed as a REIT, we generally must distribute at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gains, in order for U.S. federal income tax not to apply to our distributed earnings.

We have no obligations to provide financial support to CT Legacy Partners, CTOPI, or CT CDO I, and all debt obligations of such entities, some of which are consolidated onto our financial statements, are non-recourse to us.

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents for the six months ended June 30, 2013 and 2012 ($ in thousands):

	Six Months Ended June 30,
	2013			2012			$ Change
Cashflows from operating activities	$	8,601		$	6,508		$	2,093
Cashflows from investing activities		(667,469	)		105,566			(773,035	)
Cashflows from financing activities		703,191			(112,288	)		815,479
Net increase (decrease) in cash and cash equivalents	$	44,323		($	214	)	$	44,537

We experienced a net increase in cash of $44.3 million for the six months ended June 30, 2013, compared to a net decrease of $214,000 for the six months ended June 30, 2012. The increase was primarily due to the financing and investing activities associated with our loan origination business which commenced in the second quarter of 2013.

During the quarter, we generated $633.8 million of net proceeds from the sale of our class A common stock and borrowed $165.2 million under our repurchase facilities. We used the proceeds from our debt and equity financing activities to originate $756.6 million of new loans during the quarter. Refer to Note 12 and Note 10 to our consolidated financial statements for additional discussion of our sale of shares of class A common stock and repurchase facilities, respectively. Refer to Note 5 to our consolidated financial statements for further discussion of our loan origination activity.

Our consolidated statements of cash flows also include the cash inflows and outflows of the consolidated entities described in Note 3 to our consolidated financial statements. While this does not impact our net cash flow, it does increase certain gross cash flow disclosures. As discussed above, we do not have access to the liquidity in our CT Legacy Portfolio.

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Income Taxes

We made an election to be taxed as a REIT, effective January 1, 2003, under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of June 30, 2013 and December 31, 2012, we were in compliance with all REIT requirements.

During the six months ended June 30, 2013, we recorded a current income tax provision of $593,000. Of the total current income tax provision, $554,000 was due to activities of taxable REIT subsidiaries. As a result of our sale of CTIMCO we no longer have any deferred tax assets or liabilities as of December 31, 2012.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our NOLs and net capital losses, or NCLs, is significantly limited by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust, Inc. As of December 31, 2012, we had net operating losses, or NOLs, of $161.5 million and net capital losses, or NCLs, of $121.4 million available to be carried forward and utilized in current or future periods. If we are unable to utilize our NOLs, they will expire in 2029. If we are unable to utilize our NCLs, $2.0 million will expire in 2013, $87.4 million will expire in 2014, $31.4 million will expire in 2015, and $618,000 will expire in 2017.

As of June 30, 2013, tax years 2009 through 2012 remain subject to examination by taxing authorities.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires our Manager to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. There have been no material changes to our Critical Accounting Policies described in our annual report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2013.

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IV. Loan Portfolio Details

The following table provides details of the loan origination portfolio, on a loan-by-loan basis ($ in millions):

Loan Origination Segment Loans Receivable as of June 30, 2013
	Principal		Book		Cash			All-in			Maximum			Geographic	Property	Origination			Risk Rating as of
	Balance		Value		Coupon  (1)			Yield  (1)			Maturity  (2)		Loan Type	Location	Type	LTV			June 30, 2013		December 31, 2012
Loan 1	$	68.3	$	68.1		L + 3.95	% (3)		L + 4.05	% (3)		6/9/2018	Sr. mortgage	West	Office		71	%		2		N/A
Loan 2		300.0		298.5		L + 3.80	% (3)		L + 3.98	% (3)		6/15/2018	Sr. mortgage	West	Office		59	%		2		N/A
Loan 3		109.8		109.0		L + 5.25	%		L + 8.41	%		7/9/2014	Sr. mortgage	Northeast	Multifamily		80	%		3		N/A
Loan 4		58.0		57.4		L + 3.50	%		L + 4.50	%		7/9/2018	Sr. mortgage	West	Hotel		74	%		2		N/A
Loan 5		48.4		48.4		L + 5.00	% (4)		L + 5.68	% (4)		12/9/2016	Sr. mortgage	Midwest	Hotel		53	%		3		N/A
Loan 6		27.1		27.1		L + 3.87	%		L + 3.87	%		7/9/2017	Sr. mortgage (5)	Northeast	Hotel		32	%		1		N/A
Loan 7		81.0		80.6		L + 3.85	%		L + 4.03	%		7/9/2018	Sr. mortgage	Southeast	Multifamily		75	%		2		N/A
Loan 8		64.0		64.0		L + 8.00	% (6)		L + 9.67	% (6)		2/9/2015	Sr. mortgage (5)	Northeast	Land		69	%		3		N/A
	$	756.6	$	753.1		L + 4.44	%		L + 5.26	%		4.0 years					65	%		2.3		N/A

(1) All loans are floating rate loans indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013.

(2) Maximum maturity date assumes all extension options are exercised.

(3) Loan earns interest based on a minimum LIBOR of 0.20%

(4) Loan earns interest based on a minimum LIBOR of 1.00%

(5) Represents a pari passu participation in a senior mortgage loan.

(6) Loan earns interest based on a minimum LIBOR of 0.50%

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The following tables provide details of our CT Legacy Portfolios’ loan portfolios, on a loan-by-loan basis ($ in millions):

CT Legacy Partner’s Loans Receivable as of June 30, 2013
	Principal		Book		Cash			All-in			Maximum			Geographic	Property	Risk Rating as of
	Balance		Value  (1)		Coupon  (2)			Yield  (2)			Maturity  (3)		Loan Type	Location	Type	June 30, 2013		December 31, 2012
Loan 1	$	17.4	$	24.1		L + 2.75	%		L + 2.75	%		12/31/14	Sub. mortgage	Northwest	Other		8		8
Loan 2		25.6		25.6		L + 4.94	%		L + 7.94	%		4/9/13	Sub. mortgage	International	Hotel		4		4
Loan 3		19.8		20.0		8.00	%		8.00	%		9/1/14	Mezzanine	Northeast	Office		2		2
Loan 4		17.9		12.5		L + 4.00	% (4)		L + 4.00	% (4)		3/15/12	Sr. mortgage	Northeast	Office		8		8
Loan 5		15.0		14.3		L + 4.00	% (4)		L + 4.00	% (4)		12/9/14	Sr. mortgage	West	Hotel		4		4
Loan 6		14.3		11.9		L + 2.76	%		L + 2.76	%		6/9/13	Mezzanine	Southeast	Hotel		7		5
Loan 7		8.0		5.5		L + 4.75	%		L + 4.75	%		10/9/13	Mezzanine	Northeast	Office		5		3
Loan 8		4.4		3.6		8.77	%		8.77	%		2/1/16	Mezzanine	Northeast	Office		4		4
Other (5)		98.2		—		N/A			N/A			Various	Various	Various	Various		8		8
	$	220.6	$	117.5		4.74	% (6)		5.34	%		0.8 years					6.5		6.3

(1) Represents the fair value of each loan as of June 30, 2013.

(2) All floating rate loans are indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013.

(3) Maximum maturity date assumes all extension options are exercised.

(4) Loan earns interest based on a minimum LIBOR of 2.00%.

(5) Includes four loans receivable investments, each of which are 100% impaired as of June 30, 2013.

(6) Weighted average includes LIBOR of 0.19% for floating rate loans.

CT CDO I’s Loans Receivable and Loans Held-For-Sale as of June 30, 2013
	Principal		Book		Cash			All-in			Maximum			Geographic	Property	Risk Rating as of
	Balance		Value		Coupon  (1)			Yield  (1)			Maturity  (2)		Loan Type	Location	Type	June 30, 2013		December 31, 2012
Loan 1	$	30.0	$	30.0		L + 3.25	%		L + 7.25	%		5/9/14	Sub. mortgage	West	Hotel		4		4
Loan 2		27.0		27.0		L + 3.53	%		L + 3.53	%		10/9/13	Sub. mortgage	Northeast	Office		5		3
Loan 3		20.0		20.0		L + 5.06	%		L + 5.06	%		10/9/13	Sub. mortgage	Diversified	Office		2		2
Loan 4 (3)		6.6		3.8		L + 5.01	%		L + 5.01	%		2/9/13	Sub. mortgage	Southwest	Office		8		7
Other (4)		18.0		—		N/A			N/A			Various	Various	Various	Various		8		8
	$	101.6	$	80.8		L + 3.90	%		L + 5.36	%		0.5 years					4.8		4.2

(1) All loans are floating rate loans indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013.

(2) Maximum maturity date assumes all extension options are exercised.

(3) Loan has been classified as held-for-sale as of June 30, 2013. Accordingly, its book value represents fair market value as of June 30, 2013.

(4) Includes two loans receivable investments, each of which are 100% impaired as of June 30, 2013.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our business is exposed to the risks related to interest rate fluctuations. We generally originate floating rate assets and finance those assets with index-matched floating rate liabilities. As a result, we effectively eliminate exposure to changes in portfolio value related to changes in interest rates. In the limited instances where we make fixed rate investments with the intention to finance these investments, we use interest rate swaps to effectively convert floating rate liabilities to fixed rate liabilities for proper matching with fixed rate assets. Each derivative used as a hedge is matched with a liability with which it is expected to have a high correlation. The swap agreements are generally held-to-maturity and we do not use interest rate derivative financial instruments for trading purposes.

Our investments in fixed rate assets are generally exposed to changes in value due to interest rate fluctuations, and our investments in floating rate assets are generally exposed to cash flow variability from fluctuations in rates.

Loan Origination Portfolio

Our Loan Origination investments are exposed to the risks related to interest rate fluctuations discussed above. The table below details our interest rate exposure to this portfolio as of June 30, 2013 ($ in thousands):

Interest Rate Exposure - Loan Origination segment
	June 30, 2013
Cash flow exposure to interest rates (1)
Floating rate assets	$	756,638
Floating rate debt		(165,239	)
Net floating rate exposure	$	591,399
Weighted average cash coupon (2)		L + 4.44	%
Net income impact from 100 bps increase in LIBOR (3)	$	5,914

(1) All values are in terms of face or notional amounts.

(2) LIBOR was 0.19% as of June 30, 2013.

(3) Excludes the impact of LIBOR floors on certain of our loans receivable investments.

CT Legacy Partners

Our investment in CT Legacy Partners is exposed to the risks related to interest rate fluctuations discussed above. The table below details our interest rate exposure to this portfolio as of June 30, 2013 ($ in thousands):

Interest Rate Exposure - CT Legacy Partners
	June 30, 2013
Cash flow exposure to interest rates (1)
Floating rate assets	$	90,189
Weighted average cash coupon (2)		L + 3.90	%
Net income impact from 100 bps increase in LIBOR (3)	$	901.9

(1) All values are in terms of face or notional amounts, and exclude investments from which we do not expect any future cash flows.

(2) LIBOR was 0.19% as of June 30, 2013.

(3) Excludes the impact of LIBOR floors on certain of our loans receivable investments.

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CT CDO I

Our investment in CT CDO I is exposed to the risks related to interest rate fluctuations discussed above. The table below details our interest rate exposure to this portfolio as of June 30, 2013 ($ in thousands):

Interest Rate Exposure - CT CDO I
	June 30, 2013
Cash flow exposure to interest rates (1)
Floating rate assets	$	83,601
Floating rate debt		(74,472	)
Net floating rate exposure	$	9,129
Weighted average cash coupon (2)		L + 3.91	%
Net income impact from 100 bps change in LIBOR	$	91.3

(1) All values are in terms of face or notional amounts, and exclude investments from which we do not expect any future cash flows.

(2) LIBOR was 0.19% as of June 30, 2013.

CTOPI

Although our carried interest investment in CTOPI generally relates to a portfolio of interest earning assets, our economic interest in this portfolio relates primarily to the realization of investments purchased at a discount by CTOPI. Accordingly, our investment in this portfolio is not exposed to a significant degree of interest rate risk. See Note 9 to our consolidated financial statements for additional discussion of CTOPI.

Secured Notes

Although our secured notes are interest-bearing liabilities, they contain prepayment provisions such that we will ultimately be required to pay $11.1 million to satisfy these obligations. Accordingly, we are not exposed to any interest rate risk under our secured notes. See Note 10 to our consolidated financial statements for additional discussion of our secured notes.

Risk of Non-Performance

In addition to the risks related to fluctuations in asset values and cash flows associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the additional debt service payments due from our borrowers may strain the operating cash flows of the collateral real estate assets and, potentially, contribute to non-performance or, in severe cases, default.

Market Risks

Our loans and investments are also subject to credit risk. The ultimate performance and value of our loans and investments depends upon the owners’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay interest and principal due to us. To monitor this risk, our Manager’s asset management team continuously reviews our investment portfolios and in certain instances is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.

In addition, we are exposed to the risks generally associated with the commercial real estate market, including variances in occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond our control. We seek to manage these risks through our underwriting and asset management processes.

Capital Market Risks

We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our class A common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under repurchase obligations or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow which requires us to utilize debt or equity capital to finance our business.

Counterparty Risk

The nature of our business requires us to hold our cash and cash equivalents, obtain financing from, and enter into hedging agreements with various financial institutions. This exposes us to the risk that these financial institutions may not fulfill their obligations to us under these various contractual arrangements. We mitigate this exposure by depositing our cash and cash equivalents, and entering into financing and hedging agreements with high credit quality institutions.

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The nature of our loans and investments also expose us to the risk that our counterparties do not make required interest and principal payments on scheduled due dates. We seek to manage this risk through a comprehensive credit analysis prior to making an investment and actively monitoring the asset portfolio that serves as our collateral.

Currency Risk

We are not currently exposed to future changes in foreign currency rates.

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ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this quarterly report on Form 10-Q was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by Securities and Exchange Commission rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

There have been no significant changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1: Legal Proceedings

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2013, we were not involved in any material legal proceedings.

ITEM 1A: Risk Factors

Our business inherently involves certain risks and uncertainties. The risks and uncertainties described below or in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. Should one or more of any of these risks materialize, our business, financial condition, results of operations or liquidity could be materially adversely affected.

Except as set forth below, there have been no material changes to the risk factors disclosed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012. The information below updates, and should be read in conjunction with, the risk factors and information disclosed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012.

Our master repurchase agreements impose, and any additional lending facilities may impose, restrictive covenants, which would restrict our flexibility to determine our operating policies and investment strategy.

We borrow funds under master repurchase agreements with four counterparties. The documents that govern these master repurchase agreements and the related guarantees contain, and any additional lending facilities may contain, customary affirmative and negative covenants, including financial covenants applicable to us that may restrict our flexibility to determine our operating policies and investment strategy. In particular, our master repurchase agreements require us to maintain a certain amount of cash or set aside assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would otherwise choose, which could reduce our return on assets. If we are unable to meet these collateral obligations, our financial condition and prospects could deteriorate rapidly. In addition, lenders may require that our Manager or one or more of our Manager’s executives continue to serve in such capacity. If we fail to meet or satisfy any of these covenants, we would be in default under these agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce their interests against existing collateral. We may also be subject to cross-default and acceleration rights in our other debt facilities. Further, this could also make it difficult for us to satisfy the requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.

Our master repurchase agreements require, and any bank credit facilities, repurchase agreements or other financing that we may use in the future to finance our assets may require, us to provide additional collateral or pay down debt.

We may borrow funds under our master repurchase agreements. We anticipate that we will also utilize bank credit facilities (including term loans and revolving facilities), additional repurchase agreements or other financing to finance our assets if they become available on acceptable terms. Such financing arrangements would involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We may not have the funds available to repay our debt at that time, which would likely result in defaults unless we are able to raise the funds from alternative sources including by selling assets at a time when we might not otherwise choose to do so, which we may not be able to achieve on favorable terms or at all. Posting additional margin would reduce our cash available to make other, higher yielding investments (thereby decreasing our return on equity). If we cannot meet these requirements, the lender or counterparty could accelerate our indebtedness, increase the interest rate on advanced funds and terminate our ability to borrow funds from it, which could materially and adversely affect our financial condition and ability to implement our investment strategy. In the case of repurchase transactions, if the value of the underlying security has declined as of the end of that term, or if we default on our obligations under the repurchase agreement, we will likely incur a loss on our repurchase transactions. In addition, if a lender or counterparty files for bankruptcy or becomes insolvent, our loans may become subject to bankruptcy or insolvency proceedings, thus depriving us, at least temporarily, of the benefit of these assets. Such an event could restrict our access to financing and increase our cost of capital.

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We depend on repurchase agreements and may depend on bank credit facilities, warehouse facilities and structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset specific funding arrangements and other sources of financing to execute our business plan, and our inability to access funding could have a material adverse effect on our results of operations, financial condition and business.

Our ability to fund our investments may be impacted by our ability to secure bank credit facilities (including term loans and revolving facilities), additional repurchase agreements, warehouse facilities and structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset specific funding arrangements and repurchase agreements on acceptable terms. We may also rely on short-term financing that would be especially exposed to changes in availability. In addition to our four master repurchase agreements a repurchase agreement in place at our subsidiary, CT Legacy Asset, LLC, that is not recourse to us, we are in discussions a financial institution that we expect in the near future will provide us with an additional repurchase facility. Our access to sources of financing will depend upon a number of factors, over which we have little or no control, including:

• general economic or market conditions;

• the market’s view of the quality of our assets;

• the market’s perception of our growth potential;

• our current and potential future earnings and cash distributions; and

• the market price of the shares of our class A common stock.

We will need to periodically access the capital markets to raise cash to fund new investments. Unfavorable economic or capital market conditions, such as the severe dislocation in the capital and credit markets that began in 2008, may increase our funding costs, limit our access to the capital markets or could result in a decision by our potential lenders not to extend credit. An inability to successfully access the capital markets could limit our ability to grow our business and fully execute our business strategy and could decrease our earnings and liquidity. In addition, any dislocation or weakness in the capital and credit markets, such as the dislocation that occurred in 2008 and 2009, could adversely affect one or more lenders and could cause one or more of our lenders to be unwilling or unable to provide us with financing or to increase the costs of that financing. In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price. No assurance can be given that we will be able to obtain any such financing on favorable terms or at all.

We may be subject to losses arising from current and future guarantees of debt and contingent obligations of our subsidiaries or joint venture or co-investment partners.

We currently guarantee certain obligations of our subsidiaries under the four master repurchase agreements that provide for aggregate total borrowings of up to $1.0 billion and we may in the future guarantee the performance of additional subsidiaries’ obligations, including, but not limited to, additional repurchase agreements, derivative agreements and unsecured indebtedness. In the future we may also agree to guarantee indebtedness incurred by a joint venture or co-investment partner. Such a guarantee may be on a joint and several basis with such joint venture or co-investment partner, in which case we may be liable in the event such partner defaults on its guarantee obligation. The non-performance of such obligations may cause losses to us in excess of the capital we initially may have invested or committed under such obligations and there is no assurance that we will have sufficient capital to cover any such losses.

We may compete with existing and future private and public investment vehicles established and/or managed by Blackstone or its affiliates, which may present various conflicts of interest that restrict our ability to pursue certain investment opportunities or take other actions that are beneficial to our business and result in decisions that are not in the best interests of our stockholders.

We are subject to conflicts of interest arising out of our relationship with Blackstone, including our Manager and its affiliates. Blackstone has appointed two nominees to serve on our board of directors (one of whom serves as executive chairman of our board of directors), and Stephen D. Plavin, our

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chief executive officer and a member of our board, Geoffrey G. Jervis, our chief financial officer, Randall S. Rothschild, our secretary and managing director, legal and compliance and Thomas C. Ruffing, our managing director, asset management, are executives of Blackstone and/or one or more of its affiliates, and we are managed by our Manager, a Blackstone affiliate. There is no guarantee that the policies and procedures adopted by us, the terms and conditions of the Management Agreement or the policies and procedures adopted by our Manager, Blackstone and their affiliates, will enable us to identify, adequately address or mitigate these conflicts of interest.

Some examples of conflicts of interest that may arise by virtue of our relationship with our Manager and Blackstone include:

• Broad and Wide-Ranging Activities. Our Manager, Blackstone and their affiliates engage in a broad spectrum of activities, including a broad range of activities relating to investments in the real estate industry and have invested or committed billions of dollars in capital through various investment funds, managed accounts and other vehicles affiliated with Blackstone. In the ordinary course of their business activities, our Manager, Blackstone and their affiliates may engage in activities where the interests of certain divisions of Blackstone and its affiliates, including our Manager, or the interests of their clients may conflict with the interests of our stockholders. Certain of these divisions and entities affiliated with our Manager have or may have an investment strategy similar to Blackstone Mortgage Trust’s and therefore may engage in competing activities with Blackstone Mortgage Trust. In particular, Blackstone Real Estate Debt Strategies, or BREDS, part of Blackstone’s real estate investment business, seeks to invest in a broad range of real estate-related debt investments via several different investment funds, managed accounts and other vehicles.

• Blackstone’s Policies and Procedures. Specified policies and procedures implemented by Blackstone and its affiliates, including our Manager, to mitigate potential conflicts of interest and address certain regulatory requirements and contractual restrictions may reduce the advantages across Blackstone’s and its affiliates’ various businesses that Blackstone expects to draw on for purposes of pursuing attractive investment opportunities. Because Blackstone has many different asset management, advisory and other businesses, it is subject to a number of actual and potential conflicts of interest, greater regulatory oversight and more legal and contractual restrictions than that to which it would otherwise be subject if it had just one line of business. In addressing these conflicts and regulatory, legal and contractual requirements across its various businesses, Blackstone has implemented certain policies and procedures (e.g., information walls) that may reduce the benefits that Blackstone expects to utilize for purposes of identifying and managing its investments. For example, Blackstone may come into possession of material non-public information with respect to companies in which our Manager may be considering making an investment in companies that are Blackstone’s and its affiliates’ advisory clients. As a consequence, that information, which could be of benefit to our Manager, might become restricted to those other businesses and otherwise be unavailable to our Manager, and could also restrict our Manager’s activities. Additionally, the terms of confidentiality or other agreements with or related to companies in which any investment vehicle of Blackstone has or has considered making an investment or which is otherwise an advisory client of Blackstone and its affiliates may restrict or otherwise limit the ability of Blackstone or its affiliates, including our Manager, to engage in businesses or activities competitive with such companies.

• Allocation of Investment Opportunities. Certain inherent conflicts of interest arise from the fact that Blackstone and its affiliates, including our Manager, will provide investment management and other services both to us and any other person or entity, whether or not the investment objectives or policies of any such other person or entity are similar to those of ours, including, without limitation, the sponsoring, closing and/or managing of any investment funds, vehicles, accounts, products and/or other similar arrangements sponsored, advised, and/or managed by Blackstone or its affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, co-investment vehicles and other entities formed in connection with Blackstone or its affiliates side-by-side or additional general partner investments with respect thereto), which we refer to as the “Blackstone Funds.” The respective investment guidelines and programs of our business and the Blackstone Funds may or may not overlap, in whole or in part, and if there is any such overlap investment opportunities will be allocated between us and the Blackstone Funds in a manner that may

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result in fewer investment opportunities being allocated to us than would have otherwise been the case in the absence of such Blackstone Funds. In particular, while the primary investment strategies of Blackstone Mortgage Trust and Blackstone’s latest flagship successor real estate debt fund, Blackstone Real Estate Debt Strategies II, L.P., or BREDS II, are materially different in that Blackstone Mortgage Trust will generally seek to invest primarily in senior mortgage loans and other similar interests and whereas BREDS II will generally seek to invest primarily in junior mortgage debt (e.g., B Notes) and mezzanine debt, a significant portion of the capital of BREDS II may nonetheless be invested in investments that would also be appropriate for Blackstone Mortgage Trust. Our Manager, Blackstone or their affiliates may also give advice to the Blackstone Funds that may differ from advice given to us even though their investment objectives may be the same or similar to ours.

While our Manager will seek to manage potential conflicts of interest in a fair and equitable manner in accordance with the investment allocation policy and procedures of our Manager and/or its affiliates with respect to the allocation of investment opportunities among us and one or more Blackstone Funds (as the same may be amended, updated or revised from time to time without prior notice from our Manager or our consent), which we refer to as the Allocation Policy, and as required pursuant to the Management Agreement, the portfolio strategies employed by our Manager, Blackstone or their affiliates in managing the Blackstone Funds could conflict with the strategies employed by our Manager in managing our business and may adversely affect the marketability, exit strategy, prices and availability of the securities and instruments in which we invest. Conversely, participation in specific investment opportunities may be appropriate, at times, for both us and the Blackstone Funds. Our Manager has an investment allocation policy in place which provides that investment opportunities falling within the shared investment objectives of our business and the Blackstone Funds will generally be allocated on a basis that our Manager and applicable Blackstone affiliates determine to be fair and reasonable in accordance with the Allocation Policy, subject to legal, tax, regulatory, accounting and other considerations and taking into account a variety of factors. Our Manager is entitled to amend the Allocation Policy at any time without prior notice or our consent.

• Investments in Different Levels or Classes of an Issuer’s Securities. From time to time, we and the Blackstone Funds may make investments at different levels of an issuer’s or borrower’s capital structure (e.g., an investment by a Blackstone Fund in an equity or mezzanine interest with respect to the same portfolio entity in which we own a debt interest or vice versa) or otherwise in different classes of the same issuer’s securities. We may make investments that are senior or junior to, or have rights and interests different from or adverse to, the investments made by the Blackstone Funds. Such investments may conflict with the interests of such Blackstone Funds in related investments, and the potential for any such conflicts of interests may be heightened in the event of a default or restructuring of any such investments. Our Management Agreement requires our Manager to keep our board of directors reasonably informed on a periodic basis in connection with the foregoing, including with respect to transactions that involve investments at different levels of an issuer’s or borrower’s capital structure, as to which our Manager has agreed to provide our board of directors with quarterly updates. We, CT Legacy Partners and CTOPI currently hold mortgage and mezzanine loans and other investments in which Blackstone affiliates have interests in the collateral securing or backing such investments. While Blackstone will seek to resolve any such conflicts in a fair and equitable manner in accordance with the Allocation Policy and its prevailing policies and procedures with respect to conflicts resolution among the Blackstone Funds generally, such transactions are not required to be presented to our board of directors for approval, and there can be no assurance that any conflicts will be resolved in our favor.

• Pursuit of Differing Strategies. At times, the investment professionals employed by our Manager or its affiliates and other investment vehicles affiliated with our Manager and/or Blackstone may determine that an investment opportunity may be appropriate for only some of the accounts, clients, entities, funds and/or investment companies for which he or she exercises investment responsibility, or may decide that certain of the accounts, clients, entities, funds and/or investment companies should take differing positions with respect to a particular security. In these cases, the investment professionals may place separate transactions for one or more accounts, clients, entities, funds and/or investment companies which may affect the market price of the security or the execution of the transaction, or both,

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to the detriment or benefit of one or more other accounts, clients, entities, funds and/or investment companies. For example, an investment professional may determine that it would be in the interest of another account to sell a security that we hold long, potentially resulting in a decrease in the market value of the security held by us.

• Variation in Financial and Other Benefits. A conflict of interest arises where the financial or other benefits available to our Manager or its affiliates differ among the accounts, clients, entities, funds and/or investment companies that it manages. If the amount or structure of the base management fee, incentive fee and/or our Manager’s compensation differs among accounts, clients, entities, funds and/or investment companies (such as where certain funds or accounts pay higher base management fees, incentive fees, performance-based management fees or other fees), our Manager might be motivated to help certain accounts, clients, entities, funds and/or investment companies over others. Similarly, the desire to maintain assets under management or to enhance our Manager’s performance record or to derive other rewards, financial or otherwise, could influence our Manager in affording preferential treatment to those accounts, clients, entities, funds and/or investment companies that could most significantly benefit our Manager. Our Manager may, for example, have an incentive to allocate favorable or limited opportunity investments or structure the timing of investments to favor such accounts, clients, entities, funds and/or investment companies. Additionally, our Manager might be motivated to favor accounts, clients, entities, funds and/or investment companies in which it has an ownership interest or in which Blackstone and/or its affiliates have ownership interests. Conversely, if an investment professional at our Manager or its affiliates does not personally hold an investment in the fund but holds investments in other Blackstone affiliated vehicles, such investment professional’s conflicts of interest with respect to us may be more acute.

• Investment Banking, Underwriting Advisory and Other Relationships. As part of its regular business, Blackstone provides a broad range of investment banking, underwriting, advisory, and other services. In the regular course of its investment banking and advisory businesses, Blackstone represents potential purchasers, sellers and other involved parties, including corporations, financial buyers, management, stockholders and institutions, with respect to transactions that could give rise to investments that are suitable for us. Blackstone will be under no obligation to decline any such engagements in order to make an investment opportunity available to us. In connection with its investment banking, advisory and other businesses, Blackstone may come into possession of information that limits its ability to engage in potential transactions. Our activities may be constrained as a result of the inability of Blackstone personnel to use such information. For example, employees of Blackstone not serving as employees of our Manager or its affiliates may be prohibited by law or contract from sharing information with members of our Manager’s investment team. Additionally, there may be circumstances in which one or more of certain individuals associated with Blackstone will be precluded from providing services to our Manager because of certain confidential information available to those individuals or to other parts of Blackstone. In certain sell-side assignments, the seller may permit Blackstone to act as a participant in such transaction, which would raise conflicts of interest inherent in such a situation. In addition, in connection with selling investments by way of a public offering, a Blackstone broker-dealer may act as the managing underwriter or a member of the underwriting syndicate on a firm commitment basis and purchase securities on that basis. Blackstone may retain any commissions, remuneration, or other profits and receive compensation from such underwriting activities, which have the potential to create conflicts of interest. Blackstone may also participate in underwriting syndicates from time to time with respect to us or portfolio companies of Blackstone Funds, or may otherwise be involved in the private placement of debt or equity securities issued by us or such portfolio companies, or otherwise in arranging financings with respect thereto. Subject to applicable law, Blackstone may receive underwriting fees, placement commissions, or other compensation with respect to such activities, which are not required to be shared with us or our stockholders. Where Blackstone serves as underwriter with respect to a portfolio company’s securities, we or the applicable Blackstone fund holding such securities may be subject to a “lock-up” period following the offering under applicable regulations during which time our ability to sell any securities that we continue to hold is restricted. This may prejudice our ability to dispose of such securities at an opportune time.

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Blackstone has long-term relationships with a significant number of corporations and their senior management. In determining whether to invest in a particular transaction on our behalf, our Manager may consider those relationships (subject to its obligations under the Management Agreement), which may result in certain transactions that our Manager will not undertake on our behalf in view of such relationships.

Blackstone and its affiliates may represent creditors or debtors in proceedings under Chapter 11 of the Bankruptcy Code or prior to such filings. From time to time Blackstone and its affiliates may serve as advisor to creditor or equity committees. This involvement, for which Blackstone and its affiliates may be compensated, may limit or preclude the flexibility that we may otherwise have to participate in restructurings.

• Service Providers. Our service providers (including lenders, brokers, attorneys, and investment banking firms) may be sources of investment opportunities, counterparties therein or advisors with respect thereto. This may influence our Manager in deciding whether to select such a service provider. In addition, in instances where multiple Blackstone businesses may be exploring a potential individual investment, certain of these service providers may choose to be engaged by other Blackstone affiliates rather than us.

• Material, Non-Public Information. We, directly or through Blackstone, our Manager or certain of their respective affiliates may come into possession of material non-public information with respect to an issuer in which we have invested or may invest. Should this occur, our Manager may be restricted from buying or selling securities, derivatives or loans of the issuer on our behalf until such time as the information becomes public or is no longer deemed material. Disclosure of such information to the personnel responsible for management of our business may be on a need-to-know basis only, and we may not be free to act upon any such information. Therefore, we and/or our Manager may not have access to material non-public information in the possession of Blackstone which might be relevant to an investment decision to be made by our Manager on our behalf, and our Manager may initiate a transaction or purchase or sell an investment which, if such information had been known to it, may not have been undertaken. Due to these restrictions, our Manager may not be able to initiate a transaction on our behalf that it otherwise might have initiated and may not be able to purchase or sell an investment that it otherwise might have purchased or sold, which could negatively affect our operations.

• Possible Future Activities. Our Manager and its affiliates may expand the range of services that they provide over time. Except as and to the extent expressly provided in the Management Agreement, our Manager and its affiliates will not be restricted in the scope of its business or in the performance of any such services (whether now offered or undertaken in the future) even if such activities could give rise to conflicts of interest, and whether or not such conflicts are described herein. Our Manager, Blackstone and their affiliates continue to develop relationships with a significant number of companies, financial sponsors and their senior managers, including relationships with clients who may hold or may have held investments similar to those intended to be made by us. These clients may themselves represent appropriate investment opportunities for us or may compete with us for investment opportunities.

• Transactions with Blackstone Funds. From time to time, we may enter into purchase and sale transactions with Blackstone Funds. Such transactions will be conducted in accordance with, and subject to, the terms and conditions of the Management Agreement (including the requirement that sales to or acquisitions of investments from Blackstone, any Blackstone Fund or any of their affiliates be approved in advance by a majority of our independent directors) and our code of business conduct and ethics and applicable laws and regulations.

• Loan Refinancings. We may from time to time seek to participate in investments relating to the refinancing of loans held by the Blackstone Funds (including the BREDS funds). While it is expected that our participation in connection with such refinancing transactions will be at arms’ length and on market/contract terms, such transactions may give rise to potential or actual conflicts of interest.

• Other Affiliate Transactions. Our Manager may on our behalf acquire debt issued by a borrower in which a separate equity or another debt investment has been made by Blackstone or its other affiliates, including the BREDS funds. In connection with investments in which

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we participate alongside other Blackstone Funds (including the BREDS funds), we may from time to time share certain rights with such other Blackstone Funds relating to such investments for legal, tax, regulatory or other similar reasons, including, in certain instances, certain control-related rights with respect to jointly-held investments. When making any such investments, there may be conflicting interests. There can be no assurance that the return on our investment will be equivalent to or better than the returns obtained by Blackstone or its other affiliates.

Further conflicts could arise once we and Blackstone or its affiliates have made their respective investments. For example, if a company goes into bankruptcy or reorganization, becomes insolvent or otherwise experiences financial distress or is unable to meet its payment obligations or comply with covenants relating to securities held by us or by the Blackstone or its affiliates, Blackstone or its affiliates may have an interest that conflicts with our interests or Blackstone or its affiliates may have information regarding the company that we do not have access to. If additional financing is necessary as a result of financial or other difficulties, it may not be in our best interests to provide such additional financing. If Blackstone or its affiliates were to lose their respective investments as a result of such difficulties, the ability of our Manager to recommend actions in our best interests might be impaired.

We do not own the Blackstone name, but we may use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of Blackstone. Use of the name by other parties or the termination of our trademark license agreement may harm our business.

We have entered into a trademark license agreement, or Trademark License Agreement, with an affiliate of Blackstone pursuant to which it has granted us a fully paid-up, royalty-free, non-exclusive, non-transferable license to use the name “Blackstone Mortgage Trust, Inc.” and the ticker symbol “BXMT”. Under this agreement, we have a right to use this name for so long as our Manager (or another affiliate of Blackstone TM L.L.C., or Licensor) serves as our Manager (or another managing entity) and the Manager remains an affiliate of the Licensor under the Trademark License Agreement. The Trademark License Agreement may also be earlier terminated by either party as a result of certain breaches or for convenience upon 90 days’ prior written notice; provided that upon notification of such termination by us, the Licensor may elect to effect termination of the Trademark License Agreement immediately at any time after 30 days from the date of such notification. The Licensor and its affiliates, such as Blackstone, will retain the right to continue using the “Blackstone” name. We will further be unable to preclude the Licensor from licensing or transferring the ownership of the “Blackstone” name to third parties, some of whom may compete with us. Consequently, we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the Licensor, Blackstone or others. Furthermore, in the event that the Trademark License Agreement is terminated, we will be required to, among other things, change our name and NYSE ticker symbol. Any of these events could disrupt our recognition in the market place, damage any goodwill we may have generated and otherwise harm our business.

We must manage our portfolio so that we do not become an investment company that is subject to regulation under the Investment Company Act.

We conduct our operations so that we avail ourselves of the statutory exclusion provided in Section 3(c)(5)(C) for companies engaged primarily in investment in mortgages and other liens on or interests in real estate. In order to qualify for this exclusion, we must maintain, on the basis of positions taken by the SEC’s Division of Investment Management, or the “Division,” in interpretive and no-action letters, a minimum of 55% of the value of our total assets in mortgage loans and other related assets that are considered “mortgages and other liens on and interests in real estate,” which we refer to as Qualifying Interests, and a minimum of 80% in Qualifying Interests and real estate-related assets. In the absence of SEC or Division guidance that supports the treatment of other investments as Qualifying Interests, we will treat those other investments appropriately as real estate-related assets or miscellaneous assets depending on the circumstances.

The SEC staff has commenced an advance notice rulemaking initiative, indicating that it is reconsidering its interpretive policy under Section 3(c)(5)(C) and whether to advance rulemaking to define the basis for the exclusion. We cannot predict the outcome of this reconsideration or potential rulemaking initiative and its impact on our ability to rely on the exclusion. To the extent that the SEC or its staff provides more specific guidance regarding any of the matters bearing upon the requirements of Section 3(c)(5)(C) of the Investment Company Act, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC or its staff could further inhibit our ability to pursue the strategies we have chosen.

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Because registration as an investment company would significantly affect our ability to engage in certain transactions or be structured in the manner we currently are, we intend to conduct our business so that we will continue to satisfy the requirements to avoid regulation as an investment company. If we do not meet these requirements, we could be forced to alter our investment portfolios by selling or otherwise disposing of a substantial portion of the assets that do not satisfy the applicable requirements or by acquiring a significant position in assets that are Qualifying Interests. In the past, when required due to the mix of assets in our balance sheet portfolio, and in connection with our reliance on the Section 3(c)(5)(C) exclusion, we have purchased agency residential mortgage-backed securities that represent the entire beneficial interests in the underlying pools of whole residential mortgage loans, which are treated as Qualifying Interests based on Division positions. Such investments may not represent an optimum use of capital when compared to the available investments we and our subsidiaries target pursuant to our investment strategy. These investments present additional risks to us, and these risks are compounded by our inexperience with such investments. We continue to analyze our investments and may acquire other pools of whole loan residential mortgage-backed securities when and if required for compliance purposes. Altering our portfolio in this manner may have an adverse effect on our investments if we are forced to dispose of or acquire assets in an unfavorable market, and may adversely affect our stock price.

If it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the SEC, that we would be unable to enforce contracts with third parties, that third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company, and that we would be subject to limitations on corporate leverage that would have an adverse impact on our investment returns. In order to comply with provisions that allow us to avoid the consequences of registration under the Investment Company Act, we may need to forego otherwise attractive opportunities and limit the manner in which we conduct our operations. Thus, compliance with the requirements of the Investment Company Act may hinder our ability to operate solely on the basis of maximizing profits.

The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT.

We intend to enter into financing arrangements that are structured as sale and repurchase agreements pursuant to which we would nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these assets at a later date in exchange for a purchase price. Economically, these agreements are financings which are secured by the assets sold pursuant thereto. We believe that we would be treated for REIT asset and income test purposes as the owner of the assets that are the subject of any such sale and repurchase agreement notwithstanding that such agreements may transfer record ownership of the assets to the counterparty during the term of the agreement. It is possible, however, that the IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3: Defaults Upon Senior Securities

None.

ITEM 4: Mine Safety Disclosures

Not applicable

ITEM 5: Other Information

Amendment No. 1 to Amended and Restated Management Agreement

On July 30, 2013, we and our Manager entered into Amendment No. 1 (the “Amendment”) to the Amended and Restated Management Agreement, dated as of March 26, 2013 (the “Amended and Restated Management Agreement”) between us and our Manager, an affiliate Blackstone that serves as our external manager. As of June 30, 2013, affiliates of Blackstone owned approximately 8.5% of our outstanding shares of class A common stock.

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The amendments to the Amended and Restated Management Agreement were the following:

• revisions to clarify that internal audit expenses (including through one or more third parties and/or affiliates of our Manager) are to be paid by us and not our Manager; and

• updates to reflect our recent name change and the merger of our CT Legacy REIT Mezz Borrower, Inc. subsidiary with and into CT Legacy Partners, LLC.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Amendment, a copy of which is filed as Exhibit 10.1 to this quarterly report on Form 10-Q and is incorporated herein by reference.

First Amendment to Master Repurchase Agreement with Citibank, N.A.

On July 26, 2013, we and a special-purpose wholly-owned subsidiary of ours entered into a First Amendment to Master Repurchase agreement (“First Amendment”) with Citibank, N.A. to the Master Repurchase Agreement, dated June 12, 2013 (“Master Repurchase Agreement”) to provide for a second $250.0 million tranche of potential advances, which we expect to use to finance the acquisition or origination of eligible loans as more particularly described in the Master Repurchase Agreement. The second tranche is subject to a one year “availability period,” during which new financing transactions can be initiated. All other terms, including the maturity dates, for the second tranche advances are the same as the original $250 million tranche.

The foregoing description of Master Repurchase Agreement, as amended by the First Amendment, is qualified in its entirety by reference to the complete terms of the Master Repurchase Agreement and the First Amendment, copies of which are filed as Exhibit 10.10 and Exhibit 10.16, respectively, to this quarterly report on Form 10-Q and are incorporated herein by reference.

Section 13(r) Disclosure

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, we hereby incorporate by reference herein Exhibit 99.1 of this report, which includes disclosures publicly filed and/or provided to Blackstone by Hilton Worldwide Inc., SunGard Capital Corp., SunGard Capital Corp. II, SunGard Data Systems Inc. and Travelport Limited, which may be considered affiliates of Blackstone and therefore our affiliates.

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ITEM 6:        Exhibits

•	10.1	Amendment No.1. to Amended and Restated Management Agreement, dated as of July 30, 2013, by and between Blackstone Mortgage Trust, Inc. and BXMT Advisors L.L.C.
	10.2	Amended and Restated Registration Rights Agreement, dated May 6, 2013, by and among Blackstone Mortgage Trust, Inc., Blackstone Holdings III L.P. and BREDS/CT Advisors L.L.C. (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on May 6, 2013 and incorporated herein by reference)
	10.3	Trademark License Agreement, dated May 6, 2013, by and between Capital Trust, Inc. and Blackstone TM L.L.C. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 7, 2013 and incorporated herein by reference)
	10.4	Limited Liability Company Agreement of 42-16 Partners, LLC, dated as of May 13, 2013, by and between Blackstone Mortgage Trust, Inc. and Blackstone Holdings Finance Co. L.L.C. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 17, 2013 and incorporated herein by reference)
	10.5	Letter Agreement, dated as of May 13, 2013, by and between Blackstone Mortgage Trust, Inc. and Blackstone Holdings Finance Co. L.L.C. (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 17, 2013 and incorporated herein by reference)
	10.6	Master Repurchase Agreement, dated as of May 21, 2013, by and between Bank of America, N.A. and Parlex 1 Finance, LLC (filed as Exhibit 10.25 of the Registrant’s Registration Statement on Form S-11 (No. 333-187541) filed on May 22, 2013 and incorporated herein by reference)
	10.7	Guarantee Agreement, dated as of May 21, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Bank of America, N.A. (filed as Exhibit 10.26 of the Registrant’s Registration Statement on Form S-11 (No. 333-187541) filed on May 22, 2013 and incorporated herein by reference)
•	10.8	Master Repurchase and Securities Contract, dated as of June 7, 2013, by and between Wells Fargo Bank, National Association and SVP Finance, LLC
•	10.9	Limited Guarantee Agreement, dated as of June 7, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Wells Fargo Bank, National Association
•	10.10	Master Repurchase Agreement, dated as of June 12, 2013, by and between Citibank, N.A. and Parlex 2 Finance, LLC
•	10.11	Limited Guarantee, dated as of June 12, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Citibank, N.A.
•	10.12	Master Repurchase Agreement, dated as of June 28, 2013, by and between JPMorgan Chase Bank, National Association and Parlex 4 Finance, LLC
•	10.13	Guarantee Agreement, dated as of June 28, 2013, made by Blackstone Mortgage Trust, Inc. in favor of JPMorgan Chase Bank, National Association
	10.14	Blackstone Mortgage Trust, Inc. 2013 Stock Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on July 1, 2013 and incorporated herein by reference)
	10.15	Blackstone Mortgage Trust, Inc. 2013 Manager Incentive Plan (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on July 1, 2013 and incorporated herein by reference)
•	10.16	First Amendment to Master Repurchase Agreement, dated as of July 26, 2013, by and between Citibank, N.A., Parlex 2 Finance, LLC, and Blackstone Mortgage Trust, Inc.
•	31.1	Certification of Stephen D. Plavin, Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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•	31.2	Certification of Geoffrey G. Jervis, Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
+	32.1	Certification of Stephen D. Plavin, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+	32.2	Certification of Geoffrey G. Jervis, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
•	99.1	Section 13(r) Disclosure
*	101.INS	XBRL Instance Document
*	101.SCH	XBRL Taxonomy Extension Schema Document
*	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
*	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
*	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
*	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

• Filed herewith

+ This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, 2013 and December 31, 2012; (ii) the Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012; (iii) the Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2013 and 2012; (iv) the Consolidated Statements of Changes in (Deficit) Equity for the six months ended June 30, 2013 and 2012; (v) the Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012; and (vi) Notes to Consolidated Financial Statements.

Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, is deemed not “filed” for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BLACKSTONE MORTGAGE TRUST, INC.
July 30, 2013	/s/ Stephen D. Plavin
Date	Stephen D. Plavin
	Chief Executive Officer
	(Principal executive officer)
July 30, 2013	/s/ Geoffrey G. Jervis
Date	Geoffrey G. Jervis
	Chief Financial Officer
	(Principal financial officer and Principal accounting officer)

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EX-10.1

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 1 TO

AMENDED AND RESTATED MANAGEMENT AGREEMENT

This AMENDMENT NO. 1 TO AMENDED AND RESTATED MANAGEMENT AGREEMENT, dated as of July 30, 2013 (this “Amendment”), is entered into by and between Blackstone Mortgage Trust, Inc. (formerly known as Capital Trust, Inc.), a Maryland corporation (the “Company”) and BXMT Advisors L.L.C. (formerly known as BREDS/CT Advisors L.L.C.), a Delaware limited liability company (the “Manager”). This Amendment is an amendment to the Amended and Restated Management Agreement, dated as of March 26, 2013 (the “Agreement”) by and between the Company and the Manager.

W I T N E S S E T H:

WHEREAS, the Company and the Manager desire to amend the Agreement with respect to the matters set forth herein.

NOW THEREFORE, in consideration of the premises and agreements hereinafter set forth, the parties hereto hereby agree as follows:

Section 1. Amendments.

(a) The Agreement is hereby amended by replacing all references to “Capital Trust, Inc.” and BREDS/CT Advisors L.L.C” with “Blackstone Mortgage Trust, Inc.” and “BXMT Advisors L.L.C.”, respectively.

(b) The Agreement is hereby amended to delete the definition of “CT Legacy REIT” in its entirety and to add the following definition in alphabetical order:

“CT Legacy Partners” means CT Legacy Partners, LLC, a Delaware corporation, and its successors and assigns.

(c) The Agreement is hereby amended to replace all remaining references to “CT Legacy REIT” and “CT Legacy REIT Award Agreements” with “CT Legacy Partners” and “CT Legacy Award Agreements”, respectively.

(d) The Agreement is hereby amended to amend Section 2(m) of the Agreement in its entirety to read as follows:

(m) The Manager shall provide, or, at the sole cost and expense of the Company, cause to be provided, such internal audit, compliance and control services as may be required for the Company to comply with applicable law (including the Securities Act and Exchange Act), regulation (including SEC regulations) and the rules and requirements of the NYSE and as otherwise reasonably requested by the Company or its Board from time to time.

(e) The Agreement is hereby amended to amend Section 7(b)(ii) of the Agreement in its entirety to read as follows:

(ii) fees, costs and expenses of legal, tax, accounting, consulting, auditing (including internal audit), finance, administrative, investment banking, capital market and other similar services rendered to the Company (including, where the context requires, through one or more third parties and/or Affiliates of the Manager) or, if provided by the Manager’s personnel, in accordance with Section 2(e) hereof;

(f) The Agreement is hereby amended to amend the notice details for the Company in Section 16(a) of the Agreement to read as follows:

The Company: Blackstone Mortgage Trust, Inc. 345 Park Avenue, 42nd Floor New York, New York 10154 Attention: Chief Financial Officer Fax: (212) 655-0044 Email: geoffrey.jervis@blackstone.com

Section 2. Status. This Amendment amends the Agreement, but only to the extent expressly set forth herein. All other provisions of the Agreement remain in full force and effect. Unless otherwise defined herein, initially capitalized terms have the meaning given them in the Agreement.

Section 3. Representations. In order to induce both the Company and the Manager to execute and deliver this Amendment, each party represents that as of the date hereof, it is in full compliance with all of the terms and conditions of the Agreement, including, but not limited to, the warranties and representations set forth in the Agreement.

Section 4. Governing Law. This Amendment shall be governed by and construed in accordance with the applicable terms and provisions of Section 16(e) of the Agreement, which terms and provisions are incorporated herein by reference.

Section 5. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall be considered one and the same instrument.

Section 6. Facsimile Execution. Facsimile signatures on counterparts of this Amendment are hereby authorized and shall be acknowledged as if such facsimile signatures were an original execution, and this Amendment shall be deemed as executed when an executed facsimile hereof is transmitted by a party to any other party.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of the date first written above.

Blackstone Mortgage Trust, Inc.
By:	/s/ Geoffrey G. Jervis
	Name: Geoffrey G. Jervis
	Title:   Chief Financial Officer
BXMT Advisors L.L.C.
By:	/s/ Randall S. Rothschild
	Name: Randall S. Rothschild
	Title:   Authorized Signatory

EX-10.8

Exhibit 10.8

MASTER REPURCHASE AND SECURITIES CONTRACT

dated as of June 7, 2013

by and between

SVP 2013 FINANCE, LLC,

Seller

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

Agent, Initial Buyer, Lead Arranger and Syndication Agent

TABLE OF CONTENTS

		Page
ARTICLE 1	APPLICABILITY		1
Section 1.01	Applicability		1
ARTICLE 2	DEFINITIONS AND INTERPRETATION		1
Section 2.01	Rules of Interpretation		25
ARTICLE 3	THE TRANSACTIONS		26
Section 3.01	Procedures		26
Section 3.02	Transfer of Purchased Asset; Servicing Rights		27
Section 3.03	Disbursement to Seller		28
Section 3.04	Early Repurchase Date; Voluntary Reduction of Purchase Price; Mandatory Reductions of Purchase Price		28
Section 3.05	Repurchase		29
Section 3.06	Extension Option		29
Section 3.07	Payment of Price Differential and Fees		32
Section 3.08	Payment, Transfer and Custody		32
Section 3.09	Repurchase Obligations Absolute		33
ARTICLE 4	CONVERSION OF PURCHASED ASSET TO REO PROPERTY		33
Section 4.01	Conversion of Purchased Asset to REO Property		33
Section 4.02	Conversion Conditions		34
Section 4.03	Recording		36
Section 4.04	Environmental Compliance		36
Section 4.05	Completion of Conversion		37
ARTICLE 5	APPLICATION OF INCOME		37
Section 5.01	Waterfall Account		37
Section 5.02	Before an Event of Default		38
Section 5.03	After Event of Default		39
Section 5.04	Seller to Remain Liable		39
ARTICLE 6	CONDITIONS PRECEDENT; POST CLOSING OBLIGATION		40
Section 6.01	Conditions Precedent to Closing Date		40
Section 6.02	Conditions Precedent to the Transaction		40
ARTICLE 7	REPRESENTATIONS AND WARRANTIES OF SELLER		42
Section 7.01	Seller		42
Section 7.02	Repurchase Documents		42
Section 7.03	Solvency		43
Section 7.04	Taxes		43
Section 7.05	Financial Condition		43
Section 7.06	True and Complete Disclosure		44
Section 7.07	Compliance with Laws		44
Section 7.08	Compliance with ERISA		44

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TABLE OF CONTENTS

(continued)

		Page
Section 7.09	No Default		45
Section 7.10	Purchased Asset		45
Section 7.11	Intentionally Omitted		45
Section 7.12	Transfer and Security Interest		45
Section 7.13	No Broker		46
Section 7.14	Separateness		46
ARTICLE 8	COVENANTS OF SELLER		46
Section 8.01	Existence; Governing Documents; Conduct of Business		46
Section 8.02	Compliance with Laws, Contractual Obligations and Repurchase Documents		47
Section 8.03	Protection of Buyer’s Interest in Purchased Asset		47
Section 8.04	Actions of Seller Relating to Distributions, Indebtedness, Guarantee Obligations, Contractual Obligations, Investments and Liens		48
Section 8.05	Delivery of Income		48
Section 8.06	Delivery of Financial Statements and Other Information		49
Section 8.07	Delivery of Notices		50
Section 8.08	Intentionally Omitted		50
Section 8.09	Material Actions, Etc		50
Section 8.10	Maintenance of Property, Insurance and Records		51
Section 8.11	Tax Treatment of Seller		51
Section 8.12	Reserve Accounts		51
Section 8.13	Appraisals		51
ARTICLE 9	SINGLE-PURPOSE ENTITY		52
Section 9.01	Covenants Applicable to Seller		52
Section 9.02	Covenants Applicable to Seller		53
Section 9.03	Reliance		53
ARTICLE 10	EVENTS OF DEFAULT AND REMEDIES		54
Section 10.01	Events of Default		54
Section 10.02	Remedies of Agent as Owner of the Purchased Asset		56
ARTICLE 11	SECURITY INTEREST		57
Section 11.01	Grant		57
Section 11.02	Effect of Grant		58
Section 11.03	Seller to Remain Liable		58
Section 11.04	Waiver of Certain Laws		58
ARTICLE 12	INCREASED COSTS; CAPITAL ADEQUACY		59
Section 12.01	Market Disruption		59
Section 12.02	Illegality		59
Section 12.03	Breakfunding		59

ii

TABLE OF CONTENTS

(continued)

		Page
Section 12.04	Increased Costs		59
Section 12.05	Capital Adequacy		60
Section 12.06	Withholding Taxes		60
Section 12.07	Payment and Survival of Obligations		62
ARTICLE 13	INDEMNITY AND EXPENSES		63
Section 13.01	Indemnity		63
Section 13.02	Expenses		65
ARTICLE 14	INTENT		65
Section 14.01	Safe Harbor		65
Section 14.02	Right to Liquidate		65
Section 14.03	Qualified Financial Contract		66
Section 14.04	Netting Contract		66
Section 14.05	Master Netting Agreement		66
ARTICLE 15	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS		66
ARTICLE 16	NO RELIANCE		67
ARTICLE 17	AGENT		67
Section 17.01	Reliance		67
Section 17.02	Knowledge		68
Section 17.03	No Representations; No Reliance		68
Section 17.04	Indemnification by Buyer		68
Section 17.05	Free Agent		69
Section 17.06	Exclusive Agent		69
Section 17.07	Resignation		69
Section 17.08	Administration		69
Section 17.09	Foreclosure; Post-Foreclosure Operations		73
ARTICLE 18	MISCELLANEOUS		74
Section 18.01	Governing Law		74
Section 18.02	Submission to Jurisdiction; Service of Process		74
Section 18.03	IMPORTANT WAIVERS		75
Section 18.04	Integration		76
Section 18.05	Intentionally Omitted		76
Section 18.06	Use of Employee Plan Assets		76
Section 18.07	Survival and Benefit of Seller’s Agreements		76
Section 18.08	Assignments and Participations		76
Section 18.09	Ownership and Hypothecation of Purchased Asset		78
Section 18.10	Confidentiality		79
Section 18.11	No Implied Waivers		79
Section 18.12	Notices and Other Communications		80

iii

TABLE OF CONTENTS

(continued)

		Page
Section 18.13	Counterparts; Electronic Transmission		80
Section 18.14	No Personal Liability		80
Section 18.15	Protection of Buyer’s Interests in the Purchased Asset; Further Assurances		80
Section 18.16	Default Rate		82
Section 18.17	Set-off		82
Section 18.18	Seller’s Waiver of Setoff		83
Section 18.19	Power of Attorney; Release of Purchased Asset and Purchased Asset Documents		83
Section 18.20	Periodic Due Diligence Review		84
Section 18.21	Time of Essence		85
Section 18.22	Patriot Act Notice		85
Section 18.23	Successors and Assigns		85
Section 18.24	Acknowledgement of Anti-Predatory Lending Policies		85
Section 18.25	Servicing		85
Section 18.26	Funds Transfer Disbursements		86

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ANNEXES, SCHEDULES AND EXHIBITS

ANNEXES
ANNEX I	Names and Addresses for Communications Between Parties
SCHEDULES
SCHEDULE I	Asset, Applicable Purchase Percentage and Original Purchase Price
SCHEDULE II	Representations and Warranties with respect to Asset
SCHEDULE III	Reserve Balances
EXHIBITS
EXHIBIT A	Form of Transaction Request
EXHIBIT B	Form of Confirmation
EXHIBIT C	Form of Irrevocable Redirection Notice
EXHIBIT D-1	Form of Closing Certificate
EXHIBIT D-2	Form of Compliance Certificate
EXHIBIT E	Form of Power of Attorney
EXHIBIT F	Form of Assignment and Acceptance
EXHIBIT G	Transfer Authorizer Designation

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THIS MASTER REPURCHASE AND SECURITIES CONTRACT, dated as of June 7, 2013 (this “Agreement”), is made by and among SVP 2013 FINANCE, LLC, a Delaware limited liability company (“Seller”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the initial “Buyer”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Agent for the initial Buyer (in such capacity, the “Agent”). Seller, Agent and initial Buyer (each a “Party”) hereby agree as follows:

ARTICLE 1

APPLICABILITY

Section 1.01 Applicability. Subject to the terms and conditions of the Repurchase Documents, on or prior to the Funding Expiration Date and at the request of Seller, the Parties may enter into a transaction in which Seller agrees to sell, transfer and assign to Agent the Asset and all related rights in and interests related to the Asset on a servicing released basis, against the transfer of funds by initial Buyer representing the Original Purchase Price for the Asset, with a simultaneous agreement by Agent to transfer to Seller and Seller to repurchase the Asset in a repurchase transaction at a date not later than the Facility Termination Date, against the transfer of funds by Seller representing the Repurchase Price for the Asset.

ARTICLE 2

DEFINITIONS AND INTERPRETATION

“Accelerated Repurchase Date”: Defined in Section 10.02.

“Account Bank”: PNC Bank, National Association, or such other bank approved by Agent.

“Actual Knowledge”: With respect to any Person, the actual knowledge of such Person without further inquiry or investigation; provided, that for the avoidance of doubt, such actual knowledge shall include the actual knowledge of such Person and each of its Responsible Officers.

“Additional Amount”: Defined in Section 12.06(a).

“Affiliate”: With respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person.

“Agent”: As defined in the introductory paragraph hereof.

“Alternative Rate”: A per annum rate based on an index approximating the behavior of LIBOR, as reasonably determined by Agent.

“Anti-Terrorism Laws”: Any Requirements of Law relating to money laundering or terrorism, including Executive Order 13224 signed into law on September 23, 2001, the regulations promulgated by the Office of Foreign Assets Control of the Treasury Department, and the Patriot Act.

“Applicable Purchase Percentage”: As of any date, the applicable Buyer purchase price percentage for the Purchased Asset, as set forth on Schedule I hereto under the column headed “Buyer Original Purchase Price (%)”.

“Appraisal”: A FIRREA-compliant appraisal, prepared by an Independent Appraiser and addressed to and reasonably satisfactory to Agent, of the related Mortgaged Property securing the Purchased Asset.

“Approval Information”: Defined in the definition of Deemed Approval Requirements.

“Approved Expenses”: (a) Amounts expended which are Protective Advances; and (b) any expenses with respect to the administration, enforcement, modification, amendment, restructure or collection of the Transaction (including, without limitation, any such actions taken with respect to the Purchased Asset) for which Agent has obtained the prior consent of the Requisite Buyers, if necessary.

“Approved Representation Exception”: Any Representation Exceptions furnished by Seller to Agent and approved by Agent prior to the Purchase Date.

“Asset”: The Whole Loan described on Schedule I hereto and all other rights and interests of Seller under the Purchased Asset Documents in connection therewith.

“Assignment and Acceptance”: Defined in Section 18.08(c).

“Bailee Agreement”: As defined in the Custodial Agreement.

“Bankruptcy Code”: Title 11 of the United States Code, as amended.

“Blank Assignment Documents”: Defined in Section 6.02(i).

“Business Day”: Any day other than (a) a Saturday or a Sunday, (b) a day on which banks in the States of New York, California or North Carolina are authorized or obligated by law or executive order to be closed, (c) any day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed, or (d) if the term “Business Day” is used in connection with the determination of LIBOR, a day dealings in Dollar deposits are not carried on in the London interbank market.

“Buyer”: As defined in the introductory paragraph hereof.

“Buyer Reply Period”: Defined in Section 17.08(f).

“Buyer’s Percentage Share”: The meaning set forth in the Fee and Pricing Letter, which definition is incorporated by reference herein.

“Capital Lease Obligations”: With respect to any Person, the amount of all obligations of such Person to pay rent or other amounts under a lease of property to the extent and in the amount that such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person.

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“Capital Stock”: Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests (certificated or uncertificated) in any limited liability company, and any and all partnership or other equivalent interests in any partnership or limited partnership, and any and all warrants or options to purchase any of the foregoing.

“Change of Control”: Any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the beneficial owner, directly or indirectly, of more than 49% of the total voting power of all classes of Equity Interests of Seller entitled to vote generally in the election of the directors (or the applicable equivalent) other than Affiliates of Blackstone Mortgage Trust, Inc., a Maryland corporation.

“Closing Certificate”: A certificate in the form of Exhibit D-1, duly executed by a Responsible Officer of Seller.

“Closing Date”: June 7, 2013.

“Code”: The Internal Revenue Code of 1986, and the regulations promulgated and rulings issued thereunder, in each case as amended, modified or replaced from time to time.

“Commitment Fee”: The meaning set forth in the Fee and Pricing Letter, which definition is incorporated by reference herein.

“Compliance Certificate”: A certificate in the form of Exhibit D-2, duly executed by a Responsible Officer of Seller.

“Confirmation”: A purchase confirmation in the form of Exhibit B, duly completed, executed and delivered by Seller and Agent in accordance with Section 3.01.

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

“Control”: With respect to any Person, the direct or indirect possession of the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling,” “Controlled” and “under common Control” have correlative meanings.

“Controlled Account Agreement”: A control agreement with respect to the Waterfall Account among Seller, Agent and Account Bank.

“Conversion Conditions”: Defined in Section 4.02.

“Conversion Date”: Defined in Section 4.01.

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“Convert,” “Conversion” or “Converted”: With respect to the Purchased Asset, the conversion of such Purchased Asset into a fee interest in REO Property, whether by way of foreclosure, deed in lieu of foreclosure of such Purchased Asset or otherwise, in each case in accordance with Article 4 hereof.

“Current Buyer”: A Buyer which is not a Defaulting Buyer.

“Custodial Agreement”: The Custodial Agreement, dated as of the date hereof, among Agent, Seller and Custodian.

“Custodian”: Wells Fargo Bank, National Association, or any successor permitted by the Custodial Agreement.

“Deemed Approval Requirements”: With respect to any matter that requires Agent’s approval pursuant to Section 8.09 of this Agreement, (i) no Event of Default shall have occurred and be continuing (either at the date of any notices specified below or as of the effective date of any deemed approval), (ii) Seller shall have sent Agent a written request for approval with respect to such matter in accordance with the applicable terms and conditions hereof (the “Initial Notice”), which Initial Notice shall have been (A) accompanied by any and all required information and documentation relating thereto as may be reasonably required in order to approve or disapprove such matter (the “Approval Information”) and (B) marked in bold lettering with the following language: “AGENT’S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A MASTER REPURCHASE AND SECURITIES CONTRACT BETWEEN THE UNDERSIGNED AND AGENT” and the envelope containing the Initial Notice shall have been marked “PRIORITY-DEEMED APPROVAL MAY APPLY”; (iii) Agent shall have failed to respond to the Initial Notice within the aforesaid time-frame; (iv) Seller shall have submitted a second request for approval with respect to such matter in accordance with the applicable terms and conditions hereof (the “Second Notice”), which Second Notice shall have been (A) accompanied by the Approval Information and (B) marked in bold lettering with the following language: “AGENT’S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A MASTER REPURCHASE AND SECURITIES CONTRACT BETWEEN THE UNDERSIGNED AND AGENT” and the envelope containing the Second Notice shall have been marked “PRIORITY-DEEMED APPROVAL MAY APPLY”; and (v) Agent shall have failed to respond to the Second Notice within the aforesaid time-frame. For purposes of clarification, Agent requesting additional and/or clarified information, in addition to approving or denying any request (in whole or in part), shall be deemed a response by Agent for purposes of the foregoing.

“Default”: Any event that, with the giving of notice or the lapse of time, or both, would become an Event of Default.

“Defaulting Buyer”: Any Buyer which for any reason shall fail or refuse to abide by its obligations under this Agreement or the other Repurchase Documents within the time periods specified for performance of such obligation or, if no time frame is specified, if such failure or refusal continues for a period of five (5) Business Days.

4

“Default Rate”: As of any date, the Pricing Rate in effect on such date plus 400 basis points (4.00%).

“Derivatives Contract”: Any rate swap transaction, basis swap, credit derivative transaction, forward rate transaction, commodity swap, commodity option, forward commodity contract, equity or equity index swap or option, bond or bond price or bond index swap or option or forward bond or forward bond price or forward bond index transaction, interest rate option, forward foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot contract, or any other similar transaction or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, including any obligations or liabilities thereunder.

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

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

“Early Repurchase Date”: Defined in Section 3.04(b).

“Eligible Asset”: The Asset, provided no Representation Breach exists; provided, that notwithstanding the existence of a Representation Breach with respect to the Asset, Agent may, subject to such terms, conditions and requirements as Agent may require, designate in writing any such non-conforming Asset as an Eligible Asset, which designation may include a temporary or permanent waiver of one or more Eligible Asset requirements.

“Eligible Assignee”: Any of the following Persons designated by Agent for purposes of Section 18.08(b) or Section 18.08(c): (a) any Person that is a “qualified institutional buyer” (as defined in the Securities Act) and has a long-term unsecured debt rating of “A” or better by S&P and “A3” or better by Moody’s or (b) an Affiliate of Agent or any Buyer or (c) any other Person to which Seller provides consent; provided, that such consent of Seller shall not be unreasonably withheld, delayed or conditioned, and shall not be required following the occurrence and during the continuance of an Event of Default. Such Person shall provide to Seller such duly executed IRS forms as Seller reasonably requests. Notwithstanding anything herein to the contrary, any such Person must also be a “qualified transferee” under all Purchased Asset Documents.

“Environmental Laws”: Any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety or hazardous materials, including CERCLA, RCRA, the Federal Water Pollution Control Act, the

5

Toxic Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the Oil Pollution Act of 1990, the Emergency Planning and the Community Right-to-Know Act of 1986, the Hazardous Material Transportation Act, the Occupational Safety and Health Act, and any state and local or foreign counterparts or equivalents.

“Equity Interests”: With respect to any Person, (a) any share, interest, participation and other equivalent (however denominated) of Capital Stock of (or other ownership, equity or profit interests in) such Person, (b) any warrant, option or other right for the purchase or other acquisition from such Person of any of the foregoing, (c) any security convertible into or exchangeable for any of the foregoing, and (d) any other ownership or profit interest in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date.

“ERISA”: The Employee Retirement Income Security Act of 1974.

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

“Event of Default”: Defined in Section 10.01.

“Excluded Taxes”: Shall mean, with respect to Agent, any Buyer, any other recipient of any payment to be made by or on account of any obligation of Seller hereunder or any other Indemnified Person (each such person a “Tax Indemnity Beneficiary”), (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such Tax Indemnity Beneficiary is organized, in which its principal office is located, conducts business or is paying tax or, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which Seller is located, (c) any U.S. federal withholding tax imposed on “withholdable payments”, if a Tax Indemnity Beneficiary is a “foreign financial institution” that fails to comply with the requirements of section 1471(b) of the Code or a “non-financial foreign entity” that fails to comply with section 1472(b) of the Code, each as in effect on the date hereof, or Treasury regulations or administrative guidance promulgated thereunder, and (d) any withholding taxes to the extent attributable to a failure to comply with Section 12.06(d) or 12.06(f).

“Extended Facility Termination Date”: Defined in Section 3.06.

“Extension Exercise Notice”: Defined in Section 3.06.

“Extension Fee”: The meaning set forth in the Fee and Pricing Letter, which definition is incorporated by reference herein.

“Facility Termination Date”: The earliest of (a) June 7, 2016 (or the next Business Day thereafter if June 7, 2016 is not a Business Day), as such date may be extended pursuant to Section 3.06, (b) any Accelerated Repurchase Date, (c) any date on which the Facility

6

Termination Date shall otherwise occur in accordance with Requirements of Law or (d) if the Transaction has not occurred on or prior to the Funding Expiration Date, the Funding Expiration Date.

“FDIA”: Defined in Section 14.03.

“FDICIA”: Defined in Section 14.04.

“Fee and Pricing Letter”: The fee and pricing letter, dated as of the date hereof, between Agent, for the benefit of each Buyer and Seller.

“Fees”: The meaning set forth in the Fee and Pricing Letter, which definition is incorporated by reference herein.

“FIRREA”: The Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“Funding Expiration Date”: The earliest of (a) Forty-five (45) days following the Closing Date (i.e., July 22, 2013), or such later date approved by Agent pursuant to written notice delivered to Seller by Agent on or prior to such date that is forty-five (45) days following the Closing Date, (b) the Purchase Date and (c) any date on which the Funding Expiration Date shall otherwise occur in accordance with Requirements of Law.

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

“Governing Documents”: With respect to any Person, its articles or certificate of incorporation or formation, by-laws, partnership, limited liability company, memorandum and articles of association, operating or trust agreement and/or other organizational, charter or governing documents.

“Governmental Authority”: Any (a) nation or government, (b) state or local or other political subdivision thereof, (c) central bank or similar monetary or regulatory authority, (d) Person, agency, authority, instrumentality, court, regulatory body, central bank or other body or entity exercising executive, legislative, judicial, taxing, quasi-judicial, quasi-legislative, regulatory or administrative functions or powers of or pertaining to government, (e) court or arbitrator having jurisdiction over such Person, its Affiliates or its assets or properties, (f) stock exchange on which shares of stock of such Person are listed or admitted for trading, (g) accounting board or authority that is responsible for the establishment or interpretation of national or international accounting principles, and (h) supra-national body such as the European Union or the European Central Bank.

“Guarantee Agreement”: A Limited Guarantee Agreement made by Guarantor in favor of Agent, for the benefit of each Buyer.

“Guarantee Obligation”: With respect to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of the obligations for which the guaranteeing person has

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issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, Contractual Obligation, Derivatives Contract or other obligations or indebtedness (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation, or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the maximum stated amount of the primary obligation relating to such Guarantee Obligation (or, if less, the maximum stated liability set forth in the instrument embodying such Guarantee Obligation); provided, that in the absence of any such stated amount or stated liability, the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum anticipated liability in respect thereof as reasonably determined by such Person.

“Guarantor”: Individually and collectively, the parties named as such in the Guarantee Agreement.

“Hazardous Substances”: Any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including but not limited to petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise), but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purpose of cleaning or other maintenance or operations and otherwise in compliance with all Environmental Laws.

“Income”: All of the following (in each case with respect to the entire par amount of the Asset represented by the Purchased Asset and not just with respect to the portion of the par amount represented by the Purchase Price advanced against the Asset): (a) all Principal Payments, (b) all Interest Payments, and (c) all other income, distributions, receipts, payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed on, in connection with or in respect of the Purchased Asset, including Principal Payments, Interest Payments, principal and interest payments, prepayment fees, extension fees, exit fees, defeasance fees, transfer fees, make whole fees, late charges, late fees and all other fees or charges of any kind or nature, premiums, yield maintenance charges, penalties, default interest, dividends, gains, receipts, allocations, rents, interests, profits, payments in kind, returns or repayment of contributions, net sale, foreclosure, liquidation, securitization or other disposition proceeds,

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insurance payments, settlements and proceeds; provided, that any amounts that under the Purchased Asset Documents are required to be deposited into and held in escrow or reserve to be used for a specific purpose, such as taxes and insurance, shall not be included in the term “Income” unless and until such amounts may be applied to all or a portion of the outstanding indebtedness under the Purchased Asset Documents.

“Indebtedness”: With respect to any Person and any date, all of the following with respect to such Person as of such date: (a) obligations in respect of money borrowed, (b) obligations, whether or not for money borrowed (i) represented by notes payable, letters of credit or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or services rendered, or (iv) in connection with the issuance of Preferred Equity or trust preferred securities, (c) Capital Lease Obligations, (d) reimbursement obligations under any letters of credit or acceptances (whether or not the same have been presented for payment), (e) Off-Balance Sheet Obligations, (f) obligations to purchase, redeem, retire, defease or otherwise make any payment in respect of any mandatory redeemable stock issued by such Person or any other Person (inclusive of forward equity contracts), valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (g) as applicable, all obligations of such Person (but not the obligation of others) in respect of any keep well arrangements, and, in the case of Seller only, contingent or future funding obligations under the Purchased Asset, purchase obligation, repurchase obligation, sale/buy-back agreement, takeout commitment or forward equity commitment or credit enhancements, in each case evidenced by a binding agreement (excluding any such obligation to the extent the obligation can be satisfied by the issuance of Equity Interests (other than mandatory redeemable stock)), (h) net obligations under any Derivatives Contract not entered into as a hedge against existing indebtedness, in an amount equal to the Derivatives Termination Value thereof, (i) all Non-Recourse Indebtedness, recourse indebtedness and all indebtedness of other Persons that such Person has guaranteed or is otherwise recourse to such Person, (j) all indebtedness of another Person secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (other than certain Permitted Liens) on property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment obligation; provided, that if such Person has not assumed or become liable for the payment of such indebtedness, then for the purposes of this definition the amount of such indebtedness shall not exceed the market value of the property subject to such Lien, (k) all Guarantee Obligations with respect to Indebtedness, (l) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person or obligations of such Person to pay the deferred purchase or acquisition price of property or assets, including contracts for the deferred purchase price of property or assets that include the procurement of services, (m) indebtedness of general partnerships of which such Person is liable as a general partner (whether secondarily or contingently liable or otherwise), and (n) obligations to fund capital commitments under any Governing Document, subscription agreement or otherwise, except to the extent such indebtedness provides that such Person is not liable therefor.

“Indemnified Amount”: Defined in Section 13.01(a).

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“Indemnified Person”: Defined in Section 13.01(a).

“Independent”: As to any Person, any other Person who (i) does not have and is not committed to acquire any material direct or any material indirect financial interest in such Person or in any Affiliate of such Person, and (ii) is not connected with such Person as an officer, employee, promoter, underwriter, voting trustee, partner, director or Person performing similar functions.

“Independent Appraiser”: An independent professional real estate appraiser who is a member in good standing of the American Appraisal Institute and, if the state in which the subject Mortgaged Property is located certifies or licenses appraisers, is certified or licensed in such state, and in each case having a minimum of five (5) years experience in the subject property type.

“Independent Manager”: An individual who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors, independent managers or independent members, another nationally recognized company reasonably approved by Agent, in each case that is not an Affiliate of Seller and that provides professional independent directors, independent managers or independent members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a member of the board of managers of Seller and is not, has never been, and will not while serving as Independent Manager be, any of the following:

(a) a member, partner, equity holder, manager, director, officer or employee of Seller, Guarantor, any of their respective equity holders or Affiliates (other than (a) as an Independent Manager of Seller or Guarantor and (b) as an Independent Manager of an Affiliate of Seller or Guarantor or any of their respective single-purpose entity equity holder that is not in the direct chain of ownership of Seller or Guarantor and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional independent directors, independent managers or independent members);

(b) a creditor, supplier or service provider (including provider of professional services) to Seller, any single-purpose entity equity holder, or any of their respective equity holders or Affiliates (other than a nationally-recognized company that routinely provides professional independent directors, independent managers or independent members and other corporate services to Seller, any single-purpose entity equity holder, or any of their respective equity holders or Affiliates in the ordinary course of business);

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

(d) a Person that controls (whether directly, indirectly or otherwise) any of the individuals described in the preceding clauses (a), (b) or (c).

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An individual who otherwise satisfies the preceding definition other than clause (a) by reason of being the Independent Manager of a special purpose entity affiliated with Seller or Guarantor shall not be disqualified from serving as an Independent Manager of Seller or Guarantor if the fees that such individual earns from serving as Independent Managers of affiliates of Seller or Guarantor in any given year constitute in the aggregate less than 5% of such individual’s annual income for that year.

“Initial Notice”: Defined in the definition of Deemed Approval Requirements.

“Insolvency Action”: With respect to any Person, the taking by such Person of any action resulting in an Insolvency Event, other than solely under clause (g) of the definition thereof.

“Insolvency Event”: With respect to any Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises with respect to such Person or any substantial part of its assets or property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of sixty (60) days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, (c) the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law, (d) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, (e) the making by such Person of any general assignment for the benefit of creditors, (f) such Person is not Solvent, (g) the failure by such Person generally to pay its debts as they become due, or (h) the taking of action by such Person in furtherance of any of the foregoing.

“Insolvency Laws”: The Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments and similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

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

“Interest Payments”: All payments of interest, income, receipts, dividends, and any other collections and distributions received from time to time in connection with the Purchased Asset (other than Principal Payments and any Fees).

“Internal Control Event”: Fraud that involves management or other employees who have a significant role in, the internal controls of Seller, Guarantor or any Affiliate of Seller or Guarantor over financial reporting.

“Investment”: With respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty or credit enhancement of Indebtedness of, or purchase or other

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acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any binding commitment or option to make an Investment in any other Person shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in this Agreement, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Company Act”: The Investment Company Act of 1940, as amended, restated or modified from time to time, including all rules and regulations promulgated thereunder.

“Irrevocable Redirection Notice”: A notice in the form of Exhibit C sent by Seller directing the remittance of Income with respect to the Purchased Asset to the Waterfall Account.

“Knowledge”: With respect to any Person, means collectively (i) the Actual Knowledge of such Person and (ii) notice of any fact, event, condition or circumstance that would cause a reasonably prudent Person to conduct an inquiry that would give such Person Actual Knowledge, whether or not such Person actually undertook such an inquiry.

“LIBOR”: The rate of interest per annum determined by Buyer on the basis of the rate for United States dollar deposits for delivery on the first (1^st) day of each Pricing Period, for a period approximately equal to such Pricing Period, as reported on Reuters Screen LIBOR01 Page (or any successor page) at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of the Pricing Period (or if not so reported, then as determined by Buyer from another recognized source or interbank quotation).

“LIBO Rate”: For any Pricing Period, LIBOR.

“Lien”: Any mortgage, statutory or other lien, pledge, charge, right, claim, adverse claim, attachment, levy, hypothecation, assignment, deposit arrangement, security interest, UCC financing statement or encumbrance of any kind on or otherwise relating to any Person’s assets or properties in favor of any other Person or any preference, priority or other security agreement or preferential arrangement of any kind.

“LTV”: The ratio, expressed as a percentage, of (a) the Purchase Price of the Purchased Asset as of the applicable Facility Termination Date, taking into account the application of all Income pursuant to Section 5.02 on such date, to (b) the value of the Mortgaged Properties securing the Purchased Asset as set forth in the Appraisals delivered pursuant to Section 3.06.

“Market Disruption Event”: Any event or events which, as determined by Agent, acting in a reasonable manner, shall have resulted in (i) the effective absence of a “repo market” or related “lending market” for purchasing (subject to repurchase) or financing debt obligations secured by commercial mortgage loans or securities, (ii) Agent or any Buyer not being able to finance mortgage assets through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events, (iii) the effective absence of a “securities market” for securities backed by mortgage assets or (iv) Agent or any Buyer not being able to sell securities backed by mortgage assets at prices which would have been reasonable prior to the occurrence of such event or events.

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“Material Action”: Any amendment, waiver or other modification to the terms of the Purchased Asset or the Purchased Asset Documents, or any other action taken pursuant to or with respect to the Purchased Asset or a Purchased Asset Document, which, in each case, would have the effect of:

(a) decreasing the principal of, or interest on, the obligations evidenced by the related Mortgage Note;

(b) (i) postponing or extending any scheduled date (other than the maturity date, for which the provisions of clause (b)(ii) below shall apply) fixed for any payment of principal of, or interest on, the obligations evidenced by the Mortgage Note, or (ii) extending the maturity date thereunder (other than any extension of the maturity date thereunder in accordance with the terms, and satisfying the conditions, of such loan document);

(c) releasing any material portion of the collateral securing the obligations evidenced by such Mortgage Note (other than any release required by the terms of the underlying Purchased Asset Document, including, without limitation, releases of condominium units as and when the same are sold), as applicable;

(d) releasing any obligor thereunder (other than any release required by the terms of the underlying Purchased Asset Document or described in the parenthetical to clause (a) above);

(e) waiving a Material Default under the Purchased Asset Documents;

(f) waiving, modifying, reducing or delaying the payment of any material Fees by the Underlying Obligor with respect to the Purchased Asset;

(g) waiving, modifying, reducing or delaying any condition to the extension of the maturity date of the Purchased Asset in accordance with the Purchased Asset Documents; or

(h) (i) exercising any voting, consensual and other powers of ownership pertaining to any membership interests of the Underlying Obligor as if Seller were the an owner thereof or (ii) selling, assigning or otherwise disposing of all or any part of the membership interests of the Underlying Obligor pursuant to that certain Pledge and Security Agreement, dated as of the date of this Agreement, by Pledgor in favor of Seller.

“Material Adverse Effect”: A material adverse effect on or material adverse change in or to (a) the property, business, operations or financial condition of Seller or Guarantor, (b) the ability of Seller or Guarantor to pay and perform the Repurchase Obligations, (c) the validity, legality, binding effect or enforceability of any Repurchase Document, Purchased Asset Document, Purchased Asset or security interest granted hereunder or thereunder, (d) the rights and remedies of Agent under any Repurchase Document, Purchased Asset Document or

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Purchased Asset, (e) the perfection or priority of any Lien on the Purchased Asset, taken as a whole, granted under any Repurchase Document or Purchased Asset Document, in each case, as reasonably determined by Agent or (f) the nature as a going concern of any Mortgaged Property or Underlying Obligor (it being understood that a default or event of default with respect to a Purchased Asset Document, Mortgaged Property or Underlying Obligor shall not constitute a “Material Adverse Affect” for purposes of this clause (f), which is intended to relate solely to a catastrophic event with respect to a Mortgaged Property); provided, however, that this clause (f) shall not apply to any casualty event affecting any Mortgaged Property for which (x) such casualty is covered by insurance proceeds under policies issued by Qualified Insurers and evidenced by certificates of insurance naming Seller or the applicable administrative agent under the Purchased Asset Documents as an insured party, (y) Seller’s pro rata share of such insurance proceeds (net of deductibles) is equal to or greater than the Purchase Price for the Purchased Asset, and (z) Seller provides to Agent evidence reasonably satisfactory to Agent that such casualty is not excluded from the coverage of such insurance policies.

“Material Default”: The occurrence and continuance of any of the following defaults under the terms of the Purchased Asset Documents, regardless of whether Seller shall have delivered notice to the Underlying Obligor of such default, but taking into account any cure or grace periods allowed to such Underlying Obligor in the Purchased Asset Documents:

(a) payment default,

(b) maturity default; provided, however, that a maturity default shall not be a “Material Default” hereunder if Seller continues to pay as and when due pursuant to the Repurchase Documents the Price Differential, any reduction in Purchase Price, and Fees and any other amounts, sums of money, payments, deposits or premiums due under the Repurchase Documents,

(c) breach of a material representation or a material covenant of which Seller has Actual Knowledge,

(d) breach of any material provisions of a related guaranty delivered by a guarantor of the obligations of an Underlying Obligor of which Seller has Actual Knowledge; and

(e) bankruptcy or insolvency of an Underlying Obligor or any guarantor of the obligations of an Underlying Obligor.

Notwithstanding the foregoing, a maturity default shall not constitute a “Material Default” hereunder for so long as (x) Seller has delivered evidence reasonably acceptable to Agent that Seller is actively and diligently pursuing a resolution and/or cure of such Material Default under the applicable Purchased Asset Documents to the extent permitted under Section 8.09 hereof and (y) Seller continues to pay as and when due pursuant to the Repurchase Documents the Price Differential, any reduction in Purchase Price, any Fees and any other amounts, sums of money, payments, deposits or premiums due under the Repurchase Documents.

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“Materials of Environmental Concern”: Any hazardous, toxic or harmful substances, materials, wastes, pollutants or contaminants defined as such in or regulated under any Environmental Law.

“Maximum Purchase Price”: An amount equal to eighty-three and thirty-three one-hundredths percent (83.33%) of the then-outstanding principal balance of the Asset as of the Purchase Date, as determined by Agent, subject to adjustment downward only pursuant to Section 6.02 hereof, subject to reduction pursuant to Section 8.13(b).

“Monetary Default”: The failure by Seller to pay when due any Price Differential, reduction in Purchase Price or other amounts, sums of money, payments, deposits or premiums due under the Repurchase Documents, and the failure by Seller to cure such failure within the applicable notice and cure period, if any.

“Moody’s”: Moody’s Investors Service, Inc. or, if Moody’s Investors Service, Inc. is no longer issuing ratings, another nationally recognized rating agency reasonably acceptable to Agent.

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

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

“Mortgaged Property”: The real property (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the debt evidenced by the Mortgage Note.

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

“Mortgagor”: The obligor on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.

“New Counterparty Office”: Defined in Section 12.06(d).

“Multiemployer Plan”: A Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Non-Material Action”: Any amendment, waiver or other modification of the Purchased Asset or a Purchased Asset Document, or any other action taken pursuant or with respect to the Purchased Asset or a Purchased Asset Document (other than a Material Action).

“Non-Monetary Default”: Any Default other than a Monetary Default.

“Non-Principal Income”: Defined in Section 5.02(a).

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“Non-Recourse Indebtedness”: With respect to any Person and any date, indebtedness of such Person as of such date for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, Insolvency Events, non-approved transfers or other events) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness.

“Non-U.S. Assignee”: Defined in Section 12.06(d).

“Notice of Conversion”: Defined in Section 4.02.

“Off-Balance Sheet Obligations”: With respect to any Person and any date, to the extent not included as a liability on the balance sheet of such Person, all of the following with respect to such Person as of such date: (a) monetary obligations under any financing lease or so-called “synthetic,” tax retention or off-balance sheet lease transaction that, upon the application of any Insolvency Laws, would be characterized as indebtedness, (b) monetary obligations under any sale and leaseback transaction that does not create a liability on the balance sheet of such Person, or (c) any other monetary obligation arising with respect to any other transaction that (i) is characterized as indebtedness for tax purposes but not for accounting purposes, or (ii) is the functional equivalent of or takes the place of borrowing but that does not constitute a liability on the balance sheet of such Person (for purposes of this clause (c), any transaction structured to provide tax deductibility as interest expense of any dividend, coupon or other periodic payment will be deemed to be the functional equivalent of a borrowing).

“Original Purchase Price”: With respect to the Purchased Asset the applicable amount set forth on Schedule I hereto under the column headed “Buyer Original Purchase Price ($)”.

“Other Taxes”: Defined in Section 12.06(b).

“Participant”: Defined in Section 18.08(b).

“Participant Register”: Defined in Section 18.08(e).

“Patriot Act”: The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, modified or replaced from time to time.

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

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

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“Person”: An individual, corporation, limited liability company, business trust, partnership, trust, unincorporated organization, joint stock company, sole proprietorship, joint venture, Governmental Authority or any other form of entity.

“Plan”: An employee benefit plan as defined in Section 3(3) of ERISA, subject to Section 4001(a)(15) of ERISA in respect of which Seller, Guarantor or any ERISA Affiliate thereof has any actual or potential liability or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be, an “employer” as defined in Section 3(5) of ERISA.

“Pledged Collateral”: The membership interests held by Pledgor in the Underlying Obligor, together with all membership interest certificates, options or rights of any nature whatsoever which currently exist or hereafter may be issued or granted by the Underlying Obligor to Pledgor while this Agreement is in effect, including, without limitation, any certificates evidencing such interests which have been delivered to Seller.

“Pledgor”: Means SVCA Holdco, LLC, a Delaware limited liability company.

“Post-Foreclosure Plan”: Defined in Section 17.09.

“Preferred Equity”: A performing current pay preferred equity position (with a put or synthetic maturity date structure replicating a debt instrument) evidenced by a stock share certificate or other similar ownership certificate representing the entire equity ownership interest in entities that own income producing commercial real estate.

“Price Differential”: For any Pricing Period or portion thereof and for each day during such Pricing Period or portion thereof, (a) 1/360th of the Pricing Rate in effect during such Pricing Period, times (b) the outstanding Purchase Price.

“Pricing Margin”: Defined in the Fee and Pricing Letter.

“Pricing Period”: Means (a) in the case of the first Remittance Date, the period from the Purchase Date to but excluding such Remittance Date, and (b) in the case of any subsequent Remittance Date, the one-month period commencing on and including the prior Remittance Date and ending on but excluding such Remittance Date; provided, that no Pricing Period shall end after the Repurchase Date.

“Pricing Rate”: For any Pricing Period, the LIBO Rate for such Pricing Period plus the applicable Pricing Margin, which shall be subject to adjustment and/or conversion as provided in Sections 12.01 and 12.02; provided, that while an Event of Default exists, the Pricing Rate shall be the Default Rate.

“Pricing Rate Reset Date”: (a) In the case of the first Pricing Period, the Purchase Date, and (b) in the case of any subsequent Pricing Period, the Business Day immediately preceding the Remittance Date on which such Pricing Period begins.

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“Principal Income”: All Income described in Section 5.01 and deposited into the Waterfall Account during each Pricing Period representing Principal Payments (other than any Fees).

“Principal Payments”: All payments and prepayments (in whole or in part) of principal received and applied as principal toward the Purchase Price for the Purchased Asset (including, without limitation, insurance and condemnation proceeds, scheduled amortization, principal paydowns associated with any restructuring of the Purchased Asset, pay-offs in part (including in connection with any sale of condominium units) and recoveries from liquidation or foreclosure) (other than any Fees).

“Pro Rata Share”: With respect to any Buyer at any time, the proportionate interest of such Buyer in the Transaction as the same may be adjusted from time to time as a result of assignments to or from a Buyer pursuant to Section 18.08 hereof.

“Protective Advances”: Any amount (not to exceed $100,000.00 without the prior written consent of the Requisite Buyers) advanced or expended by Agent to preserve or protect the Purchased Asset or Agent’s right or title thereto.

“Purchase Date”: The date on which the Purchased Asset is transferred by Seller to Agent and Buyers.

“Purchase Price”: As of any date, the Original Purchase Price, (i) reduced by (x) any Principal Payments remitted to the Waterfall Account and which were applied to the Purchase Price by Agent pursuant to Section 5.02(b), (y) any Interest Payments remitted to the Waterfall Account and which were applied to the Purchase Price by Agent pursuant to clause fourth of Section 5.02(a), and (z) any Income remitted to the Waterfall Account and which was applied to the Purchase Price by Agent pursuant to Section 5.03 and (ii) reduced by any payments made by Seller in reduction of the outstanding Purchase Price pursuant to Sections 3.04(c) and 3.05. In no event shall any Fees received by Agent or Buyer reduce the Purchase Price hereunder.

“Purchased Asset”: For the Transaction, the Asset sold by Seller to Agent, for the benefit of each Buyer in such Transaction, including, to the extent relating to the Asset, all of Seller’s right, title and interest in and to: (i) the Purchased Asset Documents, (ii) Servicing Rights, (iii) Servicing Files, (iv) mortgage guaranties and insurance (issued by Governmental Authorities or otherwise) and claims, payments and proceeds thereunder, (v) insurance policies, certificates of insurance and claims, payments and proceeds thereunder, (vi) the principal balance of the Asset, not just the amount advanced, (vii) amounts and property from time to time on deposit in the Waterfall Account and the Waterfall Account itself, (viii) collection, escrow, reserve or collateral accounts and all amounts and property from time to time on deposit therein, to the extent of Seller’s or the holder’s interest therein, (ix) Income, (x) security interests of Seller in Derivatives Contracts entered into by Underlying Obligors, (xi) rights of Seller under any letter of credit, guarantee, warranty, indemnity or other credit support or enhancement, and (xii) all supporting obligations of any kind; provided, that (A) the Purchased Asset shall not include any obligations of Seller or any Retained Interests, and (B) for purposes of the grant of security interest by Seller to Agent, for the benefit of each Buyer and the other provisions of Article 11, the Purchased Asset shall include all of the following: general intangibles, accounts, chattel paper, deposit

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accounts, securities accounts, instruments, securities, financial assets, uncertificated securities, security entitlements and investment property (as such terms are defined in the UCC) and replacements, substitutions, conversions, distributions or proceeds relating to or constituting any of the items described in the preceding clauses (i) through (xii). Notwithstanding anything herein to the contrary, “Purchased Asset” shall not include the Asset if Seller has repurchased the Asset pursuant to Sections 3.04(b), (d) or (e).

“Purchased Asset Documents”: Those documents executed in connection with, evidencing or governing the Purchased Asset, the related Mortgaged Property and the Pledged Collateral and which are required to be delivered to Agent (to the extent that Seller holds legal title to such documents).

“Purchased Asset Event of Default”: Shall mean an “Event of Default”, as such term is defined in the Underlying Loan Agreement.

“Qualified Insurer”: An insurance company having a general policy rating of A or better and a financial class of X or better by A.M. Best Company, Inc., and a claims paying ability/financial strength rating of “A+” (or its equivalent) or better by at least two (2) of the Rating Agencies.

“Rating Agencies”: Each of Fitch, Inc., Moody’s and S&P.

“Reference Banks”: Banks each of which shall (a) be a leading bank in the international Eurocurrency market, and (b) have an established place of business in London. Initially, the Reference Banks shall be JPMorgan Chase Bank, Barclays Bank, PLC and Deutsche Bank AG. If any such Reference Bank should be unwilling or unable to act as such or if Agent shall terminate the appointment of any such Reference Bank or if any of the Reference Banks should be removed from the Reuters Monitor Money Rates Service or in any other way fail to meet the qualifications of a Reference Bank, Agent may designate alternative banks meeting the criteria specified in the preceding clauses (a) and (b).

“Register”: Defined in Section 18.08(f).

“Release”: Any generation, treatment, use, storage, transportation, manufacture, refinement, handling, production, removal, remediation, disposal, presence or migration of Materials of Environmental Concern on, about, under or within all or any portion of any property or Mortgaged Property.

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

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“Remittance Date”: The twenty-sixth (26^th) day of each month (or if such day is not a Business Day, the next following Business Day), or such other day as is mutually agreed to by Seller and Agent.

“REO Mortgage”: A mortgage or deed of trust, as applicable, on an REO Property, given by an REO Owner to Agent in the form and substance reasonably acceptable to Agent, in accordance with Article 4 hereof.

“REO Owner”: Individually and collectively, as the context may require, any party that is formed to acquire title to REO Property pursuant to Article 4 hereof, which entity shall (a) be a newly formed single-purpose, bankruptcy remote Delaware limited liability company that complies with this Agreement and the other Repurchase Documents, (b) be a wholly owned subsidiary of Seller, and (c) have Governing Documents substantially in the form of Seller.

“REO Propert(y)(ies)”: Individually or collectively, as the context may require, each Mortgaged Property and/or Pledged Collateral that is Converted to direct ownership by an REO Owner pursuant to Article 4.

“Reportable Event”: Any event set forth in Section 4043(c) of ERISA, other than an event as to which the notice period is waived under Pension Benefit Guaranty Commission Reg. §4043.

“Representation Breach”: Any representation, warranty, certification, statement or affirmation made or deemed made by Seller or Guarantor in any Repurchase Document (including in Schedule II) or in any certificate, notice, report or other document delivered pursuant to any Repurchase Document proves to be incorrect, false or misleading in any material respect when made or deemed made, without regard to any Knowledge or lack of Knowledge thereof by such Person, other than an Approved Representation Breach.

“Representation Exceptions”: A written list prepared by Seller specifying, in reasonable detail, the representations and warranties (or portions thereof) set forth in this Agreement (including in Schedule II) which are not satisfied with respect to the Asset.

“Repurchase Date”: The earliest of (a) the Facility Termination Date, (b) any Early Repurchase Date therefor, and (c) the Business Day on which Seller is to repurchase the Purchased Asset as specified by Seller and agreed to by Agent in the related Confirmation.

“Repurchase Documents”: Collectively, this Agreement, the Custodial Agreement, the Fee and Pricing Letter, the Controlled Account Agreement, the Guarantee Agreement, the Repurchase Deficiency Indemnity Agreement, all Irrevocable Redirection Notices, all Confirmations, all UCC financing statements, amendments and continuation statements filed pursuant to any Repurchase Document, any REO Mortgage, any other agreements delivered in accordance with Article 4 hereof in connection with a Conversion (including, without limitation, any pledge agreement, joinder agreement, guaranty agreement or environmental indemnity agreement), all other agreements, documents and instruments granting, attaching or perfecting Liens to secure, inter alia, the Repurchase Obligations (whether now or hereafter executed and/or filed, executed and delivered in connection with the granting, attachment and perfection of Agent’s security interests and Liens arising thereunder) and all additional documents,

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certificates, agreements or instruments, the execution of which is required or necessary for performing or carrying out any other Repurchase Document; provided, however, the Underwriting Package shall not constitute Repurchase Documents.

“Repurchase Deficiency Indemnity Agreement”: A Facility Repurchase Deficiency Indemnity Agreement made by Guarantor in favor of Agent, for the benefit of each Buyer.

“Repurchase Obligation Trigger Event”: Shall mean the Facility Termination Date.

“Repurchase Obligations”: All obligations of Seller to pay the Repurchase Price on the Repurchase Date and all other obligations and liabilities of Seller to each Buyer arising under or in connection with the Repurchase Documents, whether now existing or hereafter arising, and all interest and fees that accrue after the commencement by or against Seller or Guarantor of any Insolvency Proceeding naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding (in each case, whether due or accrued).

“Repurchase Price”: An amount equal to the sum of:

(a) the outstanding Purchase Price as of such date; and

(b) the accrued and unpaid Price Differential on the amount referred to in the immediately preceding clause (a) for the Purchased Asset as of such date; and

(c) all other amounts due and payable as of such date by Seller to any Buyer under this Agreement or any Repurchase Document;

(d) any accrued and unpaid fees and expenses and indemnity amounts and any other amounts due and payable as of such date by Seller or Guarantor to Agent, any Buyer or any of their respective Affiliates under this Agreement or any Repurchase Document; and

(e) any unpaid Fees due to Buyer as of such Date.

“Requirements of Law”: With respect to any Person or property or assets of such Person and as of any date, all of the following applicable thereto as of such date: all Governing Documents and existing and future laws, statutes, rules, regulations, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority (including Environmental Laws, ERISA, regulations of the Board of Governors of the Federal Reserve System, and laws, rules and regulations relating to usury, licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other Governmental Authority.

“Requisite Buyers”: Buyers holding not less than 66 2/3% of the outstanding Purchase Price of the Transaction held by all Current Buyers or, if the commitments have been terminated or reduced to zero, Buyers holding at least 66 2/3% of the outstanding Purchase Price under the Transaction, provided that: (a) in determining such percentage at any given time, all then existing

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Defaulting Buyers will be disregarded and excluded and the Pro Rata Shares of the Transaction of Buyers shall be redetermined, for voting purposes only, to exclude the Pro Rata Shares of the Transaction of such Defaulting Buyers; and (b) at all times when two or more Buyers are party to this Agreement, the term “Requisite Buyers” shall in no event mean less than two Current Buyers (unless there are only two Buyers in which case the term “Requisite Buyers” shall mean the Current Buyer(s)).

“Reserve Requirement”: For any Pricing Period, the aggregate of the rates (expressed as a decimal fraction) of reserve requirements in effect during such Pricing Period (including basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board of Governors) maintained by any Buyer.

“Responsible Officer”: With respect to any Person, the chief executive officer, the chief financial officer, the chief accounting officer, the treasurer or the chief operating officer of such Person together with, in connection with a determination of Knowledge, any employee, officer or director that has ongoing responsibilities in connection with the administration of the Repurchase Documents and/or the Purchased Asset.

“Retained Interest”: (a) With respect to the Purchased Asset, (i) all duties, obligations and liabilities of Seller thereunder, including payment and indemnity obligations, (ii) all obligations of agents, trustees, servicers, administrators or other Persons under the documentation evidencing the Purchased Asset, and (iii) if any portion of the Indebtedness related to the Purchased Asset is owned by another lender or is being retained by Seller, the interests, rights and obligations under such documentation to the extent they relate to such portion, and (b) with respect to the Purchased Asset with an unfunded commitment on the part of Seller, all obligations to provide additional funding, contributions, payments or credits.

“S&P”: Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or, if Standard & Poor’s Ratings Services is no longer issuing ratings, another nationally recognized rating agency reasonably acceptable to Agent.

“Sanctioned Entity”: (a) A country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, that (in the case of the preceding clauses (a), (b), (c) and this clause (d)) is subject to a country sanctions program administered and enforced by the Office of Foreign Assets Control, or (e) a Person named on the list of Specially Designated Nationals maintained by the Office of Foreign Assets Control.

“Second Notice”: Defined in the definition of Deemed Approval Requirements.

“Securities Act”: Shall mean the Securities Act of 1933, together with any amendment thereto or replacement thereof and any rules or regulations promulgated thereunder, as the same are amended from time to time.

“Seller”: The Seller named in the preamble of this Agreement.

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“Seller’s Counsel”: Defined in Section 18.08(c).

“Servicer”: Shall mean Midland Loan Services, a division of PNC Bank, National Association, in its capacity as servicer under the Servicing Agreement, together with its successors and permitted assigns, or any other servicer approved by Agent.

“Servicing Agreement”: Shall mean a tri-party servicing agreement acceptable to Agent to be entered into by and among Seller, Buyer and Servicer on or prior to the Purchase Date, as the same shall be amended, modified, waived, supplemented, extended, replaced or restated from time to time or such other replacement agreement entered into by Seller and Servicer (or Seller, Buyer and Servicer, as the case may be) for the servicing of the Purchased Asset, acceptable to Agent in its discretion.

“Servicing File”: With respect to the Purchased Asset, the file retained and maintained by Seller or Servicer including the originals or copies of all Purchased Asset Documents and other documents and agreements relating to the Purchased Asset, including to the extent applicable all servicing agreements, files, documents, records, data bases, computer tapes, insurance policies and certificates, appraisals, other closing documentation, payment history and other records relating to or evidencing the servicing of the Purchased Asset, which file shall be held by Seller and/or Servicer for and on behalf of Agent.

“Servicing Rights”: All right, title and interest of Seller, Guarantor or any Affiliate of Seller or Guarantor in and to any and all of the following, to the extent applicable: (a) rights to service and collect and make all decisions with respect to the Purchased Asset, (b) amounts received by Seller or any other Person for servicing the Purchased Asset, (c) late fees, penalties or similar payments with respect to the Purchased Asset, (d) agreements and documents creating or evidencing any such rights to service, documents, files and records relating to the servicing of the Purchased Asset, and rights of Seller or any other Person thereunder, (e) escrow, reserve and similar amounts with respect to the Purchased Asset, (f) rights to appoint, designate and retain any other servicers, sub-servicers, special servicers, agents, custodians, trustees and liquidators with respect to the Purchased Asset, and (g) accounts and other rights to payment related to the Purchased Asset.

“Single Employer Plan”: Any Plan that is not a Multiemployer Plan.

“Solvent”: With respect to any Person at any time, having a state of affairs such that all of the following conditions are met at such time: (a) the fair value of the assets and property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 91(32) of the Bankruptcy Code, (b) the present fair salable value of the assets and property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets and property would constitute unreasonably small capital.

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“Special Purpose Entity”: A corporation, limited partnership or limited liability company that, since the date of its formation (unless otherwise indicated in this Agreement) and at all times on and after the date hereof, has complied with and shall at all times comply with the provisions of Article 9.

“Subsidiary”: With respect to any Person, any corporation, partnership, limited liability company or other entity (heretofore, now or hereafter established) of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership, limited liability company or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts of which are with those of such Person pursuant to GAAP.

“Taxes”: Defined in Section 12.06(a).

“Tax Indemnity Beneficiary”: Defined in the definition of Excluded Taxes.

“Transaction”: With respect to the Asset, the sale and transfer of the Asset from Seller to Agent and initial Buyer pursuant to the Repurchase Documents against the transfer of funds from initial Buyer to Seller representing the Original Purchase Price for the Asset.

“Transfer Authorizer Designation”: Defined in Section 18.26.

“UCC”: The Uniform Commercial Code as in effect in the State of New York; provided, that, if, by reason of Requirements of Law, the perfection or priority of the security interest in the Purchased Asset is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority.

“Underlying Loan Agreement”: Means that certain Loan Agreement, dated as of the date hereof, between Seller and Underling Obligor.

“Underlying Obligor”: Individually and collectively, as the context may require, the Mortgagor and other obligor or obligors under the Asset, including any other Person who has assumed or guaranteed the obligations of such Mortgagor under the Purchased Asset Documents relating to the Asset.

“Underwriting Package”: With respect to the Asset, (a) the internal underwriting asset summary and abridged business plan (redacted to protect confidential information), prepared by Seller for its evaluation of the Asset, (b) all documents, instruments and agreements made available to Seller in respect of the closing of the origination of the Purchased Asset, (c) all Purchased Asset Documents required to be delivered to Custodian under the Custodial Agreement, (d) an appraisal, and (e) such further documents or information as Agent may reasonably request.

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“Waterfall Account”: A segregated account to be established at Account Bank, in the name of Seller, pledged to Agent and subject to a Controlled Account Agreement.

“Whole Loan”: A first priority commercial real estate whole loan.

Section 2.01 Rules of Interpretation. Headings are for convenience only and do not affect interpretation. The following rules of this Section 2.01 apply unless the context requires otherwise. The singular includes the plural and conversely. A gender includes all genders. Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. A reference to an Article, Section, Subsection, Paragraph, Subparagraph, Clause, Annex, Schedule, Appendix, Attachment, Rider or Exhibit is, unless otherwise specified, a reference to an Article, Section, Subsection, Paragraph, Subparagraph or Clause of, or Annex, Schedule, Appendix, Attachment, Rider or Exhibit to, this Agreement, all of which are hereby incorporated herein by this reference and made a part hereof. A reference to a party to this Agreement or another agreement or document includes the party’s permitted successors, substitutes or assigns. A reference to an agreement or document is to the agreement or document as amended, modified, novated, supplemented or replaced, except to the extent prohibited by any Repurchase Document. A reference to legislation or to a provision of legislation includes a modification, codification, replacement, amendment or reenactment of it, a legislative provision substituted for it and a rule, regulation or statutory instrument issued under it. A reference to writing includes a facsimile or electronic transmission and any means of reproducing words in a tangible and permanently visible form. A reference to conduct includes an omission, statement or undertaking, whether or not in writing. A Default or Event of Default exists until it has been cured or waived in writing by Agent. The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement, unless the context clearly requires or the language provides otherwise. The word “including” is not limiting and means “including without limitation.” The word “any” is not limiting and means “any and all” unless the context clearly requires or the language provides otherwise. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.” The words “will” and “shall” have the same meaning and effect. A reference to day or days without further qualification means calendar days. A reference to any time means New York time. This Agreement may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their respective terms. Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed in accordance with GAAP, and all accounting determinations, financial computations and financial statements required hereunder shall be made in accordance with GAAP, without duplication of amounts, and on a consolidated basis with all Subsidiaries. All terms used in Articles 8 and 9 of the UCC, and used but not specifically defined herein, are used herein as defined in such Articles 8 and 9. A reference to “fiscal year” and “fiscal quarter” means the fiscal periods of the applicable Person referenced therein. A reference to an agreement includes a security interest, guarantee, agreement or legally enforceable arrangement whether or not in writing. A reference to a document includes an agreement (as so defined) in writing or a certificate, notice, instrument or document, or any information recorded in computer disk form. Whenever a Person is required to provide any document to Agent or any Buyer under the Repurchase Documents, the relevant document shall

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be provided in writing, including in the form of a PDF attachment to an electronic mail, or printed form unless Agent or such Buyer requests otherwise. At the request of Agent or such Buyer, the document shall be provided in computer disk form or both printed and computer disk form. The Repurchase Documents are the result of negotiations between the Parties, have been reviewed by counsel to Agent and each Buyer and counsel to Seller, and are the product of both Parties. No rule of construction shall apply to disadvantage one Party on the ground that such Party proposed or was involved in the preparation of any particular provision of the Repurchase Documents or the Repurchase Documents themselves. Except where otherwise expressly stated, Agent may give or withhold, or give conditionally, approvals and consents, and may form opinions and make determinations, in its sole and absolute discretion subject in all cases to the implied covenant of good faith and fair dealing. Reference in any Repurchase Document to Agent’s discretion, shall mean, unless otherwise expressly stated herein or therein, Agent’s sole and absolute discretion, and the exercise of such discretion shall be final and conclusive. In addition, unless otherwise stated in a Repurchase Document, whenever Agent has a decision or right of determination, opinion or request, exercises any right given to it to agree, disagree, accept, consent, grant waivers, take action or no action or to approve or disapprove (or any similar language or terms), or any arrangement or term is to be satisfactory or acceptable to or approved by Agent (or any similar language or terms), the decision of Agent with respect thereto shall be in the sole and absolute discretion of Agent, and such decision shall be final and conclusive, absent manifest error.

ARTICLE 3

THE TRANSACTIONS

Section 3.01 Procedures.

(a) Prior to the Closing Date, Seller delivered to initial Buyer the Underwriting Package for the Asset. On or prior to the Funding Expiration Date, with not less than three (3) Business Days’ prior written notice to Agent, Seller and Agent shall enter into the Transaction as evidenced by Seller sending Agent a notice substantially in the form of Exhibit A (“Transaction Request”) (i) describing the Asset and (ii) specifying which (if any) of the representations and warranties of Seller set forth in this Agreement (including in Schedule II applicable to the Asset) Seller will be unable to make with respect to the Asset. Seller shall promptly deliver to Agent and each Buyer any supplemental materials requested at any time by Agent or any Buyer, provided such requested supplemental materials are either in Seller’s possession or are reasonably obtainable by Seller. It is expressly agreed and acknowledged that Agent is entering into the Transaction on behalf of each Buyer, on the basis of all such representations and warranties. In the event of either (i) a Representation Breach relating to Section 7.10 or to a representation contained in Schedule II of this Agreement or (ii) a Representation Breach or breach of a covenant set forth in Article 8 hereof arising solely out of clause (f) of the definition of “Material Adverse Effect”, Seller shall (x) by not later than the fifth (5th) Business Day after receipt of notice thereof from Agent or any Buyer or the discovery thereof by Seller, either remedy such Representation Breach or deliver evidence to Agent that Guarantor has delivered to the investors in Guarantor capital calls in an amount sufficient to repurchase the Purchased Asset and (y) if the Representation Breach remains unremedied at the end of the five (5) Business Day period referred to in the immediately preceding clause (x), repurchase the Asset in accordance with Section 3.05 by not later than ten (10) Business Days after the end of the initial five (5) Business Day period referred to in the preceding clause (x).

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(b) By not later than the Purchase Date, Seller shall deliver to Agent an executed preliminary Confirmation for the Transaction, describing the Asset and its proposed Purchase Date, Applicable Purchase Percentage and Original Purchase Price. If Agent, in its commercially reasonable discretion, requires changes to the preliminary Confirmation, Seller shall make such changes and re-execute the preliminary Confirmation. Agent shall promptly execute and return the same to Seller, which shall thereupon become effective as the Confirmation of the Transaction. Upon the execution of the Confirmation by Agent and Seller, the Transaction shall become effective and shall be subject to all of the terms and conditions of the Repurchase Documents. Agent’s purchase of the Asset shall be evidenced only by its execution and delivery of the Confirmation. For the avoidance of doubt, neither Agent nor any Buyer shall (i) be bound by any preliminary or final non-binding determination referred to above, or (ii) be obligated to purchase the Asset notwithstanding the Confirmation executed by the Parties unless and until all applicable conditions precedent in Article 6 have been satisfied or waived by Agent.

(c) The Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction covered thereby, and shall be construed to be cumulative to the extent possible. If terms in a Confirmation are inconsistent with terms in this Agreement with respect to the Transaction, the Confirmation shall prevail. Whenever the Applicable Purchase Percentage or any other term of the Transaction (other than the Pricing Rate and outstanding Purchase Price) with respect to the Asset is revised or adjusted in accordance with this Agreement, an amended and restated Confirmation reflecting such revision or adjustment and that is otherwise acceptable to the Parties shall be prepared by Seller and executed by Seller and Agent.

(d) The fact that Agent or any Buyer has conducted or has failed to conduct any partial or complete examination or any other due diligence review of the Asset or Purchased Asset shall in no way affect any rights Agent or any Buyer may have under the Repurchase Documents or otherwise with respect to any representations or warranties or other rights or remedies thereunder or otherwise.

(e) The Transaction shall not be entered into if (i) any Default or Event of Default exists or would exist as a result of such Transaction or (ii) after giving effect to the Transaction, the Purchase Price of the Purchased Asset would exceed the Maximum Purchase Price.

Section 3.02 Transfer of Purchased Asset; Servicing Rights. On the Purchase Date, and subject to the satisfaction of all applicable conditions precedent in Article 6, (a) ownership of and title to the Purchased Asset shall be transferred to and vest in Agent and each Buyer or their respective designee against the simultaneous transfer of the Purchase Price for the Purchased Asset to the account of Seller specified in Annex 1 (or if not specified therein, in the related Confirmation or as directed by Seller), and (b) Seller hereby sells, transfers, conveys and assigns to Agent on a servicing-released basis all of Seller’s right, title and interest (but no Retained Interests) in and to the Purchased Asset, together with all related Servicing Rights. The

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Servicing Rights and other servicing provisions under this Agreement are not severable from or to be separated from the Purchased Asset under this Agreement and such Servicing Rights and other servicing provisions of this Agreement constitute (a) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or other arrangement or other credit enhancement related to the Repurchase Documents. Subject to the satisfaction of all conditions precedent set forth in Article 6, Buyer agrees to pay to Seller the Original Purchase Price for the Purchased Asset.

Section 3.03 Disbursement to Seller. Seller may request and receive only one payment hereunder in respect of the Transaction. Seller is not entitled to receive any additional payment hereunder as a result of any payment by Seller to Agent and/or Buyer hereunder with respect to the Repurchase Price.

Section 3.04 Early Repurchase Date; Voluntary Reduction of Purchase Price; Mandatory Reductions of Purchase Price.

(a) Except as set forth in Sections 3.04(b), (d) and (e) hereof, Seller shall not have any right to terminate the Transaction and repurchase the Purchased Asset prior to the Repurchase Date. Except as set forth in Section 3.04(c) and Section 3.06(a)(i)(E) hereof, Seller shall not have any right to reduce the outstanding Purchase Price prior to the Repurchase Date.

(b) Notwithstanding anything herein to the contrary, during the continuance of a Purchased Asset Event of Default, Seller may terminate the Transaction with respect to the Purchased Asset and repurchase the Purchased Asset on any date prior to the Repurchase Date (an “Early Repurchase Date”); provided, that:

(i) Seller notifies Agent at least three (3) Business Days before the proposed Early Repurchase Date identifying the Purchased Asset to be repurchased and the Repurchase Price thereof,

(ii) Seller delivers a certificate from a Responsible Officer of Seller in form and substance reasonably satisfactory to Agent, certifying that (1) no Default or Event of Default exists or would exist as a result of such repurchase which would continue after the completion of such repurchase and (2) there are no other Liens on the Purchased Asset other than Buyer’s Lien or a Permitted Lien which would continue after the completion of such repurchase,

(iii) if the Early Repurchase Date is not a Remittance Date, Seller pays to Agent any amount due under Section 12.03, and

(iv) Seller thereafter complies with Section 3.05.

(c) Notwithstanding anything herein to the contrary, upon any prepayment or repayment in part of the debt evidenced by the Mortgage Note with respect to the Purchased Asset in part in accordance with to the Purchased Asset Documents, Seller shall deposit all amounts received by Seller with respect to such prepayment or repayment of the debt evidenced by the Mortgage Note into the Waterfall Account to be applied pursuant to Article 5 hereof. Seller shall not be permitted to terminate the Transaction or repurchase the Purchased Asset in connection with a reduction of the outstanding Purchase Price pursuant to this Section 3.04(c).

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(d) Notwithstanding anything herein to the contrary, upon the prepayment or repayment in full of the debt evidenced by the Mortgage Note with respect to the Purchased Asset in accordance with the Purchased Asset Documents and the satisfaction in full of all other obligations of the Underlying Obligor with respect to the Purchased Asset, Seller shall (i) repurchase the Purchased Asset simultaneously with the prepayment or repayment of the debt evidenced by the Mortgage Note with respect to the Purchased Asset and (ii) comply with Section 3.05 hereof. Upon the satisfaction of the terms and conditions of this Section 3.04(d), the Transaction shall terminate with respect to the Purchased Asset.

(e) Notwithstanding anything in this Agreement, and in addition to other rights and remedies of Agent or any Buyer under any Repurchase Document, Seller shall immediately repurchase in accordance with Section 3.05 the Purchased Asset if a Repurchase Obligation Trigger Event occurs.

Section 3.05 Repurchase. On the Repurchase Date (or Early Repurchase Date, if applicable), or on the date of any pay-off of the Purchased Asset pursuant to which the obligor thereunder is released from future payment obligations in accordance with this Agreement, or upon the payment in full for any reason of the Repurchase Price with respect to the Purchased Asset, Seller shall transfer to Agent the Repurchase Price for the Purchased Asset as of the Repurchase Date (or Early Repurchase Date, if applicable) and, so long as no Event of Default has occurred and is continuing, Agent shall promptly transfer to Seller the Purchased Asset in accordance with Section 18.19, whereupon the Transaction with respect to the Purchased Asset shall terminate; provided, however, that in the event of a pay-off of the Purchased Asset, Agent shall transfer the Purchased Asset to Seller regardless of whether an Event of Default has occurred and is continuing. Any Income with respect to the Purchased Asset received by Agent or any Buyer or Account Bank after payment of the Repurchase Price therefor shall be promptly remitted to Seller. Notwithstanding the foregoing, not later than the Facility Termination Date, Seller shall repurchase the Purchased Asset by paying to Agent the outstanding Repurchase Price therefor and all other outstanding Repurchase Obligations. Agent shall promptly remit to Seller the excess, if any, remaining after application of such funds and any Income to the outstanding Repurchase Obligations.

Section 3.06 Extension Option.

(a) At the request of Seller delivered to Agent (an “Extension Exercise Notice”), Agent and each Buyer shall grant two (2) extensions of the Facility Termination Date for a period of twelve (12) months each (each an “Extension Option”), subject to the satisfaction of the conditions set forth below with respect to each Extension Option (the “Extended Facility Termination Date”). Any extension of the Facility Termination Date pursuant to this Section 3.06(a) shall be subject to the following:

(i) If no Purchased Asset Event of Default exists on the Facility Termination Date (or Extended Facility Termination Date, as applicable):

(A) Seller has delivered to Agent an Extension Exercise Notice with respect to the applicable Extension Option within five (5) Business Days after Seller’s receipt of notice from the Underlying Obligor that the Underlying Obligor has elected to exercise the Underlying Obligor’s then-applicable extension option in accordance with the Purchased Asset Documents,

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(B) the maturity date of the Purchased Asset has been extended in accordance with the terms and conditions of the Underlying Loan Agreement,

(C) no Event of Default exists on the date of the request to extend or the Facility Termination Date (or Extended Facility Termination Date, as applicable),

(D) the payment by Seller to Agent of the Extension Fee on or before the Facility Termination Date (or Extended Facility Termination Date, as applicable), which payment may be made by Seller at any time on or before the Facility Termination Date (or Extended Facility Termination Date, as applicable) in Seller’s sole discretion, and

(E) if required by Agent pursuant to the last paragraph of this Section 3.06, Agent shall have received an Appraisal with respect to the individual Mortgaged Properties securing Purchased Asset which confirms that the LTV as of the Facility Termination Date (or Extended Facility Termination Date, as applicable) shall be equal to or less than fifty-four percent (54%); provided, however, that Seller shall have the right to reduce the outstanding Purchase Price on or prior to the Facility Termination Date (or Extended Facility Termination Date, as applicable), without premium or penalty, in such an amount necessary to cause the LTV to be equal to or less than fifty-four percent (54%).

(ii) If a Purchased Asset Event of Default exists on the Facility Termination Date (or Extended Facility Termination Date, as applicable):

(A) Seller has delivered to Agent an Extension Exercise Notice with respect to the applicable Extension Option no earlier than four (4) months or later than thirty (30) days before the Facility Termination Date (or Extended Facility Termination Date, as applicable),

(B) no Event of Default exists on the date of the request to extend or the Facility Termination Date (or Extended Facility Termination Date, as applicable),

(C) the payment by Seller to Agent of the Extension Fee, if any, on or before the Facility Termination Date (or Extended Facility Termination Date, as applicable), which payment may be made by Seller at any time on or before the Facility Termination Date (or Extended Facility Termination Date, as applicable) in Seller’s sole discretion,

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(D) Seller has delivered evidence reasonably satisfactory to Agent that Seller is diligently pursuing a resolution and/or cure of the Purchased Asset Event of Default; and

(E) Seller continues to pay as and when due pursuant to the Repurchase Documents the Price Differential, any reduction in Purchase Price, and Fees and any other amounts, sums of money, payments, deposits or premiums due under the Repurchase Documents.

(b) If (i) Seller has exercised each applicable Extension Option in accordance with Section 3.06(a) hereof, (ii) a Purchased Asset Event of Default has occurred after the exercise of each applicable Extension Option in accordance with Section 3.06(a) hereof and is continuing, and (iii) a Conversion has not occurred on or prior to the then-current Extended Facility Termination Date, then Agent and each Buyer shall grant one (1) additional extension of the Facility Termination Date for a period of twelve (12) months subject to the satisfaction of the conditions set forth below:

(i) Seller has delivered to Agent an Extension Exercise Notice with respect to the applicable Extension Option no earlier than four (4) months or later than thirty (30) days before the then-current Extended Facility Termination Date,

(ii) no Event of Default exists on the date of the request to extend or the then-current Extended Facility Termination Date, and

(iii) Seller has delivered evidence reasonably satisfactory to Agent that Seller is diligently pursuing a resolution and/or cure of the Purchased Asset Event of Default.

(iv) Seller continues to pay as and when due pursuant to the Repurchase Documents the Price Differential, any reduction in Purchase Price, and Fees and any other amounts, sums of money, payments, deposits or premiums due under the Repurchase Documents.

In the event Seller timely requests an extension of the Facility Termination Date (or Extended Facility Termination Date, as applicable) pursuant to this Section 3.06(a)(i), then Seller shall, at no cost or expense to Agent or Buyer, order and commission pursuant to the Purchased Asset Documents, and deliver to Agent, an Appraisal of the Mortgaged Property in form reasonably acceptable to Agent for purposes of determining whether Section 3.06(a)(i)(E) above shall be satisfied as of the Facility Termination Date (or Extended Facility Termination Date, as applicable). If Seller fails to deliver such Appraisal to Agent within five (5) Business Days prior to the Facility Termination Date (or Extended Facility Termination Date, as applicable), then Agent shall have the right to obtain an appraisal for any Mortgaged Property for purposes of determining whether Section 3.06(a)(i)(F) above shall be satisfied as of the Facility Termination Date (or Extended Facility Termination Date, as applicable), and Seller shall be responsible for the reasonable out-of-pocket costs and expenses incurred by Agent in obtaining any such Appraisal.

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Section 3.07 Payment of Price Differential and Fees.

(a) Notwithstanding that Agent, each Buyer and Seller intend that the Transaction hereunder be a sale to Agent and each Buyer of the Purchased Asset, Seller shall pay to Agent the accrued value of the Price Differential for the Purchased Asset on each Remittance Date. Agent shall give Seller notice of the Price Differential and any fees and other amounts due under the Repurchase Documents on or prior to the second (2nd) Business Day preceding each Remittance Date; provided, that Agent’s failure to deliver such notice shall not affect Seller’s obligation to pay such amounts. If the Price Differential includes any estimated Price Differential, Agent shall recalculate such Price Differential after the Remittance Date and, if necessary, make adjustments to the Price Differential amount due on the following Remittance Date.

(b) Seller shall pay to Agent all fees and other amounts, including, without limitation, any Fees, as and when due as set forth in this Agreement and the Fee and Pricing Letter.

Section 3.08 Payment, Transfer and Custody.

(a) Unless otherwise expressly provided herein, all amounts required to be paid or deposited by Seller, Guarantor or any other Person under the Repurchase Documents shall be paid or deposited in accordance with the terms hereof no later than 3:00 p.m. (Central Standard Time) on the day when due, in immediately available Dollars and without deduction, setoff or counterclaim, and if not received before such time shall be deemed to be received on the next Business Day. Whenever any payment under the Repurchase Documents shall be stated to be due on a day other than a Business Day, such payment shall be made on the next following Business Day, and such extension of time shall in such case be included in the computation of such payment. Seller shall, to the extent permitted by Requirements of Law, pay to Agent (in addition to, and together with, such past-due Repurchase Price) a late fee equal to one percent (1%) of the total amount of the late payment, plus interest on such past-due amount as provided in Section 18.16, together with any other amounts not paid when due under the Repurchase Documents, until all such past-due amounts are received in full by Agent; provided, that notwithstanding the foregoing, Seller shall not have any obligation to pay such late fee (x) with respect to up to three (3) such late payments that occur prior to the Repurchase Date (unless such late payments occur on consecutive Remittance Dates in which event the late fee shall apply on the third (3rd) such Remittance Date) or (y) on the Repurchase Date which occurs on the Facility Termination Date. Amounts payable to a Buyer and not otherwise required to be deposited into the Waterfall Account shall be deposited into an account of such Buyer. Seller shall have no rights in, rights of withdrawal from, or rights to give notices or instructions regarding any Buyer’s account or the Waterfall Account. Amounts in the Waterfall Account may be invested at the direction of Agent in cash equivalents before they are distributed in accordance with Article 5.

(b) Any Purchased Asset Documents not delivered to Agent or Custodian are and shall be held in trust by Seller or its agent for the benefit of each Buyer as the owner thereof. Seller or its agent shall maintain a copy of the Purchased Asset Documents and the originals of the Purchased Asset Documents not delivered to Agent or Custodian. The possession of Purchased Asset Documents by Seller or its agent is in a custodial capacity only at the will of Agent and for the sole purpose of assisting the Servicer with its duties under the Servicing

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Agreement. Each Purchased Asset Document retained or held by Seller or its agent shall be segregated on Seller’s books and records from the other assets of Seller or its agent, and the books and records of Seller or its agent shall be marked to reflect clearly the sale of the Purchased Asset to Agent and each Buyer on a servicing-released basis. Seller or its agent shall release its custody of the Purchased Asset Documents only in accordance with written instructions from Agent, unless such release is required as incidental to the servicing of the Purchased Asset or is in connection with a repurchase the Purchased Asset by Seller, in each case in accordance with the Custodial Agreement.

Section 3.09 Repurchase Obligations Absolute. All amounts payable by Seller under the Repurchase Documents shall be paid without notice, demand, counterclaim, setoff, deduction or defense (as to any Person and for any reason whatsoever) and without abatement, suspension, deferment, diminution or reduction (as to any Person and for any reason whatsoever), and the Repurchase Obligations shall not be released, discharged or otherwise affected, except as expressly provided herein, by reason of: (a) any damage to, destruction of, taking of, restriction or prevention of the use of, interference with the use of, title defect in, encumbrance on or eviction from, the Purchased Asset or any Mortgaged Property, (b) any Insolvency Proceeding relating to Seller or any Underlying Obligor, or any action taken with respect to any Repurchase Document or Purchased Asset Document by any trustee or receiver of Seller or any Underlying Obligor or by any court in any such proceeding, (c) any claim that Seller has or might have against Agent or any Buyer under any Repurchase Document or otherwise, (d) any default or failure on the part of Agent or any Buyer to perform or comply with any Repurchase Document or other agreement with Seller; provided, however, that the foregoing shall not release Agent or any Buyer of its obligation to release and transfer the Purchased Asset back to Seller or Seller’s designee in a simultaneous transaction upon payment in full of the Repurchase Price, (e) the invalidity or unenforceability of the Purchased Asset, any Repurchase Document or any Purchased Asset Document, or (f) any other occurrence whatsoever, whether or not similar to any of the foregoing, and whether or not Seller has notice or Knowledge of any of the foregoing. The Repurchase Obligations shall be full recourse to Seller. This Section 3.09 shall survive the termination of the Repurchase Documents and the payment in full of the Repurchase Obligations.

ARTICLE 4

CONVERSION OF PURCHASED ASSET TO REO PROPERTY

Section 4.01 Conversion of Purchased Asset to REO Property. Seller may, from time to time after the occurrence of a Material Default with respect to the Purchased Asset with the approval of Agent (such approval not to be unreasonably withheld, conditioned or delayed), Convert all or part of the Mortgaged Properties securing the Purchased Asset (or the entire Pledged Collateral) to REO Property by satisfying the Conversion Conditions. Each date of Conversion of all or part of the Mortgaged Properties securing the Purchased Asset (or the entire Pledged Collateral), as evidenced by the recording of the related sale deed in the applicable county records (which shall occur not later than five (5) Business Days after the related foreclosure sale date or other resolution date) (or the taking of ownership to the Pledged Collateral) is referred to as the “Conversion Date” for the Purchased Asset. In the event that all or part of the Mortgaged Properties securing the Purchased Asset (or the entire Pledged

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Collateral) is Converted to REO Property by Seller in accordance with this Article 4, any term, condition or provision hereunder or under any other Repurchase Agreement applicable to the Purchased Asset shall continue to apply to the related REO Property owned by the related REO Owner and the related REO Mortgage to the same extent as if the all or part of the Mortgaged Properties securing the Purchased Asset was not subject to a Conversion (or the entire Pledged Collateral).

Section 4.02 Conversion Conditions. To Convert all or part of the Mortgaged Properties (or the entire Pledged Collateral) securing the Purchased Asset to REO Property, Seller shall satisfy each of the following conditions (the “Conversion Conditions”):

(a) Seller shall give Agent at least ten (10) Business Days prior written notice (or such shorter period as may be acceptable to Agent in its sole and absolute discretion) of Seller’s intent to Convert the Purchased Asset, which notice shall specify the anticipated Conversion Date (a “Notice of Conversion”);

(b) no Event of Default shall exist;

(c) Prior to the occurrence of any Conversion, Seller shall form a new separate REO Owner (for each REO Property) for the purpose of (i) taking the deed to the applicable Mortgaged Property in the name of such REO Owner, (ii) taking sole ownership and title to the Pledged Collateral in the name of the REO Owner or (iii) taking the Purchased Asset by assignment in the name of such REO Owner and thereafter taking the deed to the related Mortgaged Property in the name of such REO Owner, and on the date on which such REO Owner is formed, such REO Owner shall execute a guaranty agreement (guaranteeing Seller’s obligations under this Agreement and the other Repurchase Documents), in form and substance reasonably acceptable to Agent; and

(d) Prior to the occurrence of any Conversion, Seller and the applicable REO Owner shall deliver or cause to be delivered to Agent the following items:

(i) a true and complete copy of the Governing Documents, together with any original certificate representing 100% of the ownership interests in such REO Owner endorsed or otherwise assigned in blank or to Agent for the benefit of Buyers hereunder;

(ii) a pledge agreement, in form and substance reasonably acceptable to Agent, whereby Seller pledges all of its right, title and interest in such REO Owner, as additional collateral hereunder;

(iii) copies of UCC financing statements required under the pledge agreement referenced in Section 4.02(d)(ii) with evidence of filing thereon that names Seller as debtor and the Agent, on behalf of Buyers hereunder, as secured party and that describes “all assets in which the debtor now or hereafter has rights” as the collateral in which the Agent, on behalf of Buyers hereunder, has a grant;

(iv) an updated organizational chart of Seller including such REO Owner;

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(v) an original REO Mortgage on the related Mortgaged Property securing the applicable REO Owner’s obligations under the guaranty agreement referenced in Section 4.02(c);

(vi) a true and complete copy of the deed, lease (and all amendments and modifications thereof and any nondisturbance or other agreements related thereto), if any, or other instrument pursuant to which the related REO Owner, if any, acquired or will acquire its interest in the related REO Property;

(vii) an original title insurance policy, in form and substance reasonably acceptable to Agent, insuring the REO Mortgage as a first priority lien on the applicable Mortgaged Property, subject to no lien or encumbrance other than Permitted Liens, together with a tie-in endorsement if available at commercially reasonable rates, in an amount equal to at least the Original Purchase Price for the Purchased Asset from a title insurance company reasonably acceptable to Agent; provided, that in lieu of obtaining a new original title insurance policy, Seller and the applicable REO Owner may, at their option, obtain a date-down endorsement (in form and substance reasonably acceptable to Agent) of the existing title insurance policy subject to the approval of Agent (such approval not to be unreasonably withheld, conditioned or delayed);

(viii) a copy of an original owner’s policy insuring the related REO Owner as the owner of the related REO Property in an amount equal to at least the Original Purchase Price for the Purchased Asset;

(ix) a copy of any operating or master lease, if any, with respect to such REO Property, in form and substance acceptable to Agent, together with any subordination agreements as Agent may require;

(x) an asset management agreement, in form and substance acceptable to Agent, providing for property management of the REO Property, together with any assignment and subordination agreements as Agent may require;

(xi) copies of UCC financing statements with evidence of filing thereon that names REO Owner as debtor and the Agent, on behalf of Buyers hereunder, as secured party and that describes “all assets in which the debtor now or hereafter has rights” as the collateral in which the Agent, on behalf of Buyers hereunder, has a grant;

(xii) to the extent in Seller’s or REO Owner’s possession or control, copies of any other material written agreements related to such REO Property or any other documents, reports and/or certifications executed and/or delivered by the related Underlying Obligor, the Seller, the REO Owner or any other person or entity in connection with the closing of the Conversion or with respect to such REO Property or any amendment thereof and any legal opinions delivered in connection with the closing of the Conversion;

(xiii) such other documents and instruments as Agent may reasonably require in order to obtain and perfect a first priority security interest in (x) the related REO Property and/or REO Owner’s interest therein and (y) the REO Owner;

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(xiv) an environmental indemnity agreement, in form and substance reasonably acceptable to Agent, executed by Seller, such REO Owner and Guarantor;

(xv) opinions of counsel, in form and substance reasonably acceptable to Agent (provided, that opinions of counsel in form and substance consistent with similar opinions delivered on the Closing Date shall be deemed reasonably acceptable), with respect to (i) entity matters and enforceability of the related guaranty agreement, pledge agreement, REO Mortgage and environmental indemnity agreement, (ii) the creation and perfection of the Agent’s (on behalf of the Buyers hereunder) security interest in all of the assets of Seller (with respect to such REO Owner) and REO Owner and (iii) bankruptcy safe-harbor protection;

(xvi) certificates of insurance, satisfactory to Agent, evidencing that customary insurance has been obtained and is in full force and effect with respect to such REO Property;

(xvii) an environmental site assessment (subject to any limitations set forth in the underlying Purchased Asset Documents) and confirmation from Seller and the applicable REO Owner pursuant to Section 4.04 hereof;

(xviii) such due diligence materials as Agent may reasonably require; and

(xix) such other documents, certificates, agreements (including, without limitation, any necessary comfort letters, replacement franchise agreements or assumptions thereof or any amendments or modifications to the Repurchase Documents necessary to establish cash management, escrows and reserves with respect to the applicable REO Property or to recognize that the Purchased Asset has been subject to a Conversion) or materials as Agent may reasonably require.

Section 4.03 Recording. In connection with the transactions contemplated by this Article 4, the Seller and applicable REO Owner shall promptly duly record or file each of the documents, instruments and agreements delivered to the Agent pursuant to Section 4.02 in such manner and in such places as is required by law to establish, preserve, protect and perfect the interests and rights created or intended to be created by this Agreement, the related REO Mortgage and the other Repurchase Documents, and the Seller and applicable REO Owner shall pay all transfer and mortgage recording taxes, fees and other charges in connection with the execution, delivery and/or filing thereof.

Section 4.04 Environmental Compliance. Notwithstanding anything to the contrary herein, neither the Seller nor any REO Owner shall obtain title to a Mortgaged Property or the Pledged Collateral in connection with any Conversion, if as a result of any such action Agent reasonably determines after consulting with legal counsel and duly qualified environmental specialists that (i) Seller or any REO Owner would fail to qualify under applicable CERCLA liability exemptions for lenders or bona fide prospective purchasers or (ii) that Agent or any Buyer would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the meaning of the Comprehensive Environmental Responsibility, Cleanup and Liability Act of 1980, as amended from time to time,

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or any comparable law, unless the Agent has previously reasonably determined, based on an Environmental Site Assessment prepared by an Independent Person who regularly conducts environmental audits, that:

(a) such Mortgaged Property is in compliance in all material respects with applicable environmental laws, or, if not, that it is reasonably prudent (as determined by Agent) to take such actions as are necessary to bring the Mortgaged Property in compliance in all material respects therewith; and

(b) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any Hazardous Substances for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any then effective federal, state or local law or regulation, or that, if any such Hazardous Substances are present for which such action could be required, it is reasonably prudent (as determined by Agent) to take such actions with respect to the affected Mortgaged Property.

In the event that the environmental site assessment first obtained by the Seller with respect to the applicable Mortgaged Property indicates that such Mortgaged Property may not be in compliance with applicable environmental laws or that Hazardous Substances may be present but does not definitively establish such fact, the Seller shall cause such further environmental tests as the Agent shall deem reasonably prudent. Any such tests shall be deemed part of the environmental site assessment obtained by the Seller for purposes of this Section 4.04.

Section 4.05 Completion of Conversion. Upon the Conversion Date relating to the Conversion of the Purchased Asset, so long as Seller has satisfied the Conversion Conditions and except to the extent previously delivered to Seller, Buyer shall, on such date (a) promptly deliver to Seller or a designee the related transfer documents and any and all other documents and instruments held by Buyer related to the Purchased Asset, and (b) solely for purposes of consummating the Conversion, be deemed to have simultaneously (x) transferred and released to Seller all of Buyer’s right, title and interest in and to the Purchased Asset (including all Servicing Rights and Income related thereto, subject to Seller’s obligations to cause all such Income to be deposited in the Waterfall Account and to satisfy the Conversion Conditions (including, without limitation, executing and delivering a REO Mortgage on the related Mortgaged Property in favor of Agent and securing the Repurchase Obligations)), and (y) released its lien on and security interest in the Purchased Asset and to have irrevocably authorized Seller (or a designee thereof) to file any UCC filing statements or mortgage assignments (without representation or warranty), releases or mortgage, as applicable to terminate its lien on and security interest in the Purchased Asset.

ARTICLE 5

APPLICATION OF INCOME

Section 5.01 Waterfall Account. The Waterfall Account shall be established at the Account Bank. Agent shall have sole dominion and control (including, without limitation, “control” within the meaning of Section 9-104(a) of the UCC) over the Waterfall Account. Neither Seller nor any Person claiming through or under Seller shall have any claim to or interest

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in the Waterfall Account. All Income received by Seller, Agent, any Buyer, Servicer or Account Bank in respect of the Purchased Asset, as well as any interest received from the reinvestment of such Income, shall be deposited directly into the Waterfall Account and shall be applied to and remitted by Waterfall Account Bank in accordance with this Article 5.

Section 5.02 Before an Event of Default.

(a) If no Event of Default exists, all Income described in Section 5.01 and deposited into the Waterfall Account during each Pricing Period (other than Principal Payments, Fees and amounts which Servicer is permitted to withhold and retain in accordance with the Servicing Agreement) (collectively, the “Non-Principal Income”) shall be applied by Account Bank by no later than the next following Remittance Date in the following order of priority:

first, to pay amounts due and payable from Seller under any Derivatives Contract that is included among the Purchased Asset Documents; provided, however, that for any such Derivatives Contract, such payments shall not exceed the amount of Non-Principal Income deposited into the Waterfall Account during the applicable Pricing Period on account of the Purchased Asset;

second, to pay to Agent an amount equal to the Price Differential accrued with respect to the Purchased Asset as of such Remittance Date;

third, to pay to Agent an amount equal to all default interest, late fees, fees, expenses and Indemnified Amounts then due and payable from Seller and other applicable Persons to Agent or any Buyer under the Repurchase Documents;

fourth, to pay any custodial and servicing fees and expenses due and payable under the Custodial Agreement and the Servicing Agreement;

fifth, to pay to Agent any other amounts due and payable from Seller and other applicable Persons to Agent or any Buyer under the Repurchase Documents;

sixth, to pay any amounts due and payable from Seller under any Derivatives Contract that is included among the Purchased Asset Documents to the extent the same were not paid pursuant to clause first of this Section 5.02(a); and

seventh, (i) if a Default exists, to be held in the Waterfall Account until such Default is (A) cured, at which time to be applied in accordance with clause (ii) below, or (B) matures into an Event of Default, at which time to be applied in accordance with Section 5.03; and (ii) if no Default exists, to pay to Seller any remainder for its own account.

(b) If no Event of Default exists, all Principal Income shall be applied by Account Bank by no later than the next following Remittance Date in the following order of priority:

first, to pay to Agent, an amount equal to Buyer’s Percentage Share of such Income, to reduce the outstanding Purchase Price to zero; and

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second, to pay to Agent any other amounts due and payable from Seller and other applicable Persons to Agent or any Buyer under the Repurchase Documents; and

third, if no Default exists, to pay to Seller any remainder for its own account.

(c) Seller shall pay to Agent Buyer’s Percentage Share of any and all Fees received by Seller in accordance with the Fee and Pricing Letter, regardless of whether or not the Transaction has occurred, within one (1) Business Day after receipt thereof by Seller; provided, however, that upon the occurrence and during the continuance of an Event of Default, Seller shall pay to Agent 100% of all Fees received by Seller, regardless of whether or not the Transaction has occurred, within one (1) Business Day after receipt thereof by Seller.

Section 5.03 After Event of Default. If an Event of Default exists, all Income (other than Fees, which shall be payable pursuant to Section 5.02(c) hereof) deposited into the Waterfall Account in respect of the Purchased Asset shall be applied by Account Bank, on the Business Day next following the Business Day on which each amount of Income is so deposited, in the following order of priority:

first, to pay to Agent an amount equal to the Price Differential accrued with respect to the Purchased Asset as of such date;

second, to pay to Agent an amount equal to all default interest, late fees, fees, expenses and Indemnified Amounts then due and payable from Seller and other applicable Persons to Agent or any Buyer under the Repurchase Documents;

third, to pay to Agent an amount equal to the Repurchase Price of the Purchased Asset (to be applied in such order and in such amounts as determined by Agent, until such Repurchase Price has been reduced to zero);

fourth, to pay to Agent all other Repurchase Obligations due to Agent or any Buyer; and

fifth, to pay the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

Section 5.04 Seller to Remain Liable. If the amounts remitted to Agent and any Buyer as provided in Sections 5.02 and 5.03 are insufficient to pay all amounts due and payable from Seller to Agent and any Buyer under this Agreement or any Repurchase Document on a Remittance Date, a Repurchase Date, upon the occurrence of an Event of Default or otherwise, Seller shall nevertheless remain liable for and shall pay to Agent and such Buyer when due all such amounts.

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ARTICLE 6

CONDITIONS PRECEDENT; POST CLOSING OBLIGATION

Section 6.01 Conditions Precedent to Closing Date. Agent and Buyers shall not be obligated to enter into the Transaction or purchase the Asset until the following conditions have been satisfied or waived by Agent, on and as of the Closing Date and the initial Purchase Date:

(a) Agent has received the following documents, each dated the Closing Date or as of the Closing Date unless otherwise specified: (i) each Repurchase Document duly executed and delivered by the parties thereto, (ii) an official good standing certificate dated a recent date with respect to Seller, (iii) certificates of the secretary or an assistant secretary of Seller with respect to attached copies of the Governing Documents and applicable resolutions of Seller, and the incumbencies and signatures of officers of Seller executing the Repurchase Documents to which it is a party, evidencing the authority of Seller with respect to the execution, delivery and performance thereof, (iv) a Closing Certificate, (v) intentionally omitted, (vi) such customary opinions from counsel to Seller as Agent may require, including with respect to corporate matters, enforceability, non-contravention, no consents or approvals required other than those that have been obtained, perfected security interests in the Purchased Asset and any other collateral pledged pursuant to the Repurchase Documents, Investment Company Act matters, and, if applicable, true sale (limited to transfers of the Purchased Asset between Seller and any of its Affiliates, but not with respect to transfers of the Purchased Asset from Seller to Agent and each Buyer), and the applicability of Bankruptcy Code safe harbors, and (vii) all other documents, certificates, information, financial statements, reports, approvals and opinions of counsel as it may require;

(b) (i) UCC financing statements have been filed against Seller in all filing offices required by Agent, (ii) Agent has received such searches of UCC filings, tax liens, judgments, pending litigation and other matters relating to Seller and the Purchased Asset as Agent may require, and (iii) the results of such searches are satisfactory to Agent; and

(c) Agent has received payment from Seller of all fees and expenses then payable under the Fee and Pricing Letter and the other Repurchase Documents, as contemplated by Section 13.02.

Section 6.02 Conditions Precedent to the Transaction. Agent shall not be obligated to enter into the Transaction, purchase the Asset, or be obligated to take, fulfill or perform any other action hereunder, until the following additional conditions have been satisfied or waived by Agent, with respect to the Asset on and as of the Purchase Date:

(a) Agent has received the following documents: (i) a Transaction Request, (ii) a Confirmation, (iii) Irrevocable Redirection Notices, (iv) subject to Section 6.03 hereof, a trust receipt and other items required to be delivered under the Custodial Agreement, and (v) if applicable and to the extent not previously delivered, opinions of counsel with respect to true sale (limited to transfers of the Purchased Asset between Seller and any of its Affiliates, but not with respect to transfers of the Purchased Asset from Seller to Buyer) as Agent may require in order to confirm its perfected security interest in the Purchased Asset;

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(b) immediately before the Transaction and after giving effect thereto and to the intended use thereof, no Representation Breach (including with respect to the Purchased Asset), Default, Event of Default, Material Adverse Effect or Market Disruption Event exists;

(c) Agent has executed the Confirmation;

(d) the Purchase Price for the Transaction does not exceed the Maximum Purchase Price after giving effect to the Transaction;

(e) the Purchase Date is not later than the Funding Expiration Date and the Repurchase Date specified in the Confirmation is not later than the Facility Termination Date;

(f) Agent has not received notice and has no knowledge that Seller has not satisfied in all material respects all requirements and conditions and has performed in all material respects all covenants, duties, obligations and agreements contained in the Repurchase Documents to be performed by such Person on or before the Purchase Date;

(g) to the extent the Purchased Asset Documents contain notice, cure and other provisions in favor of a pledgee under a repurchase or warehouse facility, and without prejudice to the sale treatment of the Asset to Agent and each Buyer, Agent and each Buyer have received evidence that Seller has given notice to the applicable Persons of Agent and each Buyer’s interest in the Asset and otherwise satisfied any other applicable requirements under such pledgee provisions so that Agent is entitled to the rights and benefits of a pledgee under such pledgee provisions;

(h) Agent shall have received executed blank assignments of the Purchased Asset Documents (which where applicable shall be in appropriate form for recording in the jurisdiction in which the underlying real estate is located) (the “Blank Assignment Documents”);

(i) Agent shall have received an executed power of attorney of Seller in the form of Exhibit E;

(j) Agent shall have received all Fees due and payable to Agent and/or Buyer as of the Purchase Date;

(k) Servicer, Seller and Agent shall have entered into the Servicing Agreement, which Servicing Agreement shall be subject to Agent’s approval in its discretion;

(l) Account Bank, Seller and Agent shall have entered into a Controlled Account Agreement acceptable to Agent with respect to the Waterfall Account;

(m) Agent shall have received a customary opinion from counsel to Seller acceptable to Agent with respect to the enforceability of the Controlled Account Agreement; and

(n) Agent shall have received any Environmental Workplans (as defined in the Underlying Loan Agreement) with respect to the Environmental Workplan Properties (as defined in the Underlying Loan Agreement) actually provided to Seller pursuant to the Underlying Loan Agreement, which shall be acceptable to Agent in its reasonable discretion,

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together with any other environmental, vapor testing, remediation or other similar reports and/or plans actually delivered by the Underlying Obligor to the Seller pursuant to the Underlying Loan Agreement, acceptable to Agent in its reasonable discretion.

The Confirmation delivered by Seller shall constitute a certification by Seller that all of the conditions precedent in this Article 6 have been satisfied or waived by Agent.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants, on and as of the date of this Agreement and each Purchase Date (except with respect to the representations and warranties in Section 7.10 regarding Schedule II, Section B, which shall be made as of the related Purchase Date and at all times when the Asset is subject to this Agreement and in Sections 7.01, 7.02, 7.04, 7.07, and, except as permitted otherwise pursuant to Section 10.01(j), 7.12 which shall be made at all times when any Repurchase Document or the Transaction is in full force and effect) as follows:

Section 7.01 Seller. Seller has been duly organized and validly exists in good standing as a corporation, limited liability company or limited partnership, as applicable, under the laws of the jurisdiction of its incorporation, organization or formation. Seller (a) has all requisite power and authority, (b) is duly qualified to do business in all jurisdictions, in which the failure to do so could reasonably be expected to have a Material Adverse Effect, (c) has legal right, license and franchise except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, and (d) has been duly authorized by all necessary action, to (w) own, lease and operate its properties and the assets, (x) conduct its business as presently conducted, (y) execute, deliver and perform its obligations under the Repurchase Documents to which it is a party, and (z) acquire, own, sell, assign, pledge and repurchase the Purchased Asset. Seller’s exact legal name is set forth in the preamble and signature pages of this Agreement, subject to Section 8.01. Seller’s location (within the meaning of Article 9 of the UCC) is at the address of Seller referred to in Annex 1, subject to Section 8.01. Seller has not changed its name or location within the past twelve (12) months, subject to Section 8.01. Seller’s organizational identification number is 5229703 and its tax identification number is 36-4761687. As of the Closing Date, Seller has no subsidiaries. Seller is a wholly-owned Subsidiary of Guarantor. The fiscal year of Seller is the calendar year. Seller has no Indebtedness, Contractual Obligations or investments other than (a) ordinary trade payables (including, without limitation, tax liabilities), (b) in connection with the Asset, (c) the Repurchase Documents, (d) the Governing Documents of Seller, and (e) other Indebtedness, Contractual Obligations and Investments expressly permitted by this Agreement (including, without limitation, under the Purchased Asset Documents). Seller has no Guarantee Obligations.

Section 7.02 Repurchase Documents. Each Repurchase Document to which Seller is a party has been duly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as such enforceability may be limited by Insolvency Laws and general principles of equity. The execution, delivery and performance by Seller of each Repurchase Document to which it is a party do not (a) conflict with, result in a breach of, or constitute (with or without notice or lapse

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of time or both) a default under, any (i) Governing Document, Indebtedness, Guarantee Obligation or Contractual Obligation applicable to Seller or any of its properties or assets, (ii) Requirements of Law, or (iii) approval, consent, judgment, decree, order or demand of any Governmental Authority, or (b) result in the creation of any Lien (other than Permitted Liens) on any of the properties or assets of Seller. All approvals, authorizations, consents, orders, filings, notices or other actions of any Person or Governmental Authority required for the execution, delivery and performance by Seller of the Repurchase Documents to which it is a party and the sale of and grant of a security interest in the Purchased Asset to Agent, have been obtained, effected, waived or given and are in full force and effect, except to the extent the failure to obtain, effect, have waived or given such approvals, authorizations, consents, orders, filings, notices or other actions could not reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance of the Repurchase Documents do not require compliance by Seller with any “bulk sales” or similar law. There is no material litigation, proceeding or investigation pending or, to the Knowledge of Seller threatened, against Seller or Guarantor before any Governmental Authority (a) asserting the invalidity of any Repurchase Document, (b) seeking to prevent the consummation of the Transaction, or (c) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.

Section 7.03 Solvency. Seller is Solvent and the transactions contemplated under the terms of the Repurchase Documents do not and will not render Seller not Solvent.

Section 7.04 Taxes. Seller has filed all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes (including mortgage recording taxes), assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, which have become due, or such taxes are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. As of the Closing Date, there is no material action, suit, proceeding, investigation, audit or claim relating to any such taxes now pending or, to the Actual Knowledge of Seller, threatened by any Governmental Authority which is not being contested in good faith as provided above. As of the Closing Date, Seller has not entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes or is aware of any circumstances that would cause the taxable years or other taxable periods of Seller not to be subject to the normally applicable statute of limitations. No tax Liens have been filed against any property or assets of Seller, except for Permitted Liens.

Section 7.05 Financial Condition. The audited balance sheet of Guarantor as at the fiscal year most recently ended for which such audited balance sheet is available, and the related audited statements of income and retained earnings and of cash flows for the fiscal year then ended, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification arising out of the audit conducted by Guarantor’s independent certified public accountants, copies of which have been delivered to Agent and each Buyer, present fairly in all material respects the financial condition of Guarantor as of such date and the results of its operations and cash flows for the fiscal year then ended. All such financial statements, including related schedules and notes, were prepared in accordance with GAAP except as disclosed therein and, in the case of unaudited financial statements, footnotes and changes, resulting from audit and normal year-end adjustments.

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Section 7.06 True and Complete Disclosure. The written information, reports, certificates, documents, books, records, files, exhibits and schedules furnished by or on behalf of Seller or Guarantor to Agent in connection with the Repurchase Documents and the Transaction (excluding financial statements, the Purchased Asset Documents and any agreements and other documents delivered pursuant thereto), when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. The representations and warranties by Seller contained in all written information, reports, certificates, documents, books, records, files, exhibits and schedules furnished after the date hereof by or on behalf of Seller or Guarantor to Agent in connection with the Repurchase Documents and the Transaction (excluding financial statements, the Purchased Asset Documents and any agreements and other documents delivered pursuant thereto) will be true, correct and complete in all material respects, on the date as of which such information is stated or certified.

Section 7.07 Compliance with Laws. Seller has complied in all respects with all Requirements of Laws, except in such instances in which the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Seller (a) is not an “enemy” or an “ally of the enemy” as defined in the Trading with the Enemy Act of 1917, (b) is not in violation of any Anti-Terrorism Laws, (c) is not a blocked person described in Section 1 of Executive Order 13224 or to its knowledge engages in any dealings or transactions or is otherwise associated with any such blocked person, (d) is not in violation of any country or list based economic and trade sanction administered and enforced by the Office of Foreign Assets Control, (e) is not a Sanctioned Entity, (f) has no more than 10% of its assets located in Sanctioned Entities, or (g) derives no more than 10% of its operating income from investments in or transactions with Sanctioned Entities. The proceeds of the Transaction have not been and will not be used to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Entity. Seller is a “qualified purchaser” as defined in the Investment Company Act. Seller (a) is not or is not controlled by an “investment company” as defined in such Act or is exempt from the provisions of the Investment Company Act, (b) is not a “broker” or “dealer” as defined in, or could be subject to a liquidation proceeding under, the Securities Investor Protection Act of 1970, or (c) is not subject to regulation by any Governmental Authority limiting its ability to incur the Repurchase Obligations. Seller is in compliance with the Foreign Corrupt Practices Act of 1977 and any foreign counterpart thereto. Seller has not made, offered, promised or authorized a payment of money or anything else of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to any foreign official, foreign political party, party official or candidate for foreign political office, or (c) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to Seller or any other Person, in violation of the Foreign Corrupt Practices Act.

Section 7.08 Compliance with ERISA. With respect to Seller, or any Affiliate of Seller, during the immediately preceding five (5) year period, (a) neither a Reportable Event nor an “accumulated funding deficiency” nor “an unpaid minimum required contribution” as defined in the Code or ERISA has occurred, (b) each Plan has complied in all material respects with the applicable provisions of the Code and ERISA, (c) no termination of a Single Employer Plan has occurred resulting in any material liability that has remained underfunded, and (d) no Lien in favor of the Pension Benefit Guaranty Corporation or a Plan has arisen, in each case of clauses (a)

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through (d) above which would reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Single Employer Plan (based on the assumptions used to fund such Plan) relating to Seller or any Affiliate of Seller did not, as of the last annual valuation date prior to the date hereof, exceed the value of the assets of such Plan allocable to such accrued benefits which would reasonably be expected to result in a Material Adverse Effect. Neither Seller nor any Affiliate of Seller is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan.

Section 7.09 No Default. No Default or Event of Default exists. No Internal Control Event has occurred. As of the Closing Date, to Seller’s Knowledge Seller has provided Agent with access to a service, internet website or other system where Agent can successfully access all underlying servicing agreements with respect to the Purchased Asset.

Section 7.10 Purchased Asset. To the Actual Knowledge of Seller, each representation and warranty set forth in Schedule II is true and correct in all material respects. To the Actual Knowledge of Seller, no material representation or warranty made by an Underlying Obligor in the Purchased Asset Documents with respect to the Purchased Asset is false or misleading in any material respect. Seller has no Knowledge of any fact that could reasonably lead it to expect that the Purchased Asset will not be paid in full. To the Knowledge of Seller, the Purchased Asset is not the subject of any setoff, counterclaim, defense, abatement, suspension, deferment, deduction or reduction, whether arising out of transactions concerning the Purchased Asset or otherwise, by Seller, Guarantor, any Underlying Obligor or other Person with respect to any material amount, except as set forth in the Purchased Asset Documents delivered to Agent. The Purchased Asset was underwritten in accordance with and satisfies applicable standards established by Seller. To the Knowledge of Seller, none of the Purchased Asset Documents has any marks or notations indicating that it is subject to an existing Lien in favor of any Person other than Agent. If any Purchased Asset Document requires the holder or transferee of the Purchased Asset to be a qualified transferee, qualified institutional lender, qualified lender or other similar terms (however defined), Seller meets such requirement and such terms are sufficiently broad enough for Agent and each initial Buyer to meet such requirement. Assuming that Agent and each Buyer also meet such requirement, the assignment and pledge of the Purchased Asset to Agent and each Buyer pursuant to the Repurchase Documents does not violate such Purchased Asset Document. There are no outstanding rights, options, warrants or agreements for the purchase, sale or issuance of the Purchased Asset created by, through, or as a result of Seller’s actions or inactions, and there are no agreements on the part of Seller to issue, sell, pledge or distribute the Purchased Asset, other than this Agreement and the other Repurchase Documents except as otherwise provided in the Purchased Asset Documents provided to Agent and each Buyer prior to the Closing Date.

Section 7.11 Intentionally Omitted.

Section 7.12 Transfer and Security Interest. The Repurchase Documents constitute a valid and effective transfer to Agent and each Buyer of all right, title and interest of Seller in, to and under the Purchased Asset (together with all related Servicing Rights), free and clear of any Liens (other than Permitted Liens). With respect to the protective security interest granted by Seller in Section 11.01, upon the delivery of the Confirmations and the Purchased Asset Documents to Custodian, the execution and delivery of the Controlled Account Agreement and

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the filing of the UCC financing statements as provided herein, such security interest shall be a valid first priority perfected security interest to the extent such security interest can be perfected by possession, filing or control under the UCC, subject only to Permitted Liens. Upon receipt by Custodian of each Purchased Asset Document required to be endorsed in blank by Seller and payment by each Buyer of the Purchase Price for the Purchased Asset, Agent and each Buyer shall either own the Purchased Asset and the related Purchased Asset Documents or have a valid first priority perfected security interest in such Purchased Asset Document (subject only to Permitted Liens). The Purchased Asset constitutes the following, as defined in the UCC: a general intangible, instrument, investment property, security, deposit account, financial asset, uncertificated security, securities account, security entitlement or supporting obligation. Seller has not sold, assigned, pledged, granted a security interest in, encumbered or otherwise conveyed the Purchased Asset to any Person other than pursuant to the Repurchase Documents. Seller has not authorized the filing of and has no Knowledge of any UCC financing statements filed against Seller as debtor that include the Purchased Asset, other than any financing statement that has been terminated or filed pursuant to this Agreement or any other Repurchase Document.

Section 7.13 No Broker. Neither Seller nor any Affiliate of Seller has dealt with any broker, investment banker, agent or other Person, except for Agent, initial Buyer or an Affiliate of initial Buyer, who may be entitled to any commission or compensation in connection with the Transaction.

Section 7.14 Separateness. Seller is in compliance in all material respects with the requirements of Article 9.

ARTICLE 8

COVENANTS OF SELLER

From the date hereof until the Repurchase Obligations are paid in full and the Repurchase Documents are terminated, Seller shall perform and observe the following covenants:

Section 8.01 Existence; Governing Documents; Conduct of Business. Seller shall (a) preserve and maintain its legal existence, (b) qualify and remain qualified in good standing in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect, (c) comply with its Governing Documents, including all Special Purpose Entity provisions, and (d) not modify, amend or terminate its Governing Documents without Agent’s prior written consent. Seller shall (a) continue to engage in the same (and no other) general lines of business as presently conducted by it, (b) maintain and preserve all of its material rights, privileges, licenses and franchises necessary for the operation of its business, and (c) maintain Seller’s status as a qualified transferee, qualified institutional lender or qualified lender (however defined) under the Purchased Asset Documents. Seller shall not (a) change its name, organizational number, tax identification number, fiscal year, identity, structure or jurisdiction of organization (or have more than one such jurisdiction), or (b) move, or consent to Custodian moving, the Purchased Asset Documents from the location thereof on the Closing Date, unless in each case Seller has given at least thirty (30) days’ prior notice to Agent and has taken all actions required under the UCC to continue the first priority perfected security interest of Agent and each Buyer in the Purchased Asset. Seller shall enter into the Transaction as principal, unless Agent agrees before the Transaction that Seller may enter into the Transaction as agent for a principal and under terms and conditions disclosed to Agent.

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Section 8.02 Compliance with Laws, Contractual Obligations and Repurchase Documents. Seller shall comply in all material respects with all Requirements of Laws, including those relating to the Purchased Asset and to the reporting and payment of taxes, except in such instances in which the failure to so comply could not reasonably be expected to have a Material Adverse Effect. No part of the proceeds of the Transaction shall be used for any purpose that violates Regulation T, U or X of the Board of Governors of the Federal Reserve System. Seller shall conduct the requisite due diligence in connection with the origination or acquisition of the Asset for purposes of complying with the Anti-Terrorism Laws, including with respect to the legitimacy of the applicable Underlying Obligor and the origin of the assets used by such Person to purchase the Mortgaged Property, and will maintain sufficient information to identify such Person for purposes of the Anti-Terrorism Laws. Seller shall maintain the Custodial Agreements and Controlled Account Agreement in full force and effect.

Section 8.03 Protection of Buyer’s Interest in Purchased Asset. Seller shall take all action necessary or required by the Repurchase Documents, Purchased Asset Documents or Requirements of Law, or reasonably requested by Agent, to perfect, protect and more fully evidence the security interest granted in the Purchased Asset and Agent’s ownership of and first priority perfected security interest in the Purchased Asset and related Purchased Asset Documents (subject to Permitted Liens), including executing or causing to be executed such other instruments or notices as may be necessary or appropriate and filing and maintaining effective UCC financing statements, continuation statements and assignments and amendments thereto. Seller shall (a) not assign, sell, transfer, pledge, hypothecate, grant, create, incur, assume or suffer or permit to exist any security interest in or Lien (other than Permitted Liens) on any of its property or assets (including the Purchased Asset) of any kind (whether real or personal, tangible or intangible), whether now owned or hereafter acquired, to or in favor of any Person, except (i) to Agent and each Buyer, (ii) Seller may sell, assign or otherwise transfer the Purchased Asset to the extent Agent has released the Purchased Asset, (iii) intentionally omitted, and (iv) as otherwise permitted in Section 8.04, (b) defend the Purchased Asset against, and take such action as is necessary to remove, any such Lien and (c) defend the right, title and interest of Agent and each Buyer in and to the Purchased Asset against the claims and demands of all Persons whomsoever. Seller shall not make any marks on its computer records and tapes inconsistent with the interests granted to Agent and each Buyer hereunder. Subject to Section 8.09 hereof, Agent and each Buyer hereby revocably grants Seller a license to (a) direct and/or consult with respect to the servicing of the Purchased Asset and (b) to direct, approve, consult with or consent to or vote on specific actions to be taken with respect to the Purchased Asset in a manner consistent with Section 8.09, so long as no Event of Default has occurred and is continuing. Such revocable license is not evidence of any ownership or other interest or right of Seller in the Purchased Asset. Upon receipt of written notice from Agent that an Event of Default has occurred and is continuing, such license shall immediately and automatically be revoked and terminate, and Agent and each Buyer shall be entitled to direct the servicing with respect to the Purchased Asset without regard to Seller’s instructions, including, but not limited to, to the extent Seller controls or is entitled to control selection of any servicer, transferring any or all of such servicing to an entity satisfactory to Agent and each Buyer. Upon written request of Seller and at Seller’s expense, Agent and each Buyer shall execute and deliver such other agreements and documents as Seller may from time to time reasonably request in order to give effect to such license.

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Section 8.04 Actions of Seller Relating to Distributions, Indebtedness, Guarantee Obligations, Contractual Obligations, Investments and Liens. Seller shall not declare or make any payment on account of, or set apart assets for, a sinking or similar fund for the purchase, redemption, defeasance, retirement or other acquisition of any Equity Interest of Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller; provided, that Seller may declare and pay dividends or distributions in accordance with its Governing Documents if no Event of Default exists or would exist as a result thereof. Seller shall not contract, create, incur, assume or permit to exist any Indebtedness, Guarantee Obligations, Contractual Obligations or Investments, except to the extent (a) arising or existing under the Repurchase Documents and the Purchased Asset Documents (and any agreements, instruments and documents entered in connection with the foregoing), (b) existing as of the Closing Date, as referenced in the financial statements delivered to Agent prior to the Closing Date, and any renewals, refinancings or extensions thereof in a principal amount not exceeding that outstanding as of the date of such renewal, refinancing or extension, (c) of short-term, unsecured payables incurred in the ordinary course of business in an amount no greater than $250,000, (d) relating to engagement letters, retention letters and other similar agreements with accounting firms, law firms and corporate service companies and other similar agreements and contracts entered into the ordinary course of its business, (e) other Contractual Obligations incidental to the conduct of its business (including with respect to the assignment, sale or transfer of the Purchased Asset and the Asset repurchased by Seller), (f) of any cash held by Seller that has been released from the Waterfall Account, (g) ordinary trade payables (including, without limitation, tax liabilities), (h) the Governing Documents of Seller, and (i) other Indebtedness, Contractual Obligations and Investments expressly permitted by this Agreement. Seller shall not grant, allow or enter into any agreement or arrangement with any Person that prohibits or restricts or purports to prohibit or restrict the granting of any Lien on the Purchased Asset (except in connection with the Repurchase Documents).

Section 8.05 Delivery of Income. Seller shall deliver to Agent a Irrevocable Redirection Notice executed by Seller with respect to the Purchased Asset which requires the underlying agent or lead lender for the Purchased Asset or if the Underlying Obligor makes payment directly to lenders, such Underlying Obligor under the Purchased Asset and all other applicable Persons to, deposit all Income in respect of the Purchased Asset into the Waterfall Account in accordance with Section 5.01 hereof. Seller (a) shall comply with and enforce each Irrevocable Redirection Notice, (b) shall not amend, modify, waive, terminate or revoke any Irrevocable Redirection Notice without Agent’s consent, and (c) shall take all commercially reasonable steps to enforce each Irrevocable Redirection Notice. In connection with each principal payment or prepayment under the Purchased Asset, Seller shall provide or cause to be provided to Agent and Custodian sufficient detail to enable Agent and Custodian to identify the Purchased Asset to which such payment applies. If Seller receives any rights, whether in addition to, in substitution of, as a conversion of, or in exchange for the Purchased Asset, or otherwise in respect thereof, Seller shall accept the same as agent of Agent and each Buyer, hold the same in trust for Agent and immediately deliver the same to Agent or its designee in the exact form received, together with duly executed instruments of transfer, stock powers or

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assignment in blank and such other documentation as Agent shall reasonably request. If any Income is received by Seller, Guarantor or any Affiliate of Seller or Guarantor, Seller shall pay or deliver such Income to Agent on behalf of Agent and each Buyer or Custodian within two (2) Business Days after receipt, and, until so paid or delivered, hold such Income in trust for Agent and each Buyer, segregated from other funds of Seller.

Section 8.06 Delivery of Financial Statements and Other Information. Seller shall deliver the following to Agent, as soon as available and in any event within the time periods specified:

(a) within sixty (60) days after the end of each of the first three fiscal quarters of each fiscal year of Guarantor, (i) the unaudited statement of assets, liabilities and partners’ capital of Guarantor as at the end of such period, (ii) the related unaudited statement of operations for such period, and (iii) a Compliance Certificate;

(b) within one hundred and twenty (120) days after the end of each fiscal year of Guarantor, (i) the audited statement of assets, liabilities and partners’ capital of Guarantor as at the end of such fiscal year, (ii) the related statements of operations, changes in partners capital and cash flows for such year, (iii) an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall not be qualified as to scope of audit or going concern and shall state that said financial statements fairly present in all material respects the financial condition and results of operations of Guarantor as at the end of and for such fiscal year in accordance with GAAP, and (iv) a Compliance Certificate;

(c) intentionally omitted;

(d) with respect to the Purchased Asset and related Mortgaged Property, but solely to the extent that Seller receives such report from the applicable Underlying Obligor, as applicable: (i) within thirty (30) days after the end of each fiscal quarter of Seller, a quarterly report of the following: delinquency, loss experience, surveillance, rent roll, occupancy and other property-level information, and (ii) within ten (10) days after receipt by Seller, remittance, servicing, securitization, exception and other reports, operating and financial statements of Underlying Obligors;

(e) any other material agreements, correspondence, documents or other written information not included in the Underwriting Package received by Seller after the Closing Date and not previously furnished to Agent which is related to Seller or the Purchased Asset, promptly after the discovery thereof by Seller; and

(f) such other information regarding the financial condition, operations or business of Seller, any Underlying Obligor or the Purchased Asset as Agent may reasonably request.

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Section 8.07 Delivery of Notices. Seller shall promptly notify Agent of the occurrence of any of the following of which Seller has Actual Knowledge, together with a certificate of a Responsible Officer of Seller setting forth details of such occurrence and any action Seller has taken or proposes to take with respect thereto:

(a) a Representation Breach;

(b) any of the following: (i) with respect to the Purchased Asset or related Mortgaged Property: material loss or damage, material licensing or permit issues, material violation of Requirements of Law, discharge of or damage from Materials of Environmental Concern or any other actual or expected event or change in circumstances that could reasonably be expected to result in a default under the Purchased Asset or material decline in value or cash flow, and (ii) with respect to Seller: violation of Requirements of Law, an Internal Control Event or other event or circumstance, in each case, that could reasonably be expected to have a Material Adverse Effect;

(c) the existence of any Default, Event of Default or Material Default under or related to the Purchased Asset, any Purchased Asset Document, any Indebtedness, any Guarantee Obligation or any Contractual Obligation of Seller; or

(d) the commencement of, settlement of or material judgment in any litigation, action, suit, arbitration, investigation or other legal or arbitrable proceedings before any Governmental Authority that (i) affects Seller, Guarantor, the Purchased Asset, any Mortgaged Property or the Pledged Collateral, (ii) questions or challenges the validity or enforceability of any Repurchase Document, Transaction, Purchased Asset or Purchased Asset Document, or (iii) individually or in the aggregate, could reasonably be likely to have a Material Adverse Effect.

Section 8.08 Intentionally Omitted.

Section 8.09 Material Actions, Etc.

(a) With respect to the Purchased Asset, Seller shall not, and shall not direct or permit the Servicer to, (i) take any Material Action without the prior written consent of Agent or (ii) take any action which would result in a violation of the obligations of any Person under or non-compliance with the servicing agreement for the Purchased Asset or any Purchased Asset Document or Repurchase Document.

(b) Seller (or Servicer on its behalf) may from time to time approve, direct or permit Non-Material Actions without the prior written consent of Agent, provided any such Non-Material Action is commercially reasonable under the facts and circumstances. By not later than five (5) Business Days following the implementation of any Non-Material Action with respect to the Purchased Asset, Seller shall notify Agent in writing. Notwithstanding the foregoing, after the occurrence and during the continuance of an Event of Default, the right of Seller to approve, direct or permit Non-Material Actions shall terminate, and all Non-Material Actions (and Material Actions) shall require the prior written consent of Agent.

(c) Intentionally omitted.

(d) To the extent that the Deemed Approval Requirements are fully satisfied in connection with any Seller request for Agent consent under this Section and Agent thereafter fails to respond, Agent’s approval shall be deemed given with respect to the matter for which approval was requested.

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Section 8.10 Maintenance of Property, Insurance and Records. Seller (or Servicer on its behalf) shall maintain and implement administrative and operating procedures (including the ability to recreate records evidencing the Purchased Asset if the original records are destroyed) and shall keep and maintain all documents, books, records and other information (including with respect to the Purchased Asset) that are reasonably necessary or advisable in the conduct of its business.

Section 8.11 Tax Treatment of Seller. Seller shall maintain its status as a partnership for U.S. Federal income tax purposes, and neither the Seller nor a portion of the Seller will be treated as a taxable mortgage pool under Section 7701(i) of the Code.

Section 8.12 Reserve Accounts. To the extent of Seller’s control thereof and interest therein under the Purchased Asset Documents, Seller shall use commercially-reasonable efforts to cause all escrow and reserve amounts on deposit in connection with the Purchased Asset (excluding amounts on deposit in any tenant lockbox account maintained pursuant to the Purchased Asset Documents) to be deposited and maintained (i) in an account or accounts established with Agent or, if Wells Fargo Bank, National Association is no longer the Agent under this Agreement, with any other financial institution selected by Seller and approved in writing by the applicable replacement Agent in its reasonable discretion; provided, however, that Wells Fargo Bank, National Association shall at all times be an approved financial institution for purposes of this Section 8.12, and (ii) in accordance with all requirements of the applicable Purchased Asset Documents.

Section 8.13 Appraisals.

(a) Seller hereby acknowledges and agrees that Agent shall have the right to commission and order an Appraisal of any related Mortgaged Property: (i) pursuant to Section 8.13(b), below, (ii) at any time and from time to time while the Purchased Asset is subject to this Agreement if Agent and/or Buyer is required by any applicable rule, regulation or law to commission and order any such Appraisal and/or (iii) if within thirty (30) days after the occurrence and during the continuance of a Purchased Asset Event of Default Seller has not delivered notice to Agent that Seller has elected to commission and order an Appraisal of the related Mortgaged Property, and that Seller shall be responsible for the reasonable out-of-pocket costs and expenses incurred by Agent in obtaining any such Appraisal. Notwithstanding the foregoing, Agent and each Buyer shall have the unlimited right, at any time and from time to time, to obtain an appraisal for any Mortgaged Property at its own cost and expense. No appraisal so obtained by Agent or any Buyer shall have any effect on the Purchase Price for the Purchased Asset. Notwithstanding anything herein to the contrary, other than with respect to the Appraisals required to be received by Agent pursuant to Section 8.13(b), below, Agent’s right to obtain an Appraisal with respect to any individual Mortgaged Property shall be limited to the rights of the holder of the Purchased Asset pursuant to the Purchased Asset Documents.

(b) If Agent has determined that the Appraisals delivered to Agent in connection with the Asset are not FIRREA-compliant, at Agent’s option, Agent shall have the one-time right to commission and order an FIRREA-compliant Appraisal (or Appraisals) of any related Mortgaged Property, at Buyer’s sole cost and expense, with respect to the individual Mortgaged Properties securing Purchased Asset, satisfactory to Agent in all respects, which

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Appraisal confirms that the LTV as of the Purchase Date shall be equal to or less than fifty-four percent (54%). If Agent commissions and orders a FIRREA-compliant Appraisal (or Appraisals) pursuant to the foregoing sentence, and such Appraisal (or Appraisals) confirm an LTV greater than fifty-four percent (54%), then (x) if such Appraisal (or Appraisals) are received prior to the Purchase Date, then the Maximum Purchase Price shall be reduced to the amount that will cause the LTV as of the Purchase Date to be equal to fifty-four percent (54%) and (ii) if on or after the Purchase Date or (y) if such Appraisal (or Appraisals) are received after the Purchase Date, then Seller shall reduce the outstanding Purchase Price, without premium or penalty, in such an amount necessary to cause the LTV to be equal to or less than fifty-four percent (54%) (an “LTV Deficiency”). Any failure by Seller to pay to Agent any LTV Deficiency within ten (10) Business Day after demand by Agent shall constitute an Event of Default hereunder.

ARTICLE 9

SINGLE-PURPOSE ENTITY

Section 9.01 Covenants Applicable to Seller. Seller shall (a) own no assets, and shall not engage in any business, other than the assets necessary to operate its business as contemplated by this Agreement (including the Purchased Asset and any REO Owner) and transactions specifically contemplated by this Agreement and any other Repurchase Document and any business that is incidental, necessary and appropriate to accomplish the foregoing, (b) not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) with respect to the Purchased Asset Documents and the Retained Interests, and (ii) as otherwise permitted under this Agreement, (c) not make any loans or advances to any Affiliate or third party and shall not acquire obligations or securities of its Affiliates, except as permitted under this Agreement, (d) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets, (e) comply with the provisions of its Governing Documents, (f) do all things necessary to observe organizational formalities and to preserve its existence, and shall not amend, modify, waive provisions of or otherwise change its Governing Documents, (g) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates, except that no separate financial statements will be required if such financial information is consolidated with those of its direct or indirect parent (“Parent”) in accordance with GAAP; provided, that, if permitted by GAAP, appropriate notation shall be made on such financial statements to indicate that certain of the consolidated assets and credit are not available to satisfy the debts and other obligations of the Parent, any Affiliate or any other Person, (h) be, and at all times shall hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other, (i) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall remain Solvent, provided, however, that the foregoing shall not require any member of Seller to make any additional capital contributions to Seller, (j) not engage in or suffer any Change of Control, dissolution, winding up, liquidation, consolidation or merger in whole or in part or convey or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein), (k) not commingle its funds or other assets with those of any Affiliate or any other Person and shall maintain its properties

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and assets in such a manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others, (l) maintain its properties, assets and accounts separate from those of any Affiliate or any other Person, (m) not hold itself out to be responsible for the debts or obligations of any other Person, (n) not, without the prior unanimous written consent of all of its Independent Managers, take any Insolvency Action, (o) (i) have at all times at least one Independent Manager and (ii) provide Agent with up-to-date contact information for each such Independent Manager and a copy of the agreement pursuant to which such Independent Manager consents to and serves as an “Independent Manager” for Seller, (p) the Governing Documents for Seller shall provide (i) that Agent be given at least two (2) Business Days prior notice of the removal and/or replacement of any Independent Manager, together with the name and contact information of the replacement Independent Manager and evidence of the replacement’s satisfaction of the definition of Independent Manager and (ii) that any Independent Manager of Seller shall not have any fiduciary duty to anyone including the holders of the Equity Interest in Seller and any Affiliates of Seller except Seller and the creditors of Seller with respect to taking of, or otherwise voting on, the Insolvency Action; provided, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing, (q) not enter into any transaction with an Affiliate of Seller except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction, (r) maintain a sufficient number of employees in light of contemplated business operations, (s) use separate stationary, invoices and checks bearing its own name, and (t) allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an affiliate, (u) not pledge its assets to secure the obligations of any other Person, and (v) not form, acquire or hold any Subsidiary or own any Equity Interest in any other entity other than a REO Owner.

Section 9.02 Covenants Applicable to Seller. Seller (a) shall be a Delaware limited liability company, (b) shall have at least one Independent Manager serving as manager of such company and (c) shall not take any Insolvency Action and shall not cause or permit the members or managers of such entity to take any Insolvency Action, with respect to itself unless all of its Independent Managers then serving as managers of the company shall have consented in writing to such action. At all times hereunder, Seller’s limited liability company agreement shall provide that the Seller shall have either (A) a member which owns no economic interest in the company, has signed the Seller’s limited liability company agreement and has no obligation to make capital contributions to the Seller, or (B) one natural person or one entity that is not a member of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company agreement becomes a member of the company immediately prior to the resignation or dissolution of the last remaining member of the company.

Section 9.03 Reliance. Seller acknowledges that each Buyer is entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from Guarantor (other than for U.S. federal income tax purposes) and in reliance upon the compliance of Seller and guarantor with Article 14 hereof.

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ARTICLE 10

EVENTS OF DEFAULT AND REMEDIES

Section 10.01 Events of Default. An Event of Default shall exist upon the occurrence and during the continuance of any of the following specified events (each, an “Event of Default”):

(a) Seller fails to make a payment of (i) any Repurchase Price or Price Differential when due, whether by acceleration or otherwise, or (ii) any fee or other amount payable hereunder or under the Repurchase Documents within two (2) Business Days of when due;

(b) Seller fails to observe or perform in any material respect any other Repurchase Obligation of Seller under the Repurchase Documents or the Purchased Asset Documents to which Seller is a party (other than breach of a covenant in Article 8 hereof arising solely out of clause (f) of the definition of “Material Adverse Effect”), and (except in the case of a failure to perform or observe the Repurchase Obligations of Seller under Section 8.03 and 18.08(a)) such failure continues unremedied for twenty (20) Business Days after the earlier of receipt of notice thereof from Agent or any Buyer or the discovery of such failure by Seller; provided, however, that such twenty (20) Business Day cure period shall be extended for up to an additional thirty (30) days so long as such obligation is susceptible of cure and Seller is taking action reasonably designed to achieve a cure within the initial twenty (20) Business Days and thereafter diligently and continuously pursues such cure (it being agreed that during such cure period any such failure shall not constitute any Event of Default);

(c) any Representation Breach (other than a Representation Breach arising out of the representations and warranties set forth in Section 7.10 or Schedule II) exists and continues unremedied for twenty (20) Business Days after the earlier of receipt of notice thereof from Agent or any Buyer or the discovery of such failure by Seller;

(d) Seller or Guarantor defaults beyond any applicable grace period in paying any amount or performing any obligation under any Indebtedness with an outstanding amount of at least $100,000 with respect to Seller, or $15,000,000 with respect to Guarantor;

(e) an Insolvency Event occurs with respect to Seller or Guarantor;

(f) a Change of Control occurs;

(g) a final judgment or judgments for the payment of money in excess of $100,000 with respect to Seller, or $25,000,000 with respect to Guarantor in the aggregate that is not insured against is entered against Seller or Guarantor by one or more Governmental Authorities and the same is not satisfied, discharged (or provision has not been made for such discharge) or bonded, or a stay of execution thereof has not been procured, within sixty (60) Business Days from the date of entry thereof; provided, however, notwithstanding the foregoing, no Event of Default will result with respect to a judgment with respect to Guarantor if Guarantor will be in compliance with all financial covenants set forth in the Guarantee Agreement applicable when calculated after subtracting the aggregate amount of any such judgments (to the extent not bonded or insured to the satisfaction of Agent) multiplied by two (2) from the Net Worth (as such term is defined in the Guarantee Agreement) of Guarantor;

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(h) a Governmental Authority takes any action to (i) displace the management of Seller or Guarantor or curtail its authority in the conduct of the business of Seller or Guarantor, (ii) terminate the activities of Seller or Guarantor as contemplated by the Repurchase Documents, and in each case such action is not discontinued or stayed within ninety (90) days and any such actions (individually or in the aggregate) could reasonably be expected to result in a Material Adverse Effect;

(i) any material provision of any material Repurchase Document, any material right or material remedy of Agent or any Buyer or material obligation, covenant, agreement or duty of Seller thereunder is declared null and void, ceases to be valid and effective, ceases to be the legal, valid, binding and enforceable obligation of Seller or any other Person, or the validity, effectiveness, binding nature or enforceability thereof is contested, challenged, denied or repudiated by Seller or any other Person, in each case directly, indirectly, in whole or in part;

(j) Any Lien created under any Repurchase Document ceases to be a valid, perfected first-priority Lien in the Purchased Asset purported to be covered thereby;

(k) Seller or Guarantor is required to register as an “investment company” (as defined in the Investment Company Act) or the arrangements contemplated by the Repurchase Documents shall require registration of Seller or Guarantor as an “investment company”;

(l) Seller fails to deposit to the Waterfall Account, as applicable, all Income and other amounts as required by Section 5.01 and other provisions of this Agreement within two (2) Business Days of the date such deposit is required to be made;

(m) Guarantor’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein are qualified or limited by reference to the status of Guarantor as a “going concern” or a reference of similar import, other than a qualification or limitation expressly related to Agent’s rights in the Purchased Asset;

(n) (i) Guarantor breaches any of the payment obligations set forth in the Guarantee Agreement or (ii) Guarantor breaches any of the other obligations, terms or conditions set forth in the Guarantee Agreement and such failure referred to in this clause (ii) continues for more than twenty (20) Business Days after the earlier of receipt of notice thereof from Agent or the discovery of such failure by Guarantor; provided, however, that such twenty (20) Business Day cure period shall be extended for up to an additional thirty (30) days so long as Guarantor is taking action reasonably designed to achieve a cure within the initial twenty (20) Business Days and thereafter diligently and continuously pursues such cure (it being agreed that during such cure period any such failure shall not constitute an Event of Default); or

(o) any Material Action is taken or made to the Purchased Asset or any Purchased Asset Document other than in accordance with Section 8.09.

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Notwithstanding anything contained in the Repurchase Documents to the contrary, unless waived by Agent in its discretion, neither Seller or Guarantor nor any other Person shall be permitted to cure an Event of Default after the acceleration of any of the Repurchase Obligations.

Section 10.02 Remedies of Agent as Owner of the Purchased Asset. If an Event of Default exists, at the option of Agent, exercised by written notice to Seller (which option shall be deemed to be exercised, even if no notice is given, automatically and immediately upon the occurrence of an Event of Default under Section 10.01(e)), the Repurchase Date for the Purchased Asset shall be deemed automatically and immediately to occur (the date on which such option is exercised or deemed to be exercised, the “Accelerated Repurchase Date”). If Agent exercises or is deemed to have exercised the foregoing option:

(a) All Repurchase Obligations shall become immediately due and payable on and as of the Accelerated Repurchase Date.

(b) All amounts in the Waterfall Account and all Income paid after the Accelerated Repurchase Date shall be retained by Agent and applied in accordance with Article 5.

(c) Agent may complete any assignments, allonges, endorsements, powers or other documents or instruments executed in blank and otherwise obtain physical possession of the Purchased Asset Documents and all other instruments, certificates and documents then held by Custodian under the Custodial Agreement. Agent may obtain physical possession of all Servicing Files, the Servicing Agreement and other files and records of Seller. Seller shall deliver to Agent such assignments and other documents with respect thereto as Agent shall request.

(d) Agent may immediately, at any time, and from time to time, exercise either of the following remedies with respect to the Purchased Asset: (i) sell the Purchased Asset on a servicing-released basis and/or without providing any representations and warranties on an “as-is where is” basis, in a recognized market and by means of a public or private sale at such price or prices as Agent accepts, and apply the net proceeds thereof in accordance with Article 5, or (ii) retain the Purchased Asset and give Seller credit against the Repurchase Price for the Purchased Asset (or if the amount of such credit exceeds the Repurchase Price for the Purchased Asset, to credit against Repurchase Obligations due and any other amounts then owing to Agent or any Buyer by any other Person pursuant to any Repurchase Document, in such order and in such amounts as determined by Agent), in an amount equal to the market value for the Purchased Asset as of such date as determined by Agent. Until such time as Agent exercises either such remedy with respect to the Purchased Asset, Agent may hold the Purchased Asset for each Buyer’s account and retain all Income with respect thereto.

(e) The Parties agree that the Purchased Asset is of such a nature that they may decline rapidly in value, and may not have a ready or liquid market. Agent may determine whether, when and in what manner the Purchased Asset shall be sold, it being agreed that both a good faith public and a good faith private sale shall be deemed to be commercially reasonable. Agent shall not be required to give notice to Seller or any other Person prior to exercising any remedy in respect of an Event of Default. If no prior notice is given, Agent shall give notice to Seller of the remedies exercised by Agent promptly thereafter.

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(f) Seller shall be liable to Agent and each Buyer for (i) any amount by which the Repurchase Obligations due to such Buyer exceeds the aggregate of the net proceeds and credits referred to in the preceding clause (d), (ii) the amount of all actual out-of-pocket expenses, including reasonable and documented legal fees and expenses, actually incurred by Agent or any Buyer in connection with or as a consequence of an Event of Default and (iii) any costs and losses payable under Section 12.03.

(g) Agent shall be entitled to an injunction, an order of specific performance or other equitable relief to compel Seller to fulfill any of its obligations as set forth in the Repurchase Documents, including this Article 10, if Seller fails or refuses to perform its obligations as set forth herein or therein.

(h) Seller hereby appoints Agent as attorney-in-fact of Seller for purposes of carrying out the Repurchase Documents, including executing, endorsing and recording any instruments or documents and taking any other actions that Agent deems necessary or advisable to accomplish such purposes, which appointment is coupled with an interest and is irrevocable.

(i) Agent may, without prior notice to Seller, exercise any or all of its set-off rights including those set forth in Section 18.17. This Section 10.02(i) shall be without prejudice and in addition to any right of set-off, combination of accounts, Lien or other rights to which any Party is at any time otherwise entitled.

(j) All rights and remedies of Agent and each Buyer under the Repurchase Documents, including those set forth in Section 18.17, are cumulative and not exclusive of any other rights or remedies that Agent or such Buyer may have and may be exercised at any time when an Event of Default exists. Such rights and remedies may be enforced without prior judicial process or hearing. Seller agrees that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s-length. Seller hereby expressly waives any defenses Seller might have to require Agent or such Buyer to enforce its rights by judicial process or otherwise arising from the use of nonjudicial process, disposition of the Purchased Asset, or any other election of remedies.

ARTICLE 11

SECURITY INTEREST

Section 11.01 Grant. Agent, each Buyer and Seller intend that the Transaction shall be a sale to Agent and Buyer of the Purchased Asset and not loans from Agent and Buyer to Seller secured by the Purchased Asset. However, to preserve and protect Agent and each Buyer’s rights with respect to the Purchased Asset and under the Repurchase Documents in the event that any Governmental Authority recharacterizes the Transaction as other than a sale, and as security for Seller’s performance of the Repurchase Obligations, Seller hereby grants to Agent a Lien on and security interest in all of the right, title and interest of Seller in, to and under the Purchased Asset (which for this purpose shall be deemed to include the items described in the proviso in the

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definition thereof), and the transfers of the Purchased Asset to Agent and Buyer shall be deemed to constitute and confirm such grant, to secure the payment and performance of the Repurchase Obligations (including the obligation of Seller to pay the Repurchase Price, or if the Transaction is recharacterized as loans, to repay such loans for the Repurchase Price).

Section 11.02 Effect of Grant. If any circumstance described in Section 11.01 occurs, (a) this Agreement shall also be deemed to be a security agreement as defined in the UCC, (b) Agent and Buyer shall have all of the rights and remedies provided to a secured party by Requirements of Law (including the rights and remedies of a secured party under the UCC and the right to set off any mutual debt and claim) and under any other agreement between Agent and Buyer and Seller, (c) without limiting the generality of the foregoing, Agent and Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Asset against all of the Repurchase Obligations, without prejudice to any Buyer’s right to recover any deficiency, (d) the possession by any Buyer or any of its agents, including Agent and Custodian, of the Purchased Asset Documents, the Purchased Asset and such other items of property as constitute instruments, money, negotiable documents, securities or chattel paper shall be deemed to be possession by the secured party for purposes of perfecting such security interest under the UCC and Requirements of Law, and (e) notifications to Persons (other than Agent or any Buyer) holding such property, and acknowledgments, receipts or confirmations from Persons (other than Agent or any Buyer) holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, securities intermediaries, bailees or agents (as applicable) of the secured party for the purpose of perfecting such security interest under the UCC and Requirements of Law. The security interest of Agent and Buyer granted herein shall be, and Seller hereby represents and warrants to Agent and each Buyer that it is, a first priority perfected security interest (subject to Permitted Liens). For the avoidance of doubt, (i) the Purchased Asset secures the Repurchase Obligations of Seller with respect to the Transaction, and (ii) if an Event of Default exists, the Purchased Asset will not be released from Agent and Buyer’s Lien or transferred to Seller until the Repurchase Obligations are paid in full, or the payment by the Underlying Obligor of its obligations in accordance with the Purchased Asset Documents. Notwithstanding the foregoing, the Repurchase Obligations shall be full recourse to Seller.

Section 11.03 Seller to Remain Liable. Agent, each Buyer and Seller agree that the grant of a security interest under this Article 11 shall not constitute or result in the creation or assumption by any Buyer of any Retained Interest or other obligation of Seller or any other Person in connection with the Purchased Asset, whether or not such Buyer exercises any right with respect thereto. Seller shall remain liable under the Purchased Asset and Purchased Asset Documents to perform all of Seller’s duties and obligations thereunder to the same extent as if the Repurchase Documents had not been executed.

Section 11.04 Waiver of Certain Laws. Seller agrees, to the extent permitted by Requirements of Law, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where the Purchased Asset may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of the Purchased Asset, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and Seller, for itself and all who may at any time claim through or

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under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws and any and all right to have any of the properties or assets constituting the Purchased Asset marshaled upon any such sale, and agrees that Agent or any court having jurisdiction to foreclose the security interests granted in this Agreement may sell the Purchased Asset as an entirety or in such parcels as each Buyer or such court may determine.

ARTICLE 12

INCREASED COSTS; CAPITAL ADEQUACY

Section 12.01 Market Disruption. If prior to any Pricing Period, Agent reasonably determines that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Pricing Period, Agent shall give prompt notice thereof to Seller, whereupon the Pricing Rate for such Pricing Period, and for all subsequent Pricing Periods until such notice has been withdrawn by Agent, shall be the Alternative Rate.

Section 12.02 Illegality. If the adoption of or any change in any Requirements of Law or in the interpretation or application thereof after the date hereof shall make it unlawful for a Buyer or Agent to effect or continue the Transaction as contemplated by the Repurchase Documents, (a) any commitment of Buyers hereunder to enter into the Transaction shall be terminated and the Funding Expiration Date shall be deemed to have occurred, (b) the Pricing Rate shall be converted automatically to the Alternative Rate on the last day of the then current Pricing Period or within such earlier period as may be required by Requirements of Law, and (c) if required by such adoption or change, the Facility Termination Date shall be deemed to have occurred.

Section 12.03 Breakfunding. Seller shall indemnify Agent and each Buyer and hold Agent and each Buyer harmless from any loss, cost or expense (including reasonable and documented legal fees and expenses, but excluding loss of anticipated profit) which Agent or such Buyer may sustain or incur arising from (a) the failure by Seller to terminate the Transaction after Seller has given a notice of termination pursuant to Section 3.04, (b) any payment to Agent on account of the outstanding Repurchase Price, including a payment made pursuant to Section 3.04 but excluding a payment made pursuant to Section 5.02, on any day other than a Remittance Date (based on the assumption that each Buyer funded its commitments with respect to the Transaction in the London Interbank Eurodollar market and using any reasonable attribution or averaging methods that Agent deems appropriate and practical), (c) any failure by Seller to sell Eligible Assets to Buyer after Seller has notified Agent of the Transaction and Agent has agreed to purchase such Eligible Assets in accordance with this Agreement, or (d) any conversion of the Pricing Rate to the Alternative Rate because the LIBO Rate is not available for any reason on a day that is not the last day of the then current Pricing Period.

Section 12.04 Increased Costs. If the adoption of or any change in any Requirements of Law or in the interpretation or application thereof by any Governmental Authority or compliance by Agent or any Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority having jurisdiction over Agent or any Buyer made after the date of this Agreement (a) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits

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or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of Agent or any Buyer, or (b) shall impose on Agent or any Buyer any other condition; and the result of any of the preceding clauses (a) and (b) is to increase the cost to Agent or any Buyer, by an amount that Agent or such Buyer deems to be material, of entering into, continuing or maintaining the Transaction, or to reduce any amount receivable under the Repurchase Documents in respect thereof, then, in any such case, upon not less than thirty (30) days’ prior written notice to Seller, Seller shall pay to Agent or such Buyer such additional amount or amounts as reasonably necessary to fully compensate Agent or such Buyer for such increased cost or reduced amount receivable; provided, however, that Agent or such Buyer shall not treat Seller differently than other similarly situated customers in requiring the payment of such amount or amounts.

Section 12.05 Capital Adequacy. If Agent reasonably determines that the adoption of or any change in any Requirements of Law regarding capital adequacy or in the interpretation or application thereof or compliance by any Buyer or any corporation Controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made after the date of this Agreement has or shall have the effect of reducing the rate of return on such Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Buyer to be material, then, in any such case, upon not less than thirty (30) days’ prior written notice to Seller, Seller shall pay to Agent such additional amount or amounts as reasonably necessary to fully compensate such Buyer for such reduction; provided, however, that such Buyer shall not treat Seller differently than other similarly situated customers in requiring the payment of such amount or amounts.

Section 12.06 Withholding Taxes.

(a) All payments made by Seller to Agent or any Buyer or any other Eligible Assignee under the Repurchase Documents shall be made free and clear of and without deduction or withholding for or on account of any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority therewith or thereon, excluding income taxes, branch profits taxes, franchise taxes or any other tax imposed on net income by the United States, a state or a foreign jurisdiction under the laws of which Agent, such Buyer or such other Eligible Assignee is organized or of its applicable lending office, or a state, local or foreign jurisdiction with respect to which Agent, such Buyer or such other Eligible Assignee has a present or former connection, or any political subdivision thereof (collectively, “Taxes”), all of which shall be paid by Seller for its own account not later than the date when due. If any taxes are required to be deducted or withheld from any amounts payable to Agent, such Buyer and/or any other Eligible Assignee, then Seller shall (a) make such deduction or withholding, (b) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date when due; and (c) pay to Agent, such Buyer or other Eligible Assignee such additional amounts (the “Additional Amount”) as may be necessary so that every net payment made under this Agreement after deduction or withholding for or on account of any Taxes (including any Taxes on such increase and any penalties) is not less than the amount that

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would have been paid absent such deduction or withholding. The foregoing obligation to pay Additional Amounts, however, will not apply with respect to (i) net income or franchise taxes, or any tax imposed on net income, imposed on Agent, such Buyer and/or any other Eligible Assignee, with respect to payments required to be made by Seller under the Repurchase Documents, by a taxing jurisdiction in which Agent, such Buyer and/or any other Eligible Assignee is organized, conducts business or is paying taxes (as the case may be), or (ii) Excluded Taxes. Promptly after Seller pays any taxes referred to in this Section 12.06, Seller will send Agent appropriate evidence of such payment.

(b) In addition, Seller agrees to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation, mortgage recording taxes, transfer taxes and similar fees) imposed by the United States or any taxing authority thereof or therein that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (“Other Taxes”).

(c) Seller agrees to indemnify Agent or any Buyer for the full amount of Taxes and Other Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 12.06(c) arising therefrom or with respect thereto, provided that Agent or such Buyer shall have provided Seller with evidence, reasonably satisfactory to Seller, of payment of Taxes or Other Taxes, as the case may be.

(d) An Eligible Assignee that is organized under the laws of a jurisdiction outside the United States (a “Non-U.S. Assignee”) shall deliver to Seller two properly completed, and duly executed copies of either U.S. Internal Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY (with applicable attachments), as appropriate, or any subsequent versions thereof or successors thereto, in each case claiming complete exemption from, or reduced rate of, U.S. Federal withholding tax with respect to payments of interest hereunder. In addition, in the case of a Non-U.S. Assignee claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code, such Non-U.S. Assignee hereby represents that such Non-U.S. Assignee is not a bank for purposes of Section 881(c) of the Code, is not a 10- percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of Seller and is not a controlled foreign corporation related to Seller (within the meaning of Section 864(d)(4) of the Code), and such Non-U.S. Assignee agrees that it shall promptly notify Seller in the event any such representation is no longer accurate. Such forms shall be delivered by each Non-U.S. Assignee on or before the date it becomes a party to this Agreement and on or before the date, if any, such Non-U.S. Assignee changes its applicable counterparty office by designating a different counterparty office (a “New Counterparty Office”). In addition, each Non-U.S. Assignee shall deliver such forms within twenty (20) days after receipt of a written request therefor from Seller.

(e) Seller shall not be required to indemnify any Non-U.S. Assignee, or pay any additional sums to any Non-U.S. Assignee, in respect of United States Federal withholding tax pursuant to this Section 12.06 to the extent that (i) the obligation to withhold amounts with respect to United States Federal withholding tax existed on the date such Non-U.S. Assignee became a party to this Agreement or, with respect to payments to a New Counterparty Office, the date such Non-U.S. Assignee designated such New Counterparty Office with respect to the

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Transaction or (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Non-U.S. Assignee to provide the forms and representations required in Section 12.06(d) above.

(f) Upon the execution of this Agreement, each Buyer and Agent shall, and upon the request of Seller, any Eligible Assignee that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to Seller a duly executed original of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable laws or reasonably requested by Seller as will enable Seller to determine whether or not such Eligible Assignee is subject to backup withholding or information reporting requirements. Unless Seller has received such forms or other documents or information required by this Section 12.06(f) to establish any such Eligible Assignee’s exemption from backup withholding tax, Seller shall not be required to pay additional sums or indemnify such Eligible Assignee for any amount withheld.

(g) Any Person claiming any indemnity payment or additional sums payable pursuant to this Section 12.06 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document reasonably requested in writing by Seller or to change the jurisdiction of its applicable counterparty office if the making of such a filing or change would avoid the need for, or reduce the amount of, any such indemnity payment or additional sums which may thereafter accrue, so long as such filing or change in the applicable lending office, in the reasonable judgment of Agent, any Buyer or Eligible Assignee, would not be otherwise disadvantageous to such Person. In addition, Seller shall not be required to indemnify or pay Buyer or any Eligible Assignee to the extent that any amounts due are a result of the fault, misconduct or negligence of Buyer or Eligible Assignee.

(h) Without prejudice to the survival or any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this Section 12.06 shall survive the termination of this Agreement. Nothing contained in this Section 12.06 shall require Buyer to make available any of its tax returns or other information that it reasonably deems to be confidential or proprietary; provided, that any claim for Taxes made by Buyer or Eligible Assignee against Seller shall include all information reasonably necessary in order for Seller to fully understand the nature and amount of the claim.

Section 12.07 Payment and Survival of Obligations. Agent or any Buyer may at any time send Seller a notice showing the calculation (in reasonable detail) of any amounts payable pursuant to this Article 12, and Seller shall pay such amounts to Agent or such Buyer within thirty (30) days after Seller receives such notice. Agent or any Buyer shall be entitled to any compensation claimed under this Article 12 only if it shall at the time be the general policy of Agent or any Buyer (which, for purposes of this Section 12.07, shall mean such Person in its capacity as a buyer of assets similar to the Purchased Asset in similar transactions with similar terms and conditions) to claim compensation under similar circumstances with respect to similarly situated sellers. Failure or delay on the part of Agent or such Buyer to demand compensation pursuant to this Section 12.07 shall not constitute a waiver of Agent or such Buyer’s right to demand such compensation; provided, that the Seller shall not be required to compensate Agent or such Buyer pursuant to this Article for any increased costs or reductions incurred more than four hundred and fifty (450) days prior to the date that Agent or such Buyer

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notifies the Seller of the change in any Requirements of Law or in the interpretation or application thereof giving rise to such increased costs or reductions and of such Agent or such Buyer’s intention to claim compensation therefor; provided, further, that, if the change in any Requirements of Law or in the interpretation or application thereof giving rise to such increased costs or reductions is retroactive, then the four hundred and fifty (450) day period referred to above shall be extended to include the period of retroactive effect thereof. The obligations of Seller under this Article 12 shall apply to Eligible Assignees and Participants (subject to the foregoing) and survive the termination of the Repurchase Documents.

ARTICLE 13

INDEMNITY AND EXPENSES

Section 13.01 Indemnity.

(a) Seller shall release, defend, indemnify and hold harmless Agent, each Buyer, Affiliates of Agent and each Buyer and its and their respective officers, directors, shareholders, partners, members, owners, employees, agents, attorneys, Affiliates and advisors (each an “Indemnified Person” and collectively the “Indemnified Persons”), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including reasonable legal fees and expenses), penalties or fines of any kind that may be imposed on, incurred by or asserted against such Indemnified Person (collectively, the “Indemnified Amounts”) in any way relating to, arising out of or resulting from or in connection with (i) the Repurchase Documents, the Purchased Asset Documents, the Purchased Asset, the Transaction, any Mortgaged Property, the Pledged Collateral or any action taken or omitted to be taken by any Indemnified Person in connection with or under any of the foregoing, or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of any Repurchase Document, the Transaction, the Purchased Asset, any Purchased Asset Document, (ii) any claims, actions or damages by an Underlying Obligor or lessee with respect to the Purchased Asset, (iii) any violation or alleged violation of, non-compliance with or liability under any Requirements of Law, (iv) ownership of, Liens on, security interests in or the exercise of rights or remedies under any of the items referred to in the preceding clause (i), (v) any accident, injury to or death of any person or loss of or damage to property occurring in, on or about any Mortgaged Property or on the adjoining sidewalks, curbs, parking areas, streets or ways, (vi) any use, nonuse or condition in, on or about, or possession, alteration, repair, operation, maintenance or management of, any Mortgaged Property or on the adjoining sidewalks, curbs, parking areas, streets or ways, (vii) any failure by Seller to perform or comply with any Repurchase Document, Purchased Asset Document or the Purchased Asset, (viii) performance of any labor or services or the furnishing of any materials or other property in respect of any Mortgaged Property or the Purchased Asset, (ix) any claim by brokers, finders or similar Persons claiming to be entitled to a commission in connection with any lease or other transaction involving any Repurchase Document, the Purchased Asset, any Mortgaged Property or the Pledged Collateral, (x) any Lien or claim arising on or against the Purchased Asset, any Mortgaged Property or the Pledged Collateral under any Requirements of Law or any liability asserted against Agent, any Buyer or any Indemnified Person with respect thereto, (xi) (1) a past, present or future violation or alleged violation of any Environmental Laws in connection with any property or Mortgaged Property by any Person or other source,

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whether related or unrelated to Seller or any Underlying Obligor, (2) any presence of any Materials of Environmental Concern in, on, within, above, under, near, affecting or emanating from any Mortgaged Property, (3) the failure to timely perform any Remedial Work, (4) any past, present or future activity by any Person or other source, whether related or unrelated to Seller or any Underlying Obligor in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from any Mortgaged Property of any Materials of Environmental Concern at any time located in, under, on, above or affecting any Mortgaged Property, (5) any past, present or future actual Release (whether intentional or unintentional, direct or indirect, foreseeable or unforeseeable) to, from, on, within, in, under, near or affecting any Mortgaged Property by any Person or other source, whether related or unrelated to Seller or any Underlying Obligor, (6) the imposition, recording or filing or the threatened imposition, recording or filing of any Lien on any Mortgaged Property with regard to, or as a result of, any Materials of Environmental Concern or pursuant to any Environmental Law, or (7) any misrepresentation or failure to perform any obligations pursuant to any Repurchase Document or Mortgage Loan Document relating to environmental matters in any way, (xii) any business communications or dealings between the Parties relating thereto, or (xiii) Seller’s conduct, activities, actions and/or inactions in connection with, relating to or arising out of any of the foregoing clauses of this Section 13.01, that, in each case, results from anything whatsoever other than any Indemnified Person’s gross negligence or intentional misconduct, as determined by a court of competent jurisdiction pursuant to a final, non-appealable judgment. In any suit, proceeding or action brought by an Indemnified Person in connection with the Purchased Asset for any sum owing thereunder, or to enforce any provisions of the Purchased Asset, Seller shall defend, indemnify and hold such Indemnified Person harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the account debtor or Underlying Obligor arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or Underlying Obligor from Seller. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 13.01 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by Seller, an Indemnified Person or any other Person or any Indemnified Person is otherwise a party thereto and whether or not the Transaction is entered into.

(b) If for any reason the indemnification provided in this Section 13.01 is unavailable to the Indemnified Person or is insufficient to hold an Indemnified Person harmless, even though such Indemnified Person is entitled to indemnification under the express terms thereof, then Seller shall contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative benefits received by such Indemnified Person on the one hand and Seller on the other hand, the relative fault of such Indemnified Person, and any other relevant equitable considerations.

(c) An Indemnified Person may at any time send Seller a notice showing the calculation in reasonable detail of Indemnified Amounts, and Seller shall pay such Indemnified Amounts to such Indemnified Person within ten (10) Business Days after Seller receives such notice. The obligations of Seller under this Section 13.01 shall apply to Eligible Assignees and Participants and survive the termination of this Agreement.

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Section 13.02 Expenses. Seller shall promptly on demand pay to or as directed by Agent all reasonable and documented third-party out-of-pocket costs and expenses (including legal, accounting and advisory fees and expenses) incurred by Agent or any Buyer in connection with (a) the development, evaluation, preparation, negotiation, execution, consummation, delivery and administration of, and any amendment, supplement or modification to, or extension, renewal or waiver of, the Repurchase Documents and the Transaction, (b) subject to the next sentence, the Purchased Asset, including due diligence, inspection, testing, review, recording, registration, travel custody, care, insurance or preservation, (c) so long as an Event of Default exists, the enforcement of the Repurchase Documents or the payment or performance by Seller of any Repurchase Obligations, and (d) so long as an Event of Default exists, any actual or attempted sale, exchange, enforcement, collection, compromise or settlement relating to the Purchased Asset. Notwithstanding the foregoing, provided no Event of Default exists after the Purchase Date with respect to the Purchased Asset, Seller shall not be required to pay Agent’s or any Buyer’s out-of-pocket costs and expenses with respect to surveillance of the Purchased Asset in an amount greater than $1,000.00 per annum.

ARTICLE 14

INTENT

Section 14.01 Safe Harbor. The Parties intend (a) for the Transaction to qualify for the safe harbor treatment provided by the Bankruptcy Code and for Buyer to be entitled to all of the rights, benefits and protections afforded to Persons under the Bankruptcy Code with respect to a “repurchase agreement” as defined in Section 101(47) of the Bankruptcy Code and a “securities contract” as defined in Section 741(7) of the Bankruptcy Code and that payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Sections 101 or 741 of the Bankruptcy Code, (b) for the grant of a security interest set forth in Article 11 to also be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code and a “repurchase agreement” as that term is defined in Section 101(47)(A)(v) of the Bankruptcy Code, and (c) that Buyer (for so long as Buyer is a “financial institution,” “financial participant” or other entity listed in Section 555, 559 or 362(b)(6) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract,” including (x) the rights, set forth in Article 10 and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Asset and terminate this Agreement, and (y) the right to offset or net out as set forth in Article 10 and Section 18.17 and in Section 362(b)(6) of the Bankruptcy Code.

Section 14.02 Right to Liquidate. The Parties acknowledge and agree that Agent’s right to liquidate the Purchased Asset delivered to it in connection with the Transaction hereunder or to exercise any other remedies pursuant to Articles 10 and 11 and as otherwise provided in the Repurchase Documents is a contractual right to liquidate the Transaction as described in Section 555, 559 and 561 of the Bankruptcy Code.

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Section 14.03 Qualified Financial Contract. The Parties acknowledge and agree that if a Party is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then the Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to the Transaction would render such definition inapplicable).

Section 14.04 Netting Contract. The Parties acknowledge and agree that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under the Transaction shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation,” respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

Section 14.05 Master Netting Agreement. The Parties expressly represent, warrant, acknowledge and agree that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code.

ARTICLE 15

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The Parties acknowledge that they have been advised and understand that:

(a) if one of the Parties to the Transaction is a broker or dealer registered with the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934, the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 do not protect the other Party with respect to the Transaction;

(b) if one of the Parties to the Transaction is a government securities broker or a government securities dealer registered with the Securities and Exchange Commission under Section 14C of the Securities Exchange Act of 1934, the Securities Investor Protection Act of 1970 will not provide protection to the other Party with respect to the Transaction;

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

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

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ARTICLE 16

NO RELIANCE

Each Party acknowledges, represents and warrants to the other Party that, in connection with the negotiation of, entering into, and performance under, the Repurchase Documents and the Transaction:

(a) It is not relying (for purposes of making any investment decision or otherwise) on any advice, counsel or representations (whether written or oral) of the other Party, other than the representations expressly set forth in the Repurchase Documents;

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

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

(d) It is entering into the Repurchase Documents and the Transaction for the purposes of managing its borrowings or investments or hedging its underlying Asset or liabilities and not for purposes of speculation;

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

(f) No partnership or joint venture exists or will exist as a result of the Transaction or entering into and performing the Repurchase Documents.

ARTICLE 17

AGENT

Section 17.01 Reliance. Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon the advice and statements of legal counsel (including, without limitation, counsel to Seller), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Repurchase Document unless it shall first receive such advice or

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concurrence of each Buyer as Agent deems appropriate or it shall first be indemnified to its satisfaction by each Buyer against any and all liability and expense which may be incurred by it by reason of taking, continuing or failing to take any such action.

Section 17.02 Knowledge. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless Agent has received notice from a Buyer or Seller referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that Agent receives any such notice from Seller, Agent shall give notice thereof to each Buyer. Agent shall take such action (or refrain from taking any action) with respect to such Default or Event of Default on behalf of each Buyer. Agent shall not incur liability to any Person by reason of so acting or refraining from acting.

Section 17.03 No Representations; No Reliance. Each Buyer expressly acknowledges that neither the Agent nor any of its officers, directors, employees, agents, attorneys in fact or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of Seller shall be deemed to constitute any representation or warranty by the Agent to any Buyer. Each Buyer represents to the Agent that it has, independently and without reliance upon the Agent or any other Buyer, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, Property, financial and other condition and creditworthiness of Seller and made its own decision to purchase Eligible Assets hereunder and enter into this Agreement. Each Buyer also represents that it will, independently and without reliance upon the Agent or any other Buyer, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Repurchase Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of Seller. Except for notices, reports and other documents expressly required to be furnished to each Buyer by the Agent hereunder or under the other Repurchase Documents, the Agent shall not have any duty or responsibility to provide any Buyer with any credit or other information concerning the business, operations, Property, condition (financial or otherwise), prospects or creditworthiness of Seller that may come into the possession of the Agent or any of its officers, directors, employees, agents, attorneys in fact or Affiliates.

Section 17.04 Indemnification by Buyer. Each Buyer agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by Seller and without limiting the obligation of Seller to do so), ratably according to its percentage interest in the rights and obligations of a Buyer in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Repurchase Obligations shall have been satisfied, ratably in accordance with such Buyer’s percentage interest in the rights and obligations of a Buyer immediately prior to such date), for, and to save Agent harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (including, without limitation, at any time following satisfaction of the Repurchase Obligations) be imposed on, incurred by or asserted against Agent in any way relating to or arising out of, this Agreement, any of the other Repurchase Documents or any documents contemplated by or referred to herein

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or therein or the transactions contemplated hereby or thereby or any action taken or omitted by Agent under or in connection with any of the foregoing; provided, that no Buyer shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from Agent’s gross negligence or willful misconduct. The agreements in this Section shall survive the satisfaction of the Repurchase Obligations and all other amounts payable hereunder.

Section 17.05 Free Agent. Agent and its Affiliates may make loans to, accept deposits from, and generally engage in any kind of business with Seller as though Agent were not Agent hereunder and under the other Repurchase Documents.

Section 17.06 Exclusive Agent. Agent shall act as exclusive agent for each Buyer in any dealings with Seller and with the Transaction hereunder. Seller shall not be obligated to deal directly with any party other than Agent in connection with the Transaction hereunder. Any action taken by Agent shall be an action on behalf of and for the benefit of each Buyer and any payments made by or on behalf of Seller hereunder to Agent shall be a payment for the account of each Buyer.

Section 17.07 Resignation. Agent at any time may resign by giving sixty (60) days’ prior written notice of resignation to Seller and each Buyer and complying with the applicable provisions of this Section 17.07; provided, however, that if the resignation of Agent due to a Requirement of Law renders such prior notice either impossible or impracticable, no such prior written notice shall be required. Upon receiving such notice of resignation, with Seller’s consent for appointment, which consent for appointment shall not unreasonably be conditioned, delayed or withheld (provided, that Seller’s consent for appointment shall not be required if an Event of Default has occurred and is continuing), a successor agent shall be promptly appointed by each Buyer by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Agent and one copy to the successor agent. Any successor agent appointed as provided in this Section 17.07 shall execute and deliver to Seller, each Buyer and to its predecessor Agent an instrument accepting such appointment, and thereupon the resignation or removal of the predecessor Agent shall become effective and such successor agent, without any further act, deed or conveyance, shall become vested with all the rights and obligations of its predecessor, with like effect as if originally named as Agent; provided, that upon the written request of either Seller, each Buyer or the successor agent, Agent ceasing to act shall execute and deliver (a) an instrument transferring to such successor agent all of the rights of Agent so ceasing to act and (b) to such successor agent such instruments as are necessary to transfer the Purchased Items to such successor agent (including assignments of the Purchased Asset or Repurchase Documents). Upon the request of any such successor agent made from time to time, Seller shall execute any and all papers necessary to more fully and certainly vest in and confirm to such successor agent all such rights.

Section 17.08 Administration.

(a) Expenses. Each Buyer shall reimburse Agent for its Pro Rata Share of any Approved Expenses which are not reimbursed by Seller pursuant to and within the period required by the Repurchase Documents, or if payable upon demand or upon less than five (5)

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Business Days under the Repurchase Documents or not otherwise specified in the Repurchase Documents, within five (5) Business Days of the date after written demand by Agent is received by Buyers. Agent shall have the right, but not the obligation, to incur such Approved Expenses prior to reimbursement therefor by Buyers.

(b) Actions by Agent; Required Consents.

(i) Except as specified in this Section 17.08, Agent shall exercise its sole discretion to act or not to act under the Repurchase Documents. Such discretion may be exercised with respect to the granting of approvals, consents and modifications under the Repurchase Documents and with respect to the exercise or refraining from exercise of rights under the Repurchase Documents.

(ii) Notwithstanding Section 17.08(b)(i), the following matters shall require the prior written unanimous consent of all of Buyers:

(A) any action which would subject Buyers to any additional obligations.

(B) any change (other than by operation of the Repurchase Documents) in the Pricing Rate under the Transaction;

(C) any change (other than by operation of the Repurchase Documents) in any fees to be shared among Buyers;

(D) any change (other than by operation of the Repurchase Documents) in the Facility Termination Date of the Transaction;

(E) any release, termination, modification or amendment of the Guarantee Agreement;

(F) any forgiveness of or reduction in Purchase Price or Price Differential or any extension of time for payment of Purchase Price or Price Differential;

(G) any change in the definition of Requisite Buyers or Pro Rata Share (except in connection with a permitted assignment of a portion of a Buyer’s Pro Rata Share);

(H) any amendment to this Section 17.08(b)(ii);

(I) the waiver of any Monetary Default that continues for any length of time or any Non-Monetary Default that continues for more than sixty (60) days;

(J) the approval of any request by Seller to release all or any portion of the Purchased Asset which is not otherwise specifically provided in this Agreement;

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(K) any sale, assignment or transfer by Seller of any of its rights under this Agreement or the other Repurchase Documents or delegations of its duties thereunder.

(iii) Notwithstanding Sections 17.08(b)(i) and (ii), the following matters shall require the prior consent of the Requisite Buyers:

(A) the acceleration of the Repurchase Date under the Repurchase Documents or the commencement of remedies or the rescission thereof for any Default or Event of Default (other than accelerations and rescissions that are provided for under the terms of the Repurchase Documents);

(B) the approval of a Post-Foreclosure Plan or any amendment thereto after Agent (or its nominee) declares an Accelerated Repurchase Date, pursuant to Section 17.08(e);

(C) the waiver of any Non-Monetary Default to the extent not cured within the sixty (60) day period referred to in Section 17.08(b)(ii);

(D) the waiver of any late charges;

(E) the waiver of any Price Differential which accrues at the Default Rate;

(F) any waiver of any material condition to the Transaction;

(G) except for the approval rights of Agent set forth elsewhere in this Agreement, and except as referred to in Section 17.08(b)(ii), approval of any amendment, modification or termination of this Agreement, or any other Repurchase Document, or waiver of any provision herein or therein;

(H) delivery of notices, including notices of Default, hereunder and under the other Repurchase Documents, in accordance with the terms of this Agreement;

(I) except as may be otherwise specifically restricted by the terms of this Agreement or any other Repurchase Documents, exercise all remedies given to Agent or Buyers with respect to the Purchased Asset which is the subject of the Transaction under the Repurchase Documents, applicable law or otherwise;

(J) intentionally omitted;

(K) approval of the Transaction, including accepting exceptions to the representations and warranties set forth on Schedule II to this Agreement;

(L) intentionally omitted; and

(M) approval of Material Actions.

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(c) Instructions. In addition to the required consents or approvals referred to in Sections 17.08(b)(ii) and (iii) above, Agent may at any time request instructions from the Requisite Buyers with respect to any actions or approvals which, by the terms of this Agreement, or of any of the other Repurchase Documents, Agent is permitted or required to take or to grant without instructions from any Buyers, and if such instructions are promptly requested, Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from taking any action or withholding any approval under any of the Repurchase Documents until it shall have received such instructions from the Requisite Buyers. Without limiting the foregoing, no Buyer shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting under this Agreement or any of the other Repurchase Documents in accordance with the instructions of the Requisite Buyers or, where applicable, all of Buyers. Agent shall promptly notify each Buyer at any time that Buyers have instructed Agent to act or refrain from acting pursuant thereto.

(d) Reimbursement of Costs. If Agent shall: (i) employ counsel for advice or other representation (whether or not any suit has been or shall be filed) with respect to the Purchased Asset or any part thereof, or any of the Repurchase Documents, or the attempt to enforce any security interest or any of the Repurchase Documents; or (ii) commence any proceeding or in any way seek to enforce its rights or remedies under the Repurchase Documents, irrespective of whether as a result thereof Agent shall acquire title to the Purchased Asset, each Buyer, upon demand therefor from time to time, shall contribute its Pro Rata Share of the reasonable costs and/or expenses of any advice or other representation, enforcement or acquisition, to the extent not otherwise reimbursed by Seller; provided that Agent shall not be entitled to reimbursement of its attorneys’ fees and expenses incurred in connection with the resolution of disputes between Agent and other Buyers unless Agent shall be the prevailing party in any such dispute. Any loss of Purchase Price and Price Differential resulting from any Default shall be shared by Buyers in accordance with their respective Pro Rata Shares. It is understood and agreed that in the event Agent determines it is necessary to engage counsel for Buyers from and after the occurrence of Default, such counsel shall be selected by Agent and written notice of such selection, together with a copy of such counsel’s engagement letter and fee estimate, shall be delivered to Buyers. In no event will Agent retain counsel for Buyers to which any Buyer has a reasonable objection, provided that such Buyer gives Agent written notice of such objection within five (5) Business Days after receipt of Agent’s written notice identifying such counsel.

(e) Remedies. Notwithstanding any provisions of Section 17.08(b) to the contrary, if an Event of Default shall occur and be continuing, and if, within sixty (60) days thereafter, the Requisite Buyers shall not agree upon what action, if any, Agent shall take under the Repurchase Documents by reason thereof, then Agent shall provide written notice to Buyers of Agent’s intention to take the actions provided for in this Section 17.08(e) and, unless Agent shall be instructed not to take such actions, or to take other or different actions, by Requisite Buyers prior to the expiration of the Buyer Reply Period, Agent shall proceed to take the following actions unless and until Agent shall be instructed by Requisite Buyers to cease taking such actions and/or to take other or different actions: (i) declare an Accelerated Repurchase Date

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and all amounts outstanding under this Agreement and the other Repurchase Documents to be immediately due and payable and (ii) enforce Agent’s rights under the Repurchase Documents. Notwithstanding anything to the contrary contained in this Section 17.08)(e) or this Agreement, Buyers hereby authorize Agent, at any time prior to the expiration of the sixty (60) day period referred to in the previous sentence after a Default has occurred, to commence the actions described in Sections 17.08(e)(i) and (ii) herein only if the Requisite Buyers have not already agreed to such action, so long as Agent determines, in good faith, that such action or actions are necessary in order to preserve the value of the Purchased Asset.

(f) Notices. Each Buyer agrees that any action taken by Agent which is authorized under this Agreement or any action taken at the direction or with the consent of the Requisite Buyers in accordance with the provisions of this Agreement or any other Repurchase Documents, and the exercise by Agent at the direction or with the consent of the Requisite Buyers of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Buyers, except for actions specifically requiring the approval of all Buyers. All communications from Agent to Buyers requesting Buyers’ determination, consent, approval or disapproval: (1) shall be given in the form of a written notice to each Buyer delivered in accordance with Section 18.12 hereof; (2) shall be accompanied by a description of the matter or thing as to which such determination, approval, consent or disapproval is requested, or shall advise each Buyer where such matter or thing may be inspected, or shall otherwise describe the matter or issue to be resolved; (3) shall include, if reasonably requested by a Buyer and to the extent not previously provided to such Buyer, written materials and a summary of all oral information provided to Agent by Seller in respect of the matter or issue to be resolved; and (4) shall include Agent’s recommended course of action or determination in respect thereof. Each Buyer shall reply promptly, but in any event within ten (10) Business Days (the “Buyer Reply Period”). Unless a Buyer shall give written notice to Agent that it objects to the recommendation or determination of Agent (together with a written explanation of the reasons behind such objection) within the Buyer Reply Period, such Buyer shall be deemed to have approved of or consented to such recommendation or determination. With respect to decisions requiring the approval of the Requisite Buyers or all Buyers, Agent shall submit its recommendation or determination for approval of or consent to such recommendation or determination to all Buyers and upon receiving the required approval or consent shall follow the course of action or determination recommended to Buyers by Agent or such other course of action recommended by the Requisite Buyers, and each non-responding Buyer shall be deemed to have concurred with such recommended course of action.

Section 17.09 Foreclosure; Post-Foreclosure Operations. In the event that all or any portion of the Purchased Asset shall be acquired by Agent as the result of an Accelerated Repurchase Date, the Purchased Asset shall be held in the name of a special purpose entity that is a subsidiary of Agent, as agent, for the ratable benefit of Buyers. Agent shall prepare a recommended course of action and operating budget for the Purchased Asset (the “Post-Foreclosure Plan”), which shall be subject to the approval of the Requisite Buyers as soon as reasonably practicable, but not more than ninety (90) days, after it succeeds to the interest of Seller in the Purchased Asset. In the event that the Requisite Buyers do not approve such Post-Foreclosure Plan, Agent shall submit alternative Post-Foreclosure Plans to Buyers for evaluation and the approval of the Requisite Buyers. In accordance with the approved Post-Foreclosure Plan, Agent shall manage, operate, repair, administer, complete, construct, restore or otherwise

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deal with the Purchased Asset acquired, and administer all transactions relating thereto. Actions taken by Agent with respect to the Collateral which are not provided for in the approved Post-Foreclosure Plan or reasonably incidental thereto, shall require the consent of the Requisite Buyers by way of supplement to such Post-Foreclosure Plan. Within five (5) Business Days after demand therefor from time to time, each Buyer shall contribute its Pro Rata Share of all costs and expenses incurred by Agent permitted under this Agreement in connection with the ownership of the Purchased Asset. In addition, Agent shall render or cause to be rendered to each Buyer, monthly, an income and expense statement for the Purchased Asset, and each Buyer shall promptly contribute its Pro Rata Share of any operating loss for the Purchased Asset, and such other expenses and operating reserves as Agent shall deem reasonably necessary. To the extent there is net operating income from the Purchased Asset, Agent shall, in accordance with the Post-Foreclosure Plan, determine the amount and timing of distributions to Buyers. All such distributions shall be made to Buyers in accordance with their respective Pro Rata Shares. Buyers acknowledge that if title to the Purchased Asset is obtained by Agent or its nominee, the Purchased Asset will not be held as a permanent investment but will be liquidated as soon as practicable. Agent shall undertake to sell the Purchased Asset to a third party or parties, at such price and upon such arms-length terms and conditions as the Requisite Buyers shall reasonably determine to be most advantageous to Buyers.

ARTICLE 18

MISCELLANEOUS

Section 18.01 Governing Law. This Agreement and any claim, controversy or dispute arising under or related to or in connection with this Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties will be governed by the laws of the State of New York without regard to any conflicts of law principles other than Section 5-1401 of the New York General Obligations Law.

Section 18.02 Submission to Jurisdiction; Service of Process. Agent and each Buyer irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Repurchase Documents, or for recognition or enforcement of any judgment, and each Party irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such State court or, to the fullest extent permitted by applicable law, in such Federal court. Each Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or the other Repurchase Documents shall affect any right that Agent or any Buyer may otherwise have to bring any action or proceeding arising out of or relating to the Repurchase Documents against Seller or its properties in the courts of any jurisdiction. Seller irrevocably and unconditionally waives, to the fullest extent permitted by Requirements of Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to the Repurchase Documents in any court referred to above, and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each Party irrevocably consents to service of process in the manner provided for notices in Section 18.12. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

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Section 18.03 IMPORTANT WAIVERS.

(a) SELLER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST IT BY AGENT OR ANY INDEMNIFIED PERSON, BUT SUCH WAIVER SHALL NOT PREVENT SELLER FROM ASSERTING AGAINST AGENT IN A SEPARATE ACTION ANY CLAIM, ACTION, CAUSE OF ACTION OR DEMAND THAT SELLER MIGHT HAVE, WHETHER OR NOT ARISING OUT OF THIS AGREEMENT.

(b) TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE BETWEEN THEM, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH OR RELATED TO THE REPURCHASE DOCUMENTS, THE PURCHASED ASSET, THE TRANSACTION, ANY DEALINGS OR COURSE OF CONDUCT BETWEEN THEM, OR ANY STATEMENTS (WRITTEN OR ORAL) OR OTHER ACTIONS OF EITHER PARTY. NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

(c) TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, SELLER HEREBY WAIVES ANY RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER INVOLVING ANY INDEMNIFIED PERSON, ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER SUCH WAIVED DAMAGES ARE BASED ON STATUTE, CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION. NO INDEMNIFIED PERSON SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH ANY REPURCHASE DOCUMENT OR THE TRANSACTION.

(d) SELLER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT, ANY BUYER OR AN INDEMNIFIED PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT, ANY BUYER OR AN INDEMNIFIED PERSON WOULD NOT SEEK TO ENFORCE ANY OF THE WAIVERS IN THIS SECTION 18.03 IN THE EVENT OF LITIGATION OR OTHER CIRCUMSTANCES. THE SCOPE OF SUCH WAIVERS IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THE REPURCHASE DOCUMENTS, REGARDLESS OF THEIR LEGAL THEORY.

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(e) EACH PARTY ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 18.03 ARE A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT SUCH PARTY HAS ALREADY RELIED ON SUCH WAIVERS IN ENTERING INTO THE REPURCHASE DOCUMENTS, AND THAT SUCH PARTY WILL CONTINUE TO RELY ON SUCH WAIVERS IN THEIR RELATED FUTURE DEALINGS UNDER THE REPURCHASE DOCUMENTS. EACH PARTY FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED SUCH WAIVERS WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL AND OTHER RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

(f) THE WAIVERS IN THIS SECTION 18.03 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO ANY OF THE REPURCHASE DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(g) THE PROVISIONS OF THIS SECTION 18.03 SHALL SURVIVE TERMINATION OF THE REPURCHASE DOCUMENTS AND THE PAYMENT IN FULL OF THE REPURCHASE OBLIGATIONS.

Section 18.04 Integration. The Repurchase Documents supersede and integrate all previous negotiations, contracts, agreements and understandings (whether written or oral) between the Parties relating to a sale and repurchase of the Purchased Asset and the other matters addressed by the Repurchase Documents, and contain the entire final agreement of the Parties relating to the subject matter thereof.

Section 18.05 Intentionally Omitted.

Section 18.06 Use of Employee Plan Assets. No assets of an employee benefit plan subject to any provision of ERISA shall be used by either Party in the Transaction.

Section 18.07 Survival and Benefit of Seller’s Agreements. The Repurchase Documents and the Transaction shall be binding on and shall inure to the benefit of the Parties and their successors and permitted assigns. All of Seller’s representations, warranties, agreements and indemnities in the Repurchase Documents shall survive the termination of the Repurchase Documents and the payment in full of the Repurchase Obligations, and shall apply to and benefit all Indemnified Persons, Buyer and its successors and assigns, Eligible Assignees and Participants. No other Person shall be entitled to any benefit, right, power, remedy or claim under the Repurchase Documents.

Section 18.08 Assignments and Participations.

(a) Seller shall not sell, assign or transfer any of its rights or the Repurchase Obligations or delegate its duties under this Agreement or any other Repurchase Document without the prior written consent of Agent, and any attempt by a Seller to do so without such consent shall be null and void.

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(b) Any Buyer may at any time, upon notice to Seller, sell participations to any Eligible Assignee (a “Participant”) in all or any portion of such Buyer’s rights and/or obligations under the Repurchase Documents; provided, that (i) such Buyer’s obligations under the Repurchase Documents shall remain unchanged, (ii) such Buyer shall remain solely responsible to Seller for the performance of such obligations, and (iii) Seller shall continue to deal solely and directly with Agent in connection with Buyer’s rights and obligations under the Repurchase Documents. No Participant shall have any right to approve any amendment, waiver or consent with respect to any Repurchase Document, except to the extent that the Repurchase Price or Price Differential of the Purchased Asset would be reduced or the Repurchase Date of the Purchased Asset would be postponed. Each Participant shall be entitled to the benefits of Article 12 to the same extent as if it had acquired its interest by assignment pursuant to Section 18.08(c), but shall not be entitled to receive any greater payment thereunder than Buyer would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with Seller’s prior written consent. To the extent permitted by Requirements of Law, each Participant shall be entitled to the benefits of Sections 10.02(i) and 18.17 to the same extent as if it had acquired its interest by assignment pursuant to Section 18.08(c).

(c) Any Buyer may at any time, upon notice to Seller, sell and assign to any Eligible Assignee all or any portion of all of the rights and obligations of such Buyer under the Repurchase Documents. Notwithstanding anything herein to the contrary, Wells Fargo Bank, National Association, in its capacity as a Buyer, agrees that it will at all times hold directly at least 51% of the rights and obligations of a Buyer which Wells Fargo Bank, National Association holds as of the Closing Date under the Repurchase Documents, free and clear of any assignment or participation. Each such assignment shall be made pursuant to an Assignment and Acceptance substantially in the form of Exhibit F (an “Assignment and Acceptance”). From and after the effective date of such Assignment and Acceptance, (i) such Eligible Assignee shall be a Party and, to the extent provided therein, have the rights and obligations of such Buyer under the Repurchase Documents with respect to the percentage and amount of the Repurchase Price allocated to it, (ii) such Buyer shall, to the extent provided therein, be released from such obligations (and, in the case of an Assignment and Acceptance covering all or the remaining portion of such Buyer’s rights and obligations under the Repurchase Documents, such Buyer shall cease to be a Party), (iii) the obligations of such Buyer shall be deemed to be so reduced, and (iv) Agent will give prompt written notice thereof (including identification of the Eligible Assignee and the amount of Repurchase Price allocated to it) to each Party (but Buyer shall not have any liability for any failure to timely provide such notice). Any sale or assignment by Buyer of rights or obligations under the Repurchase Documents that does not comply with this Section 18.08(c) shall be treated for purposes of the Repurchase Documents as a sale by Buyer of a participation in such rights and obligations in accordance with Section 18.08(b). Upon written request of Agent or any Buyer who proposes to sell and assign to an Eligible Assignee the rights and obligations of such Buyer under the Repurchase Documents, Seller shall cause its counsel(s) who issued opinions on behalf of Seller and Guarantor (collectively, “Seller’s Counsel”), to issue a reliance letter, within a commercially reasonable period of time following such request, in favor of such Eligible Assignee permitting such Eligible Assignee to rely on the legal opinions issued by Seller’s Counsel on the Closing Date (but which did not otherwise by its terms permit reliance).

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(d) Seller shall cooperate with Agent in connection with any such sale and assignment of participations or assignments and shall enter into such restatements of, and amendments, supplements and other modifications to, the Repurchase Documents to give effect to any such sale or assignment; provided, that (i) none of the foregoing shall change any economic or other material term of the Repurchase Documents in a manner adverse to Seller without the consent of Seller or require the Seller to incur any out-of-pocket costs or expenses (ii) the form and substance of such restatement, amendment, supplement or modification shall be reasonably acceptable to Seller, and (iii) Seller shall have no obligation to pay any fees, costs and expenses in connection with such restatement, amendment, supplement or modification.

(e) Agent, acting for this purpose solely as a non-fiduciary agent of Seller, shall maintain, or cause to be maintained, a record with the name and address of each Participant and the principal amounts (and stated interest, if any) due to any such Participants under the Agreement and the Transaction (the “Participant Register”). The entries in the Participant Register shall be conclusive, absent manifest error. The Parties shall treat each Person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of the applicable rights and obligations and no sale of participation shall be effective unless duly noted in the Participant Register. The portion of the Participant Register relating to any Participant requesting (directly or through Buyer or through an Assignee) payment from Seller under the Agreement shall be made available to Seller upon reasonable request.

(f) Agent, acting for this purpose solely as a non-fiduciary agent of Seller, shall maintain, or cause to be maintained, a record with the name and address of each Assignee and the principal amounts (and stated interest, if any) due to any such Assignee under the Agreement and the Transaction (the “Register”). The entries in the Register shall be conclusive, absent manifest error. The Parties shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as the owner of the applicable rights and obligations and no transfer or assignment shall be effective unless duly noted in the Register. The Register shall be made available to Seller upon reasonable request.

Section 18.09 Ownership and Hypothecation of Purchased Asset. Title to the Purchased Asset shall pass to and vest in Agent and each Buyer on the applicable Purchase Dates and, subject to the terms of the Repurchase Documents, Agent and each Buyer or its designees shall have free and unrestricted use of the Purchased Asset and be entitled to exercise all rights, privileges and options relating to the Purchased Asset as the owner thereof, including rights of subscription, conversion, exchange, substitution, voting, consent and approval, and to direct any servicer or trustee. Each Buyer or its designees may engage in repurchase transactions with the Purchased Asset or otherwise sell, pledge, repledge, transfer, hypothecate, or rehypothecate the Purchased Asset, all on terms that Buyer may determine; provided, that (i) no such transaction shall affect the obligations of Agent to transfer the Purchased Asset to Seller on the applicable Repurchase Dates free and clear of any pledge, Lien, security interest, encumbrance, charge or other adverse claim and (ii) Seller shall not have any obligation to pay any fees, costs or expenses in connection with such transaction. In the event Agent engages in a repurchase transaction with any of the Purchased Asset or otherwise pledges or hypothecates any of the

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Purchased Asset, Agent shall have the right to assign to its counterparty any of the applicable representations or warranties herein and the remedies for breach thereof, as they relate to the Purchased Asset that are subject to such repurchase transaction.

Section 18.10 Confidentiality. All information regarding the terms set forth in any of the Repurchase Documents or the Transaction and all information provided to Agent regarding Seller, Guarantor and their respective businesses shall be kept confidential and shall not be disclosed by either Party to any Person except (a) to the Affiliates of such Party or its or their respective directors, members, managers, officers, employees, agents, advisors, attorneys and other representatives who are informed of the confidential nature of such information and instructed to keep it confidential, (b) to the extent requested by any regulatory authority or required by Requirements of Law, (c) to the extent required to be included in the financial statements of either Party or an Affiliate thereof, (d) to the extent required to exercise any rights or remedies under the Repurchase Documents, Purchased Asset or Mortgaged Properties, (e) to any current or potential investors in Seller, Guarantor or any of their Affiliates, or their respective advisors, attorneys and accountants, provided each of the foregoing (except in the case of Persons bound by professional obligations of confidentiality who have been instructed to keep such information confidential) has agreed in writing to keep all such information confidential and, to the extent the recipient has more than one group or division, such Person has further agreed in writing not to share or disclose such confidential information to any other group or division within such Person unless such other group or division is actively involved in the transaction and has complied with requirements of this clause (e), (f) to the extent required to consummate and administer the Transaction or (g) to any actual or prospective Participant or Eligible Assignee which agrees to comply with this Section 18.10; provided, that no such disclosure made with respect to any Repurchase Document shall include a copy of such Repurchase Document to the extent that a summary would suffice, but if it is necessary for a copy of any Repurchase Document to be disclosed, all pricing and other economic terms set forth therein shall be redacted before disclosure. Notwithstanding anything to the contrary herein, the tax treatment of the Transaction contemplated under the Repurchase Documents shall not be treated as confidential.

Section 18.11 No Implied Waivers. No failure on the part of Agent, any Buyer to exercise, or delay in exercising, any right or remedy under the Repurchase Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy thereunder preclude any further exercise thereof or the exercise of any other right. The rights and remedies in the Repurchase Documents are cumulative and not exclusive of any rights and remedies provided by law. Application of the Default Rate after an Event of Default shall not be deemed to constitute a waiver of any Event of Default or Agent’s or any Buyer’s rights and remedies with respect thereto, or a consent to any extension of time for the payment or performance of any obligation with respect to which the Default Rate is applied. Except as otherwise expressly provided in the Repurchase Documents, no amendment, waiver or other modification of any provision of the Repurchase Documents shall be effective without the signed agreement of Seller and Agent, on behalf of each Buyer. Any waiver or consent under the Repurchase Documents shall be effective only if it is in writing and only in the specific instance and for the specific purpose for which given.

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Section 18.12 Notices and Other Communications. Unless otherwise provided in this Agreement, all notices, consents, approvals, requests and other communications required or permitted to be given to a Party hereunder shall be in writing and sent prepaid by hand delivery, by certified or registered mail, by expedited commercial or postal delivery service, or by facsimile or email if also sent by one of the foregoing, to the address for such Party specified in Annex I or such other address as such Party shall specify from time to time in a notice to the other Party. Any of the foregoing communications shall be effective upon receipt, or in the case of (a) notice by mail, five (5) days after being deposited in the United States mail, first class postage prepaid, (b) notice by guaranteed overnight courier, upon confirmation of delivery by such courier service, or (c) notice by facsimile copy or e-mail, when verbal or electronic response of receipt is obtained, in each case sent to the address specified in the first sentence of this Section. A Party receiving a notice that does not comply with the technical requirements of this Section 18.12 may elect to waive any deficiencies and treat the notice as having been properly given.

Section 18.13 Counterparts; Electronic Transmission. Any Repurchase Document may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall together constitute but one and the same instrument. The parties agree that this Agreement, any documents to be delivered pursuant to this Agreement, any other Repurchase Document and any notices hereunder may be transmitted between them by email and/or facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties.

Section 18.14 No Personal Liability. No administrator, incorporator, Affiliate, owner, member, partner, stockholder, officer, director, employee, agent or attorney of Agent or any Buyer, any Indemnified Person, Seller or Guarantor, as such, shall be subject to any recourse or personal liability under or with respect to any obligation of Agent, any Buyer, Seller or Guarantor under the Repurchase Documents, whether by the enforcement of any assessment, by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed that (a) the obligations of Agent, each Buyer, Seller or Guarantor under the Repurchase Documents are solely their respective corporate, limited liability company or partnership obligations, as applicable, (b) any such recourse or personal liability is hereby expressly waived, and (c) no deficiency or other judgment may be sought or obtained against any Person other than any Buyer, Agent, Seller and Guarantor solely in their respective corporate, limited liability company or partnership obligations, as applicable. This Section 18.14 shall survive the termination of the Repurchase Documents.

Section 18.15 Protection of Buyer’s Interests in the Purchased Asset; Further Assurances.

(a) Seller shall cause the Repurchase Documents and/or all financing statements and continuation statements and any other necessary documents covering the right, title and interest of each Buyer to the Purchased Asset to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect such right, title and interest. Seller shall deliver to Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. Seller shall execute any and all documents reasonably required to fulfill the intent of this Section 18.15.

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(b) Seller will promptly at its expense execute and deliver such instruments and documents and take such other actions as Agent may reasonably request from time to time in order to perfect, protect, evidence, exercise and enforce any Buyer’s rights and remedies under and with respect to the Repurchase Documents, the Transaction and the Purchased Asset.

(c) If Seller fails to perform any of its Repurchase Obligations, upon reasonable prior written notice to Seller, Agent may (but shall not be required to) perform or cause to be performed such Repurchase Obligation, and the reasonable and documented costs and expenses incurred by Agent in connection therewith shall be payable by Seller. Without limiting the generality of the foregoing, if an Event of Default has occurred and is continuing, Seller authorizes Agent at the option of Agent and the expense of Seller, at any time and from time to time, to take all actions and pay all amounts that Agent deems necessary or appropriate to protect, enforce, preserve, insure, service, administer, manage, perform, maintain, safeguard, collect or realize on the Purchased Asset and each Buyer’s Liens and interests therein or thereon and to give effect to the intent of the Repurchase Documents. No Default or Event of Default shall be cured by the payment or performance of any Repurchase Obligation by Agent on behalf of Seller. Agent may make any such payment in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax Lien, title or claim except to the extent such payment is being contested in good faith by Seller in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.

(d) Without limiting the generality of the foregoing, Seller will no earlier than six (6) or later than three (3) months before the fifth (5th) anniversary of the date of filing of each UCC financing statement filed in connection with to any Repurchase Document or any Transaction, (i) deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statement (provided that Agent may elect to file such continuation statement), and (ii) deliver or cause to be delivered to Agent an opinion of counsel, in form and substance reasonably satisfactory to Agent, confirming and updating the opinion delivered pursuant to Section 6.01(a) with respect to perfection and otherwise to the effect that the security interests hereunder continue to be enforceable and perfected security interests, subject to no other Liens of record except as provided herein or otherwise permitted hereunder, which opinion may contain usual and customary assumptions, limitations and exceptions.

(e) Except as provided in the Repurchase Documents, the sole duty of Agent, any Buyer, Custodian or any other designee or agent of any Buyer with respect to the Purchased Asset shall be to use reasonable care in the custody, use, operation and preservation of the Purchased Asset in its possession or control. Neither Agent nor any Buyer shall incur any liability to Seller or any other Person for any act of Governmental Authority, act of God or other destruction in whole or in part or negligence or wrongful act of custodians or agents selected and supervised by Agent or any Buyer with reasonable care, or Agent’s or any Buyer’s failure to provide adequate protection or insurance for the Purchased Asset. Neither Agent nor any Buyer shall have any obligation to take any action to preserve any rights of Seller in the Purchased

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Asset against prior parties, and Seller hereby agrees to take such action. Neither Agent nor any Buyer shall have any obligation to realize upon the Purchased Asset except through proper application of any distributions with respect to the Purchased Asset made directly to Agent or any Buyer or its agent(s). So long as Agent, any Buyer and Custodian shall act in good faith in their handling of the Purchased Asset, Seller waives or is deemed to have waived the defense of impairment of the Purchased Asset by Buyer and Custodian.

(f) At Buyer’s election (at Buyer’s sole cost and expense) and at any time during the term of this Agreement, Buyer may complete and record any or all of the Blank Assignment Documents as further evidence of Buyer’s ownership interest in the Purchased Asset.

Section 18.16 Default Rate. To the extent permitted by Requirements of Law, Seller shall pay interest at the Default Rate on the amount of all Repurchase Obligations not paid when due under the Repurchase Documents until such Repurchase Obligations are paid or satisfied in full.

Section 18.17 Set-off.

(a) In addition to any rights now or hereafter granted under the Repurchase Documents, Requirements of Law or otherwise, Seller hereby grants to Agent, each Buyer and each Indemnified Person, to secure repayment of the Repurchase Obligations, a right of set-off upon any and all of the following: monies, securities, collateral or other property of Seller and any proceeds from the foregoing, now or hereafter held or received by Agent, any Buyer, any Affiliate of Agent or any Buyer or any Indemnified Person, for the account of Seller, whether for safekeeping, custody, pledge, transmission, collection or otherwise, and also upon any and all deposits (general, specified, special, time, demand, provisional or final) and credits, claims or Indebtedness of Seller, at any time existing, and any obligation owed by Agent or any Buyer or any Affiliate of Agent or any Buyer to Seller, and to set-off against any Repurchase Obligations or Indebtedness owed by Seller and any Indebtedness owed by Agent or any Buyer or any Affiliate of Agent or any Buyer to Seller, in each case whether direct or indirect, absolute or contingent, matured or unmatured, whether or not arising under the Repurchase Documents and irrespective of the currency, place of payment or booking office of the amount or obligation and in each case at any time held or owing by Agent or any Buyer, any Affiliate of Agent or any Buyer or any Indemnified Person to or for the credit of Seller, without prejudice to Agent’s or any Buyer’s right to recover any deficiency. Each of Agent, each Buyer, each Affiliate of Agent and each Buyer and each Indemnified Person is hereby authorized upon any amount becoming due and payable by Seller to Agent or any Buyer or any Indemnified Person under the Repurchase Documents, the Repurchase Obligations or otherwise or upon the occurrence and during the continuance of an Event of Default, without notice to Seller, any such notice being expressly waived by Seller to the extent permitted by any Requirements of Law, to set-off, appropriate, apply and enforce such right of set-off against any and all items hereinabove referred to against any amounts owing to Agent, any Buyer or any Indemnified Person by Seller under the Repurchase Documents and the Repurchase Obligations, irrespective of whether Agent, any Buyer, any Affiliate of Buyer or any Indemnified Person shall have made any demand under the Repurchase Documents and regardless of any other collateral securing such amounts, and in all cases without waiver or prejudice of any Buyer’s rights to recover a

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deficiency. Seller shall be deemed directly indebted to Agent, any Buyer and the other Indemnified Persons in the full amount of all amounts owing to Agent, any Buyer and the other Indemnified Parties by Seller under the Repurchase Documents and the Repurchase Obligations, and Agent, any Buyer and the other Indemnified Persons shall be entitled to exercise the rights of set-off provided for above. ANY AND ALL RIGHTS TO REQUIRE AGENT, ANY BUYER OR OTHER INDEMNIFIED PERSONS TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO THE PURCHASED ASSET OR OTHER INDEMNIFIED PERSONS UNDER THE REPURCHASE DOCUMENTS, PRIOR TO EXERCISING THE FOREGOING RIGHT OF SET-OFF, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER.

(b) Agent, each Buyer or any Indemnified Person shall promptly notify the Seller after any such set-off and application made by Agent, such Buyer or such Indemnified Person, provided that the failure to give such notice shall not affect the validity of such set-off and application. If an amount or obligation is unascertained, Agent or such Buyer may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant Party accounting to the other Party when the amount or obligation is ascertained. Nothing in this Section 18.17 shall be effective to create a charge or other security interest. This Section 18.17 shall be without prejudice and in addition to any right of set-off, combination of accounts, Lien or other rights to which any Party is at any time otherwise entitled.

(c) Agent and each Buyer hereby expressly waive any and all right of set-off upon any monies, securities, collateral or other property of Guarantors and any proceeds from the foregoing now or hereafter held or received by Agent or any Buyer for the account of Guarantor.

Section 18.18 Seller’s Waiver of Setoff. Seller hereby waives any right of setoff it may have or to which it may be or become entitled under the Repurchase Documents or otherwise against Agent, any Buyer, any Affiliate of Agent or any Buyer, any Indemnified Person or their respective assets or properties.

Section 18.19 Power of Attorney; Release of Purchased Asset and Purchased Asset Documents.

(a) Seller hereby authorizes Agent to file such financing statement or statements relating to the Purchased Asset as Agent, at its option, on behalf of each Buyer, may deem appropriate. Seller hereby appoints Agent as Seller’s agent and attorney in fact to perform all other acts which Agent, on behalf of each Buyer, deems reasonably appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and, upon the occurrence and during the continuance of an Event of Default, to protect, preserve and realize upon the Purchased Asset, including, but not limited to, the right to endorse notes, complete blanks in documents, transfer servicing, and sign assignments on behalf of such Seller as its agent and attorney in fact. This agency and power of attorney is coupled with an interest and is irrevocable without Agent’s consent. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 18.19. In addition, Seller shall execute and deliver to Agent a power of attorney in the form set forth in Exhibit E attached hereto.

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(b) On the Repurchase Date (or Early Repurchase Date, if applicable), or on the date of any pay-off of the Purchased Asset pursuant to which the obligor thereunder is released from future payment obligations in accordance with this Agreement, or upon the payment in full for any reason of the Repurchase Price with respect to the Purchased Asset, (i) all right, title and interest of Agent and each Buyer in the Purchased Asset shall automatically and immediately terminate hereunder and of record, and Agent and each Buyer shall be deemed to have simultaneously released their respective security interests in the Purchased Asset, (ii) all right, title and interest in the Purchased Asset shall revert to Seller, (iii) Agent and/or each Buyer (as applicable), at Seller’s expense, shall promptly execute and deliver to Seller, or otherwise authorize the filing by Seller of, such agreements, instruments and other documents as Seller shall reasonably request to evidence the foregoing, including, without limitation, by (A) returning (or causing the Custodian to return) the Purchased Asset Documents, (B) executing such assignments or terminations with respect to the Purchased Asset Documents as Seller may reasonably request, (C) to the extent that any UCC financing statement filed by Agent or Buyer against Seller specifically indentifies the Purchased Asset, delivering an amendment thereto or termination thereof (as applicable) evidencing the release of the Purchased Asset from each Buyer’s security interest therein, (D) to the extent that any control agreement executed by Seller in favor of Agent and/or Buyer specifically indentifies the Purchased Asset, delivering an amendment thereto or termination thereof (as applicable) evidencing the release of the Purchased Asset under such control agreement, (E) causing the Agent to execute and deliver appropriate documentation evidencing the termination of any Irrevocable Redirection Notices, and (F) promptly executing and delivering to Seller a limited power of attorney, in a form satisfactory to Agent and Seller, sufficient to permit Seller to execute (or cause to be executed) and send for recording, in accordance with applicable Requirements of Law or otherwise in Seller’s discretion, any instrument of satisfaction regarding the related Mortgage (if applicable) or any other related Purchased Asset Document. Any such transfer or release shall be without recourse to Agent or any Buyer and without representation or warranty by Agent or any Buyer, except that Agent shall be deemed to represent to Seller, to the extent that good title was transferred and assigned by Seller to Agent hereunder on the related Purchase Date, that Agent is the sole owner of the Purchased Asset, free and clear of any other interests or Liens caused by actions or inactions of Agent or any Buyer.

Section 18.20 Periodic Due Diligence Review. Agent may perform continuing due diligence reviews with respect to the Purchased Asset, Seller and Guarantor, including ordering new third party reports, for purposes of, among other things, verifying compliance with the representations, warranties, covenants, agreements, duties, obligations and specifications made under the Repurchase Documents or otherwise. Upon reasonable prior notice to Seller, unless a Default or Event of Default exists, in which case no notice is required, Agent or its representatives may during normal business hours inspect any properties and examine, inspect and make copies of the books and records of Seller, the Purchased Asset Documents and the Servicing Files. Seller shall make available to Agent one or more knowledgeable financial or accounting officers and representatives of the independent certified public accountants of Seller for the purpose of answering questions of Agent or any Buyer concerning any of the foregoing. Agent may purchase the Purchased Asset from Seller based solely on the information provided by Seller to Agent in the Underwriting Materials and the representations, warranties, duties, obligations and covenants contained herein, and Agent may at any time conduct a partial or complete due diligence review of the Purchased Asset, including ordering new credit reports and

84

new appraisals on the Mortgaged Properties and otherwise re-generating the information used to originate and underwrite the Purchased Asset. The provisions of this Section 18.20 shall be subject to Section 13.02 with respect to the obligation of Seller to pay any expenses incurred in connection therewith.

Section 18.21 Time of Essence. Time is of the essence with respect to all obligations, duties, covenants, agreements, notices or actions or inactions of the parties under the Repurchase Documents.

Section 18.22 Patriot Act Notice. Agent hereby notifies Seller that Agent and each Buyer is required by the Patriot Act to obtain, verify and record information that identifies Seller.

Section 18.23 Successors and Assigns. Subject to the foregoing, the Repurchase Documents and the Transaction shall be binding upon and shall inure to the benefit of the Parties and their successors and permitted assigns. Nothing in the Repurchase Documents, express or implied, shall give to any Person other than the Parties any benefit or any legal or equitable right, power, remedy or claim under the Repurchase Documents.

Section 18.24 Acknowledgement of Anti-Predatory Lending Policies. Seller and Buyer each have in place internal policies and procedures that expressly prohibit their purchase of any high cost mortgage loan.

Section 18.25 Servicing. From and after the effective date of the Servicing Agreement:

(a) Servicer shall service the Purchased Asset on behalf of Buyer.

(b) The servicing fee payable to Servicer shall be payable as a servicing fee in accordance with the Servicing Agreement. Servicer shall also be entitled to additional servicing compensation under the Servicing Agreement. Notwithstanding the foregoing or anything herein to the contrary, Buyer shall not be liable for any servicing fees, additional servicing compensation, costs and expenses incurred by Servicer in connection with the Servicing of the Purchased Asset and Servicer shall look solely to the Underlying Obligor and/or Seller for payment of all and any servicing fees, additional servicing compensation, costs and expenses incurred by Servicer in connection with the Servicing of the Purchased Asset.

(c) From and after the Purchase Date, upon the occurrence and during the continuance of an Event of Default under the Repurchase Agreement, in addition to all of the other rights and remedies of Buyer and Servicer under the Servicing Agreement, the Repurchase Agreement and the other Repurchase Documents (and in addition to the provisions of the Servicing Agreement providing for termination of the Servicing Agreement pursuant to its terms), (i) for the avoidance of doubt, the right, if any, of Seller to direct the servicing of the Purchased Asset shall immediately and automatically cease to exist, and (ii) either Buyer or Servicer may at any time terminate the Servicing Agreement upon the delivery of a written termination notice from Buyer, in accordance with the Servicing Agreement. Seller shall pay all expenses associated with any such termination, including, without limitation, any fees and expenses required in connection with the transfer of servicing.

85

Section 18.26 Funds Transfer Disbursements. Seller hereby authorizes each Buyer to disburse the proceeds due to Seller from such Buyer pursuant to the Repurchase Documents as requested by an authorized representative of the Seller to any of the accounts designated in that certain Transfer Authorizer Designation dated as of the date hereof, a copy of which is attached as Exhibit G hereto and made a part hereof (the “Transfer Authorizer Designation”). Seller agrees to be bound by any transfer request: (i) authorized or transmitted by Seller; or (ii) made in Seller’s name and accepted by Agent and any Buyer in good faith and in compliance with these transfer instructions, even if not properly authorized by Seller. Seller further agrees and acknowledges that each Buyer may rely solely on any bank routing number or identifying bank account number or name provided by Seller to effect a wire or funds transfer even if the information provided by Seller identifies a different bank or account holder than named by the Seller. No Buyer is obligated or required in any way to take any actions to detect errors in information provided by Seller. If any Buyer takes any actions in an attempt to detect errors in the transmission or content of transfer or requests or takes any actions in an attempt to detect unauthorized funds transfer requests, Seller agrees that no matter how many times such Buyer takes these actions such Buyer will not in any situation be liable for failing to take or correctly perform these actions in the future and such actions shall not become any part of the transfer disbursement procedures authorized under this provision, the Repurchase Documents, or any agreement between such Buyer and Seller. Seller agrees to notify any Buyer of any errors in the transfer of any funds or of any unauthorized or improperly authorized transfer requests within fourteen (14) days after such Buyer’s confirmation to Seller of such transfer. Each Buyer will, in its sole discretion, determine the funds transfer system and the means by which each transfer will be made. Each Buyer may delay or refuse to accept a funds transfer request if the transfer would: (i) violate the terms of this authorization; (ii) require use of a bank unacceptable to such Buyer or prohibited by government authority; (iii) cause such Buyer to violate any Federal Reserve or other regulatory risk control program or guideline; or (iv) otherwise cause such Buyer to violate any applicable law or regulation. No Buyer shall be liable to Seller or any other parties for (i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which Seller’s transfers may be made or information received or transmitted, and no such entity shall be deemed an agent of any Buyer, (ii) any loss, liability or delay caused by fires, earthquakes, wars, civil disturbances, power surges or failures, acts of government, labor disputes, failures in communications networks, legal constraints or other events beyond such Buyer’s control, or (iii) any special, consequential, indirect or punitive damages, whether or not (a) any claim for these damages is based on tort or contract or (b) any Buyer or Seller knew or should have known the likelihood of these damages in any situation. Each Buyer makes no representations or warranties other than those expressly made in this Agreement.

[ONE OR MORE UNNUMBERED SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first above written.

SELLER:
SVP 2013 FINANCE, LLC,
a Delaware limited liability company
By:	/s/ Douglas Armer
	Name:	Douglas Armer
	Title:	Principal, Head of Capital Markets
AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:	/s/ Craig R. Larsen
	Name:	Craig R. Larsen
	Title:	Senior Vice President
BUYER:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:	/s/ Craig R. Larsen
	Name:	Craig R. Larsen
	Title:	Senior Vice President

ANNEX I

Names and Addresses for Communications Between Parties

Buyer:

Wells Fargo Bank, National Association 600 California Street 19th Floor
San Francisco, CA 94108
Attention:	Sean Flannery
Telephone:	(415) 396-6764
Email:	seanf@wellsfargo.com

Agent:

Wells Fargo Bank, National Association
600 California Street
19th Floor
San Francisco, CA 94108
Attention:	Sean Flannery
Telephone:	(415) 396-6764
Email:	seanf@wellsfargo.com

With copies to:

Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, Pennsylvania 19104
Attention:	Richard D. Jones, Esq.
Telephone:	(212) 698-3844
Fax:	(215) 655-2501
Email:	richard.jones@dechert.com

Seller:

SVP 2013 Finance, LLC

c/o The Blackstone Group LP

345 Park Avenue

New York, New York 10154

Attention: Douglas N. Armer

Email: douglas.armer@blackstone.com

Annex I-1

With copies to:

Gibson, Dunn & Crutcher LLP
200 Park Avenue New York, New York 10166-0193
Attention:	Andrew Dady
Telephone:	(212) 351-2411
Fax:	(212) 351-6211
Email:	adady@gibsondunn.com

Annex I-1

SCHEDULE I

Asset, Applicable Purchase Percentage and Original Purchase Price

Attached

Sch. I-1

SCHEDULE II

Representations and Warranties With Respect to the Asset

A. Seller represents and warrants to Agent and Buyers, with respect to the Purchased Asset, that except as specifically disclosed in the Confirmation for the Purchased Asset, as of the Purchase Date for the Purchased Asset by Agent from Seller, the representations set forth on this Schedule II, Section A, shall be true and correct in all material respects. For purposes of this Schedule II, Section A and the representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to the Purchased Asset if and when Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to such breach no longer affects the Purchased Asset or has repurchased the Purchased Asset in accordance with the terms of the Agreement.

1. Seller is the sole owner and holder of the Purchased Asset.

2. No fraudulent acts were committed by Seller in connection with its origination of the Purchased Asset.

3. To the Actual Knowledge of Seller, no consent, approval, authorization or order of, or registration or filing with, or notice to, any Governmental Authority having jurisdiction or regulatory authority is required for any transfer, assignment or pledge by the holder of the Purchased Asset.

4. Seller has full right, power and authority to sell and assign the Purchased Asset to Agent and Seller has not previously assigned, sold or otherwise transferred or created any liens or encumbrances upon or granted any options to purchase, pledge or otherwise hypothecate any of its interest in and to the Purchased Asset. There are no participation agreements affecting the Purchased Asset.

5. To the Actual Knowledge of Seller, all real estate taxes and governmental assessments, or installments thereof, which would be a Lien on the Mortgaged Property and that prior to the Purchase Date have become delinquent in respect of the Mortgaged Property have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established. For purposes of this representation and warranty, real estate taxes and governmental assessments and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

6. To the Actual Knowledge of Seller, the related Mortgaged Property is free and clear of any material damage (other than deferred maintenance for which escrows were established at origination) that would affect materially and adversely the value of such Mortgaged Property as security for the related Whole Loan and, to the Actual Knowledge of Seller, there is no proceeding pending or, based solely upon the delivery of written notice thereof from the appropriate condemning authority, threatened for the total or partial condemnation of such Mortgaged Property.

Sch. II-1

7. To the Actual Knowledge of Seller and except as set forth on the phase 1 environmental reports with respect to the Mortgaged Property provided to Agent prior to the Closing Date, there is no material and adverse environmental condition or circumstance affecting the Mortgaged Property. To the Actual Knowledge of Seller and except as set forth on the phase 1 environmental reports with respect to the Mortgaged Property provided to Agent prior to the Closing Date, there is no violation of any applicable Environmental Law with respect to the Mortgaged Property. Neither Seller nor, to the Actual Knowledge of Seller, the Mortgagor or Underlying Obligor, as applicable, or any prior holder of the Purchased Asset, has taken any actions which would cause the Mortgaged Property not to be in compliance with all applicable Environmental Laws.

8. To the Actual Knowledge of Seller, there are no material violations of any applicable zoning ordinances, building codes or land laws applicable to the Mortgaged Property or the use and occupancy thereof which would have a Material Adverse Effect on the value, operation or net operating income of the Mortgaged Property.

9. To the Actual Knowledge of Seller, there is no pending action, suit or proceeding, or governmental investigation of which Seller has received written notice, against the Mortgagor or Underlying Obligor, as applicable, the related Mortgaged Property or the Pledged Collateral the adverse outcome of which could reasonably be expected to materially and adversely affect such Mortgagor’s or Underlying Obligor’s ability to pay principal, interest or any other amounts due under the Purchased Asset or the security intended to be provided by the Purchased Asset Documents or the current use of the Mortgaged Property.

10. To the Actual Knowledge of Seller, the improvements located on the Mortgaged Property are either not located in a federally designated special flood hazard area or, if so located, the Mortgagor or Underlying Obligor, as applicable, is required to maintain or the Mortgagee maintains, flood insurance with respect to such improvements and such policy is in full force and effect in an amount no less than the lesser of (i) the original principal balance of the Whole Loan (ii) the value of such improvements on the related Mortgaged Property located in such flood hazard area or (iii) the maximum allowed under the related federal flood insurance program.

11. To the Actual Knowledge of Seller, the related Mortgagor or Underlying Obligor, as applicable, the related lessee, franchisor or operator was in possession of all material licenses, permits and authorizations then required for use of the related Mortgaged Property by the related Mortgagor or Underlying Obligor.

12. To Seller’s Actual Knowledge, the Underwriting Package in respect of the Purchased Asset does not contain any untrue statement of material fact or omit to

Sch. II-2

state any material fact that would reasonably be expected to result in a Material Adverse Affect with respect to the Purchased Asset. To Seller’s Actual Knowledge, Seller has made available to Agent and Buyers, with respect to the Purchased Asset, true, correct and complete Purchased Asset Documents.

13. To the Actual Knowledge of Seller, each related Mortgaged Property constitutes one or more complete separate tax lots (or the related Mortgagor or Underlying Obligor, as applicable, has covenanted to obtain separate tax lots and a Person has indemnified the Mortgagee for any loss suffered in connection therewith or an escrow of funds in an amount sufficient to pay taxes resulting from a breach thereof has been established) or is subject to an endorsement under the related title insurance policy.

14. Seller has delivered to Agent or its designee the original Mortgage Note related to the Purchased Asset, together with an original assignment thereof, executed by Seller in blank.

15. The related Blank Assignment Documents constitute the legal, valid and binding first priority assignment from Seller (assuming the insertion of the Agent’s name), except as such enforcement may be limited by bankruptcy, insolvency, receivership, reorganization, moratorium, redemption, liquidation or other laws relating to or affecting the enforcement of creditors’ rights generally, or by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

16. Seller, to Seller’s Actual Knowledge, has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of the Purchased Asset is or may become obligated.

17. To Seller’s Actual Knowledge, there is no valid offset, defense, counterclaim, abatement or right to rescission with respect to the Purchased Asset Document, except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, and no advance of funds has been made other than pursuant to the Purchased Asset Documents, directly or indirectly, by Seller and, to Seller’s Actual Knowledge, any prior holder of the Purchased Asset to the Mortgagor or Underlying Obligor, as applicable, and no funds have been received from any Person other than the Mortgagor or Underlying Obligor, as applicable, for or on account of payments due on the Purchased Asset Documents.

18. (a) To the Actual Knowledge of Seller, other than payments due but not yet thirty (30) days or more delinquent (and excepting, for avoidance of doubt, any defaults which have been cured prior to the date hereof), there is no default, breach, violation or event of acceleration currently existing under the Purchased Asset Documents, and no event has occurred (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of

Sch. II-3

any grace or cure period, would constitute a material default, breach, violation or event of acceleration, provided, however, that this representation and warranty does not address or otherwise cover any default, breach, violation or event of acceleration that specifically pertains to any matter otherwise covered by any other representation and warranty made by Seller in any paragraph of this Schedule II and (b) neither Seller nor, to Seller’s Actual Knowledge, any prior holder of the Purchased Asset, has waived any default, breach, violation or event of acceleration under the Purchased Asset Documents and pursuant to the terms of the Purchased Asset Documents.

19. The Purchased Asset is not, and to the Actual Knowledge of Seller, since origination, has not been, thirty (30) days or more past due in respect of any scheduled payment.

20. To the Actual Knowledge of Seller, no Mortgagor or Underlying Obligor, as applicable, with respect to the Purchased Asset, is a debtor in any state or federal bankruptcy or insolvency proceeding.

21. The Purchased Asset is presently outstanding and, to the Actual Knowledge of Seller, (a) the proceeds thereof have been fully and properly disbursed and, (b) except for amounts held in escrow by Seller, there is no requirement for any future advances by Seller thereunder.

22. To Seller’s Actual Knowledge, as of the Closing Date the reserve balances for the Asset are as shown on Schedule III to the Agreement. Seller is not holding any letters of credit as collateral for the Purchased Asset.

23. Except as set forth in the Purchased Asset Documents, the Purchased Asset or any related Mortgage Note has not been cancelled, satisfied or rescinded in whole or part nor has any instrument been executed that would (i) effect a cancellation, satisfaction or rescission thereof or (ii) operate to release any part of the Mortgaged Property and/or the Pledged Collateral from the lien of the Purchased Asset Documents.

24. To Seller’s Actual Knowledge, except as set forth in the Purchased Asset Documents, no Underlying Obligor under any of the applicable Purchased Asset Documents has been released from any obligation or liability thereunder.

25. Seller has not, nor to Seller’s Actual Knowledge has any other lender under the Purchased Asset, received any request, which request is currently outstanding, for any consent to restructure, modify, extend or waive any of the Underlying Obligors’ obligations under any of the applicable Purchased Asset Documents, and no agreement to restructure, modify, extend or waive any of such obligations in the future has been entered into relating to the Purchased Asset.

26. Seller has not, nor to Seller’s Actual Knowledge has any other lender under the Purchased Asset, received written notice of any litigation, actions, suits or proceedings currently pending before any court, administrative agency or

Sch. II-4

arbitrator concerning the Purchased Asset, the applicable Mortgaged Property or the Pledged Collateral that would reasonably be expected to adversely affect the validity or enforceability of the liens on and security interests in such Mortgaged Property or the Pledged Collateral or that would reasonably be expected, if determined adversely, to materially and adversely affect the value of the Purchased Asset, the Mortgaged Property or the Pledged Collateral.

27. To Seller’s Actual Knowledge, the Purchased Asset is not cross-collateralized with any other loan or financing.

B. Seller represents and warrants to Agent and Buyers, with respect to the Purchased Asset, that except as specifically disclosed in the Confirmation for the Purchased Asset, as of the Purchase Date for the Purchased Asset by Agent from Seller, and at all times when the Purchased Asset is subject to the Agreement, the representations set forth in this Schedule II, Section B shall be true and correct in all material respects. For purposes of this Schedule II, Section B, and the representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to the Purchased Asset if and when Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to such breach no longer affects the Purchased Asset or has repurchased the Purchased Asset in accordance with the terms of the Agreement.

1. The Purchased Asset is a Whole Loan.

2. To the Actual Knowledge of Seller, other than the right of first refusal by the Mortgagor or Underlying Obligor, as applicable, for the Purchased Asset, and except for the rights of Agent under the Agreement, no third party holds any “right of first refusal,” “right of first negotiation,” “right of first offer,” purchase option, or other similar rights of any kind, and no other impediment exists to any such pledge to Agent or Agent’s exercise of rights or remedies.

3. Seller holds no preferred equity interest and neither Seller nor any Affiliate has any obligation to make capital contributions to the Mortgagor or Underlying Obligor, as applicable, under the Purchased Asset.

Sch. II-5

SCHEDULE III

Reserve Balances

[Attached]

Sch. III-1

EXHIBIT A

Form of Transaction Request

[            ], 2013

Wells Fargo Bank, National Association
600 California Street
19th Floor
San Francisco, CA 94108
Attention:	Sean Flannery
Telephone:	(415) 396-6764
Email:	seanf@wellsfargo.com

Re: Master Repurchase and Securities Contract dated as of June 7, 2013 (the “Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company (“Seller”) and Wells Fargo Bank, National Association (“Buyer” and “Agent”)

Ladies and Gentlemen:

This is a Transaction Request (as this and other terms used but not defined herein are defined in the Agreement) delivered pursuant to Section 3.01(a) of the Agreement. Seller hereby requests that Agent, on behalf of Buyers, enter into a Transaction upon the proposed terms set forth below.

Assets:	As described in Appendix 1 hereto
Asset Documents:	As described in Appendix 1 hereto
Purchase Date:	[            ], 2013
Purchase Price:	$

Except as specified in Appendix 1 hereto, on the Purchase Date for each Asset described in this Transaction Request, Seller will make all of the representations and warranties contained in the Agreement (including Schedule II to the Agreement) with respect thereto.

Ex. A-1

Seller:
SVP 2013 FINANCE, LLC, a Delaware
limited liability company
By:
	Name:
	Title:

Ex. A-2

Appendix 1 to Transaction Request

List of Eligible Assets requested to be purchased, to include, as applicable:

[Description of any exceptions to representations and warranties to be made by Seller in the related Confirmation]

Ex. A-3

EXHIBIT B

Form of Confirmation

[            ], 20[    ]

Wells Fargo Bank, National Association
600 California Street
19th Floor
San Francisco, CA 94108
Attention:	Sean Flannery
Telephone:	(415) 396-6764
Email:	seanf@wellsfargo.com

Re: Master Repurchase and Securities Contract dated as of June 7, 2013 (the “Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company (“Seller”) and Wells Fargo Bank, National Association (“Buyer” and “Agent”)

Ladies and Gentlemen:

This is a Confirmation (as this and other terms used but not defined herein are defined in the Agreement) executed and delivered by Seller and Agent pursuant to Section 3.01(c) of the Agreement. Seller and Agent hereby confirm and agree that, as of the Purchase Date and upon the other terms specified below, Seller shall sell and assign to Agent, on behalf of Buyers, and Agent, on behalf of Buyers, shall purchase from Seller, all of Seller’s right, title and interest in, to and under the Purchased Asset listed in Appendix 1 hereto.

Purchased Asset:	As described in Appendix 1 hereto
Asset Documents:	As described in Appendix 1 hereto
Purchase Date:	[            ], 20[    ]
Purchase Price:	$

Seller hereby certifies as follows, on and as of the above Purchase Date with respect to each Purchased Asset described in this Confirmation:

1. All of the conditions precedent in Article 6 of the Agreement have been satisfied.

2. Except as specified in Appendix 1 hereto, Seller will make all of the representations and warranties contained in the Agreement.

Ex. B-1

Seller:
SVP 2013 FINANCE, LLC,
a Delaware limited liability company
By:
	Name:
	Title:

Agent:

Acknowledged and Agreed:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent for Buyer

By:
	Name:
	Title:

Ex. B-2

Appendix 1 to Confirmation

Purchased Asset, including, as applicable:

[Description of any exceptions to representations and warranties made by Seller in the Confirmation]

Ex. B-3

EXHIBIT C

Form of Irrevocable Redirection Notice

[PAYOR ADDRESS] [DATE]

Attention: [                    ]

Re: Payment Redirection Letter

Ladies and Gentlemen:

[INSERT PARTY NAME] (“Payor”) is obligated to pay over to [                    ] (“Payee”) the proceeds of, or the payments, dividends or distributions with respect thereto, the Asset identified on Appendix A attached hereto (the “Proceeds”). Payor is hereby irrevocably instructed to deposit all Proceeds into the account identified below.

Bank:

ABA#:

Acct#:

Attn:

Reference: Prime/Loan # [                    ]

The instructions set forth herein are irrevocable without the consent of Payee and Wells Fargo Bank, National Association (“Agent”), in each party’s respective sole and absolute discretion. No provision of this instruction letter may be revoked, amended or otherwise modified without the prior written consent of Payee and Agent, in each party’s respective sole and absolute discretion. Agent is an intended third party beneficiary of this instruction letter and may enforce this instruction letter the same as if it were a party hereto.

Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed copy to Agent promptly upon receipt. Any notices to Agent should be delivered to the following address: Wells Fargo Bank, National Association, Wells Fargo Bank, National Association, 600 California Street, 19th Floor, San Francisco, CA 94108, Sean Flannery

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

Very truly yours,

[                    ], as Payee

By:

Name:

Title:

Ex. C-1

Appendix A

Asset

[describe Asset to which Irrevocable Redirection Notice relates]

Ex. C-1

EXHIBIT D-1

Form of Closing Certificate

SVP 2013 FINANCE, LLC

(the “Company”)

CERTIFICATE OF [                    ]

            , 20    

I,                     , a [                    ] of the Company, DO HEREBY CERTIFY AND CONFIRM that I am authorized to execute and deliver this Certificate on behalf of the Company and I further certify, in my capacity as [                    ], the following:

1. Attached as Exhibit A hereto is a true, up to date and correct copy of the Certificate of [                    ] of the Company.

2. Attached as Exhibit B hereto is a true, up to date and correct copy of the [                    ] of the Company.

3. Attached as Exhibit C hereto is an Incumbency Certificate of the Company setting forth, as of the date hereof, each duly elected or appointed, qualified and acting [                    ] of the Company and the signature appearing opposite his or her name is his or her true and genuine signature (or true facsimile thereof).

4. Attached as Exhibit D hereto is a true and correct copy of a Resolution duly executed by the [                    ] of the Company approving the documents referred to therein and their signing, execution and performance of such resolutions have not been amended, modified or revoked and are in full force and effect.

5. Attached as Exhibit E hereto is a true, up to date and correct copy of a Certificate of Good Standing of the Company in the State of [                    ].

6. The Registered Office of the Company is at [                    ].

This Certificate is given without personal recourse or liability to the signor.

[Signature Page Follows]

Ex. D-1-1

IN WITNESS WHEREOF, the undersigned has hereunto executed this Certificate for and on behalf of the Company on             , 20    .

SVP 2013 FINANCE, LLC, a Delaware
limited liability company
By:
	Name:
	Title:

Ex. D-1-2

EXHIBIT D-2

Form of Compliance Certificate

[            ], 20[    ]

Wells Fargo Bank, National Association
600 California Street
19th Floor
San Francisco, CA 94108
Attention:	Sean Flannery
Telephone:	(415) 396-6764
Email:	seanf@wellsfargo.com

Re: Master Repurchase and Securities Contract dated as of June 7, 2013 (the “Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company (“Seller”) and Wells Fargo Bank, National Association (“Buyer” and “Agent”)

This Compliance Certificate is furnished pursuant to the above Agreement. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the respective meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am a duly elected Responsible Officer of [                    ].

The financial statements attached hereto with respect to Seller fairly present in all material respects the financial condition and results of operations of Seller as of the end of and for the period covered thereby in accordance with GAAP (except in the case of quarterly financial statements, subject to yearend audit adjustments and the absence of footnotes).

I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and financial condition of Seller during the accounting period covered by the financial statements attached hereto (or most recently delivered to Agent, if none are attached).

To the best of my knowledge, Seller has, during the period since the delivery of the immediately preceding Compliance Certificate, observed or performed all of its covenants and other agreements in all material respects, and satisfied in all material respects every condition, contained in the Agreement and the other Repurchase Documents to be observed, performed or satisfied by it, and I have no knowledge of the occurrence during such period, or present existence, of any condition or event which constitutes an Event of Default or Default, except as set forth below.

Attached as Exhibit 1 hereto are the financial statements required to be delivered pursuant to Section 8.06 of the Agreement (or, if none are required to be delivered as of the date

Ex. D-2-1

of this Compliance Certificate, the financial statements most recently delivered pursuant to Section 8.06 of the Agreement), which financial statements, to the best of my knowledge after due inquiry, fairly present in all material respects, the consolidated financial condition and operations of Guarantor and the consolidated results of their operations as of the date or with respect to the period therein specified, determined in accordance with GAAP.

Attached as Exhibit 2 hereto are the calculations demonstrating compliance with the financial covenants set forth in Section 9 of the Guarantee Agreement, each for the immediately preceding fiscal quarter.

Described below are the exceptions, if any, to the above paragraph, setting forth in detail the nature of the condition or event, the period during which it has existed and the action which Seller has taken, is taking, or proposes to take with respect to such condition or event:

The foregoing certifications, together with the financial statements, updates, reports, materials, calculations and other information set forth in any exhibit or other attachment hereto, or otherwise covered by this Compliance Certificate, are made and delivered as of             , 20    .

SVP 2013 FINANCE, LLC, a Delaware
limited liability company
By:
	Name:
	Title:

Exhibit 1: Financial Statements

Exhibit 2: Financial Covenant Compliance Calculations

Ex. D-2-2

EXHIBIT E

Form of Power of Attorney

Know All Men by These Presents, that SVP 2013 FINANCE, LLC, a Delaware limited liability company (“Seller”), does hereby appoint WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Agent (in such capacity, “Agent”) for Wells Fargo Bank, National Association, a national banking association (“Buyer”), its attorney in fact to act in Seller’s name, place and stead, upon the occurrence and during the continuance of an Event of Default, in any way that Seller could do with respect to the enforcement of Seller’s rights under the Purchased Asset purchased by Agent, on behalf of Buyer, pursuant to the Master Repurchase and Securities Contract, dated as of June 7, 2013 between Seller, Buyer and Agent (the “Repurchase Agreement”), and to take such other steps as may be necessary or desirable to enforce Buyer’s rights against the Purchased Asset to the extent that Seller is permitted by law to act through an agent.

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

[SIGNATURE PAGE FOLLOWS]

Ex. E-1

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a deed on the date first written above.

SVP 2013 FINANCE, LLC,
a Delaware limited liability company
By:
	Name:
	Title:

Ex. E-2

EXHIBIT F

Form of Assignment and Acceptance

1. Reference is made to the Master Repurchase and Securities Contract dated as of June 7, 2013, (the “Repurchase Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company (“Seller”), Wells Fargo Bank, National Association (“Buyer”), and Wells Fargo Bank, National Association, as Agent for Buyer (in such capacity, “Agent”).

2. [                    ] (“Assignor”) and [                    ] (“Assignee”) hereby agree as follows:

3. Assignor hereby sells and assigns and delegates, without recourse except as to the representations and warranties made by it herein, to Assignee, and Assignee hereby purchases and assumes from Assignor, an interest in and to Assignor’s rights and obligations under the Agreement as of the Effective Date (as hereinafter defined) equal to the percentage interest specified on Schedule I hereto of all outstanding rights and obligations under the Repurchase Agreement (collectively, the “Assigned Interest”).

4. Assignor:

(a) hereby represents and warrants that its name set forth on Schedule I hereto is its legal name, that it is the legal and beneficial owner of the Assigned Interest and that such Assigned Interest is free and clear of any adverse claim;

(b) other than as provided herein, makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Repurchase Agreement or any of the other Repurchase Documents, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, the Repurchase Agreement or any of the other Repurchase Documents, or any other instrument or document furnished pursuant thereto; and

(c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Seller or the performance or observance by Seller of any of its Repurchase Obligations.

5. Assignee:

(a) confirms that it has received a copy of the Repurchase Agreement, the other Repurchase Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance;

(b) agrees that it will, independently and without reliance upon Agent or Buyers, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Repurchase Agreement;

Ex. F-1

(c) represents and warrants that its name set forth on Schedule I hereto is its legal name;

(d) agrees that, from and after the Effective Date, it will be bound by the provisions of the Repurchase Agreement and the other Repurchase Documents and, to the extent of the Assigned Interest, it will perform in accordance with their terms all of the obligations that by the terms of the Repurchase Agreement are required to be performed by it as a Buyer; and

(e) The effective date for this Assignment and Acceptance (the “Effective Date”) shall be the date specified on Schedule I hereto.

6. As of the Effective Date, (a) Assignee shall be a party to the Agreement and, to the extent of the Assigned Interest, shall have the rights and obligations of a Buyer thereunder and (b) Assignor shall, to the extent that any rights and obligations under the Agreement have been assigned and delegated by it pursuant to this Assignment and Acceptance, relinquish its rights (other than provisions of the Repurchase Agreement and the other Repurchase Documents that are specified under the terms thereof to survive the payment in full of the Repurchase Obligations) and be released from its obligations under the Repurchase Agreement (and, if this Assignment and Acceptance covers all or the remaining rights and obligations of such Assignor under the Agreement, such Assignor shall cease to be a party thereto).

7. Assignor and Assignee shall make all appropriate adjustments in payments under the Repurchase Agreement for periods prior to the Effective Date directly between themselves.

8. This Assignment and Acceptance shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.

9. This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule I hereto in Portable Document Format (PDF) or by telecopier or facsimile transmission shall be effective as delivery of an originally executed counterpart of this Assignment and Acceptance.

Ex. F-2

IN WITNESS WHEREOF, each of Assignor and Assignee have caused Schedule I hereto to be executed by their respective officers thereunto duly authorized, as of the date specified thereon.

Ex. F-3

Schedule I

to

ASSIGNMENT AND ACCEPTANCE

Assignor: [                    ]

Assignee: [                    ]

Effective Date: [            ], 20[    ]

Assigned Purchase Price	$
Aggregate Purchase Price	$
Assigned Buyer Percentage		%
Outstanding Aggregate Purchase Amount	$
Outstanding Buyer Purchase Amount	$

Assignor:
[                    ], as Assignor
[Type or print legal name of Assignor]
By:
	Name:
	Title:
Dated: [            ], 20[    ]
Assignee:
[                    ], as Assignee [Type or print legal name of Assignee]
By:
	Name:
	Title:
Address for Notices:

Ex. F-4

EXHIBIT G

Transfer Authorizer Designation

(Attached)

Ex. G-1

EX-10.9

Exhibit 10.9

LIMITED GUARANTEE AGREEMENT

LIMITED GUARANTEE AGREEMENT, dated as of June 7, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, this “Guarantee”), made by BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation, having its principal place of business at c/o The Blackstone Group, 345 Park Avenue, New York, NY 10154 (“Guarantor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Agent”), as Agent on behalf of Wells Fargo Bank, National Association, a national banking association (“Buyer”), and any of its respective parents, subsidiaries or affiliated companies.

RECITALS

Pursuant to that certain Master Repurchase and Securities Contract, dated as of June 7, 2013 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), among SVP 2013 FINANCE, LLC, a Delaware limited liability company (the “Seller”), Agent and Buyer, Seller has agreed to sell to Agent the Asset, as defined in the Repurchase Agreement (the “Purchased Asset”), upon the terms and subject to the conditions as set forth therein. The Repurchase Agreement, this Guarantee and any other agreements executed in connection with the Repurchase Agreement shall be referred to herein as the “Repurchase Documents”.

It is a condition precedent to Agent purchasing the Purchased Asset pursuant to the Repurchase Agreement that Guarantor shall have executed and delivered this Guarantee with respect to the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following in accordance with the provisions of this Guarantee: (a) all payment obligations owing by Seller to Agent under or in connection with the Repurchase Agreement and any other Repurchase Documents; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by Agent in the enforcement of any of the foregoing or any obligation of Guarantor hereunder; and (d) all other Repurchase Obligations, including any other obligations of Seller with respect to Agent under each of the Repurchase Documents (collectively, the “Obligations”).

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer and Agent to enter into the Repurchase Documents and to enter into the transactions contemplated thereunder, Guarantor hereby agrees with Agent as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, terms which are defined in the Repurchase Agreement and used herein are so used as so defined.

(b) In addition to initially capitalized terms defined elsewhere in this Guarantee, the following terms shall have the respective meanings set forth below:

“Available Borrowing Capacity” shall mean, with respect to any Person, on any date of determination, the total unrestricted borrowing capacity which may be drawn (taking into account required reserves and discounts) upon by such Person or its Subsidiaries, at such Person’s or its Subsidiaries’ sole discretion, under committed credit facilities or repurchase agreements which provide financing to such Person or its Subsidiaries.

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

“Cash Equivalents” shall mean any of the following: (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof), (b) securities issued or directly and fully guaranteed or insured by any state of the United States or any political subdivision of any such state and rated at least AA or the equivalent thereof by S&P or at least Aa2 or the equivalent thereof by Moody’s on the date of acquisition, (c) bonds (excluding mortgage-backed securities), notes or other debt obligations issued by private issuers and rated at least AA or the equivalent thereof by S&P or at least Aa2 or the equivalent thereof by Moody’s on the date of acquisition, (d) time deposits or certificates of deposit of any commercial bank incorporated under the laws of the United States or any state thereof, having capital and unimpaired surplus in excess of $500,000,000 and whose short-term commercial paper rating at the time of acquisition is at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s (any such bank, an “Approved Bank”) on the date of acquisition, with such deposits or certificates having maturities of not more than one (1) year from the date of acquisition, (e) repurchase agreements entered into by any Person with a bank or trust company (including Wells Fargo Bank, National Association) or recognized securities dealer having capital and surplus in excess of $500,000,000 for underlying securities of the types described in clauses (a) and (d) above, (f) commercial paper or finance company paper issued by any Person incorporated under the laws of the United States or any state thereof and rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s on the date of acquisition, and in each case maturing not more than one (1) year after the date of acquisition, and (g) investments in money market funds that are registered under the Investment Company Act, which have net assets of at least $1,000,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (a) through (f) above. All such Cash Equivalents must be denominated solely for payment in Dollars.

“Cash Liquidity” shall mean, with respect to any Person, on any date of determination, the sum of (i) unrestricted cash, plus (ii) Available Borrowing Capacity, plus (iii) Cash Equivalents.

“Consolidated Net Income” shall mean, with respect to any Person, for any period, the amount of consolidated net income (or loss) of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

2

“EBITDA” shall mean, with respect to any Person, for any period, such Person’s Consolidated Net Income, excluding the effects of such Person’s and its Subsidiaries’ interest expense with respect to Indebtedness, taxes, depreciation, amortization, asset write-ups or impairment charges, provisions for loan losses, and changes in mark-to-market value(s) (both gains and losses) of financial instruments and noncash compensation expenses, all determined on a consolidated basis in accordance with GAAP.

“Fixed Charges” shall mean, with respect to any Person, for any period, the amount of interest paid in cash with respect to Indebtedness as shown on such Person’s consolidated statement of cash flow in accordance with GAAP as offset by the amount of receipts pursuant to net receive interest rate swap agreements of such Person and its consolidated Subsidiaries during the applicable period.

“Indebtedness” shall mean, with respect to any Person: (i) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (ii) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (iii) Indebtedness of others secured by a lien on the property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (iv) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; contingent or future funding obligations under any Purchased Asset or any obligations senior to, or pari passu with, any Purchased Asset; (v) Capital Lease Obligations of such Person; (vi) obligations of such Person under repurchase agreements or like arrangements; (vii) Indebtedness of others Guaranteed by such Person to the extent of such guarantee; and (viii) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person. Notwithstanding the foregoing, nonrecourse Indebtedness owing pursuant to a securitization transaction such as a REMIC securitization, a collateralized loan obligation transaction or other similar securitization shall not be considered Indebtedness for any person.

“Recourse Indebtedness” shall mean, with respect to any Person, on any date of determination, the amount of Indebtedness for which such Person has recourse liability such (such as through a guarantee agreement), exclusive of any such Indebtedness for which such recourse liability is limited to obligations relating to or under agreements containing customary nonrecourse carve-outs.

“Tangible Net Worth” shall mean, with respect to any Person, on any date of determination, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person pursuant to GAAP, minus (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and/or expenses, all on or as of such date.

3

“Total Assets” shall mean, with respect to any Person, on any date of determination, an amount equal to the aggregate book value of all assets owned by such Person and the proportionate share of such Person of all assets owned by Affiliates of such Person as consolidated in accordance with GAAP, less (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and expenses, all on or as of such date, and (d) the amount of nonrecourse Indebtedness owing pursuant to securitization transactions such as a REMIC securitization, a collateralized loan obligation transactions or other similar securitizations.

2. Guarantee.

(a) In the event of the occurrence of any event described in clause (b) below, Guarantor hereby unconditionally and irrevocably guarantees to Buyer the prompt and complete payment and performance of the Obligations by Seller when due (whether at the stated maturity, by acceleration or otherwise).

(b) The Obligations shall be fully recourse to Seller and Guarantor, jointly and severally, upon the occurrence of any of the following:

(i) a voluntary bankruptcy or insolvency proceeding is commenced by Seller under the U.S. Bankruptcy Code or any similar federal or state law; or

(ii) an involuntary bankruptcy or insolvency proceeding is commenced against Seller or Guarantor in connection with which Seller, Guarantor, or any Affiliate of any of the foregoing has or have colluded in any way with the creditors commencing or filing such proceeding.

(c) In addition to the foregoing, Guarantor shall also be liable for any losses, costs, claims, expenses or other liabilities incurred by Agent (exclusive of consequential damages) arising out of or attributable to the fraud or intentional misrepresentation by Seller, Guarantor or any of their respective Affiliates in connection with the execution and the delivery of this Guarantee, the Repurchase Agreement, or any of the other Repurchase Documents, or any certificate, report, financial statement or other instrument or document furnished to Agent at the time of the closing of the Repurchase Agreement or during the term of the Repurchase Agreement.

(d) Nothing herein shall be deemed to be a waiver of any right that Agent may have under Section 506(a), 506(b), 1111(b) or any other provision of the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness owed by Seller and secured by the Repurchase Agreement or any other Repurchase Document or to require that all collateral shall continue to secure all of the indebtedness owing by Seller to Agent in accordance with the Repurchase Agreement or any other Repurchase Documents.

(e) In the event of the occurrence of any event described in clause (b) above, Guarantor further agrees to pay any and all reasonable and documented expenses (including, without limitation, all reasonable and documented fees and disbursements of external counsel) which may be paid or incurred by Agent in enforcing any rights with respect to, or collecting

4

against, Guarantor under this Guarantee. This Guarantee shall remain in full force and effect until the Obligations are paid in full, notwithstanding that from time to time prior thereto Seller may be free from any Obligations.

(f) No payment or payments made by Seller or any other Person or received or collected by Agent from Seller or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder for the remaining Obligations and Guarantor shall, notwithstanding any such payment or payments, remain liable for the amount of the Obligations until the Obligations are paid in full.

(g) Guarantor agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to Agent on account of Guarantor’s liability hereunder, Guarantor will notify Agent in writing that such payment is made under this Guarantee for such purpose.

3. Subrogation. Upon making any payment hereunder, Guarantor shall be subrogated to the rights of Agent against Seller and any collateral for any Obligations with respect to such payment; provided, that Guarantor shall not seek to enforce any right or receive any payment by way of subrogation until all amounts due and payable by Seller to Agent under the Repurchase Documents or any related documents have been paid in full; and, further provided, that such subrogation rights shall be subordinate in all respects to all amounts owing to Agent under the Repurchase Documents. When Guarantor shall have paid in full all Obligations required under this Guarantee, the Agent will, promptly after the request of Guarantor, execute and deliver to the Guarantor (without recourse, representation or warranty) appropriate documents necessary or reasonably requested to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations, subject to the provisos set forth above

4. Amendments, etc. with Respect to the Obligations. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Obligations made by Agent may be rescinded by Agent and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Agent, and any Repurchase Document and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Agent may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Agent for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Agent shall have no obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against Guarantor, Agent may, but shall be under no obligation to, make a similar demand on Seller or any other guarantor, and any failure by Agent to make any such demand or to collect any payments from Seller or any such other guarantor or any release of Seller or such other guarantor shall not relieve Guarantor of its Obligations or liabilities hereunder, and shall not impair or

5

affect the rights and remedies, express or implied, or as a matter of law, of Agent against Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

5. Guarantee Absolute and Unconditional.

(a) Guarantor hereby agrees that its obligations under this Guarantee constitute a guarantee of payment when due and not of collection. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Agent upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee; and all dealings between Seller or Guarantor, on the one hand, and Agent, on the other hand, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Guarantor waives promptness, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Seller or Guarantor with respect to the Obligations. This Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity, regularity or enforceability of any Repurchase Document, any of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Agent, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by Seller against Agent, (iii) any requirement that Agent exhaust any right to take any action against Seller or any other Person prior to or contemporaneously with proceeding to exercise any right against Guarantor under this Guarantee or (iv) any other circumstance whatsoever (with or without notice to or knowledge of Seller or Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of Seller for the Obligations or of Guarantor under this Guarantee, in bankruptcy or in any other instance (other than by reason of actual payment). When pursuing its rights and remedies hereunder against Guarantor, Agent may, but shall be under no obligation, to pursue such rights and remedies that Agent may have against Seller or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Agent to pursue such other rights or remedies or to collect any payments from Seller or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Seller or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Agent against Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and its successors and assigns thereof, and shall inure to the benefit of Agent, and their respective successors, endorsees, transferees and assigns, until all the Obligations and the obligations of Guarantor under this Guarantee shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Repurchase Documents Seller may be free from any Obligations.

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(b) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to Agent as follows:

(i) Guarantor hereby waives any defense arising by reason of, and any and all right to assert against Agent any claim or defense based upon, an election of remedies by Agent which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against Seller or any other guarantor for reimbursement or contribution, and/or any other rights of Guarantor to proceed against Seller, against any other guarantor, or against any other person or security.

(ii) Guarantor is presently informed of the financial condition of Seller and of all other circumstances which diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed about each of Seller’s financial condition and the status of any guarantors, if any, of circumstances which bear upon the risk of nonpayment and that it will continue to rely upon sources other than Agent for such information and will not rely upon Agent for any such information. Absent a written request for such information by Guarantor to Agent, Guarantor hereby waives the right, if any, to require Agent to disclose to Guarantor any information that Agent may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other guarantor.

(iii) Guarantor has independently reviewed the Repurchase Documents and related agreements, agrees to be bound thereby (including, without limitation, Article 13 of the Repurchase Agreement), and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Guarantee to Agent, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any liens or security interests of any kind or nature granted by Seller or any other guarantor to Agent, now or at any time and from time to time in the future.

(iv) Guarantor is not and has never been the subject of an Insolvency Proceeding. Guarantor is Solvent and this Guarantee does not and will not render Guarantor not Solvent. Guarantor is not entering into this Guarantee with the intent to hinder, delay or defraud any creditor of Guarantor. Guarantor has received or will receive reasonably equivalent value for this Guarantee. Guarantor has or will have adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Guarantor is generally able to pay, and as of the date hereof is paying, its debts as they come due.

6. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Agent upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Seller or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of Seller or any substantial part of Seller’s property, or otherwise, all as though such payments had not been made.

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7. Payments. Guarantor hereby agrees that the Obligations will be paid to Agent without set-off or counterclaim in U.S. Dollars at the address specified in writing by Agent.

8. Representations and Warranties. Guarantor represents and warrants that, as of the date hereof:

(a) Guarantor has the legal capacity and the legal right to execute and deliver this Guarantee and to perform Guarantor’s obligations hereunder;

(b) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority and no consent of any other Person (including, without limitation, any creditor of Guarantor) is required in connection with the execution, delivery, performance, validity or enforceability of this Guarantee;

(c) this Guarantee has been duly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought in proceedings in equity or at law);

(d) the execution, delivery and performance of this Guarantee will not violate any law, treaty, rule or regulation or determination of an arbitrator, a court or other governmental authority, applicable to or binding upon Guarantor or any of its property or to which Guarantor or any of its property is subject (“Requirement of Law”), or any provision of any security issued by Guarantor or of any agreement, instrument or other undertaking to which Guarantor is a party or by which it or any of its property is bound (“Contractual Obligation”), and will not result in or require the creation or imposition of any lien on any of the properties or revenues of Guarantor pursuant to any Requirement of Law or Contractual Obligation of Guarantor;

(e) no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of Guarantor, threatened by or against Guarantor or against any of Guarantor’s properties or revenues, in each case with respect to or relating to this Guarantee;

(f) Guarantor has filed all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes (including mortgage recording taxes), assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, which have become due, or such taxes are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. As of the Closing Date, there is no material action, suit, proceeding, investigation, audit or claim relating to any such taxes now pending or, to the Actual Knowledge of Guarantor, threatened by any Governmental Authority which is not being contested in good faith as provided above. As of the Closing Date, Guarantor has not entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes or is aware of any circumstances that would cause the taxable years or other taxable periods of Seller not to be subject to the normally applicable statute of limitations. No tax Liens have been filed against any property or assets of Guarantor;

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(g) Guarantor has been duly organized and validly exists in good standing as a corporation, under the laws of the jurisdiction of its formation;

(h) Guarantor has all requisite power and authority and has been duly authorized by all necessary action, to execute, deliver and perform its obligations under this Guarantee; and

(i) the execution, delivery and performance by Guarantor of this Guarantee does not conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under, any Governing Document.

9. Financial Covenants. Guarantor shall maintain the following covenants at all times following the Closing Date until the Obligations have been paid in full:

(a) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Guarantor’s EBITDA during the previous four (4) fiscal quarters to (ii) Guarantor’s Fixed Charges during the same such previous four (4) fiscal quarters shall not be less than 1.40 to 1.00 as determined as soon as practicable after the end of each fiscal quarter, but in no event later than forty-five (45) days after the last day of the applicable fiscal quarter.

(b) Minimum Tangible Net Worth. Guarantor’s Tangible Net Worth shall not fall below the sum of (i) five hundred twenty-five million dollars ($525,000,000) plus (ii) seventy-five percent (75%) of the net cash proceeds of any equity issuance by Guarantor that occurs after the Closing Date.

(c) Minimum Cash Liquidity. Guarantor’s Cash Liquidity shall not fall below the greater of (i) ten million dollars ($10,000,000) or (ii) five percent (5%) of Guarantor’s Recourse Indebtedness.

(d) Maximum Indebtedness. The ratio, expressed as a percentage, the numerator of which shall equal Guarantor’s and its Subsidiaries’ Indebtedness and the denominator of which shall equal Guarantor’s and its Subsidiaries’ Total Assets, shall be greater than eighty percent (80%).

10. Severability. Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

11. Paragraph Headings. The paragraph headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

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12. No Waiver; Cumulative Remedies. Agent shall not by any act (except by a written instrument pursuant to paragraph 13 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or event of default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of Agent, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Agent of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that Agent would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

13. Waivers and Amendments; Successors and Assigns; Governing Law. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Agent, provided that, subject to any limitations set forth in the Repurchase Agreement, any provision of this Guarantee may be waived by Agent in a letter or agreement executed by Agent or by telex or facsimile transmission from Agent. This Guarantee shall be binding upon the heirs, personal representatives, successors and assigns of Guarantor and shall inure to the benefit of Agent and its successors and assigns. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

14. Notices. Notices by Agent to Guarantor may be given by mail, or by telecopy transmission, addressed to Guarantor at c/o The Blackstone Group, 345 Park Avenue, New York, New York 10154, Attention: Douglas N. Armer, Email: douglas.armer@blackstone.com and shall be effective (a) in the case of mail, five (5) calendar days after deposit in the postal system, first class certified mail and postage pre-paid, (b) one (1) Business Day following timely delivery to a nationally recognized overnight courier service for next Business Day delivery and (c) in the case of telecopy transmissions, when sent, transmission electronically confirmed. Notices to Agent by Guarantor may be given in the manner set forth in the Repurchase Agreement.

15. SUBMISSION TO JURISDICTION; WAIVERS; SERVICE OF PROCESS. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER REPURCHASE DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION

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OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO GUARANTOR AT ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH AGENT SHALL HAVE BEEN NOTIFIED; AND

(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

16. Integration. This Guarantee represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations by Agent relative to the subject matter hereof not reflected herein.

17. Acknowledgments. Guarantor hereby acknowledges that:

(a) Guarantor has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Repurchase Documents;

(b) Agent has no fiduciary relationship to Guarantor, and the relationship between Agent and Guarantor is solely that of surety and creditor; and

(c) no joint venture exists between or among any of Agent, Guarantor or Seller.

18. WAIVERS OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

19. Intentionally omitted.

20. Guarantor’s Waiver of Setoff. Guarantor hereby waives any right of setoff Guarantor may have or to which Guarantor may be or become entitled under the Repurchase Documents or otherwise against Agent, any Affiliate of Agent, any Indemnified Person or their respective assets or properties.

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned has caused this Limited Guarantee Agreement to be duly executed and delivered as of the date first above written.

GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Douglas Armer
	Name:	Douglas Armer
	Title:	Principal, Head of Capital Markets

EX-10.10

Exhibit 10.10

MASTER REPURCHASE AGREEMENT

Dated as of June 12, 2013

between

PARLEX 2 FINANCE, LLC,

as Seller,

and

CITIBANK, N.A.,

as Buyer

TABLE OF CONTENTS

		Page
1.	APPLICABILITY		1
2.	DEFINITIONS		1
3.	INITIATION; CONFIRMATION; TERMINATION; FEES		20
4.	MARGIN MAINTENANCE		26
5.	INCOME PAYMENTS AND PRINCIPAL PAYMENTS		29
6.	SECURITY INTEREST		31
7.	PAYMENT, TRANSFER AND CUSTODY		32
8.	SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS		35
9.	INTENTIONALLY OMITTED		36
10.	REPRESENTATIONS		36
11.	NEGATIVE COVENANTS OF SELLER		41
12.	AFFIRMATIVE COVENANTS OF SELLER		42
13.	SINGLE-PURPOSE ENTITY		45
14.	EVENTS OF DEFAULT; REMEDIES		46
15.	SINGLE AGREEMENT		51
16.	RECORDING OF COMMUNICATIONS		52
17.	NOTICES AND OTHER COMMUNICATIONS		52
18.	ENTIRE AGREEMENT; SEVERABILITY		52
19.	NON-ASSIGNABILITY		53
20.	GOVERNING LAW		54
21.	NO WAIVERS, ETC.		54
22.	USE OF EMPLOYEE PLAN ASSETS		54
23.	INTENT		55
24.	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS		56
25.	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL		57
26.	NO RELIANCE		58
27.	INDEMNITY		58
28.	DUE DILIGENCE		59
29.	SERVICING		60
30.	MISCELLANEOUS		61
31.	TAXES		62

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ANNEXES AND EXHIBITS

ANNEX I	Names and Addresses for Communications between Parties and Wire Instructions
SCHEDULE I	Prohibited Transferees
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III	Form of Custodial Delivery
EXHIBIT IV	Eligible Loan Due Diligence Checklist
EXHIBIT V	Form of Power of Attorney
EXHIBIT VI	Representations and Warranties Regarding Each Individual Purchased Loan
EXHIBIT VII	Collateral Tape
EXHIBIT VIII	Form of Transaction Request
EXHIBIT IX	Form of Request for Margin Excess
EXHIBIT X	Form of Irrevocable Direction Letter

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MASTER REPURCHASE AGREEMENT, dated as of June 12, 2013, by and among PARLEX 2 FINANCE, LLC, a Delaware limited liability company (“Seller”) and CITIBANK, N.A., a national banking association (“Buyer”).

1. APPLICABILITY

From time to time during the Facility Availability Period, the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Purchased Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Purchased Loans at a date certain, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any exhibits identified herein as applicable hereunder.

2. DEFINITIONS

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

“Acceptable Attorney” means Ropes & Gray LLP or any other attorney-at-law or law firm reasonably acceptable to Buyer.

“Accepted Servicing Practices” shall have the meaning given to such term in the Servicing Agreement (or, if not defined therein, shall mean with respect to any Purchased Loan, those mortgage servicing practices of prudent mortgage lending institutions which service whole mortgage loans (and senior interests in whole mortgage loans) in the jurisdiction where the related Mortgaged Property is located).

“Act of Insolvency” shall mean, with respect to any Person, (a) the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its assets or property in an involuntary case under any applicable Insolvency Law now or hereafter in effect which (i) results in the entry of an order for relief or (ii) is not dismissed within 90 days, (b) the appointment by a court having jurisdiction over such Person or any substantial part of its assets or property, of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property and such appointment shall remain unstayed and in effect for a period of 90 days, (c) an order by a court having jurisdiction over such Person or any substantial part of its assets or property ordering the winding up or liquidation of such Person’s affairs, and such order shall remain unstayed and in effect for a period of 90 days, (d) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, (e) the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law, (f) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, (g) the making by such Person of any general assignment for the benefit of creditors, or (h) the admission in writing in connection with a legal proceeding of the inability of such Person to pay its debts generally as they become due.

“Actual Knowledge” shall mean, as of any date of determination, the then current actual knowledge of Stephen Plavin, Geoffrey Jervis and Douglas Armer, without duty of further inquiry or investigation; provided, that if any such individual ceases to be an officer of or in the employ of Seller and/or Guarantor after the date of this Agreement in a capacity comparable to the capacity occupied as of the date of this Agreement, then Seller shall designate promptly another individual reasonably acceptable to Buyer for purposes of satisfying this definition.

“Affiliate” shall mean, when used with respect to any specified Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person.

“Agreement” shall mean this Master Repurchase Agreement, dated as of the date first set forth above, by and between Parlex 2 Finance, LLC, and Citibank, N.A., as such agreement may be modified or supplemented from time to time.

“Alternative Rate” shall have the meaning specified in Section 3(g) of this Agreement.

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

“Applicable Spread” shall mean, with respect to each Transaction:

(i) so long as no Event of Default shall have occurred and be continuing, the number of basis points (i.e., 1 basis point equals 0.01%) determined in accordance with the Pricing Matrix, and confirmed in the related Confirmation; or

(ii) after the occurrence and during the continuance of an Event of Default, the applicable incremental per annum rate described in clause (i) of this definition, as applicable, plus 400 basis points (4.00%).

“Applicable Standard of Discretion” shall mean (a) at any time the Maximum LTV (Purchase Price) of a Purchased Loan is less than or equal to the LTV (Loan UPB) of such Purchased Loan as of the Purchase Date, Buyer’s commercially reasonable discretion, and (b) at any time the Maximum LTV (Purchase Price) of a Purchased Loan is greater than the LTV (Loan UPB) of such Purchased Loan as of the Purchase Date, Buyer’s sole discretion.

“Appraisal” shall mean a FIRREA compliant appraisal addressed to Buyer, Seller or Guarantor, and the successors and assigns of the addressee (and, if not addressed to Buyer, containing reliance language acceptable to Buyer, which language shall be made available by Seller to and approved by Buyer prior to the applicable Purchase Date) and reasonably satisfactory to Buyer of the related Mortgaged Property from a third party appraiser.

“ARD Loan” shall mean any loan that provides that if the unamortized principal balance thereof is not repaid by a date certain set forth in the related loan documents, such loan will accrue additional interest at the rate specified in the related Mortgage Note and the related Mortgagor is required to apply certain excess monthly cash flow generated by the related Mortgaged Property to the repayment of the outstanding principal balance on such Mortgage Loan.

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“Assignment Documents in Blank” shall mean, for each Purchased Loan, the (i) allonge in blank, (ii) omnibus assignment in blank, (iii) Assignment of Mortgage in blank, and (iv) assignment of Assignment of Leases in blank.

“Assignment of Leases” shall mean, with respect to any Mortgage, an assignment of leases thereunder, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the Mortgaged Property is located to reflect the assignment of leases, subject to the terms, covenants and provisions of this Agreement.

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

“Attorney’s Bailee Letter” shall mean a letter from an Acceptable Attorney, in form and substance reasonably acceptable to Buyer, wherein such Acceptable Attorney in possession of a Purchased Loan File (i) acknowledges receipt of such Purchased Loan File, (ii) confirms that such Acceptable Attorney is holding the same as bailee of Buyer under such letter and (iii) agrees that such Acceptable Attorney shall deliver such Purchased Loan File to the Custodian by not later than the third (3^rd) Business Day following the Purchase Date for the related Purchased Loan.

“Bankruptcy Code” shall mean Title 11 of the United States Code (11 U.S.C. § 101, et seq.), as amended, modified or replaced from time to time.

“Blocked Account Agreement” shall mean that certain Deposit Account Control Agreement, dated as of the date hereof, among Buyer, Seller and the Depository, relating to the Cash Management Account, as the same may be amended, modified and/or restated from time to time.

“Business Day” shall mean a day other than (i) a Saturday or Sunday, (ii) a day on which the New York Stock Exchange or Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed and (iii) a day on which commercial banks in the State of New York, Pennsylvania, Kansas or Minnesota are authorized or obligated by law or executive order to be closed. When used with respect to a Pricing Rate Determination Date, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banks in London, England are closed for interbank or foreign exchange transactions.

“Buyer” shall mean Citibank, N.A., or any successor or assign.

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

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“Capital Stock” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, and any and all warrants or options to purchase any of the foregoing.

“Cash Management Account” shall mean a segregated interest bearing account, in the name of Seller for the benefit of Buyer, established at the Depository and subject to the Blocked Account Agreement.

“Change of Control” shall mean any of the following events shall have occurred without the prior approval of Buyer:

(i) Guarantor shall no longer own, directly or indirectly, 100% of the ownership interest in Seller and Control, directly or indirectly, Seller;

(ii) any merger, reorganization or consolidation of Guarantor where Guarantor is not the surviving entity; or

(iii) any conveyance, transfer, lease or disposal of all or substantially all assets of Seller or Guarantor to any Person or entity other than an Affiliate of such entity.

“Code” shall mean The Internal Revenue Code of 1986 and the regulations promulgated and rulings issued thereunder, in each case as amended, modified or replaced from time to time.

“Collateral” shall have the meaning specified in Section 6 of this Agreement.

“Collateral Tape” shall mean, with respect to each Eligible Loan, the tape containing the fields of information set forth in Exhibit VII attached hereto.

“Concentration Limit” shall mean, unless otherwise agreed to in writing by Buyer (including, without limitation, in a Confirmation), the test that shall be satisfied at any applicable date of determination, if: (x) the aggregate outstanding Purchase Price with respect to all Purchased Loans which are participation interests shall not exceed 33% of the Facility Amount and (y) the outstanding Purchase Price with respect to any single Purchased Loan shall not exceed 25% of the Facility Amount.

“Confirmation” shall have the meaning specified in Section 3(b) of this Agreement.

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract and “Controlling” and “Controlled” shall have meanings correlative thereto.

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“Current Appraisal” shall mean, as of any date of determination, an Appraisal approved by Buyer dated within six (6) months (or such greater number of months as Buyer may approve in its sole discretion) of such date of determination.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the date hereof, by and among the Custodian, Seller and Buyer.

“Custodial Delivery” shall mean the form executed by Seller in order to deliver the Purchased Loan Schedule and the Purchased Loan File to Buyer or its designee (including the Custodian) pursuant to Section 7 hereof, a form of which is attached hereto as Exhibit III.

“Custodian” shall mean U.S. Bank, National Association, or any successor Custodian appointed by Buyer with the prior written consent of Seller (which consent shall not be unreasonably withheld or delayed).

“Debt Yield (Loan UPB)” shall mean, with respect to each Purchased Loan, as of any date of determination, the net cash flow debt yield equal to the percentage equivalent of the quotient obtained by dividing (a) the in place underwritten net cash flow of the related Mortgaged Property, as determined by Buyer in its good faith business judgment, by (b) the unpaid principal balance of such Purchased Loan on such date of determination.

“Debt Yield (Purchase Price)” shall mean, with respect to each Purchased Loan, as of any date of determination, the net cash flow debt yield equal to the percentage equivalent of the quotient obtained by dividing (a) the in place underwritten net cash flow of the related Mortgaged Property, as determined by Buyer in its good faith business judgment, by (b) the outstanding Purchase Price of such Purchased Loan on such date of determination.

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

“Defeasance” shall have the meaning specified in Exhibit VI.

“Depository” shall mean PNC Bank, or any successor Depository appointed by Seller with the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed).

“Due Diligence Package” shall mean (i) the Collateral Tape, (ii) the items on the Eligible Loan Due Diligence Checklist, in each case to the extent applicable and (iii) such other documents or information as Buyer or its counsel shall reasonably deem necessary.

“Early Repurchase Date” shall have the meaning specified in Section 3(d) of this Agreement.

“Eligible Loan Due Diligence Checklist” shall mean the due diligence materials set forth in Exhibit IV attached hereto.

“Eligible Loans” shall mean fixed or floating rate whole mortgage loans (“Whole Loans”) or senior interests (including “A” notes in an “A/B” note structure) in such Whole Loans

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(“Senior Interests”) or participation interests in such Whole Loans or Senior Interests which are secured by stabilized or un-stabilized multi-family or commercial properties (including office, retail, industrial and hotel properties), which have been approved by Buyer in its sole discretion as a Purchased Loan and which satisfy all of the following criteria as of the applicable Purchase Date:

(a) the Debt Yield (Loan UPB) is equal to or greater than 6.00%,

(b) the LTV (Loan UPB) is 75.00% or less (or such higher percentage as Buyer may agree to in its sole discretion), and

(c) the LTV (Aggregate Loan UPB) is 80.00% or less.

Eligible Loans shall also include such other loans and debt instruments (or interests in such loans and debt instruments) as Buyer may approve from time to time in its sole discretion, subject to terms and conditions and document delivery requirements as may be established by Buyer.

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

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

“ERISA Affiliate” shall mean any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Section 302 of ERISA and Section 412 of the Code and the lien created under Section 303(k) of ERISA and Section 430(k) of the Code, described in Section 414(m) or (o) of the Code of which Seller is a member.

“ESA” shall have the meaning specified in Exhibit VI.

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

“Excluded Taxes” shall mean, any of the following Taxes imposed on or with respect to payment to Buyer or required to be withheld or deducted from such payment, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, Taxes imposed on or

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measured by net worth (however denominated) and branch profits Taxes, in each case, (i) imposed as a result of Buyer being organized under the laws of, or having its principal office or the office from which it books the Transactions located in, the jurisdiction imposing such Taxes (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of Buyer with respect to an interest in the Transactions pursuant to a law in effect on the date on which such Party (i) acquires such interest in the Transactions or (ii) changes its principal office or the office from which it books the Transactions, except in each case to the extent that, pursuant to Section 31, amounts with respect to such Taxes were payable either to such Buyer’s assignor immediately before such Buyer became a party hereto or to such Buyer immediately before it changed the office from which it books the Transactions, (c) Taxes attributable to Buyer’s failure to comply with Section 31 of this Agreement, (d) Taxes attributable to Buyer’s failure to comply with its obligations under Sections 19(c), 19(d) or 23(i) of this Agreement, (e) any withholding Taxes imposed under FATCA, (f) any U.S. federal backup withholding Taxes imposed under Section 3406 of the Code, and (g) any interest, additions to tax or penalties in respect of the foregoing.

“Exit Fee” shall have the meaning specified in the Fee Agreement.

“Extension Fee” shall have the meaning specified in the Fee Agreement.

“Facility Amount” shall mean $250,000,000.

“Facility Availability Period” shall mean the thirty six (36) month period commencing on the date of this Agreement and ending on the third (3^rd) anniversary of the date of this Agreement (i.e. June 12, 2016) (or if such day is not a Business Day, the next succeeding Business Day). Notwithstanding anything herein to the contrary, at any time during the Facility Availability Period, Seller may request an extension of the Facility Availability Period which extension shall be in Buyer’s sole discretion and subject to terms and conditions determined by Buyer in its sole discretion.

“Facility Expiration Date” shall mean the last day of the Facility Availability Period; provided, that the Facility Expiration Date shall be extendible by Seller on an annual basis thereafter (i.e. for consecutive twelve (12) month periods), subject to the following:

(a) Seller delivers to Buyer a written request of the extension of the Facility Expiration Date no earlier than ninety (90) nor later than thirty (30) days before the then current Facility Expiration Date,

(b) no Default or Event of Default has occurred and is continuing on the date the request to extend is delivered or on the then current Facility Expiration Date,

(c) no Margin Deficit exists that has not been satisfied,

(d) the Concentration Limit is satisfied on the date the request to extend is delivered and on the then current Facility Expiration Date (except to the extent waived or otherwise approved by Buyer), and

(e) Seller shall have paid to Buyer the Extension Fee on or before the then current Facility Expiration Date.

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“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and, for the avoidance of doubt, any agreements entered into pursuant to any of the foregoing.

“Fee Agreement” shall mean that certain fee letter agreement, dated as of the date hereof, between Seller and Buyer.

“Filings” shall have the meaning specified in Section 6.

“Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

“FIRREA” shall mean the Financial Institutions, Reform, Recovery and Enforcement Act of 1989.

“Funding Fee” shall have the meaning specified in the Fee Agreement.

“Future Funding Conditions Precedent” shall have the meaning specified in Section 4(c).

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

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

“Ground Lease” shall have the meaning specified in Exhibit VI.

“Guarantor” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation (or, following a substitution consummated in accordance with Section 9, Successor Guarantor).

“Guaranty” shall mean the Limited Guaranty, dated as of the date hereof, from Guarantor in favor of Buyer.

“Hedging Transactions” shall mean, with respect to any Purchased Loan that is a fixed rate loan, any short sale of U.S. Treasury Securities or mortgage-related securities, futures contract (including Eurodollar futures) or options contract or any interest rate swap, cap or collar agreement or similar arrangements providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller with either (x) Buyer or an Affiliate of Buyer or (y) one or more other counterparties reasonably acceptable to Buyer and, in the case of clause (y) only, assigned by Seller to Buyer as additional collateral for the applicable Transaction.

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“Income” shall mean, with respect to any Purchased Loan at any time, the sum of (x) any principal thereof and all interest, dividends or other distributions thereon and (y) all net sale proceeds received by Seller in connection with a sale of such Purchased Loan to a Person other than Buyer.

“Indebtedness” shall mean, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; contingent or future funding obligations under any Purchased Loan or any obligations senior to, or pari passu with, any Purchased Loan; (e) Capital Lease Obligations of such Person; and (f) obligations of such Person under repurchase agreements or like arrangements; (g) Indebtedness of others guaranteed by such Person to the extent of such guarantee; and (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person. Notwithstanding the foregoing, nonrecourse Indebtedness owing pursuant to a securitization transaction such as a REMIC securitization, a collateralized loan obligation transaction or other similar securitization shall not be considered Indebtedness for any person.

“Indemnified Amounts” and “Indemnified Parties” shall have the meaning specified in Section 27 of this Agreement.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Seller under any Transaction Document and (b) Other Taxes.

“Independent Director” shall mean a duly appointed manager or member of the board of directors (or managers) of the relevant entity who shall not have been, at the time of such appointment or at any time while serving as a director or manager of the relevant entity and may not have been at any time in the preceding five (5) years, (a) a direct or indirect legal or beneficial owner in such entity or any of its Affiliates, (b) a creditor, supplier, employee, officer, director (other than in its capacity as Independent Director), family member, manager or contractor of such entity or any of its Affiliates, or (c) a Person who controls (directly, indirectly or otherwise) such entity or any of its Affiliates or any creditor, supplier, employee, officer, director, family member, manager or contractor of such Person or any of its Affiliates.

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“Insolvency Laws” shall mean the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension or payments and similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“Insurance Rating Requirements” shall have the meaning specified in Exhibit VI.

“Irrevocable Direction Letter” shall have the meaning specified in Section 5(b).

“Junior Interest” shall have the meaning specified in Exhibit VI.

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars, for a one month period, that appears on “Page BBAM” of the Bloomberg Financial Markets Services Screen (or the successor thereto) as of 11:00 a.m., London time, on the related Pricing Rate Determination Date. If such rate does not appear on “Page BBAM” of the Bloomberg Financial Markets Services Screen (or the successor thereto) as of 11:00 a.m., London time, on such Pricing Rate Determination Date, Buyer shall request the principal London office of any four major reference banks in the London interbank market selected by Buyer to provide such bank’s offered quotation (expressed as a percentage per annum) to prime banks in the London interbank market for deposits in U.S. dollars for a one month period as of 11:00 a.m., London time, on such Pricing Rate Determination Date for amounts of not less than the Repurchase Price of the applicable Transaction. If at least two such offered quotations are so provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, Buyer shall request any three major banks in New York City selected by Buyer to provide such bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars to leading European banks for a one month period as of approximately 11:00 a.m., New York City time on the applicable Pricing Rate Determination Date for amounts of not less than the Repurchase Price of such Transaction. If at least two such rates are so provided, LIBOR shall be the arithmetic mean of such rates. LIBOR shall be determined by Buyer or its agent, which determination shall be conclusive absent manifest error.

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

LIBOR

1 – Reserve Requirement

“Lien” shall mean any mortgage, lien, encumbrance, charge or other security interest, whether arising under contract, by operation of law, judicial process or otherwise.

“LTV (Aggregate Loan UPB)” shall mean, with respect to any Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the sum of (x) the unpaid principal balance of such Purchased Loan plus (y) the unpaid principal balance of any subordinate or mezzanine debt secured indirectly by the Mortgaged Property and the denominator of which shall equal the “as is” value of such Mortgaged Property securing such Purchased Loan as determined by Buyer in its sole discretion. For purposes of determining the value of a

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Mortgaged Property in accordance with this definition, (i) the value may be determined by reference to a Current Appraisal, discounted cash flow analysis or other commercially reasonable method and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks (including risk of delay) posed by any Liens on the related Mortgaged Property.

“LTV (Loan UPB)” shall mean, with respect to any Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the unpaid principal balance of the Purchased Loan and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan as determined by Buyer in its sole discretion. For purposes of determining the value of a Mortgaged Property in accordance with this definition, (i) the value may be determined by reference to a Current Appraisal, discounted cash flow analysis or other commercially reasonable method and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks (including risk of delay) posed by any Liens on the related Mortgaged Property.

“LTV (Purchase Price)” shall mean, with respect to any Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the outstanding Purchase Price of the Purchased Loan and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan as determined by Buyer in its sole discretion. For purposes of determining the value of a Mortgaged Property in accordance with this definition, (i) the value may be determined by reference to a Current Appraisal, discounted cash flow analysis or other commercially reasonable method and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks (including risk of delay) posed by any Liens on the related Mortgaged Property.

“Maximum LTV (Purchase Price)” shall mean, with respect to any Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the maximum potential outstanding Purchase Price of the Purchased Loan (as set forth in the related Confirmation) and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan as determined by Buyer in its commercially reasonable discretion.

“MAI” shall have the meaning specified in Exhibit VI.

“Margin Amount” shall mean, with respect to any Purchased Loan as of any date of determination, an amount equal to the product of the applicable Margin Percentage and the outstanding Purchase Price of such Purchased Loan as of such date.

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

“Margin Deficit Notice” shall have the meaning specified in Section 4(b).

“Margin Excess” shall mean, as applicable, Margin Excess (Future Funding) or Margin Excess (Other).

“Margin Excess (Future Funding)” shall have the meaning specified in Section 4(c).

“Margin Excess (Other)” shall have the meaning specified in Section 4(e).

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“Margin Percentage” shall mean, with respect to any Purchased Loan as of any date of determination, the reciprocal of the applicable Purchase Price Percentage.

“Market Value” shall mean, with respect to any Purchased Loan, the market value for such Purchased Loan, as determined by Buyer at the Applicable Standard of Discretion on each Business Day in accordance with this definition. For purposes of Section 4(a) and 5(e), as applicable, changes in the Market Value of a Purchased Loan shall be determined solely in relation to material positive or negative changes (relative to Buyer’s initial underwriting or the most recent determination of Market Value in terms of the performance or condition, taken in the aggregate, of (i) the Mortgaged Property securing the Purchased Loan or other collateral securing or related to the Purchased Loan, (ii) the Purchased Loan’s borrower (including obligors, guarantors, participants and sponsors) and the borrower on any underlying property or other collateral securing such Purchased Loan, (iii) the commercial real estate market relevant to the Mortgaged Property and (iv) any actual risks posed by any liens or claims on the related Mortgaged Property or Properties. In addition, the Market Value for any Purchased Loan may be deemed by Buyer to be zero or such greater amount (in the Applicable Standard of Discretion) in the event any of the following occurs with respect to such Purchased Loan: (a) a negative change in Market Value to the extent resulting from a continuing material breach of a representation or warranty set forth on Exhibit VI (but without giving effect to any qualifications for Seller’s Actual Knowledge); or (b) the Repurchase Date with respect to such Purchased Loan occurs without repurchase of such Purchased Loan.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, condition (financial or otherwise) or results of operations of Seller and Guarantor, taken as a whole, (b) the ability of Seller or Guarantor to pay and perform its material obligations under any of the Transaction Documents, (c) the legality, validity or enforceability of any of the Transaction Documents, (d) the rights and remedies of Buyer under any of the Transaction Documents, or (e) the perfection or priority of any Lien granted under any Purchased Loan Document.

“Maximum Purchase Price Percentage” shall have the meaning set forth in the Fee Letter.

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

“Mortgage Note” shall mean a note or other evidence of indebtedness of a Mortgagor secured by a Mortgage in connection with a Purchased Loan.

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

“Mortgagee” shall mean the record holder of a Mortgage Note secured by a Mortgage.

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

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“MTM Representations” shall mean the representations and warranties set forth as items 11, 12, 14, 25, 35, 36, 37 and 42 on Exhibit VI of this Agreement.

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

“OFAC” shall mean the U.S. Department of Treasury, Office of Foreign Assets Control

“OFAC List” shall mean the Specially Designated Nationals list maintained by OFAC.

“Other Connection Taxes” shall mean Taxes imposed as a result of a present or former connection between Buyer and the jurisdiction imposing such Taxes (other than a connection arising solely as a result of Buyer having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under or enforced any Transaction Document, or sold or assigned an interest in any Transaction or Transaction Document).

“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under any Transaction Document; provided, however, that Other Taxes shall not include (i) Taxes imposed with respect to an assignment, transfer or sale of participation or other interest in or with respect to the Transaction Documents or (ii) any Excluded Taxes.

“Participant Register” shall have the meaning specified in Section 19(d).

“Permitted Encumbrances” shall have the meaning specified in Exhibit VI.

“Permitted Liens” shall mean any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding has been commenced: (a) Liens for Taxes not yet due and payable or which are being contested in good faith and for which adequate reserves have been established in accordance with GAAP, (b) Liens imposed by Requirements of Law, such as materialmen’s, mechanics’, carriers’, workmen’s, repairmen’s and similar Liens, arising in the ordinary course of business securing obligations that are not overdue for more than thirty (30) days, and (c) Liens granted pursuant to or by the Transaction Documents.

“Permitted Purchased Loan Modification” shall mean any modification or amendment of a Purchased Loan which is not a Significant Purchased Loan Modification.

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

“Plan” shall mean an employee benefit or other plan established or maintained by Seller or any ERISA Affiliate during the five year period ended prior to the date of this Agreement or to which Seller or any ERISA Affiliate makes, is obligated to make or has, within the five year

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period ended prior to the date of this Agreement, been required to make contributions and that is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, other than a Multiemployer Plan.

“Plan Party” shall have the meaning specified in Section 22(a) of this Agreement.

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

“Pricing Matrix” shall mean the matrix attached to the Fee Agreement which shall be used to determine the Purchase Price Percentage, Maximum Purchase Price Percentage and the Applicable Spread for each Purchased Loan. On the Purchase Date for each Purchased Loan, the Purchase Price Percentage for such Purchased Loan shall equal the Maximum Purchase Price Percentage for which such Purchased Loan is eligible under the Pricing Matrix based upon its LTV (Loan UPB); provided, that notwithstanding the foregoing, Seller may request that the Purchase Price Percentage for any Purchased Loan equal a percentage which is lower than such Maximum Purchase Price Percentage. The Applicable Spread for each Purchased Loan shall equal the number of basis points set forth under the column heading “Applicable Spread (bps)” which corresponds to the applicable Purchase Price Percentage for such Purchased Loan as of such Purchase Date. It is understood and agreed that no improvement or decline in the LTV (Loan UPB) after the applicable Purchase Date for a Purchased Loan shall result in any adjustment to the Applicable Spread for such Purchased Loan.

“Pricing Rate” shall mean, for any Pricing Rate Period, an annual rate equal to the LIBO Rate for such Pricing Rate Period plus the Applicable Spread for such Transaction and shall be subject to adjustment and/or conversion as provided in Sections 3(g) and 3(h) of this Agreement.

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

“Pricing Rate Period” shall mean, (a) in the case of the first Pricing Rate Period with respect to any Transaction, the period commencing on and including the Purchase Date for such Transaction and ending on and excluding the following Remittance Date, and (b) in the case of any subsequent Pricing Rate Period, the period commencing on and including such Remittance Date and ending on and excluding the following Remittance Date; provided, however, that in no event shall any Pricing Rate Period end subsequent to the Repurchase Date.

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

“Principal Payment” shall mean, with respect to any Purchased Loan, any payment or prepayment of principal received by the Depository in respect thereof.

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“Prohibited Person” shall mean any (1) person or entity who is on the OFAC List; a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in the Foreign Assets Control Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, (2) person acting on behalf of, or an entity owned or controlled by, any government against whom the United States maintains economic sanctions or embargoes under the Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, including, but not limited to, the “Government of Sudan,” the “Government of Iran,” and the “Government of Cuba,” and any person or organization determined by the Director of the Office of Foreign Assets Control to be included within 31 C.F.R. Section 575.306 (definition of “Government of Iraq”), (3) person or entity who is listed in the Annex to or is otherwise within the scope of Executive Order 13224 – Blocking Property and Prohibiting Transactions with Person who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001, or (4) person or entity subject to additional restrictions imposed by the following statutes or Regulations and Executive Orders issued thereunder: the Trading with the Enemy Act, 50 U.S.C. app. §§ 1 et seq., the Iraq Sanctions Act, Pub. L. 101-513, Title V, §§ 586 to 586J, 104 Stat. 2047, the National Emergencies Act, 50 U.S.C. §§ 1601 et seq., the Anti-Terrorism and Effective Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214-1319, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the United Nations Participation Act, 22 U.S.C. § 287c, the International Security and Development Cooperation Act, 22 U.S.C. § 2349aa-9, the Nuclear Proliferation Prevention Act of 1994, Pub. L. 103-236, 108 Stat. 507, the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. §§ 1901 et seq., the Iran and Libya Sanctions Act of 1996, Pub. L. 104-172, 110 Stat. 1541, the Cuban Democracy Act, 22 U.S.C. §§ 6001 et seq., the Cuban Liberty and Democratic Solidarity Act, 22 U.S.C. §§ 6201-91, the Foreign Operations, Export Financing and Related Programs Appropriations Act, 1997, Pub. L. 104-208, 110 Stat. 3009-172, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, 115 Stat. 272, or any other law of similar import as to any non-U.S. country, as each such Act or law has been or may be amended, adjusted, modified, or reviewed from time to time.

“Prohibited Transferee” shall mean any of the Persons listed on Schedule I attached to this Agreement.

“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“Purchase Date” shall mean any date on which a Purchased Loan is to be transferred by Seller to Buyer.

“Purchase Price” shall mean, with respect to any Purchased Loan, (x) as of any Purchase Date for such Purchased Loan, an amount (expressed in dollars) equal to the lesser of (a) the product obtained by multiplying (i) the lesser of the Market Value of such Purchased Loan and the par amount of such Purchased Loan by (ii) the applicable Purchase Price Percentage and (b) the amount that causes the LTV (Purchase Price) to equal 60.00% and (y) thereafter, such amount referred to in clause (x), increased by any Margin Excess transferred by Buyer to Seller pursuant to Section 4(c) or 4(e) of this Agreement, and reduced by any amount applied to reduce the Purchase Price pursuant to Section 3(f), 4(a) or 5 of this Agreement.

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“Purchase Price Percentage” shall mean, with respect to each Purchased Loan, the percentage determined on the related Purchase Date for such Purchased Loan based upon the procedure set forth in the definition of “Pricing Matrix” and set forth in the related Confirmation. Notwithstanding the foregoing with respect to each Transaction where the applicable Purchased Loan is an Eligible Loan secured by a hotel property, the “Purchase Price Percentage” otherwise applicable in accordance with this definition shall be reduced by 5%.

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

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

“Purchased Loans” shall mean (i) with respect to any Transaction, the Eligible Loan sold by Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Loans sold by Seller to Buyer.

“Purchased Loan Schedule” shall mean a schedule of Purchased Loans attached to each Trust Receipt and Custodial Delivery, which may but is not required to, contain information substantially similar to the Collateral Tape.

“Register” shall have the meaning specified in Section 19(c).

“REMIC” shall mean a real estate mortgage investment conduit, within the meaning of Section 860D(a) of the Code.

“Remittance Date” shall mean the seventeenth (17th) calendar day of each month, or the next succeeding Business Day, if such calendar day shall not be a Business Day, or such other day as is mutually agreed to by Seller and Buyer.

“Repurchase Date” shall mean, with respect to each Purchased Loan, the earliest of: (x) the Facility Expiration Date or (y) the maturity date of such Purchased Loan (subject to extension, if applicable, in accordance with its Purchased Loan Documents) or (z) the related Early Repurchase Date.

“Repurchase Obligations” shall mean all obligations of Seller to pay the Repurchase Price on the Repurchase Date and all other obligations and liabilities of Seller to Buyer arising under or in connection with the Transaction Documents, whether now existing or hereafter arising.

“Repurchase Price” shall mean, with respect to any Purchased Loan as of any date, the price at which such Purchased Loan is to be transferred from Buyer to Seller upon termination of the related Transaction; such price will be determined in each case as the sum of (a) the outstanding Purchase Price of such Purchased Loan, (b) the accrued but unpaid Price Differential

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thereon with respect to such Purchased Loan as of such date, (c) all other amounts due and payable as of such date by Seller to Buyer under this Agreement or any Transaction Document with respect to such Purchased Loan (including, but not limited to, accrued and unpaid fees, expenses and indemnity amounts) and (d) any costs incurred in connection with terminating any related Hedging Transactions entered into with Buyer or an Affiliate of Buyer.

“Request for Margin Excess” shall mean a request for Margin Excess, in the form of Exhibit IX attached hereto.

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

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

“SEC” shall have the meaning specified in Exhibit VI.

“Seller” shall mean Parlex 2 Finance, LLC, a Delaware limited liability company.

“Senior Interests” shall have the meaning given to such term in the definition of “Eligible Loans”.

“Servicer” shall mean (x) Midland Loan Services, a division of PNC Bank, National Association or (y) any other third party servicer selected by Seller and approved by Buyer in its sole discretion; provided, that notwithstanding the foregoing, such other third party servicer selected by Seller shall be approved by Buyer in its reasonable discretion, so long as such Person’s primary servicer rating shall be at least “above average” by Standard & Poor’s Ratings Service.

“Servicing Agreement” shall mean (x) the Interim Servicing Agreement dated as of the date hereof between Seller, Buyer and Servicer, or (y) any other servicing agreement entered into by Seller, Buyer and any Servicer approved by Buyer for the servicing of Purchased Loans.

“Servicing Records” shall have the meaning specified in Section 29(b).

“Servicing Rights” shall mean Seller’s right, title and interest in and to any and all of the following: (a) any and all rights to service the related Purchased Loan; (b) any payments to or monies received by such Seller or any other Person as a fee for servicing such Purchased Loan; (c) any late fees, penalties or similar payments with respect to such Purchased Loan; (d) all agreements or documents creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights and all rights of such Seller or any other Person thereunder;

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(e) escrow payments or other similar payments with respect to such Purchased Loan and any amounts actually collected by such Seller or any other Person with respect thereto; (f) the right, if any, to appoint a special servicer or liquidator of such Purchased Loan; and (g) all accounts and other rights to payment related to the servicing of such Purchased Loan.

“Significant Purchased Loan Modification” means any modification or amendment of a Purchased Loan which

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

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

(iii) modifies the amount or timing of any regularly scheduled payments of principal and non-contingent interest of the Purchased Loan in question,

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

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

(vi) releases any collateral for the Purchased Loan in question other than releases required under the then existing Purchased Loan documents or releases in connection with eminent domain or under threat of eminent domain,

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

(viii) waives any due-on-sale or due-on-encumbrance provisions of the Purchased Loan in question other than waivers required to be given under the then existing Purchased Loan documents, or

(ix) waives, amends or modifies the underlying insurance requirements of the Purchased Loan.

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“Single Purpose Entity” shall have the meaning specified in Exhibit VI.

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

“Special Purpose Entity” shall mean a Person, other than an individual, which is formed or organized solely for the purpose of holding, directly and subject to this Agreement, the Purchased Loans and otherwise complies with the requirements of Section 13.

“Standard Qualifications” shall have the meaning specified in Exhibit VI.

“Supplemental Funding Fee” shall have the meaning specified in the Fee Agreement.

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

“Taxes” shall mean all present or future Taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Terrorism Cap Amount” shall have the meaning specified in Exhibit VI.

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

“Transaction” shall have the meaning set forth in Section 1.

“Transaction Conditions Precedent” shall have the meaning specified in Section 3(b) of this Agreement.

“Transaction Documents” shall mean, collectively, this Agreement, any applicable Annexes to this Agreement, the Guaranty, the Custodial Agreement, the Blocked Account Agreement, any Servicing Agreement, all Confirmations executed pursuant to this Agreement in connection with specific Transactions, any other documents or instruments relating to any such documents executed by Seller or Guarantor, and any written modifications, extensions, renewals, restatements, or replacements of any of the foregoing.

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“Transaction Request” shall mean a request to enter into a Transaction, in the form of Exhibit VIII attached hereto.

“Treasury Regulations” shall have the meaning specified in Section 19(d) of this Agreement.

“TRIA” shall have the meaning specified in Exhibit VI.

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

“UCC” shall have the meaning specified in Section 6 of this Agreement.

“U.S. Person” shall mean a “United States person” as defined in Section 7701(a)(30) of the Code.

“Whole Loans” shall have the meaning given to such term in the definition of “Eligible Loans”.

“Zoning Regulations” shall have the meaning specified in Exhibit VI.

3. INITIATION; CONFIRMATION; TERMINATION; FEES

(a) Subject to the terms and conditions set forth in this Agreement (including, without limitation, the “Transaction Conditions Precedent” specified in Section 3(b) of this Agreement), an agreement to enter into a Transaction shall be made, from time to time, in writing at the initiation of Seller as provided below; provided, however, that (i) the aggregate outstanding Purchase Price at any time for all Transactions shall not exceed the Facility Amount and (ii) Buyer shall not have any obligation to enter into new Transactions with Seller after the occurrence and during the continuance of a monetary or material non-monetary Default or an Event of Default or after the Facility Availability Period. Seller may, from time to time, submit to Buyer a Transaction Request, in the form of Exhibit VIII attached hereto, for Buyer’s review and approval in order to enter into a Transaction with respect to any Eligible Loan that Seller proposes to be included as Collateral under this Agreement. Upon Buyer’s receipt of a complete Due Diligence Package, Buyer shall have the right to request, in Buyer’s good faith business judgment and in a manner consistent with Buyer’s other master repurchase facilities for comparable assets, additional diligence materials and deliveries with respect to the applicable Eligible Loan, to the extent necessary for Buyer’s underwriting of such Eligible Loan. Upon Buyer’s receipt of the Transaction Request, Due Diligence Package and additional diligence materials, Buyer shall use commercially reasonable efforts to within five (5) Business Days and following receipt of internal credit approval, either (i) notify Seller of the Purchase Price and the Market Value for the Eligible Loan or (ii) deny Seller’s request for a Transaction. Buyer’s failure to respond to Seller within five (5) Business Days shall be deemed to be a denial of Seller’s request for a Transaction, unless Buyer and Seller have agreed otherwise in writing. Buyer shall have the right to review all Eligible Loans proposed to be sold to Buyer in any Transaction and to conduct its own due diligence investigation of such Eligible Loans as Buyer

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reasonably determines. Buyer shall be entitled to make a determination, in its sole discretion, that it shall or shall not purchase any or all of the Eligible Loans proposed to be sold to Buyer by Seller. On the Purchase Date for the Transaction which shall be on a date mutually agreed upon by Buyer and Seller following the approval of an Eligible Loan by Buyer, the Purchased Loan shall be transferred to Buyer against the transfer of the Purchase Price to an account of Seller or as directed by Seller in writing.

(b) Upon agreeing to enter into a Transaction hereunder, provided each of the Transaction Conditions Precedent shall have been satisfied (or waived by Buyer), Buyer shall promptly deliver to Seller a written confirmation in the form of Exhibit I attached hereto of each Transaction (a “Confirmation”). Such Confirmation shall describe the Purchased Loan, shall identify Buyer and Seller, and shall set forth:

(i) the Purchase Date,

(ii) the Purchase Price Percentage, Maximum Purchase Price Percentage, the initial Purchase Price and the maximum Purchase Price for such Purchased Loan,

(iii) the Repurchase Date,

(iv) the Pricing Rate (including the Applicable Spread),

(v) the Margin Percentage,

(vi) the LTV (Purchase Price) and Maximum LTV (Purchase Price),

(vii) the LTV (Loan UPB) and LTV (Aggregate Loan UPB) (if applicable),

(viii) the Funding Fee, any additional conditions precedent to the availability of Margin Excess (Future Funding) and the type of funding (i.e. table funded/non-table funded), and

(ix) any additional reasonable terms or conditions not inconsistent with this Agreement and mutually agreed upon by Buyer and Seller.

With respect to any Transaction, the Pricing Rate shall be determined initially on the Pricing Rate Determination Date applicable to the first Pricing Rate Period for such Transaction, and shall be reset on each subsequent Pricing Rate Determination Date for the next succeeding Pricing Rate Period for such Transaction. Buyer or its agent shall determine in accordance with the terms of this Agreement the Pricing Rate on each Pricing Rate Determination Date for the related Pricing Rate Period and notify Seller of such rate for such period on such subsequent Pricing Rate Determination Date. For purposes of this Section 3(b), the “Transaction Conditions Precedent” shall be deemed to have been satisfied with respect to any proposed Transaction if:

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

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(B) subject to any exceptions reasonably approved by Buyer, the representations and warranties made by Seller in any of the Transaction Documents shall be true and correct in all material respects as of the Purchase Date for such Transaction, before and after giving effect to such Transaction, as though made on such Purchase Date (except to the extent such representations and warranties are made as of a particular date);

(C) Buyer shall have received from Seller all corporate and governmental approvals, legal opinions of counsel to Seller and Guarantor (including, without limitation, as to authority, enforceability, perfection, bankruptcy safe harbor and the Investment Company Act of 1940) and closing documentation as Buyer may reasonably request pursuant to this Agreement,

(D) Seller shall have paid to Buyer (x) the Funding Fee then due and payable with respect to such Transaction pursuant to the Fee Letter and (y) Buyer’s out-of-pocket costs and expenses pursuant to Section 30(d) of this Agreement (which amounts referred to in the preceding sub-clauses (D)(x) and (D)(y) may be paid through a holdback to the Purchase Price);

(E) Buyer shall have (A) determined, in accordance with the applicable provisions of Section 3(a) of this Agreement, that the Assets proposed to be sold to Buyer by Seller in such Transaction are Eligible Loans and (B) obtained internal credit approval for the inclusion of such Eligible Loan as a Purchased Loan in a Transaction; and

(F) Buyer shall have determined that no event has occurred which is reasonably likely to result in a Material Adverse Effect; and

(G) as of the applicable Purchase Date, each of the Concentration Limits is satisfied (unless waived by Buyer).

(c) Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby unless specific objection is made in writing no less than three (3) Business Days after the date thereof. In the event of any conflict between the terms of such Confirmation and the terms of this Agreement, the Confirmation shall prevail. An objection sent by Seller with respect to any Confirmation must state specifically that the writing is an objection, must specify the provision(s) of such Confirmation being objected to by Seller, must set forth such provision(s) in the manner that Seller believes such provisions should be stated, and must be sent by Seller no more than five (5) Business Days after such Confirmation is received by Seller. It is understood and agreed that once a Confirmation has been executed by Buyer and Seller, such Confirmation shall be binding on the parties hereto (absent manifest error) and shall constitute evidence of Buyer’s approval of the applicable Purchased Loan and the terms of the applicable Transaction.

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(d) No Transaction shall be terminable on demand by Buyer (other than upon the occurrence and during the continuance of an Event of Default). Seller shall be entitled to terminate a Transaction on demand, in whole only, and repurchase the Purchased Loan subject to a Transaction on any Business Day prior to the Repurchase Date (an “Early Repurchase Date”); provided, however, that:

(i) Seller notifies Buyer in writing of its intent to terminate such Transaction and repurchase such Purchased Loan no later than three (3) Business Days prior to such Early Repurchase Date,

(ii) on such Early Repurchase Date Seller pays to Buyer an amount equal to the sum of (x) the Repurchase Price for such Transaction, (y) the Exit Fee, if any, then due and payable with respect to such Transaction pursuant to the Fee Letter and (z) any other amounts payable under this Agreement (including, without limitation, Section 3(i) of this Agreement) with respect to such Transaction, in connection with the transfer to Seller or its agent of such Purchased Loan,

(iii) on such Early Repurchase Date, following the payment of the amounts set forth in subclause (ii) above, no unpaid Margin Deficit exists, and

(iv) no Default or Event of Default shall have occurred and be continuing as of such Early Repurchase Date.

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

(e) On the Repurchase Date or any Early Repurchase Date (including, without limitation, in order to cure a Margin Deficit), termination of the applicable Transaction will be effected by transfer to Seller or its agent of the applicable Purchased Loan and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Section 5 of this Agreement) against the simultaneous transfer to an account of Buyer of the Repurchase Price, the amount, if any, payable by Seller in the event any Hedging Transaction related to such Purchased Loan is being terminated as of such date and any other amounts payable under this Agreement with respect to such Transaction.

(f) On any Remittance Date before the Repurchase Date (or any Business Day before the Repurchase Date upon two (2) Business Days prior notice to Buyer, with respect to a reduction in outstanding Purchase Price of greater than $2,000,000), Seller shall have the right, from time to time, to transfer cash to Buyer for the purpose of reducing the outstanding Purchase Price of, but not terminating, a Transaction and without the release of any Collateral or the payment of any Exit Fee or other prepayment fee or penalty; provided, that any such reduction in outstanding Purchase Price occurring on a date other than a Remittance Date shall be required to be accompanied by payment of all unpaid accrued Price Differential on the amount of such reduction. Upon any reduction in outstanding Purchase Price in accordance with this Section 3(f), either Seller or Buyer can request an amended and restated Confirmation which shall reflect the decrease in the outstanding Purchase Price (it being acknowledged that the failure by any party to request or deliver such amended and restated Confirmation shall not be a Default).

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(g) If prior to any Pricing Rate Period with respect to any Transaction, Buyer shall have determined in the exercise of its reasonable business judgment (which determination shall be conclusive and binding upon Seller) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Pricing Rate Period, Buyer shall give prompt written notice thereof to Seller. If such notice is given, the Pricing Rate with respect to such Transaction for such Pricing Rate Period, and for any subsequent Pricing Rate Periods until such notice has been withdrawn by Buyer shall be a per annum rate equal to the Prime Rate plus 100 basis points (1.00%) (the “Alternative Rate”).

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

(i) Upon written demand by Buyer, Seller shall indemnify Buyer and hold Buyer harmless from any net actual, out-of-pocket loss or expense (not to include any lost profit or opportunity or other consequential costs, loss or damages) (including, without limitation, reasonable actual attorneys’ fees and disbursements of outside counsel) which Buyer sustains or incurs as a consequence of (i) default by Seller in terminating any Transaction after Seller has given a notice in accordance with Section 3(d) hereof of a termination of a Transaction, (ii) any payment of the Repurchase Price on any day other than a Remittance Date or the Repurchase Date (including, without limitation, any such actual, out-of-pocket loss or expense arising from the reemployment of funds obtained by Buyer to maintain Transactions hereunder or from customary and reasonable fees payable to terminate the deposits from which such funds were obtained) or (iii) a default by Seller in selling Eligible Loans after Seller has delivered to Buyer an executed Confirmation in connection with a proposed Transaction and Buyer has agreed to purchase such Eligible Loans in accordance with the provisions of this Agreement as evidenced by a countersigned Confirmation executed by Buyer and delivered to Seller. A certificate as to such actual costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly by Buyer to Seller.

(j) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by any Governmental Authority or compliance by Buyer with any request or directive from any central bank or other Governmental Authority having jurisdiction over Buyer made subsequent to the date hereof:

(i) shall subject Buyer to any tax of any kind whatsoever with respect to the Transaction Documents, any Purchased Loan or any Transaction, or

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change the basis of taxation of payments to Buyer in respect thereof (except for (i) Indemnified Taxes (with Other Taxes applying for this purpose without the proviso in the definition thereof), (ii) Taxes described in clauses (b) through (g) of the definition of Excluded Taxes and (iii) Connection Income Taxes); or

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

and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems, in the exercise of its reasonable business judgment, to be material, of entering into, continuing or maintaining Transactions or to reduce in a material manner any amount receivable under the Transaction Documents in respect thereof; then, in any such case, and provided Buyer imposes such additional costs generally on all of its similarly situated customers, Seller shall pay to Buyer within ten (10) Business Days any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable. If Buyer becomes entitled to claim any additional amounts pursuant to this Section 3(j), it shall notify Seller in writing of the event by reason of which it has become so entitled. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller.

(k) If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof has the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer, in the exercise of its reasonable business judgment, to be material, then from time to time, after submission by Buyer to Seller of a written request therefor, and provided Buyer imposes such additional costs generally on all of its similarly situated customers, Seller shall pay to Buyer within ten (10) Business Days such additional amount or amounts as will compensate Buyer for such reduction. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller.

(l) Notwithstanding the foregoing or anything herein or in the Fee Agreement to the contrary, (x) if any Transaction is converted to an Alternative Rate Transaction, then Seller may consummate an early repurchase of the related Purchased Loan at any time while the Alternative Rate is in effect without payment of the Exit Fee, (y) if Buyer notifies Seller of its entitlement to additional amounts pursuant to Section 3(j) or 3(k), then provided Seller pays such additional amounts pursuant to Section 3(j) or 3(k), Seller may consummate an early repurchase of all of the Purchased Loans and terminate this Agreement and the other Transaction Documents without

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payment of the Exit Fee and (z) no Exit Fee shall be due and payable in connection with any reduction in outstanding Purchase Price or consummation of an early repurchase of a Purchased Loan in accordance with Section 4(a).

4. MARGIN MAINTENANCE

(a) If, at any time, the aggregate Market Value of the Purchased Loans shall be less than the sum of the Margin Amounts calculated individually with respect to each Purchased Loan (a “Margin Deficit”), then Buyer may by notice to Seller in writing (including therein a description of the Market Value calculation for each Purchased Loan) require Seller to cure such Margin Deficit by either:

(i) transferring to Buyer additional cash collateral in an amount at least equal to the sum of the amounts, calculated individually for each Purchased Loan, equal to the product of (x) the difference between the Margin Amount with respect to such Purchased Loan and the Market Value of such Purchased Loan multiplied by (y) the applicable Purchase Price Percentage, which cash collateral shall be held by Buyer as additional Collateral with respect to the applicable Purchased Loan(s),

(ii) reducing the outstanding Purchase Price of any Purchased Loan, as applicable, such that the aggregate Market Value of the Purchased Loans is at least equal to or is greater than the sum of the Margin Amounts of the Purchased Loans, or

(iii) doing an early repurchase on an Early Repurchase Date of any of the Purchased Loans pursuant to Section 3(d) of this Agreement and paying the related Repurchase Price which early repurchase results in a cure of such Margin Deficit.

Any cash transferred to Buyer pursuant to clause (ii) of this Section 4(a) of this Agreement with respect to any Purchased Loan shall be applied to reduce the outstanding Purchase Price for each Purchased Loan on a dollar-for-dollar basis for which there was a Margin Deficit. Notwithstanding the foregoing or anything herein to the contrary, a Margin Deficit shall not exist or be deemed to exist with respect to any Purchased Loan at any time the outstanding Purchase Price with respect to such Purchased Loan is less than 60% of the related Market Value.

(b) If any notice is given by Buyer under Section 4(a) of this Agreement on any Business Day (such notice, a “Margin Deficit Notice”) and Seller elects to transfer cash pursuant to Section 4(a)(i) or (ii), Seller shall transfer cash in the full amount required in Section 4(a)(i) or (ii), if the Margin Deficit Notice is given before 1:00 p.m. EST, by no later than the close of business on the Business Day following the Business Day on which such Margin Deficit Notice is given, and if the Margin Deficit Notice is given on or after 1:00 p.m. EST, by no later than the close of business on the second (2^nd) Business Day following the Business Day on which such Margin Deficit Notice is given. The failure of Buyer, on any one or more occasions, to exercise its rights under Section 4(a) of this Agreement shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Buyer and Seller agree that any failure or delay by Buyer to exercise its rights under Section 4(a) of this Agreement shall not limit such party’s rights under this Agreement or otherwise existing by law or in any way create additional rights for such party.

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(c) At any time prior to the Facility Expiration Date, in the event a future funding is contractually required to be made available to the related Mortgagor under a Purchased Loan, Seller may submit to Buyer a Request for Margin Excess, in the form of Exhibit IX attached hereto, which requests that Buyer transfer to Seller cash in an amount equal to the product of the applicable Purchase Price Percentage for such Purchased Loan multiplied by the amount of such future funding (such product, “Margin Excess (Future Funding)”), which cash shall be applied to increase the outstanding Purchase Price with respect to the Transaction for such Purchased Loan and to satisfy such future funding obligation in part; provided, that, Buyer shall not have any obligation to transfer such Margin Excess (Future Funding) to Seller unless Buyer shall have determined that all of the following conditions precedent (such conditions, the “Future Funding Conditions Precedent”) are satisfied:

(i) If in connection with the entry into the initial Transaction relating to the Purchased Loan that is the subject of a future funding obligation, Buyer and Seller agreed upon additional conditions precedent which are required to be satisfied (e.g. maintenance of or improvement in Debt Yield (Purchase Price) and/or Debt Yield (Loan UPB)) with respect to such Purchased Loan and which are specified in the Confirmation, taking into account the increase in the outstanding Purchase Price attributable to such Margin Excess (Future Funding), then such additional conditions precedent are satisfied;

(ii) taking into account the increase in the outstanding Purchase Price attributable to such Margin Excess (Future Funding), the LTV (Purchase Price) shall not exceed sixty percent (60%);

(iii) no Default or Event of Default has occurred and is continuing;

(iv) the increase in the outstanding Purchase Price with respect to such Purchased Loan attributable to such Margin Excess (Future Funding) shall be equal to or greater than $250,000;

(v) Seller shall have demonstrated to Buyer’s reasonable satisfaction that all conditions precedent to the future funding obligation under the Purchased Loan documentation shall have been satisfied in all material respects; and

(vi) following such increase in the outstanding Purchase Price attributable to such Margin Excess (Future Funding), no Margin Deficit shall exist.

(d) If any notice is given by Seller under Section 4(c) of this Agreement on any Business Day, Buyer shall transfer cash as provided in Section 4(c) by no later than the close of business on the second (2^nd) Business Day following the Business Day on which Buyer reasonably determines that the Future Funding Conditions Precedent have been satisfied (or, in Buyer’s sole discretion, waived). The failure of Seller, on any one or more occasions, to exercise its rights under Section 4(c) of this Agreement shall not change or alter the terms and conditions

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to which this Agreement is subject or limit the right of Seller to do so at a later date. Buyer and Seller agree that any failure or delay by Seller to exercise its rights under Section 4(c) of this Agreement shall not limit such party’s rights under this Agreement or otherwise existing by law or in any way create additional rights for such party.

(e) At any time prior to the Facility Expiration Date, in the event,

(x)(a) Seller elects to transfer cash to Buyer pursuant to Section 4(a)(i) or (ii) to satisfy a Margin Deficit and (b) on any date subsequent to such transfer of cash, the Market Value of a Purchased Loan increases such that the outstanding Purchase Price (or if cash collateral was transferred in accordance with Section 4(a)(i), the outstanding Purchase Price less such cash collateral so transferred) with respect to such Purchased Loan is less than the maximum Purchase Price available with respect to such Purchased Loan based upon the applicable Maximum Purchase Price Percentage, or

(y)(a) Seller elects to transfer cash to Buyer pursuant to Section 3(f) or elects as described in the definition of Pricing Matrix to receive on the applicable Purchase Date a Purchase Price lower than the maximum Purchase Price available based upon the applicable Maximum Purchase Price Percentage and (b) on any date subsequent to such transfer of cash, Seller desires to receive a re-advance of such cash so transferred or an additional advance of cash in an amount up to the maximum Purchase Price available with respect to such Purchased Loan based upon the Maximum Purchase Price Percentage (the difference between the actual outstanding Purchase Price (or outstanding Purchase Price less cash collateral transferred, as the case may be), and the higher hypothetical Purchase Price, the “Margin Excess (Other)”), then Seller may submit to Buyer a Request for Margin Excess, in the form of Exhibit IX attached hereto, which requests that Buyer transfer to Seller an amount up to such Margin Excess (Other), by wire transfer to an account designated by Seller; provided, that, Buyer shall not have any obligation to transfer such Margin Excess (Other) to Seller unless Buyer shall have determined that all of the following conditions precedent are satisfied:

(i) no Default or Event of Default has occurred and is continuing;

(ii) with respect to any Purchased Loan, the amount of cash transferred by Buyer pursuant to clause (x) or (y) above shall not cause the Purchase Price to exceed the maximum Purchase Price based upon the Maximum Purchase Price Percentage for such Purchased Loan;

(iii) the increase in the outstanding Purchase Price with respect to such Purchased Loan attributable to such Margin Excess (Other) shall be equal to or greater than $250,000; and

(iv) following such increase in the outstanding Purchase Price attributable to such Margin Excess (Other), no Margin Deficit shall exist.

(f) If any Request for Margin Excess is given by Seller on any Business Day under (x) Section 4(e)(x) of this Agreement, Buyer shall transfer cash as provided in Section 4(e)(x) by no later than the close of business on the next succeeding Business Day following the Business

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Day on which Buyer has completed its calculation of Market Value, or (y) Section 4(e)(y) of this Agreement, Buyer shall transfer cash as provided in Section 4(e)(y) by no later than the close of business on the next succeeding Business Day following the Business Day on which such Request for Margin Excess is submitted. The failure of Seller, on any one or more occasions, to exercise its rights under Section 4(e) of this Agreement shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Seller to do so at a later date. Buyer and Seller agree that any failure or delay by Seller to exercise its rights under Section 4(e) of this Agreement shall not limit such party’s rights under this Agreement or otherwise existing by law or in any way create additional rights for such party.

(g) Promptly following the transfer of Margin Excess by Buyer to Seller pursuant to Section 4(c) and 4(d) or 4(e) and 4(f), Buyer shall deliver to Seller an amended and restated Confirmation which shall reflect the increase in the outstanding Purchase Price.

5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a) The Cash Management Account shall be established at the Depository concurrently with the execution and delivery of this Agreement by Seller and Buyer. Buyer shall have sole dominion and control over the Cash Management Account. All Income in respect of the Purchased Loans and any payments in respect of associated Hedging Transactions, as well as any interest received from the reinvestment of such Income, shall be deposited directly into the Cash Management Account and shall be remitted by the Depository in accordance with the applicable provisions of Sections 5(d), 5(e), 5(f) and 14(b)(iii) of this Agreement.

(b) With respect to each Purchased Loan, Seller shall deliver to each Mortgagor, issuer of a participation or borrower under a Purchased Loan an irrevocable direction letter (the “Irrevocable Direction Letter”) in the form attached as Exhibit X to this Agreement, with a simultaneous copy to Servicer, instructing the Mortgagor and Servicer to pay all amounts payable under the related Purchased Loan to the Cash Management Account and shall provide to Buyer proof of such delivery. If a Mortgagor or Servicer forwards any Income with respect to a Purchased Loan to Seller rather than directly to the Cash Management Account, Seller shall (i) deliver an additional Irrevocable Direction Letter to the applicable Mortgagor, with a simultaneous copy to Servicer, and make other commercially reasonable efforts to cause such Mortgagor or Servicer to forward such amounts directly to the Cash Management Account and (ii) deposit in the Cash Management Account any such amounts within one Business Day of Seller’s receipt thereof.

(c) On each Remittance Date, Seller shall pay to Buyer an amount equal to the Price Differential which has accrued during the related Pricing Rate Period for each Transaction to the extent not previously paid to Buyer.

(d) So long as no Event of Default shall have occurred and be continuing, during the Facility Availability Period, all Income received by the Depository in respect of the Purchased Loans and the associated Hedging Transactions (other than Principal Payments and net sale proceeds) may be remitted by the Depository on the next Business Day to the account of Seller specified in the Blocked Account Agreement (or in accordance with such other direction and instruction of Seller which is reasonably approved by Buyer).

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(e) So long as no Event of Default shall have occurred and be continuing, during the Facility Availability Period, all Principal Payments in respect of each Purchased Loan (whether scheduled or unscheduled) received by the Depository shall be paid, pursuant to the withdrawal instructions of Seller that have been approved by Buyer after Buyer and Seller have reconciled the amount of any partial Principal Payment, to Buyer on the next Remittance Date and, in each instance, applied as follows: (i) first, toward the reduction of the outstanding Purchase Price of such Purchased Loan to the extent necessary to cause the outstanding Purchase Price with respect to such Purchased Loan to equal the product of the related Market Value and the applicable Purchase Price Percentage (or with respect to any Principal Payment in full, in the amount necessary to reduce the outstanding Purchase Price of such Purchased Loan to zero) and (ii) second, to the extent necessary to cause the outstanding Purchase Price with respect to each other Purchased Loan to equal the product of the related Market Value and the applicable Purchase Price Percentage. Any Principal Payments received by the Depository and not paid to Buyer pursuant to the preceding sentence on each Remittance Date during the Facility Availability Period shall be remitted promptly to Seller.

(f) Following the end of the Facility Availability Period (so long as no Event of Default shall have occurred and be continuing), all Income received by the Depository in respect of the Purchased Loans and the associated Hedging Transactions shall be applied, pursuant to the withdrawal instructions of Seller that have been approved by Buyer, by the Depository on each Remittance Date as follows (subject to the following sentence):

(i) first, to the Depository and Custodian an amount equal to the depository and custodial fees due and payable;

(ii) second, to Buyer an amount equal to its out-of-pocket costs and expenses and any other amounts due and payable under this Agreement;

(iii) third, to Buyer an amount equal to the Price Differential which has accrued and is outstanding in respect of all of the Purchased Loans as of such Business Day;

(iv) fourth, to make a payment to Buyer in reduction of the outstanding Purchase Price of the Purchased Loans, such payment to be allocated amongst the Purchased Loans on a pro rata basis based upon outstanding Purchase Price of each Purchased Loan;

(v) fifth, to pay, the amount, if any, payable by Seller in the event any Hedging Transaction is being terminated as of such date; and

(vi) sixth, the surplus, if any, to Seller.

Notwithstanding anything in Section 5(f) of this Agreement to the contrary, prior to the application of funds pursuant to such Section, Seller shall be entitled upon written request to Buyer to receive the amount of funds, if any, as may be required by applicable law to be distributed for Guarantor to maintain its status as a “real estate investment trust” for tax purposes and to avoid other adverse tax consequences to Guarantor and/or its shareholders related to the status of Guarantor as a “real estate investment trust” for tax purposes; provided, that such

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distribution shall be subject to the condition precedent (which Seller shall be required to demonstrate to the satisfaction of Buyer in its sole discretion) that Guarantor has exhausted all other sources of cash flow and income, whether in the form of equity or debt, prior to such request being made to Buyer.

(g) If an Event of Default shall have occurred and be continuing, all Income received by the Depository in respect of the Purchased Loans and the associated Hedging Transactions shall be applied, upon the direction and instruction of Buyer, by the Depository on the Business Day next following the Business Day on which such funds are deposited in the Cash Management Account as follows:

(i) first, to the Depository and Custodian an amount equal to the depository and custodial fees due and payable;

(ii) second, to Buyer an amount equal to its out-of-pocket costs and expenses and any other amounts due and payable under this Agreement;

(iii) third, to Buyer an amount equal to the Price Differential which has accrued and is outstanding in respect of all of the Purchased Loans as of such Business Day;

(iv) fourth, to make a payment to Buyer in reduction of the outstanding Purchase Price of the Purchased Loans, such payment to be allocated amongst the Purchased Loans as determined by Buyer in its sole discretion, until the outstanding Purchase Price for all of the Purchased Loans has been reduced to zero;

(v) fifth, to pay, the amount, if any, payable by Seller in the event any Hedging Transaction related to such Purchased Loan is being terminated as of such date; and

(vi) sixth, the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

6. SECURITY INTEREST

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

(a) the Purchased Loans, the Servicing Rights, Servicing Agreements, Servicing Records, insurance relating to the Purchased Loans, and collection and escrow accounts relating to the Purchased Loans;

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(b) the Hedging Transactions, if any, entered into pursuant to this Agreement;

(c) the Cash Management Account and all financial assets (including, without limitation, all security entitlements with respect to all financial assets) from time to time on deposit in the Cash Management Account;

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

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

Buyer’s security interest in the Collateral shall terminate only upon termination of Seller’s obligations under this Agreement and the documents delivered in connection herewith and therewith. Upon such termination, Buyer shall promptly deliver to Seller such UCC termination statements and other release documents as may be commercially reasonable and to return the Purchased Loans to Seller. For purposes of the grant of the security interest pursuant to this Section 6, this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “UCC”). Buyer shall have all of the rights and may exercise all of the remedies of a secured creditor under the UCC and the other laws of the State of New York. In furtherance of the foregoing, (a) Buyer, at Seller’s sole cost and expense, shall cause to be filed in such locations as may be reasonably necessary to perfect and maintain perfection and priority of the security interest granted hereby, UCC financing statements and continuation statements (collectively, the “Filings”), and shall forward copies of such Filings to Seller upon completion thereof, and (b) Seller shall from time to time take such further actions as may be reasonably requested by Buyer to maintain and continue the perfection and priority of the security interest granted hereby (including marking its records and files to evidence the interests granted to Buyer hereunder).

7. PAYMENT, TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, ownership of the Purchased Loans shall be transferred to Buyer or its designee (including the Custodian) against the simultaneous transfer of the Purchase Price to an account of Seller specified in writing by Seller relating to such Transaction.

(b) On or before each Purchase Date, Seller shall deliver or cause to be delivered to Buyer or its designee the Custodial Delivery in the form attached hereto as Exhibit III; provided, that notwithstanding the foregoing, upon request of Seller, Buyer in its sole discretion may elect to permit Seller to make such delivery by not later than the third (3^rd) Business Day after the related Purchase Date, so long as Seller causes an Acceptable Attorney to deliver to Buyer and the Custodian an Attorney’s Bailee Letter on or prior to such Purchase Date. In connection with each sale, transfer, conveyance and assignment of a Purchased Loan, on or prior to the Purchase Date with respect to such Purchased Loan, Seller shall deliver or cause to be delivered and released the following documents (collectively, the “Purchased Loan File”) pertaining to such Purchased Loan to the Custodian on or prior to the Purchase Date (unless otherwise waived by

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Buyer) with respect to such Purchased Loan (or, pursuant to the proviso in the immediately preceding sentence, by not later than the third (3^rd) Business Day after the related Purchase Date):

With respect to each Purchased Loan that is a Whole Loan or Senior Interest, to the extent applicable:

(i) The original Mortgage Note (or senior Mortgage Note in an “A/B” structure) bearing all intervening endorsements.

(ii) An original or copy of any loan agreement and any guarantee executed in connection with the Mortgage Note.

(iii) An original or copy of the Mortgage with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

(iv) Originals or copies of all assumption, modification, consolidation or extension agreements with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

(v) An original of the Assignment Documents in Blank.

(vi) Originals or copies of all intervening assignments of mortgage with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

(vii) An original or copy of the attorney’s opinion of title and abstract of title or a copy of the mortgagee title insurance policy, as applicable, or if the mortgagee title insurance policy has not been issued, a copy of the irrevocable marked commitment to issue the same (or irrevocable signed proforma policy).

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

(ix) An original or copy of the assignment of leases and rents, if any, with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

(x) Originals or copies of all intervening assignments of assignment of leases and rents, if any, or copies thereof, with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

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(xi) A copy of the UCC financing statements and all necessary UCC continuation statements with evidence of filing or submission for filing thereon, and UCC assignments prepared by Seller in blank, which UCC assignments shall be in form and substance acceptable for filing.

(xii) An environmental indemnity agreement (if any).

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

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

(xv) A copy of the Mortgagor’s opinion of counsel.

(xvi) An assignment of permits, contracts and agreements (if any).

With respect to each Purchased Loan which is a participation interest in a Whole Loan or Senior Interest:

(i) the original or a copy of all of the documents described above with respect to a Purchased Loan which is a whole mortgage loan;

(ii) if applicable, an original participation certificate bearing all intervening endorsements, endorsed “Pay to the order of                     without recourse” and signed in the name of the Last Endorsee by an authorized Person;

(iii) an original or copy of any participation agreement and an original or copy of any intercreditor agreement, co–lender agreement and/or servicing agreement executed in connection with the Purchased Loan; and

(iv) the omnibus assignment of Purchased Loan sufficient to transfer to Buyer all of Seller’s rights, title and interest in and to the Purchased Loan.

From time to time, Seller shall forward to the Custodian additional original documents or additional documents evidencing any assumption, modification, consolidation or extension of a Purchased Loan approved in accordance with the terms of this Agreement, and upon receipt of any such other documents, the Custodian shall hold such other documents as Buyer shall request from time to time. With respect to any documents which have been delivered or are being delivered to recording offices for recording and have not been returned to Seller in time to permit their delivery hereunder at the time required, in lieu of delivering such original documents, Seller shall deliver to Buyer a true copy thereof with an officer’s certificate certifying that such copy is a true, correct and complete copy of the original, which has been transmitted for recordation. Seller shall deliver such original documents to the Custodian promptly when they are received. With respect to all of the Purchased Loans delivered by Seller to Buyer or its designee (including the Custodian), Seller shall execute an omnibus power of attorney substantially in the form of Exhibit V attached hereto irrevocably appointing Buyer its attorney-in-fact with full power during the occurrence and continuance of an Event of Default and, subject to the following sentence, during the occurrence and continuance of a monetary Default or material non-monetary

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Default, to (i) complete and record the Assignment of Mortgage, (ii) complete the endorsement of the Mortgage Note and (iii) take such other steps as may be reasonably necessary or desirable to enforce Buyer’s rights against such Purchased Loans and the related Purchased Loan Files and the Servicing Records. If a monetary Default or a material non-monetary Default has occurred and is continuing and Buyer has requested in writing that Seller take or cause to be taken any action that Buyer deems reasonably necessary to preserve Buyer’s ability to enforce upon the Purchased Loans as and when permitted pursuant to Section 14(b) hereof (which writing shall include a statement that Buyer will exercise its power of attorney if Seller fails to take or cause to be taken such action requested by Buyer), and Seller has not complied with any such request promptly following receipt thereof, then Buyer may exercise its power of attorney during the existence and continuation of any such monetary Default or material non-monetary Default, as the case may be, as Buyer deems reasonably necessary to preserve Buyer’s ability to enforce upon the Purchased Loans as and when permitted pursuant to Section 14(b) hereof. Buyer shall deposit the Purchased Loan Files representing the Purchased Loans, or direct that the Purchased Loan Files be deposited directly, with the Custodian. The Purchased Loan Files shall be maintained in accordance with the Custodial Agreement. Any Purchased Loan Files not delivered to Buyer or its designee (including the Custodian) are and shall be held in trust by Seller or its designee for the benefit of Buyer as the owner thereof. Seller or its designee shall maintain a copy of the Purchased Loan File and the originals of the Purchased Loan File not delivered to Buyer or its designee. The possession of the Purchased Loan File by Seller or its designee is at the will of Buyer for the sole purpose of servicing the related Purchased Loan, and such retention and possession by Seller or its designee is in a custodial capacity only. The books and records (including, without limitation, any computer records or tapes) of Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Loan to Buyer. Seller or its designee (including the Custodian) shall release its custody of the Purchased Loan File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Loans, is in connection with a repurchase of any Purchased Loan by Seller or as otherwise required by law.

(c) Unless an Event of Default shall have occurred and be continuing, Buyer shall exercise all voting and corporate rights with respect to the Purchased Loans in accordance with Seller’s written instructions; provided, however, that Buyer shall not be required to follow Seller’s instructions concerning any vote or corporate right if doing so would, in Buyer’s Applicable Standard of Discretion and in a manner consistent with Buyer’s other master repurchase facilities for comparable assets, be inconsistent with or result in any violation of any provision of the Transaction Documents or any Requirement of Law. Upon the occurrence and during the continuation of an Event of Default, Buyer shall be entitled to exercise all voting and corporate rights with respect to the Purchased Loans without regard to Seller’s instructions.

8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS

(a) Title to all Purchased Loans shall pass to Buyer on the applicable Purchase Date, and Buyer shall have free and unrestricted use of all Purchased Loans, subject however, to the terms of this Agreement. Nothing in this Agreement or any other Transaction Document shall preclude Buyer from engaging in repurchase transactions with the Purchased Loans or otherwise selling, transferring, pledging, repledging, hypothecating, or rehypothecating the Purchased Loans, but no such transaction shall relieve Buyer of its obligations to transfer the Purchased

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Loans to Seller pursuant to Section 3 of this Agreement, of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Section 5 hereof or of Buyer’s obligations pursuant to Section 19(b).

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

9. INTENTIONALLY OMITTED

10. REPRESENTATIONS

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

(b) In addition to the representations and warranties in subsection (a) above, Seller represents and warrants to Buyer that as of the date of this Agreement, as of the Purchase Date for the purchase of any Purchased Loans by Buyer from Seller and any Transaction thereunder, as of any Business Day on which Margin Excess is made available by Buyer to Seller, and at all times while this Agreement and any Transaction thereunder is in full force and effect:

(i) Organization. Seller is duly formed, validly existing and in good standing under the laws and regulations of the state of Seller’s formation and is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of Seller’s business. Seller has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents.

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

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(iii) Non-Contravention. Neither the execution and delivery of the Transaction Documents, nor consummation by Seller of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by Seller with the terms, conditions and provisions of the Transaction Documents (or any of them) will conflict with or result in a breach of any of the terms or provisions of (i) the organizational documents of Seller, (ii) any contractual obligation to which Seller is now a party or the rights under which have been assigned to Seller or the obligations under which have been assumed by Seller or to which the assets of Seller are subject or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of the assets of Seller, other than pursuant to the Transaction Documents, (iii) any judgment or order, writ, injunction, decree or demand of any court applicable to Seller, or (iv) any applicable Requirement of Law, in the case of clauses (ii)-(iv) above, to the extent that such conflict or breach would have a Material Adverse Effect. Seller has all necessary licenses, permits and other consents from Governmental Authorities necessary to acquire, own and sell the Purchased Loans and for the performance of its obligations under the Transaction Documents, except to the extent failure to have such licenses, permits and consents is not reasonably likely to have a Material Adverse Effect.

(iv) Litigation; Requirements of Law. Except as disclosed in writing to Buyer, there is no action, suit, proceeding, investigation, or arbitration pending or, to Seller’s Actual Knowledge, threatened in writing against Seller or any of its assets, which is reasonably likely to have a Material Adverse Effect. Seller is in compliance in all material respects with all Requirements of Law. Seller is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

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

(vi) Good Title to Purchased Loans. Immediately prior to the purchase of any Purchased Loans by Buyer from Seller, such Purchased Loans are free and clear of any lien, encumbrance or impediment to transfer (including any “adverse claim” as defined in Section 8-102(a)(1) of the UCC), and Seller is the record and beneficial owner of and has good and marketable title to and the right to sell and transfer such Purchased Loans to Buyer and, upon transfer of such Purchased Loans to Buyer, Buyer shall be the owner of such Purchased Loans free of any adverse claim, subject to the rights of

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Seller and other obligations of Buyer pursuant to the terms of this Agreement. In the event the related Transaction is recharacterized as a secured financing of the Purchased Loans, the provisions of this Agreement are effective to create in favor of Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Collateral and Buyer shall have a valid, perfected first priority security interest in the Purchased Loans.

(vii) No Default. As of the date of this Agreement and each Purchase Date, no Default or Event of Default has occurred and is continuing under or with respect to the Transaction Documents. At all times while this Agreement and any Transaction thereunder is in effect, no monetary Default, material non-monetary Default or Event of Default to Seller’s Actual Knowledge has occurred and is continuing under or with respect to the Transaction Documents.

(viii) Representations and Warranties Regarding Purchased Loans; Delivery of Purchased Loan File. Seller represents and warrants to Buyer that each Purchased Loan sold in a Transaction hereunder, as of the related Purchase Date for such Transaction and as of any Business Day on which Margin Excess is made available by Buyer to Seller which increases the outstanding Purchase Price of such Purchased Loan, conforms to the applicable representations and warranties set forth in Exhibit VI attached hereto in all material respects, except as disclosed to Buyer in writing. With respect to each Purchased Loan, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered under this Agreement and the Custodial Agreement for such Purchased Loan have been delivered to Buyer or the Custodian on its behalf (or shall be delivered in accordance with the time periods set forth herein).

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

(x) Consents. No consent, approval or other action of, or filing by Seller with, any Governmental Authority or any other Person is required to authorize,

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or is otherwise required in connection with, the execution, delivery and performance of any of the Transaction Documents (other than consents, approvals and filings that have been obtained or made, as applicable, or that, if not obtained or made, are not reasonably likely to have a Material Adverse Effect).

(xi) Members. Seller is a wholly owned subsidiary of Guarantor.

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

(xiii) No Encumbrances. Except to the extent expressly set forth in this Agreement, there are (i) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Loans, (ii) no agreements on the part of Seller to issue, sell or distribute the Purchased Loans, and (iii) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or any interest therein or to pay any dividend or make any distribution in respect of the Purchased Loans.

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

(xv) Taxes. Seller and Guarantor have filed or caused to be filed all U.S. federal and other material tax returns which are required to be filed with respect to Seller and have paid all U.S. federal and other material taxes imposed on or with respect to Seller except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP; no tax liens have been filed against Seller or its assets (except for Permitted Liens).

(xvi) ERISA. Neither Seller nor any ERISA Affiliate maintains any Plans and neither Seller nor any ERISA Affiliate and makes any contributions to any Plans or any Multiemployer Plans.

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

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

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

(xx) Notice Address; Jurisdiction of Organization. On the date of this Agreement, Seller’s address for notices is as set forth in Annex I. Seller’s jurisdiction of organization is Delaware. The location where Seller keeps its books and records, including all computer tapes and records relating to the Collateral, is its notice address.

(xxi) Prohibited Person. None of Seller, Guarantor or any of their respective Affiliates is a Prohibited Person and each of Seller and Guarantor is in full compliance with all applicable orders, rules, regulations and recommendations of OFAC. None of Seller or Guarantor or any of their respective members, directors, executive officers, parents or Subsidiaries, as applicable: (A) are subject to U.S. or multilateral economic or trade sanctions currently in force; (B) are owned or controlled by, or act on behalf of, any governments, corporations, entities or individuals that are subject to U.S. or multilateral economic or trade sanctions currently in force; or (C) is a Prohibited Person or is otherwise named, identified or described on any blocked persons list, designated nationals list, denied persons list, entity list, debarred party list, unverified list, sanctions list or other list of individuals or entities with whom U.S. persons may not conduct business, including but not limited to lists published or maintained by OFAC, lists published or maintained by the U.S. Department of Commerce, and lists published or maintained by the U.S. Department of State. Each of Seller and Guarantor has established an anti-money laundering compliance program as required by all applicable anti-money laundering laws and regulations, including without limitation the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56).

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11. NEGATIVE COVENANTS OF SELLER

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

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

(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Purchased Loans (or any of them) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Loans (or any of them) with any Person other than Buyer, unless and until such Purchased Loans are repurchased by Seller in accordance with this Agreement;

(c) create, incur or permit to exist any Lien in or on the Purchased Loans, except as described in Section 6 of this Agreement;

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

(e) modify or terminate any of the organizational documents of Seller (except Buyer shall not unreasonably withhold or delay any request for a consent to such modification to the organizational documents (excluding the special purpose entity provisions));

(f) consent to any amendment or supplement to, or termination of any note, loan agreement, mortgage or guaranty relating to the Purchased Loans or other material agreement or instrument relating to the Purchased Loans (other than Permitted Purchased Loan Modifications), unless and until such Purchased Loans are repurchased by Seller in accordance with this Agreement; provided, that notwithstanding the foregoing, to the extent Buyer’s prior approval is required for any such amendment or termination set forth in this Section 11(f) and Seller delivers a written request for approval to Buyer which is not responded to within five (5) Business Days, then Buyer shall be deemed to have granted its approval to such amendment or termination if Seller proceeds to deliver to Buyer a second written request for approval which is not responded to within five (5) Business Days, so long as such second request is marked in bold lettering with the following language: “BUYER’S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A REPURCHASE AGREEMENT BETWEEN THE UNDERSIGNED AND BUYER” and the envelope containing the request must be marked “PRIORITY”;

(g) admit any additional members in Seller, or permit the sole member of Seller to assign or transfer all or any portion of its membership interest in Seller;

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(h) enter into any Hedging Transactions (it being understood and agreed Seller shall not have any obligation to enter into Hedging Transactions with respect to individual Purchased Loans or pursue hedging strategies at the level of Seller with respect to the Purchased Loans);

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

12. AFFIRMATIVE COVENANTS OF SELLER

(a) Seller shall use commercially reasonable efforts to promptly notify Buyer of any change in its business operations and/or financial condition that would be reasonably likely to have a Material Adverse Effect; provided, however, the failure to deliver such notice in accordance with this Section 12(a) shall not give rise to an Event of Default; provided, further, that nothing in this Section 12 shall relieve Seller of its obligations under this Agreement.

(b) Seller shall provide Buyer with copies of such documents as Buyer may reasonably request and which are in Seller’s possession or control evidencing the truthfulness of the representations set forth in Section 10.

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

(d) Seller shall notify Buyer and the Depository of the occurrence of any Default or Event of Default of which Seller has written notice or Actual Knowledge and which has not otherwise been disclosed pursuant to the reports delivered in accordance with Section 12(i).

(e) With respect to each fixed rate Purchased Loan, Seller shall enter into Hedging Transactions designed to mitigate interest rate risk (i.e. not credit risk) pursuant to a hedging strategy reasonably acceptable to Buyer and pledge such Hedging Transactions to Buyer as Collateral (including, without limitation, to the extent such Hedging Transactions are entered into with a party other than Buyer, delivering a collateral assignment of such Hedging Transactions in form and substance acceptable to Buyer). Seller acknowledges Buyer will mark to market such Hedging Transactions from time to time in accordance with and subject to the terms of this Agreement.

(f) Seller shall promptly (and in any event not later than three (3) Business Days following receipt) deliver to Buyer (i) any written notice of the occurrence of an event of default received by Seller pursuant to the Purchased Loan Documents and (ii) any other information with respect to the Purchased Loans within Seller’s possession or control as may be reasonably requested by Buyer from time to time.

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(g) Seller will permit Buyer or its designated representative to inspect at Buyer’s sole cost and expense (so long as an Event of Default has not occurred and is not continuing) Seller’s records which are not privileged or confidential (but excluding for this purpose all information received from Mortgagors or other obligors on the Purchased Loans) and the conduct and operation of its business related thereto upon reasonable prior written notice from Buyer or its designated representative, at such reasonable times and with reasonable frequency (not to exceed twice per calendar year, so long as an Event of Default has not occurred and is not continuing), subject to the terms of any confidentiality agreement between Buyer and Seller and applicable law, and if no such confidentiality agreement then exists between Buyer and Seller, Buyer and Seller shall act in accordance with customary market standards regarding confidentiality and applicable law. Buyer shall act in a commercially reasonable manner in requesting and conducting any inspection relating to the conduct and operation of Seller’s business.

(h) At any time from time to time upon the reasonable request of Buyer, at the sole expense of Seller, Seller will promptly and duly execute and deliver such further instruments and documents and take such further actions as Buyer may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the first priority security interest granted hereunder and of the rights and powers herein granted (including, among other things, filing such UCC financing statements as Buyer may reasonably request). If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such note, instrument or chattel paper shall be immediately delivered to Buyer, duly endorsed in a manner reasonably satisfactory to Buyer, to be held as Collateral pursuant to this Agreement, and the documents delivered in connection herewith.

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

(i) Within 45 days after the last day of each of the first three fiscal quarters in any fiscal year, Guarantor’s and (to the extent prepared separately from Guarantor) Seller’s unaudited consolidated balance sheets as of the end of such quarter, in each case certified as being true and correct by an officer’s certificate;

(ii) Within 90 days after the last day of its fiscal year, Guarantor’s audited and (to the extent prepared separately from Guarantor) Seller’s unaudited (or, if generated by Seller, Seller’s audited) consolidated statements of income and statements of changes in cash flow for such year and balance sheets as of the end of such year, in each case presented fairly in accordance with GAAP, and accompanied, in the case of Guarantor, by an unqualified report of a nationally recognized independent certified public accounting firm, Deloitte & Touche LLP or any other accounting firm consented to by Buyer in its reasonable discretion;

(iii) Within 30 days after the last day of each calendar month, any and all property level financial information (including, without limitation, operating and financial statements) with respect to the Purchased Loans that was received during the preceding calendar month and is in the possession of Seller or an Affiliate, including, without limitation, rent rolls and income statements;

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(iv) Within 30 days after the last day of each calendar quarter in any fiscal year, an officer’s certificate from Seller addressed to Buyer certifying that, as of such calendar month, (x) Seller and Guarantor are in compliance in all material respects with all of the terms and requirements of this Agreement, (y) Guarantor is in compliance with the financial covenants set forth in the Guaranty (including therein detailed calculations demonstrating such compliance) and (z) no Event of Default has occurred and is continuing; and

(v) With respect to the Purchased Loans and related Mortgaged Properties: (x) within 30 days after the last day of each calendar month, Seller’s monthly operations report covering occupancy, collections, delinquencies, losses, recoveries, cash flows and such other property level information as may reasonably be requested by Buyer and (y) within 30 days after the last day of each calendar quarter in any fiscal year, an asset management report prepared by Seller or Guarantor.

(j) Seller shall at all times comply with all laws, ordinances, rules and regulations of any federal, state, municipal or other public authority having jurisdiction over Seller or any of its assets, except to the extent any failure thereof is not reasonably likely to result in a Material Adverse Effect. Seller shall do or cause to be done all things reasonably necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business.

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

(l) Seller shall observe, perform and satisfy all the terms, provisions and covenants required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents. Seller shall pay and discharge all Taxes, levies, liens and other charges on its assets and on the Collateral that, in each case, in any manner would create any Lien upon the Collateral, except for Permitted Liens or similar charges.

(m) Seller will maintain records with respect to the Collateral and the conduct and operation of its business with no less a degree of prudence than if the Collateral were held by Seller for its own account.

(n) In the event that Guarantor terminates BXMT Advisors L.L.C. as Guarantor’s external manager pursuant to the Amended and Restated Management Agreement, dated as of March 26, 2013, between Guarantor and BXMT Advisors L.L.C., any replacement external manager or switch to internal management shall be subject to Buyer’s prior written approval, not to be unreasonably withheld, conditioned or delayed.

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13. SINGLE-PURPOSE ENTITY

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

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

(b) It has complied and will comply with the provisions of its organizational documents (i.e. certificate of formation and operating agreement) in all material respects.

(c) It has done or caused to be done and will, to the extent under its control, do all things necessary to observe corporate formalities and to preserve its existence.

(d) It has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates, its members and any other Person (except, in each case, to the extent consolidation is permitted under GAAP or as a matter of law), and, to the extent required by law, it will file its own tax returns, if any (except, for the avoidance of doubt, if the Seller is included as part of a consolidated, unitary, combined or similar tax return, or if the Seller is disregarded as a separate entity for applicable tax purposes).

(e) It has been, is and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any misunderstanding of which it has Actual Knowledge regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other, shall maintain and utilize separate stationery, invoices and checks, and allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an Affiliate.

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

(g) It has not engaged and will not engage in any business other than the acquisition, origination, ownership, servicing, enforcement, financing and disposition of Purchased Loans in accordance with the applicable provisions of the Transaction Documents and its organizational documents.

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

(i) It has not incurred and will not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) with respect to the Purchased Loan Documents, and (B) trade payables in the ordinary course of its business which are either (x) no more than ninety (90) days past due and do not exceed $500,000.00 in the aggregate or (y) more than ninety (90) days past due and do not exceed $250,000.00 in the aggregate, and are being contested in good faith and for which adequate reserves are maintained, and (C) as otherwise expressly permitted under this Agreement.

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(j) It has not made and will not make any loans or advances to any other Person, except as permitted under this Agreement, and shall not acquire obligations or securities of any member or any Affiliate of any member or any other Person.

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

(l) It shall not seek its dissolution, liquidation or winding up, in whole or in part, or suffer any Change of Control or consolidation or merger with respect to Seller.

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

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

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

(p) Seller shall not take any Act of Insolvency without the affirmative vote of the Independent Director.

(q) It shall at all times maintain at least one Independent Director. For so long as the Repurchase Obligations remain outstanding, Seller shall not take any of the actions contemplated by Section 13(p) above (including, to the extent, applicable without the affirmative vote of such Independent Director).

(r) It shall not pledge its assets to secure the obligations of any other Person.

14. EVENTS OF DEFAULT; REMEDIES

(a) After the occurrence and during the continuance of an Event of Default, Seller hereby appoints Buyer as attorney-in-fact of Seller in accordance with Section 7(b) for the purpose of carrying out the provisions of this Agreement and taking any action and executing or endorsing any instruments that Buyer may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. With respect to each Transaction, each of the following clauses (i) through (xv) shall be an Event of Default under this Agreement:

(i) Seller fails to repurchase the Purchased Loans upon the applicable Repurchase Date;

(ii) Seller fails to cure a Margin Deficit in accordance with Section 4 hereof;

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(iii) an Act of Insolvency occurs with respect to Seller or Guarantor;

(iv) Guarantor fails to qualify as a REIT (after giving effect to any cure or corrective periods or allowances pursuant to the Code);

(v) either (A) the Transaction Documents shall for any reason not cause, or shall cease to cause, Buyer to be the owner free of any adverse claim of any of the Purchased Loans, or (B) if a Transaction is recharacterized as a secured financing, the Transaction Documents with respect to any Transaction shall for any reason cease to create a valid first priority security interest in favor of Buyer in any of the Purchased Loans;

(vi) if an event occurs which would constitute (a) an “event of default” under any Hedging Transaction or (b) a “termination event” or an “additional termination event” under any Hedging Transaction (and, in either case, Seller has failed to cure the “event of default” within the applicable cure period or to meet its obligation to pay the Early Termination Amount, if any, pursuant to the terms of such Hedging Transaction);

(vii) failure of Buyer to receive within one (1) Business Day after any Remittance Date the accreted value of the Price Differential (less any amount of such Price Differential previously paid by Seller to Buyer);

(viii) failure of Seller to make any other payment owing to Buyer which has become due, whether by acceleration or otherwise under the terms of this Agreement (other than due to any act or failure to act of Depository to the extent available funds are on deposit in the Cash Management Account), which failure is not remedied within three (3) Business Days after written notice thereof to Seller from Buyer;

(ix) any Governmental Authority takes any action to (i) condemn, seize or appropriate, or assume custody or control of, all or any substantial part of the property of Seller, (ii) displace the management of Seller or curtail its authority in the conduct of the business of Seller, or (iii) terminate the activities of Seller as contemplated by the Transaction Documents;

(x) a Change of Control shall have occurred;

(xi) any representation (other than a MTM Representation) made by Seller or Guarantor in any Transaction Document shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated and such incorrect or untrue representation exists and continues unremedied for ten (10) Business Days after the earlier of receipt of written notice thereof from Buyer or the Seller’s acquiring Actual Knowledge of such incorrect or untrue representation (other than the representations and warranties set forth in Section 10(b)(viii) of this Agreement made by Seller, which shall not be considered an Event of Default if incorrect or untrue in any material respect, provided Seller

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repurchases the related Purchased Loan on an Early Repurchase Date no later than three (3) Business Days after receiving notice of such incorrect or untrue representation and terminates the related Transaction; provided further Seller shall not have made any such representation with actual knowledge that it was materially incorrect or untrue at the time made);

(xii) (i) Guarantor breaches any of the payment obligations set forth in the Guaranty or (ii) Guarantor shall fail to observe any of the financial covenants set forth in the Guaranty or (iii) shall have defaulted or failed to perform any of the other obligations under the Guaranty in any material respect and such default or failure referred to in this clause (iii) remains uncured for a period of seven (7) Business Days after the earlier of receipt of notice thereof from Buyer or the Seller’s acquiring Actual Knowledge of such default or failure by Guarantor;

(xiii) a final non-appealable judgment by any competent court in the United States of America for the payment of money in an amount greater than $100,000 (in the case of Seller) or $5,000,000 (in the case of the Guarantor) shall have been rendered against Seller or Guarantor, and remains undischarged or unpaid for a period of forty-five (45) days, during which period execution of such judgment is stayed by the posting of cash or a bond or other collateral acceptable to Buyer in the amount of the judgment;

(xiv) Seller or Guarantor shall have (x) defaulted under any note, indenture, loan agreement, guaranty or other Indebtedness to which it is a party, which default (A) involves the failure to pay a matured obligation in excess of $100,000 (in the case of Seller) or the greater of (a) $5,000,000 or (b) 5% of Tangible Net Worth (as such term is defined in the Guaranty) (in the case of Guarantor), or (B) results in the acceleration of the maturity of such Indebtedness in excess of a principal amount of $100,000 (in the case of Seller) or the greater of (a) $5,000,000 or (b) 5% of Tangible Net Worth (as such term is defined in the Guaranty) (in the case of Guarantor) by any other party to or beneficiary of such note, indenture, loan agreement, guaranty or other Indebtedness or (y) failed to perform any other material non-payment obligation under such note, indenture, loan agreement, guaranty or other Indebtedness with an asserted actual out-of-pocket damages claim in excess of the limits referenced in clause (x) with respect to Seller or Guarantor, as applicable and acceleration occurs under such Indebtedness as a result thereof; provided, however, that any such default, failure to perform or breach shall not constitute an Event of Default if Seller or Guarantor cures such default or failure to perform, as the case may be, within the grace notice and/or cure period, if any, provided under the applicable agreement; or

(xv) if Seller or Guarantor shall breach or fail to perform any of the terms, agreements, conditions, covenants or obligations applicable to such Person

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under this Agreement, any other Transaction Document or any Purchased Loan Document to which such Person is a party, other than as specifically otherwise referred to in this definition of “Event of Default” (including, without limitation, the failure by Seller to deliver any report required pursuant to Section 12(i)), and such breach or failure to perform is not remedied within fifteen (15) Business Days after written notice thereof to Seller from the applicable party or its successors or assigns; (each of (i) through (xv), an “Event of Default”).

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

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

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

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

(B) to the extent permitted by applicable law, the Repurchase Price with respect to each Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the Accelerated Repurchase Date to but excluding the date of payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such Transaction multiplied by (y) the outstanding Purchase Price for such Transaction (decreased by (I) any amounts actually remitted to Buyer by the Depository or Seller from time to time pursuant to Sections 4 or 5 of this Agreement and applied to such Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant to Section 14(b)(iii) of this Agreement); and

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

(iii) Upon the occurrence and during the continuance of an Event of Default with respect to Seller, Buyer may (A) immediately sell, at a public or

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private sale in a commercially reasonable manner in accordance with Requirements of Law, and with prior written notice to Seller, at such price or prices as Buyer may reasonably deem satisfactory any or all of the Purchased Loans or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Loans, to give Seller credit for such Purchased Loans in an amount equal to the market value of such Purchased Loans as determined by Buyer in its sole discretion against the aggregate unpaid Repurchase Price for such Purchased Loans and any other amounts owing by Seller under the Transaction Documents. The proceeds of any disposition of Purchased Loans effected pursuant to this Section 14(b)(iii) shall be applied in accordance with Section 5(g).

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

(v) Seller shall be liable to Buyer for (A) the amount of all actual out-of-pocket expenses, including reasonable legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default with respect to Seller, (B) all actual costs incurred in connection with the termination of Hedging Transactions, and (C) any other actual out-of-pocket loss, damage, cost or expense directly arising or resulting from the occurrence and continuance of an Event of Default with respect to Seller.

(vi) Buyer shall have, in addition to its rights and remedies under the Transaction Documents, all of the rights and remedies provided by applicable federal, state, foreign, and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, the rights and remedies of a secured party under the UCC of the State of New York, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), in equity, and under any other agreement between Buyer and Seller. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Loans against all of Seller’s obligations to Buyer pursuant to this Agreement, whether or not such obligations are then due, without prejudice to Buyer’s right to recover any deficiency.

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(vii) Subject to the notice and grace periods set forth herein, Buyer may exercise any or all of the remedies available to Buyer immediately upon the occurrence and continuance of an Event of Default (other than with respect to Buyer) and at any time during the continuance thereof. All rights and remedies arising under the Transaction Documents, as amended from time to time, are cumulative and not exclusive of any other rights or remedies which Buyer may have.

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

(ix) Upon the designation of any Accelerated Repurchase Date, Buyer may, without prior notice to Seller, set off any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or not contingent and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by Seller to Buyer or any Affiliate of Buyer against any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or not contingent and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by Buyer or any Affiliate of Buyer to Seller. Buyer will give written notice to the other party of any set off effected under this Section 14(b)(ix). If a sum or obligation is unascertained, Buyer may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Section 14(b)(ix) shall be effective to create a charge or other security interest. This Section 14(b)(ix) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other rights to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

15. SINGLE AGREEMENT

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

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its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

16. RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF THE APPLICABLE PARTY.

17. NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery, or (d) by email with proof of delivery to the address specified in Annex I hereto or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section. A notice shall be deemed to have been given: (a) in the case of hand delivery, at the time of delivery, (b) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (c) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (d) in the case of email, upon receipt of confirmation of transmission and delivery, respectively, provided that such notice sent by email was also delivered as required in this Section. A party receiving a notice which does not comply with the technical requirements for notice under this Section may elect to waive any deficiencies and treat the notice as having been properly given. Notwithstanding the foregoing, in the event that Seller directs Buyer to transfer funds pursuant to a Transaction or otherwise in accordance with Section 3 or 4 to an account or recipient other than Seller’s wiring instructions specified on Annex I, such direction shall be in writing (including in a Confirmation) and signed by two (2) authorized officers of Seller.

18. ENTIRE AGREEMENT; SEVERABILITY

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

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19. NON-ASSIGNABILITY

(a) The rights and obligations of Seller under the Transaction Documents and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer.

(b) Upon prior written notice to Seller, Buyer shall be entitled to assign an interest in its rights and obligations under the Transaction Documents and/or under any Transaction to any other Person or issue one or more participation interests with respect to any or all of the Transactions and, in connection therewith, may bifurcate or allocate (i.e. senior/subordinate) amounts due to Buyer; provided, however, in all such instances, so long as no Event of Default has occurred and is continuing, (i) Buyer may not assign an interest in its rights and obligations under the Transaction Documents and/or under any Transaction or issue one or more participation interests with respect to any or all of the Transactions to any Prohibited Transferee, (ii) Buyer shall retain control and authority over its rights and obligations under the Transaction Documents and/or under any Transaction, (iii) Seller shall not be obligated to deal directly or indirectly with any party other than Buyer, and (iv) Seller shall not be charged for, incur or be required to pay or reimburse Buyer or any assignee, transferee, participant or other third party for any costs that would not have been incurred but for the assignment, participation, bifurcation or allocation by Buyer in accordance with this Section 19(b). In furtherance of and without limitation to the foregoing, in no event shall Buyer confer on or grant any rights in any Person other than Buyer any right to determine the Market Value of any Purchased Loan, to declare a Margin Deficit, to determine whether a Default or Event of Default has occurred or is continuing, to approve a Purchased Loan, to make available to Seller Margin Excess, or to enforce any provision of any Transaction Documents against Seller or Guarantor, it being understood and agreed that nothing herein shall restrict or limit Buyer’s right to consult with and consider the views and opinions of any assignee, transferee or participant under this Agreement.

(c) Buyer, acting solely for this purpose as a non-fiduciary agent of Seller, shall maintain a register for the recordation of each assignment pursuant to Section 19(b) above and the name and address of any assignee, and the Repurchase Price and Price Differential owing to such assignee (the “Register”). The entries in the Register shall be conclusive absent manifest error. Buyer and Seller shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as the owner of the applicable rights and obligations and no transfer or assignment shall be effective unless duly noted in the Register. The Register shall be available for inspection by the Seller at any reasonable time and from time to time upon reasonable request.

(d) The Buyer and each assignee, if any that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Seller, maintain a register on which it records such sale, the name and address of the applicable participant and, with respect to each such participant, the participated Repurchase Price and Price Differential (the “Participant Register”). Neither the Buyer nor any such assignee shall have any obligation to disclose the identity of any participant or any information relating to a participant’s interest in any obligations under any Transaction Document to any Person except (i) to the extent that the Internal Revenue Service

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requests such disclosure (from Seller, Guarantor, Buyer, such assignee or otherwise) or such disclosure is otherwise reasonably determined to be required to establish that such obligation is in registered form under Section 5f.103-1I of the United States Treasury Regulations (the “Treasury Regulations”), and (ii) the portion of the Participant Register relating to any such participant requesting (directly or through Buyer or an assignee) payment from Seller under the Transaction Documents shall be made available to Seller upon reasonable request. The entries in the Participant Register shall be conclusive absent manifest error. The applicable Buyer shall treat each Person whose name is recorded in the Participant Register as the owner of the applicable participation for all purposes of this Agreement and no sale of a participation shall be effective unless duly noted in the Participant Register.

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

20. GOVERNING LAW

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

21. NO WAIVERS, ETC.

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

22. USE OF EMPLOYEE PLAN ASSETS

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

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

(c) By entering into a Transaction pursuant to this Section, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not disclosed to

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Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.

23. INTENT

(a) The parties recognize and agree that: (i) each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code and a “securities contract” as that term is defined in Section 741(7) of the Bankruptcy Code, (ii) payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 741 of the Bankruptcy Code, and (iii) the grant of a security interest set forth in Sections 6 and 29(b) hereof and the Guaranty, each of which secures the rights of Buyer hereunder also constitutes a “repurchase agreement” as contemplated by Section 101(47)(A)(v) of the Bankruptcy Code and a “securities contract” as contemplated by Section 741(7)(A)(xi) of the Bankruptcy Code. It is further understood that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, as amended, with respect to the Transaction so constituting a “repurchase agreement” or “securities contract”.

(b) The parties recognize and agree that each of Buyer and Seller is a “repo participant” as that term is defined in Section 101(46) of the Bankruptcy Code.

(c) The parties recognize and agree that each party (for so long as each is either a “financial institution,” “financial participant,” repo participant, or “master netting participant” or other entity listed in Section 555, 559, 561, 362(b)(6), or 362(b)(7) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract” and a “master netting agreement,” including (x) the rights set forth in Sections 3 and 14 and in Section 555, 559, and 561 of the Bankruptcy Code to liquidate the Purchased Loans and/or accelerate or terminate this Agreement, and (y) the right to offset or net out termination payments, payment amounts or other transfer obligations and otherwise exercise contractual rights as set forth in Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), and 546 of the Bankruptcy Code.

(d) Each party hereto hereby further agrees that it shall not challenge the characterization of (i) this Agreement as a “repurchase agreement”, “securities contract” and/or “master netting agreement”, or (ii) each party as a “repo participant” within the meaning of the Bankruptcy Code except insofar as, in the case of a “repurchase agreement”, the term of the Transactions, would render such definition inapplicable.

(e) It is understood that either party’s right to accelerate or terminate this Agreement or to liquidate assets delivered to it in connection with the Transactions hereunder or to exercise any other remedies pursuant to Section 14 or 29 hereof is a contractual right to accelerate, terminate or liquidate this Agreement or the Transactions as described in Sections 555 and 559 of the Bankruptcy Code. It is further understood and agreed that either party’s right to cause the termination, liquidation, or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with, this Agreement or the Transactions hereunder is a contractual right to cause the termination, liquidation, or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with, this Agreement as described in Section 561 of the Bankruptcy Code.

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(f) The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each of the Transactions hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to the Transactions would render such definition inapplicable).

(g) The parties agree and acknowledge that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under the Transactions hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

(h) In light of the intent set forth above in this Section 23, each Party agrees that, from time to time upon the written request of the other Party (the “Requesting Party”), each Party will execute and deliver any supplements, modifications, addendums or other documents as may be necessary or desirable, in the Requesting Party’s good faith discretion, in order to cause this Agreement and the Transactions contemplated hereby to qualify for, comply with the provisions of, or otherwise satisfy, maintain or preserve the criteria for safe harbor treatment under the Bankruptcy Code for “repurchase agreements”, “securities contracts” and “master netting agreements”; provided, however, that either Party’s failure to request, or either Party’s failure to execute, such supplements, modifications, addendums or other documents does not in any way alter or otherwise change the intention of the parties hereto that this Agreement and the Transactions hereunder constitute “repurchase agreements”, “securities contracts” and/or a “master netting agreement” as such terms are defined in the Bankruptcy Code.

(i) Notwithstanding anything to the contrary in this Agreement, it is the intention of the parties that, for U.S. Federal, state and local income and franchise tax purposes, the Transactions constitute a loan from Buyer to Seller, and that Seller is and, so long as no Event of Default shall have occurred and be continuing, will continue to be, treated as the owner of the Purchased Loans for such purposes. Unless prohibited by applicable law, Seller and Buyer (and its assignees and participants, if any) shall treat the Transactions as described in the preceding sentence for all U.S. Federal, state and local income and franchise tax purposes (including, without limitations, on any and all filings with any U.S. Federal, state or local taxing authority).

24. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

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

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

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

25. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

(a) Each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under this Agreement or relating in any way to this Agreement or any Transaction under this Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.

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

(c) The parties hereby irrevocably waive, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding and irrevocably consent to the service of any summons and complaint and any other process by the mailing of copies of such process to them at their respective address specified herein. The parties hereby agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Section 25 shall affect the right of Buyer or Seller to serve legal process in any other manner permitted by law or affect the right of Buyer or Seller to bring any action or proceeding against the other party or its property in the courts of other jurisdictions.

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

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26. NO RELIANCE

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

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

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

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

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

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

27. INDEMNITY

Seller hereby agrees to indemnify Buyer and each of its officers, directors, employees and agents (“Indemnified Parties”) from and against any and all actual out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including reasonable attorneys fees and disbursements of outside counsel) or disbursements (all of the foregoing, collectively “Indemnified Amounts”) which may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transactions shall have been repaid in full) be imposed on or asserted against any Indemnified Party in any way whatsoever arising out of or in connection with, or relating to, this Agreement or any Transactions thereunder or any action taken or omitted to be taken by any Indemnified Party under or in connection with any of the foregoing; provided, that Seller shall not be liable for Indemnified Amounts resulting from the gross negligence or willful misconduct of any Indemnified Party. Without limiting the generality of the foregoing, Seller agrees to hold Buyer harmless from and indemnify Buyer against all Indemnified Amounts with respect to all Purchased Loans relating to or arising out of any violation or alleged violation of any

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Environmental Law, rule or regulation or any consumer credit laws, including without limitation ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act, that, in each case, results from anything other than Buyer’s gross negligence or willful misconduct. In any suit, proceeding or action brought by Buyer in connection with any Purchased Loan for any sum owing thereunder, or to enforce any provisions of any Purchased Loan, Seller will save, indemnify and hold Buyer harmless from and against all actual out-of-pocket expense (including reasonable attorneys’ fees of outside counsel), actual out-of-pocket loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller.

28. DUE DILIGENCE

Seller acknowledges that, at reasonable times and upon reasonable notice to Seller, Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable prior written notice to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Purchased Loan Files, Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Loans in the possession or under the control of Seller, any other servicer or subservicer of Seller and/or the Custodian. Seller also shall make available to Buyer upon reasonable advance written notice a knowledgeable financial or accounting officer for the purpose of answering financial or accounting questions respecting the Purchased Loan Files and the Purchased Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may enter into Transactions with Seller based solely upon the information provided by Seller to Buyer and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Loans. Buyer may underwrite such Purchased Loans itself or engage a third party underwriter to perform such underwriting. Seller agrees to reasonably cooperate with Buyer and any third party underwriter reasonably acceptable to Seller in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Loans in the possession, or under the control, of Seller. Seller further agrees that Seller shall reimburse Buyer for any and all actual costs and expenses reasonably incurred by Buyer in connection with Buyer’s activities pursuant to this Section 28 and for Buyer’s actual costs and out-of-pocket expenses incurred in connection with due diligence reviews with respect to Eligible Loans which Seller proposes to make the subject of a Transaction under this Agreement. Notwithstanding the foregoing, (x) Seller’s obligation to reimburse Buyer for Buyer’s out-of-pocket costs and expenses (including legal expenses) incurred in connection with Eligible Loans which Seller proposes to make the subject of a Transaction shall not exceed $15,000 with respect to any individual Eligible Loan without Seller’s prior consent and (y) so long as an Event of Default has not occurred and is not continuing, with respect to any due diligence Buyer proposes to perform with respect to any Purchased Loan after the related Purchase Date which would create a reimbursement obligation on the part of Seller, Buyer shall provide to Seller prior written notice of such due diligence

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activities (including an estimate of the cost) and a reasonable opportunity for Seller to demonstrate to Buyer that such due diligence need not be performed, provided the final determination to perform or not perform such due diligence shall be made by Buyer.

29. SERVICING

(a) Seller and Buyer agree that all Servicing Rights with respect to the Purchased Loans are being transferred hereunder to Buyer on the applicable Purchase Date and such Servicing Rights shall be transferred by Buyer to Seller upon Seller’s payment of the Repurchase Price for such applicable Purchased Loan. Notwithstanding the purchase and sale of the Purchased Loans and Servicing Rights hereby, Seller or, upon request by Seller, Servicer shall be granted a revocable license to exercise the Servicing Rights with respect to the Purchased Loans for the benefit of Buyer and, if Buyer shall exercise its rights to pledge or hypothecate a Purchased Loan prior to the Repurchase Date pursuant to Section 8, Buyer’s assigns (which license shall be deemed automatically revoked upon the occurrence and during the continuance of an Event of Default); provided, however, that the obligations of Seller or Servicer to service the Purchased Loans shall cease, at Seller’s option, upon the payment by Seller to Buyer of the Repurchase Price therefor. Seller shall cause Servicer to service the Purchased Loans pursuant to the Servicing Agreement, in each case, in accordance with Accepted Servicing Practices. Seller shall obtain the written consent of Buyer prior to appointing any third party Servicer for a Purchased Loan or entering into any Servicing Agreement with a Servicer (other than the initial Servicing Agreement with Midland Loan Services as initial Servicer).

(b) Seller agrees that Buyer is the owner of all servicing records, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of Purchased Loans (collectively, the “Servicing Records”) so long as the Purchased Loans are subject to this Agreement. Seller grants Buyer a security interest in all servicing fees and rights relating to the Purchased Loans and all Servicing Records to secure the obligation of the Seller or Servicer to service in conformity with this Section and any other obligation of Seller to Buyer. Seller covenants to safeguard such Servicing Records which are in Seller’s possession and to deliver them promptly to Buyer or its designee (including the Custodian) at Buyer’s request.

(c) Upon the occurrence and during the continuance of an Event of Default, Buyer may, in its sole discretion, (i) sell its right to the Purchased Loans on a servicing released basis or (ii) terminate any Seller or Servicer of the Purchased Loans with or without cause, in each case without payment of any termination fee to the extent provided in the Servicing Agreement.

(d) Seller shall not employ or permit Servicer to employ sub-servicers to service the Purchased Loans without the prior written approval of Buyer in its sole discretion except to the extent permitted in the Servicing Agreement.

(e) The payment of servicing fees under any Servicing Agreement shall be solely the obligation of Seller.

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30. MISCELLANEOUS

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

(b) The Transaction Documents may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures.

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

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

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

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

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

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

(i) The parties recognize that each Transaction is a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended.

31. TAXES

(a) Any and all payments by or on account of any obligation of Seller under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Tax from any such payment, then Seller shall make (or cause to be made) such deduction or withholding and shall timely pay (or cause to be timely paid) the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable shall be increased by Seller as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 31) Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) Seller shall timely pay any Other Taxes of which it is aware to the relevant Governmental Authority in accordance with applicable law.

(c) Seller shall indemnify Buyer, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 31) payable or paid by Buyer or required to be withheld or deducted from a payment to Buyer, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail calculation of the amount of such payment or liability (together with a certified copy of the return reporting such payment, if applicable or other evidence of such payment reasonably satisfactory to the Seller) delivered to Seller by Buyer shall be conclusive absent manifest error.

(d) Buyer shall deliver to Seller such documentation as prescribed by applicable law or as reasonably requested by Seller as will enable Seller to determine whether or not payments hereunder or under any other Transaction Document to or for the benefit of Buyer (or any assignee or participant thereof) is subject to tax withholding, backup withholding or information reporting requirements. Without limiting the generality of the foregoing, if Buyer (or an assignee

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or participant thereof) is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Transaction Document, Buyer shall deliver to Seller, at the time or times prescribed by applicable law and otherwise as reasonably requested by Seller, such properly completed and executed documentation as prescribed by applicable law or as reasonably requested by Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. Without limiting the generality of the foregoing:

(i) On or prior to the date on which the Buyer becomes a Buyer under this Agreement and prior to the entry in the Register of any assignment to a U.S. Person (and from time to time thereafter as required by applicable law or upon the reasonable request of Seller) the Buyer shall deliver to the Seller two (2) executed originals of IRS Form W-9 (or successor forms) certifying that Buyer (and/or such assignee) is exempt from U.S. federal backup withholding tax.

(ii) On or prior to entry in the Register of an assignment to an assignee that is not a U.S. Person (and from time to time thereafter as required by applicable law or upon the reasonable request of Seller) the Buyer shall deliver to the Seller two (2) executed originals of IRS Forms W-8ECI, W-8BEN, W-8IMY (or any successor forms thereof, as applicable) or other applicable form, certificate or document prescribed by the United States Internal Revenue Service certifying as to such person’s entitlement to exemption from, or reduction in the rate of, withholding Taxes.

(e) If a payment made to the Buyer (or any assignee or participant thereof) under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such person were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such person shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA and to determine that such person has complied with it’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (c), “FATCA” shall include any amendments made to FATCA after the date of this Agreement

(f) Buyer may not effect an assignment (and may not reflect such assignment in the Register) to an assignee that is not a U.S. Person, unless such assignee delivers a valid U.S. branch withholding certificate on IRS Form W-8IMY (or any successor thereto) evidencing its agreement with the Buyer and the Seller to be treated as a U.S. Person for U.S. federal withholding purposes.

(g) Buyer (and each applicable assignee and participant) agrees that if any form or certification it previously delivered (on behalf of itself or any assignee or any participant thereof) expires or becomes obsolete or inaccurate in any respect, it shall update (in the case of an assignee or participant, by obtaining such updated form for such person) such form or certification or promptly notify Seller in writing of its legal inability to do so.

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(h) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 31 (including by the payment of additional amounts pursuant to this Section 31), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 31 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 31(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 31(h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 31(h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 31(h) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(i) Each party’s obligations under this Section 31 shall survive any assignment of rights by, or the replacement of, Buyer, the termination of the Transactions and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first written above.

BUYER:
CITIBANK, N.A.
By:	/s/ Richard B. Schlenger
Name:	Richard B. Schlenger
Title:	Authorized Person

[SIGNATURES CONTINUE ON NEXT PAGE]

Signature Page to Master Repurchase Agreement

SELLER:
PARLEX 2 FINANCE, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Principal, Head of Capital Markets

Signature Page to Master Repurchase Agreement

ANNEXES AND EXHIBITS

ANNEX I	Names and Addresses for Communications between Parties and Wire Instructions
SCHEDULE I	Prohibited Transferees
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III	Form of Custodial Delivery
EXHIBIT IV	Eligible Loan Due Diligence Checklist
EXHIBIT V	Form of Power of Attorney
EXHIBIT VI	Representations and Warranties Regarding Each Individual Purchased Loan
EXHIBIT VII	Collateral Tape
EXHIBIT VIII	Form of Transaction Request
EXHIBIT IX	Form of Request for Margin Excess
EXHIBIT X	Form of Irrevocable Direction Letter

ANNEX I

Names and Addresses for Communications Between Parties and Wire Instructions

Buyer:

Citibank, N.A.

388 Greenwich Street

New York, New York 10013

Attention: Richard Schlenger

Tel: (212) 816-7806

Email: Richard.Schlenger@Citi.com

and

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention: Brian Krisberg, Esq.

Tel: (212) 839-8735

Email: Brian.Krisberg@Sidley.com

Seller:

Parlex 2 Finance, LLC

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue

New York, NY 10154

Attention: Douglas Armer

Tel: (212) 583-5000

Email: BXMTCitiRepo@blackstone.com

With copies to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attention: David C. Djaha

Tel: (212) 841-0489

Email: david.djaha@ropesgray.com

Payments to Buyer: Payments to Buyer under this Agreement shall be made by transfer, via wire transfer, to the following account of Buyer: Citibank, New York, ABA #: 021000089, Account #: 36855692, Account Name: Citi, NA, Ref: Loan No. BXMT, Credit to: Mortgage Ops.

Payments to Seller: Payments to Seller under this Agreement shall be made by transfer, via wire transfer, to the following account of Seller: Bank of America, ABA #: 026009593, Account #: 483024227101, Account Name: “Blackstone Mortgage Trust, Inc.”.

SCHEDULE I

Prohibited Transferees

All Affiliates, successors and assigns of the entities listed on this Schedule I and such other Persons indicated by Seller from time to time and approved by Buyer, such approval not to be unreasonably withheld, shall be Prohibited Transferees, as defined and used in the Agreement.

Angelo, Gordon & Co., L.P.	LoanCore Capital, LLC
Annaly Capital Management, Inc.	Lone Star U.S. Acquisitions, LLC
Apollo Commercial Real Estate Finance, Inc.	Macquarie Group Limited
Arbor Realty Trust Inc.	Mesa West Capital, LLC
Ares Commercial Real Estate Corporation	NCH Capital Inc.
Brookfield Investment Management Inc.	Newcastle Investment Corp.
Cantor Fitzgerald & Co.	NorthStar Realty Finance Corp.
CapitalSource Inc.	OZ Management LP
Children’s Investment Fund LP	RAIT Financial Trust
Colony Financial, Inc.	Redwood Trust Inc.
CreXus Investment Corp.	Rialto Capital Management, LLC
Fortress Credit Corp.	SL Green Realty Corp.
Guggenheim Partners, LLC	Square Mile Capital Management, LLC
H/2 Credit Manager LP	Starwood Capital Group
iStar Financial Inc.	Starwood Property Trust, Inc.
KKR & Co. L.P.	TPG Capital Management, L.P.
Ladder Capital Securities LLC	Winthrop Capital Management, LLC

EXHIBIT I

CONFIRMATION STATEMENT

Ladies and Gentlemen:

Citibank, N.A., is pleased to deliver our written CONFIRMATION of our agreement to enter into the Transaction pursuant to which Citibank, N.A. shall purchase from you the Purchased Loans identified in the Master Repurchase Agreement, dated as of June 12, 2013 (the “Agreement”), between Citibank, N.A. (“Buyer”) and PARLEX 2 FINANCE, LLC (“Seller”) as follows below and on the attached Schedule 1. Capitalized terms used herein without definition have the meanings given in the Agreement.

Purchased Loan:	As identified on attached Schedule 1
Aggregate Principal Amount of Purchased Loan:	As identified on attached Schedule 1
Governing Agreements:	As identified on attached Schedule 1
Purchase Date:	, 20
Repurchase Date:	The earlier of (x) the Facility Expiration Date and (y) the maturity date of the Purchased Loan, not extended (i.e. [            , 20    ])
Purchase Price Percentage:	[    %]
Maximum Purchase Price Percentage:	[    %]
Pricing Rate:	one month LIBOR plus [    %]
Margin Percentage:	[    %]
LTV (Purchase Price):	[    %]
Maximum LTV (Purchase Price):	[    %]
LTV (Aggregate Loan UPB):	[    %]
LTV (Loan UPB):	[    %]
Purchase Price:	[$        ]
Maximum Purchase Price as of Purchase Date:	[$        ]
Funding Fee:	[$        ]
Future Funding Conditions Precedent:	[            ]
Type of Funding:	[Table Funding/Non-Table Funding]

I-1

[Wiring Instructions]1	[ABA No:
	Credit:
	Acct. No:
	Reference:	]

¹  If different than the standard wiring instructions on Annex I to the Master Repurchase Agreement. In such instance, Confirmation requires signature of two officers of Seller.

I-2

Name and address for communications:	Buyer:	Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention: Richard Schlenger Tel: (212) 816-7806 Email: Richard.Schlenger@Citi.com
	Seller:	Parlex 2 Finance, LLC c/o Blackstone Mortgage Trust, Inc. 345 Park Avenue New York, NY 10154 Attention: Douglas Armer Tel: (212) 583-5000 Email: BXMTCitiRepo@blackstone.com

I-3

CITIBANK, N.A.

By:

Name:

Title:

By:

Name:

Title:

AGREED AND ACKNOWLEDGED:

PARLEX 2 FINANCE, LLC,

a Delaware limited liability company

By:

Name:

Title:

[By:

Name:

Title:]²

²  Second signature of Seller is only needed if Seller is directing Buyer to fund to an account other than Seller’s account specified in Annex I to the Master Repurchase Agreement.

I-4

Schedule 1 to Confirmation Statement

Purchased Loan:

Aggregate Principal Amount:

I-5

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLER

Name	Specimen Signature
Douglas N. Armer
Randall S. Rothschile
Geoffrey G. Jervis
Thomas C. Ruffing
Michael B. Nash
Stephen D. Plavin

II-1

EXHIBIT III

FORM OF CUSTODIAL DELIVERY

On this      day of             , 20    , Parlex 2 Finance, LLC, a Delaware limited liability company (“Seller”), pursuant to (i) that certain Custodial Agreement, dated as of             , 2013 (as amended, modified or supplemented from time to time, the “Custodial Agreement”), among Seller, U.S. Bank National Association, as Custodian, and Citibank, N.A. (“Buyer”) and (ii) that certain Master Repurchase Agreement, dated as of June 12, 2013 (as amended, modified or supplemented from time to time, the “Repurchase Agreement”), between Seller and Buyer, does hereby deliver the documents comprising the Purchased Loan File(s) (and listed on Exhibit B hereto with respect to the Purchased Loan(s) identified in Exhibit A hereto) to (a) the Bailee, for Bailee to hold and deliver to Custodian as set forth therein, and (b) the Custodian (through the Bailee aforesaid pursuant to Section 7(b) of the Repurchase Agreement and that certain Attorney’s Bailee Letter between Bailee and Seller dated as of June 12, 2013 the “Attorney’s Bailee Letter”). Seller hereby instructs Bailee to comply with the terms of the Attorney’s Bailee Letter, and hereby instructs Custodian to comply with the Custodial Agreement, in each case, holding the Purchased Loan File(s) for the benefit of Buyer.

With respect to the Purchased Loan File(s) delivered herewith, for purposes of issuing its Trust Receipt, Custodian shall review the Purchased Loan File to confirm receipt of each of the documents identified on Exhibit B hereto.

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

[Remainder of this page intentionally left blank.]

III-1

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

PARLEX 2 FINANCE, LLC,

a Delaware limited liability company

By:

Name:

Title:

III-2

EXHIBIT IV

ELIGIBLE LOAN DUE DILIGENCE CHECKLIST

General Information

Asset Summary Report

Site Inspection Report

Maps and Photos

Borrower/Sponsor Information

Credit Reports

Financial Statements & Tax Returns

Borrower Structure or Org Chart

Bankruptcy and Foreclosure History

Property Information

Historical Operating Statements

Rent Rolls

Budget

Insurance Review

Retail Sales Figures

Market Survey

Leasing Information

Stacking Plan

Major Leases

Tenant Estoppels

Standard Lease Forms

SNDA’s

Third Party Reports

Appraisals

Environmental Site Assessments

Engineering Reports

Seismic Reports

Other Information

Hotel Franchise Compliance Reports

Hotel Franchise Agreement

Hotel Franchise Comfort Letters

Ground Lease

Management Contract

Documentation

Purchase and Sale Agreement

Closing Statement

Legal Binder

IV-1

EXHIBIT V

FORM OF POWER OF ATTORNEY

“Know All Men by These Presents, that PARLEX 2 FINANCE, LLC (“Seller”), does hereby appoint Citibank, N.A. (“Buyer”), its attorney-in-fact to act in Seller’s name, place and stead in any way which Seller could do during the occurrence and continuance of an Event of Default and, subject to the following sentence, during the occurrence and continuance of a monetary Default or material non-monetary Default, with respect to (i) the completion of the endorsements of the Mortgage Notes and the Assignments of Mortgages, (ii) the recordation of the Assignments of Mortgages, and (iii) the enforcement of Seller’s rights under the Purchased Loans purchased by Buyer pursuant to the Master Repurchase Agreement dated as of June[12], 2013 (the “Repurchase Agreement”), between Buyer and Seller, and to take such other steps as may be necessary or desirable to enforce Buyer’s rights against such Purchased Loans, the related Purchased Loan Files and the Servicing Records to the extent that Seller is permitted by law to act through an agent. If a monetary Default or a material non-monetary Default has occurred and is continuing and Buyer has requested in writing that Seller take or cause to be taken any action that Buyer deems reasonably necessary to preserve Buyer’s ability to enforce upon the Purchased Loans as and when permitted pursuant to Section 14(b) of the Repurchase Agreement (which writing shall include a statement that Buyer will exercise its power of attorney if Seller fails to take or cause to be taken such action requested by Buyer), and Seller has not complied with any such request promptly following receipt thereof, then Buyer may exercise its power of attorney during the existence and continuation of any such monetary Default or material non-monetary Default, as the case may be, as Buyer deems reasonably necessary to preserve Buyer’s ability to enforce upon the Purchased Loans as and when permitted pursuant to Section 14(b) of the Repurchase Agreement.

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

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

V-1

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a deed this      day of             , 2013.

PARLEX 2 FINANCE, LLC,

a Delaware limited liability company

By:

Name:

Title:

V-2

EXHIBIT VI

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED LOAN

(1) Whole Loan; Ownership of Purchased Loans. Except with respect to a Purchased Loan that is part of a Whole Loan, each Purchased Loan is a whole loan and not a participation interest in a Purchased Loan. Each Purchased Loan that is part of a Whole Loan is a senior portion of a whole mortgage loan evidenced by a senior note. At the time of the sale, transfer and assignment to Buyer, no Mortgage Note or Mortgage was subject to any assignment, participation or pledge, and the Seller had good title to, and was the sole owner of, each Purchased Loan free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests on, in or to such Purchased Loan other than any servicing rights appointment or similar agreement and rights of the holder of a related “B note” in an “A/B” structure in a commercial real estate loan (a “Junior Interest”). Seller has full right and authority to sell, assign and transfer each Purchased Loan, and the assignment to Buyer constitutes a legal, valid and binding assignment of such Purchased Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Purchased Loan other than the rights of the holder of a related Junior Interest.

(2) Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Mortgagor, guarantor or other obligor in connection with such Purchased Loan is the legal, valid and binding obligation of the related Mortgagor, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) that certain provisions in such Purchased Loan Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Purchased Loan Documents invalid as a whole or materially interfere with the Mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).

Except as set forth in the immediately preceding sentence, there is no valid offset, defense, counterclaim or right of rescission available to the related Mortgagor with respect to any of the related Mortgage Notes, Mortgages or other Purchased Loan Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Purchased Loan, that would deny the Mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Purchased Loan Documents.

VI-1

(3) Mortgage Provisions. The Purchased Loan Documents for each Purchased Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, nonjudicial foreclosure subject to the limitations set forth in the Standard Qualifications.

(4) Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Purchased Loan File (a) the material terms of such Mortgage, Mortgage Note, Purchased Loan guaranty, and related Purchased Loan Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect which materially interferes with the security intended to be provided by such Mortgage; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related Mortgagor nor the related guarantor has been released from its material obligations under the Purchased Loan.

(5) Lien; Valid Assignment. Subject to the Standard Qualifications, each assignment of Mortgage and assignment of Assignment of Leases to the Mortgagee constitutes a legal, valid and binding assignment to the Mortgagee. Each related Mortgage and Assignment of Leases is freely assignable without the consent of the related Mortgagor. Each related Mortgage is a legal, valid and enforceable first lien on the related Mortgagor’s fee (or if identified in the Due Diligence Package, leasehold) interest in the Mortgaged Property in the principal amount of such Purchased Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph 6 (“Permitted Liens; Title Insurance”) of this Exhibit VI set forth in the related report delivered by Seller to Buyer of any exceptions to the representations and warranties set forth in this Exhibit VI (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Except as otherwise set forth in the Title Policy (as hereinafter defined) relating to the Purchased Loan, such Mortgaged Property (subject to and excepting Permitted Encumbrances and Title Exceptions) as of origination was, and currently is, free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below), and, subject to the rights of tenants (as tenants only) (subject to and excepting Permitted Encumbrances), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other

VI-2

personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required in order to effect such perfection.

(6) Permitted Liens; Title Insurance. Each Mortgaged Property securing a Purchased Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Purchased Loan (or with respect to a Purchased Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments due and payable but not yet delinquent; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; (f) if the related Purchased Loan is part of a Whole Loan, the rights of the holder of the related Junior Interest; and (g) if the related Purchased Loan is cross-collateralized and cross-defaulted with one or more mortgage loans, the lien of the Mortgage for another mortgage loan contained in the same cross-collateralized and cross-defaulted group of mortgage loans; provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the Mortgagor’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clause (g) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Seller thereunder and no claims have been paid thereunder. Neither the Seller, nor to the Seller’s Actual Knowledge, any other holder of the Purchased Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.

(7) Junior Liens. It being understood that B notes secured by the same Mortgage as a Purchased Loan are not subordinate mortgages or junior liens, except for any Junior Interests and Purchased Loan that is cross-collateralized and cross-defaulted with another Purchased Loan, there are, as of origination, and to Seller’s Actual Knowledge, no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmens liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal

VI-3

property financing). Except as set forth in the Due Diligence Package, the Seller has no Actual Knowledge of any mezzanine debt secured directly by interests in the related Mortgagor.

(8) Assignment of Leases and Rents. There exists as part of the related Purchased Loan File an Assignment of Leases (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions, each related Assignment of Leases creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Mortgagor to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related Mortgage or related Assignment of Leases, subject to applicable law and the Standard Qualifications, provides that, upon an event of default under the Purchased Loan, a receiver is permitted to be appointed for the collection of rents or for the related Mortgagee to enter into possession to collect the rents or for rents to be paid directly to the Mortgagee.

(9) UCC Filings. If the related Mortgaged Property is operated as a hospitality property, the Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Purchased Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such Mortgagor and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Purchased Loan Documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.

(10) Condition of Property. Seller or the originator of the Purchased Loan inspected or caused to be inspected each related Mortgaged Property within six months of origination of the Purchased Loan and within thirteen months of the Purchase Date.

An engineering report or property condition assessment was prepared in connection with the origination of each Purchased Loan no more than thirteen months prior to the Purchase Date. To the Seller’s Actual Knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, and except as disclosed on any engineering report or property condition assessment delivered to Buyer, as of the Purchase Date, each related Mortgaged Property was free

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and clear of any material damage (other than (i) deferred maintenance for which escrows were established at origination and (ii) any damage fully covered by insurance) that would affect materially and adversely the use or value of such Mortgaged Property as security for the Purchased Loan.

(11) Taxes and Assessments. All taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, which could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Purchase Date have become delinquent in respect of each related Mortgaged Property, to Seller’s Actual Knowledge, have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

(12) Condemnation. To the Seller’s Actual Knowledge, as of the Purchase Date, Seller has not received written notice from any government agency or body of any proceeding pending or threatened, for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.

(13) Actions Concerning Purchased Loan. To the Seller’s Actual Knowledge as of the Purchase Date, there was no pending or filed action, suit or proceeding, arbitration or governmental investigation involving any Mortgagor, guarantor, or Mortgagor’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Mortgagor’s title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Mortgagor’s ability to perform under the related Purchased Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Purchased Loan Documents or (f) the current principal use of the Mortgaged Property.

(14) Escrow Deposits. All escrow deposits and payments required to be escrowed with Mortgagee pursuant to each Purchased Loan are in the possession, or under the control, of the Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with Mortgagee under the related Purchased Loan Documents are being conveyed by the Seller to Buyer or its servicer.

(15) No Holdbacks. Except as for Purchased Loans identified to Buyer in connection with the subject transaction as having future advances, the principal amount of the Purchased Loan stated in the Due Diligence Package has been fully disbursed as of the Purchase Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Purchased Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions

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relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Mortgagor or other considerations determined by Seller to merit such holdback).

(16) Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Purchased Loan Documents and having a claims-paying or financial strength rating of at least “A-:VIII” from A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” from Standard & Poor’s Ratings Service (collectively, the “Insurance Rating Requirements”), in an amount (subject to a customary deductible) not less than the lesser of (1) the outstanding principal balance of the Purchased Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the Mortgagor and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.

Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Purchased Loan Documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each Purchased Loan on a single asset with a principal balance of $50 million or more, 18 months).

If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as “a Special Flood Hazard Area”, the related Mortgagor is required to maintain insurance in the maximum amount available under the National Flood Insurance Program.

If the Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related Mortgagor is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms.

The Mortgaged Property is covered, and required to be covered pursuant to the related Purchased Loan Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by prudent institutional commercial mortgage lenders, and in any event not less than $1 million per occurrence and $2 million in the aggregate.

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An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing the scenario expected limit (“SEL”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” by Standard & Poor’s Ratings Service in an amount not less than 100% of the SEL.

The related Purchased Loan Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Purchased Loan, the Mortgagee (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Purchased Loan together with any accrued interest thereon.

All premiums on all insurance policies referred to in this section due and payable as of the Purchase Date have been paid, and such insurance policies name the Mortgagee under the Purchased Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the Buyer. Each related Purchased Loan obligates the related Mortgagor to maintain or cause to be maintained all such insurance and, at such Mortgagor’s failure to do so, authorizes the Mortgagee to maintain such insurance at the Mortgagor’s reasonable cost and expense and to charge such Mortgagor for related premiums. All such insurance policies (other than commercial liability policies) require prior notice as provided in the Mortgage Loan Documents to the lender of termination or cancellation (or such lesser period, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.

(17) Access; Utilities; Separate Tax Lots. To the Seller’s Actual Knowledge, based solely upon Seller’s review of the related Title Policy and current surveys obtained in connection with origination, each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Purchased Loan requires the Mortgagor to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created.

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(18) No Encroachments. To Seller’s Actual Knowledge based solely on current surveys obtained in connection with origination and the Mortgagee’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Purchased Loan, (a) all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Purchased Loan are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy, (b) no improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy and (c) no improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements obtained with respect to the Title Policy.

(19) No Contingent Interest or Equity Participation. No Purchased Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the anticipated repayment date) or an equity participation by Seller (excluding any equity interest held or pledged in connection with a Mezzanine Loan or preferred equity interest).

(20) REMIC. To the extent such Purchased Loan is identified as being REMIC eligible, the Purchased Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in the Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the Purchased Loan to the related Mortgagor at origination did not exceed the non-contingent principal amount of the Purchased Loan and (B) either: (a) such Purchased Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (i) at the date the Purchased Loan was originated at least equal to 80% of the adjusted issue price of the Purchased Loan on such date or (ii) at the Purchase Date at least equal to 80% of the adjusted issue price of the Purchased Loan on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Purchased Loan and (B) a proportionate amount of any lien that is in parity with the Purchased Loan; or (b) substantially all of the proceeds of such Purchased Loan were used to acquire, improve or protect the real property which served as the only security for such Purchased Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the Purchased Loan was “significantly modified” prior to the Purchase Date so as to

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result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such Purchased Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Purchased Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Purchased Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-1(b)(2). All terms used in this paragraph shall have the same meanings as set forth in the related Treasury Regulations.

(21) Compliance with Usury Laws. To Seller’s Actual Knowledge, in reliance solely upon legal opinions delivered in connection with a Purchased Loan, the interest rate (exclusive of any default interest, late charges, yield maintenance charge, or prepayment premiums) of such Purchased Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

(22) Authorized to do Business. To the extent required under applicable law, as of the Purchase Date or as of the date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Purchased Loan by Buyer.

(23) Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination and, to the Seller’s Actual Knowledge, as of the Purchase Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related Mortgagee.

(24) Local Law Compliance. To the Seller’s Actual Knowledge, based solely upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial and multifamily mortgage loans intended for securitization, the improvements located on or forming part of each Mortgaged Property securing a Purchased Loan as of the date of origination of such Purchased Loan (or related Whole Loan, as applicable) and as of the Purchase Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) other than those which (i) are insured by the Title Policy or a law and ordinance insurance policy, (ii) are adequately reserved for in accordance with the Mortgage Loan Documents, or (iii) would not have a material adverse effect on the value, operation or net operating income of the Mortgaged Property. The terms of the Purchased Loan Documents require the Mortgagor to comply in all material respects with all applicable governmental regulations, zoning and building laws.

(25) Licenses and Permits. Each Mortgagor covenants in the Purchased Loan Documents that it shall keep all material licenses, permits and applicable governmental authorizations

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necessary for its operation of the Mortgaged Property in full force and effect, and to the Seller’s Actual Knowledge based upon any of a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial and multifamily mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Purchased Loan requires the related Mortgagor to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.

(26) Recourse Obligations. The Purchased Loan Documents for each Purchased Loan provide that such Purchased Loan (a) becomes full recourse to the Mortgagor or guarantor (which is a natural person or persons, or an entity distinct from the Mortgagor (but may be affiliated with the Mortgagor) that has assets other than equity in the related Mortgaged Property that are not de minimis) in any of the following events: (i) if any voluntary petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by the Mortgagor; (ii) Mortgagor or guarantor shall have colluded with (or, alternatively, solicited or caused to be solicited) other creditors to cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii) voluntary transfers of either the Mortgaged Property or equity interests in Mortgagor made in violation of the Purchased Loan Documents; and (b) contains provisions providing for recourse against the Mortgagor or guarantor (which is a natural person or persons, or an entity distinct from the Mortgagor (but may be affiliated with the Mortgagor) that has assets other than equity in the related Mortgaged Property that are not de minimis), for losses and damages sustained by reason of Mortgagor’s (i) misappropriation of rents after the occurrence of an event of default under the Purchased Loan, (ii) misappropriation of (A) insurance proceeds or condemnation awards or (B) security deposits or, alternatively, the failure of any security deposits to be delivered to Mortgagee upon foreclosure or action in lieu thereof (except to the extent applied in accordance with leases prior to a Purchased Loan event of default); (iii) fraud or intentional material misrepresentation; (iv) breaches of the environmental covenants in the Purchased Loan Documents; or (v) commission of intentional material physical waste at the Mortgaged Property.

(27) Mortgage Releases. The terms of the related Mortgage or related Purchased Loan Documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment, or partial Defeasance (as defined in paragraph (32)), of not less than a specified percentage, which, in the case of a Purchased Loan identified as REMIC eligible, at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Purchased Loan, (b) upon payment in full of such Purchased Loan, (c) upon a Defeasance defined in paragraph (32) below, (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the Purchased Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning

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requirements, or (e) as required pursuant to an order of condemnation or taking by a State or any political subdivision or authority thereof. With respect to any Purchased Loan identified as REMIC eligible, with respect to any partial release under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of such Purchased Loan within the meaning of Section 1.860G-2(b)(2) of the Treasury Regulations and (ii) would not cause such Purchased Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; or (y) the Mortgagee or Servicer can, in accordance with the related Purchased Loan Documents, condition such release of collateral on the related Mortgagor’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), if the fair market value of the real property constituting such Mortgaged Property after the release is not equal to at least 80% of the principal balance of such Purchased Loan outstanding after the release, the Mortgagor is required to make a payment of principal in an amount not less than the amount required by the REMIC provisions.

(28) Financial Reporting and Rent Rolls. Each Mortgage requires the Mortgagor to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Purchased Loan with more than one Mortgagor are in the form of an annual combined balance sheet of the Mortgagor entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis.

(29) Acts of Terrorism Exclusion. With respect to each Purchased Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Purchased Loan, the related special all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Purchased Loan, and, to Seller’s Actual Knowledge, do not, as of the Purchase Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Purchased Loan, the related Purchased Loan Documents do not expressly waive or prohibit the Mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms, or as otherwise indicated in the related report delivered by Seller to Buyer of any exceptions to the representations and warranties set forth in this Exhibit VI; provided, that if TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the Mortgagor under each Purchased Loan

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is required to carry terrorism insurance, but in such event the Mortgagor shall not be required to spend more than the Terrorism Cap Amount on terrorism insurance coverage, and if the cost of terrorism insurance exceeds the Terrorism Cap Amount, the Mortgagor is required to purchase the maximum amount of terrorism insurance available with funds equal to the Terrorism Cap Amount. The “Terrorism Cap Amount” is the specified percentage (which is at least equal to 200%) of the amount of the insurance premium that is payable at such time in respect of the property and business interruption/rental loss insurance required under the related Purchased Loan Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance).

(30) Due on Sale or Encumbrance. Except as otherwise disclosed in the Due Diligence Package, subject to specific exceptions set forth below, each Purchased Loan contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Purchased Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Purchased Loan Documents (which provide for transfers without the consent of the Mortgagee which are customarily acceptable to Seller lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Purchased Loan Documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related Mortgagor, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Purchased Loan Documents, (iii) transfers of less than, or other than, a controlling interest in the related Mortgagor, (iv) transfers to another holder of direct or indirect equity in the Mortgagor, a specific Person designated in the related Purchased Loan Documents or a Person satisfying specific criteria identified in the related Purchased Loan Documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies or (vi) a substitution or release of collateral within the parameters of paragraphs (27) and (32) herein, or (vii) by reason of any mezzanine debt that existed at the origination of the related Purchased Loan, or future permitted mezzanine debt as set forth in the Due Diligence Package or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Junior Interest of any Purchased Loan or any subordinate debt that existed at origination and is permitted under the related Purchased Loan Documents, (ii) purchase money security interests (iii) any Purchased Loan that is cross-collateralized and cross-defaulted with another Purchased Loan, as set forth in the Due Diligence Package or (iv) Permitted Encumbrances. The related Mortgage or other Purchased Loan Documents provide that to the extent any rating agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the Mortgagor is responsible for such payment along with all other reasonable out-of-pocket fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance.

(31) Single-Purpose Entity. Except as otherwise disclosed in the Due Diligence Package, each

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Purchased Loan requires the Mortgagor to be a Single-Purpose Entity for at least as long as the Purchased Loan is outstanding. Both the Purchased Loan Documents and the organizational documents of the Mortgagor with respect to each Purchased Loan with an unpaid principal balance as of the Purchase Date in excess of $5 million provide that the Mortgagor is a Single-Purpose Entity, and each Purchased Loan with an unpaid principal balance as of the Purchase Date of $50 million or more has a counsel’s opinion regarding non-consolidation of the Mortgagor. For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Purchased Loan has an unpaid principal balance as of the Purchase Date equal to $5 million or less, its organizational documents or the related Purchased Loan Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the Purchased Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or commercial or multi-family properties, and whose organizational documents further provide, or which entity represented in the related Purchased Loan Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or commercial or multi-family properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Purchased Loan Documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Mortgagor for a Purchased Loan that is cross-collateralized and cross-defaulted with the related Purchased Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.

(32) Defeasance. With respect to any Purchased Loan that, pursuant to the Purchased Loan Documents, can be defeased (a “Defeasance”), (i) the Purchased Loan Documents provide for defeasance as a unilateral right of the Mortgagor, subject to satisfaction of conditions specified in the Purchased Loan Documents; (ii) the Purchased Loan cannot be defeased within two years after the date of origination of such Purchased Loan; (iii) the Mortgagor is permitted to pledge only United States “government securities” within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the Purchased Loan when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty) or, if the Senior Loan is an ARD Loan, the entire principal balance outstanding on the anticipated repayment date, and if the Purchased Loan permits partial releases of real property in connection with partial defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to the lesser of (a) 110% of the allocated loan amount for the real property to be released and (b) the outstanding principal balance of the Purchased Loan; (iv) the Mortgagor is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in (iii) above, (v) if the Mortgagor would continue to own assets in addition to the defeasance collateral, the portion of the Purchased Loan secured by defeasance collateral is required to be assumed (or the Mortgagee may require such

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assumption) by a Single-Purpose Entity; (vi) the Mortgagor is required to provide an opinion of counsel that the Mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (vii) the Mortgagor is required to pay all rating agency fees associated with Defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable out-of-pocket expenses associated with Defeasance, including, but not limited to, accountant’s fees and opinions of counsel.

(33) Ground Leases. For purposes of this Exhibit VI, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.

With respect to any Purchased Loan where the Purchased Loan is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:

(a) The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage;

(b) The lessor under such Ground Lease has agreed in a writing included in the related Purchased Loan File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the Mortgagee;

(c) The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either Mortgagor or the Mortgagee) that extends not less than 20 years beyond the stated maturity of the related Purchased Loan, or 10 years past the stated maturity if such Purchased Loan fully amortizes by the stated maturity (or with respect to a Purchased Loan that accrues on an actual 360 basis, substantially amortizes);

(d) The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the Mortgagee on the lessor’s fee interest in the Mortgaged Property is subject;

VI-14

(e) The Ground Lease does not place, in Seller’s reasonable judgment and to Seller’s Actual Knowledge, commercially unreasonably restrictions on the identity of the Mortgagee and, upon foreclosing on the Mortgage, the Ground Lease is assignable to the holder of the Purchased Loan and its successors and assigns without the consent of the lessor thereunder (provided that proper notice is delivered to the extent required in accordance with such Ground Lease), and in the event it is so assigned, it is further assignable by the holder of the Purchased Loan and its successors and assigns without the consent of the lessor;

(f) The Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To the Seller’s Actual Knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the Seller’s Actual Knowledge, such Ground Lease is in full force and effect as of the Purchase Date;

(g) The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the Mortgagee written notice of any default, and provides that no notice of default or termination is effective against the Mortgagee unless such notice is given to the Mortgagee;

(h) The Mortgagee is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the Mortgagee’s receipt of notice of any default before the lessor may terminate the Ground Lease;

(i) The Ground Lease does not impose any restrictions on subletting that would be viewed, in Seller’s reasonable judgment, as commercially unreasonable by a Seller in connection with loans originated for securitization;

(j) Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in subpart (k)) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Purchased Loan Documents) the Mortgagee or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Purchased Loan, together with any accrued interest;

VI-15

(k) In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Purchased Loan, together with any accrued interest; and

(l) Provided that the Mortgagee cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with Mortgagee upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in an Act of Insolvency.

(35) Servicing. The servicing and collection practices used by the Seller with respect to the Purchased Loan have been, in all respects, legal and have met customary industry standards for servicing of commercial loans.

(36) Origination and Underwriting. The origination practices of the Seller (or to Seller’s Actual Knowledge the related originator if the Seller was not the originator) with respect to each Purchased Loan have been, in all material respects, in material compliance with applicable law and as of the date of its origination, such Purchased Loan (or the related Whole Loan, as applicable) and to the extent originated by Seller or its Affiliates or, if originated by another Person, to Seller’s Actual Knowledge, the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Purchased Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Exhibit VI.

(37) No Material Default; Payment Record. As of the Purchase Date and the date of the transfer of any Margin Excess to Seller, no Purchased Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required debt service payments since origination, and no Purchased Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments. As of the Purchase Date and the date of the transfer of any Margin Excess to Seller, to the Seller’s Actual Knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Purchased Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either (a) or (b), materially and adversely affects the value of the Purchased Loan or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Seller in this Exhibit VI (including, but not limited to, the prior sentence). Solely with respect to a Whole Loan, no person other than the holder of such Purchased Loan may declare any event of default under the Purchased Loan or accelerate any indebtedness under the Purchased Loan Documents.

VI-16

(38) Bankruptcy. To the Seller’s Actual Knowledge as of the Purchase Date and the date of the transfer of any Margin Excess to Seller, neither the Mortgaged Property (other than any tenants of such Mortgaged Property), nor any portion thereof, is the subject of, and no Mortgagor, guarantor or tenant occupying a single-tenant property is a debtor in a state or federal Act of Insolvency.

(39) Organization of Mortgagor. With respect to each Purchased Loan, based solely upon Seller’s reliance on certified copies of the organizational documents of the Mortgagor delivered by the Mortgagor in connection with the origination of such Purchased Loan (or related Whole Loan, as applicable), the Mortgagor is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Purchased Loan that is cross-collateralized and cross defaulted with another Purchased Loan, to Seller’s Actual Knowledge, no Purchased Loan has a Mortgagor that is an affiliate of another Mortgagor. An “Affiliate” for purposes of this Paragraph 39 means, a mortgagor that is under direct or indirect common ownership and control with another mortgagor.

(40) Environmental Conditions. There is no material and adverse environmental condition or circumstance affecting the related Mortgaged Property; there is no material violation of any applicable Environmental Law with respect to the related Mortgaged Property. Neither Seller nor the underlying obligor on such Senior Loan has taken any actions which would cause the related Mortgaged Property not to be in material compliance with all applicable Environmental Laws. The related Purchased Loan Documents require the borrower to materially comply with all Environmental Laws. Each mortgagor has agreed to either indemnify the mortgagee for any losses resulting from any material, adverse environmental condition (to the extent such condition is not caused by Seller, or from any failure of the mortgagor to abide by such Environmental Laws) or has provided environmental insurance.

(41) Appraisal. The Purchased Loan File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the Purchased Loan origination date, and within 12 months of the Purchase Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute (“MAI”) and, to the Seller’s Actual Knowledge, had no interest, direct or indirect, in the Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Purchased Loan. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation.

(42) Due Diligence Package. To Seller’s Actual Knowledge, the information pertaining to each Purchased Loan which is set forth in the Due Diligence Package is true and correct in all material respects as of the Purchase Date.

VI-17

(43) [Intentionally Omitted]

(44) Advance of Funds by the Seller. After origination, no advance of funds has been made by Seller to the related Mortgagor other than in accordance with the Purchased Loan Documents, and, to Seller’s Actual Knowledge, no funds have been received from any person other than the related Mortgagor or an affiliate for, or on account of, payments due on the Purchased Loan (other than as contemplated by the Purchased Loan Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a Mortgagee-controlled lockbox if required or contemplated under the related lease or Purchased Loan Documents). Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Mortgagor under a Purchased Loan, other than contributions made on or prior to the date hereof.

(45) Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA PATRIOT Act of 2001 with respect to the origination of the Purchased Loan, the failure to comply with which would have a material adverse effect on the Purchased Loan.

For purposes of these representations and warranties, “Mortgagee” shall mean the mortgagee, grantee or beneficiary under any Mortgage, any holder of legal title to any portion of any Purchased Loan or, if applicable, any agent or servicer on behalf of such party.

VI-18

EXHIBIT VII

COLLATERAL TAPE

Appraisal

Appraisal

Appraisal

Appraisal

Appraisal

Appraisal

Appraisal

Appraisal

Appraisal

Rent Roll

Appraisal

Rent Roll- Physical

Rent Roll

All Debt- Calc

Calc

Mortgage

B-Note Original Balance

Mezzanine Debt Original Balance

Calc

Property ID

Number of Mortgaged Properties

Property Name

Address

City

State

Zip Code

General Property Type

Detailed Property Type

Year Built

Year Renovated

Units, Pads, Rooms, Sq. Ft.

Unit Description

Occupancy (%)

Occupancy Date

Total Debt Original Balance

Whole Loan Original Balance

A-Note Original Balance

B-Note Original Balance

Mezzanine Debt Original Balance

Total Debt Cut-off Balance

VII-1

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Calc

Loan Amgt

Loan Amgt

Calc

Whole Loan Cut-off Balance

A-Note Cut-off Balance

B-Note Cut-off Balance

Mezzanine Debt Cut-off Balance

Total Debt Initial Maturity Balance

Whole Loan Initial Maturity Balance

A-Note Initial Maturity Balance

B-Note Initial Maturity Balance

Mezzanine Debt Initial Maturity Balance

Total Debt Final Maturity Balance

Whole Loan Final Maturity Balance

A-Note Final Maturity Balance

B-Note Final Maturity Balance

Mezzanine Debt Final Maturity Balance

A-Note Loan Per Unit

Whole Loan Loan Per Unit

Total Debt Loan Per Unit

Amortization Type (During Initial Term and Extended Term)

Interest Accrual Method

Original Term (Excluding Extensions)

VII-2

Loan Agmt

Loan Agmt

Calc

Calc

Calc

Calc

Calc

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Original Amortization Term (Excluding Extensions)

Original Term (Including Extension Options)

IO Period

Seasoning

Remaining Term to Maturity

Remaining Amortization Term

Remaining Term (Including Extensions)

Remaining Amortization Term (Including Extensions)

Origination Date

First Due Date

Initial Maturity Date

Extension Options (Yes/No)

Extension Options Description

Fully Extended Maturity Date

First Extension Fee

Second Extension Fee

Third Extension Fee

Extension Test Description

Extension Spread Increase (Yes/No)

Extension Spread Increase Description

Exit Fees

Payment Day of Month

VII-3

Strike Price

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Cap Agreement

Cap Agreement

Bloomberg

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Loan Agmt

Payment Date Business Day Convention)

Payment Grace Period Event of Default

Payment Grace Period Event of Late Fee

Balloon Grace Period Event of Default

Balloon Grace Period Event of Late Fee

Interest accrual period start

Interest accrual period end

Interest rate adjustment frequency

LIBOR rounding methodology

LIBOR Lookback Days

LIBOR Floor

LIBOR Cap

LIBOR Cap after Extension

LIBOR Cap expiration date

LIBOR Cap provider

LIBOR Cap provider rating

Total Debt Margin

Whole Loan Margin

A-Note Margin

B-Note Margin

Mezzanine Margin

VII-4

Calc

Calc

Calc

Calc

Calc

Calc

Loan Agmt

Calc

Calc

Loan Agmt

Total Debt Interest Rate

Whole Loan Interest Rate

Trust Asset Interest Rate

Total Debt Interest Rate (At LIBOR Cap)

Whole Loan Interest Rate (At LIBOR Cap)

Trust Asset Interest Rate (At LIBOR Cap)

Original Lockout Payments

Remaining Lockout Payments

Lockout End Date

Spread Maintenance

Open Payments

Prepayment String

Partially Prepayable without Penalty

Partially Prepayable without Penalty Description

Partial Collateral Release (Y/N)

Partial Collateral Release Description

Substitution Allowed (Y/N)

Substitution Provision Description

LockBox (Y/N)

Lockbox Type

Terms/ Description of Springing Lockbox (If applicable)

VII-5

Closing Statement

Servicer Tape

Loan Agreement

Loan Agreement

Closing Statement

Servicer Tape

Loan Agreement

Loan Agreement

Loan Agreement

Loan Agreement

Closing Statement

Cash Management Triggers

Upfront RE Tax Reserve

Monthly RE Tax Reserve

Tax Reserve Cap

Terms/ Description of Springing Tax Reserve (If applicable)

Upfront Insurance Reserve

Monthly Insurance Reserve

Terms/ Description of Springing Insurance Reserve (If applicable)

Upfront Replacement Reserve

Monthly Replacement Reserve

Replacement Reserve Cap

Terms/ Description of Springing Replacement Reserve (If applicable)

Upfront Capex Reserve

Upfront TI/LC Reserve

Monthly TI/LC Reserve

TI/LC Reserve Cap

Terms/ Description of Springing TI/LC Reserve (If applicable)

Upfront Debt Service Reserve

Monthly Debt Service Reserve

Other Reserve Description

Upfront Other Reserve

Monthly Other Reserve

VII-6

Appraisal

Appraisal

Appraisal

Appraisal

Other Reserve Cap

Terms/ Description of Springing Other Reserve (If applicable)

Appraised Value ($)

Appraisal Type

Appraisal Cap Rate

Appraised Value Date

Environmental Phase I Date

Phase II Recommended

Environmental Phase II Date

Engineering Report Date

Seismic Report Date

PML or SEL(%)

Ownership Interest

Ground Lease Expiration

Ground Lease Extension Options

Annual Ground Lease Payment

Ground Lease Escalation Terms

Borrower Name

Recourse Guarantor

VII-7

EXHIBIT VIII

FORM OF TRANSACTION REQUEST

Ladies and Gentlemen:

Pursuant to Section 3(a) of that certain Master Repurchase Agreement, dated as of June [12], 2013 (the “Agreement”), between Citibank, N.A. (“Buyer”) and Parlex 2 Finance, LLC (“Seller”), Seller hereby requests that Buyer enter into a Transaction with respect to the Eligible Loans set forth on Schedule 1 attached hereto, upon the proposed terms set forth below. Capitalized terms used herein without definition have the meanings given in the Agreement.

Proposed Eligible Loan:	[                      ]
Aggregate Principal Amount of Proposed Eligible Loan:	[$                    ]
Amount of Purchase Price Requested by Seller:	[$                    ]

VIII-1

Name and address for communications:	Buyer:
		Citibank, N.A.
		388 Greenwich Street New York, New York 10013
		Attention:	Richard Schlenger
		Telephone:	(212) 816-7806
		Email: Richard.Schlenger@Citi.com
	Seller:
		Parlex 2 Finance, LLC c/o Blackstone Mortgage Trust, Inc. 345 Park Avenue
		New York, NY 10154
		Attention: Douglas Armer
		Tel: (212) 583-5000
		Email: BXMTCitiRepo@blackstone.com

VIII-2

SELLER:

PARLEX 2 FINANCE, LLC,

a Delaware limited liability company

By:

Name:

Title:

VIII-3

Schedule 1 to Transaction Request

(Attachments: Collateral Tape and Eligible Loan Due Diligence Checklist)

Eligible Loan:

Aggregate Principal Amount of Eligible Loan: $[            ]

VIII-4

Schedule 2 to Transaction Request

Exceptions to Representations and Warranties Set

Forth on Exhibit VI

VIII-5

EXHIBIT IX

FORM OF REQUEST FOR MARGIN EXCESS

Ladies and Gentlemen:

Pursuant to Section [4(c)][4(e)] of that certain Master Repurchase Agreement, dated as of June [12], 2013 (the “Agreement”), between Citibank, N.A. (“Buyer”) and Parlex 2 Finance, LLC (“Seller”), Seller hereby requests that Buyer transfer cash to Seller with respect to the Purchased Loan described below in the amount set forth below. Capitalized terms used herein without definition have the meanings given in the Agreement.

Purchased Loan:	[                    ]
Amount of Increase in Outstanding Purchase Price Requested by Seller:	[$                    ] [Describe how Amount Calculated]
Type of Margin Excess:	[Margin Excess (Future Funding)]
	[Margin Excess (Other) – [DESCRIBE REASON: Margin Deficit, Prior Paydown without Release of Collateral, Original Purchase Price less than Maximum Purchase Price]]

IX-1

Name and address for communications:	Buyer:
		Citibank, N.A.
		388 Greenwich Street
		New York, New York 10013
		Attention:	Richard Schlenger
		Telephone:	(212) 816-7806
		Email: Richard.Schlenger@Citi.com
	Seller:
		Parlex 2 Finance, LLC c/o Blackstone Mortgage Trust, Inc. 345 Park Avenue
		New York, NY 10154 Attention: Douglas Armer Tel: (212) 583-5000
		Email:  BXMTCitiRepo@blackstone.com

IX-2

SELLER:

PARLEX 2 FINANCE, LLC,

a Delaware limited liability company

By:

Name:

Title:

IX-3

EXHIBIT X

FORM OF IRREVOCABLE DIRECTION LETTER

[SELLER]

[LETTERHEAD]

IRREVOCABLE DIRECTION LETTER

AS OF [            ], 20[    ]

Ladies and Gentlemen:

Please refer to: (a) that certain [Loan Agreement], dated [            ], 20[    ], by and among [            ] (the “Borrower”), as borrower, and Parlex 2 Finance, LLC (the “Lender”), as lender; and (b) all documents securing or relating to that certain $[        ] loan made by the Lender to the Borrower on [            ], 20[    ] (the “Loan”).

You are advised as follows, effective as of the date of this letter.

Assignment of the Loan. The Lender has entered into a Master Repurchase Agreement, dated as June [12], 2013 (as the same may be amended and/or restated from time to time, the “Repo Agreement”), with Citibank, N.A. (“Citi”), 388 Greenwich Street, New York, New York 10013, and has assigned its rights and interests in the Loan (and all of its rights and remedies in respect of the Loan) to Citi. This assignment shall remain in effect unless and until Citi has notified Borrower otherwise in writing.

Direction of Funds. In connection with Lender’s obligations under the Repo Agreement, Lender hereby directs Borrower to disburse, by wire transfer, any and all payments to be made under or in respect of the Loan to the following account at [            ] for the benefit of Citi:

Account:

Attn:

This direction shall remain in effect unless and until Citi has notified Borrower otherwise in writing.

Modifications, Waivers, Etc. No modification or waiver of any party’s obligations in respect of this letter shall be effective without the prior written consent of Citi.

X-1

Please acknowledge your acceptance of the terms and directions contained in this correspondence by executing a counterpart of this correspondence and returning it to the undersigned.

[Signature Page Follows]

X-2

Very truly yours,
PARLEX 2 FINANCE, LLC,
a Delaware limited liability company
By:
Name:
Title:
Date:	[            ], 20[    ]

Agreed and accepted this [    ]

day of [        ], 20[    ]

[                                     ]

By:

Name:

Title:

X-3

EX-10.11

Exhibit 10.11

LIMITED GUARANTY

This LIMITED GUARANTY (this “Guaranty”) is made and entered into by BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation, whose address is 345 Park Avenue, New York, NY 10154 (“Guarantor”), for the benefit of CITIBANK, N.A., a national banking association whose address is 388 Greenwich Street, New York, New York 10013 (“Buyer”) on this 12^th day of June, 2013 (the “Effective Date”). This Guaranty is made with reference to the following facts (with some capitalized terms being defined below):

A. PARLEX 2 FINANCE, LLC, a Delaware limited liability company (“Seller”), as seller, and Buyer have entered into that certain Master Repurchase Agreement, dated as of the date hereof (as amended, modified and/or restated, the “Repurchase Agreement”), pursuant to which Buyer may, from time to time, purchase certain Eligible Loans from Seller with a simultaneous agreement from Seller to repurchase such Eligible Loans at a date certain or on demand (the “Transactions”);

B. Buyer has requested, as a condition of entering into the Repurchase Agreement and the other Transaction Documents, that Guarantor deliver to Buyer this Guaranty;

C. Seller is a wholly-owned Subsidiary of Guarantor;

D. Guarantor expects to benefit if Buyer enters into the Repurchase Agreement and the other Transaction Documents with Seller, and desires that Buyer enter into the Repurchase Agreement and the other Transaction Documents with Seller; and

E. Buyer would not enter into the Transaction Documents with Seller unless Guarantor executed this Guaranty. This Guaranty is therefore delivered to Buyer to induce Buyer to enter into the Repurchase Agreement and the other Transaction Documents.

NOW, THEREFORE, in exchange for good, adequate, and valuable consideration, the receipt of which Guarantor acknowledges, and to induce Buyer to enter into the Repurchase Agreement, Guarantor agrees as follows:

1. Definitions. For purposes of this Guaranty, the following terms shall be defined as set forth below. In addition, any capitalized term defined in the Repurchase Agreement but not defined in this Guaranty shall have the same meaning in this Guaranty as in the Repurchase Agreement.

(a) “Available Borrowing Capacity” means, with respect to any Person, on any date of determination, the total unrestricted borrowing capacity which may be drawn (taking into account required reserves and discounts) upon by such Person or its Subsidiaries, at such Person’s or its Subsidiaries’ sole discretion, under committed credit facilities or repurchase agreements which provide financing to such Person or its Subsidiaries.

(b) “Buyer Entity” means, as designated by Buyer from time to time, Buyer or Buyer’s assignee, designee, nominee, servicer, or wholly owned subsidiary as permitted in accordance with the terms of the Repurchase Agreement.

(c) “Cash” means coin or currency of the United States of America or immediately available federal funds, including such funds delivered by wire transfer.

(d) “Cash Equivalents” means any of the following, to the extent owned by Guarantor or any of its Subsidiaries free and clear of all Liens and having a maturity of not greater than 90 days from the date of issuance thereof: (a) readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the government of the United States, (b) certificates of deposit of or time deposits with Buyer or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any state thereof and has combined capital and surplus of at least $1,000,000,000 or (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any state of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P.

(e) “Cash Liquidity” means, with respect to any Person, on any date of determination, the sum of (i) unrestricted Cash, plus (ii) Available Borrowing Capacity, plus (iii) Cash Equivalents.

(f) “Consolidated Net Income” means, with respect to any Person, for any period, the amount of consolidated net income (or loss) of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

(g) “EBITDA” means, with respect to any Person, for any period, such Person’s Consolidated Net Income, excluding the effects of such Person’s and its Subsidiaries’ interest expense with respect to Indebtedness, taxes, depreciation, amortization, asset write-ups or impairment charges, provisions for loan losses, and changes in mark-to-market value(s) (both gains and losses) of financial instruments and noncash compensation expenses, all determined on a consolidated basis in accordance with GAAP.

(h) “Fixed Charges” means, with respect to any Person, for any period, the amount of interest paid in cash with respect to Indebtedness as shown on such Person’s consolidated statement of cash flow in accordance with GAAP as offset by the amount of receipts pursuant to net receive interest rate swap agreements of such Person and its consolidated Subsidiaries during the applicable period.

(i) “Guaranteed Obligations” means Seller’s obligation (without regard to any limitation of recourse against Seller) to fully and promptly pay the aggregate outstanding Repurchase Prices for all Purchased Loans that are subject to a Transaction on the date of determination.

(j) “Guarantor Litigation” means any litigation, arbitration, investigation, or administrative proceeding of or before any court, arbitrator, or Governmental Authority, bureau or agency instituted by Buyer against Guarantor that relates to or affects this Guaranty or any asset(s) or property(ies) of Guarantor.

2

(k) “Guarantor’s Knowledge” means the then current actual knowledge of Stephen Plavin, Geoffrey Jervis and Douglas Armer without further inquiry or investigation.

(l) “Hazardous Materials” means oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including any substances which are “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,” “wastes,” “regulated substances,” “industrial solid wastes,” or “pollutants” under Environmental Laws.

(m) “Insolvency Proceeding” means any case under Title 11 of the United States Code or any successor statute or any other insolvency, bankruptcy, reorganization, liquidation, or like proceeding, or other statute or body of law relating to creditors’ rights, whether brought under state, federal, or foreign law.

(n) “Legal Costs” means all costs and actual out-of-pocket expenses reasonably incurred by Buyer in any Proceeding, any Guarantor Litigation, or any default by Seller under the Transaction Documents or by any Guarantor under this Guaranty, including reasonable attorneys’ fees of outside counsel, disbursements, and other reasonable out-of-pocket, charges actually incurred by Buyer’s outside attorneys, court costs and expenses, and reasonable, charges for the services of paralegals, law clerks, and all other personnel whose services are charged to Buyer in connection with Buyer’s receipt of legal services of outside counsel incurred in connection with the enforcement of this Guaranty.

(o) “Proceeding” means any action, suit, arbitration, or other proceeding arising out of, or relating to the interpretation or enforcement of, this Guaranty or the Transaction Documents, including (a) an Insolvency Proceeding; and (b) any proceeding which Buyer institutes to realize upon any Security or to enforce any Transaction Document(s) (including this Guaranty) against Seller or Guarantor.

(p) “Recourse Indebtedness” means, with respect to any Person, on any date of determination, the amount of Indebtedness for which such Person has recourse liability (such as through a guarantee agreement), exclusive of any such Indebtedness for which such recourse liability is limited to obligations relating to or under agreements containing customary nonrecourse carve-outs.

(q) “Security” means any security or collateral held by or for Buyer and relating to the Transactions or the Guaranteed Obligations, whether real or personal property, including any mortgage, deed of trust, financing statement, security agreement, and other security document or instrument of any kind securing the Transactions in whole or in part. “Security” shall include all assets and property of any kind whatsoever pledged to Buyer by Seller pursuant to the Transaction Documents.

(r) “Subsidiary” means as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such

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power only by reason of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

(s) “Tangible Net Worth” means, with respect to any Person, on any date of determination, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person pursuant to GAAP, minus (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and/or expenses, all on or as of such date.

(t) “Total Assets” means, with respect to any Person, on any date of determination, an amount equal to the aggregate book value of all assets owned by such Person and the proportionate share of such Person of all assets owned by Affiliates of such Person as consolidated in accordance with GAAP, less (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and expenses, all on or as of such date, and (d) the amount of nonrecourse Indebtedness owing to such Person pursuant to securitization transactions such as a REMIC securitization, a collateralized loan obligation transactions or other similar securitizations.

2. Absolute Guaranty of All Guaranteed Obligations. (a) Subject to clause (b) below, Guarantor hereby unconditionally and irrevocably guarantees to Buyer the prompt and complete payment and performance by Seller when due (whether at the stated maturity, by acceleration or otherwise) of the Guaranteed Obligations. All assets and property of Guarantor shall be subject to recourse if Guarantor fails to pay and perform any Guaranteed Obligation(s) when and as required to be paid and performed pursuant to the Transaction Documents.

(b) Notwithstanding anything in this Guaranty or in any other Transaction Document to the contrary, but subject to clauses (c) and (d) below, the maximum liability of Guarantor hereunder and under the other Transaction Documents shall in no event exceed twenty-five percent (25%) of the Guaranteed Obligations.

(c) Notwithstanding the foregoing, the limitation on recourse liability as set forth in subsection (b) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Guaranteed Obligations immediately shall become fully recourse to Seller and Guarantor, jointly and severally, in the event of any of the following:

(i) a voluntary Insolvency Proceeding is commenced by Seller or Guarantor under any bankruptcy law; or

(ii) an involuntary Insolvency Proceeding is commenced under any bankruptcy law against Seller or Guarantor in connection with which Seller, Guarantor, or any Affiliate of any of the foregoing has or have colluded in any way with the creditors commencing or filing such proceeding.

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(d) In addition to the foregoing and notwithstanding the limitation on recourse liability set forth in subsection (b) above, Guarantor shall be liable for any actual out-of-pocket losses, costs, claims, expenses or other liabilities reasonably incurred by Buyer arising out of or attributable to:

(i) fraud or intentional misrepresentation by or on behalf of Seller or Guarantor in connection with the execution and the delivery of this Guaranty, the Repurchase Agreement or any of the other Transaction Documents, or any certificate, report, financial statement or other instrument or document furnished by Seller or Guarantor to Buyer in connection with any Transaction Document at the time of the closing of the Repurchase Agreement or following the Effective Date and through the Facility Expiration Date;

(ii) any material breach by Seller of the single-purpose entity covenants set forth in Section 13 of the Repurchase Agreement which results in the substantive consolidation of Seller in any Insolvency Proceeding of any Affiliate thereof;

(iii) the misappropriation or misapplication by Seller or Guarantor of any Income received with respect to the Purchased Loans in violation of the Transaction Documents; and

(iv) any material breach of any representations and warranties by Seller or Guarantor, or any of their respective Affiliates, of any representations and warranties in the Transaction Documents relating to Environmental Laws or Hazardous Materials, or any indemnity for costs incurred in connection with the violation of any Environmental Law, the correction of any environmental condition, or the removal of any Hazardous Materials, in each case in any way affecting any Mortgaged Property or any of the Purchased Loans; provided, that the guarantee set forth in this Section 2(d)(iv) shall terminate upon foreclosure and transfer or assumption of the Purchased Loan following an Event of Default under the Repurchase Agreement pursuant to a public or private sale or strict foreclosure, or other similar proceeding.

(e) Nothing herein shall be deemed to be a waiver of any right which Buyer may have in any Insolvency Proceeding involving Seller as debtor under Section 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code or any other bankruptcy law to file a claim against Seller for the full amount of the indebtedness secured by the Repurchase Agreement or to require that all collateral shall continue to secure all of the indebtedness owing to Buyer in accordance with the Repurchase Agreement or any other Transaction Documents.

(f) Guarantor further agrees to pay any and all Legal Costs which may be paid or actually incurred by Buyer in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Guaranteed Obligations, as limited by Section 2(b), as applicable, and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guaranty. This Guaranty shall remain in full force and effect until the Guaranteed Obligations, as limited by Section 2(b), as applicable, are paid in full, notwithstanding that from time to time prior thereto Seller may be free from any Guaranteed Obligations.

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(g) No payment or payments made by Seller or any other Person or received or collected by Buyer from Seller or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder which shall, notwithstanding any such payment or payments, remain liable for the amount of the Guaranteed Obligations, as limited by Section 2(b), as applicable, until the Guaranteed Obligations are paid in full.

(h) Guarantor agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to Buyer on account of Guarantor’s liability hereunder, Guarantor will notify Buyer in writing that such payment is made under this Guaranty for such purpose.

3. Nature and Scope of Liability. Guarantor’s liability under this Guaranty is primary and not secondary. Guarantor’s liability under this guaranty shall be in the full amount of all Guarantied Obligations, as limited by Section 2(b), as applicable.

4. Changes in Transaction Documents. Without notice to, or consent by, Guarantor, and in Buyer’s sole and absolute discretion and without prejudice to Buyer or in any way limiting or reducing Guarantor’s liability under this Guaranty, Buyer may: (a) grant extensions of time, renewals or other indulgences or modifications to Seller or any other party under any of the Transaction Document(s), (b) change, amend or modify any Transaction Document(s), (c) authorize the sale, exchange, release or subordination of any Security, (d) accept or reject additional Security, (e) discharge or release any party or parties liable under the Transaction Documents, (f) foreclose or otherwise realize on any Security, or attempt to foreclose or otherwise realize on any Security, whether such attempt is successful or unsuccessful, (g) accept or make compositions or other arrangements or file or refrain from filing a claim in any Insolvency Proceeding, (h) enter into other Transactions with Seller in such amount(s) and at such time(s) as Buyer may determine, (i) credit payments in such manner and order of priority to Repurchase Prices or other obligations as Buyer may determine in its sole and absolute discretion, and (j) otherwise deal with Seller and any other party related to the Transactions or any Security as Buyer may determine in its sole and absolute discretion. Without limiting the generality of the foregoing, Guarantor’s liability under this Guaranty shall continue even if Buyer alters any obligations under the Transaction Documents in any respect or Buyer’s or Guarantor’s remedies or rights against Seller are in any way impaired or suspended without Guarantor’s consent. If Buyer performs any of the actions described in this paragraph, then Guarantor’s liability shall continue in full force and effect even if Buyer’s actions impair, diminish or eliminate Guarantor’s subrogation, contribution, or reimbursement rights (if any) against Seller or otherwise adversely affect Guarantor or expand Guarantor’s liability hereunder, in all cases as limited by Section 2(b), as applicable.

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5. Certain Financial Covenants. Guarantor shall maintain the following covenants at all times following the Effective Date until the Guaranteed Obligations have been paid or otherwise satisfied in full, as determined quarterly on a consolidated basis in conformity with GAAP:

(a) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Guarantor’s EBITDA during the previous four (4) fiscal quarters to (ii) Guarantor’s Fixed Charges during the same such previous four (4) fiscal quarters shall not be less than 1.40 to 1.00 as determined as soon as practicable after the end of each fiscal quarter, but in no event later than forty-five (45) days after the last day the applicable fiscal quarter.

(b) Minimum Tangible Net Worth. Guarantor’s Tangible Net Worth shall not fall below the sum of (i) five hundred twenty-five million dollars ($525,000,000) plus (ii) seventy-five percent (75%) of the net cash proceeds of any equity issuance by Guarantor that occurs after the Effective Date.

(c) Minimum Cash Liquidity. Guarantor’s Cash Liquidity shall not fall below the greater of (i) ten million dollars ($10,000,000) or (ii) five percent (5%) of Guarantor’s Recourse Indebtedness.

(d) Maximum Indebtedness. The ratio, expressed as a percentage, the numerator of which shall equal Guarantor’s and its Subsidiaries’ Indebtedness and the denominator of which shall equal Guarantor’s and its Subsidiaries’ Total Assets, shall be greater than eighty percent (80%).

6. Nature of Guaranty. Guarantor’s liability under this Guaranty is a guaranty of payment of the Guaranteed Obligations, as limited by Section 2(b), as applicable, and is not a guaranty of collection or collectability. Guarantor’s liability under this Guaranty is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of any of the Transaction Documents. Guarantor’s liability under this Guaranty is a continuing, absolute, and unconditional obligation under any and all circumstances whatsoever (except as expressly stated, if at all, in this Guaranty), without regard to the validity, regularity or enforceability of any of the Guaranteed Obligations. Guarantor acknowledges that Guarantor is fully obligated under this Guaranty even if Seller had no liability at the time of execution of the Transaction Documents or later ceases to be liable under any Transaction Document, whether pursuant to Insolvency Proceedings or otherwise. Guarantor shall not be entitled to claim, and irrevocably covenants not to raise or assert, any defenses against the Guaranteed Obligations that would or might be available to Seller, other than actual payment and performance of all Guaranteed Obligations in full in accordance with their terms. Guarantor waives any right to compel Buyer to proceed first against Seller or any Security before proceeding against Guarantor. Guarantor agrees that if any of the Guaranteed Obligations are or become void or unenforceable (because of inadequate consideration, lack of capacity, Insolvency Proceedings, or for any other reason), then Guarantor’s liability under this Guaranty shall continue in full force with respect to all Guaranteed Obligations as if they were and continued to be legally enforceable, all in accordance with their terms and, in the case of Insolvency Proceedings, before giving effect to the Insolvency Proceedings. Guarantor also recognizes and acknowledges that its liability under this Guaranty, as limited by Section 2(b), as applicable, may be more extensive in amount and more burdensome than that of Seller. Guarantor waives any defense that might otherwise be available to Guarantor based on the proposition that a guarantor’s liability cannot exceed the liability of the principal. Guarantor intends to be fully liable under the Guaranteed Obligations, as limited by Section 2(b), as applicable, regardless of the scope of Seller’s liability thereunder. Without limiting the generality of the foregoing, if the Guaranteed

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Obligations are “nonrecourse” as to Seller or Seller’s liability for the Guaranteed Obligations is otherwise limited in some way, Guarantor nevertheless intends to be fully liable, subject to the limitations set forth in Section 2(b), to the full extent of all of Guarantor’s assets, with respect to all the Guaranteed Obligations, even though Seller’s liability for the Guaranteed Obligations may be less limited in scope or less burdensome. Guarantor waives any defenses to this Guaranty arising or purportedly arising from the manner in which Buyer conducts the Transactions with Seller or otherwise, or any waiver of the terms of any Transaction Document by Buyer or other failure of Buyer to require full compliance with the Transaction Documents. Guarantor’s liability under this Guaranty shall continue until all sums due under the Transaction Documents have been paid in full (other than indemnification obligations which expressly survive beyond the termination of the Repurchase Agreement and the other Transaction Documents) and all other performance required under the Transaction Documents has been rendered in full, except as expressly provided otherwise in this Guaranty. Guarantor’s liability under this Guaranty shall not be limited or affected in any way by any impairment or any diminution or loss of value of any Security whether caused by (a) Hazardous Materials, (b) Buyer’s failure to perfect a security interest in any Security, (c) any disability or other defense(s) of Seller, or (d) any breach by Seller of any representation or warranty contained in any Transaction Document.

7. Waivers of Rights and Defenses. Guarantor waives any right to require Buyer to (a) proceed against Seller, (b) proceed against or exhaust any Security, or (c) pursue any other right or remedy for Guarantor’s benefit. Guarantor agrees that Buyer may proceed against Guarantor with respect to the Guaranteed Obligations, as limited by Section 2(b), as applicable, without taking any actions against Seller and without proceeding against or exhausting any Security. Guarantor agrees that Buyer may unqualifiedly exercise in its sole discretion (or may waive or release, intentionally or unintentionally) any or all rights and remedies available to it against Seller without impairing Buyer’s rights and remedies in enforcing this Guaranty, under which Guarantor’s liabilities shall remain independent and unconditional. Guarantor agrees and acknowledges that Buyer’s exercise (or waiver or release) of certain of such rights or remedies may affect or eliminate Guarantor’s right of subrogation or recovery against Seller (if any) and that Guarantor may incur a partially or totally nonreimbursable liability in performing under this Guaranty. Guarantor has assumed the risk of any such loss of subrogation rights, even if caused by Buyer’s acts or omissions. If Buyer’s enforcement of rights and remedies, or the manner thereof, limits or precludes Guarantor from exercising any right of subrogation that might otherwise exist, then the foregoing shall not in any way limit Buyer’s rights to enforce this Guaranty. Without limiting the generality of any other waivers in this Guaranty, Guarantor expressly waives any statutory or other right (except as set forth herein) that Guarantor might otherwise have to: (i) limit Guarantor’s liability after a nonjudicial foreclosure sale to the difference between the Guaranteed Obligations and the fair market value of the property or interests sold at such nonjudicial foreclosure sale or to any other extent, (ii) otherwise limit Buyer’s right to recover a deficiency judgment after any foreclosure sale, or (iii) require Buyer to exhaust its Security before Buyer may obtain a personal judgment for any deficiency. Any proceeds of a foreclosure or similar sale may be applied first to any obligations of Seller that do not also constitute Guaranteed Obligations within the meaning of this Guaranty. Guarantor acknowledges and agrees that any nonrecourse or exculpation provided for in any Transaction Document, or any other provision of a Transaction Document limiting Buyer’s recourse to specific Security or limiting Buyer’s right to enforce a deficiency judgment against Seller or any other person, shall have absolutely no application to Guarantor’s

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liability under this Guaranty. To the extent that Buyer collects or receives any sums or payments from Seller or any proceeds of a foreclosure or similar sale, Buyer shall have the right, but not the obligation, to apply such amounts first to that portion of Seller’s indebtedness and obligations to Buyer (if any) that is not covered by this Guaranty, regardless of the manner in which any such payments and/or amounts are characterized by the person making the payment.

8. Additional Waivers. Guarantor waives diligence and all demands, protests, presentments and notices of every kind or nature, including notices of protest, dishonor, nonpayment, acceptance of this Guaranty and the creation, renewal, extension, modification or accrual of any of the Guaranteed Obligations. Guarantor further waives the right to plead any and all statutes of limitations as a defense to Guarantor’s liability under this Guaranty or the enforcement of this Guaranty. No failure or delay on Buyer’s part in exercising any power, right or privilege under this Guaranty shall impair or waive any such power, right or privilege.

9. Other Actions Taken or Omitted. Notwithstanding any other action taken or omitted to be taken with respect to the Transaction Documents, the Guaranteed Obligations, or the Security, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations, as limited by Section 2(b), as applicable, pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed Obligations, as limited by Section 2(b), as applicable, when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied as to any Guaranteed Obligation only upon the full and final payment and satisfaction of such Guaranteed Obligations, as limited by Section 2(b), as applicable.

10. No Duty to Prove Loss. To the extent that Guarantor at any time incurs any liability under this Guaranty, Guarantor shall immediately pay Buyer (to be applied on account of the Guaranteed Obligations) the amount provided for in this Guaranty, without any requirement that Buyer demonstrate that the Security is inadequate for the Transactions; that Buyer has currently suffered any loss; or that Buyer has otherwise exercised (to any degree) or exhausted any of Buyer’s rights or remedies with respect to Seller or any Security.

11. Full Knowledge. Guarantor acknowledges, represents, and warrants that Guarantor has had a full and adequate opportunity to review the Transaction Documents, the transactions contemplated by the Transaction Documents, and all underlying facts relating to such transactions. Guarantor represents and warrants that Guarantor fully understands: (a) the remedies Buyer may pursue against Seller and/or Guarantor in the event of a default under the Transaction Documents, (b) the value (if any) and character of any Security, and (c) Seller’s financial condition and ability to perform under the Transaction Documents. Guarantor agrees to keep itself fully informed regarding all aspects of the foregoing and the performance of Seller’s obligations to Buyer. Buyer has no duty, whether now or in the future, to disclose to Guarantor any information pertaining to Seller, the Transactions or any Security. At any time provided for in the Transaction Documents, Guarantor agrees and acknowledges that an Insolvency Proceeding affecting Guarantor, or other actions or events relating to Guarantor (including Guarantor’s failure to comply with the financial covenants in Section 5 of this Guaranty), in each case, as set forth in the Transaction Documents, may be event(s) of default under the Transaction Documents.

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12. Representations and Warranties. Guarantor acknowledges, represents and warrants as of the date hereof and as of each Purchase Date as follows, and acknowledges that Buyer is relying upon the following acknowledgments, representations, and warranties by Guarantor in entering into the Transactions:

(a) Due Execution; Enforceability. This Guaranty has been duly authorized, executed, and delivered, and is fully valid, binding, and enforceable against Guarantor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought in proceedings in equity or at law).

(b) No Conflict. The execution, delivery, and performance of this Guaranty will not violate any Requirement of Law, or any provision of any security issued by Guarantor or of any agreement, instrument or other undertaking to which Guarantor is a party or by which it or any of its property is bound.

(c) No Third Party Consent Required. No consent of any person (including creditors or partners, members, stockholders, or other owners of Guarantor), other than those consents obtained as of the date hereof, is required in connection with Guarantor’s execution of this Guaranty or performance of Guarantor’s obligations under this Guaranty. Guarantor’s execution of, and obligations under, this Guaranty are not contingent upon any consent, approval or other action of, or filing by Guarantor with any Governmental Authority (other than consents, approvals and filings that have been obtained or made, as applicable).

(d) Authority and Execution. Guarantor has full power, authority, and legal right to execute, deliver and perform its obligations under this Guaranty. Guarantor has taken all necessary corporate and legal action to authorize this Guaranty.

(e) No Representations by Buyer. Guarantor delivers this Guaranty based solely upon Guarantor’s own independent investigation and based in no part upon any representation or statement by Buyer, except for those set forth in the other Transaction Documents.

(f) Organization. Guarantor is duly incorporated, validly existing and in good standing under the laws and regulations of the state of Guarantor’s incorporation and is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of Guarantor’s business. Guarantor has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Guaranty and the other Transaction Documents.

(g) Litigation; Requirements of Law. Except as disclosed in writing to Buyer, there is no action, suit, proceeding, investigation, or arbitration pending or, to Guarantor’s Knowledge, threatened in writing by or against Guarantor or any of its assets. Guarantor is in

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compliance in all material respects with all Requirements of Law, including ERISA. Guarantor is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

(h) Financial Information. All financial data concerning Guarantor that has been prepared and delivered by Guarantor to Buyer is true, complete and correct in all material respects and has been prepared in accordance with GAAP. Since the delivery of such data, except as otherwise disclosed in writing to Buyer, there has been no change in the financial positions or operations of Guarantor which is reasonably likely to have a Material Adverse Effect.

(i) Adequate Capitalization. Guarantor and its consolidated Subsidiaries have not become, or are presently, financially insolvent nor will Guarantor and its consolidated Subsidiaries be made insolvent by virtue of Guarantor’s execution of or performance under this Guaranty or any of the Transaction Documents within the meaning of the bankruptcy laws or the insolvency laws of any jurisdiction.

(j) No Misstatements. No information, exhibit, report or certificate delivered by Guarantor to Buyer in connection with the Transactions or any Transaction Document contains any material misstatement of fact or has omitted to state a material fact or any fact necessary to make the statements contained therein not materially misleading.

13. Reimbursement and Subrogation Rights. Except to the extent that Buyer notifies Guarantor to the contrary in writing from time to time:

(a) General Deferral of Reimbursement. Guarantor waives any right to be reimbursed by Seller for any payment(s) made by Guarantor on account of the Guaranteed Obligations, unless and until all Guaranteed Obligations have been paid in full and all periods within which such payments may be set aside or invalidated have expired. Guarantor acknowledges that Guarantor has received adequate consideration for execution of this Guaranty by virtue of Buyer’s entering into the Transactions (which benefits Guarantor, as an owner or principal of Seller) and Guarantor does not require or expect, and is not entitled to, any other right of reimbursement against Seller as consideration for this Guaranty.

(b) Deferral of Subrogation and Contribution. Guarantor agrees it shall have no right of subrogation against Seller or Buyer and no right of subrogation against any Security unless and until: (a) such right of subrogation does not violate (or otherwise produce any result adverse to Buyer under) any applicable law, including any bankruptcy or insolvency law; (b) all amounts due under the Transaction Documents have been paid in full and all other performance required under the Transaction Documents has been rendered in full to Buyer (other than indemnification obligations which expressly survive beyond the termination of the Repurchase Agreement and the other Transaction Documents); and (c) all periods within which such payment may be set aside or invalidated have expired (such deferral of Guarantor’s subrogation and contribution rights, the “Subrogation Deferral”).

(c) Effect of Invalidation. To the extent that a court of competent jurisdiction determines that Guarantor’s Subrogation Deferral is void or voidable for any reason,

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Guarantor agrees, notwithstanding any acts or omissions by Buyer that Guarantor’s rights of subrogation against Seller or Buyer and Guarantor’s right of subrogation against any Security shall at all times be junior and subordinate to Buyer’s rights against Seller and to Buyer’s right, title, and interest in such Security.

(d) Claims in Insolvency Proceeding. Guarantor shall not file any claim in any Insolvency Proceeding affecting Seller unless Guarantor simultaneously assigns and transfers such claim to Buyer, without consideration, pursuant to documentation reasonably satisfactory to Buyer. In the event Guarantor fails to satisfy its obligations pursuant to the immediately preceding sentence following written notice from Buyer, Guarantor shall automatically be deemed to have assigned and transferred such claim to Buyer whether or not Guarantor executes documentation to such effect, and by executing this Guaranty hereby authorizes Buyer (and grants Buyer a power of attorney coupled with an interest) to execute and file such assignment and transfer documentation on Guarantor’s behalf. Buyer shall have the sole right to vote, receive distributions, and exercise all other rights with respect to any such claim, provided, however, that if and when the Guaranteed Obligations have been paid in full Buyer shall release to Guarantor any further payments received on account of any such claim and shall provide written evidence of such release in form and substance reasonably satisfactory to Guarantor.

14. Waiver Disclosure. Guarantor acknowledges that pursuant to this Guaranty, Guarantor has waived a substantial number of defenses that Guarantor might otherwise under some circumstance(s) be able to assert against Guarantor’s liability to Buyer. Guarantor acknowledges and confirms that Guarantor has substantial experience as a sophisticated participant in substantial commercial real estate transactions and is fully familiar with the legal consequences of signing this or any other guaranty. In addition, Guarantor is represented by competent counsel. Guarantor has obtained from such counsel, and understood, a full explanation of the nature, scope, and effect of the waivers contained in this Guaranty (a “Waiver Disclosure”). In the alternative, Guarantor has, with advice from such counsel, knowingly and intentionally waived obtaining a Waiver Disclosure. Accordingly Guarantor does not require or expect Buyer to provide a Waiver Disclosure. It is not necessary for Buyer or this Guaranty to provide or set forth any Waiver Disclosure, notwithstanding any principles of law to the contrary. Nevertheless, Guarantor specifically acknowledges that Guarantor is fully aware of the nature, scope, and effect of all waivers contained in this Guaranty, all of which have been fully disclosed to Guarantor. Guarantor acknowledges that as a result of the waivers contained in this Guaranty:

(a) Actions by Buyer. Buyer will be able to take a wide range of actions relating to Seller, the Transactions, and the Transaction Documents, all without Guarantor’s consent or notice to Guarantor. Guarantor’s full and unconditional liability under this Guaranty will continue whether or not Guarantor has consented to such actions. Guarantor may disagree with or disapprove such actions, and Guarantor may believe that such actions should terminate or limit Guarantor’s obligations under this Guaranty, but such disagreement, disapproval, or belief on the part of Guarantor will in no way limit Guarantor’s obligations under this Guaranty.

(b) Interaction with Seller Liability. Guarantor shall be fully liable for all Guaranteed Obligations, as limited by Section 2(b), as applicable, even if Seller has no liability

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whatsoever under the Transaction Documents or the Transaction Documents are otherwise invalid, unenforceable, or subject to defenses available to Seller. Guarantor acknowledges that Guarantor’s full and unconditional liability under this Guaranty (with respect to the Guaranteed Obligations as if they were fully enforceable against Seller) will continue notwithstanding any such limitations on or impairment of Seller’s liability.

(c) Timing of Enforcement. Buyer will be able to enforce this Guaranty against Guarantor even though Buyer might also have available other rights and remedies that Buyer could conceivably enforce against the Security or against other parties. As a result, Buyer may require Guarantor to pay the Guaranteed Obligations, as limited by Section 2(b), as applicable, earlier than Guarantor would prefer to pay such Guaranteed Obligations, including immediately upon the occurrence of a default by Seller. Guarantor will not be able to assert against Buyer various defenses, theories, excuses, or procedural requirements that might otherwise force Buyer to delay or defer the enforcement of this Guaranty against Guarantor. Guarantor acknowledges that Guarantor intends to allow Buyer to enforce the Guaranty against Guarantor in such manner. All of Guarantor’s assets will be available to satisfy Buyer’s claims against Guarantor under this Guaranty.

(d) Continuation of Liability. Guarantor’s liability for the Guaranteed Obligations, as limited by Section 2(b), as applicable, shall continue at all times until the Guaranteed Obligations have actually been paid in full, even if other circumstances have changed such that in Guarantor’s view Guarantor’s liability under this Guaranty should terminate, except to the extent that any express conditions to the termination of this Guaranty, as set forth in this Guaranty, have been satisfied.

15. Buyer’s Disgorgement of Payments. Upon payment of all or any portion of the Guaranteed Obligations, Guarantor’s obligations under this Guaranty shall continue and remain in full force and effect if all or any part of such payment is, pursuant to any Insolvency Proceeding or otherwise, avoided or recovered directly or indirectly from Buyer as a preference, fraudulent transfer, or otherwise, irrespective of (a) any notice of revocation given by Guarantor prior to such avoidance or recovery, or (b) payment in full of the Transactions (other than indemnification obligations which expressly survive beyond the termination of the Repurchase Agreement and the other Transaction Documents). Guarantor’s liability under this Guaranty shall continue until all periods have expired within which Buyer could (on account of any Insolvency Proceedings, whether or not then pending, affecting Seller or any other person) be required to return, repay, or disgorge any amount paid at any time on account of the Guaranteed Obligations.

16. Financial Information. Guarantor shall deliver to Buyer: (a) within forty-five (45) days after the last day of each of the first three fiscal quarters in any fiscal year, Guarantor’s unaudited consolidated balance sheets as of the end of such quarter, in each case certified as being true and correct by an officer’s certificate; (b) within ninety (90) days after the end of each calendar year or other fiscal year of Guarantor, consolidated statements of income and statements of changes in cash flow for such year and balance sheets as of the end of such year, in each case presented fairly in accordance with GAAP, and accompanied by an unqualified report of a nationally recognized independent certified public accounting firm or any other accounting firm consented to by Buyer in its reasonable discretion; and (c) such other financial information relating to Guarantor and in Guarantor’s possession as Buyer may reasonably request.

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17. Notice of Default and Litigation. Guarantor shall promptly, and in any event (a) within three (3) Business Days after Guarantor’s Knowledge thereof, notify Buyer of any default on the part of Guarantor under any Indebtedness which would reasonably be likely to give rise to an Event of Default, and (b) within three (3) Business Days after service of process or Guarantor’s Knowledge thereof, notify Buyer of the commencement, or threat in writing of, any action, suit, proceeding, investigation or arbitration involving Guarantor or any of its Affiliates or assets or any judgment in any action, suit, proceeding, investigation or arbitration involving Guarantor or any of its Affiliates or assets, which in any of the foregoing cases (i) relates to any Purchased Loan, (ii) questions or challenges the validity or enforceability of any Transaction or Transaction Document, (iii) makes a claim or claims against Guarantor in an aggregate amount in excess of $5,000,000 or (iv) that, individually or in the aggregate, if adversely determined, would be reasonably likely to have a Material Adverse Effect.

18. Right to Set Off. Notwithstanding anything to the contrary contained herein, no provision of this Guaranty shall be deemed to limit, decrease or in any way diminish any rights of set-off Buyer may have with respect to any cash, cash equivalents, certificates of deposit or the like which may now or hereafter be put on deposit with Buyer by Seller or by Guarantor. Upon the occurrence and during the continuance of any Event of Default, Buyer is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by Buyer to or for the credit or the account of Guarantor against any and all of the obligations of Guarantor now or hereafter existing under this Guaranty. Buyer agrees promptly to notify Guarantor after any set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application or this Guaranty. The rights of Buyer under this Section 18 are in addition to other rights and remedies (including, without limitation, other rights to set-off) which Buyer may have.

19. Consent to Jurisdiction. Guarantor agrees that any Proceeding to enforce this Guaranty may be brought in any state or federal court located in the state of New York, as Buyer may select. By executing this Guaranty, Guarantor irrevocably accepts and submits to the exclusive personal jurisdiction of each of the aforesaid courts, generally and unconditionally with respect to any such Proceeding. Guarantor agrees not to assert any basis for transferring jurisdiction of any such proceeding to another court. Guarantor further agrees that a final non-appealable judgment against Guarantor in any Proceeding shall be conclusive evidence of Guarantor’s liability for the full amount of such judgment.

20. Merger; No Conditions; Amendments. This Guaranty and documents referred to herein contain the entire agreement among the parties with respect to the matters set forth in this Guaranty. This Guaranty supersedes all prior agreements among the parties with respect to the matters set forth in this Guaranty. No course of prior dealings among the parties, no usage of trade, and no parol or extrinsic evidence of any nature shall be used to supplement, modify, or vary any terms of this Guaranty. This Guaranty is unconditional. There are no unsatisfied conditions to the full effectiveness of this Guaranty. No terms or provisions of this

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Guaranty may be changed, waived, revoked, or amended without Buyer’s written agreement. If any provision of this Guaranty is determined to be unenforceable, then all other provisions of this Guaranty shall remain fully effective.

21. Enforcement. Guarantor acknowledges that this Guaranty is an “instrument for the payment of money only,” within the meaning of New York Civil Practice Law and Rules Section 3213. In the event of any Proceeding between Seller or Guarantor and Buyer, including any Proceeding in which Buyer enforces or attempts to enforce this Guaranty or the Transactions against Seller or Guarantor, or in the event of any Guarantor Litigation, Guarantor shall reimburse Buyer for all Legal Costs of such Proceeding.

22. Fundamental Changes. Guarantor shall not wind up, liquidate, or dissolve its affairs or enter into any transaction of merger or consolidation, or sell, lease, or otherwise dispose of (or agree to do any of the foregoing) all or substantially all of its property or assets, without Buyer’s prior written consent.

23. Further Assurances. Guarantor shall execute and deliver such further documents, and perform such further acts, as Buyer may request to achieve the intent of the parties as expressed in this Guaranty, provided in each case that any such documentation is consistent with this Guaranty and with the Transaction Documents.

24. Certain Entities. If Seller or Guarantor is a partnership, limited liability company, or other unincorporated association, then: (a) Guarantor’s liability shall not be impaired by changes in the name or composition of Seller or Guarantor; and (b) the withdrawal or removal of any partner(s) or member(s) of Seller or Guarantor shall not diminish Guarantor’s liability or (if Guarantor is a partnership) the liability of any withdrawing general partners of Guarantor.

25. Counterparts. This Guaranty may be executed in counterparts each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Delivery by telecopier or other electronic transmission (including a .pdf e-mail transmission) of an executed counterpart of a signature page to this Guaranty shall be effective as delivery of an original executed counterpart of this Guaranty.

26. WAIVER OF TRIAL BY JURY. GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING FROM OR RELATING TO THIS GUARANTY OR THE TRANSACTION DOCUMENTS OR ANY OBLIGATION(S) OF GUARANTOR HEREUNDER OR UNDER THE TRANSACTION DOCUMENTS.

27. Miscellaneous.

(a) Assignability. Subject to the restrictions set forth in the Repurchase Agreement, Buyer may assign this Guaranty (in whole or in part) together with any one or more of the Transaction Documents, in accordance with the terms of the Transaction Documents without in any way affecting Guarantor’s or Seller’s liability. Buyer may from time to time designate any Buyer Entity to hold and exercise any or all of Buyer’s rights and remedies under this Guaranty. This Guaranty shall benefit Buyer and its successors and assigns (including any Buyer Entity) and shall bind Guarantor and its successors, and assigns. Guarantor may not assign this Guaranty in whole or in part without the prior written consent of Buyer.

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(b) Notices. All notices, requests and demands to be made under this Guaranty shall be given in writing at the address set forth in the opening paragraph of this Guaranty and shall be effective for all purposes if hand delivered or sent by: (i) hand delivery, with proof of delivery, (ii) certified or registered United States mail, postage prepaid, (iii) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (iv) by e-mail with proof of delivery (A) to Buyer at richard.schlenger@citi.com or (B) to Guarantor at BXMTCitiRepo@blackstone.com, as applicable, and with respect to notices to Guarantor, with a copy to Ropes and Gray LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: David C. Djaha, david.djaha@ropesgray.com, and with respect to notices to Buyer, with a copy to Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019, Attention: Brian Krisberg, bkrisberg@sidley.com, or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section 27(b). Any notice, request or demand shall be deemed to have been given: (i) in the case of hand delivery, at the time of delivery, (ii) in the case of registered or certified mail, when first delivered or the first attempted delivery on a business day, (iii) in the case of expedited prepaid delivery upon the first attempted delivery on a business day, or (iv) in the case of e-mail, upon receipt of confirmation of delivery.

(c) Interpretation. This Guaranty shall be enforced and interpreted according to the laws of the state of New York, disregarding its rules on conflicts of laws. The word “include” and its variants shall be interpreted in each case as if followed by the words “without limitation.”

28. Business Purposes. Guarantor acknowledges that this Guaranty is executed and delivered for business and commercial purposes, and not for personal, family, household, consumer, or agricultural purposes. Guarantor acknowledges that Guarantor is not entitled to, and does not require the benefits of, any rights, protections, or disclosures that would or may be required if this Guaranty were given for personal, family, household, consumer, or agricultural purposes. Guarantor acknowledges that none of Guarantor’s obligation(s) under this Guaranty constitute(s) a “debt” within the meaning of the United States Fair Debt Collection Practices Act, 15 U.S.C. § 1692a(5), and accordingly compliance with the requirements of such Act is not required if Buyer (directly or acting through its counsel) makes any demand or commences any action to enforce this Guaranty.

29. No Third-Party Beneficiaries. This Guaranty is executed and delivered for the benefit of Buyer and its successors, and assigns, and is not intended to benefit any third party.

30. CERTAIN ACKNOWLEDGMENTS BY GUARANTOR. GUARANTOR ACKNOWLEDGES THAT BEFORE EXECUTING THIS GUARANTY: (A) GUARANTOR HAS HAD THE OPPORTUNITY TO REVIEW IT WITH AN ATTORNEY OF GUARANTOR’S CHOICE; (B) BUYER HAS RECOMMENDED TO GUARANTOR THAT GUARANTOR OBTAIN SEPARATE COUNSEL,

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INDEPENDENT OF SELLER’S COUNSEL, REGARDING THIS GUARANTY; AND (C) GUARANTOR HAS CAREFULLY READ THIS GUARANTY AND UNDERSTOOD THE MEANING AND EFFECT OF ITS TERMS, INCLUDING ALL WAIVERS ANDACKNOWLEDGMENTS CONTAINED IN THIS GUARANTY AND THE FULL EFFECT OF SUCH WAIVERS AND THE SCOPE OF GUARANTOR’S OBLIGATIONS UNDER THIS GUARANTY.

[Signature Page Follows]

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IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date first written above.

GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Thomas C. Ruffing
Name:	Thomas C. Ruffing
Title:	Managing Director, Asset Management

Guaranty

EX-10.12

Exhibit 10.12

MASTER REPURCHASE AGREEMENT

Dated as of June 28, 2013

between

PARLEX 4 FINANCE, LLC

as Seller,

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as Buyer

TABLE OF CONTENTS

	Page
ARTICLE 1. APPLICABILITY		2
ARTICLE 2. DEFINITIONS		2
ARTICLE 3. INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION OF MATURITY DATE; EXTENSION OF REPURCHASE DATE		26
ARTICLE 4. MARGIN MAINTENANCE		46
ARTICLE 5. INCOME PAYMENTS AND PRINCIPAL PROCEEDS		46
ARTICLE 6. SECURITY INTEREST		49
ARTICLE 7. PAYMENT, TRANSFER AND CUSTODY		51
ARTICLE 8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS		55
ARTICLE 9. REPRESENTATIONS AND WARRANTIES		55
ARTICLE 10. NEGATIVE COVENANTS OF SELLER		63
ARTICLE 11. AFFIRMATIVE COVENANTS OF SELLER		65
ARTICLE 12. EVENTS OF DEFAULT; REMEDIES		72
ARTICLE 13. SINGLE AGREEMENT		78
ARTICLE 14. RECORDING OF COMMUNICATIONS		78
ARTICLE 15. NOTICES AND OTHER COMMUNICATIONS		79
ARTICLE 16. ENTIRE AGREEMENT; SEVERABILITY		79
ARTICLE 17. NON-ASSIGNABILITY		79
ARTICLE 18. GOVERNING LAW		81

-i-

ARTICLE 19. NO WAIVERS, ETC.	81
ARTICLE 20. USE OF EMPLOYEE PLAN ASSETS	82
ARTICLE 21. INTENT	82
ARTICLE 22. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	84
ARTICLE 23. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	84
ARTICLE 24. NO RELIANCE	85
ARTICLE 25. INDEMNITY	86
ARTICLE 26. DUE DILIGENCE	87
ARTICLE 27. SERVICING	87
ARTICLE 28. MISCELLANEOUS	89

-ii-

ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Prohibited Transferees
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III-A	Monthly Reporting Package
EXHIBIT III-B	Quarterly Reporting Package
EXHIBIT III-C	Annual Reporting Package
EXHIBIT IV	Form of Custodial Delivery Certificate
EXHIBIT V	Form of Power of Attorney
EXHIBIT VI	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VII	Asset Information
EXHIBIT VIII	Purchase Procedures
EXHIBIT IX	Form of Bailee Letter
EXHIBIT X	Form of Margin Deficit Notice
EXHIBIT XI	Form of Tax Compliance Certificates
EXHIBIT XII	UCC Filing Jurisdictions
EXHIBIT XIII	Form of Servicer Notice
EXHIBIT XIV	Form of Release Letter
EXHIBIT XV	Covenant Compliance Certificate
EXHIBIT XVI	Form of Re-Direction Letter

MASTER REPURCHASE AGREEMENT

MASTER REPURCHASE AGREEMENT, dated as of June 28, 2013, by and between PARLEX 4 FINANCE, LLC, a Delaware limited liability company (the “Seller”) and JPMORGAN CHASE BANK, National Association, a banking association organized under the laws of the United States (“Buyer”).

ARTICLE 1.

APPLICABILITY

From time to time during the Funding Period (as defined herein) the parties hereto may enter into transactions in which Seller and Buyer agree to the transfer from Seller to Buyer of all of its rights, title and interest to certain Eligible Assets (as defined herein) or other assets and, in each case, the other related Purchased Items (as defined herein) (collectively, the “Assets”) against the transfer of funds by Buyer to Seller, with a simultaneous agreement by Buyer to transfer back to Seller such Assets at a date certain or on demand, against the transfer of funds by Seller to Buyer. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any exhibits identified herein as applicable hereunder. Each individual transfer of an Eligible Asset shall constitute a distinct Transaction. Notwithstanding any provision or agreement herein, at no time shall Buyer be obligated to purchase or effect the transfer of any Eligible Asset from Seller to Buyer.

ARTICLE 2.

DEFINITIONS

“Accelerated Repurchase Date” shall have the meaning specified in Article 12(b)(i) of this Agreement.

“Acceptable Attorney” means Ropes & Gray, LLP or another attorney-at-law or law firm that has delivered at Seller’s request a Bailee Letter, with the exception of an attorney or law firm that is not reasonably satisfactory to Buyer.

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

“Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors (“Insolvency Law”), or suffering any such petition or proceeding to be commenced by another that is consented to, not timely contested, or that results in entry by a Governmental Authority having jurisdiction of an order for relief that, in the case of an action not instigated by or on behalf of or with the consent of Seller, is not dismissed or stayed within

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ninety (90) days; (ii) the seeking or consenting to the appointment of a receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (iv) the making of a general assignment for the benefit of creditors; (v) the admission by such Person of its inability to pay its debts or discharge its obligations as they become due or mature; (vi) that any Governmental Authority or agency or any person, agency or entity acting or purporting to act under Governmental Authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person; (vii) the consent by such Person to the entry of an order for relief in an insolvency case under any Insolvency Law; or (viii) the taking of action by any such Person in furtherance of any of the foregoing.

“Additional Purchase Amount” shall have the meaning specified in Section 3(w)(i) of this Agreement.

“Additional Purchase Available Amount” shall mean the positive difference, if any, between (x) the Maximum Advance Purchase Price as of the proposed date for an Additional Purchase Transaction minus (y) the outstanding Purchase Price of such Purchased Asset as of such proposed date.

“Additional Purchase Transaction” shall have the meaning specified in Section 3(w)(i) of this Agreement.

“Additional Purchase Transaction Conditions Precedent” shall have the meaning specified in Section 3(w)(ii).

“Advance Rate” shall mean, with respect to each Transaction and any Pricing Rate Period, the initial Advance Rate for such Transaction as shown in the related Confirmation, as may be adjusted for an Additional Purchase Transaction or Future Funding Transaction as set forth herein, unless otherwise agreed to by Buyer and Seller, which in any case shall not exceed the Maximum Advance Rate.

“Affiliate” shall mean, when used with respect to any specified Person, (i) any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person or (ii) any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

“Affiliated Hedge Counterparty” shall mean JPMorgan Chase Bank, National Association, or any Affiliate thereof, in its capacity as a party to any Hedging Transaction with Seller.

“Agreement” shall mean this Master Repurchase Agreement, dated as of June 28, 2013 by and between Parlex 4 Finance, LLC and JPMorgan Chase Bank, National Association, as such agreement may be modified or supplemented from time to time.

“Alternative Rate” shall have the meaning specified in Article 3(g) of this Agreement.

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

“Annual Reporting Package” shall mean the reporting package described on Exhibit III-C.

“Anti-Money Laundering Laws” shall have the meaning specified in Article 9(b)(xxxi) of this Agreement.

“Applicable Law” means all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“Applicable Spread” shall mean, with respect to a Transaction involving a Purchased Asset:

(i) so long as no Event of Default shall have occurred and be continuing, the incremental per annum rate (expressed as a number of “basis points”, each basis point being equivalent to 1/100 of 1%) specified in Schedule I attached to the Fee Letter as being the “Applicable Spread” for Purchased Assets in such Asset Type Grouping for the applicable LTV shown in Schedule I of the Fee Letter, as applicable, or such other rate as may be agreed upon between Seller and Buyer, and, in either case, as set forth in the related Confirmation; and

(ii) after the occurrence and during the continuance of an Event of Default, the applicable incremental per annum rate described in clause (i) of this definition, plus 400 basis points (4.0%);

provided, that the Applicable Spread may be increased in connection with an Additional Purchase Transaction or Future Funding Transaction.

“Applicable Standard of Discretion” shall mean (a) if the ratio of (x) the Maximum Purchase Price of such Purchased Asset to (y) the value of the related Underlying Mortgaged Property, determined in Buyer’s commercially reasonable discretion, is less than or equal to the LTV as of the Purchase Date, Buyer’s commercially reasonable discretion, and (b) if the ratio of (x) the Maximum Purchase Price of such Purchased Asset to (y) the value of the related Underlying Mortgaged Property, determined in Buyer’s commercially reasonable discretion, is greater than the LTV as of the Purchase Date, Buyer’s sole discretion. For purposes of Buyer’s determination of the value of the relevant Underlying Mortgaged Property, (i) the value may be determined using any commercially reasonable method, including without limitation by reference to a recent appraisal prepared in accordance with FIRREA, broker price opinions and/or discounted cash flow analysis or any other commercially reasonable method (for the avoidance of doubt, while not exclusive, any of the foregoing shall be deemed for all purposes to be commercially reasonable) and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks posed by any Liens on the related Underlying Mortgaged Property(ies).

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“Asset Due Diligence” shall have the meaning set forth in Article 3(b)(vi) hereof.

“Asset Information” shall mean, with respect to each Purchased Asset, the information set forth in Exhibit VII attached hereto.

“Asset Type Grouping” shall have the meaning set forth in the Fee Letter.

“Assets” shall have the meaning specified in Article 1 of this Agreement.

“Assignee” shall have the meaning set forth in Article 17(a) hereof.

“Bailee Letter” shall mean a letter from an Acceptable Attorney or from a Title Company, in the form attached to this Agreement as Exhibit IX, wherein such Acceptable Attorney or Title Company in possession of a Purchased Asset File (i) acknowledges receipt of such Purchased Asset File, (ii) confirms that such Acceptable Attorney, Title Company, or other Person acceptable to Buyer is holding the same as bailee of Buyer under such letter and (iii) agrees that such Acceptable Attorney or Title Company shall deliver such Purchased Asset File to the Custodian by not later than the third (3^rd) Business Day following the Purchase Date (or, if applicable, the date of the Future Funding Transaction) for the related Purchased Asset.

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

“Breakage Costs” shall have the meaning assigned thereto in Article 3(l).

“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which the New York Stock Exchange or the Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed and (iii) a day on which banks in the State of New York, Pennsylvania, Kansas or Minnesota are authorized or obligated by law or executive order to be closed or, with respect to “London Business Days” for the determination of LIBOR, any day on which banks in London, England are authorized or obligated by law or executive order to be closed.

“Buyer” shall mean JPMorgan Chase Bank, National Association, or any permitted successor or assign.

“Buyer Compliance Policy” shall mean any corporate policy of Buyer or of any corporate entity controlling Buyer related to the compliance by Buyer or such corporate entity or any of Buyer’s or by any such corporate entity’s Affiliates with any Requirement of Law and/or any request or directive by any Governmental Authority (whether or not having the force of law) and/or any proposed law, rule or regulation, including without limitation any policy of Buyer or any such corporation to comply with rules in proposed form or otherwise not yet in effect or to adhere to standards or other requirements in excess of those that would be required by any Requirement of Law.

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“Buyer Funding Costs” shall mean the actual funding costs of Buyer or of any corporate entity controlling Buyer associated with any one or more of the Transactions (including any related Additional Purchase Transaction or Future Funding Transaction) or otherwise with Buyer’s obligations under the Transaction Documents.

“Buyer’s Margin Amount” shall mean with respect to any Transaction and any Purchased Asset on any date of determination, the Advance Rate applied to such Purchased Asset at the time that such Transaction was entered into as agreed to by Seller and Buyer and set forth in the applicable Confirmation (as increased as a result of any Additional Purchase Transaction or Future Funding Transaction), multiplied by the Market Value of such Purchased Asset as of such date of determination; provided, that to the extent the Advance Rate is not set forth in the related Confirmation, the Advance Rate shall be deemed to be the applicable Advance Rate set forth on Schedule I to the Fee Letter.

“Capital Stock” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, any and all partner or other equivalent interests in any partnership or limited partnership, and any and all warrants or options to purchase any of the foregoing.

“Cash Equivalents” shall mean, as of any date of determination, marketable securities issued or directly and unconditionally guaranteed as to interest and principal by the United States Government.

“Cash Sweep Tail Period” shall mean the period beginning on the second (2^nd) anniversary of the expiration of the Funding Period.

“Cash Sweep Tail Period Additional Amount” shall mean, with respect to any Purchased Asset and on any date during the Cash Sweep Tail Period, an amount equal to the difference of (a) the then-outstanding principal balance of such Purchased Asset on such date less (b) the Purchase Price of such Purchased Asset on such date.

“Change in Law” shall have the meaning specified in Section 3(h).

“Change of Control” shall mean, with respect to any Person, if either (a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a percentage of the total voting power of all Capital Stock of such Person entitled to vote generally in the election of directors, members or partners of 20% or more other than wholly-owned Affiliates of such Person and related funds of The Blackstone Group L.P. or (b) Guarantor shall cease to own and Control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of Seller. Notwithstanding the foregoing, neither Buyer nor any other Person shall be deemed to approve or to have approved any internalization of management as a result of this definition or any other provision herein.

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“Closing Date” shall mean June 28, 2013.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collection Period” shall mean (i) with respect to the first Remittance Date, the period beginning on and including the Closing Date and continuing to, and including the calendar day immediately preceding such Remittance Date, and (ii) with respect to each subsequent Remittance Date, the period beginning on and including the Remittance Date in the month preceding the month in which such Remittance Date occurs and continuing to and including the calendar day immediately preceding the following Remittance Date.

“Concentration Limit” shall mean the limit on the maximum portion of the aggregate Maximum Purchase Price for all Purchased Assets on each Business Day that may relate to Purchased Assets that are Junior Mortgage Loans or Mezzanine Loans, which limit shall be thirty-five percent (35%) of such then-current aggregate Maximum Purchase Price for all Purchased Assets.

“Confirmation” shall have the meaning specified in Article 3(b)(v) of this Agreement.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “Control,” “Controlling” and “Controlled” shall have meanings correlative thereto.

“Covenant Compliance Certificate” shall mean a properly completed and executed Covenant Compliance Certificate in form and substance identical to the certificate attached hereto as Exhibit XV.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the date hereof, by and among the Custodian, Seller and Buyer.

“Custodial Delivery Certificate” shall mean the form executed by Seller in order to deliver the Purchased Asset Schedule and the Purchased Asset File to Buyer or its designee (including the Custodian) pursuant to Article 7(b) of this Agreement, a form of which is attached hereto as Exhibit IV.

“Custodian” shall mean U.S. Bank National Association, or any successor Custodian appointed by Buyer with the prior written consent of Seller, not to be unreasonably withheld, conditioned or delayed.

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

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“Defaulted Mortgage Asset” shall mean any asset (a) that is thirty (30) days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents or other Asset documentation or, with respect to a Senior Mortgage Loan or Junior Mortgage Loan that is a participation interest, the Underlying Mortgage Loan is thirty (30) days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents, (b) for which there is a breach of the applicable representations and warranties set forth on Exhibit VI hereto, (c) as to which an Act of Insolvency shall have occurred (and, in the case of an involuntary Act of Insolvency, be continuing) with respect to the Mortgagor, (d) as to which a non-monetary event of default shall have occurred under any document included in the Purchased Asset File for such Purchased Asset or (e) with respect to which there has been an extension, amendment, waiver, termination, rescission, cancellation, release or other modification to the terms of, or any collateral, guaranty or indemnity for, or the exercise of any material right or remedy of a holder (including all lending, corporate and voting rights, remedies, consents, approvals and waivers) of any related loan or participation document that has an adverse effect on the interest in such asset, as determined by Buyer in its sole discretion and with respect to which Buyer has not consented to in writing.

“Depository” shall mean PNC Bank, National Association, or any successor Depository appointed by Buyer with the prior written consent of Seller, not to be unreasonably withheld, conditioned or delayed.

“Depository Account” shall mean a segregated interest bearing account, in the name of Buyer, established at Depository pursuant to this Agreement, and which is subject to the Depository Agreement.

“Depository Agreement” shall mean that certain Depository Agreement, dated as of the date hereof, among Buyer, Seller and Depository, or any successor agreement thereto approved by Buyer in its discretion.

“Due Diligence Legal Expenses” shall mean all of the reasonable and necessary out of pocket third-party legal fees, costs and expenses actually incurred by Buyer in connection with the Asset Due Diligence associated with Buyer’s decision as to whether or not to enter into a particular Transaction (including an Additional Purchase Transaction or Future Funding Transaction).

“Due Diligence Package” shall have the meaning specified in Exhibit VIII to this Agreement.

“Early Repurchase” shall mean a repurchase of a Purchased Asset as described in Article 3(f) of this Agreement.

“Early Repurchase Date” shall have the meaning specified in Article 3(f) of this Agreement.

“Eligible Assets” shall mean any of the following types of assets or loans (1) that are acceptable to Buyer in its sole and absolute discretion (such determination of acceptability only being applicable prior to the Purchase Date for the related Purchased Asset, but shall not be a

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factor at any time after the Purchase Date for such Purchased Asset and the initial Transaction), (2) on each day, with respect to which the representations and warranties set forth in this Agreement (including the exhibits hereto) are true and correct in all material respects except to the extent disclosed in a Requested Exceptions Report approved by Buyer, and (3) that are secured directly or indirectly by properties that are multi-family, mixed use, industrial, office building or hospitality or such other types of properties that Buyer may agree to in its sole discretion, and are properties located in the United States of America, its territories or possessions (or elsewhere, in the sole discretion of Buyer):

(i) Senior Mortgage Loans;

(ii) Junior Mortgage Loans;

(iii) Mezzanine Loans; and

(iv) any other asset or loan types or classifications that are acceptable to Buyer, subject to its consent on all necessary and appropriate modifications to this Agreement and each of the Transaction Documents, as determined by Buyer in its sole and absolute discretion.

Notwithstanding anything to the contrary contained in this Agreement, the following shall not be Eligible Assets for purposes of this Agreement, unless otherwise specifically agreed to by Buyer in writing: (1) non-performing loans; (2) loans that are Defaulted Mortgage Assets; (3) any asset, where payment of the Purchase Price with respect thereto would cause the aggregate of all Repurchase Prices to exceed the Maximum Facility Amount; (4) construction loans; (5) Mezzanine Loans or Junior Mortgage Loans backed by hotels with a last-dollar loan-to-value ratio in excess of seventy percent (70%); (6) other than as approved by Buyer in its discretion, Assets where the Underlying Mortgaged Property is owned or leased in whole or in part by any Seller, Guarantor or any of their respective Affiliates; (7) Assets that, upon becoming a Purchased Asset would violate the Concentration Limit; or (8) assets secured directly or indirectly by loans described in the preceding clauses (1) through (7).

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

“Environmental Site Assessment” shall have the meaning specified in Exhibit VI.

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

“ERISA Affiliate” shall mean any Person that is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as a single employer described in Section 414 of the Code.

“Event of Default” shall have the meaning specified in Article 12 of this Agreement.

“Exchange Act” shall have the meaning specified in the definition of “Change of Control”.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to Buyer or any Assignee, or required to be withheld or deducted from a payment to or for the account of Buyer or Assignee, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, Taxes imposed on or measured by net worth (however denominated) and branch profits Taxes, in each case, (i) imposed as a result of Buyer or Assignee being organized under the laws of, or having its principal office or the office from which it books the Transactions located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Buyer or Assignee with respect to an interest under this Agreement pursuant to a law in effect on the date on which (i) such Buyer or Assignee acquires such interest hereunder (other than pursuant to an assignment request by Seller under Article 3(u)) or (ii) Buyer or Assignee changes the office from which it books the Transactions, except in each case to the extent that, pursuant to Article 3(n) or Article 3(q), amounts with respect to such Taxes were payable either to Buyer’s or Assignee’s assignor immediately before such Buyer or Assignee acquired an interest hereunder or to such Buyer or Assignee immediately before it changed the office from which it books the Transactions, (c) Taxes attributable to such Buyer’s or Assignee’s failure to comply with its obligations under Article 3(r) and Article 21(f), and (d) any U.S. federal withholding Taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into with a Governmental Authority pursuant thereto (including pursuant to Section 1471(b)(1) of the Code).

“Federal Funds Rate” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by Buyer from three federal funds brokers of recognized standing selected by it.

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

“Filings” shall have the meaning specified in Article 6(d) of this Agreement.

“Final Maturity Date” shall have the meaning specified in the definition of “Maturity Date”.

“Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

“Fitch” shall mean Fitch Ratings, Inc.

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

“Force Majeure Event” shall mean any of the following: (a) there has occurred and is continuing an outbreak of significant hostilities or escalation thereof or other calamity or crisis the effect of which is that, in the reasonable judgment of Buyer, it is impossible or commercially inadvisable to continue to enter into transactions in the repurchase (or “repo”) market or financing market with respect to assets similar to Eligible Assets, (b) a banking moratorium has been declared and is continuing under federal law, New York law or by federal or New York Governmental Authorities other applicable authorities, or (c) Buyer is and continues to be prohibited, as a result of any Requirement of Law, from entering into transactions similar to those contemplated under the Transaction Documents.

“Foreign Buyer” shall mean an Assignee that is not a U.S. Person.

“Funding Period” shall mean the period beginning on the Closing Date and ending on June 27, 2014, or such later date as may be reflected in a written amendment to this Agreement agreed to by Buyer and Seller; provided, however, that the decision to enter into any such amendment shall be at Buyer’s sole and absolute discretion.

“Future Funding Amount” shall have the meaning specified in Section 3(x)(i).

“Future Funding Confirmation” shall have the meaning specified in Section 3(x)(i).

“Future Funding Date” shall mean, with respect to any Purchased Asset, the date on which Buyer advances any portion of the Future Funding Amount related to such Purchased Asset.

“Future Funding Transaction” shall mean an additional Transaction requested with respect to any Purchased Asset to provide for the advance of additional funds in connection with any future funding that Seller is obligated to make to the related Mortgagor under a Purchased Asset.

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“Future Funding Transaction Conditions Precedent” shall have the meaning specified in Section 3(x)(iii).

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

“Governmental Authority” shall mean any national or federal government, any state, regional, local or other political subdivision thereof with jurisdiction and any Person with jurisdiction exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee Agreement” shall mean the Guarantee Agreement, dated as of the date hereof, from Guarantor, as guarantor in favor of Buyer, in form and substance acceptable to Buyer.

“Guarantor” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation.

“Hedge-Required Asset” shall mean any Eligible Asset that is a fixed rate Eligible Asset.

“Hedging Transactions” shall mean, with respect to any or all of the Purchased Assets, any short sale of U.S. Treasury Securities or mortgage-related securities, futures contract (including Eurodollar futures) or options contract or any interest rate swap, cap or collar agreement or similar arrangements providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, entered into by any Affiliated Hedge Counterparty or Qualified Hedge Counterparty with Seller, either generally or under specific contingencies that is required by Buyer, or otherwise pursuant to this Agreement, to hedge the financing of a Hedge-Required Asset, or that Seller has elected to pledge or transfer to Buyer pursuant to this Agreement.

“Income” shall mean, with respect to any Purchased Asset at any time, (x) any collections or receipts of principal, interest, dividends, receipts or other distributions or collections or any other amounts related to such Purchased Asset, (y) all net sale proceeds received by Seller or any Affiliate of Seller in connection with a sale or liquidation of such Purchased Asset and (z) all payments actually received by Buyer on account of Hedging Transactions.

“Indebtedness” shall mean, for any Person, (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) obligations of

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such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (f) Indebtedness of others guaranteed by such Person; (g) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (h) Indebtedness of general partnerships of which such Person is a general partner or is secondarily or contingently liable (other than by endorsement of instruments in the course of collection), whether by reason of any agreement to acquire such indebtedness to supply or advance sums or otherwise; (i) all net liabilities or obligations under any interest rate, interest rate swap, interest rate cap, interest rate floor, interest rate collar, or other hedging instrument or agreement; and (j) all obligations of such Person under Financing Leases. Notwithstanding the foregoing, bona fide securitizations that fall into this category solely as a result of the application of FAS 166 and/or FAS 167 shall not be considered Indebtedness of any Person.

“Indemnified Amounts” shall have the meaning specified in Article 25 of this Agreement.

“Indemnified Parties” shall have the meaning specified in Article 25 of this Agreement.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Seller under any Transaction Document and (b) to the extent not otherwise described in clause (a) of this definition, Other Taxes.

“Independent Director” shall mean an individual with at least three (3) years of employment experience serving as an independent director at the time of appointment who is provided by, and is in good standing with, CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors or managers or is not acceptable to the Rating Agencies, another nationally recognized company reasonably approved by Buyer, in each case that is not an Affiliate of Seller and that provides professional independent directors or managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a member of the board of directors or board of managers of Seller and is not, and has never been, and will not while serving as independent director or manager be:

(a) a member (other than an independent, non-economic “springing” member), partner, equityholder, manager, director, officer or employee of Seller or any of its equityholders or Affiliates (other than as an independent director or manager of an Affiliate of Seller that is not in the direct chain of ownership of Seller and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such independent director or manager is employed by a company that routinely provides professional independent directors or managers in the ordinary course of business);

(b) a customer, creditor, supplier or service provider (including provider of professional services) to Seller or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional independent directors or managers and other corporate services to Seller or any of its equityholders or Affiliates in the ordinary course of business);

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

(d) a Person that Controls or is under common Control with (whether directly, indirectly or otherwise) any of (a), (b) or (c) above.

A natural person who otherwise satisfies the foregoing definition other than subparagraph (a) by reason of being the independent director or manager of a single purpose bankruptcy remote entity in the direct chain of ownership of Seller shall not be disqualified from serving as an independent director or manager of Seller, provided that the fees that such individual earns from serving as independent directors or managers of such Affiliates in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

“Initial Maturity Date” shall have the meaning specified in the definition of “Maturity Date”.

“Insolvency Law” shall have the meaning specified in the definition of “Act of Insolvency”.

“Interim Servicer” shall mean Midland Loan Services, Inc., or any other servicer approved by Buyer in its commercially reasonable discretion.

“Interim Servicing Agreement” shall mean the Interim Servicing Agreement, dated as of the date hereof, by and among the Servicer, Seller and Buyer.

“IRS” shall mean the United States Internal Revenue Service.

“Junior Mortgage Loan” shall mean a performing mortgage loan evidenced by one or more junior promissory notes or a participation interest evidenced by a certificate of participation in a stabilized or transitional commercial, multifamily fixed or floating rate mortgage loan evidenced by a promissory note, in each case secured by first liens on multi-family or commercial properties.

“Knowledge” shall mean, as of any date of determination, the then-current actual (as distinguished from imputed or constructive) knowledge of (i) Stephen Plavin, Geoffrey Jervis or Douglas Armer, (ii) any asset manager at The Blackstone Group L.P. responsible for any Purchased Asset, or (iii) any other employee with a title equivalent or more senior to that of “principal” within The Blackstone Group L.P. responsible for the origination, acquisition and/or management of any Purchased Asset.

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate determined by Buyer to be (i) the per annum rate for deposits in U.S. dollars for a period equal to the applicable Pricing Rate Period, which appears on the Reuters Screen LIBOR01 Page (or any successor thereto) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the day that is two (2) London Business Days prior to that respective Pricing Rate Determination Date (rounded upwards, if necessary, up to the nearest 1/1000 of 1%); (ii) if such rate does not appear on said Reuters Screen LIBOR01 Page, the arithmetic mean (rounded as aforesaid) of the offered quotations of rates obtained by Buyer from the Reference Banks for deposits in U.S. dollars for a

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period equal to the applicable Pricing Rate Period to prime banks in the London Interbank market as of approximately 11:00 a.m., London time, on the day that is two (2) London Business Days prior to that Pricing Rate Determination Date and in an amount that is representative for a single transaction in the relevant market at the relevant time; or (iii) if fewer than two (2) Reference Banks provide Buyer with such quotations, the rate per annum which Buyer determines to be the arithmetic mean (rounded as aforesaid) of the offered quotations of rates which major banks in New York, New York selected by Buyer are quoting at approximately 11:00 a.m., New York City time, on the Pricing Rate Determination Date for loans in U.S. dollars to leading European banks for a period equal to the applicable Pricing Rate Period in amounts of not less than U.S. $1,000,000.00. Buyer’s determination of LIBOR shall be binding and conclusive on Sellers absent manifest error. LIBOR may or may not be the lowest rate based upon the market for U.S. Dollar deposits in the London Interbank Eurodollar Market at which Buyer prices loans on the date which LIBOR is determined by Buyer as set forth above.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing), and the filing of any financing statement under the UCC or comparable law of any jurisdiction in respect of any of the foregoing.

“London Business Day” shall mean any day other than (a) a Saturday, (b) a Sunday or (c) any other day on which commercial banks in London, England are not open for business.

“LTV” shall mean, with respect to any Purchased Asset, the ratio of the aggregate outstanding debt (which shall include such Purchased Asset and all debt senior to or pari passu with such Purchased Asset whether advanced on such date or permitted to be advanced in the future) secured, directly or indirectly, by the related Underlying Mortgaged Property(ies), to the aggregate value of such Underlying Mortgaged Property(ies) as determined by Buyer in its commercially reasonable discretion. For purposes of Buyer’s determination, (i) the value of the Underlying Mortgaged Property may be determined using any commercially reasonable method, including without limitation by reference to a recent appraisal, broker price opinions, quotes from a recognized dealer in the commercial real estate market and/or discounted cash flow analysis or other method commonly utilized by Buyer or any other commercially reasonable method and the foregoing shall be deemed for such purposes to be commercially reasonable and (ii) for the avoidance of doubt, Buyer may reduce the value of the Underlying Mortgaged Property for any actual or potential risks posed by any Liens on the related Underlying Mortgaged Property(ies).

“Margin Deadline” shall have the meaning specified in Article 4(a).

“Margin Deficit” shall have the meaning specified in Article 4(a).

“Margin Deficit Notice” shall have the meaning specified in Article 4(a).

“Margin Notice Deadline” shall mean 1:00 p.m. New York time.

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“Mark-to-Market Representations” shall mean the representations and warranties set forth (1) as items (t), (aa), (dd), (oo) and (rr) on Part 1 of Exhibit VI, (2) as item (j) on Part 2 of Exhibit VI, (3) as item (k) on Part 3 of Exhibit VI, and (4) as items (p), (bb), (gg), (ii), (mm) and (qq) on Part 4 of Exhibit VI.

“Market Disruption Event” shall mean either (a) any event or events shall have occurred in the determination of Buyer resulting in the effective absence of a “repo market” or related “lending market” for purchasing (subject to repurchase) or financing debt obligations secured by commercial mortgage loans, mezzanine loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Eligible Assets through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events, or (b) any event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by Eligible Assets, including, but not limited to the “CMBS/CLO market”, or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by Eligible Assets at prices which would have been reasonable prior to such event or events, in each case as determined by Buyer.

“Market Value” shall mean, with respect to any Purchased Asset, the market value for such Purchased Asset, as determined by Buyer at the Applicable Standard of Discretion on each Business Day in accordance with this definition. For purposes of Article 4 and 5(e), as applicable, changes in the Market Value of a Purchased Asset that is a Senior Mortgage Loan or a Junior Mortgage Loan shall be determined solely in relation to material positive or negative changes (relative to Buyer’s initial underwriting or the most recent determination of Market Value in terms of the performance or condition of (i) the Underlying Mortgaged Property(ies) securing the Purchased Asset or other collateral securing or related to the Purchased Asset, (ii) the Purchased Asset’s borrower (including obligors, guarantors, participants and sponsors) and the borrower on any Underlying Mortgaged Property or other collateral securing such Purchased Asset or the Underlying Mortgage Loan, as applicable, (iii) the commercial real estate market relevant to the Underlying Mortgaged Property(ies), and (iv) any actual or potential risks posed by any Liens on the related Underlying Mortgaged Property(ies), taken in the aggregate. In addition, the Market Value for any Purchased Asset shall be deemed to be zero on the third (3^rd) Business Day following the occurrence of any of the following with respect to such Purchased Asset: (a) a breach of a representation or warranty contained in Exhibit VI hereto other than a Mark-to-Market Representation or (b) the Repurchase Date with respect to such Purchased Asset occurs without repurchase of such Purchased Asset.

“Material Action” shall mean, as to any Person, to file any insolvency, or reorganization case or proceeding, to institute proceedings to have such Person be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against such Person, to file a petition seeking, or consent to, reorganization or relief with respect to such Person under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for such Person or a substantial part of its property, to make any assignment for the benefit of creditors of such Person, to admit in writing such Person’s inability to pay its debts generally as they become due (unless such admission is true), or to take action in furtherance of any of the foregoing.

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“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, operations or financial condition of Seller or Guarantor taken as a whole, (b) the ability of Seller or Guarantor to perform its obligations under any of the Transaction Documents, (c) the validity or enforceability of any of the Transaction Documents, (d) the rights and remedies of Buyer under any of the Transaction Documents, (e) the timely payment of any amounts payable under this Agreement or any other Transaction Document.

“Materials of Environmental Concern” shall mean any toxic mold, any petroleum (including, without limitation, crude oil or any fraction thereof) or petroleum products (including, without limitation, gasoline) or any hazardous or toxic substances, materials or wastes, defined as such in or regulated under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, and urea-formaldehyde insulation.

“Maturity Date” shall mean June 27, 2014 or the immediately succeeding Business Day, if such day shall not be a Business Day (the “Initial Maturity Date”), or such later date as may be in effect pursuant to Article 3(m) hereof. For the sake of clarity, the Maturity Date shall not be any date beyond the latest Repurchase Date of any Purchased Asset subject to a Transaction (the “Final Maturity Date”).

“Maturity Date Extension Conditions” shall have the meaning set forth in Article 3(m)(i).

“Maximum Advance Purchase Price” shall mean, with respect to a Purchased Asset with respect to which an Additional Purchase Transaction is requested in accordance with the terms of this Agreement, an amount (expressed in dollars) equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset (or the par amount of such Purchased Asset, if lower than Market Value) as re-determined by Buyer as of the proposed date of such requested Additional Purchase Transaction by (ii) the Maximum Advance Rate permitted for such Purchased Asset as set forth in this Agreement.

“Maximum Advance Rate” shall mean, with respect to each Eligible Asset, the “Advance Rate” specified for the applicable Asset Type Grouping in Schedule I attached to the Fee Letter for the loan-to-value ratios shown in Schedule I, or if not shown in Schedule I attached to the Fee Letter or if otherwise agreed to by Seller and Buyer, in the related Confirmation; provided, however, that (a) the Buyer is not obligated to purchase any Eligible Asset and (b) with respect to any Eligible Asset to be purchased hereunder, the Advance Rates shown in Schedule I attached to the Fee Letter are only indicative of the maximum advance rate available to Seller, and Buyer is not obligated to purchase any Eligible Asset at such Maximum Advance Rates.

“Maximum Facility Amount” shall mean (a) for the period from the Closing Date up to but not including the expiration of the Funding Period, $250,000,000, and (b) at any time after the expiration of the Funding Period, the aggregate Maximum Purchase Price of all Purchased Assets as of the expiration of the Funding Period, as permanently reduced thereafter by each reduction in the Maximum Purchase Price of a Purchased Asset whether through prepayment, repurchase, payment of Margin Deficits or otherwise.

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“Maximum Purchase Price” shall mean, with respect to any Purchased Asset, an amount (expressed in dollars) equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset (or the par amount of such Purchased Asset, if lower than Market Value) as of the Purchase Date by (ii) the Maximum Advance Rate permitted for such Purchased Asset as set forth in this Agreement.

“Mezzanine Loan” shall mean a performing loan evidenced by a note and primarily secured by pledges of all the equity interests in entities that own, directly or indirectly, multifamily or commercial properties that serve as collateral for Senior Mortgage Loans.

“Mezzanine Note” shall mean the original promissory note that was executed and delivered in connection with a particular Mezzanine Loan.

“Minimum Transfer Amount” shall mean, with respect to Seller, $250,000.

“Monthly Reporting Package” shall mean the reporting package described on Exhibit III-A.

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

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

“Mortgage Note” shall mean a note or other evidence of indebtedness of a Mortgagor secured by a Mortgage, including any Senior Mortgage Loan or Junior Mortgage Loan that is a Purchased Asset.

“Mortgagor” shall mean the obligor on a Mortgage Note and the grantor of the related Mortgage, or the obligor on a Mezzanine Note or Participation Certificate.

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

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

“Originated Asset” shall mean any Eligible Asset originated by Seller.

“Other Connection Taxes” shall mean Taxes imposed as a result of a present or former connection between such Buyer or Assignee and the jurisdiction imposing such Tax (other than connections arising from such Buyer or Assignee having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other Transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Transaction or any Transaction Document).

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“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document, except for (i) any such Taxes imposed with respect to an assignment, transfer or sale of participation or other interest in or with respect to the Transaction Documents (other than an assignment made pursuant to Article 3(u) hereof), and (ii) for the avoidance of doubt, any Excluded Taxes.

“Parent” shall mean 42-16 Partners LLC, a wholly owned Subsidiary of Guarantor.

“Participation Certificate” shall mean the original participation certificate that was executed and delivered in connection with a Senior Mortgage Loan or Junior Mortgage Loan that is a participation interest.

“Person” shall mean an individual, corporation, limited liability company, business trust, partnership, joint tenant or tenant-in-common, trust, joint stock company, joint venture, unincorporated organization, or any other entity of whatever nature, or a Governmental Authority.

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

“Plan Party” shall have the meaning set forth in Article 20(a) of this Agreement.

“Pledge Agreement” shall mean that certain Pledge Agreement, dated as of the date hereof, by Parent in favor of Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time, pledging all of Seller’s Capital Stock to Buyer.

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

“Price Differential” shall mean, with respect to any Purchased Asset as of any date, the aggregate amount obtained by daily application of the applicable Pricing Rate for such Purchased Asset to the outstanding Purchase Price of such Purchased Asset on a 360-day-per-year basis for the actual number of days during each Pricing Rate Period commencing on (and including) the Purchase Date for such Purchased Asset and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Purchased Asset).

“Pricing Rate” shall mean, for any Pricing Rate Period, an annual rate equal to the sum of (i) LIBOR and (ii) the relevant Applicable Spread, in each case, for the applicable Pricing Rate Period for the related Purchased Asset. The Pricing Rate shall be subject to adjustment and/or conversion as provided in the Transaction Documents or the related Confirmation.

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

“Pricing Rate Period” shall mean, with respect to any Transaction, Remittance Date or Repurchase Date (a) in the case of the first Pricing Rate Period with respect to any Transaction, the period commencing on and including the Purchase Date for such Transaction and ending on and excluding the following Remittance Date, and (b) in the case of any subsequent Pricing Rate Period, the period commencing on and including the immediately preceding Remittance Date and ending on and excluding such Remittance Date; provided, however, that in no event shall any Pricing Rate Period for a Purchased Asset end subsequent to the Repurchase Date for such Purchased Asset.

“Principal Proceeds” shall mean, with respect to any Purchased Asset, any scheduled or unscheduled payment or prepayment of principal (including net sale proceeds) received by the Depository or allocated as principal in respect of any such Purchased Asset.

“Prohibited Investor” shall mean (1) a person or entity whose name appears on the list of Specially Designated Nationals and Blocked Persons by the Office of Foreign Asset Control (“OFAC”), (2) any foreign shell bank, and (3) any person or entity resident in or whose subscription funds are transferred from or through an account in a jurisdiction that has been designated as a non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering (“FATF”), of which the U.S. is a member and with which designation the U.S. representative to the group or organization continues to concur. (See http://www.fatf-gati.org for FATF’s list of Non-Cooperative Countries and Territories.)

“Prohibited Person” shall have the meaning set forth in Article 9(b)(xxix).

“Prohibited Transferee” shall mean any of the Persons listed on Schedule I attached to this Agreement.

“Purchase Date” shall mean, with respect to any Purchased Asset, the date on which Buyer purchases such Purchased Asset from Seller in connection with a Transaction.

“Purchase Price” shall mean, with respect to any Purchased Asset, the price at which such Purchased Asset is transferred by Seller to Buyer on the applicable Purchase Date, adjusted after the Purchase Date as set forth below, not to exceed the Maximum Purchase Price. The Purchase Price as of the Purchase Date for any Purchased Asset shall be an amount (expressed in dollars) equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset as of the Purchase Date (or the par amount of such Purchased Asset, if lower than Market Value) by (ii) the Advance Rate for such Purchased Asset, as set forth on the related Confirmation. The Purchase Price of any Purchased Asset shall be (x) increased by an Additional Purchase Amount or Future Funding Amount made by Buyer to Seller or by any other amounts disbursed by Buyer to Seller or to the related borrower on behalf of Seller with respect to such Purchased Asset to the related borrower on behalf of Seller with respect to such Purchased Asset and (y) decreased by (A) the portion of any Principal Proceeds on such Purchased Asset that are applied pursuant

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to Article 5 hereof to reduce such Purchase Price and (B) any other amounts paid to Buyer by Seller specifically to reduce such Purchase Price and that are applied pursuant to Article 5 hereof to reduce such Purchase Price.

“Purchased Asset” shall mean (i) with respect to any Transaction, the Eligible Asset sold by Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Assets sold by Seller to Buyer (other than Purchased Assets that have been repurchased by Seller).

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

“Purchased Asset Fee” shall have the meaning set forth in the Fee Letter.

“Purchased Asset File” shall mean the documents specified as the “Purchased Asset File” in Article 7(b), together with any additional documents and information required to be delivered to Buyer or its designee (including the Custodian) pursuant to this Agreement; provided that to the extent that Buyer waives, including pursuant to Article 7(b), receipt of any document in connection with the purchase of an Eligible Asset (but not if Buyer merely agrees to accept delivery of such document after the Purchase Date), such document shall not be a required component of the Purchased Asset File until such time as Buyer determines in good faith that such document is necessary or customary for the servicing of the applicable Purchased Asset.

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

“Purchased Items” shall have the meaning specified in Article 6(a) of this Agreement.

“Qualified Hedge Counterparty” shall mean, with respect to any Hedging Transaction, any entity, other than an Affiliated Hedge Counterparty, that (a) qualifies as an “eligible contract participant” as such term is defined in the Commodity Exchange Act (as amended by the Commodity Futures Modernization Act of 2000), (b) the long-term debt of which is rated no less than “A+” by S&P, and “A1” by Moody’s and (c) is reasonably acceptable to Buyer; provided, that with respect to clause (c), if Buyer has approved an entity as a counterparty, it may not thereafter deem such counterparty unacceptable with respect to any previously outstanding Transaction unless clause (a) or clause (b) no longer applies with respect to such counterparty.

“Quarterly Reporting Package” shall mean the reporting package described on Exhibit III-B.

“Rating Agency” shall mean any of Fitch, Moody’s, S&P, DBRS, Inc. and Kroll Bond Rating Agency Inc.

“Re-direction Letter” shall have the meaning specified in Article 5(b).

“Reference Banks” shall mean banks each of which shall (i) be a leading bank engaged in transactions in Eurodollar deposits in the international Eurocurrency market and (ii) have an

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established place of business in London. Initially, the Reference Banks shall be JPMorgan Chase Bank, National Association, Barclays Bank, Plc and Deutsche Bank AG. If any such Reference Bank should be unwilling or unable to act as such or if Buyer shall terminate the appointment of any such Reference Bank or if any of the Reference Banks should be removed from the Reuters Monitor Money Rates Service or in any other way fail to meet the qualifications of a Reference Bank, Buyer, in its sole discretion exercised in good faith, may designate alternative banks meeting the criteria specified in clauses (i) and (ii) above.

“Register” shall have the meaning assigned in Article 17(c).

“Release Letter” shall mean a letter substantially in the form of Exhibit XIV hereto (or such other form as may be acceptable to Buyer).

“REMIC” shall mean a real estate mortgage investment conduit, within the meaning of Section 860D(a) of the Code.

“Remittance Date” shall mean the seventeenth (17^th) calendar day of each month, or the immediately succeeding Business Day, if such calendar day shall not be a Business Day, or such other day as is mutually agreed to by Seller and Buyer.

“Repurchase Date” shall mean, with respect to a Purchased Asset, the earliest to occur of (i) three hundred sixty-four (364) days from the Purchase Date applicable to such Transaction, or if the Repurchase Date for such Transaction is extended pursuant to Article 3(z), the date to which it is extended; (ii) any Early Repurchase Date for such Transaction; (iii) the date set forth in the applicable Confirmation; (iv) the Accelerated Repurchase Date; (v) the Maturity Date; and (vi) the date that is two (2) Business Days prior to the maturity date of such Purchased Asset (subject to extension, if applicable, in accordance with the related Purchased Asset Documents); provided, that, solely with respect to clause (vi), the settlement with respect to such Repurchase Date and Purchased Asset may occur two (2) Business Days later.

“Repurchase Date Extension Conditions” shall have the meaning set forth in Article 3(z).

“Repurchase Obligations” shall have the meaning assigned thereto in Article 6(a).

“Repurchase Price” shall mean, with respect to any Purchased Asset as of any Repurchase Date or any date on which the Repurchase Price is required to be determined hereunder, the price at which such Purchased Asset is to be transferred from Buyer to Seller; such price will be determined in each case as the sum of the (i) outstanding Purchase Price of such Purchased Asset (inclusive of any other additional funds advanced by Buyer in connection with such Purchased Asset including Additional Purchase Amounts and/or Future Funding Amounts); (ii) the accreted and unpaid Price Differential with respect to such Purchased Asset as of the date of such determination (other than, with respect to calculations in connection with the determination of a Margin Deficit, accreted and unpaid Price Differential for the current Pricing Rate Period); (iii) any other amounts due and owing by Seller to Buyer and its Affiliates pursuant to the terms of this Agreement as of such date; (iv) if such Repurchase Date is not a Remittance Date, except as otherwise expressly set forth in this Agreement, any Breakage Costs payable in connection with such repurchase other than with respect to the determination of a Margin Deficit; (v) any amounts that would be payable to (a positive amount) a Qualified Hedge

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Counterparty under any related Hedging Transaction, if such Hedging Transaction were terminated on the date of determination, if such determination is in connection with any calculation of Margin Deficit; (vi) any amounts that would be payable to (a positive amount) an Affiliated Hedge Counterparty under any related Hedging Transaction, if such Hedging Transaction were terminated on the date of determination, if such determination is in connection with any calculation of Margin Deficit (and not in connection with an actual repurchase of a Purchased Asset) and (vii) at any time during the Cash Sweep Tail Period, the Cash Sweep Tail Period Additional Amount. In addition to the foregoing, the Repurchase Price shall be decreased by (A) the portion of any Principal Proceeds on such Purchased Asset that is applied pursuant to Article 5 hereof to reduce such Repurchase Price for such Purchased Asset and (B) any other amounts paid to Buyer by or on behalf of Seller to reduce such Repurchase Price for such Purchased Asset.

“Requested Exceptions Report” shall have the meaning assigned thereto in Article 3(b)(vi)(E).

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

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

“Responsible Officer” shall mean the officers of Seller as designated in its operating agreement.

“S&P” shall mean Standard and Poor’s Ratings Services.

“Secondary Market Transaction” shall have the meaning set forth in Section 28(a).

“Seller” shall mean the entity identified as “Seller” in the Recitals hereto and such other sellers as may be approved by Buyer in its sole discretion from time to time.

“Senior Tranche” shall have the meaning set forth in Section 28(a).

“Senior Mortgage Loan” shall mean a performing senior commercial or multifamily fixed or floating rate senior mortgage loan evidenced by one or more promissory notes or senior participation interests in such a mortgage loan evidenced by a certificate of participation, in each case secured by first liens on multifamily or commercial properties.

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“Servicer Notice” shall mean the agreement between Buyer, Seller and the primary servicer, substantially in the form of Exhibit XIII hereto, as amended, supplemented or otherwise modified from time to time.

“Servicing Agreement” shall have the meaning specified in Article 27(b).

“Servicing Records” shall have the meaning specified in Article 27(b).

“Servicing Rights” shall mean rights of any Person, to administer, service or subservice, the Purchased Assets or to possess related Servicing Records.

“Servicing Tape” shall have the meaning specified in Exhibit III-A hereto.

“Subordinate Eligible Assets” shall mean Eligible Assets described in items (ii) and (iii) of the definition of Eligible Assets.

“Subordinate Financing” shall have the meaning set forth in Section 28(a).

“Subsidiary” shall mean, as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise Controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Seller.

“Survey” shall mean a certified ALTA/ACSM (or applicable state standards for the state in which the collateral is located) survey of the underlying real estate directly or indirectly securing or supporting such Purchased Asset prepared by a registered independent surveyor or engineer and in form and content satisfactory to Buyer and the company issuing the Title Policy for such Property.

“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Title Company” shall mean a nationally-recognized title insurance company reasonably acceptable to Buyer.

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

“Transaction” shall mean a Transaction, as specified in Article 1 of this Agreement and shall include any related Additional Purchase Transaction and any related Future Funding Transaction.

“Transaction Documents” shall mean, collectively, this Agreement, any applicable Schedules, Exhibits and Annexes to this Agreement, the Guarantee Agreement, the Custodial

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Agreement, the Fee Letter, each Servicing Agreement, the Depository Agreement, the Pledge Agreement, all Hedging Transactions and all Confirmations and assignment documentation executed pursuant to this Agreement in connection with specific Transactions.

“Transferee” shall have the meaning set forth in Article 17(a) hereof.

“Trust Receipt” shall mean a trust receipt issued by Custodian to Buyer confirming the Custodian’s possession of certain Purchased Asset Files that are the property of and held by Custodian for the benefit of Buyer (or any other holder of such trust receipt) or a bailment arrangement with an Acceptable Attorney or such other counsel or other third party acceptable to Buyer in its sole discretion.

“UCC” shall have the meaning specified in Article 6(d) of this Agreement.

“Underlying Mortgage Loan” shall mean, with respect to any Senior Mortgage Loan or Junior Mortgage Loan that is a participation interest or any Mezzanine Loan, a mortgage loan made in respect of the related Underlying Mortgaged Property.

“Underlying Mortgaged Property” shall mean, in the case of:

A. a Senior Mortgage Loan, the mortgaged property securing such Senior Mortgage Loan, or the mortgaged property securing the mortgage loan in which such Senior Mortgage Loan represents a senior participation interest, as applicable;

B. a Junior Mortgage Loan, the mortgaged property securing such Junior Mortgage Loan, or the mortgaged property securing the mortgage loan in which such Junior Mortgage Loan represents a junior participation interest, as applicable; and

C. a Mezzanine Loan, the mortgaged property that is owned by the Person the equity of which is pledged as collateral security for such Mezzanine Loan.

“Underwriting Issues” shall mean, with respect to any Purchased Asset as to which Seller intends to request a Transaction, Additional Purchase Transaction or Future Funding Transaction, all material information Known by Seller that, based on the making of reasonable inquiries and the exercise of reasonable care and diligence under the circumstances, would be considered a materially “negative” factor (either separately or in the aggregate with other information), or a material defect in loan documentation or closing deliveries (such as any absence of any material Purchased Asset Document(s)), to a reputable nationally recognized institutional mortgage buyer in determining whether to originate or acquire the Purchased Asset in question.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning assigned to such term in Article 3(r)(ii)(B)(3).

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All references to articles, schedules and exhibits are to articles, schedules and exhibits in or to this Agreement unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. References to “good faith” in this Agreement shall mean “honesty in fact in the conduct or transaction concerned”.

ARTICLE 3.

INITIATION; CONFIRMATION; TERMINATION;

FEES; EXTENSION OF MATURITY DATE; EXTENSION OF REPURCHASE DATE

Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of all of the following items, each of which shall be satisfactory in form and substance to Buyer and its counsel:

(a) The following documents, delivered to Buyer:

(i) this Agreement, duly completed and executed by each of the parties hereto (including all exhibits hereto);

(ii) the Guarantee Agreement, duly completed and executed by each of the parties thereto;

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

(iv) the Depository Agreement, duly completed and executed by each of the parties thereto;

(v) the Interim Servicing Agreement, duly completed and executed by each of the parties thereto;

(vi) the Pledge Agreement, duly completed and executed by each of the parties thereto;

(vii) any and all consents and waivers applicable to Seller or to the Purchased Assets;

(viii) UCC financing statements for filing in each of the UCC filing jurisdictions described on Exhibit XII hereto, each naming Seller as “Debtor” and Buyer as “Secured Party” and adequately describing as “Collateral” all of the items set forth in the definition of Purchased Items in this Agreement, together with any other documents necessary or requested by Buyer to perfect the security interests granted by Seller in favor of Buyer under this Agreement or any other Transaction Document such that the lien created in favor of Buyer is senior to the claim of any other creditor of Seller or Affiliate of Seller;

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(ix) any documents relating to any Hedging Transactions;

(x) opinions of outside counsel to Seller reasonably acceptable to Buyer (including, but not limited to, those relating to bankruptcy safe harbor, enforceability, corporate matters, applicability of the Investment Company Act of 1940 to Seller or any Affiliate of Seller and security interests);

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

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

(xiii) Buyer shall have received payment from Seller of an amount equal to the amount of actual costs and expenses, including, without limitation, the reasonable fees and expenses of outside counsel to Buyer, incurred by Buyer in connection with the development, preparation and execution of this Agreement, the other Transaction Documents and any other documents prepared in connection herewith or therewith; and

(xiv) all such other and further documents, documentation and legal opinions as Buyer in its commercially reasonable discretion shall reasonably require.

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

(i) the Purchase Date is prior to the expiration of the Funding Period.

(ii) the sum of (A) the unpaid Repurchase Price for all prior outstanding Transactions and (B) the requested Maximum Purchase Price for the pending Transaction, in each case, shall not exceed the Maximum Facility Amount.

(iii) no Market Disruption Event or Force Majeure Event has occurred and is continuing, no Margin Deficit exists, and no Default or Event of Default has occurred and is continuing under this Agreement or any other Transaction Document.

(iv) Seller shall have paid to Buyer (x) the Purchased Asset Fee then due and payable with respect to such Transaction pursuant to the Fee Letter and (y) Buyer’s out-of-pocket costs and expenses pursuant to Article 28(e) of this Agreement (which amounts referred to in the preceding sub-clauses (x) and (y) may be paid through a holdback to the Purchase Price) and any other amounts then due and owing to Buyer under this Agreement.

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(v) Seller shall give Buyer no less than one (1) Business Day’s prior written notice of each Transaction (including the initial Transaction), together with a signed, written confirmation in the form of Exhibit I attached hereto prior to each Transaction (a “Confirmation”). Each Confirmation shall describe the terms of the Transaction, the Purchased Assets, shall identify Buyer and Seller and shall be executed by both Buyer and Seller (provided, that, in instances where funds are being wired to an account other than account number 483024227101 at Bank of America, account name “Blackstone Mortgage Trust, Inc.”, ABA # 026009593, the Confirmation shall be signed by two (2) Responsible Officers of Seller); provided, however, that Buyer shall not be liable to Seller if it inadvertently acts on a Confirmation that has not been signed by a Responsible Officer of Seller, and shall set forth (among other things):

(A) the Purchase Date for the Purchased Assets included in the Transaction;

(B) the Purchase Price and Maximum Purchase Price for the Purchased Assets included in the Transaction;

(C) the Repurchase Date for the Purchased Assets included in the Transaction;

(D) the requested Advance Rate and Maximum Advance Rate for the Purchased Assets included in the Transaction;

(E) the amount of any Additional Purchase Amount or Future Funding Amount requested;

(F) the Market Value and LTV of the Purchased Asset and the Underlying Mortgaged Property as of the Purchase Date;

(G) the Applicable Spread; and

(H) any additional terms or conditions not inconsistent with this Agreement and mutually agreed upon by Buyer and Seller.

No Confirmation may be amended unless in a writing executed by Buyer and Seller. Neither (i) changes in the Repurchase Price related to a Purchased Asset due to the application of Principal Proceeds nor (ii) periodic adjustments to LIBOR related to a Purchased Asset shall require an amendment to the related Confirmation; provided, however, that the funding of any Additional Purchase Amount or Future Funding Amount shall require an amended and restated Confirmation.

(vi) Buyer shall have the right to review the Eligible Assets Seller proposes to sell to Buyer in any Transaction and to conduct its own due diligence investigation of such Eligible Assets as Buyer determines (each, “Asset Due Diligence”). Buyer shall be

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entitled to make a determination, in the exercise of its sole discretion, that, in the case of a Transaction, it shall or shall not purchase any or all of the assets proposed to be sold to Buyer by Seller. On the Purchase Date for the Transaction, which shall be not less than one (1) Business Day following the final approval of an Eligible Asset by Buyer in accordance with Exhibit VIII hereto, the Eligible Assets shall be transferred to Buyer or the Custodian on Buyer’s behalf against the transfer of the Purchase Price to an account of Seller. Buyer shall inform Seller of its determination with respect to any such proposed Transaction solely in accordance with Exhibit VIII attached hereto. Upon the approval by Buyer of a particular proposed Transaction, Buyer shall deliver to Seller a signed copy of the related Confirmation (which shall not be binding upon Seller until it is signed and delivered by Seller and shall not be binding upon Buyer until it is signed and delivered by Buyer) described in clause (iii) above, on or before the scheduled date of the underlying proposed Transaction. Prior to the approval of each proposed Transaction by Buyer, as applicable:

(A) Buyer shall have (i) determined, in its sole and absolute discretion, that the asset proposed to be sold to Buyer by Seller in such Transaction is an Eligible Asset and (ii) determined conformity to the terms of the Transaction Documents, Buyer’s internal credit and underwriting criteria, and (iii) obtained internal credit approval, to be granted or denied in Buyer’s sole and absolute discretion, for the inclusion of such Eligible Asset as a Purchased Asset in a Transaction, without regard for any prior credit decisions by Buyer or any Affiliate of Buyer, and with the understanding that Buyer shall have the absolute right to change any or all of its internal underwriting criteria at any time, without notice of any kind to Seller;

(B) Buyer shall have fully completed all external legal due diligence;

(C) Buyer shall have determined the Pricing Rate applicable to the Transaction (including the Applicable Spread) in accordance with Schedule I attached to the Fee Letter (as adjusted by Buyer on a case by case basis in its sole discretion) hereto or as otherwise agreed by Buyer and Seller;

(D) no Market Disruption Event or Force Majeure Event has occurred and is continuing, no Margin Deficit exists, and no Default or Event of Default has occurred and is continuing under this Agreement or any other Transaction Document;

(E) Seller shall have delivered to Buyer a list of all exceptions to the representations and warranties relating to the Purchased Asset and any other eligibility criteria for such Purchased Asset of which Seller has Knowledge (the “Requested Exceptions Report”);

(F) Buyer shall have waived in writing all exceptions in the Requested Exceptions Report;

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(G) both immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in each of Exhibit VI and Article 9, as applicable, shall be true, correct and complete on and as of such Purchase Date in all respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(H) subject to Buyer’s right to perform one or more due diligence reviews pursuant to Article 26, Buyer shall have completed its due diligence review of the Purchased Asset File, and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as Buyer in its sole discretion deems appropriate to review and such review shall be satisfactory to Buyer in its sole discretion and Buyer has consented in writing (including by signing the related Confirmation) to the Eligible Asset becoming a Purchased Asset;

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

(J) Seller, regardless of whether this Agreement is executed, shall have paid to Buyer all legal fees and expenses of outside counsel actually incurred by Buyer in connection with the entering into of any Transaction, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of any Transaction hereunder, which amounts, at Buyer’s option, may be withheld from the sale proceeds of any Transaction hereunder;

(K) Buyer shall have determined in accordance with this Agreement that no Margin Deficit shall exist, either immediately prior to or after giving effect to the requested Transaction;

(L) on each Purchase Date Buyer shall have received, in the case of a “Table Funded” Transaction, a Bailee Letter and, from Custodian, an Asset Schedule and Exception Report (as defined in the Custodial Agreement) and a Trust Receipt and with respect to each Purchased Asset, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day;

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

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(N) Buyer shall have reasonably determined that no introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions;

(O) the Repurchase Date for such Transaction is not later than the Maturity Date;

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

(Q) with respect to any Eligible Asset to be purchased hereunder, if such Eligible Asset was acquired by Seller, Seller shall have disclosed to Buyer the acquisition cost of such Eligible Asset (including therein reasonable supporting documentation required by Buyer, if any);

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

(S) Buyer shall have received a copy of any documents relating to any Hedging Transaction, and Seller shall have pledged and assigned to Buyer, pursuant to Article 6 hereunder, all of Seller’s rights under each Hedging Transaction included within a Purchased Asset, if any;

(T) no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by Seller, however defined therein, shall have occurred and be continuing under any Hedging Transaction required to be assigned hereunder; and

(U) the counterparty to Seller in any Hedging Transaction shall be an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and, in the case of a Qualified Hedge Counterparty, in the event that such counterparty no longer qualifies as a Qualified Hedge Counterparty, then, at the election of Buyer, Seller shall ensure that such counterparty posts additional collateral in an amount satisfactory to Buyer under all its Hedging Transactions with Seller, or Seller shall immediately terminate the Hedging Transactions with such counterparty and enter into new Hedging Transactions with a Qualified Hedge Counterparty.

(c) Upon the satisfaction of all conditions set forth in Articles 3(a) and (b), Seller shall sell, transfer, convey and assign to Buyer on a servicing-released basis all of Seller’s right, title and interest in and to each Purchased Asset, together with all related Servicing Rights against the transfer of the Purchase Price to an account of Seller. With respect to any

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Transaction, the Pricing Rate shall be determined initially on the Pricing Rate Determination Date applicable to the first Pricing Rate Period for such Transaction, and shall be reset on the Pricing Rate Determination Date for each of the next succeeding Pricing Rate Periods for such Transaction. Buyer or its agent shall determine in accordance with the terms of this Agreement the Pricing Rate on each Pricing Rate Determination Date for the related Pricing Rate Period in Buyer’s sole and absolute discretion, and notify Seller in writing two (2) Business Days prior to the next Pricing Rate Period of such Pricing Rate for such period. Notwithstanding any other provision herein or in any other Transaction Document, Buyer shall not be obligated to enter into any Transaction or purchase any Asset and may terminate a Transaction at any time for any or no reason until such time as Buyer has executed and delivered a Confirmation and funded the Purchase Price with respect to any Transaction.

(d) Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby. In the event of any conflict between the terms of such Confirmation and the terms of this Agreement, other than with respect to the Advance Rate or the applicable Price Differential set forth in the related Confirmation, the Confirmation shall prevail.

(e) On the Repurchase Date (including any Early Repurchase Date) for any Transaction, termination of the Transaction will be effected by (A) payment by Seller to Buyer of an amount equal to the sum of (1) the Repurchase Price for the applicable Purchased Asset and (2) any other amounts then due and payable under this Agreement (including, without limitation, Article 3(g)), any other Transaction Documents, and any related Hedging Transactions with respect to such Purchased Asset and (B) transfer to Seller of the Purchased Asset being repurchased and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Article 5 of this Agreement). In the event that a Purchased Asset is repurchased as of the date set forth in clause (vi) of the definition of Repurchase Date, the settlement of the payment of the Repurchase Price and other amounts due in connection with the repurchase of such Purchased Asset pursuant to this Section 3(e) shall occur no later than two (2) Business Days after such Repurchase Date. For the avoidance of doubt, until such settlement occurs and such amounts are paid, all rights of Buyer with respect to the applicable Purchased Asset, including all liens and security interests granted in favor of Buyer in connection therewith, shall continue in full force and effect.

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

(i) Seller notifies Buyer in writing of its intent to terminate such Transaction and repurchase such Purchased Asset, setting forth the Early Repurchase Date and identifying with particularity the Purchased Asset to be repurchased on such Early Repurchase Date, no later than three (3) Business Days prior to such Early Repurchase Date (unless such Early Repurchase is in connection with curing a Margin Deficit or breach of any representation or warranty set forth in Exhibit VI, or in connection with any of the events described in Article 3(h) having occurred, in which case such notice shall not be required);

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(ii) on such Early Repurchase Date, Seller pays to Buyer an amount equal to the sum of (A) the Repurchase Price for the applicable Purchased Asset and (B) any other amounts due and payable under this Agreement (including, without limitation, Article 3(g)) and under any related Hedging Transactions with respect to such Purchased Asset against transfer to Seller or its agent of such Purchased Assets;

(iii) on such Early Repurchase Date, in addition to the amounts set forth in subclause (ii) above, Seller pays to Buyer, on account of all other Purchased Assets then subject to Transactions, an amount sufficient to reduce the Purchase Price for each such Purchased Asset to an amount equal to the Buyer’s Margin Amount for each such Purchased Asset; and

(iv) such Early Repurchase does not cause Seller to violate the covenant set forth in Article 10(k) hereof.

(g) If prior to the first day of any Pricing Rate Period with respect to any Transaction, (i) Buyer shall have determined in the exercise of its reasonable business judgment (which determination shall be conclusive and binding upon Seller) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR for such Pricing Rate Period, or (ii) LIBOR determined or to be determined for such Pricing Rate Period will not adequately and fairly reflect the cost to Buyer (as determined and certified by Buyer) of making or maintaining Transactions during such Pricing Rate Period, Buyer shall give written notice thereof to Seller as soon as practicable thereafter. If such notice is given, the Pricing Rate with respect to such Transaction for such Pricing Rate Period, and for any subsequent Pricing Rate Periods until such notice has been withdrawn by Buyer, shall be a per annum rate equal to the Federal Funds Rate plus the Applicable Spread (the “Alternative Rate”).

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

(i) Upon written demand by Buyer, Seller shall indemnify Buyer and hold Buyer harmless from any actual out-of-pocket loss, cost or expense (including, without limitation, reasonable attorneys’ fees and disbursements of outside counsel) that Buyer may sustain or incur as a consequence of (i) default by Seller in repurchasing any Purchased Asset after Seller has given written notice in accordance with Article 3(f) of an Early Repurchase, (ii) any payment of the Repurchase Price on any day other than a Remittance Date, including Breakage Costs, (iii) a

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default by Seller in selling Eligible Assets after Seller has notified Buyer of a proposed Transaction and Buyer has agreed in writing to purchase such Eligible Assets in accordance with the provisions of this Agreement, (iv) Buyer’s enforcement of the terms of any of the Transaction Documents, (v) any actions taken to perfect or continue any Lien created under any Transaction Documents, and/or (vi) Buyer entering into any Transaction or any of the Transaction Documents or owning any Purchased Item. A certificate as to such costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly in writing by Buyer to Seller and shall be prima facie evidence of the information set forth therein.

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

(i) shall subject Buyer to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligation, or its deposits, reserves, other liabilities or capital attributable thereto;

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

(iii) shall impose on Buyer any other condition;

and the result of any of the foregoing is to increase the cost to Buyer, by an amount that Buyer deems to be material, of entering into, continuing or maintaining Transactions, Additional Purchase Transactions or Future Funding Transactions or to reduce any amount receivable under the Transaction Documents in respect thereof; then, in any such case, Seller shall promptly pay Buyer, upon its demand, any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable. This covenant shall survive the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Assets.

(k) If Buyer shall have determined that the adoption of or any change in any Requirement of Law or Buyer Compliance Policy made subsequent to the date hereof regarding capital adequacy or otherwise affecting the Buyer Funding Costs, or in the interpretation of any such Requirement of Law or Buyer Compliance Policy, the application thereof or the compliance therewith, in each case whether by a Governmental Authority, by Buyer or by any corporation controlling Buyer (including, without limitation, any request or directive regarding capital adequacy or otherwise affecting the Buyer Funding Costs (whether or not having the force of law) from any Governmental Authority or any Buyer Compliance Policy related to such request or directive), does or shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of any one or more of the Transactions, Additional Purchase Transactions or Future Funding Transactions or otherwise as a consequence of its

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obligations under the Transaction Documents to a level below that which Buyer or such corporation could have achieved, but for such adoption, change, interpretation, application or compliance, by an amount that Buyer deems, in the exercise of its reasonable business judgment, to be material, then, from time to time, after submission by Buyer to Seller of a written request therefor, Seller shall pay to Buyer such additional amount or amounts as will reimburse Buyer for the actual damages, losses, costs and expenses incurred by Buyer in connection with each such reduction; provided that Buyer has then-currently made the same determination with respect to a similarly situated repurchase customer in a situation where Buyer has similar contractual rights. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller and shall be prima facie evidence of such additional amounts. This covenant shall survive the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Assets.

(l) If Seller repurchases Purchased Assets on a day other than the last day of a Pricing Rate Period, Seller shall indemnify Buyer and hold Buyer harmless from any actual out-of-pocket losses, costs and/or expenses which Buyer sustains as a direct consequence thereof (“Breakage Costs”), in each case for the remainder of the applicable Pricing Rate Period. Buyer shall deliver to Seller a written statement setting forth the amount and basis of determination of any Breakage Costs in reasonable detail, it being agreed that such statement and the method of its calculation shall be conclusive and binding upon Seller absent manifest error. This Article 3(l) shall survive termination of this Agreement and the repurchase of all Purchased Assets subject to Transactions hereunder.

(m) (i) Notwithstanding the definition of Maturity Date herein, upon written request of Seller prior to the then-current Maturity Date, provided that all of the extension conditions listed in clause (ii) below (collectively, the “Maturity Date Extension Conditions”) shall have been satisfied, Seller may request an extension of the Maturity Date for a period of up to three hundred sixty-four (364) additional days by giving notice to Buyer of such extension; provided, however, that in no event shall the Maturity Date be extended to a date that is later than the Final Maturity Date.

(ii) For purposes of this Article 3(m), the Maturity Date Extension Conditions shall be deemed to have been satisfied if:

(A) Seller shall have given Buyer written notice, not less than forty-five (45) days prior, and no more than one hundred and eighty (180) days prior to the originally scheduled Maturity Date, of Seller’ desire to extend the Maturity Date; and if Seller fails to give such notice, Seller shall be deemed to have elected not to extend the Maturity Date;

(B) no Force Majeure Event shall have occurred and be continuing, no Margin Deficit shall exist, and no Default or Event of Default under this Agreement shall have occurred and be continuing as of the date notice is given under subclause (ii) above or as of the originally scheduled Maturity Date and no “Termination Event,” “Event of Default” or “Potential Event of Default” or any similar event by Seller, however denominated, shall have occurred and be continuing under any Hedging Transaction; and

(C) all representations and warranties of Seller set forth in this Agreement other than the Mark-to-Market Representations shall be true, correct, complete and accurate in all material respects as of the existing Maturity Date, except to the extent disclosed in a Requested Exceptions Report previously accepted by Buyer.

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(iii) Notwithstanding any extension to the Maturity Date as described in this Article 3, an extension of the Maturity Date shall not extend any particular Transaction’s Repurchase Date unless the Repurchase Date for such a Transaction is specifically extended by agreement of Buyer and Seller in accordance with Article 3(z), and Buyer and Seller execute a new Confirmation containing the same pricing terms as the original Confirmation and the extended Repurchase Date for the Transaction.

(n) Any and all payments by or on account of any obligation of Seller under this Agreement or any other Transaction Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by Seller to the applicable Buyer or Assignee shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Article 3(n) or Article 3(o)) the applicable Buyer or Assignee receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(o) Seller shall timely pay (i) any Other Taxes imposed on Seller to the relevant Governmental Authority in accordance with Applicable Law, and (ii) any Other Taxes imposed on the Buyer or Assignee upon written notice from such Person setting forth in reasonable detail the calculation of such Other Taxes.

(p) As soon as practicable after any payment of Taxes by Seller to a Governmental Authority pursuant to Article 3(o) or Article 3(q), Seller shall deliver to Buyer or Assignee, as applicable, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Buyer or Assignee, as applicable.

(q) Seller shall indemnify Buyer and each Assignee, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under Article 3(o) or this Article 3(q)) payable or paid by Buyer or such Assignee or required to be withheld or deducted from a payment to such Person and any reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that no payment shall be required under this Article 3(q) for any claim for Indemnified Taxes that were paid by Buyer or such Assignee two hundred and seventy (270) or more days prior to the date of such claim. A certificate setting forth in reasonable detail the calculation of the amount of such payment or liability delivered to Seller by Buyer or such Assignee shall be conclusive absent manifest error.

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(r) (i) Any Buyer and any Assignee that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to Seller, at the time or times reasonably requested by Seller, such properly completed and executed documentation reasonably requested by Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Buyer or Assignee, if reasonably requested by Seller, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Seller as will enable Seller to determine whether or not Buyer or Assignee is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses (ii)(A), (ii)(B), (ii)(D) and (iii) below) shall not be required if in Buyer’s or Assignee’s reasonable judgment such completion, execution or submission would subject Buyer or such Assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Buyer or such Assignee.

(ii) Without limiting the generality of the foregoing,

(A) Buyer and any Assignee that is a U.S. Person shall deliver to Seller on or prior to the date on which Buyer or such Assignee acquires an interest under any Transaction Document (and from time to time thereafter upon the reasonable request of Seller), executed originals of IRS Form W-9 certifying that Buyer and such Assignee is exempt from U.S. federal backup withholding tax;

(B) any Foreign Buyer shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Buyer acquires an interest under this Agreement (and from time to time thereafter upon the reasonable request of Seller), whichever of the following is applicable:

(1) in the case of a Foreign Buyer claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under this Agreement, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Buyer claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit XI-1 to the effect that such

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Foreign Buyer is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Seller within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Buyer is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit XI-2 or Exhibit XI-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Buyer is a partnership and one or more direct or indirect partners of such Foreign Buyer are claiming the portfolio interest exemption, such Foreign Buyer may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit XI-4 on behalf of each such direct and indirect partner;

(C) any Foreign Buyer shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Buyer acquires an interest under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit Seller to determine the withholding or deduction required to be made; and

(D) if a payment made to Buyer or Assignee under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if Buyer or Assignee were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Buyer or such Assignee shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA and to determine that Buyer or such Assignee has complied with Buyer’s or such Assignee’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(iii) Buyer and each Assignee agrees that if any form or certification described in items (A), (B), (C) or (D) above it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Seller in writing of its legal inability to do so.

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(s) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to Article 3(o) or, Article 3(q) (including by the payment of additional amounts pursuant to Article 3(i)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under Article 3(i), Article 3(o) and/or Article 3(q) with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Article 3(s) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Article 3(s), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Article 3(s) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(t) Each party’s obligations under clauses (n) through (s) of this Article 3 shall survive any assignment of rights by, or the replacement of, Buyer or Assignee, the termination of the Agreement and the repayment, satisfaction or discharge of all obligations under this Agreement.

(u) If any Buyer or Assignee requests compensation under Article 3 or, if Seller is required to pay any Indemnified Taxes or additional amounts to any Buyer or any Assignee or any Governmental Authority for the account of any Buyer or Assignee pursuant to Article 3(i), Article 3(o) or Article 3(q), or if any Buyer or Assignee defaults in its obligations under this Agreement, then Seller may, at its sole expense and effort, upon notice to such Buyer or Assignee, require such Buyer or Assignee to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Article 17), all its interests, rights (other than its existing rights to payments pursuant to Articles 3(g) or 3(i)) and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Buyer, if a Buyer accepts such assignment); provided that (i) such Buyer shall have received payment of an amount equal to the Repurchase Price for all Transactions, Price Differential accreted with respect thereto, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding Repurchase Price principal and accreted Price Differential and fees) or Seller (in the case of all other amounts) and (ii) in the case of any such assignment resulting from a claim for compensation under Article 3(i) or payments required to be made pursuant to Article 3(g), such assignment will result in a reduction in such compensation or payments. A Buyer or Assignee shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Buyer or Assignee or otherwise, the circumstances entitling Seller to require such assignment and delegation cease to apply.

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(v) If at any time prior to the Maturity Date, a non-use fee or other similar charge is assessed against Buyer internally, Seller shall, monthly on demand from Buyer, provided that Buyer has then-currently made the same determination with respect to a similarly situated repurchase customer in a situation where Buyer has similar contractual rights, reimburse Buyer for the exact amount of each such fee, as and when originally assessed, with each such assessment and payment to be in addition to the monthly Price Differential payments otherwise due in accordance with the applicable provisions of this Agreement.

(w) (i) If at any time prior to the Cash Sweep Tail Period, there exists Additional Purchase Available Amount with respect to a Purchased Asset, Seller may submit to Buyer a request that Buyer increase the Purchase Price for such Purchased Asset in an amount requested by Seller, which amount shall be no less than $250,000 and shall not exceed the Additional Purchase Available Amount as of the proposed date for such increase to the Purchase Price for such Purchased Asset (each such transaction, an “Additional Purchase Transaction” and the amount so funded with respect to each Additional Purchase Transaction, the “Additional Purchase Amount”). Notwithstanding the foregoing, Seller may not request, and Buyer shall not be obligated to pay, any Additional Purchase Amount unless no uncured Margin Deficit, Force Majeure Event, Default or Event of Default has occurred and is continuing or would result from the funding of such Additional Purchase Transaction. Upon delivery of a request by Seller for an Additional Purchase Transaction, and Buyer’s satisfaction that all terms and conditions set forth in this Section 3(w) have been complied with (including, without limitation, those in the immediately preceding sentence), Buyer shall, within one (1) Business Day following Seller’s request therefore, pay the Additional Purchase Amount for each such Additional Purchase Transaction. In connection with any such Additional Purchase Transaction, Buyer and Seller shall execute and deliver to each other an updated Confirmation setting forth the new outstanding Purchase Price with respect to such Transaction. Notwithstanding the above or any other provision in this Agreement, to the extent that the Purchase Price of any Purchased Asset is reduced by Seller pursuant to Section 3(y) of this Agreement to an amount that is less than fifty percent (50%) of the Maximum Purchase Price of such Purchased Asset, the Additional Purchase Available Amount with respect to such Purchased Asset shall thereafter (unless Buyer, in its sole discretion, determines not to apply the following reduction) be reduced by the amount equal to the difference between (i) fifty percent (50%) of the Maximum Purchase Price of such Purchased Asset and (ii) the Purchase Price of such Purchased Asset following the application of such reduction to the Purchase Price pursuant to Section 3(y) which causes the Purchase Price to be less than fifty percent (50%) of the Maximum Purchase Price.

(ii) Buyer’s agreement to enter into any Additional Purchase Transaction with respect to any Purchased Asset is further subject to the satisfaction, in Buyer’s reasonable discretion, of the following conditions precedent (the “Additional Purchase Transaction Conditions Precedent”):

(A) Buyer shall have determined the Pricing Rate applicable to the related Transaction (including the Applicable Spread) in accordance with Schedule I attached to the Fee Letter or as otherwise agreed by Buyer and Seller;

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(B) no uncured Margin Deficit, Force Majeure Event, Default or Event of Default has occurred and is continuing or would result from the funding of such Additional Purchase Transaction;

(C) both immediately prior to the requested Additional Purchase Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in each of Exhibit VI and Article 9, as applicable, shall be true, correct and complete on and as of the date of such Additional Purchase Transaction in all respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date) except to the extent disclosed in a Requested Exceptions Report previously accepted by Buyer; and

(D) the sum of (A) the unpaid Repurchase Price for all outstanding Transactions and (B) the requested Additional Purchase Amount, shall not exceed the Maximum Facility Amount as of such date.

(iii) In connection with any such Additional Purchase Transaction, Buyer and Seller shall execute and deliver to each other an updated Confirmation setting forth the new outstanding Purchase Price with respect to such Transaction.

(iv) No decision on the part of Buyer to enter into an Additional Purchase Transaction or the advance of any Additional Purchase Amount shall be deemed to be a waiver of any covenant, representation or warranty or other obligation of Seller contained herein.

(x) (i) At any time prior to the expiration of the Funding Period, Seller may request a Future Funding Transaction by giving Buyer written notice thereof together with a written Confirmation signed by an officer of Seller (a “Future Funding Confirmation”) at least two (2) Business Days prior to the proposed Future Funding Date. Buyer shall be entitled to make a determination, in the exercise of its sole and absolute discretion, that, in the case of a Future Funding Transaction, it shall or shall not enter into the Future Funding Transaction, and notwithstanding any other provision herein, Buyer shall have no obligation to enter into any Future Funding Transaction. If Buyer determines it will enter into a Future Funding Transaction and that the Future Funding Transaction Conditions Precedent have been satisfied with respect to the applicable Future Funding Transaction in its sole and absolute discretion, Buyer shall deliver to Seller a countersigned copy of the related Future Funding Confirmation on or before the Future Funding Date for the proposed Future Funding Transaction. On the Future Funding Date for the applicable Future Funding Transaction, funds in the amount stated in the Future Funding Confirmation (the “Future Funding Amount”) shall be transferred by Buyer to the Purchased Asset’s underlying obligor. Each Future Funding Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Future Funding Transaction covered thereby. If terms in a Future Funding Confirmation are inconsistent with terms in this Agreement with respect to a particular Future Funding Transaction, the Future Funding Confirmation shall prevail.

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(ii) While Buyer and Seller hereby acknowledge and agree that it is not intended that Buyer re-underwrite each Purchased Asset in connection with a Future Funding Transaction request, Seller shall provide Buyer with all confirmatory or updated documentation that is reasonably requested by Buyer in connection with Buyer’s evaluation of the Future Funding Transaction for the related Purchased Asset as Buyer reasonably determines to be necessary and appropriate and Buyer shall conduct such additional diligence based on such information as Buyer determines to be necessary or appropriate and Seller shall provide Buyer such additional information with respect to such due diligence as Buyer may reasonably request.

(iii) Buyer’s agreement to enter into any Future Funding Transaction with respect to any Purchased Asset is subject to the satisfaction, in Buyer’s reasonable discretion, of the following conditions precedent (the “Future Funding Transaction Conditions Precedent”):

(A) the date of the Future Funding Transaction is prior to the expiration of the Funding Period;

(B) if, in connection with the entry into the initial Transaction relating to the Purchased Asset that is the subject of a Future Funding Transaction, Buyer and Seller agreed upon additional conditions precedent which are required to be satisfied with respect to such Purchased Asset and that are specified in the related Future Funding Confirmation, then such additional conditions precedent have been satisfied;

(C) Buyer shall have (i) determined, in its sole and absolute discretion, that the related Purchased Asset is an Eligible Asset and (ii) determined conformity to the terms of the Transaction Documents, Buyer’s internal credit and underwriting criteria, and (iii) obtained internal credit approval, to be granted or denied in Buyer’s sole and absolute discretion, for the Future Funding Transaction, without regard for any prior credit decisions by Buyer or any Affiliate of Buyer, and with the understanding that Buyer shall have the absolute right to change any or all of its internal underwriting criteria at any time, without notice of any kind to Seller;

(D) Buyer shall have fully completed all external due diligence as discussed in clause (ii) above;

(E) Buyer shall have determined the Pricing Rate applicable to the related Transaction (including the Applicable Spread) in accordance with Schedule I attached to the Fee Letter (as adjusted by Buyer on a case by case basis in its sole discretion) hereto or as otherwise agreed by Buyer and Seller;

(F) no Material Adverse Effect or Force Majeure Event shall have occurred, no Margin Deficit shall exist, and no Default or Event of Default under this Agreement shall have occurred and be continuing;

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(G) both immediately prior to the requested Future Funding Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in each of Exhibit VI and Article 9, as applicable, shall be true, correct and complete on and as of the date of such Future Funding Transaction in all respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(H) the LTV of the related Purchased Asset taking into account the requested advance of the Future Funding Amount is no greater than the LTV of the related Purchased Asset as of the Purchase Date;

(I) following such increase in the outstanding Purchase Price attributable to the Future Funding Amount (1) no Margin Deficit shall exist and (2) no breach of the Concentration Limit shall occur;

(J) the Future Funding Amount shall be equal to or greater than $250,000;

(K) the sum of (A) the unpaid Repurchase Price for all outstanding Transactions and (B) the requested Future Funding Amount shall not exceed the Maximum Facility Amount as of such date;

(L) Seller shall have delivered to Buyer a certification that all conditions precedent to the future funding obligation under the Purchased Asset documentation have been satisfied in all material respects and provided Buyer with any evidence or documentation thereto Buyer may request;

(M) Seller shall have paid to Buyer all legal fees and expenses of outside counsel actually incurred by Buyer in connection with the entering into of the Future Funding Transaction, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of the Future Funding Transaction, which amounts, at Buyer’s option, may be withheld from the sale proceeds of the Future Funding Transaction;

(N) on the date of the Future Funding Transaction Buyer shall have received, in the case of a “Table Funded” Transaction, a Bailee Letter and, from Custodian, an Asset Schedule and Exception Report (as defined in the Custodial Agreement) and a Trust Receipt and with respect to each Purchased Asset, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day;

(O) Buyer shall have received from Seller a Release Letter covering the related Purchased Asset;

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(P) Buyer shall have reasonably determined that no introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Future Funding Transactions;

(Q) the Repurchase Date for the related Transaction is not later than the Initial Maturity Date;

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

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

(T) Buyer shall have received a copy of any documents relating to any Hedging Transaction, and Seller shall have pledged and assigned to Buyer, pursuant to Article 6 hereunder, all of Seller’s rights under each Hedging Transaction included within a Purchased Asset, if any;

(U) no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by Seller, however defined therein, shall have occurred and be continuing under any Hedging Transaction required to be assigned hereunder;

(V) the counterparty to Seller in any Hedging Transaction shall be an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and, in the case of a Qualified Hedge Counterparty, in the event that such counterparty no longer qualifies as a Qualified Hedge Counterparty, then, at the election of Buyer, Seller shall ensure that such counterparty posts additional collateral in an amount satisfactory to Buyer under all its Hedging Transactions with Seller, or Seller shall immediately terminate the Hedging Transactions with such counterparty and enter into new Hedging Transactions with a Qualified Hedge Counterparty; and

(W) Seller shall pay to Buyer on the Future Funding Date the Purchased Asset Fee attributable to the Future Funding Amount.

(iv) If Buyer determines, in accordance with Section 3(x)(i) that the Future Funding Transaction Conditions Precedent have not been satisfied (or otherwise waived by Buyer in its sole discretion), and that Buyer shall not advance the Future Funding Advance requested by Seller, then, on any Business Day thereafter, Seller may elect, in its sole discretion, to repurchase the related Purchased Asset.

(v) No decision on the part of Buyer to enter into a Future Funding Transaction or the advance of any Future Funding Amount shall be deemed to be a waiver of any covenant, representation or warranty or other obligation of Seller contained herein.

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(y) On any Business Day prior to the Repurchase Date, Seller shall have the right, from time to time, to transfer cash to Buyer for the purpose of reducing the outstanding Purchase Price of, but not terminating, a Transaction and without the release of any Purchased Items; provided, that (i) any such reduction in outstanding Purchase Price occurring on a date other than a Remittance Date shall be required to be accompanied by payment of (A) all unpaid accrued Price Differential as of the applicable Business Day on the amount of such reduction and (B) any other amounts due and payable by Seller under this Agreement and under any related Hedging Transactions with respect to such Purchased Asset, (ii) such transfer of cash to Buyer shall be in an amount no less than $1,000,000, and (iii) Seller shall provide Buyer with three (3) Business Days prior notice with respect to a reduction in outstanding Purchase Price in an amount greater than $5,000,000 occurring on any date that is not a Remittance Date. In connection with any such reduction of outstanding Purchase Price pursuant to this Section 3(y), Buyer and Seller shall execute and deliver to each other an updated Confirmation setting forth the new outstanding Purchase Price with respect to such Transaction.

(z) If all of the extension conditions listed in clauses (i) through (iv) of this Article 3(z) (collectively, the “Repurchase Date Extension Conditions”) shall have been satisfied, Seller may extend the Repurchase Date for a Transaction for a period of up to three hundred sixty-four (364) additional days by giving notice to Buyer of such extension; provided that in no event shall the Repurchase Date for any Transaction be extended beyond the Final Maturity Date. For purposes of the preceding sentence, the Repurchase Date Extension Conditions shall be deemed to have been satisfied if:

(i) Buyer shall have received payment from Seller of the Purchased Asset Fee;

(ii) Seller shall have given Buyer written notice, not less than thirty (30) days prior but no more than ninety (90) days prior to the originally scheduled Repurchase Date, of Seller’s desire to extend the Repurchase Date; and if Seller fails to give such notice, Seller shall be deemed to have elected not to extend the Repurchase Date;

(iii) no Force Majeure Event shall have occurred and be continuing, no Margin Deficit shall exist, and no Default or Event of Default under this Agreement shall have occurred and be continuing as of the date notice is given under subclause (i) above or as of the originally scheduled Repurchase Date and no “Termination Event,” “Event of Default” or “Potential Event of Default” or any similar event by Seller, however denominated, shall have occurred and be continuing under any Hedging Transaction required to be assigned hereunder; and

(iv) all representations and warranties shall be true, correct, complete and accurate in all material respects as of the then-scheduled Repurchase Date, except to the extent disclosed in a Requested Exceptions Report previously accepted by Buyer.

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ARTICLE 4.

MARGIN MAINTENANCE

(a) If at any time the Buyer’s Margin Amount for all Purchased Assets is less than the aggregate Purchase Price outstanding for all Purchased Assets (a “Margin Deficit”), then Buyer may by written notice (which may be in electronic form) delivered to Seller in the form of Exhibit X (a “Margin Deficit Notice”) require Seller to, at Seller’s option, to the extent such Margin Deficit equals or exceeds the Minimum Transfer Amount, (i) repurchase some or all of the Purchased Assets at their respective Repurchase Prices, (ii) make a payment in reduction of the Repurchase Price of some or all of the Purchased Assets in immediately available funds, (iii) deliver collateral in the form of cash or Cash Equivalents, or (iv) choose any combination of the foregoing, such that, after giving effect to such transfers, repurchases and payments, Buyer’s Margin Amount for all Purchased Assets shall be equal to or greater than the aggregate Repurchase Price for all Purchased Assets. In connection with the delivery of cash or Cash Equivalents in accordance with clause (iii) above, Seller shall deliver to Buyer any additional documents (including, without limitation, to the extent not covered by any previously delivered legal opinions, one or more opinions of counsel reasonably satisfactory to Buyer) and take any actions reasonably necessary in Buyer’s discretion for Buyer to have a first priority, perfected security interest in such cash or Cash Equivalents, as applicable.

(b) If a Margin Deficit Notice is given by Buyer under Article 4(a) of this Agreement on any Business Day at or prior to the Margin Notice Deadline, Seller shall cure the related Margin Deficit as provided in Article 4(a) prior to 5:00 p.m. New York time no later than one (1) Business Day following the day such Margin Deficit Notice is given by Buyer. If any Margin Deficit Notice is given by Buyer on any Business Day at any time after the Margin Notice Deadline, Seller shall cure the related Margin Deficit as provided in Article 4(a) by no later than prior to 5:00 p.m. New York time no later than two (2) Business Days following the day such Margin Deficit Notice is given by Buyer.

(c) The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

ARTICLE 5.

INCOME PAYMENTS AND PRINCIPAL PROCEEDS

(a) The Depository Account shall be established at the Depository and shall be subject to the Depository Agreement concurrently with the execution and delivery of this Agreement by Seller and Buyer. Pursuant to the Depository Agreement, Buyer shall have sole dominion and control (including “control” within the meaning of the UCC (as defined in Section 6(d) below)) over the Depository Account. The Depository Account shall at all times be subject to the Depository Agreement. All Income or other amounts in respect of the Purchased Assets, as well as any interest received from the reinvestment of such Income or other amounts, shall be deposited directly by the applicable Mortgagor into the Depository Account in accordance with the Re-direction Letter. Depository shall then apply such Income in accordance with the applicable provisions of Articles 5(c) through 5(e) of this Agreement.

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(b) Contemporaneously with the sale to Buyer of any Purchased Asset, Seller shall deliver to each Mortgagor, issuer of a participation interest, servicer and paying agent with respect to each Purchased Asset or borrower under a Purchased Asset an irrevocable direction letter substantially in the form of Exhibit XVI (the “Re-direction Letter”), instructing, as applicable, the Mortgagor, issuer of a participation interest, servicer or trustee with respect to such Purchased Asset or borrower (as applicable) to pay all amounts payable under the related Purchased Asset into the Depository Account. If a Mortgagor, issuer of a participation interest, servicer or paying agent with respect to the Purchased Asset or borrower forwards any Income or other amounts with respect to a Purchased Asset to Seller or any Affiliate of Seller rather than directly into the Depository Account, Seller shall, or shall cause such Affiliate to, (i) deliver an additional Re-direction Letter to the applicable Mortgagor, issuer of a participation interest, servicer or paying agent with respect to the Purchased Asset or borrower and make other reasonable best efforts to cause such Mortgagor, issuer of a participation interest, servicer or paying agent with respect to the Purchased Asset or borrower to forward such amounts directly to the Depository Account and (ii) deposit in the Depository Account any such amounts within one (1) Business Day of Seller’s (or its Affiliate’s) receipt thereof.

(c) So long as no Event of Default with respect to any Purchased Asset shall have occurred and be continuing, prior to the Cash Sweep Tail Period, all Income or other amounts received by the Depository in respect of any Purchased Asset (other than Principal Proceeds) during each Collection Period shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i) first, (i) to the Custodian for payment of the document custodian fees payable to Custodian pursuant to the Custodian Agreement, then (ii) to the Depository for payment of fees payable to the Depository in connection with the Depository Account and then (iii) to the Interim Servicer for payment of the loan servicing fees payable monthly to the Interim Servicer pursuant plus the reasonable out-of-pocket costs and expenses, in each case, as required under the Interim Servicing Agreement as in effect from time to time;

(ii) second, pro rata, (A) to Buyer, an amount equal to the Price Differential that has accreted and is outstanding as of such Remittance Date and (B) to any Affiliated Hedge Counterparty, any amount then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to a Purchased Asset;

(iii) third, to Buyer, an amount equal to any other amounts then due and payable to Buyer or its Affiliates under any Transaction Document (including any outstanding Margin Deficits); and

(iv) fourth, to Seller, the remainder, if any.

Notwithstanding the foregoing, so long as any Default has occurred and is continuing, but has not become an Event of Default, all amounts remaining in the Depository Account on each

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Remittance Date after application to clauses (i) through (iii) above shall remain in the Depository Account until such Default has either (x) been cured to Buyer’s satisfaction, in which case such remaining amounts shall be distributed to Seller pursuant to clause (iv) above, or (y) has matured into an Event of Default, in which case such remaining amounts shall be distributed pursuant to Article 5(e) below.

(d) So long as no Event of Default with respect to any Purchased Asset shall have occurred and be continuing, prior to the Cash Sweep Tail Period, any Principal Proceeds shall be applied by the Depository on the Business Day following the Business Day on which such funds are deposited in the Depository Account in the following order of priority:

(i) first, pro rata, (A) to Buyer, until the Purchase Price for such Purchased Asset has been reduced to the Buyer’s Margin Amount for such Purchased Asset as of the date of such payment (as determined by Buyer after giving effect to such Principal Proceeds and application of net sales proceeds, if applicable) and (B) solely with respect to any Hedging Transaction with an Affiliated Hedge Counterparty related to such Purchased Asset, to such Affiliated Hedge Counterparty an amount equal to any accrued and unpaid breakage costs or termination payments under such Hedging Transaction related to such Purchased Asset;

(ii) second, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document (including any outstanding Margin Deficits); and

(iii) third, to Seller, the remainder of such Principal Proceeds.

Notwithstanding the foregoing, so long as any Default has occurred and is continuing, but has not become an Event of Default, all amounts remaining in the Depository Account on each Remittance Date after application to clauses (i) through (ii) above shall remain in the Depository Account until such Default has either (x) been cured to Buyer’s satisfaction, in which case such remaining amounts shall be distributed to Seller pursuant to clause (iii) above, or (y) has matured into an Event of Default, in which case such remaining amounts shall be distributed pursuant to Article 5(e) below.

(e) At any time during the Cash Sweep Tail Period or if an Event of Default shall have occurred and be continuing, all Income (including, without limitation, any Principal Proceeds or any other amounts received, without regard to their source) or any other amounts received by the Depository in respect of a Purchased Asset shall be applied by the Depository on the Business Day next following the Business Day on which such funds are deposited in the Depository Account in the following order of priority:

(i) first, (i) to the Custodian for payment of the document custodian fees payable to Custodian pursuant to the Custodian Agreement, then (ii) to the Depository for payment of fees payable to the Depository in connection with the Depository Account and then (iii) to the Interim Servicer for payment of the loan servicing fees payable monthly to the Interim Servicer pursuant plus the reasonable out-of-pocket costs and expenses, in each case, as required under the Interim Servicing Agreement as in effect from time to time;

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(ii) second, pro rata, (A) to Buyer, an amount equal to the Price Differential that has accreted and is outstanding in respect of all of the Purchased Assets as of such Business Day and (B) to any Affiliated Hedge Counterparty, any amounts then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to such Purchased Asset;

(iii) third, to Buyer, on account of the Repurchase Price of such Purchased Asset until the Repurchase Price for such Purchased Asset has been reduced to zero;

(iv) fourth, to Buyer, on account of the Repurchase Price of all Purchased Assets until the Repurchase Price for all such Purchased Assets has been reduced to zero;

(v) fifth, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

(vi) sixth, to Seller, any remainder.

ARTICLE 6.

SECURITY INTEREST

(a) Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s obligations to Buyer under the Transaction Documents and the Transactions entered into hereunder, or in the event that a transfer of a Purchased Asset is otherwise ineffective to effect an outright transfer of such Purchased Asset to Buyer, Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items (as defined below) to Buyer to secure the payment of the Repurchase Price on all Transactions to which it is a party and all other amounts owing by Seller or Seller’s Affiliates to Buyer and any of Buyer’s present or future Affiliates hereunder, including, without limitation, amounts owing pursuant to Article 25, and under the other Transaction Documents, including any obligations of Seller under any Hedging Transaction entered into with any Affiliated Hedge Counterparty (including, without limitation, all amounts anticipated to be paid to Buyer by an Affiliated Hedge Counterparty as provided for in the definition of Repurchase Price or otherwise) and to secure the obligation of Seller or its designee to service the Purchased Assets in conformity with Article 27 and any other obligation of Seller to Buyer (collectively, the “Repurchase Obligations”). Seller agrees to mark its computer records and tapes to evidence the interests granted to Buyer hereunder. All of Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “Purchased Items”:

(i) the Purchased Assets and all “securities accounts” (as defined in Article 8-501(a) of the UCC) to which any or all of the Purchased Assets are credited;

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(ii) any and all interests of Seller in, to and under the Depository Account and all monies from time to time on deposit in the Depository Account;

(iii) any cash or Cash Equivalents delivered to Buyer in accordance with Article 4(a);

(iv) the Purchased Asset Documents, Servicing Agreements, Servicing Records, Servicing Rights, all servicing fees relating to the Purchased Assets, insurance policies relating to the Purchased Assets, and collection and escrow accounts and letters of credit relating to the Purchased Assets;

(v) Seller’s right under each Hedging Transaction, if any, relating to the Purchased Assets to secure the Repurchase Obligations;

(vi) all “general intangibles”, “accounts”, “chattel paper”, “investment property”, “instruments”, “securities accounts” and “deposit accounts”, each as defined in the UCC, relating to or constituting any and all of the foregoing;

(vii) any other items, amounts, rights or properties transferred or pledged by Seller to Buyer under any of the Transaction Documents; and

(viii) all replacements, substitutions or distributions on or proceeds, payments, Income and profits of, and records (but excluding any financial models or other proprietary information) and files relating to any and all of any of the foregoing.

(b) Without limiting Article 6(a) hereto, to secure payment of the Repurchase Obligations owing to Buyer, Seller hereby grants to Buyer a security interest in the Purchased Items, whether now owned or hereafter acquired, now existing or hereafter created and wherever located.

(c) Buyer agrees to act as agent for and on behalf of the Affiliated Hedge Counterparties with respect to the security interest granted hereby to secure the obligations owing to the Affiliated Hedge Counterparties under any Hedging Transactions, including, without limitation, with respect to the Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to the Custodial Agreement.

(d) Buyer’s security interest in the Purchased Items shall terminate only upon termination of Seller’s obligations under this Agreement and the other Transaction Documents, all Hedging Transactions and the documents delivered in connection herewith and therewith. Upon such termination, Buyer shall promptly deliver to Seller such UCC termination statements and other release documents as may be commercially reasonable and return the Purchased Assets to Seller and reconvey the Purchased Items to Seller and release its security interest in the Purchased Items. For purposes of the grant of the security interest pursuant to this Article 6, this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “UCC”). Buyer shall have all of the rights and may exercise all of the remedies of a secured creditor under the UCC and the other laws of the State of New York. In furtherance of the foregoing, (a) Buyer, at Seller’s sole cost and expense, as applicable, shall cause to be filed in such locations as may be necessary to perfect and maintain perfection and

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priority of the security interest granted hereby, UCC financing statements and continuation statements (collectively, the “Filings”), and shall forward copies of such Filings to Seller upon the filing thereof, and (b) Seller shall from time to time take such further actions as may be reasonably requested by Buyer to maintain and continue the perfection and priority of the security interest granted hereby (including marking its records and files to evidence the interests granted to Buyer hereunder). For the avoidance of doubt, notwithstanding clause (vi) of the definition of Repurchase Date and the proviso thereto, Buyer’s security interest in any particular Purchased Asset shall not terminate until Seller has fully paid the related Repurchase Price.

(e) Seller acknowledges that neither it nor Guarantor has any right to service the Purchased Assets but only has rights as a party to the Interim Servicing Agreement or any other servicing agreement with respect to the Purchased Assets. Without limiting the generality of the foregoing and in the event that Seller or Guarantor is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, each of Seller and Guarantor grants, assigns and pledges to Buyer a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Agreement and Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(x)(A)(xi) of the Bankruptcy Code.

ARTICLE 7.

PAYMENT, TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, ownership of the Purchased Asset shall be transferred to Buyer or its designee (including the Custodian) against the simultaneous transfer of the Purchase Price in immediately available funds to an account of Seller specified in the Confirmation relating to such Transaction and otherwise in accordance with this Agreement.

(b) (i) With respect to each Transaction, Seller shall deliver or cause to be delivered to Buyer or its designee the Custodial Delivery Certificate in the form attached hereto as Exhibit IV, provided, that notwithstanding the foregoing, upon request of Seller, Buyer in its sole but good faith discretion may elect to permit Seller to make such delivery by not later than the third (3^rd) Business Day after the related Purchase Date, so long as Seller causes an Acceptable Attorney, Title Company or other Person acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or prior to such Purchase Date. Subject to Article 7(c), in connection with each sale, transfer, conveyance and assignment of a Purchased Asset, on or prior to each Purchase Date with respect to such Purchased Asset, Seller shall deliver or cause to be delivered and released to the Custodian a copy or original of each document as specified in the Asset File (as defined in the Custodial Agreement, and collectively, the “Purchased Asset File”), pertaining to each of the Purchased Assets identified in the Custodial Delivery Certificate delivered therewith, together with any other documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion.

(ii) With respect to each Additional Purchase Transaction and Future Funding Transaction, Seller shall deliver or cause to be delivered to Buyer or its designee an updated Custodial Delivery Certificate that includes any additional documents delivered and/or executed in connection with any such Additional Purchase Transaction or Future

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Funding Transaction, as applicable, provided, that notwithstanding the foregoing, upon request of Seller, Buyer in its sole but good faith discretion may elect to permit Seller to make such delivery by not later than the third (3^rd) Business Day after the related date of the Additional Purchase Transaction or Future Funding Transaction, as applicable, so long as Seller causes an Acceptable Attorney, Title Company or other Person acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or prior to such date. Subject to Article 7(c), on or prior to that date of a Additional Purchase Transaction or Future Funding Transaction, as applicable, Seller shall deliver or cause to be delivered and released to the Custodian a copy or original of each additional document delivered and/or executed in connection with each such Additional Purchase Transaction or Future Funding Transaction, as applicable, as specified in the Asset File (as defined in the Custodial Agreement), pertaining to each of the Purchased Assets identified in the Custodial Delivery Certificate delivered therewith, together with any other documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion.

(c) From time to time, Seller shall forward to the Custodian additional original documents or additional documents evidencing any assumption, modification, consolidation or extension of a Purchased Asset approved in accordance with the terms of this Agreement (including without limitation in connection with an Additional Purchase Transaction or Future Funding Transaction), and upon receipt of any such other documents, the Custodian shall hold such other documents as Buyer shall request from time to time. With respect to any documents that have been delivered or are being delivered to recording offices for recording and have not been returned to Seller in time to permit their delivery hereunder at the time required, in lieu of delivering such original documents, Seller shall deliver to Buyer a true copy thereof with an officer’s certificate certifying that such copy is a true, correct and complete copy of the original, which has been transmitted for recordation. Seller shall deliver such original documents to the Custodian promptly when they are received. With respect to all of the Purchased Assets delivered by Seller to Buyer or its designee (including the Custodian), Seller shall execute an omnibus power of attorney substantially in the form of Exhibit V attached hereto irrevocably appointing Buyer its attorney-in-fact with full power to (i) complete the endorsements of the Purchased Assets, including without limitation the Mortgage Notes, Assignments of Mortgages, Mezzanine Notes, Participation Certificates and assignments of participation interests and any transfer documents related thereto, (ii) record the Assignments of Mortgages, (iii) prepare and file and record each Assignment of Mortgage or other assignment, (iii) take any action (including exercising voting and/or consent rights) with respect to any participation interest, (iv) complete the preparation and filing, in form and substance satisfactory to Buyer, of such financing statements, continuation statements, and other UCC forms, as Buyer may from time to time, reasonably consider necessary to create, perfect, and preserve Buyer’s security interest in the Purchased Assets, (v) enforce Seller’s rights under the Purchased Assets purchased by Buyer pursuant to this Agreement, and (vi) to take such other steps as may be necessary or desirable to enforce Buyer’s rights against, under or with respect to such Purchased Assets and the related Purchased Asset Files and the Servicing Records to achieve the remedies and other provisions contemplated by this Agreement; provided that Buyer agrees not to and shall not exercise its rights under such power of attorney unless a monetary Default, material non-monetary Default or an Event of Default has occurred and is continuing. Notwithstanding the immediately preceding proviso, in the event that a material non-monetary Default has occurred and is continuing, Buyer

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agrees it shall use commercially reasonable efforts to notify Seller of any action described above and Seller shall promptly take such action. Buyer agrees not to exercise the rights described above under such power of attorney for two (2) Business Days subsequent to such material non-monetary Default unless (x) Buyer reasonably believes that Buyer needs to take action sooner in order to protect its interest in the Purchased Items or (y) a monetary Default or an Event of Default has occurred and is continuing. If Seller fails to complete such action within such two (2) Business Day period, then Buyer shall, upon notice to Seller, be entitled to exercise its rights under such power of attorney, provided that a failure to provide any notice or refrain from taking any action under this Article 7(c) shall not limit or waive Buyer’s rights to exercise such rights or invalidate such action or in any way create any liability whatsoever on the part of Buyer for exercising such rights. Buyer shall deposit the Purchased Asset Files representing the Purchased Assets, or direct that the Purchased Asset Files be deposited directly, with the Custodian. The Purchased Asset Files shall be maintained in accordance with the Custodial Agreement. If a Purchased Asset File is not delivered to Buyer or its designee (including the Custodian), such Purchased Asset File shall be held in trust by Seller or its designee for the benefit of Buyer as the owner thereof. Seller or its designee shall maintain a copy of the Purchased Asset File and the originals of the Purchased Asset File not delivered to Buyer or its designee. The possession of the Purchased Asset File by Seller or its designee is at the will of Buyer for the sole purpose of servicing the related Purchased Asset, and such retention and possession by Seller or its designee is in a custodial capacity only. The books and records (including, without limitation, any computer records or tapes) of Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to Buyer. Seller or its designee (including the Custodian) shall release its custody of the Purchased Asset File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Assets, is in connection with a repurchase of any Purchased Asset by Seller or as otherwise required by law.

(d) Subject to clause (e) below, Buyer hereby grants to Seller a revocable option to direct Buyer with respect to the exercise of all voting and corporate rights with respect to the Purchased Assets and to vote, take corporate actions and exercise any rights in connection with the Purchased Assets, so long as no monetary Default, material non-monetary Default, or Event of Default has occurred and is continuing. Such revocable option is not evidence of any ownership or other interest or right of either Seller in any Purchased Asset. Upon the occurrence and during the continuation of (i) a monetary Default, (ii) a material non-monetary Default, (iii) an Event of Default or (iv) with respect to the exercise of any voting or corporate rights with respect to the Purchased Assets that could be reasonably determined to materially impair the Market Value, and in each case subject to the provisions of the Purchased Asset Documents, the revocable option discussed above shall be deemed to automatically terminate and Buyer shall be entitled to exercise all voting and corporate rights with respect to the Purchased Assets without regard to Seller’s instructions (including, but not limited to, if an Act of Insolvency shall occur with respect to Seller, to the extent Seller controls or is entitled to control selection of any servicer, Buyer may transfer any or all of such servicing to an entity satisfactory to Buyer); provided further, that with respect to clause (iv) above, Buyer shall use commercially reasonable efforts to consult in good faith with Seller regarding the exercise of any such voting or corporate rights, provided that a failure by Buyer to consult with Seller under this Article 7(d) shall not limit or waive Buyer’s rights to exercise such voting and corporate rights or invalidate such vote or exercise of rights or in any way create any liability whatsoever on the part of Buyer for exercising such rights.

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(e) Notwithstanding the rights granted to Seller pursuant to clause (d) above, Seller shall not, and shall not permit Interim Servicer, the primary servicer or any other servicer of any Purchased Asset to consent to any amendments, modifications, waivers, releases, sales, transfers, dispositions or other resolutions relating to the Purchased Assets (including, with respect to a Purchased Asset that is a participation interest, relating to the Underlying Mortgage Loan) (except to the extent contemplated or required by the related Purchased Asset Documents) including, without limitation, the following actions set forth in clauses (i) through (v) below, without the prior written consent of Buyer:

(i) any forbearance, extension or other modification or waiver with respect to any Purchased Asset;

(ii) the release, discharge or reduction of any: (A) lien on any Underlying Mortgaged Property or collateral for the related Purchased Asset or Purchased Item or (B) lien or claim on any letters of credit and other non-cash collateral that is required to be maintained pursuant to the Purchased Asset Documents or underlying mortgage loan documents, if any;

(iii) the extension of credit (including increasing the terms of any existing credit) to any Person with respect to any Purchased Asset or Underlying Mortgage Loan or Underlying Mortgaged Property;

(iv) any sale or other disposition of any Purchased Asset, Underlying Mortgage Loan, Underlying Mortgaged Property or any other material property or collateral related thereto; and

(v) the incurrence of any lien or other encumbrance other than as expressly created hereunder or under any other Transaction Document.

(f) Notwithstanding the provisions of Article 7(b) above requiring the execution of the Custodial Delivery Certificate and corresponding delivery of the Purchased Asset File to the Custodian on or prior to the related Purchase Date, with respect to each Transaction involving a Purchased Asset that is identified in the related Confirmation as a “Table Funded” Transaction, Seller shall, in lieu of effectuating the delivery of all or a portion of the Purchased Asset File on or prior to the related Purchase Date, (i) deliver to the Custodian by facsimile or email on or before the related Purchase Date for the Transaction copies of (A) the promissory note(s), original stock certificate or Participation Certificate in favor of Seller evidencing the making of the Purchased Asset, with Seller’s endorsement of such instrument to Buyer, (B) the mortgage, security agreement or similar item creating the security interest in the related collateral and the applicable assignment document evidencing the transfer to Buyer, (C) such other components of the Purchased Asset File as Buyer may require on a case by case basis with respect to the particular Transaction, and (D) evidence satisfactory to Buyer that all documents necessary to perfect Seller’s (and, by means of assignment to Buyer on the Purchase Date, Buyer’s) interest in the Purchased Items for the Purchased Asset, (ii) deliver to Buyer and Custodian a Bailee Letter

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from an Acceptable Attorney, Title Company or other Person acceptable to Buyer on or prior to such Purchase Date and (iii) not later than the third (3^rd) Business Day following the Purchase Date, deliver to Buyer the Custodial Delivery Certificate and to the Custodian the entire Purchased Asset File.

ARTICLE 8.

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

(h) Title to all Purchased Items shall pass to Buyer on the applicable Purchase Date, and Buyer shall have free and unrestricted use of all Purchased Items, subject, however, to the terms of this Agreement. Nothing in this Agreement or any other Transaction Document shall preclude Buyer from engaging in repurchase transactions with the Purchased Items or otherwise selling, transferring, pledging, repledging, hypothecating, or rehypothecating the Purchased Items on terms and conditions that shall be in Buyer’s discretion, but no such transaction shall relieve Buyer of its obligations to transfer the Purchased Assets to Seller pursuant to Article 3 of this Agreement, or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Article 5 hereof, or of Buyer’s obligations pursuant to Article 17.

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

ARTICLE 9.

REPRESENTATIONS AND WARRANTIES

(a) Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect, (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance or rule applicable to it or its organizational documents or any agreement by which it is bound or by which any of its assets are affected and (vi) it has not dealt with any broker, investment banker, agent, or other Person (other than Buyer or an Affiliate of Buyer in the case of Seller) who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to any of the Transaction Documents. On the Purchase Date for any Transaction for the purchase of any Purchased Assets by Buyer from Seller and any Transaction hereunder and covenants that at all times while this Agreement and any Transaction thereunder is in effect, Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.

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(b) In addition to the representations and warranties in subsection (a) above, Seller represents and warrants to Buyer as of the date of this Agreement and will be deemed to represent and warrant to Buyer as of the Purchase Date for the purchase of any Purchased Assets by Buyer from Seller and any Transaction thereunder and covenants that at all times while this Agreement and any Transaction thereunder is in effect, unless otherwise stated herein:

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

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

(iii) Non-Contravention. Neither the execution and delivery of the Transaction Documents, nor consummation by Seller of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by Seller with the terms, conditions and provisions of the Transaction Documents (or any of them) will conflict with or result in a breach of any of the terms, conditions or provisions of (A) the organizational documents of Seller, (B) any contractual obligation to which Seller is now a party or the rights under which have been assigned to Seller or the obligations under which have been assumed by Seller or to which the assets of Seller are subject or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of the assets of Seller, other than pursuant to the Transaction Documents, (C) any judgment or order, writ, injunction, decree or demand of any court applicable to Seller, or (D) any applicable Requirement of Law applicable to these Transactions, in the case of clauses (B) or (C) above, to the extent that such conflict or breach would have a Material Adverse Effect upon Seller’s ability to perform its obligations hereunder.

(iv) Litigation; Requirements of Law. Except as otherwise disclosed in writing to Buyer prior to the Closing Date, as of the date hereof and as of the Purchase Date for any Transaction hereunder, there is no action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of Seller, threatened against Seller, the Guarantor or any of their respective assets, nor is there any action, suit, proceeding, investigation, or arbitration pending or threatened against Seller or the Guarantor that is reasonably likely to result in any Material Adverse Effect. Seller is in compliance in all material respects with all Requirements of Law. Neither Seller nor the Guarantor is in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

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(v) Good Title to Purchased Assets and Other Collateral. Immediately prior to the purchase of any Purchased Assets by Buyer from Seller, such Purchased Assets are free and clear of any lien, encumbrance or impediment to transfer (including any “adverse claim” as defined in Article 8-102(a)(1) of the UCC), and Seller is the record and beneficial owner of and has good and marketable title to and the right to sell and transfer such Purchased Assets to Buyer and, upon transfer of such Purchased Assets to Buyer, Buyer shall be the owner of such Purchased Assets free of any adverse claim subject to the rights of Seller and obligations of Buyer under this Agreement or any other Transaction Document in each case except for (1) Liens to be released simultaneously with the sale to Buyer hereunder and (2) Liens granted by Seller in favor of the counterparty to any Hedging Transaction, solely to the extent such liens are expressly subordinate to the rights and interests of Buyer hereunder. Without limitation of the foregoing, the provisions of this Agreement are effective to create in favor of Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Purchased Items and Buyer shall have a valid, perfected first priority security interest in the Purchased Items free of any adverse claim subject to the rights of Seller and obligations of Buyer under this Agreement or any other Transaction Document (and without limitation on the foregoing, Buyer, as entitlement holder, shall have a “security entitlement” to the Purchased Assets).

(vi) No Adverse Effect; No Default or Event of Default. As of the related Purchase Date and the date of each Future Funding Transaction and Additional Purchase Transaction, Seller has no Knowledge of any facts or circumstances that are reasonably likely to have a material adverse effect on any Purchased Asset or Underlying Mortgaged Property. No Default or Event of Default has occurred or exists under or with respect to the Transaction Documents.

(vii) Authorized Representatives. The duly authorized representatives of Seller are listed on, and true signatures of such authorized representatives are set forth on, Exhibit II attached to this Agreement.

(viii) Representations and Warranties Regarding Purchased Assets; Delivery of Purchased Asset File.

(A) As of the date hereof, Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Items to any other Person, and immediately prior to the sale of, and/or grant of a security interest in, the Purchased Items to, or in favor of, Buyer.

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

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

(D) Each of the representations and warranties made in respect of the Purchased Assets pursuant to Exhibit VI are true, complete and correct, except to the extent disclosed in a Requested Exceptions Report previously accepted by Buyer.

(E) Upon the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party”, Seller as “Debtor” and describing the Purchased Items in the jurisdiction and filing office listed on Exhibit XII attached hereto, the security interests granted hereunder in that portion of the Purchased Items which can be perfected by filing under the UCC will constitute fully perfected security interests under the UCC in all right, title and interest of Seller in, to and under such Purchased Items.

(F) Upon execution and delivery of the Depository Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, the Depository Account and all amounts at any time on deposit therein.

(G) Upon execution and delivery of the Depository Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, the “investment property” and all “deposit accounts” (each as defined in the UCC) comprising Purchased Items or any after-acquired property related to such Purchased Items. Except to the extent disclosed in a Requested Exceptions Report, Seller or its designee is in possession of a complete, true and accurate Purchased Asset File with respect to each Purchased Asset, except for such documents the originals of which have been delivered to the Custodian.

(ix) Adequate Capitalization; No Fraudulent Transfer. Seller has, as of such Purchase Date, adequate capital for the normal obligations foreseeable in a business of its size and character and in light of its contemplated business operations. Seller is generally able to pay, and as of the date hereof is paying, its debts as they come due. Seller has not become, or is not presently, financially insolvent nor will Seller be made insolvent by virtue of Seller’s execution of or performance under any of the Transaction Documents within the meaning of the bankruptcy laws or the insolvency laws of any jurisdiction. Seller has not entered into any Transaction Document or any Transaction pursuant thereto in contemplation of insolvency or with intent to hinder, delay or defraud any creditor.

(x) No Conflicts or Consents. Neither the execution and delivery of this Agreement and the other Transaction Documents by Seller, nor the consummation of any of the transactions by it herein or therein contemplated, nor compliance with the terms

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and provisions hereof or with the terms and provisions thereof, will contravene or conflict with or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of Seller pursuant to the terms of any indenture, mortgage, deed of trust, or other agreement or instrument to which Seller is a party or by which Seller may be bound, or to which Seller may be subject, other than liens created pursuant to the Transaction Documents. No consent, approval, authorization, or order of any third party is required in connection with the execution and delivery by Seller of the Transaction Documents to which it is a party or to consummate the transactions contemplated hereby or thereby which has not already been obtained (other than consents, approvals and filings that have been obtained or made, as applicable, or that, if not obtained or made, are not reasonably likely to have a Material Adverse Effect).

(xi) Governmental Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration by Seller with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (A) the execution, delivery and performance of any Transaction Document to which Seller is or will be a party, (B) the legality, validity, binding effect or enforceability of any such Transaction Document against Seller or (C) the consummation of the transactions contemplated by this Agreement (other than consents, approvals and filings that have been obtained or made, as applicable, and the filing of certain financing statements in respect of certain security interests).

(xii) Organizational Documents. Seller has delivered to Buyer certified copies of its organization documents, together with all amendments thereto, if any.

(xiii) No Encumbrances. Except as contemplated by the Transaction Documents, there are (A) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Assets, (B) no agreements on the part of Seller to issue, sell or distribute the Purchased Asset, and (C) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or interest therein, except as contemplated by the Transaction Documents.

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

(xv) Taxes. Seller has timely filed or caused to be filed all required federal and other material tax returns that, to the Knowledge of Seller, would be delinquent if they had not been filed on or before the date hereof and has paid all Taxes imposed on it and any of its assets by any Governmental Authority except for any such Taxes (A) as are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been provided in accordance with GAAP or (B) to the extent that the failure to pay them could not reasonably be expected to result in a Material Adverse

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Effect. No Tax liens have been filed against any of Seller’s assets and, to Seller’s Knowledge, no claims are being asserted in writing with respect to any such Taxes (except for liens and with respect to Taxes not yet due and payable or liens or claims with respect to Taxes that are being contested in good faith and for which adequate reserves have been established in accordance with GAAP).

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

(xvii) Solvency. Neither the Transaction Documents nor any Transaction, Additional Purchase Transaction or Future Funding Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller’s creditors. The transfer of the Purchased Assets subject hereto and the obligation to repurchase such Purchased Assets is not undertaken with the intent to hinder, delay or defraud any of Seller’s creditors. As of the Purchase Date, Seller is not insolvent within the meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and the transfer and sale of the Purchased Assets pursuant hereto and the obligation to repurchase such Purchased Asset (A) will not cause the liabilities of Seller to exceed the assets of Seller, (B) will not result in Seller having unreasonably small capital, and (C) will not result in debts that would be beyond Seller’s ability to pay as the same mature. Seller received reasonably equivalent value in exchange for the transfer and sale of the Purchased Assets and the Purchased Items subject hereto. No petition in bankruptcy has been filed against Seller in the last ten (10) years, and Seller has not in the last ten (10) years made an assignment for the benefit of creditors or taken advantage of any debtors relief laws. Seller has only entered into agreements on terms that would be considered arm’s length and otherwise on terms consistent with other similar agreements with other similarly situated entities.

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

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

(xx) Financial Information. All financial data concerning Seller and the Purchased Assets that has been delivered by or on behalf of Seller to Buyer is true,

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complete and correct in all material respects. All financial data concerning Seller has been prepared fairly in accordance with GAAP. All financial data concerning the Purchased Assets provided and prepared by Seller has been prepared in accordance with standard industry practices. Since the delivery of such data, except as otherwise disclosed in writing to Buyer, there has been no change in the financial position of Seller or the Purchased Assets, or in the results of operations of Seller, which change is reasonably likely to have a Material Adverse Effect on Seller.

(xxi) Hedging Transactions. To the Knowledge of Seller, as of the Purchase Date for any Purchased Asset that is subject to a Hedging Transaction, each such Hedging Transaction is in full force and effect in accordance with its terms, each counterparty thereto is an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event, however denominated, has occurred and is continuing with respect thereto.

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

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

(xxiv) PATRIOT Act.

A. Seller is in compliance, in all material respects, with the (1) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto, and (2) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of any Transaction will, to Seller’s Knowledge, be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

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B. Seller agrees that, from time to time upon the prior written request of Buyer, it shall (1) execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to insure compliance with the provisions hereof (including, without limitation, compliance with the USA Patriot Act of 2001 and to fully effectuate the purposes of this Agreement and (2) provide such opinions of counsel concerning matters relating to this Agreement as Buyer may reasonably request; provided, however, that nothing in this Article 9(b)(xxvi) shall be construed as requiring Buyer to conduct any inquiry or decreasing Seller’s responsibility for its statements, representations, warranties or covenants hereunder. In order to enable Buyer and its Affiliates to comply with any anti-money laundering program and related responsibilities including, but not limited to, any obligations under the USA Patriot Act of 2001 and regulations thereunder, Seller on behalf of itself and its Affiliates makes the following representations and covenants to Buyer and its Affiliates that neither Seller, nor, to Seller’s Knowledge, any of its Affiliates, is a Prohibited Investor, and, to Seller’s Knowledge, Seller is not acting on behalf of or for the benefit of any Prohibited Investor. Seller agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation and covenant.

(xxv) Ownership of Property. Seller does not own, and has not ever owned, any assets other than (A) the Purchased Assets and (B) such incidental personal property related thereto.

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

(xxvii) Office of Foreign Assets Control. Seller warrants, represents and covenants that neither Seller nor any of its Affiliates are or will be an entity or person (A) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”); (B) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designed National and Blocked Persons,” (C) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO 13224; or (D) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in (A) through (D) above are herein referred to as a “Prohibited Person”). Seller covenants and agrees that none of Seller nor any of its Affiliates will knowingly (1) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person or (2) engage in or conspire to engage in any transaction that evades or avoids or that the purpose of evading or avoiding any of the prohibitions of EO 13224.

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Seller further covenants and agrees to deliver to Buyer any such certification or other evidence as may be requested by Buyer in its sole and absolute discretion, confirming that none of Seller or any of the its Affiliates is a Prohibited Person and none of Seller, or any of its Affiliates has engaged in any business transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person.

(xxviii) Notice Address; Name; Jurisdiction of Organization. On the date of this Agreement, Seller’s address for notices is as specified on Annex I. Seller’s legal name is, and has at all times been, Parlex 4 Finance, LLC. Seller’s sole jurisdiction of organization is, and at all times has been, Delaware. The location where Seller keeps its books and records, including all computer tapes and records relating to the Purchased Items, is its notice address. Seller may change its address for notices and for the location of its books and records by giving Buyer written notice of such change.

(xxix) Anti-Money Laundering Laws. Seller either (1) is entirely exempt from or (2) has otherwise fully complied with all applicable anti-money laundering laws and regulations (collectively, the “Anti-Money Laundering Laws”), by (A) establishing an adequate anti-money laundering compliance program as required by the Anti-Money Laundering Laws, (B) conducting the requisite due diligence in connection with the origination of each Purchased Asset for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the related obligor (if applicable) and the origin of the assets used by such obligor to purchase the property in question, and (C) maintaining sufficient information to identify the related obligor (if applicable) for purposes of the Anti-Money Laundering Laws.

(xxx) Ownership. Seller is and shall remain at all times a wholly-owned direct or indirect subsidiary of Guarantor.

ARTICLE 10.

NEGATIVE COVENANTS OF SELLER

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

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

(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Purchased Items (or any of it) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Items (or any of it) with any Person other than Buyer, unless and until such Purchased Asset relating to such Purchased Items is repurchased by Seller in accordance with this Agreement;

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(c) modify in any material respect any Servicing Agreements to which it is a party, without the consent of Buyer in its discretion, not to be unreasonably withheld, conditioned, or delayed;

(d) create, incur or permit to exist any Lien in or on any of its property, assets, revenue, the Purchased Assets, unless and until such Purchased Asset relating to such Purchased Items is repurchased by Seller in accordance with this Agreement, the Purchased Items, whether now owned or hereafter acquired, other than the Liens granted by Seller pursuant to Article 6 of this Agreement and the Lien granted by Parent under the Pledge Agreement;

(e) except as otherwise expressly permitted herein, enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution), sell all or substantially all of its assets without the consent of Buyer in its sole and absolute discretion;

(f) consent or assent to any amendment or supplement to, or termination of, any note, loan agreement, mortgage or guarantee relating to the Purchased Assets or other agreement or instrument relating to the Purchased Assets other than in accordance with Section 7(e) or Article 27;

(g) permit the organizational documents or organizational structure of Seller to be amended without the prior written consent of Buyer not to be unreasonably withheld, conditioned, or delayed, other than special purpose entity provisions, for which such consent shall be at Buyer’s sole and absolute discretion;

(h) acquire or maintain any right or interest in any Purchased Asset or Underlying Mortgaged Property that is senior to or pari passu with the rights and interests of Buyer therein under this Agreement and the other Transaction Documents unless such right or interest becomes a Purchased Asset hereunder;

(i) use any part of the proceeds of any Transaction hereunder for any purpose which violates, or would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System;

(j) enter into any Hedging Transaction with respect to any Purchased Asset with any entity that is not an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty; and

(k) permit, at any time after thirty (30) days subsequent to the Purchase Date of the first Purchased Asset subject to a Transaction, the number of Purchased Assets that are Senior Mortgage Loans to be less than three (3); provided, however, that in the event of an Early Repurchase of all Purchased Assets subject to Transactions, this Article 10(k) shall not apply until such time as Buyer and Seller enter into a new Transaction subsequent to such Early Repurchase of all Purchased Assets.

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ARTICLE 11.

AFFIRMATIVE COVENANTS OF SELLER

On and as of the date hereof and each Purchase Date and until this Agreement is no longer in force with respect to any Transaction:

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

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

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

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

(e) Seller shall cause the special servicer rating of the special servicer with respect to all mortgage loans underlying Purchased Assets to be no lower than “average” by S&P to the extent Seller controls or is entitled to control the selection of the special servicer. In the event the special servicer rating with respect to any Person acting as special servicer for any mortgage loans underlying Purchased Assets shall be below “average” by S&P, or if an Act of Insolvency occurs with respect to Seller or Guarantor, Buyer shall be entitled to transfer special servicing with respect to all Purchased Assets to an entity satisfactory to Buyer, to the extent Seller controls or is entitled to control the selection of the special servicer.

(f) Seller shall promptly (and in any event not later than two (2) Business Days following receipt) deliver to Buyer (i) any notice of the occurrence of an event of default under or report received by Seller pursuant to the Purchased Asset Documents; (ii) any notice of transfer of servicing under the Purchased Asset Documents and (iii) any other information with respect to the Purchased Assets that may be reasonably requested by Buyer from time to time and within Seller’s possession or control or are obtainable by Seller.

(g) Seller will permit Buyer, its Affiliates or its designated representative, upon reasonable prior written notice from Buyer, at reasonable times not to exceed twice per calendar year unless an Event of Default has occurred and is continuing, at Buyer’s sole cost and expense, to inspect records of Seller with respect to the Purchased Items that are not privileged and the conduct and operation of its business related thereto subject to the terms of any confidentiality agreement between Buyer and Seller and applicable law, and if no such confidentiality agreement then exists between Buyer and Seller, Buyer and Seller shall act in accordance with customary market standards regarding confidentiality and applicable law. Buyer shall act in a commercially reasonable manner in requesting and conducting any inspection relating to the conduct and operation of Seller’s business.

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(h) If Seller shall at any time become entitled to receive or shall receive any rights, whether in addition to, in substitution of, as a conversion of, or in exchange for a Purchased Asset, or otherwise in respect thereof, Seller shall accept the same as Buyer’s agent, hold the same in trust for Buyer and deliver the same forthwith to Buyer (or the Custodian, as appropriate) in the exact form received, duly endorsed by Seller to Buyer, if required, together with all related necessary transfer documents, to be held by Buyer hereunder as additional collateral security for the Transactions. If any sums of money or property are paid or distributed in respect of the Purchased Assets and received by Seller, Seller shall, until such money or property is paid or delivered to Buyer, hold such money or property in trust for Buyer, segregated from other funds of Seller, as additional collateral security for the Transactions.

(i) At any time from time to time upon the reasonable request of Buyer, at the sole expense of Seller, Seller will (i) promptly and duly execute and deliver such further instruments and documents and take such further actions as Buyer may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the perfected, first-priority security interest required hereunder, (ii) ensure that such security interest remains fully perfected at all times and remains at all times first in priority as against all other creditors of such Seller (whether or not existing as of the Closing Date, any Purchase Date or in the future) and (iii) obtain or preserve the rights and powers herein granted (including, among other things, filing such UCC financing statements as Buyer may reasonably request). If any amount payable under or in connection with any of the Purchased Items shall be or become evidenced by any promissory note, other instrument or certificated security, such note, instrument or certificated security shall be immediately delivered to Buyer, duly endorsed in a manner satisfactory to Buyer, to be itself held as a Purchased Item pursuant to this Agreement, and the documents delivered in connection herewith.

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

(i) Within fifteen (15) calendar days after each month-end, a monthly reporting package substantially in the form of Exhibit III-A attached hereto (the “Monthly Reporting Package”);

(ii) Within forty-five (45) calendar days after the last day of each of the first three fiscal quarters in any fiscal year, a quarterly reporting package substantially in the form of Exhibit III-B attached hereto (the “Quarterly Reporting Package”);

(iii) Within ninety (90) calendar days after the last day of its fiscal year, an annual reporting package substantially in the form of Exhibit III-C attached hereto (the “Annual Reporting Package”); and

(iv) (A) Upon Buyer’s request, a listing of any material changes in Hedging Transactions with Qualified Hedge Counterparties, the names of the Qualified Hedge Counterparties and the material terms of such Hedging Transactions, delivered within ten (10) days after Buyer’s request; and

(B) copies of Seller’s and Guarantor’s Federal Income Tax returns, if any, delivered within thirty (30) days after the earlier of (1) filing or (2) the last filing extension period.

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(k) Seller shall make a representative available to Buyer every month for attendance at a telephone conference, the date of which to be mutually agreed upon by Buyer and Seller, regarding the status of each Purchased Asset, Seller’s compliance with the requirements of Articles 10 and 11, and any other matters relating to the Transaction Documents or Transactions that Buyer wishes to discuss with Seller.

(l) Seller shall and shall cause Guarantor to at all times (i) comply with all material contractual obligations, (ii) comply in all respects with all laws, ordinances, rules, regulations and orders (including, without limitation, environmental laws) of any Governmental Authority or any other federal, state, municipal or other public authority having jurisdiction over Seller and Guarantor or any of its assets and Seller and Guarantor shall do or cause to be done all things necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business and (iii) maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses held by Seller and of Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets).

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

(n) Seller shall observe, perform and satisfy all the terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents. Seller will continue to be a U.S. Person that is a partnership for U.S. federal income tax purposes, or a disregarded entity of a U.S. Person for U.S. federal income tax purposes. Seller shall pay and discharge all Taxes on its assets and on the Purchased Items that, in each case, in any manner would create any Lien upon the Purchased Items, except for Liens created pursuant to the Transaction Documents and other than any Liens with respect to Taxes, such taxes that are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP or Taxes that are not yet due and payable.

(o) Seller shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office of Seller or Guarantor and of any change in Seller’s or Guarantor’s name or respective jurisdictions of organization or the places where the books and records pertaining to the Purchased Assets are held not less than thirty (30) Business Days’ prior to taking any such action.

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

(q) Seller shall provide Buyer and its Affiliates with reasonable access plus any such additional reports as Buyer may reasonably request. Upon two (2) Business Days’ prior notice (unless a Default or an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal business hours, Seller shall allow Buyer to (i) review any operating statements, occupancy status and other property level information with respect to the underlying real estate directly or indirectly securing or supporting the Purchased Asset that either is in Seller’s possession or is available to Seller, (ii) examine, copy (at Buyer’s expense) and make extracts from its books and records, to inspect any of its properties, and (iii) discuss Seller’s business and affairs with its officers.

(r) Seller shall enter into Hedging Transactions with respect to each of the Hedge-Required Assets to the extent necessary to hedge interest rate risk associated with the Purchase Price on such Hedge-Required Assets, in a manner reasonably acceptable to Buyer.

(s) Seller shall take all such steps as Buyer deems necessary to perfect the security interest granted pursuant to Article 6 in the Hedging Transactions, shall take such action as shall be necessary or advisable to preserve and protect Seller’s interest under all such Hedging Transactions (including, without limitation, requiring the posting of any required additional collateral thereunder), and hereby authorizes Buyer to take any such action that Seller fails to take after demand therefor by Buyer. Seller shall provide the Custodian with copies of all documentation relating to Hedging Transactions with Qualified Hedge Counterparties promptly after entering into same. All Hedging Transactions, if any, entered into by Seller with Buyer or any of its Affiliates in respect of any Purchased Asset shall be terminated contemporaneously with the repurchase of such Purchased Asset on the Repurchase Date therefor.

(t) Seller shall:

(i) continue to engage in business of the same general type as now conducted by it or otherwise as reasonably approved by Buyer prior to the date hereof and maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses held by Seller and of Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets) to the extent that failure to do so would have a Material Adverse Effect;

(ii) comply with all contractual obligations and with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation, all environmental laws) if failure to comply with such requirements would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect;

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

(iv) pay and discharge all Taxes imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such Taxes the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and

(v) not cause or permit any Change of Control without providing Buyer with at least ten (10) Business Days prior written notice thereof.

(u) Seller shall cause each servicer of the Purchased Asset to provide to Buyer and to the Custodian via electronic transmission, promptly upon request by Buyer a Servicing Tape for the month (or any portion thereof) prior to the date of Buyer’s request; provided that to the extent any servicer does not provide any such Servicing Tape, Seller shall prepare and provide to Buyer and the Custodian via electronic transmission a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape; provided, further, that regardless of whether Seller at any time delivers any such remittance report, Seller shall at all times use commercially reasonable efforts to cause each servicer to provide each Servicing Tape in accordance with this Article 11(u).

(v) Seller’s organizational documents shall at all times include the following provisions: (a) at all times there shall be, and Seller shall cause there to be, at least one (1) Independent Director; (b) Seller shall not, without the unanimous written consent of its board of directors including the Independent Director, take any Material Action or any action that might cause such entity to become insolvent; (c) no Independent Director may be removed or replaced unless Seller provides Buyer with not less than five (5) Business Days’ prior written notice of (i) any proposed removal of an Independent Director, together with a statement as to the reasons for such removal, and (ii) the identity of the proposed replacement Independent Director, together with a certification that such replacement satisfies the requirements set forth in the organizational documents for an Independent Director; and provided further, that any removal or replacement shall not be effective until the replacement Independent Director has accepted his or her appointment; (d) to the fullest extent permitted by applicable law, including Section 18-1101(c) of the Bankruptcy Code and notwithstanding any duty otherwise existing at law or in equity, the Independent Director shall consider only the interests of Seller, including its creditors in acting or otherwise voting with respect to a Material Action; (e) except for duties to Seller as set forth in subsection (d) above (including duties to its equity owners and its creditors solely to the extent of their respective economic interests in Seller but excluding (i) all other interests of the equity owners, (ii) the interests of other Affiliates of Seller, and (iii) the interests of any group of Affiliates of which Seller is a part), the Independent Director shall not have any fiduciary duties to any Person bound by its organizational documents; (f) the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing under applicable law; and (g) to the fullest extent permitted by applicable law, including Section 18-1101(e) of the Bankruptcy Code, an Independent Director shall not be liable to Seller or any other Person for breach of contract or breach of duties (including fiduciary duties), unless the Independent Director acted in bad faith or engaged in willful misconduct. No consent by Buyer shall be required for the removal of any Independent Director for Cause. “Cause” means, with respect to an Independent Director, (i)

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acts or omissions by such Independent Director that constitute willful disregard of such Independent Director’s duties as set forth in Seller’s organizational documents, (ii) that such Independent Director has engaged in or has been charged with, or has been convicted of, fraud or other acts constituting a crime under any law applicable to such Independent Director, (iii) that such Independent Director is unable to perform his or her duties as Independent Director due to death, disability or incapacity, or (iv) that such Independent Director no longer meets the definition of Independent Director.

(w) Seller has not and will not, except in connection with the obligations contemplated under the Transaction Documents:

(i) engage in any business or activity other than the entering into and performing its obligations under the Transaction Documents, and activities incidental thereto;

(ii) acquire or own any assets other than (A) the Purchased Assets, and (B) such incidental personal property related thereto;

(iii) merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;

(iv) fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable laws of the jurisdiction of its organization or formation, or (B) amend, modify, terminate or fail to comply with the material provisions of its organizational documents, in each case without the prior written consent of Buyer;

(v) own any subsidiary, or make any investment in, any Person;

(vi) commingle its assets with the assets of any other Person (excluding any consolidation of its financials with those of an Affiliate in accordance with GAAP), or permit any Affiliate or constituent party independent access to its bank accounts;

(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the debt incurred pursuant to this Agreement and the other Transaction Documents and unsecured trade debt in an unpaid amount less than $100,000;

(viii) fail to maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person; except that Seller’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that (A) appropriate notation shall be made on such consolidated financial statements to indicate the separate identity of Seller from such Affiliate and that Seller’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) Seller’s assets, liabilities and net worth shall also be listed on Seller’s own separate balance sheet;

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(ix) except for capital contributions or capital distributions permitted under the terms and conditions of Seller’s organizational documents and properly reflected on its books and records, enter into any transaction, contract or agreement with any general partner, member, shareholder, principal, guarantor of the obligations of Seller, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;

(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(xi) assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;

(xii) except in connection with the origination of the Purchased Assets, make any loans or advances to any Person, or own any stock or securities of, any Person;

(xiii) (A) fail to file its own tax returns separate from those of any other Person, except to the extent Seller is not required to file tax returns under Applicable Law, (B) fail to pay any taxes required to be paid under Applicable Law, or any obligation to reimburse its equityholders or their Affiliates for any taxes that such equityholders or their Affiliates may incur as a result of any profits or losses of Seller;

(xiv) fail to (A) hold itself out to the public as a legal entity separate and distinct from any other Person, (B) conduct its business solely in its own name or (C) correct any misunderstanding of which Seller has Knowledge regarding its separate identity;

(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations, provided that the foregoing shall not require any member, partner or shareholder of Seller to make any additional capital contributions to Seller;

(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of all directors or managers of Seller, including, without limitation, the Independent Director, take any Material Action or any action that might cause such entity to become insolvent;

(xvii) fail to allocate shared expenses (including, without limitation, shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses and to use separate stationery, invoices and checks bearing its own name;

(xviii) fail to remain solvent or pay its own liabilities only from its own funds; provided that the foregoing shall not require any member, partner or shareholder of Seller to make any additional capital contributions to Seller;

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(xix) acquire obligations or securities of its partners, members, shareholders or other Affiliates, as applicable;

(xx) have any employees, but shall be permitted to utilize employees of its Affiliates pursuant to arms-length terms;

(xxi) fail to maintain and use separate stationery, invoices and checks bearing its own name;

(xxii) have any of its obligations guaranteed by an Affiliate except for the Guarantee Agreement;

(xxiii) identify itself as a department or division of any other Person; or

(xxiv) except in connection with the Purchased Assets, buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).

(x) With respect to each Eligible Asset to be purchased hereunder, Seller shall notify Buyer in writing of the creation of any right or interest in such Eligible Asset or related Underlying Mortgaged Property that is senior to or pari passu with the rights and interests that are to be transferred to Buyer under this Agreement and the other Transaction Documents, and whether any such interest will be held or obtained by Seller or an Affiliate of Seller.

(y) Seller shall be solely responsible for the fees and expenses of the Custodian, Depository and each servicer (including, without limitation, the Interim Servicer) of any or all of the Purchased Assets.

(z) Seller shall obtain estoppels and agreements reasonably acceptable to Buyer for each Asset that is subject to a ground lease.

(aa) Seller shall notify Buyer in writing of any event or occurrence that could be reasonably determined to cause Guarantor to breach any of the covenants contained in paragraph 9 of the Guarantee Agreement.

(bb) With respect to each Purchased Asset subject to a Transaction, Seller shall pay Buyer the applicable Purchased Asset Fee for such Purchased Asset as forth herein and in the Fee Letter.

ARTICLE 12.

EVENTS OF DEFAULT; REMEDIES

(a) Each of the following events shall constitute an “Event of Default” under this Agreement:

(i) Seller or Guarantor shall fail to repurchase (A) Purchased Assets upon the applicable Repurchase Date or (B) a Purchased Asset that is no longer an Eligible Asset in accordance with Article 12(c);

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(ii) Buyer shall fail to receive on any Remittance Date the accreted value of the Price Differential (less any amount of such Price Differential previously paid by Seller to Buyer) (including, without limitation, in the event the Income paid or distributed on or in respect of the Purchased Assets is insufficient to make such payment and Seller does not make such payment or cause such payment to be made) (except that such failure shall not be an Event of Default by Seller if sufficient Income, including Principal Proceeds which would otherwise be remitted to Seller pursuant to Article 5 of this Agreement, is on deposit in the Depository Account and the Depository fails to remit such funds to Buyer);

(iii) Seller or Guarantor shall fail to cure any Margin Deficit, to the extent such Margin Deficit equals or exceeds the Minimum Transfer Amount, in accordance with Article 4 of this Agreement;

(iv) Seller or Guarantor shall fail to make any payment not otherwise addressed under this Article 12(a) owing to Buyer that has become due, whether by acceleration or otherwise under the terms of this Agreement, the Pledge Agreement, the Guarantee Agreement or any other Transaction Document, which failure is not remedied within five (5) Business Days of notice thereof;

(v) Seller shall default in the observance or performance of its obligation in Article 7(c) or any agreement contained in Articles 10 or 11 of this Agreement and such default shall not be cured within five (5) Business Days after notice by Buyer to Seller thereof;

(vi) an Act of Insolvency occurs with respect to Seller or Guarantor;

(vii) any employee with a title equivalent or more senior to that of “Senior Vice President” of Seller or Guarantor shall admit in writing to any Person in an external communication (whether electronic or otherwise) its inability to, or its intention not to, perform any of its material obligations hereunder;

(viii) the Custodial Agreement, the Depository Agreement, the Pledge Agreement, the Guarantee Agreement or any other Transaction Document or a replacement therefor acceptable to Buyer shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by Seller;

(ix) Seller or Guarantor shall be in default under (A) any Indebtedness of Seller or Guarantor, as applicable, which default (1) involves the failure to pay a matured obligation in excess of $250,000, with respect to Seller or $15,000,000, with respect to Guarantor or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, if the aggregate amount of the Indebtedness in respect of which such default or defaults shall have occurred is at least $250,000, with respect to Seller or $15,000,000, with respect to Guarantor; or (B) any other material contract to which Seller or Guarantor is a party, which default (1) involves the failure to pay a matured obligation if the aggregate amount of such obligation is

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greater than $250,000 with respect to Seller or $15,000,000 with respect to Guarantor, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract if the aggregate amount of such obligations is greater than $250,000, with respect to Seller or $15,000,000, with respect to Guarantor;

(x) Seller or Guarantor shall be in default under any Indebtedness of Seller or Guarantor, as applicable, to Buyer or any of its present or future Affiliates, which default (A) involves the failure to pay a matured obligation, or (B) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness;

(xi) (A) Seller or an ERISA Affiliate shall engage in any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that is not exempt from such Sections of ERISA and the Code, (B) any material “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the Pension Benefit Guaranty Corporation or a Plan shall arise on the assets of Seller or any ERISA Affiliate, (C) a “Reportable Event” (as referenced in Section 4043(b)(3) of ERISA) shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event (as so defined) or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (D) any Plan shall terminate for purposes of Title IV of ERISA, (E) Seller or any ERISA Affiliate shall, or in the reasonable opinion of Buyer is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or (F) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (A) through (F) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect;

(xii) either (A) the Transaction Documents shall for any reason not cause, or shall cease to cause, Buyer to be the owner free of any adverse claim of any of the Purchased Assets, and such condition is not cured by Seller within three (3) Business Days after notice thereof from Buyer to Seller, or (B) if a Transaction is recharacterized as a secured financing, and the Transaction Documents with respect to any Transaction shall for any reason cease to create and maintain a valid first priority security interest in favor of Buyer in any of the Purchased Assets;

(xiii) an “Event of Default,” “Termination Event,” “Potential Event of Default” or other default or breach, however defined therein, occurs under any Hedging Transaction on the part of Seller, or the counterparty to Seller on any such Hedging Transaction with a Qualified Hedge Counterparty ceases to be a Qualified Hedge Counterparty, that is otherwise not cured within any applicable cure period thereunder or, if no cure period exists thereunder, which is not cured by Seller within three (3) Business Days after notice thereof from an Affiliated Hedge Counterparty or Qualified Hedge Counterparty to Seller;

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(xiv) any governmental, regulatory, or self-regulatory authority shall have taken any action to suspend or terminate the rights, privileges, or operations of Seller, which suspension has a Material Adverse Effect in the determination of Buyer;

(xv) any other representation (other than the representations and warranties of Seller set forth in Exhibit VI and Article 9(b)(viii)(D), which shall not be considered an Event of Default if incorrect or untrue in any material respect) made by Seller to Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated and such incorrect or untrue representation exists and continues unremedied for ten (10) calendar days after the earlier of receipt of written notice thereof from Buyer or Seller’s Knowledge of such incorrect or untrue representation;

(xvi) a final non-appealable judgment by any competent court in the United States of America for the payment of money (A) rendered against Seller in an amount greater than $250,000 or (B) rendered against Guarantor in an amount greater than $15,000,000, and remained undischarged or unpaid for a period of sixty (60) days, during which period execution of such judgment is not effectively stayed by bonding over or other means reasonably acceptable to Buyer;

(xvii) if Seller shall breach or fail to perform any of the terms, covenants, obligations or conditions of this Agreement, other than as specifically otherwise referred to in this definition of “Event of Default”, and such breach or failure to perform is not remedied within the earlier of five (5) Business Days after (a) delivery of notice thereof to Seller by Buyer, or (b) Knowledge on the part of Seller of such breach or failure to perform; provided, that, if Buyer determines, in its sole discretion, that any such breach is capable of being cured and Seller is diligently and continuously pursuing such a cure in good faith but is not able to do so on a timely basis, Seller shall have an additional period of time, not to exceed thirty (30) additional days, within which to complete such cure; provided further, that such additional 30-day period shall not apply to any breach of or other failure to comply with the terms of Article 10(k) of this Agreement;

(xviii) the Guarantee Agreement or a replacement therefor acceptable to Buyer shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by Guarantor or Seller; and

(xix) the breach by Guarantor of any material term or condition set forth in the Guarantee Agreement or of any representation, warranty, certification or covenant made or deemed made in the Guarantee Agreement by Guarantor or if any certificate furnished by Guarantor to Buyer pursuant to the provisions hereof or thereof or any information with respect to the Purchased Assets furnished in writing on behalf of Guarantor shall prove to have been false or misleading in any respect as of the time made or furnished; provided, however, that any such default, failure to perform or breach shall not constitute an Event of Default if Guarantor cures such default or failure to perform, as the case may be, within the grace notice and/or cure period, if any, provided under the applicable agreement.

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(b) After the occurrence and during the continuance of an Event of Default, Seller hereby appoints Buyer as attorney-in-fact of Seller for the purpose of carrying out the provisions of this Agreement and taking any action and executing or endorsing any instruments that Buyer may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. If an Event of Default shall occur and be continuing with respect to Seller, the following rights and remedies shall be available to Buyer:

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

(ii) If Buyer exercises or is deemed to have exercised the option referred to in Article 12(b)(i) of this Agreement:

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

(B) to the extent permitted by applicable law, the Repurchase Price with respect to each Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the Accelerated Repurchase Date to but excluding the date of payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such Transaction multiplied by (y) the Repurchase Price for such Transaction (decreased by (I) any amounts actually remitted to Buyer by the Depository or Seller from time to time pursuant to Article 5 of this Agreement and applied to such Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant to Article 12(b)(iii) of this Agreement); and

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

(iii) Upon the occurrence and during the continuance of an Event of Default with respect to Seller, Buyer may (A) immediately sell on a servicing released basis, at a public or private sale in a commercially reasonable manner and at such price or prices as Buyer may deem satisfactory any or all of the Purchased Assets, and/or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit for such Purchased Assets in an amount equal to the Market Value of such Purchased Assets against the aggregate unpaid Repurchase Price for such Purchased Assets and any other amounts owing by Seller under the Transaction Documents. The proceeds of any disposition of Purchased Assets effected pursuant to this

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Article 12(b)(iii) shall be applied, (v) first, to the costs and expenses incurred by Buyer in connection with Seller’s default; (w) second, to actual out-of-pocket damages incurred by Buyer in connection with Seller’s default (including, but not limited to, costs of cover and/or Hedging Transactions, if any), (x) third, to the Repurchase Price; (y) fourth, to any Breakage Costs; and (z) fifth, to return any excess to Seller.

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

(v) Seller shall be liable to Buyer and its Affiliates and shall indemnify Buyer and its Affiliates for (A) the amount (including in connection with the enforcement of this Agreement) of all out of pocket losses, and costs and expenses, including reasonable legal fees and expenses of outside counsel, actually incurred by Buyer in connection with or as a consequence of an Event of Default with respect to Seller and (B) all documented, actual costs incurred by Buyer in connection with the termination of Hedging Transactions in the event that Seller, from and after an Event of Default, takes any action to impede or otherwise affect Buyer’s remedies under this Agreement.

(vi) Buyer shall have, in addition to its rights and remedies under the Transaction Documents, all of the rights and remedies provided by applicable federal, state, foreign (where relevant), and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, the rights and remedies of a secured party under the UCC as in effect from time-to-time in the State of New York, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), in equity, and under any other agreement between Buyer and Seller. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Assets against all of Seller’s obligations to Buyer under this Agreement, without prejudice to Buyer’s right to recover any deficiency.

(vii) Subject to the applicable notice and cure periods set forth herein, Buyer may exercise any or all of the remedies available to Buyer immediately upon the occurrence of an Event of Default with respect to Seller and at any time during the continuance thereof. All rights and remedies arising under the Transaction Documents, as amended from time to time, are cumulative and not exclusive of any other rights or remedies that Buyer may have.

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

(c) If at any time Buyer determines that (i) any Purchased Asset is not an Eligible Asset (other than as a result of a breach of a Mark-to-Market Representation, which shall in no event, in and of itself, cause an Early Repurchase but may be used in connection with the determination of Market Value in accordance with this Agreement) or (ii) has been released from the possession of the Custodian for a period in excess of ten (10) calendar days, the related Transaction shall terminate and an Early Repurchase Date shall be deemed to occur with respect to such Purchased Asset. No later than three (3) Business Days after receiving written notice from Buyer or Seller becoming otherwise aware that such Purchased Asset is not an Eligible Asset, Seller shall repurchase the affected Purchased Asset and Seller shall pay the applicable Repurchase Price for such Purchased Asset to Buyer by depositing such amount in immediately available funds at the direction of Buyer.

ARTICLE 13.

SINGLE AGREEMENT

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction (including an Additional Purchase Transaction or Future Funding Transaction) hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

ARTICLE 14.

RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS

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SHALL BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF THE APPLICABLE PARTY. EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.

ARTICLE 15.

NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery or (d) by email, provided that such emailed notice must also be delivered by one of the means set forth above, to the address specified in Annex I hereto or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Article 15. A notice shall be deemed to have been given: (w) in the case of hand delivery, at the time of delivery, (x) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (y) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (z) in the case of email, upon receipt of confirmation, provided that such emailed notice was also delivered as required in this Article 15. A party receiving a notice that does not comply with the technical requirements for notice under this Article 15 may elect to waive any deficiencies and treat the notice as having been properly given.

ARTICLE 16.

ENTIRE AGREEMENT; SEVERABILITY

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

ARTICLE 17.

NON-ASSIGNABILITY

(a) Subject to Article 17(b) below, Seller may not assign any of its respective rights or obligations under this Agreement without the prior written consent of Buyer (not to be unreasonably withheld or delayed) and any attempt by Seller to assign any of its rights or obligations under this Agreement without the prior written consent of Buyer shall be null and void. Buyer may, without consent of Seller, sell to one or more banks, financial institutions or other entities (“Participants”) (other than with respect to an assignment to a Prohibited

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Transferee, which shall be subject to the prior written consent of Seller) participating interests in any Transaction, its interest in the Purchased Assets, or any other interest of Buyer under this Agreement. Buyer may, at any time and from time to time, upon prior written notice to Seller, assign to any Person (other than Prohibited Transferees, so long as no Event of Default has occurred and is continuing, in which case such limitation shall not apply) (an “Assignee” and together with Participants, each a “Transferee” and collectively, the “Transferees”) all or any part of its rights its interest in the Purchased Assets, or any other interest of Buyer under this Agreement; provided, however, that in all such circumstances (for the avoidance of doubt, including participations) other than a sale, assignment, transfer or participation by Buyer of one hundred percent (100%) of its rights and obligations under the Transaction Documents (which sale, assignment, transfer or participation, if Buyer does not retain control and authority over its rights and obligations under the Transaction Documents, shall be subject to the prior written consent of Seller, not to be unreasonably withheld, conditioned or delayed), (i) Buyer shall retain control and authority over its rights and obligations under the Transaction Documents and any Transaction, subject to major decision approval rights, (ii) Seller shall not be obligated or required to deal directly or indirectly with any Person other than Buyer, and (iii) Seller shall not be charged for, incur or be required to reimburse Buyer or any other Person for any costs or expense relating to any such sale, assignment, transfer or participation. Each of Seller and Guarantor agrees to reasonably cooperate with Buyer, at Buyer’s sole cost and expense, in connection with any such assignment, transfer or sale of participating interest and to enter into such restatements of, and amendments, supplements and other modifications to, this Agreement in order to give effect to such assignment, transfer or sale. Seller agrees that each properly registered Participant shall be entitled to the benefits of Article 3(h), Article 3(i), and Articles 3(n) through (s) (subject to the requirements and limitations therein, including, without limitation and for the avoidance of doubt, the requirements under Article 3(o) or Article 3(p) (it being understood that the documentation required under Article 3(p) shall be delivered to the participating Buyer or Assignee, as applicable)) to the same extent as if it were an Assignee and had acquired its interest by assignment pursuant to this Article 17(a); provided that such Participant (A) agrees to be subject to the provisions of Article 3 as if it were an Assignee under this Article 17(a), and (B) shall not be entitled to receive any greater payment under Article 3(o) or Article 3(q), with respect to any participation, than its participating Buyer or Assignee, as applicable, would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by a Governmental Authority, in any case which occurs after the Participant acquired the applicable participation. Each Buyer or Assignee that sells a participation agrees to use reasonable efforts to cooperate with Sellers to effectuate the provisions of Article 3 with respect to the applicable Participant.

(b) Title to all Purchased Assets and Purchased Items shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets. Nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets and Purchased Items or otherwise selling, pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets and Purchased Items, all on terms that Buyer may determine in its sole discretion other than with respect to repurchase transactions or sales, pledges, repledges, transfers, hypothecations, or rehypothecations to Prohibited Transferees, which shall be subject to the prior written consent of Seller; provided, however, that Buyer shall transfer the Purchased Assets to Seller on the applicable Repurchase Date free and clear of any

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pledge, lien, security interest, encumbrance, charge or other adverse claim on any of the Purchased Assets. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets or Purchased Items transferred to Buyer by Seller.

(c) Buyer, acting for this purpose as an agent of Seller, shall maintain at one of its offices a register for the recordation of the names and addresses of Buyer, and the percentage of the rights and obligations under this Agreement owing to, Buyer and each Transferee pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and Seller, Buyer, and each Transferee shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Buyer or Transferee, as applicable, hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by Seller at any reasonable time and from time to time upon reasonable prior notice; provided that Buyer shall have no obligation to disclose all or any portion of the Register regarding Participants (including the identity of any Participant or any information relating to a Participant’s beneficial interest in this Agreement) to any Person except to the extent that such disclosure is necessary to establish that such beneficial interest in this Agreement or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Register shall be conclusive absent manifest error, and Buyer shall treat each Person whose name is recorded in the Register as the owner of its respective interest for all purposes of this Agreement notwithstanding any notice to the contrary. No sale, assignment, transfer or participation pursuant to this Article 17 shall be effective until reflected in the Register.

ARTICLE 18.

GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

ARTICLE 19.

NO WAIVERS, ETC.

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

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ARTICLE 20.

USE OF EMPLOYEE PLAN ASSETS

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

(b) Subject to the last sentence of subparagraph (a) of this Article 20, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.

(c) By entering into a Transaction or a related Additional Purchase Transaction or Future Funding Transaction, pursuant to this Article 20, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition that Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is Seller in any outstanding Transaction involving a Plan Party.

ARTICLE 21.

INTENT

(a) The parties intend and recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code (except insofar as the type of Assets subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). The Parties intend (a) for each Transaction to qualify for the safe harbor treatment provided by the Bankruptcy Code and for Buyer to be entitled to all of the rights, benefits and protections afforded to Persons under the Bankruptcy Code with respect to a “repurchase agreement” as defined in Section 101(47) of the Bankruptcy Code and a “securities contract” as defined in Section 741(7) of the Bankruptcy Code and that payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 741 of the Bankruptcy Code, (b) for the grant of a security interest set forth in Article 6 to also be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code and a “repurchase agreement” as that term is defined in Section 101(47)(A)(v) of the Bankruptcy Code, and (c) that each party (for so long as each is either a “financial institution,” “financial participant,” “repo participant,” “master netting participant” or other entity listed in Section 546, 555, 559, 561, 362(b)(6) or 362(b)(7) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract,” and a “master netting agreement,” including (x) the rights, set forth in Article 12 and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Assets and terminate this Agreement, and (y) the right to offset or net out as set forth in Article 12 and in Sections 362(b)(6), 362 (b)(7), 362(b)(27), 362(o) and 546 of the Bankruptcy Code.

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(b) It is understood that either party’s right to accelerate or terminate this Agreement or to liquidate Assets delivered to it in connection with the Transactions hereunder or to exercise any other remedies pursuant to Article 12 hereof is a contractual right to accelerate, terminate or liquidate this Agreement or the Transactions as described in Sections 555 and 559 of the Bankruptcy Code. It is further understood and agreed that either party’s right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement or the Transactions hereunder is a contractual right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement as described in Section 561 of the Bankruptcy Code.

(c) The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in the FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

(d) Each party hereto hereby further agrees that it shall not challenge the characterization of (i) this Agreement or any Transaction as a “repurchase agreement,” “securities contract” and/or “master netting agreement,” or (ii) each party as a “repo participant” within the meaning of the Bankruptcy Code except insofar as the type of Asset subject to the Transactions or, in the case of a “repurchase agreement,” the term of the Transactions, would render such definition inapplicable.

(e) It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

(f) It is understood that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, and as used in Section 561 of the Bankruptcy Code.

(g) Notwithstanding anything herein to the contrary, it is the intention of the parties that, for U.S. Federal, state and local income and franchise tax purposes and for accounting purposes, each Transaction constitute a financing, and that Seller be (except to the extent that Buyer shall have exercised its remedies following an Event of Default) the owner of the Purchased Assets for such purposes. Unless prohibited by applicable law, Seller and Buyer shall treat the Transactions as described in the preceding sentence (including on any and all filings with any U.S. Federal, state, or local taxing authority) and agree not to take any action inconsistent with such treatment.

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ARTICLE 22.

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

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

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

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

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

ARTICLE 23.

CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

(a) Each party irrevocably and unconditionally (i) submits to the non-exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under this Agreement or relating in any way to this Agreement or any Transaction under this Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.

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

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(c) The parties hereby irrevocably waive, to the fullest extent each may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding and irrevocably consent to the service of any summons and complaint and any other process by the mailing of copies of such process to them at their respective address specified herein. The parties hereby agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Article 23 shall affect the right of Buyer to serve legal process in any other manner permitted by law or affect the right of Buyer to bring any action or proceeding against Seller or its property in the courts of other jurisdictions.

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

ARTICLE 24.

NO RELIANCE

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

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

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

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

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

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

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ARTICLE 25.

INDEMNITY

Seller hereby agrees to indemnify Buyer, Buyer’s Affiliates and each of its officers, directors, employees and agents (“Indemnified Parties”) from and against any and all actual out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including attorneys’ fees and disbursements) or disbursements (all of the foregoing, collectively “Indemnified Amounts”) that may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transactions shall have been repaid in full) be imposed on or asserted against any Indemnified Party in any way whatsoever arising out of or in connection with, or relating to, this Agreement or any Transactions hereunder or any action taken or omitted to be taken by any Indemnified Party under or in connection with any of the foregoing; provided, that Seller shall not be liable for losses resulting from the gross negligence, bad faith or willful misconduct of Buyer or any other Indemnified Party. Without limiting the generality of the foregoing, Seller agrees to hold Buyer harmless from and indemnify Buyer against all Indemnified Amounts with respect to all Purchased Assets relating to or arising out of any violation or alleged violation of any environmental law, rule or regulation or any consumer credit laws, including without limitation ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act; provided, that Seller shall not be liable for losses resulting from the gross negligence, bad faith or willful misconduct of Buyer or any other Indemnified Party. In any suit, proceeding or action brought by Buyer in connection with any Purchased Asset for any sum owing thereunder, or to enforce any provisions of any Purchased Asset, Seller will save, indemnify and hold Buyer harmless from and against all out-of-pocket expense (including reasonable attorneys’ fees of outside counsel), loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller. Seller also agrees to reimburse Buyer as and when billed by Buyer for all Buyer’s reasonable out-of-pocket costs and expenses incurred in connection with Buyer’s due diligence reviews with respect to the Purchased Assets (including, without limitation, those incurred pursuant to Article 26 and Article 3 (including, without limitation, all Due Diligence Legal Expenses, even if the underlying prospective Transaction for which they were incurred does not take place for any reason) and the enforcement or the preservation of Buyer’s rights under this Agreement, any Transaction Documents or Transaction contemplated hereby, including without limitation the reasonable fees and disbursements of its outside counsel. Seller hereby acknowledges that the obligation of Seller hereunder is a recourse obligation of Seller. This Article 25 shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

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ARTICLE 26.

DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable prior notice to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Purchased Asset Files, Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession or under the control of Seller, any servicer or subservicer and/or the Custodian. Seller agrees to reimburse Buyer for any and all reasonable out-of-pocket costs and expenses incurred by Buyer with respect to the Purchased Assets during the term of this Agreement, which shall be paid by Seller to Buyer within five (5) days after receipt of an invoice therefor. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Purchased Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may enter into Transactions with Seller based solely upon the information provided by Seller to Buyer and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets. Buyer may underwrite such Purchased Assets itself or engage a third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Seller. Seller further agrees that Seller shall reimburse Buyer for any and all attorneys’ fees, costs and expenses incurred by Buyer in connection with continuing due diligence on Eligible Assets and Purchased Assets.

ARTICLE 27.

SERVICING

(a) Each servicer of any Purchased Asset (including the Interim Servicer) shall service the Purchased Assets for the benefit of Buyer and Buyer’s successors and assigns. Seller shall cause each such servicer (including the Interim Servicer) to service the Purchased Assets at Seller’s sole cost and for the benefit of Buyer in accordance with Accepted Servicing Practices; provided that, without prior written consent of Buyer in its sole discretion as required by Section 7(d), no servicer (including the Interim Servicer and the primary servicer) of any of the Purchased Assets shall take any action with respect to any Purchased Asset described in Section 7(d).

(b) Seller agrees that Buyer is the owner of all servicing records, including but not limited to any and all servicing agreements and pooling and servicing agreements (including, without limitation the Interim Servicing Agreement or any other servicing agreement relating to the servicing of any or all of the Purchased Assets) (collectively, the “Servicing Agreements”), files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history

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records, and any other records relating to or evidencing the servicing of Purchased Assets (the “Servicing Records”) so long as the Purchased Assets are subject to this Agreement. Seller covenants to safeguard such Servicing Records and to deliver them promptly to Buyer or its designee (including the Custodian) at Buyer’s request.

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

(d) Seller shall not employ sub-servicers or any other servicers other than the Interim Servicer pursuant to the Interim Servicing Agreement to service the Purchased Assets without the prior written approval of Buyer, in Buyer’s sole discretion. If the Purchased Assets are serviced by a sub-servicer or any other servicer, Seller shall, irrevocably assign all rights, title and interest (if any) in the servicing agreements in the Purchased Assets to Buyer. Seller shall cause all servicers (other than the Interim Servicer) and sub-servicers engaged by Seller to execute the Servicer Notice with Buyer acknowledging Buyer’s security interest and agreeing that each servicer and/or sub-servicer shall immediately transfer all Income and other amounts with respect to the Purchased Assets in accordance with the applicable Servicing Agreement and so long as any Purchased Asset is owned by Buyer hereunder, following notice from Buyer to Seller and each such servicer of an Event of Default under this Agreement, each such servicer (including the Interim Servicer) or sub-servicer shall take no action with regard to such Purchased Asset other than as specifically directed by Buyer. Seller shall cause each Servicing Agreement (including the Interim Servicing Agreement) to be consistent with the terms of this Agreement and each Servicer (including the Interim Servicer) to comply with such terms.

(e) The payment of servicing fees shall be subordinate to payment of amounts outstanding under any Transaction and this Agreement.

(f) For the avoidance of doubt, Seller retains no economic rights to the servicing, other than Seller’s rights under the Interim Servicing Agreement or any other servicing agreement related to the Purchased Assets. As such, Seller expressly acknowledges that the Purchased Assets are sold to Buyer on a “servicing released” basis with such servicing retained by the Servicer.

(g) Seller shall cause each servicer of a Purchased Asset to provide to Buyer and to the Custodian via electronic transmission, promptly upon request by Buyer a Servicing Tape for the month (or any portion thereof) prior to the date of Buyer’s request; provided, that to the extent any servicer does not provide any such Servicing Tape, Seller shall prepare and provide to Buyer and Custodian via electronic transmission a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape; and provided, further, that regardless of whether Seller at any time delivers any such remittance report, Seller shall at all times use commercially reasonable efforts to cause each servicer to provide each Servicing Tape in accordance herewith.

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ARTICLE 28.

MISCELLANEOUS

(a) Seller hereby acknowledges and agrees that Buyer may either securitize or participate, syndicate or otherwise sell interests in the Transactions, any Transaction and/or any portion thereof (any such transaction, a “Secondary Market Transaction”). To the extent Buyer desires to implement any Secondary Market Transaction, Seller agrees to reasonably cooperate with Buyer, at Buyer’s sole cost and expense (including, without limitation, Buyer’s attorneys’ fees and costs and Seller’s reasonable attorneys’ fees and costs), to plan, structure, negotiate, implement and execute such Secondary Market Transaction; provided that such Secondary Market Transaction has no material adverse tax consequence on Seller or their direct or indirect owners. Seller hereby further acknowledges and agrees that (i) Buyer reserves the right to convert any Transaction or Transactions (or any portion thereof) at any time (including in connection with a Secondary Market Transaction) to components, pari passu financing or subordinate financing, including one or more tranches of preferred equity, subordinate debt, multiple notes, or participation interests, each subordinate to such loan (“Subordinate Financing”, and the senior portion of any such Subordinate Financing, the “Senior Tranche”), and (ii) any such Subordinate Financing shall have individual coupon rates that, when blended with the Senior Tranche in the aggregate, shall initially equal the Price Differential. Seller acknowledges and agrees that the terms of any such Subordinate Financing will provide that a default under the Senior Tranche shall be a default under the respective Subordinate Financing. Seller consents to disclosure by Buyer or any of its Affiliates of the Purchased Assets, collateral therefor and Seller’s and its Affiliates’ and/or principals’ operating and financial statements in connection with the servicing of any Purchased Assets and any Secondary Market Transaction.

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

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

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

(e) Without limiting the rights and remedies of Buyer under the Transaction Documents, Seller shall pay Buyer’s reasonable actual out-of-pocket costs and expenses, including reasonable fees and expenses of accountants, attorneys and advisors, incurred in connection with the preparation, negotiation, execution and consummation of, and any amendment, supplement or modification to, the Transaction Documents and the Transactions thereunder, whether or not such Transaction Document (or amendment thereto) or Transaction is ultimately consummated. Seller agrees to pay Buyer on demand all costs and expenses (including reasonable expenses for legal services of every kind) of any subsequent enforcement

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of any of the provisions hereof, or of the performance by Buyer of any obligations of Seller in respect of the Purchased Assets, or any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Purchased Items and for the custody, care or preservation of the Purchased Items (including insurance costs) and defending or asserting rights and claims of Buyer in respect thereof, by litigation or otherwise. In addition, Seller agrees to pay Buyer on demand all reasonable costs and expenses (including reasonable expenses for legal services) incurred in connection with the maintenance of the Depository Account and registering the Purchased Items in the name of Buyer or its nominee. All such expenses shall be recourse obligations of Seller to Buyer under this Agreement. This Article 28(e) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

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

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

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

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

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

(k) Wherever pursuant to this Agreement, Buyer exercises any right given to it to consent or not consent, or to approve or disapprove, or any arrangement or term is to be satisfactory to, Buyer in its sole discretion, Buyer shall decide to consent or not consent, or to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory, in its sole and absolute discretion and such decision by Buyer shall be final and conclusive.

(l) Each Affiliated Hedge Counterparty is an intended third party beneficiary of this Agreement and the parties hereto agree that this Agreement shall not be amended or otherwise modified without the written consent of each Affiliated Hedge Counterparty, such consent not to be unreasonably withheld.

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IN WITNESS WHEREOF, the parties have executed this Agreement as a deed as of the day first written above.

BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association
By:	/s/ Thomas N. Cassino
	Name:	Thomas N. Cassino
	Title:	Vice President

SELLER:
PARLEX 4 FINANCE, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
	Name:	Douglas Armer
	Title:	Principal, Head of Capital Markets

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ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Prohibited Transferees
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III-A	Monthly Reporting Package
EXHIBIT III-B	Quarterly Reporting Package
EXHIBIT III-C	Annual Reporting Package
EXHIBIT IV	Form of Custodial Delivery Certificate
EXHIBIT V	Form of Power of Attorney
EXHIBIT VI	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VII	Asset Information
EXHIBIT VIII	Purchase Procedures
EXHIBIT IX	Form of Bailee Letter
EXHIBIT X	Form of Margin Deficit Notice
EXHIBIT XI	Form of Tax Compliance Certificates
EXHIBIT XII	UCC Filing Jurisdictions
EXHIBIT XIII	Form of Servicer Notice
EXHIBIT XIV	Form of Release Letter
EXHIBIT XV	Covenant Compliance Certificate
EXHIBIT XVI	Form of Re-Direction Letter

ANNEX I

Names and Addresses for Communications Between Parties

Buyer:

JPMorgan Chase Bank, National Association

4 New York Plaza, 20th Floor

New York, New York 10004

Attention: Ms. Nancy S Alto

Telephone: (212) 623-1989

Fax: (917) 546-2564

With copies to:

JPMorgan Chase Bank, National Association

270 Park Avenue, 10th Floor

New York, New York 10017-2014

Attention: Chuck Y. Lee

Telephone: (212) 834-5467

Fax: (212) 834-6593

and

Cadwalader Wickersham & Taft LLP

227 West Trade Street

Charlotte, North Carolina 28202

Attention: Stuart N. Goldstein, Esq.

Telephone: (704) 348-5258

Fax: (704) 348-5200

Seller:

Parlex 4 Finance, LLC

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue New York, NY 10154

Attention: Douglas Armer

Telephone: (212) 583-5000

Email: BXMTJPMRepo@blackstone.com

With a copy to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036-8704

Attention: David C. Djaha, Esq.

Telephone: (212) 841-0489

SCHEDULE I

Prohibited Transferees

All Affiliates, successors and assigns of the entities listed on this Schedule I and such other Persons indicated by Seller from time to time and approved by Buyer, such approval not to be unreasonably withheld, shall be Prohibited Transferees, as defined and used in the Agreement.

Angelo, Gordon & Co., L.P.	LoanCore Capital, LLC
Annaly Capital Management, Inc.	Lone Star U.S. Acquisitions, LLC
Apollo Commercial Real Estate Finance, Inc.	Macquarie Group Limited
Arbor Realty Trust Inc.	Mesa West Capital, LLC
Ares Commercial Real Estate Corporation	NCH Capital Inc.
Brookfield Investment Management Inc.	Newcastle Investment Corp.
Cantor Fitzgerald & Co.	NorthStar Realty Finance Corp.
CapitalSource Inc.	OZ Management LP
Children’s Investment Fund LP	Pacific Investment Management Company LLC
Colony Financial, Inc.	RAIT Financial Trust
CreXus Investment Corp.	Redwood Trust Inc.
Fortress Credit Corp.	Rialto Capital Management, LLC
Guggenheim Partners, LLC	SL Green Realty Corp.
H/2 Credit Manager LP	Square Mile Capital Management, LLC
iStar Financial Inc.	Starwood Capital Group
Invesco Ltd.	Starwood Property Trust, Inc.
KKR & Co. L.P.	TPG Capital Management, L.P.
Ladder Capital Securities LLC	Winthrop Capital Management, LLC

EXHIBIT I

CONFIRMATION STATEMENT

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

Ladies and Gentlemen:

Parlex 4 Finance, LLC is pleased to deliver our written CONFIRMATION of our agreement to enter into the Transaction pursuant to which JPMorgan Chase Bank, National Association shall purchase from us the Purchased Assets identified on the attached Schedule 1 to this Confirmation pursuant to the Master Repurchase Agreement, dated as of June 28, 2013 (the “Agreement”), between JPMorgan Chase Bank, National Association (the “Buyer”) and Parlex 4 Finance, LLC (the “Seller”) on the following terms. Capitalized terms used herein without definition have the meanings given in the Agreement.

Purchase Date:	, 201
Name of Purchased Asset(s):	[            ]
Aggregate Principal Amount of Purchased Assets:	$[            ]
Repurchase Date:
Purchase Price:	$[            ]
Market Value:	$[            ]
Pricing Rate:	one month LIBOR plus     %
Maximum Pricing Rate:	one month LIBOR plus     %
Advance Rate:	[    ]%
Maximum Advance Rate:	[    ]%
Governing Agreements:	[            ]
Requested Wire Amount:	$[        ]
Requested Fund Date:	[                    ] [    ], 201[  ]
Wiring Instructions:	[            ]1
Name and address for communications:	Buyer:
	JPMorgan Chase Bank, National Association
	4 New York Plaza, 20th Floor

¹  If wire instructions are to an account other than as specified in Section 3(b)(v) of the Agreement, the Confirmation shall require the signature of two Responsible Officers of Seller.

New York, New York 10004

Attention: Ms. Nancy S. Alto

Telephone: (212) 623-1989

Fax: (917) 546-2564

With copies to:

JPMorgan Chase Bank, National Association

270 Park Avenue, 10th Floor

New York, New York 10017-2014

Attention: Chuck Y. Lee

Telephone: (212) 834-5467

Fax: (212) 834-6593

and

Cadwalader Wickersham & Taft LLP

227 West Trade Street

Charlotte, North Carolina 28202

Attention: Stuart N. Goldstein, Esq.

Telephone: (704) 348-5258

Fax: (704) 348-5200

Seller:

Parlex 4 Finance, LLC

[            ]

[            ]

Attn: [            ]

Telephone: [            ]

Fax: [            ]

With a copy to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036-8704

Attention: David C. Djaha, Esq.

Telephone: (212) 841-0489

Fax: (212) [        ]-[            ]

PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

AGREED AND ACKNOWLEDGED:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:

Schedule 1 to Confirmation Statement

Purchased Assets:

Aggregate Principal Amount:

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLER

EXHIBIT III-A

MONTHLY REPORTING PACKAGE

The Monthly Reporting Package shall include, inter alia, the following:

• Any and all financial statements, rent rolls or other material information received from the borrowers related to each Purchased Asset. To the extent that Seller fails, after diligent efforts, to obtain on a monthly basis such financial statements, rent rolls and other material information from the borrowers, Seller shall provide such information to Buyer on a quarterly basis.

• A remittance report containing servicing information, including without limitation, the amount of each periodic payment due, the amount of each periodic payment received, the date of receipt, the date due, and whether there has been any material adverse change to the real property, on a loan by loan basis and in the aggregate, with respect to the Purchased Assets serviced by any servicer (such remittance report, a “Servicing Tape”), or to the extent any servicer does not provide any such Servicing Tape, a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape.

• A listing of all Purchased Assets reflecting the payment status of each Purchased Asset and any material changes in the financial or other condition of each Purchased Asset.

• A listing of any existing Defaults.

• Trustee remittance reports.

• All other information as Buyer, from time to time, may reasonably request with respect to Seller or any Purchased Asset, obligor or Underlying Mortgaged Property.

• A certificate substantially in the form attached hereto as Exhibit XV to this Agreement (the “Covenant Compliance Certificate”), from a Responsible Officer of Seller.

EXHIBIT III-B

QUARTERLY REPORTING PACKAGE

The Quarterly Reporting Package shall include, inter alia, the following:

• Consolidated unaudited financial statements of Guarantor presented fairly in accordance with GAAP or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the Exchange Act, or similar state securities laws, presented in accordance with applicable statutory and/or regulatory requirements and delivered to Buyer within the same time frame as are required to be filed in accordance with such applicable statutory or regulatory requirements, in either case accompanied by a Covenant Compliance Certificate, including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter, and certified as being true and correct by a Covenant Compliance Certificate.

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EXHIBIT III-C

ANNUAL REPORTING PACKAGE

The Annual Reporting Package shall include, inter alia, the following:

• Guarantor’s consolidated audited financial statements, prepared by a nationally recognized independent certified public accounting firm and presented fairly in accordance with GAAP or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the Exchange Act, or similar state securities laws, presented in accordance with applicable statutory and/or regulatory requirements and delivered to Buyer within the same time frame as are required to be filed in accordance with such applicable statutory and/or regulatory requirements, in either case accompanied by a Covenant Compliance Certificate, including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter accompanied by an unqualified report of the nationally recognized independent certified public accounting firm that prepared them.

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EXHIBIT IV

FORM OF CUSTODIAL DELIVERY CERTIFICATE

On this      day of                     , 201  , Parlex 4 Finance, LLC, a Delaware limited liability company, as Seller (“Seller”) under that certain Master Repurchase Agreement, dated as of June 28, 2013 (as amended, modified or supplemented from time to time, the “Repurchase Agreement”) between JPMorgan Chase Bank, National Association (“Buyer”) and Seller, does hereby deliver to the documents comprising the Purchased Asset File and listed on Exhibit B hereto with respect to the Purchased Asset identified in Exhibit A hereto to (a) [            ] (the “Bailee”), for Bailee to hold for the benefit of Buyer for delivery to the Custodian (as defined below) and pursuant to that certain Bailee Agreement, dated as of the date hereof between Seller, Buyer, and Bailee, and (b) U.S. Bank National Association (“Custodian”), as custodian under that certain Custodial Agreement, dated as of June [    ], 2013 (as amended, modified or supplemented from time to time, the “Custodial Agreement”), among Buyer, Custodian and Seller. Seller hereby instructs the Bailee to comply with the Bailee Letter and the Custodian to comply with the Custodial Agreement, in each case, holding the Purchased Asset File for the benefit of Buyer.

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

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

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

PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

Exhibit A

PURCHASED ASSET SCHEDULE

For each Purchased Asset set forth below, Seller shall provide, as applicable, the following information:

A. Loan Number:

B. Obligor Name:

C. Property Name and Address:

D. Original Balance:

E. Maturity Date:

Exhibit B

PURCHASED ASSET FILE

	DOCUMENT NAME	REQ’D2	DEL’D3	STATUS4	COMMENTS5
1.
2.
3.
4.
5.

²  Seller to indicate whether the document is required to be delivered.

³  Seller to indicate whether the document is being delivered (applies to this delivery only – do not mark if documents were previously delivered).

⁴  Seller to indicate whether the document is an original, certified copy or copy. For recordable documents, indicate if document is recorded, sent for recordation, not sent for recordation.

⁵  Seller may indicate any relevant comments.

EXHIBIT V

FORM OF POWER OF ATTORNEY

Know All Men by These Presents, that Parlex 4 Finance, LLC, a Delaware limited liability company (“Seller”), does hereby appoint JPMorgan Chase Bank, National Association (“Buyer”), its attorney-in-fact to act in Seller’s name, place and stead in any way that Seller could do with respect to (i) complete the endorsements of the Purchased Assets, including without limitation the Mortgage Notes, Assignments of Mortgages, Mezzanine Notes, Participation Certificates and assignments of participation interests and any transfer documents related thereto, (ii) record the Assignments of Mortgages, (iii) prepare and file and record each Assignment of Mortgage or other assignment, (iii) take any action (including exercising voting and/or consent rights) with respect to any participation interest, (iv) complete the preparation and filing, in form and substance satisfactory to Buyer, of such financing statements, continuation statements, and other UCC forms, as Buyer may from time to time, reasonably consider necessary to create, perfect, and preserve Buyer’s security interest in the Purchased Assets, (v) enforce Seller’s rights under the Purchased Assets purchased by Buyer pursuant to this Agreement, and (vi) to take such other steps as may be necessary or desirable to enforce Buyer’s rights against, under or with respect to such Purchased Assets and the related Purchased Asset Files and the Servicing Records and (iv) the enforcement of Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the Master Repurchase Agreement dated as of June 28, 2013 (the “Repurchase Agreement”), between Buyer and Seller, and to take such other steps as may be necessary or desirable to enforce Buyer’s rights against such Purchased Assets, the related Purchased Asset Files and the Servicing Records to the extent that Seller is permitted by law to act through an agent; provided that Buyer agrees not to exercise its rights under this instrument unless a monetary Default, material non-monetary Default or an Event of Default has occurred and is continuing.

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

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a deed this      day of June, 2013.

PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

-2-

EXHIBIT VI

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

THAT IS A SENIOR MORTGAGE LOAN

(OTHER THAN A PARTICIPATION INTEREST)

(a) As applicable, each Purchased Asset is either a whole loan and not a participation interest in a whole loan or an A-note interest in a whole loan. The sale of the Purchased Assets to Buyer or its designee does not require Seller to obtain any governmental or regulatory approval or consent that has not been obtained. It being understood that B-notes secured by the same Mortgage as a Senior Mortgage Loan are not subordinate mortgages or junior liens, there are no subordinate mortgages or junior liens encumbering the related Underlying Mortgaged Property. Seller has no knowledge of any mezzanine debt related to the Underlying Mortgaged Property and secured directly by the ownership interests in the Mortgagor.

(b) No Purchased Asset is 30 days or more delinquent in payment of principal and interest (without giving effect to any applicable grace period) and no Purchased Asset has been 30 days or more (without giving effect to any applicable grace period in the related Mortgage Note) past due.

(c) Except with respect to the ARD Loans, which provide that the rate at which interest accrues thereon increases after the Anticipated Repayment Date, the Purchased Assets (exclusive of any default interest, late charges or prepayment premiums) are fixed rate mortgage loans or floating rate mortgage loans with terms to maturity, at origination or as of the most recent modification, as set forth in the Purchased Asset Schedule.

(d) The information pertaining to each Purchased Asset set forth on the Purchased Asset Schedule is true and correct in all material respects as of the Purchase Date.

(e) At the time of the assignment of the Purchased Assets to Buyer, Seller had good and marketable title to and was the sole owner and holder of, each Purchased Asset, free and clear of any pledge, lien, encumbrance or security interest and such assignment validly and effectively transfers and conveys all legal and beneficial ownership of the Purchased Assets to Buyer free and clear of any pledge, lien, charge, encumbrance, participation or security interest, any other ownership interests and other interests on, in or to such Senior Mortgage Loan other than any servicing rights appointment, subservicing or similar agreement. Seller has full right and authority to sell, assign and transfer each Senior Mortgage Loan, and the assignment to Buyer constitutes a legal, valid and binding assignment of such Senior Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Senior Mortgage Loan subject to the rights and obligations of Seller pursuant to the Agreement.

(f) To the extent required under applicable law, Seller is authorized to transact and do business in the jurisdiction in which each Underlying Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Senior Mortgage Loan.

(g) In respect of each Purchased Asset, (A) the related Mortgagor is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico and (B) the Mortgagor is not a debtor in any bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or similar proceeding.

(h) Each Purchased Asset is secured by (or in the case of a participation interest, the Underlying Mortgage Loan is secured by) a Mortgage that establishes and creates a valid and subsisting first priority lien on the Underlying Mortgaged Property, free and clear of any liens, claims, encumbrances, participation interests, pledges, charges or security interests subject only to Permitted Encumbrances. Such Mortgage, together with any separate security agreement, UCC financing statement or similar agreement, if any, establishes and creates a first priority security interest in favor of Seller in all personal property owned by the Mortgagor that is used in, and is reasonably necessary to, the operation of the Underlying Mortgaged Property and, to the extent a security interest may be created therein and perfected by the filing of a UCC financing statement under the Uniform Commercial Code as in effect in the relevant jurisdiction, the proceeds arising from the Underlying Mortgaged Property and other collateral securing such Purchased Asset, subject only to Permitted Encumbrances. Each UCC financing statement, if any, filed with respect to personal property constituting a part of the Underlying Mortgaged Property and each UCC financing statement assignment, if any, filed with respect to such financing statement was in suitable form for filing in the filing office in which such financing statement was filed. There exists with respect to such Underlying Mortgaged Property an assignment of leases and rents provision, either as part of the related Mortgage or as a separate document or instrument, which establishes and creates a first priority security interest in and to leases and rents arising in respect of the Underlying Mortgaged Property subject only to Permitted Encumbrances. No person other than the related Mortgagor and the mortgagee owns any interest in any payments due under the related leases. The related Mortgage or such assignment of leases and rents provision provides for the appointment of a receiver for rents or allows the holder of the related Mortgage to enter into possession of the Underlying Mortgaged Property to collect rent or provides for rents to be paid directly to the holder of the related Mortgage in the event of a default beyond applicable notice and grace periods, if any, under the related Purchased Asset Documents. As of the origination date, there are no mechanics’ or other similar liens or claims that have been filed for work, labor or materials affecting the Underlying Mortgaged Property that are or may be prior or equal to the lien of the Mortgage, except those that are insured against pursuant to the applicable Title Policy (as defined below). As of the Purchase Date, there are no mechanics’ or other similar liens or claims that have been filed for work, labor or materials affecting the Underlying Mortgaged Property that are or may be prior or equal in priority to the lien of the Mortgage, except those that are insured against pursuant to the applicable Title Policy (as defined below). No (a) Underlying Mortgaged Property secures any mortgage loan not represented on the Purchased Asset Schedule, (b) Purchased Asset is cross-defaulted with any other mortgage loan, other than a mortgage loan listed on the Purchased Asset Schedule, or (c) Purchased Asset is secured by property that is not an Underlying Mortgaged Property.

(i) The Purchased Asset Documents for each Senior Mortgage Loan that is secured by a hospitality property operated pursuant to a franchise agreement includes an executed comfort letter or similar agreement signed by the Mortgagor and franchisor of such property enforceable by the Trust against such franchisor, either directly or as an assignee of the

originator. The Mortgage or related security agreement for each Mortgage Loan secured by a hospitality property creates a security interest in the revenues of such property for which a UCC financing statement has been filed in the appropriate filing office.

(j) The related Mortgagor under each Purchased Asset has good and indefeasible fee simple or, with respect to those Purchased Assets described in clause (cc) hereof, leasehold title to the Underlying Mortgaged Property comprising real estate subject to any Permitted Encumbrances.

(k) Seller has received an American Land Title Association (ALTA) lender’s title insurance policy or a comparable form of lender’s title insurance policy (or escrow instructions binding on the Title Insurer (as defined below) and irrevocably obligating the Title Insurer to issue such title insurance policy, a title policy commitment or pro-forma “marked up” at the closing of the related Purchased Asset and countersigned by the Title Insurer or its authorized agent) as adopted in the applicable jurisdiction (the “Title Policy”), which was issued by a nationally recognized title insurance company (the “Title Insurer”) qualified to do business in the jurisdiction where the Underlying Mortgaged Property is located, covering the portion of each Underlying Mortgaged Property comprised of real estate and insuring that the related Mortgage is a valid first lien in the original principal amount of the related Purchased Asset on the Mortgagor’s fee simple interest (or, if applicable, leasehold interest) in such Underlying Mortgaged Property comprised of real estate subject only to Permitted Encumbrances. Such Title Policy was issued in connection with the origination of the related Purchased Asset. No claims have been made under such Title Policy. Such Title Policy is in full force and effect and all premiums thereon have been paid and will provide that the insured includes the owner of the Purchased Asset and its successors and/or assigns. No holder of the related Mortgage has done, by act or omission, anything that would, and Seller has no Knowledge of any other circumstance that would, impair the coverage under such Title Policy. Each Title Policy contains no exclusion for, or affirmatively insures (except for any Underlying Mortgaged Property located in a jurisdiction where such affirmative insurance is not available in which case such exclusion may exist), (i) that the Underlying Mortgaged Property shown on the survey is the same as the property legally described in the Mortgage, and (i) to the extent that the Underlying Mortgaged Property consists of two or more adjoining parcels, such parcels are contiguous.

(l) The related Assignment of Mortgage and the related assignment of the assignment of leases executed in connection with each Mortgage, if any, have been recorded in the applicable jurisdiction (or, if not recorded, have been submitted for recording or are in recordable form) and constitute the legal, valid and binding assignment of such Mortgage and the related assignment of leases and rents from Seller to Buyer. The endorsement of the related Mortgage Note by Seller constitutes the legal, valid, binding and enforceable (except as such enforcement may be limited by anti-deficiency laws or bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)) assignment of such Mortgage Note, and together with such Assignment of Mortgage and the related assignment of assignment of leases and rents, legally and validly conveys all right, title and interest in such Purchased Asset and (except in the case of an A-note or a participation interest) the Purchased Asset Documents to Buyer.

(m) The Purchased Asset Documents for each Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan) provide that such Purchased Asset (or Underlying Mortgage Loan) is non-recourse except that the related Mortgagor and guarantor that has assets other than equity in the Underlying Mortgaged Property that are not de minimis and at least one individual or entity shall be fully liable for actual losses, liabilities, costs and damages arising from at least the following acts of the related Mortgagor and/or its principals: (i) if any petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by, consented to, or acquiesced in by, the Mortgagor; (ii) Mortgagor or guarantor shall have colluded with other creditors to cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii) transfers of either the Underlying Mortgaged Property or equity interests in Mortgagor made in violation of the Purchased Asset Documents; and (b) contains provisions providing for recourse against the Mortgagor and guarantor (which is a natural person or persons, or an entity distinct from the Mortgagor (but may be affiliated with the Mortgagor) that has assets other than equity in the Underlying Mortgaged Property that are not de minimis), for losses and damages sustained in the case of (i) (A) misapplication, misappropriation or conversion of rents, insurance proceeds or condemnation awards, or (B) any security deposits not delivered to lender upon foreclosure or action in lieu thereof (except to the extent applied in accordance with leases prior to an event of default under the Purchased Asset Documents); (ii) the Mortgagor’s fraud or intentional misrepresentation; (iii) willful misconduct by the Mortgagor or guarantor; (iv) breaches of the environmental covenants in the Purchased Asset Documents; or (v) commission of material physical waste at the Underlying Mortgaged Property, which may, with respect to this clause (v), in certain instances, be limited to acts or omissions of the related Mortgagor, guarantor, property manager or their affiliates, employees or agents.

(n) The Purchased Asset Documents for each Purchased Asset contain enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the practical realization against the Underlying Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure, and there is no exemption available to the related Mortgagor that would interfere with such right of foreclosure except (i) any statutory right of redemption or (ii) any limitation arising under anti deficiency laws or by bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(o) Each of the related Mortgage Notes and Mortgages are the legal, valid and binding obligations of the related Mortgagor named on the Purchased Asset Schedule and each of the other related Purchased Asset Documents is the legal, valid and binding obligation of the parties thereto (subject to any non-recourse provisions therein), enforceable in accordance with its terms, except as such enforcement may be limited by anti-deficiency laws or bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law), and except that certain provisions of such Purchased Asset Documents are or may be unenforceable in whole or in part under applicable state or federal laws, but the inclusion of such provisions does not render any of the Purchased Asset Documents invalid as a whole, and such Purchased Asset Documents taken as a whole are enforceable to the extent necessary and customary for the practical realization of the principal rights and benefits afforded thereby.

(p) The terms of the Purchased Assets or the related Purchased Asset Documents, (including, in the case of a participation, the documents evidencing the Underlying Mortgage Loan) have not been altered, impaired, modified or waived in any material respect, except prior to the Purchase Date by written instrument duly submitted for recordation, to the extent required, and as specifically set forth by a document in the related Purchased Asset File.

(q) With respect to each Mortgage that is a deed of trust, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee, and no fees or expenses are or will become payable to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor other than de minimis fees paid in connection with the full or partial release of the Underlying Mortgaged Property or related security for such Purchased Asset following payment of such Purchased Asset in full. The material terms of such Mortgage and related Purchased Asset Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect.

(r) No Purchased Asset has been satisfied, canceled, subordinated, released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

(s) Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, including, without limitation, any valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Senior Mortgage Loan, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto. None of the Purchased Asset Documents provides for a release of a portion of the Underlying Mortgaged Property from the lien of the Mortgage except upon payment or defeasance in full of all obligations under the Mortgage, provided that, notwithstanding the foregoing, certain of the Purchased Assets may allow partial release (a) upon payment or defeasance of an allocated loan amount which may be formula based, but in no event less than 125% of the allocated loan amount, or (b) in the event the portion of the Underlying Mortgaged Property being released was not given any material value in connection with the underwriting or appraisal of the related Purchased Asset.

(t) As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or, by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach under the related Purchased Asset Documents. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

(u) The principal amount of the Purchased Asset stated on the Purchased Asset Schedule has been fully disbursed as of the Purchase Date (except for certain amounts that were fully disbursed by the mortgagee, but escrowed pursuant to the terms of the related Purchased Asset Documents) and there are no future advances required to be made by the mortgagee under any of the related Purchased Asset Documents. Any requirements under the related Purchased Asset Documents regarding the completion of any on-site or off-site improvements and to disbursements of any escrow funds therefor have been or are being complied with or such escrow funds are still being held. The value of the Underlying Mortgaged Property relative to the value reflected in the most recent appraisal thereof is not materially impaired by any improvements that have not been completed. Seller has not, nor, have any of its agents or predecessors in interest with respect to the Purchased Assets, in respect of such Purchased Asset, directly or indirectly, advanced funds or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor other than (a) interest accruing on such Purchased Asset from the date of such disbursement of such Purchased Asset to the date which preceded by thirty (30) days the first payment date under the related Mortgage Note and (b) application and commitment fees, escrow funds, points and reimbursements for fees and expenses, incurred in connection with the origination and funding of the Purchased Asset.

(v) No Purchased Asset has capitalized interest included in its principal balance, or provides for any shared appreciation rights or other equity participation therein and no contingent or additional interest contingent on cash flow or, except for ARD Loans, negative amortization accrues or is due thereon.

(w) Each Purchased Asset identified in the Purchased Asset Schedule as an ARD Loan substantially fully amortizes over its stated term, which term is at least 60 months after the related Anticipated Repayment Date. Each ARD Loan has an Anticipated Repayment Date not less than seven years following the origination of such Purchased Asset. If the related Mortgagor elects not to prepay its ARD Loan in full on or prior to the Anticipated Repayment Date pursuant to the existing terms of the Purchased Asset or a unilateral option (as defined in Treasury Regulations under Article 1001 of the Code) in the Purchased Asset exercisable during the term of the mortgage loan, (i) the Purchased Asset’s interest rate will step up to an interest rate per annum as specified in the related Purchased Asset Documents; provided, however, that payment of such Excess Interest shall be deferred until the principal of such ARD Loan has been paid in full; (ii) all or a substantial portion of the Excess Cash Flow collected after the Anticipated Repayment Date shall be applied towards the prepayment of such ARD Loan and once the principal balance of an ARD Loan has been reduced to zero all Excess Cash Flow will be applied

to the payment of accrued Excess Interest; and (iii) if the property manager for the Underlying Mortgaged Property can be removed by or at the direction of the mortgagee on the basis of a debt service coverage test, the subject debt service coverage ratio shall be calculated without taking account of any increase in the related Mortgage Interest Rate on such Purchased Asset’s Anticipated Repayment Date. No ARD Loan provides that the property manager for the Underlying Mortgaged Property can be removed by or at the direction of the mortgagee solely because of the passage of the related Anticipated Repayment Date.

(x) Each Purchased Asset identified in the Purchased Asset Schedule as an ARD Loan with a hard lockbox requires that tenants at the Underlying Mortgaged Property shall (and each Purchased Asset identified in the Purchased Asset Schedule as an ARD Loan with a springing lockbox requires that tenants at the Underlying Mortgaged Property shall, upon the occurrence of a specified trigger event, including, but not limited to, the occurrence of the related Anticipated Repayment Date) make rent payments into a lockbox controlled by the holder of the Purchased Asset and to which the holder of the Purchased Asset has a first perfected security interest; provided however, with respect to each ARD Loan that is secured by a multi-family property with a hard lockbox, or with respect to each ARD Loan that is secured by a multi-family property with a springing lockbox, upon the occurrence of a specified trigger event, including, but not limited to, the occurrence of the related Anticipated Repayment Date, tenants either pay rents to a lockbox controlled by the holder of the mortgage loan or deposit rents with the property manager who will then deposit the rents into a lockbox controlled by the holder of the Purchased Asset.

(y) The servicing and collection practices used by Seller in respect of each Senior Mortgage Loan and the terms of the Purchased Asset Documents evidencing such Purchased Asset comply in all material respects with all applicable local, state and federal laws, and regulations and Seller has complied with all material requirements pertaining to the origination, funding and servicing of the Purchased Assets, including but not limited to, usury and any and all other material requirements of any federal, state or local law to the extent non-compliance would have a Material Adverse Effect on the Purchased Asset and was in all material respects legal, proper and prudent, in accordance with Seller’s customary commercial mortgage servicing practices.

(z) The Underlying Mortgaged Property is, in all material respects, in compliance with, and is used and occupied in accordance with, all restrictive covenants of record applicable to such Underlying Mortgaged Property and applicable zoning laws and all material inspections, licenses, permits and certificates of occupancy required by law, ordinance or regulation to be made or issued with regard to the Underlying Mortgaged Property governing the occupancy, use, and operation of such Underlying Mortgaged Property have been obtained and are in full force and effect, except to the extent (a) any material non-compliance with applicable zoning laws is insured by an ALTA lender’s title insurance policy (or binding commitment therefor), or the equivalent as adopted in the applicable jurisdiction, or a law and ordinance insurance policy that provides coverage for additional costs to rebuild and/or repair the property to current zoning regulations, (b) the inability to restore the Underlying Mortgaged Property to the full extent of the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of such Underlying Mortgaged Property, or title insurance coverage has been obtained for such nonconformity, the failure to obtain or maintain such inspections,

licenses, permits or certificates of occupancy does not materially impair or materially and adversely affect the use and/or operation of the Underlying Mortgaged Property as it was used and operated as of the date of origination of the Purchased Asset or the rights of a holder of the related Purchased Asset, or (c) no improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Underlying Mortgaged Property or are insured by applicable provisions of the Title Policy.

(aa) All (a) taxes, water charges, sewer rents, assessments or other similar outstanding governmental charges and governmental assessments that became due and owing prior to the Purchase Date in respect of the Underlying Mortgaged Property (excluding any related personal property), and that if left unpaid, would be, or might become, a lien on such Underlying Mortgaged Property having priority over the related Mortgage and (b) insurance premiums or ground rents that became due and owing prior to the Purchase Date in respect of the Underlying Mortgaged Property (excluding any related personal property), have been paid, or if any such items are disputed, an escrow of funds in an amount sufficient (together with escrow payments required to be made prior to delinquency) to cover such taxes and assessments and any late charges due in connection therewith has been established. As of the date of origination, the Underlying Mortgaged Property consisted of one or more separate and complete tax parcels. For purposes of this representation and warranty, the items identified herein shall not be considered due and owing until the date on which interest or penalties would be first payable thereon.

(bb) None of the improvements that were included for the purpose of determining the appraised value of the Underlying Mortgaged Property at the time of the origination of such Purchased Asset lies outside the boundaries and building restriction lines of such Underlying Mortgaged Property, except to the extent that they are legally nonconforming as contemplated by the representation in clause (48) below, and no improvements on adjoining properties encroach upon such Underlying Mortgaged Property, with the exception in each case of (a) immaterial encroachments that do not materially adversely affect the security intended to be provided by the related Mortgage or the use, enjoyment, value or marketability of such Underlying Mortgaged Property or (b) encroachments affirmatively covered by the related Title Policy. With respect to each Purchased Asset, the property legally described in the survey, if any, obtained for the Underlying Mortgaged Property for purposes of the origination thereof is the same as the property legally described in the Mortgage. Seller has no knowledge of any material issues with the physical condition of the Underlying Mortgaged Property that Seller believes would have a material adverse effect on the use, operation or value of the Underlying Mortgaged Property other than those disclosed in the engineering report and those addressed in sub-clauses (a) and (b) of the preceding sentence.

(cc) As of the date of the applicable engineering report (which was performed within 12 months prior to the Purchase Date) related to the Underlying Mortgaged Property and, as of the Purchase Date, the Underlying Mortgaged Property is either (i) in good repair, free and clear of any damage that would materially adversely affect the value of such Underlying Mortgaged Property as security for such Purchased Asset or the use and operation of the Underlying Mortgaged Property as it was being used or operated as of the origination date or (ii) escrows in an amount consistent with the standard utilized by Seller with respect to similar loans it holds for its own account have been established, which escrows will in all events be not less than 100% of

the estimated cost of the required repairs. The Underlying Mortgaged Property has not been damaged by fire, wind or other casualty or physical condition (including, without limitation, any soil erosion or subsidence or geological condition), which damage has not either been fully repaired or fully insured, or for which escrows in an amount consistent with the standard utilized by Seller with respect to loans it holds for its own account have not been established.

(dd) There are no proceedings pending or threatened, for the partial or total condemnation of the Underlying Mortgaged Property.

(ee) The Purchased Assets that are identified as being secured in whole or in part by a leasehold estate (a “Ground Lease”) (except with respect to any Purchased Asset also secured by the related fee interest in the Underlying Mortgaged Property), satisfy the following conditions:

I. such Ground Lease or a memorandum thereof has been or will be duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction; such Ground Lease, or other agreement received by the originator of the Purchased Asset from the ground lessor, provides that the interest of the lessee thereunder may be encumbered by the related Mortgage and does not restrict the use of the Underlying Mortgaged Property by such lessee, its successors or assigns, in a manner that would adversely affect the security provided by the Mortgage; as of the date of origination of the Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan), there was no material change of record in the terms of such Ground Lease with the exception of written instruments that are part of the related Purchased Asset File and there has been no material change in the terms of such Ground Lease since the recordation of the related Purchased Asset, with the exception of written instruments that are part of the related Purchased Asset File;

II. such Ground Lease is not subject to any liens or encumbrances superior to, or of equal priority with, the related Mortgage, other than the related fee interest and Permitted Encumbrances and such Ground Lease is, and shall remain, prior to any mortgage or other lien upon the related fee interest unless a nondisturbance agreement is obtained from the holder of any mortgage on the fee interest that is assignable to or for the benefit of the related lessee and the related mortgagee;

III. such Ground Lease provides that upon foreclosure of the related Mortgage or assignment of the Mortgagor’s interest in such Ground Lease in lieu thereof, the mortgagee under such Mortgage is entitled to become the owner of such interest upon notice to, but without the consent of, the lessor thereunder and, in the event that such mortgagee becomes the owner of such interest, such interest is further assignable by such mortgagee and its successors and assigns upon notice to such lessor, but without a need to obtain the consent of such lessor;

IV. such Ground Lease is in full force and effect and no default of tenant or ground lessor was in existence at origination, or is currently in existence under such Ground Lease, nor at origination was, or is there any condition that, but for the passage of time or the giving of notice, would result in a default under the terms of such Ground Lease; either such Ground Lease or a separate agreement contains the ground lessor’s covenant that it shall not amend, modify, cancel or terminate such Ground Lease without the prior written consent of the mortgagee under such Mortgage and any amendment, modification, cancellation or termination of the Ground Lease without the prior written consent of the related mortgagee, or its successors or assigns is not binding on such mortgagee, or its successor or assigns;

V. such Ground Lease or other agreement requires that the lessor thereunder will supply an estoppel and give written notice of any material default by the lessee to the mortgagee under the related Mortgage, provided that such mortgagee has provided the lessor with notice of its lien in accordance with the provisions of such Ground Lease; and such Ground Lease or other agreement provides that no such notice of default and no termination of the Ground Lease in connection with such notice of default shall be effective against such mortgagee unless such notice of default has been given to such mortgagee and any related Ground Lease contains the ground lessor’s covenant that it will give to the related mortgagee, or its successors or assigns, any notices it sends to the Mortgagor;

VI. either (i) the related ground lessor has subordinated its interest in the Underlying Mortgaged Property to the interest of the holder of the Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan) or (ii) such Ground Lease or other agreement provides that (A) the mortgagee under the related Mortgage is permitted a reasonable opportunity to cure any default under such Ground Lease that is curable, including reasonable time to gain possession of the interest of the lessee under the Ground Lease, after the receipt of notice of any such default before the lessor thereunder may terminate such Ground Lease; (B) in the case of any such default that is not curable by such mortgagee, or in the event of the bankruptcy or insolvency of the lessee under such Ground Lease, such mortgagee has the right, following termination of the existing Ground Lease or rejection thereof by a bankruptcy trustee or similar party, to enter into a new ground lease with the lessor on substantially the same terms as the existing Ground Lease; and (C) all rights of the Mortgagor under such Ground Lease may be exercised by or on behalf of such mortgagee under the related Mortgage upon foreclosure or assignment in lieu of foreclosure;

VII. such Ground Lease has an original term (or an original term plus one or more optional renewal terms that under all circumstances may be exercised, and will be enforceable, by the mortgagee or its assignee) that extends not less than 20 years beyond the stated maturity date of the related Purchased Asset (or in the case of a participation interest, of the Underlying Mortgage Loan);

VIII. under the terms of such Ground Lease and the related Mortgage, taken together, any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than in respect of a total or substantially total loss or taking or the portion of the condemnation award allocable to the ground lessee’s interest (other than in respect of a total or substantially total loss or taking as addressed in subpart (IX))) will be applied either to the repair or restoration of all or part of the Underlying Mortgaged Property, with the mortgagee under such Mortgage or a financially responsible institution acting as trustee appointed by it, or consented to by it, or by the lessor having the right to hold and disburse such proceeds as the repair or restoration progresses (except in such cases where a provision entitling another party to hold and disburse such proceeds would not be viewed as commercially unreasonable by a prudent institutional lender), or to the payment in whole or in part of the outstanding principal balance of such Purchased Asset together with any accrued and unpaid interest thereon;

IX. in the case of a total or substantial taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the Underlying Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Senior Mortgage Loan, together with any accrued interest;

X. Seller has not received any written notice of default under or notice of termination of such ground lease. To Seller’s Knowledge, there is no default under such ground lease and no condition that, but for the passage of time or giving of notice, would result in a default under the terms of such ground lease and such ground lease is in full force and effect; and

XI. such Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by Seller; such Ground Lease contains a covenant (or applicable laws provide) that the lessor thereunder is not permitted, in the absence of an uncured default, to disturb the possession, interest or quiet enjoyment of any lessee in the relevant portion of such Underlying Mortgaged Property subject to such Ground Lease for any reason, or in any manner, which would materially adversely affect the security provided by the related Mortgage.

(ff) An Environmental Site Assessment (an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant relating to each Underlying Mortgaged Property and prepared no earlier than 12 months prior to the Purchase Date was obtained and reviewed by Seller in connection with the origination of such Purchased Asset and a copy is included in the Purchased Asset File.

(gg) There are no adverse circumstances or conditions with respect to or affecting the Underlying Mortgaged Property that would constitute or result in a material violation of any applicable federal, state or local environmental laws, rules and regulations (collectively, “Environmental Laws”) and such ESA (i) did not reveal any known circumstance or condition that rendered the Underlying Mortgaged Property at the date of the ESA in material noncompliance with applicable Environmental Laws or the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) or the need for further investigation, or (ii) if any material noncompliance with Environmental Laws or the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, other than with respect to an Underlying Mortgaged Property (A) for which environmental insurance is maintained, or (B) that would require (x) any expenditure less than or equal to 5% of the outstanding principal balance of the mortgage loan to achieve or maintain compliance in all material respects with any Environmental Laws or (y) any expenditure greater than 5% of the outstanding principal balance of such Purchased Asset to achieve or maintain compliance in all material respects with any Environmental Laws for which, in connection with this clause (y), adequate sums, but in no event less than 125% of the estimated cost as set forth in the Environmental Site Assessment, were reserved in connection with the origination of the Purchased Asset and for which the related Mortgagor has covenanted to perform, or (iii) as to which the related Mortgagor or one of its affiliates is currently taking or required to take such actions, if any, with respect to such conditions or circumstances as have been recommended by the Environmental Site Assessment or required by the applicable Governmental Authority, or

(iv) as to which another responsible party not related to the Mortgagor with assets reasonably estimated by Seller at the time of origination to be sufficient to effect all necessary or required remediation identified in a notice or other action from the applicable Governmental Authority is currently taking or required to take such actions, if any, with respect to such regulatory authority’s order or directive, or (v) as to which the conditions or circumstances identified in the Environmental Site Assessment were investigated further and based upon such additional investigation, an environmental consultant recommended no further investigation or remediation, or (vi) as to which a party with financial resources reasonably estimated to be adequate to cure the condition or circumstance that would give rise to such material violation provided a guarantee or indemnity to the related Mortgagor or to the mortgagee to cover the costs of any required investigation, testing, monitoring or remediation, or (vii) as to which the related Mortgagor or other responsible party obtained a “No Further Action” letter or other evidence reasonably acceptable to a prudent commercial mortgage lender that applicable federal, state, or local Governmental Authorities had no current intention of taking any action, and are not requiring any action, in respect of such condition or circumstance, or (viii) that would not require substantial cleanup, remedial action or other extraordinary response under any Environmental Laws reasonably estimated to cost in excess of 5% of the outstanding principal balance of such Purchased Asset;

(hh) Such Senior Mortgage Loan is the subject of an environmental insurance policy, issued by the issuer set forth on Schedule I (the “Policy Issuer”) and effective as of the date thereof (the “Environmental Insurance Policy”), (ii) the Environmental Insurance Policy is in full force and effect, there is no deductible and the trustee is a named insured under such policy, (iii)(a) a property condition or engineering report was prepared, if the Underlying Mortgaged Property was constructed prior to 1985, with respect to asbestos-containing materials (“ACM”) and, if the Underlying Mortgaged Property is a multifamily property, with respect to radon gas (“RG”) and lead-based paint (“LBP”), and (b) if such report disclosed the existence of a material and adverse LBP, ACM or RG environmental condition or circumstance affecting the Underlying Mortgaged Property, the related Mortgagor (A) was required to remediate the identified condition prior to closing the Senior Mortgage Loan or provide additional security or establish with the mortgagee a reserve in an amount deemed to be sufficient by the Mortgage Loan Seller, for the remediation of the problem, and/or (B) agreed in the Purchased Asset Documents to establish an operations and maintenance plan after the closing of the Senior Mortgage Loan that should reasonably be expected to mitigate the environmental risk related to the identified LBP, ACM or RG condition, (iv) on the effective date of the Environmental Insurance Policy, the Mortgage Loan Seller as originator had no knowledge of any material and adverse environmental condition or circumstance affecting the Underlying Mortgaged Property (other than the existence of LBP, ACM or RG) that was not disclosed to the Policy Issuer in one or more of the following: (a) the application for insurance, (b) a Mortgagor questionnaire that was provided to the Policy Issuer, or (c) an engineering or other report provided to the Policy Issuer, and (v) the premium of any Environmental Insurance Policy has been paid through the maturity of the policy’s term and the term of such policy extends at least five years beyond the maturity of the Senior Mortgage Loan.

(ii) Except for any hazardous materials being handled in accordance with applicable Environmental Laws, (A) there exists either (i) environmental insurance with respect to such Underlying Mortgaged Property or (ii) an amount in an escrow account pledged as security for

such Purchased Asset under the relevant Purchased Asset Documents equal to no less than 125% of the amount estimated in such Environmental Site Assessment as sufficient to pay the cost of such remediation or other action in accordance with such Environmental Site Assessment or (B) one of the statements set forth in clause (A)(ii) above is true, (i) such Underlying Mortgaged Property is not being used for the treatment or disposal of hazardous materials; (ii) no hazardous materials are being used or stored or generated for off-site disposal or otherwise present at such Underlying Mortgaged Property other than hazardous materials of such types and in such quantities as are customarily used or stored or generated for off-site disposal or otherwise present in or at properties of the relevant property type; and (iii) such Underlying Mortgaged Property is not subject to any environmental hazard (including, without limitation, any situation involving hazardous materials) that under the Environmental Laws would have to be eliminated before the sale of, or that could otherwise reasonably be expected to adversely affect in more than a de minimis manner the value or marketability of, such Underlying Mortgaged Property.

(jj) The related Mortgage or other Purchased Asset Documents contain covenants on the part of the related Mortgagor requiring its compliance with any present or future federal, state and local Environmental Laws and regulations in connection with the Underlying Mortgaged Property. The related Mortgagor (or an affiliate thereof) has agreed to indemnify, defend and hold Seller, and its successors and assigns (or in the case of a participation interest, the lender of record), harmless from and against any and all losses, liabilities, damages, penalties, fines, expenses and claims of whatever kind or nature (including attorneys’ fees and costs) imposed upon or incurred by or asserted against any such party resulting from a breach of the environmental representations, warranties or covenants given by the related Mortgagor in connection with such Purchased Asset.

(kk) For each of the Purchased Assets that is covered by environmental insurance, each environmental insurance policy is in an amount equal to 125% of the outstanding principal balance of the related Purchased Asset and has a term ending no sooner than the date that is five years after the maturity date (or, in the case of an ARD Loan, the final maturity date) of the related Purchased Asset. All environmental assessments or updates that were in the possession of Seller and that relate to an Underlying Mortgaged Property as being insured by an environmental insurance policy have been delivered to or disclosed to the environmental insurance carrier issuing such policy prior to the issuance of such policy.

(ll) As of the date of origination of the related Purchased Asset, and, as of the Purchase Date, the Underlying Mortgaged Property is covered by insurance policies providing the coverage described below and the Purchased Asset Documents permit the mortgagee to require the coverage described below. All premiums with respect to the insurance policies insuring each Underlying Mortgaged Property have been paid in a timely manner or escrowed to the extent required by the Purchased Asset Documents, and Seller has not received any notice of cancellation or termination. The relevant Purchased Asset File contains the insurance policy required for such Purchased Asset or a certificate of insurance for such insurance policy. Each Mortgage requires that the Underlying Mortgaged Property and all improvements thereon be covered by insurance policies providing (a) coverage in the amount of the lesser of full replacement cost of such Underlying Mortgaged Property and the outstanding principal balance of the related Purchased Asset (subject to customary deductibles) for fire and extended perils included within the classification “All Risk of Physical Loss” in an amount sufficient to prevent

the Mortgagor from being deemed a co-insurer and to provide coverage on a full replacement cost basis of such Underlying Mortgaged Property (in some cases exclusive of foundations and footings) with an agreed amount endorsement to avoid application of any coinsurance provision; such policies contain a standard mortgagee clause naming mortgagee and its successor in interest as additional insureds or loss payee, as applicable; (b) business interruption or rental loss insurance in an amount at least equal to (i) 12 months of operations or (ii) in some cases all rents and other amounts customarily insured under this type of insurance of the Underlying Mortgaged Property; (c) flood insurance (if any portion of the improvements on the Underlying Mortgaged Property is located in an area identified by the Federal Emergency Management Agency (“FEMA”), with respect to certain Purchased Assets and the Secretary of Housing and Urban Development with respect to other mortgage loans, as having special flood hazards) in an amount not less than amounts prescribed by FEMA; (d) workers’ compensation, if required by law; (e) comprehensive general liability insurance in an amount equal to not less than $1,000,000; all such insurance policies contain clauses providing they are not terminable and may not be terminated without thirty (30) days prior written notice to the mortgagee (except where applicable law requires a shorter period or except for nonpayment of premiums, in which case not less than ten (10) days prior written notice to the mortgagee is required). In addition, each Mortgage permits the related mortgagee to make premium payments to prevent the cancellation thereof and shall entitle such mortgagee to reimbursement therefor. Any insurance proceeds in respect of a casualty, loss or taking will be applied either to the repair or restoration of all or part of the Underlying Mortgaged Property or the payment of the outstanding principal balance of the related Purchased Asset together with any accrued interest thereon. The Underlying Mortgaged Property is insured by an insurance policy, issued by an insurer meeting the requirements of such Purchased Asset (or in the case of a participation interest, of the Underlying Mortgage Loan) and having a claims-paying or financial strength rating of at least A:X from A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or Moody’s. An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing the probable maximum loss (“PML”) for the Underlying Mortgaged Property in the event of an earthquake. In such instance, the PML was based on a return period of not less than 100 years, an exposure period of 50 years and a 10% probability of exceedence. If the resulting report concluded that the PML would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Underlying Mortgaged Property was obtained by an insurer rated at least A:X by A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or Moody’s. The insurer issuing each of the foregoing insurance policies is qualified to write insurance in the jurisdiction where the Underlying Mortgaged Property is located.

(mm) All amounts required to be deposited by each Mortgagor at origination under the related Purchased Asset Documents have been deposited at origination and there are no deficiencies with regard thereto.

(nn) Whether or not a Purchased Asset was originated by Seller, with respect to each Purchased Asset originated by Seller and each Purchased Asset originated by any Person other than Seller, as of the date of origination of the related Purchased Asset, and, with respect to each Purchased Asset originated by Seller and any subsequent holder of the Purchased Asset, as of the Purchase Date, there are no actions, suits, arbitrations or governmental investigations or

proceedings by or before any court or other Governmental Authority or agency now pending against or affecting the Mortgagor or guarantor under any Purchased Asset or any of the Mortgaged Properties that, if determined against such Mortgagor or such Underlying Mortgaged Property, would materially and adversely affect the value of such Underlying Mortgaged Property, the security intended to be provided with respect to the related Purchased Asset, the ability of such Mortgagor and/or the current use or operation of such Underlying Mortgaged Property to generate net cash flow to pay principal, interest and other amounts due under the related Purchased Asset, title to the Underlying Mortgaged Property, the validity or enforceability of the Mortgage, such guarantor’s ability to perform under the related guaranty, ; and there are no such actions, suits or proceedings threatened against such Mortgagor.

(oo) Each Purchased Asset complied at origination, in all material respects, with all of the terms, conditions and requirements of Seller’s underwriting standards applicable to such Purchased Asset and since origination, the Purchased Asset has been serviced in all material respects in a legal manner in conformance with Seller’s servicing standards.

(pp) The originator of the Purchased Asset or Seller has inspected or caused to be inspected each Underlying Mortgaged Property within the 12 months prior to the Purchase Date.

(qq) The Purchased Asset Documents require the Mortgagor to provide the holder of the Purchased Asset with quarterly and annual operating statements, financial statements and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements (i) with respect to each Senior Mortgage Loan with more than one Mortgagor are in the form of an annual combined balance sheet of the Mortgagor entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis and (ii) for each Senior Mortgage Loan with an original principal balance greater than $50 million shall be audited by an independent certified public accountant upon the request of the owner or holder of the Mortgage.

(rr) All escrow deposits and payments required by the terms of each Purchased Asset are in the possession, or under the control of Seller (or in the case of a participation interest, the servicer of the related mortgage loan), and all amounts required to be deposited by the applicable Mortgagor under the related Purchased Asset Documents have been deposited, and there are no deficiencies with regard thereto (subject to any applicable notice and cure period). All of Seller’s interest in such escrows and deposits will be conveyed by Seller to Buyer hereunder.

(ss) Each Mortgagor with respect to a Purchased Asset is an entity whose organizational documents or related Purchased Asset Documents provide that it is, and at least so long as the Purchased Asset is outstanding will continue to be, a Single Purpose Entity. Both the Purchased Asset Documents and the organizational documents of the Mortgagor with respect to each Senior Mortgage Loan with a principal balance as of the Purchase Date in excess of $5,000,000 provide that the Mortgagor is a Single Purpose Entity, and each Senior Mortgage Loan with a principal balance as of the Purchase Date of $20,000,000 or more has a counsel’s opinion regarding non-consolidation of the Mortgagor. For this purpose, “Single Purpose Entity” shall mean a Person, other than an individual, whose organizational documents provide

that it shall engage solely in the business of owning and operating the Underlying Mortgaged Property and that does not engage in any business unrelated to such property and the financing thereof, does not have any assets other than those related to its interest in the Underlying Mortgaged Property or the financing thereof or any indebtedness other than as permitted by the related Mortgage or other Purchased Asset Documents, and the organizational documents of which require that it have its own separate books and records and its own accounts, in each case that are separate and apart from the books and records and accounts of any other Person, except as permitted by the related Mortgage or other Purchased Asset Documents, and that it holds itself out as a legal entity, separate and apart from any other person or entity.

(tt) Each of the Purchased Assets contain a “due on sale” clause, which provides for the acceleration of the payment of the unpaid principal balance of the Purchased Asset (or in the case of a participation interest, of the related mortgage loan) if, without the prior written consent of the holder of the Purchased Asset (or in the case of an A-note or a participation interest, of the holder of title to the Underlying Mortgage Loan), the property subject to the Mortgage, or any controlling interest therein, is directly or indirectly transferred or sold (except that it may provide for transfers by devise, descent or operation of law upon the death of a member, manager, general partner or shareholder of a Mortgagor and that it may provide for assignments subject to the Purchased Asset holder’s approval of transferee, transfers to affiliates, transfers to family members for estate planning purposes, transfers among existing members, partners or shareholders in Mortgagors or transfers of passive interests so long as the key principals or general partner retains control). The Purchased Asset Documents contain a “due on encumbrance” clause, which provides for the acceleration of the payment of the unpaid principal balance of the Purchased Asset if the property subject to the Mortgage or any controlling interest in the Mortgagor is further pledged or encumbered, unless the prior written consent of the holder of the Purchased Asset is obtained (except that it may provide for assignments subject to the Purchased Asset holder’s approval of transferee, transfers to affiliates or transfers of passive interests so long as the key principals or general partner retains control). The Mortgage requires the Mortgagor to pay, to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, such fees, along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance all reasonable fees and expenses associated with securing the consent or approval of the holder of the Mortgage for a waiver of a “due on sale” or “due on encumbrance” clause or a defeasance provision. As of the Purchase Date, Seller holds no preferred equity interest in any Mortgagor and Seller holds no mezzanine debt related to such Underlying Mortgaged Property.

(uu) Each Purchased Asset containing provisions for defeasance of mortgage collateral requires either (a) the prior written consent of, and compliance with the conditions set by, the holder of the Purchased Asset to any defeasance, or (b)(i) the replacement collateral consist of U.S. “government securities,” within the meaning of Treasury Regulations Article 1.860 G-2(a)(8)(i), in an amount sufficient to make all scheduled payments under the Mortgage Note when due (up to the maturity date for the related Purchased Asset, the Anticipated Repayment Date for ARD Loans or the date on which the Mortgagor may prepay the related Purchased Asset without payment of any prepayment penalty); (ii) the loan may be assumed by a Single Purpose Entity approved by the holder of the Purchased Asset; (iii) counsel provide an opinion that the trustee has a perfected security interest in such collateral prior to any other claim or interest; and (iv) such other documents and certifications as the mortgagee may reasonably require, which

may include, without limitation, (A) a certification that the purpose of the defeasance is to facilitate the disposition of the mortgaged real property or any other customary commercial transaction and not to be part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages and (B) a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note when due. Each Purchased Asset containing provisions for defeasance provides that, in addition to any cost associated with defeasance, the related Mortgagor shall pay, as of the date the mortgage collateral is defeased, all scheduled and accrued interest and principal due as well as an amount sufficient to defease in full the Purchased Asset. In addition, if the related Purchased Asset permits defeasance, then the Purchased Asset Documents provide that the related Mortgagor shall (x) pay all reasonable fees associated with the defeasance of the Purchased Asset and all other reasonable expenses associated with the defeasance, or (y) provide all opinions required under the related Purchased Asset Documents, including a REMIC opinion, and any applicable rating agency letters confirming that no downgrade or qualification shall occur as a result of the defeasance. If the Senior Mortgage Loan permits partial releases of real property in connection with partial defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to 115% of the allocated loan amount for the real property to be released and the defeasance collateral is not permitted to be subject to prepayment, call, or early redemption. If the Mortgagor would continue to own assets in addition to the defeasance collateral, the portion of the Senior Mortgage Loan secured by defeasance collateral is required to be assumed by a Single Purpose Entity and the Mortgagor is required to deliver an opinion of counsel that Buyer has a perfected security interest in such collateral prior to any other claim or interest.

(vv) In the event that a Purchased Asset is secured by more than one Underlying Mortgaged Property, then, in connection with a release of less than all of such Mortgaged Properties, an Underlying Mortgaged Property may not be released as collateral for the related Purchased Asset unless, in connection with such release, an amount equal to not less than 125% of the Allocated Loan Amount for such Underlying Mortgaged Property is prepaid or, in the case of a defeasance, an amount equal to 125% of the Allocated Loan Amount is defeased through the deposit of replacement collateral (as contemplated in clause (34) hereof) sufficient to make all scheduled payments with respect to such defeased amount, or such release is otherwise in accordance with the terms of the Purchased Asset Documents. With respect to any partial release, either: (x) such release of collateral (i) would not constitute a “significant modification” of the Senior Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b)(2) and (ii) would not cause the subject Senior Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; or (y) the mortgagee or servicer can, in accordance with the related Purchased Asset Documents, condition such release of collateral on the related Mortgagor’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), for any Senior Mortgage Loan originated after December 6, 2010, if the fair market value of the real property constituting such Underlying Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Senior Mortgage Loan outstanding after the release, the Mortgagor is required to make a payment of principal in an amount not less than the amount required by the REMIC provisions of the Code.

In the case of any Senior Mortgage Loan originated after December 6, 2010, in the event of a taking of any portion of an Underlying Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Mortgagor can be required to pay down the principal balance of the Senior Mortgage Loan in an amount not less than the amount required by the REMIC provisions of the Code and, to such extent, the award for any such taking may not be required to be applied to the restoration of the Underlying Mortgaged Property or released to the Mortgagor, if, immediately after the release of such portion of the Underlying Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Underlying Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Senior Mortgage Loan.

In the case of any Senior Mortgage Loan originated after December 6, 2010, no such Senior Mortgage Loan that is secured by more than one Underlying Mortgaged Property or that is cross-collateralized with another Senior Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the loan-to-value ratio and other requirements of the REMIC provisions of the Code.

(ww) Each Underlying Mortgaged Property is owned in fee by the related Mortgagor, with the exception of (i) Mortgaged Properties that are secured in whole or in a part by a Ground Lease and (ii) out-parcels, and is used and occupied for commercial or multifamily residential purposes in accordance with applicable law.

(xx) Any material non-conformity with applicable zoning laws constitutes a legal non-conforming use or structure that, in the event of casualty or destruction, may be restored or repaired to the full extent of the use or structure at the time of such casualty, or for which law and ordinance insurance coverage has been obtained in amounts consistent with the standards utilized by Seller.

(yy) Neither Seller nor any affiliate thereof has any obligation to make any capital contributions to the related Mortgagor under the Purchased Asset. The Purchased Asset was not originated for the sole purpose of financing the construction of incomplete improvements on the Underlying Mortgaged Property.

(zz) The following statements are true with respect to the Underlying Mortgaged Property: (a) the Underlying Mortgaged Property is located on or adjacent to a dedicated road or has access to an irrevocable easement permitting ingress and egress and (b) the Underlying Mortgaged Property is served by public or private utilities, water and sewer (or septic facilities) and otherwise appropriate for the use in which the Underlying Mortgaged Property is currently being utilized.

(aaa) None of the Purchased Asset Documents contain any provision that expressly excuses the related borrower from obtaining and maintaining insurance coverage for acts of terrorism and, in circumstances where terrorism insurance is not expressly required, the mortgagee is not prohibited from requesting that the related borrower maintain such insurance, in each case, to the extent such insurance coverage is generally available for like properties in such

jurisdictions at commercially reasonable rates. Each Underlying Mortgaged Property is insured by an “all-risk” casualty insurance policy and such policy did not, as of the date of origination of the Senior Mortgage Loan, and, to Seller’s Knowledge, do not contain an express exclusion for (or, alternatively, is covered by a separate policy that insures against property damage resulting from) acts of terrorism.

(bbb) An appraisal of the Underlying Mortgaged Property was conducted in connection with the origination of such Purchased Asset (or in the case of a participation interest, the date of origination of the Underlying Mortgage Loan), and such appraisal satisfied the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, in either case as in effect on the date such Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan) was originated. The appraisal date is within 6 months of the Senior Mortgage Loan origination date, and within 12 months of the Purchase Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute (“MAI”) and, to Seller’s Knowledge, had no interest, direct or indirect, in the Underlying Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Senior Mortgage Loan. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation.

(ccc) The Senior Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the Senior Mortgage Loan to the related Mortgagor at origination did not exceed the non-contingent principal amount of the Senior Mortgage Loan and (B) either: (a) such Senior Mortgage Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (i) at the date the Senior Mortgage Loan was originated at least equal to 80% of the adjusted issue price of the Senior Mortgage Loan on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the Senior Mortgage Loan on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Senior Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the Senior Mortgage Loan; or (b) substantially all of the proceeds of such Senior Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Senior Mortgage Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the Senior Mortgage Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such Senior Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Senior Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Senior Mortgage Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-(b)(2). All terms used in this paragraph shall have the same meanings as set forth in the related Treasury Regulations.

(ddd) Seller has obtained a rent roll other than with respect to hospitality properties certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Senior Mortgage Loan. Seller has obtained operating histories with respect to each Underlying Mortgaged Property certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Senior Mortgage Loan. The operating histories collectively report on operations for a period equal to (a) at least a continuous three-year period or (b) in the event the Underlying Mortgaged Property was owned, operated or constructed by the Mortgagor or an affiliate for less than three years then for such shorter period of time, it being understood that for Mortgaged Properties acquired with the proceeds of a Senior Mortgage Loan, operating histories may not have been available.

(eee) Seller has obtained an organizational chart or other description of each Mortgagor which identifies all beneficial controlling owners of the Mortgagor (i.e., managing members, general partners or similar controlling person for such Mortgagor) (the “Controlling Owner”) and all owners that hold a 20% or greater direct ownership share (i.e., the “Major Sponsors”). Seller (1) required questionnaires to be completed by each Controlling Owner and guarantor or performed other processes designed to elicit information from each Controlling Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior history for at least 10 years regarding any bankruptcies or other insolvencies, any felony convictions, and (2) performed or caused to be performed searches of the public records or services such as Lexis/Nexis, or a similar service designed to elicit information about each Controlling Owner, Major Sponsor and guarantor regarding such Controlling Owner’s, Major Sponsor’s or guarantor’s prior history for at least 10 years regarding any bankruptcies or other insolvencies, any felony convictions, and provided, however, that records searches were limited to the last 10 years. ((1) and (2) collectively, the “Sponsor Diligence”). Based solely on the Sponsor Diligence, to the Knowledge of Seller, no Major Sponsor or guarantor (i) was in a state of federal bankruptcy or insolvency proceeding, (ii) had a prior record of having been in a state of federal bankruptcy or insolvency, or (iii) had been convicted of a felony.

(fff) With respect to each Senior Mortgage Loan predominantly secured by a retail, office or industrial property leased to a single tenant, the Mortgage Loan Seller reviewed such estoppel obtained from such tenant no earlier than 90 days prior to the origination date of the related Senior Mortgage Loan, and to the Mortgage Loan Seller’s knowledge based solely on the related estoppel certificate, the related lease is in full force and effect or if not in full force and effect the related space was underwritten as vacant, subject to customary reservations of tenant’s rights, such as, without limitation, with respect to common area maintenance and pass-through audits and verification of landlord’s compliance with co-tenancy provisions. With respect to each Mortgage Loan predominantly secured by a retail, office or industrial property, the Mortgage Loan Seller has received lease estoppels executed within 90 days of the origination date of the related Senior Mortgage Loan that collectively account for at least 65% of the in-place base rent for the Underlying Mortgaged Property or set of cross-collateralized properties that secure a Senior Mortgage Loan that is represented on the certified rent roll. To the Mortgage Loan Seller’s knowledge, each lease represented on the certified rent roll is in full force and effect, subject to customary reservations of tenant’s rights, such as with respect to common area maintenance and pass-through audits and verification of landlord’s compliance with co-tenancy provisions.

(ggg) Such Senior Mortgage Loan is not cross-collateralized or cross-defaulted with any other Asset that is not subject to a Transaction.

(hhh) No advance of funds has been made by Seller to the related Mortgagor, and no funds have been received from any person other than the related Mortgagor or an affiliate, directly, or, to the Knowledge of Seller, indirectly for, or on account of, payments due on the Senior Mortgage Loan. Neither Seller nor any Affiliate thereof has any obligation to make any capital contribution to any Mortgagor under the Senior Mortgage Loan, other than contributions made on or prior to the Purchase Date.

(iii) Seller has complied with its internal procedures with respect to all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 in connection with the origination of the Senior Mortgage Loan.

Defined Terms

As used in this Exhibit:

The term “Allocated Loan Amount” shall mean, for each Underlying Mortgaged Property, the portion of principal of the related Purchased Asset allocated to such Mortgaged Property for certain purposes (including determining the release prices of properties, if permitted) under such Purchased Asset as set forth in the related loan documents. There can be no assurance, and it is unlikely, that the Allocated Loan Amounts represent the current values of individual Mortgaged Properties, the price at which an individual Underlying Mortgaged Property could be sold in the future to a willing buyer or the replacement cost of the Mortgaged Properties.

The term “Anticipated Repayment Date” shall mean, with respect to any Purchased Asset that is indicated on the Purchased Asset Schedule as having a Revised Rate, the date upon which such Purchased Asset commences accruing interest at such Revised Rate.

The term “Assignment of Leases” shall have the meaning specified in paragraph 10 of this Exhibit VI.

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

The term “ARD Loan” shall mean any Purchased Asset that provides that if the unamortized principal balance thereof is not repaid on its Anticipated Repayment Date, such Purchased Asset will accrue Excess Interest at the rate specified in the related Mortgage Note and the Mortgagor is required to apply excess monthly cash flow generated by the Underlying Mortgaged Property to the repayment of the outstanding principal balance on such Purchased Asset.

The term “Due Date” shall mean the day of the month set forth in the related Mortgage Note on which each monthly payment of interest and/or principal thereon is scheduled to be first due.

The term “Environmental Site Assessment” shall mean a Phase I environmental report meeting the requirements of the American Society for Testing and Materials, and, if in accordance with customary industry standards a reasonable lender would require it, a Phase II environmental report, each prepared by a licensed third party professional experienced in environmental matters.

The term “Excess Cash Flow” shall mean the cash flow from the Underlying Mortgaged Property securing an ARD Loan after payments of interest (at the Mortgage Interest Rate) and principal (based on the amortization schedule), and (a) required payments for the tax and insurance fund and ground lease escrows fund, (b) required payments for the monthly debt service escrows, if any, (c) payments to any other required escrow funds and (d) payment of operating expenses pursuant to the terms of an annual budget approved by the servicer and discretionary (lender approved) capital expenditures.

The term “Excess Interest” shall mean any accrued and deferred interest on an ARD Loan in accordance with the following terms. Commencing on the respective Anticipated Repayment Date each ARD Loan (pursuant to its existing terms or a unilateral option, as defined in Treasury Regulations under Article 1001 of the Code, in the Purchased Assets exercisable during the term of the Purchased Asset) generally will bear interest at a fixed rate (the “Revised Rate”) per annum equal to the Mortgage Interest Rate plus a percentage specified in the related Purchased Asset Documents. Until the principal balance of each such Purchased Asset has been reduced to zero (pursuant to its existing terms or a unilateral option, as defined in Treasury Regulations under Article 1001 of the Code, in the Purchased Assets exercisable during the term of the mortgage loan), such Purchased Asset will only be required to pay interest at the Mortgage Interest Rate and the interest accrued at the excess of the related Revised Rate over the related Mortgage Interest Rate will be deferred (such accrued and deferred interest and interest thereon, if any, is “Excess Interest”).

The term “Mortgage Interest Rate” shall mean the fixed rate, or the formula applicable to determine the floating rate, of interest per annum that each Purchased Asset bears as of the Purchase Date.

The term “Permitted Encumbrances” shall mean:

I. the lien of current real property taxes, water charges, sewer rents and assessments not yet delinquent or accruing interest or penalties;

II. covenants, conditions and restrictions, rights of way, easements and other matters of public record acceptable to mortgage lending institutions generally and referred to in the related mortgagee’s title insurance policy;

III. other matters to which like properties are commonly subject and which are acceptable to mortgage lending institutions generally, and

IV. the rights of tenants, as tenants only, whether under ground leases or space leases at the Underlying Mortgaged Property

that together do not materially and adversely affect the related Mortgagor’s ability to timely make payments on the related Purchased Asset, which do not materially interfere with the benefits of the security intended to be provided by the related Mortgage or the use, for the use currently being made, the operation as currently being operated, enjoyment, value or marketability of such Underlying Mortgaged Property, provided, however, that, for the avoidance of doubt, Permitted Encumbrances shall exclude all pari passu, second, junior and subordinated mortgages but shall not exclude mortgages that secure Purchased Assets that are cross-collateralized with other Purchased Assets.

The term “Revised Rate” shall mean, with respect to those Purchased Assets on the Purchased Asset Schedule indicated as having a revised rate, the increased interest rate after the Anticipated Repayment Date (in the absence of a default) for each applicable Purchased Asset, as calculated and as set forth in the related Purchased Asset.

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

THAT IS A JUNIOR MORTGAGE LOAN

(OTHER THAN A PARTICIPATION INTEREST)

(a) The information set forth in the Purchased Asset Schedule is complete, true and correct in all material respects.

(b) There exists no material default, breach, violation or event of acceleration (and no event that, with the passage of time or the giving of notice, or both, would constitute any of the foregoing) under the documents evidencing or securing the Purchased Asset, in any such case to the extent the same materially and adversely affects the value of the Purchased Asset and the related underlying real property.

(c) Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto.

(d) The Purchased Asset Documents have been duly and properly executed by the originator of the Purchased Asset, and each is the legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Purchased Asset is not usurious.

(e) The terms of the related Purchased Asset Documents have not been impaired, waived, altered or modified in any material respect (other than by a written instrument that is included in the related Purchased Asset File).

(f) The assignment of the Purchased Asset constitutes the legal, valid and binding assignment of such Purchased Asset from Seller to or for the benefit of Buyer enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(g) All representations and warranties in the Purchased Asset Documents and in the underlying documents for the performing commercial mortgage loan secured by a first lien on a multifamily or commercial property to which such Purchased Asset relates are true and correct in all material respects.

(h) The servicing and collection practices used by Seller for the Purchased Asset have complied with applicable law in all material respects and are consistent with those employed by prudent servicers of comparable Purchased Assets.

(i) Seller is not a debtor in any state or federal bankruptcy or insolvency proceeding.

(j) As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or, by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach; provided, however, that the representations and warranties set forth in this sentence do not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of any subject matter otherwise covered by any other representation or warranty made by Seller in this Exhibit VI. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

(k) No Purchased Asset has been satisfied, canceled, subordinated (except to the senior mortgage loan from which the Purchased Asset is derived), released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

(l) There are no circumstances or conditions with respect to the Purchased Asset, the Underlying Mortgaged Property, the related Mortgage, the related Mortgagor, the Purchased Asset File or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Purchased Asset as an unacceptable investment, cause the Purchased Asset to become delinquent or adversely affect the value or marketability of the Purchased Asset.

(m) The Purchased Asset was underwritten strictly in accordance with each Seller’s underwriting standards and conforms to the standards that would be required by Buyer and the Rating Agencies for Buyer to effect one or more sales or assignments of the Purchased Asset or participation interests therein or securitizations of highly-rated single or multi-class securities secured by or evidencing ownership interests in the Purchased Asset and the related Mortgage.

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

THAT IS A PARTICIPATION INTEREST

IN A SENIOR MORTGAGE LOAN

OR JUNIOR MORTGAGE LOAN

(a) The representations and warranties set forth in this Exhibit VI regarding the Senior Mortgage Loan or Junior Mortgage Loan from which the Purchased Asset is derived shall be deemed incorporated herein in respect of such senior mortgage loan, provided, however, that, in the event that such senior mortgage loan was not originated by Seller or an Affiliate of Seller, Seller shall be deemed to be making the representations set forth in this Exhibit VI with respect to such senior mortgage loan to Seller’s Knowledge.

(b) The information set forth in the Purchased Asset Schedule is complete, true and correct in all material respects.

(c) There exists no material default, breach, violation or event of acceleration (and no event that, with the passage of time or the giving of notice, or both, would constitute any of the foregoing) under the documents evidencing or securing the Purchased Asset, in any such case to the extent the same materially and adversely affects the value of the Purchased Asset and the related underlying real property.

(d) Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto.

(e) The Purchased Asset Documents have been duly and properly executed by the originator of the Purchased Asset, and each is the legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Purchased Asset is not usurious.

(f) The terms of the related Purchased Asset Documents have not been impaired, waived, altered or modified in any material respect (other than by a written instrument that is included in the related Purchased Asset File).

(g) The assignment of the Purchased Asset constitutes the legal, valid and binding assignment of such Purchased Asset from Seller to or for the benefit of Buyer enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(h) All representations and warranties in the Purchased Asset Documents and in the underlying documents for the performing commercial mortgage loan secured by a first lien on a multifamily or commercial property to which such Purchased Asset relates are true and correct in all material respects.

(i) The servicing and collection practices used by Seller for the Purchased Asset have complied with applicable law in all material respects and are consistent with those employed by prudent servicers of comparable Purchased Assets.

(j) Seller is not a debtor in any state or federal bankruptcy or insolvency proceeding.

(k) As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach; provided, however, that the representations and warranties set forth in this sentence do not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of any subject matter otherwise covered by any other representation or warranty made by Seller in this Exhibit VI. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

(l) No Purchased Asset has been satisfied, canceled, subordinated (except to the senior mortgage loan from which the Purchased Asset is derived), released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

REPRESENTATIONS AND WARRANTIES

REGARDING PURCHASED ASSETS CONSISTING

OF MEZZANINE LOANS

(a) The Mezzanine Loan is a performing mezzanine loan secured by a pledge of all of the Capital Stock of a Mortgagor that owns income producing commercial real estate.

(b) As of the Purchase Date, such Mezzanine Loan complies in all material respects with, or is exempt from, all requirements of federal, state or local law relating to such Mezzanine Loan.

(c) Immediately prior to the sale, transfer and assignment to Buyer thereof, Seller had good and marketable title to, and was the sole owner and holder of, such Mezzanine Loan, and Seller is transferring such Mezzanine Loan free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such Mezzanine Loan. Upon consummation of the purchase contemplated to occur in respect of such Mezzanine Loan on the Purchase Date therefor, Seller will have validly and effectively conveyed to Buyer all legal and beneficial interest in and to such Mezzanine Loan free and clear of any pledge, lien, encumbrance or security interest.

(d) No fraudulent acts were committed by Seller in connection with its acquisition or origination of such Mezzanine Loan nor were any fraudulent acts committed by any Person in connection with the origination of such Mezzanine Loan.

(e) All information contained in the related Due Diligence Package (or as otherwise provided to Buyer) in respect of such Mezzanine Loan is accurate and complete in all material respects.

(f) Except as included in the Due Diligence Package, Seller is not a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of such Mezzanine Loan and Seller has not consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.

(g) Such Mezzanine Loan is presently outstanding, the proceeds thereof have been fully and properly disbursed and, except for amounts held in escrow by Seller, there is no requirement for any future advances thereunder.

(h) Seller has full right, power and authority to sell and assign such Mezzanine Loan and such Mezzanine Loan or any related Mezzanine Note has not been cancelled, satisfied or rescinded in whole or part nor has any instrument been executed that would effect a cancellation, satisfaction or rescission thereof.

(i) Other than consents and approvals obtained as of the related Purchase Date or those already granted in the documentation governing such Mezzanine Loan (the “Mezzanine

Loan Documents”), no consent or approval by any Person is required in connection with Seller’s sale and/or Buyer’s acquisition of such Mezzanine Loan, for Buyer’s exercise of any rights or remedies in respect of such Mezzanine Loan or for Buyer’s sale, pledge or other disposition of such Mezzanine Loan. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies.

(j) The Mezzanine Collateral is secured by a pledge of equity ownership interests in the related borrower under the Underlying Mortgage Loan or a direct or indirect owner of the related borrower and the security interest created thereby has been fully perfected in favor of Seller as lender under the Mezzanine Loan.

(k) The Underlying Property Owner has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with requisite power and authority to own its assets and to transact the business in which it is now engaged, the sole purpose of the Underlying Property Owner under its organizational documents is to own, finance, sell or otherwise manage the Properties and to engage in any and all activities related or incidental thereto, and the Mortgaged Properties constitute the sole assets of the Underlying Property Owner.

(l) The Underlying Property Owner has good and marketable title to the Underlying Mortgaged Property, no claims under the title policies insuring the Underlying Property Owner’s title to the Properties have been made, and the Underlying Property Owner has not received any written notice regarding any material violation of any easement, restrictive covenant or similar instrument affecting the Underlying Mortgaged Property.

(m) The representations and warranties made by the borrower (the “Mezzanine Borrower”) in the Mezzanine Loan Documents were true and correct in all material respects as of the date such representations and warranties were stated to be true therein, and there has been no adverse change with respect to the Mezzanine Loan, the Mezzanine Borrower, the Underlying Mortgaged Property or the Underlying Property Owner that would render any such representation or warranty not true or correct in any material respect as of the Purchase Date.

(n) The Mezzanine Loan Documents provide for the acceleration of the payment of the unpaid principal balance of the Mezzanine Loan if (i) the related borrower voluntarily transfers or encumbers all or any portion of any related Mezzanine Collateral, or (ii) any direct or indirect interest in the related borrower is voluntarily transferred or assigned, other than, in each case, as permitted under the terms and conditions of the related loan documents.

(o) Pursuant to the terms of the Mezzanine Loan Documents: (a) no material terms of any related Mortgage may be waived, canceled, subordinated or modified in any material respect and no material portion of such Mortgage or the Underlying Mortgaged Property may be released without the consent of the holder of the Mezzanine Loan; (b) no material action may be taken by the Underlying Property Owner with respect to the Underlying Mortgaged Property without the consent of the holder of the Mezzanine Loan; (c) the holder of the Mezzanine Loan is entitled to approve the budget of the Underlying Property Owner as it relates to the Underlying Mortgaged Property; and (d) the holder of the Mezzanine Loan’s consent is required prior to the Underlying Property Owner incurring any additional indebtedness.

(p) There is no (i) monetary default, breach or violation with respect to such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the owner of the Underlying Mortgaged Property (the “Underlying Property Owner”), (ii) material non-monetary default, breach or violation with respect to such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the Underlying Property Owner or (iii) event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration.

(q) No default or event of default has occurred under any agreement pertaining to any lien or other interest that ranks pari passu with or senior to the interests of the holder of such Mezzanine Loan or with respect to any Underlying Mortgage Loan or other indebtedness in respect of the related Underlying Mortgaged Property and there is no provision in any agreement related to any such lien, interest or loan which would provide for any increase in the principal amount of any such lien, other interest or loan.

(r) Seller’s security interest in the Mezzanine Loan is covered by a UCC-9 insurance policy (the “UCC-9 Policy”) in the maximum principal amount of the Mezzanine Loan insuring that the related pledge is a valid first priority lien on the collateral pledged in respect of such Mezzanine Loan (the “Mezzanine Collateral”), subject only to the exceptions stated therein (or a pro forma title policy or marked up title insurance commitment on which the required premium has been paid exists which evidences that such UCC-9 Policy will be issued), such UCC-9 Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, no material claims have been made thereunder and no claims have been paid thereunder, Seller has not done, by act or omission, anything that would materially impair the coverage under the UCC-9 Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be issued, the coverage to be provided thereby) will inure to the benefit of Buyer without the consent of or notice to the insurer.

(s) The Mezzanine Loan, and each party involved in the origination of the Mezzanine Loan, complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

(t) Seller has delivered to Buyer or its designee the original promissory note made in respect of such Mezzanine Loan, together with an original assignment thereof executed by Seller in blank.

(u) Seller has not received any written notice that the Mezzanine Loan may be subject to reduction or disallowance for any reason, including without limitation, any setoff, right of recoupment, defense, counterclaim or impairment of any kind.

(v) Seller has no obligation to make loans to, make guarantees on behalf of, or otherwise extend credit to, or make any of the foregoing for the benefit of, the Mezzanine Borrower or any other person under or in connection with the Mezzanine Loan.

(w) The servicing and collection practices used by the servicer of the Mezzanine Loan, and the origination practices of the related originator, have been in all respects legal, proper and prudent and have met customary industry standards by prudent institutional commercial mezzanine lenders and mezzanine loan servicers except to the extent that, in connection with its origination, such standards were modified as reflected in the documentation delivered to Buyer.

(x) If applicable, the ground lessor consented to and acknowledged that (i) the Mezzanine Loan is permitted / approved, (ii) any foreclosure of the Mezzanine Loan and related change in ownership of the ground lessee will not require the consent of the ground lessor or constitute a default under the ground lease, (iii) copies of default notices would be sent to Mezzanine Lender and (iv) it would accept cure from Mezzanine Lender on behalf of the ground lessee.

(y) To the extent Buyer was granted a security interest with respect to the Mezzanine Loan, such interest (i) was given for due consideration, (ii) has attached, (iii) is perfected, (iv) is a first priority Lien, and (v) has been appropriately assigned to Buyer by the Underlying Property Owner.

(z) No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority is required for any transfer or assignment by the holder of such Mezzanine Loan.

(aa) Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of such Mezzanine Loan is or may become obligated.

(bb) Seller has not advanced funds, or knowingly received any advance of funds from a party other than the borrower relating to such Mezzanine Loan, directly or indirectly, for the payment of any amount required by such Mezzanine Loan.

(cc) All real estate taxes and governmental assessments, or installments thereof, which would be a lien on any related Underlying Mortgaged Property and that prior to the Purchase Date for the related Purchased Asset have become delinquent in respect of such Underlying Mortgaged Property have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established. For purposes of this representation and warranty, real estate taxes and governmental assessments and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

(dd) As of the Purchase Date for the related Purchased Asset, each related Underlying Mortgaged Property was free and clear of any material damage (other than deferred maintenance for which escrows were established at origination) that would affect materially and adversely the value of such Underlying Mortgaged Property as security for the related Underlying Mortgage Loan and there was no proceeding pending or, based solely upon the delivery of written notice thereof from the appropriate condemning authority, threatened for the total or partial condemnation of such Underlying Mortgaged Property.

(ee) As of the Purchase Date of the Mezzanine Loan, all insurance coverage required under the Mezzanine Loan Documents and/or any mortgage loan related to the Underlying Mortgaged Property, which insurance covered such risks as were customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Underlying Mortgaged Property in the jurisdiction in which such Underlying Mortgaged Property is located, and with respect to a fire and extended perils insurance policy, is in an amount (subject to a customary deductible) at least equal to the lesser of (i) the replacement cost of improvements located on such Underlying Mortgaged Property, or (ii) the outstanding principal balance of the Underlying Mortgage Loan, and in any event, the amount necessary to prevent operation of any co-insurance provisions; and, except if such Underlying Mortgaged Property is operated as a mobile home park, is also covered by business interruption or rental loss insurance, in an amount at least equal to 12 months of operations of the related Underlying Mortgaged Property, all of which was in full force and effect with respect to each related Underlying Mortgaged Property; and, as of the Purchase Date for the related Purchased Asset, all insurance coverage required under the Mezzanine Loan Documents and/or any Underlying Mortgage Loan related to the Underlying Mortgaged Property, which insurance covers such risks and is in such amounts as are customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Underlying Mortgaged Property in the jurisdiction in which such Underlying Mortgaged Property is located, is in full force and effect with respect to each related Underlying Mortgaged Property; all premiums due and payable through the Purchase Date for the related Purchased Asset have been paid; and no notice of termination or cancellation with respect to any such insurance policy has been received by Seller; and except for certain amounts not greater than amounts which would be considered prudent by an institutional commercial and/or multifamily mortgage lender with respect to a similar mortgage loan and which are set forth in the Mezzanine Loan Documents and/or any Underlying Mortgage Loan related to the Underlying Mortgaged Property, any insurance proceeds in respect of a casualty loss, will be applied either (i) to the repair or restoration of all or part of the related Underlying Mortgaged Property or (ii) the reduction of the outstanding principal balance of the Underlying Mortgage Loan, subject in either case to requirements with respect to leases at the related Underlying Mortgaged Property and to other exceptions customarily provided for by prudent institutional lenders for similar loans. The Underlying Mortgaged Property is also covered by comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the related Underlying Mortgaged Property, in an amount customarily required by prudent institutional lenders. An architectural or engineering consultant has performed an analysis of the Underlying Mortgaged Properties located in seismic zone 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing the probable maximum loss (“PML”) for the Underlying Mortgaged Property in the event of an earthquake. In such instance, the PML was based on a 475 year lookback with a 10% probability of exceedance in a 50 year period. If the resulting report concluded that the PML would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Underlying Mortgaged Property was obtained by an insurer rated at least A-:V by A.M. Best Company or “BBB-” (or the equivalent) from S&P and Fitch or “Baa3” (or the equivalent) from Moody’s. If the Underlying Mortgaged Property is located in Florida or within 25 miles of the

coast of Texas, Louisiana, Mississippi, Alabama, Georgia, North Carolina or South Carolina such Underlying Mortgaged Property is insured by windstorm insurance in an amount at least equal to the lesser of (i) the outstanding principal balance of such Underlying Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the replacement cost, of the improvements located on the related Underlying Mortgaged Property.

(ff) The insurance policies contain a standard Mortgagee clause naming the Mortgagee, its successors and assigns as loss payee, in the case of a property insurance policy, and additional insured in the case of a liability insurance policy and provide that they are not terminable without 30 days prior written notice to the Mortgagee (or, with respect to non-payment, 10 days prior written notice to the Mortgagee) or such lesser period as prescribed by applicable law. Each Mortgage requires that the Mortgagor maintain insurance as described above or permits the Mortgagee to require insurance as described above, and permits the Mortgagee to purchase such insurance at the Mortgagor’s expense if Mortgagor fails to do so.

(gg) There is no material and adverse environmental condition or circumstance affecting the Underlying Mortgaged Property; there is no material violation of any applicable Environmental Law with respect to the Underlying Mortgaged Property; neither Seller nor the Underlying Property Owner has taken any actions which would cause the Underlying Mortgaged Property not to be in compliance with all applicable Environmental Laws; the underlying mortgage loan documents require the borrower to comply with all Environmental Laws; and each Mortgagor has agreed to indemnify the Mortgagee for any losses resulting from any material, adverse environmental condition or failure of the Mortgagor to abide by such Environmental Laws or has provided environmental insurance.

(hh) No borrower under the Mezzanine Loan nor any Mortgagor under any Underlying Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.

(ii) Each related Underlying Mortgaged Property was inspected by or on behalf of the related originator or an affiliate during the 12 month period prior to the related origination date.

(jj) There are no material violations of any applicable zoning ordinances, building codes and land laws applicable to the Underlying Mortgaged Property or the use and occupancy thereof which (i) are not insured by an ALTA lender’s title insurance policy (or a binding commitment therefor), or its equivalent as adopted in the applicable jurisdiction, or a law and ordinance insurance policy or (ii) would have a material adverse effect on the value, operation or net operating income of the Underlying Mortgaged Property. The Purchased Asset Documents and the underlying mortgage loan documents require the Underlying Mortgaged Property to comply with all applicable laws and ordinances.

(kk) None of the material improvements which were included for the purposes of determining the appraised value of any related Underlying Mortgaged Property at the time of the origination of the Mezzanine Loan or any related Underlying Mortgage Loan lies outside of the boundaries and building restriction lines of such property (except Underlying Mortgaged Properties which are legal non-conforming uses), to an extent which would have a material adverse affect on the value of the Underlying Mortgaged Property or the related Mortgagor’s use and operation of such Underlying Mortgaged Property (unless affirmatively covered by title

insurance) and no improvements on adjoining properties encroached upon such Underlying Mortgaged Property to any material and adverse extent (unless affirmatively covered by title insurance).

(ll) As of the Purchase Date for the related Purchased Asset, there was no pending action, suit or proceeding, or governmental investigation of which Seller, the Mezzanine Borrower or the Underlying Property Owner has received notice, against the Mortgagor or the related Underlying Mortgaged Property the adverse outcome of which could reasonably be expected to materially and adversely affect the Mezzanine Loan or the Underlying Mortgage Loan.

(mm) The improvements located on the Underlying Mortgaged Property are either not located in a federally designated special flood hazard area or, if so located, the Mortgagor is required to maintain or the Mortgagee maintains, flood insurance with respect to such improvements and such policy is in full force and effect in an amount no less than the lesser of (i) the original principal balance of the Underlying Mortgage Loan, (ii) the value of such improvements on the related Underlying Mortgaged Property located in such flood hazard area or (iii) the maximum allowed under the related federal flood insurance program.

(nn) Except for Mortgagors under Underlying Mortgage Loans the Underlying Mortgaged Property with respect to which includes a Ground Lease, the related Mortgagor (or its affiliate) has title in the fee simple interest in each related Underlying Mortgaged Property.

(oo) The related Underlying Mortgaged Property is not encumbered, and none of the Purchased Asset Documents or any underlying mortgage loan documents permits the related Underlying Mortgaged Property to be encumbered subsequent to the Purchase Date of the related Purchased Asset without the prior written consent of the holder thereof, by any lien securing the payment of money junior to or of equal priority with, or superior to, the lien of the related Mortgage (other than title exceptions, taxes, assessments and contested mechanics and materialmen’s liens that become payable after such Purchase Date).

(pp) Each related Underlying Mortgaged Property constitutes one or more complete separate tax lots (or the related Mortgagor has covenanted to obtain separate tax lots and a Person has indemnified the Mortgagee for any loss suffered in connection therewith or an escrow of funds in an amount sufficient to pay taxes resulting from a breach thereof has been established) or is subject to an endorsement under the related title insurance policy.

(qq) An appraisal of the related Underlying Mortgaged Property was conducted in connection with the origination of the Underlying Mortgage Loan; and such appraisal satisfied either (A) the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in either case as in effect on the date such Underlying Mortgage Loan was originated.

(rr) The related Underlying Mortgaged Property is served by public utilities, water and sewer (or septic facilities) and otherwise appropriate for the use in which the Underlying Mortgaged Property is currently being utilized.

(ss) With respect to each related Underlying Mortgaged Property consisting of a Ground Lease, Seller represents and warrants the following with respect to the related Ground Lease:

I. Such Ground Lease or a memorandum thereof has been or will be duly recorded no later than 30 days after the Purchase Date of the related Purchased Asset and such Ground Lease permits the interest of the lessee thereunder to be encumbered by the related Mortgage or, if consent of the lessor thereunder is required, it has been obtained prior to the Purchase Date.

II. Upon the foreclosure of the Underlying Mortgage Loan (or acceptance of a deed in lieu thereof), the Mortgagor’s interest in such Ground Lease is assignable to the Mortgagee under the leasehold estate and its assigns without the consent of the lessor thereunder (or, if any such consent is required, it has been obtained prior to the Purchase Date).

III. Such Ground Lease may not be amended, modified, canceled or terminated without the prior written consent of the Mortgagee and any such action without such consent is not binding on the Mortgagee, its successors or assigns, except termination or cancellation if (i) an event of default occurs under the Ground Lease, (ii) notice thereof is provided to the Mortgagee and (iii) such default is curable by the Mortgagee as provided in the Ground Lease but remains uncured beyond the applicable cure period.

IV. Such Ground Lease is in full force and effect, there is no material default under such Ground Lease, and there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default under such Ground Lease.

V. The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give notice of any default by the lessee to the Mortgagee. The Ground Lease or ancillary agreement further provides that no notice given is effective against the Mortgagee unless a copy has been given to the Mortgagee in a manner described in the Ground Lease or ancillary agreement.

VI. The Ground Lease (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, subject, however, to only the Title Exceptions or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the Mortgagee on the lessor’s fee interest in the Underlying Mortgaged Property is subject.

VII. A Mortgagee is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease) to cure any curable default under such Ground Lease before the lessor thereunder may terminate such Ground Lease.

VIII. Such Ground Lease has an original term (together with any extension options, whether or not currently exercised, set forth therein all of which can be exercised by the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground Lease) that extends not less than 20 years beyond the stated maturity date.

IX. Under the terms of such Ground Lease, any estoppel or consent letter received by the Mortgagee from the lessor, and the related Mortgage, taken together, any related insurance proceeds or condemnation award (other than in respect of a total or substantially total loss or taking) will be applied either to the repair or restoration of all or part of the related Underlying Mortgaged Property, with the Mortgagee or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment or defeasance of the outstanding principal balance of the Underlying Mortgage Loan, together with any accrued interest (except in cases where a different allocation would not be viewed as commercially unreasonable by any commercial mortgage lender, taking into account the relative duration of the Ground Lease and the related Mortgage and the ratio of the market value of the related Underlying Mortgaged Property to the outstanding principal balance of such Underlying Mortgage Loan).

X. The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by a prudent commercial lender.

XI. The ground lessor under such Ground Lease is required to enter into a new lease upon termination of the Ground Lease for any reason, including the rejection of the Ground Lease in bankruptcy.

EXHIBIT VII

ASSET INFORMATION

Loan ID #:

Borrower Name:

Borrower Address:

Borrower City:

Borrower State:

Borrower Zip Code:

Recourse?

Guaranteed?

Related Borrower Name(s):

Original Principal Balance:

Note Date:

Loan Date:

Loan Type (e.g. fixed/arm):

Current Principal Balance:

Current Interest Rate (per annum):

Paid to date:

Annual P&I:

Next Payment due date:

Index (complete whether fixed or arm):

Gross Spread/Margin (complete whether fixed or arm):

Life Cap:

Life Floor:

Periodic Cap:

Periodic Floor:

Rounding Factor:

Lookback (in days):

Interest Calculation Method (e.g., Actual/360):

Interest rate adjustment frequency:

P&I payment frequency:

First P&I payment due:

First interest rate adjustment date:

First payment adjustment date:

Next interest rate adjustment date:

Next payment adjustment date:

Conversion Date:

Converted Interest Rate Index:

Converted Interest Rate Spread:

Maturity date:

Loan term:

Amortization term:

Hyper-Amortization Flag:

ASSET INFORMATION (continued)

Hyper-Amortization Term:

Hyper-Amortization Rate Increase:

Balloon Amount:

Balloon LTV:

Prepayment Penalty Flag:

Prepayment Penalty Text:

Lockout Period:

Lien Position:

Fee/Leasehold:

Ground Lease Expiration Date:

CTL (Yes/No):

CTL Rating (Moody’s):

CTL Rating (Duff):

CTL Rating (S&P):

CTL Rating (Fitch):

Lease Guarantor:

CTL Lease Type (NNN, NN, Bondable):

Property Name:

Property Address:

Property City:

Property Zip Code:

Property Type (General):

Property Type (Specific):

Cross-collateralized (Yes/No)^††:

Property Size:

Year built:

Year renovated:

Actual Average Occupancy:

Occupancy Rent Roll Date:

Underwritten Average Occupancy:

Largest Tenant:

Largest Tenant SF:

Largest Tenant Lease Expiration:

2nd Largest Tenant:

2nd Largest Tenant SF:

2nd Largest Tenant Lease Expiration:

3rd Largest Tenant:

3rd Largest Tenant SF:

3rd Largest Tenant Lease Expiration:

Underwritten Average Rental Rate/ADR:

^†† If yes, give property information on each property covered and in aggregate as appropriate. Loan ID’s should be denoted with a suffix letter to signify loans/collateral.

ASSET INFORMATION (continued)

Underwritten Vacancy/Credit Loss:

Underwritten Other Income:

Underwritten Total Revenues:

Underwritten Replacement Reserves:

Underwritten Management Fees:

Underwritten Franchise Fees:

Underwritten Total Expenses:

Underwritten Leasing Commissions:

Underwritten Tenant Improvement Costs:

Underwritten NOI:

Underwritten NCF:

Underwritten Debt Service Constant:

Underwritten DSCR at NOI:

Underwritten DSCR at NCF:

Underwritten NOI Period End Date:

Hotel Franchise:

Hotel Franchise Expiration Date:

Appraiser Name:

Appraised Value:

Appraisal Date:

Appraisal Cap Rate:

Appraisal Discount Rate:

Underwritten LTV:

Environmental Report Preparer:

Environmental Report Date:

Environmental Report Issues:

Architectural and Engineering Report Preparer:

Architectural and Engineering Report Date:

Deferred Maintenance Amount:

Ongoing Replacement Reserve Requirement per A&E Report:

Immediate Repairs Escrow % (e.g. [    ]%):

Replacement Reserve Annual Deposit:

Replacement Reserve Balance:

Tenant Improvement/Leasing Commission Annual Deposits:

Tenant Improvement/Leasing Commission Balance:

Taxes paid through date:

Monthly Tax Escrow:

Tax Escrow Balance:

Insurance paid through date:

Monthly Insurance Escrow:

Insurance Escrow Balance:

Reserve/Escrow Balance as of Date:

Probable Maximum Loss %:

Covered by Earthquake Insurance (Yes/No):

ASSET INFORMATION (continued)

Number of times 30 days late in last 12 months:

Number of times 60 days late in last 12 months:

Number of times 90 days late in last 12 months:

Servicing Fee:

Notes:

EXHIBIT VIII

PURCHASE PROCEDURES

(a) Submission of Due Diligence Package. No less than fifteen (15) Business Days prior to the proposed Purchase Date or date of an Additional Purchase Transaction or Future Funding Transaction, as applicable, Seller shall deliver to Buyer a due diligence package for Buyer’s review and approval, which shall contain the following items (the “Due Diligence Package”):

1. Delivery of Purchased Asset Documents. With respect to a New Asset that is a Pre-Existing Asset, each of the Purchased Asset Documents and, with respect to a Purchased Asset that is the subject of a proposed Additional Purchase Transaction or Future Funding Transaction, any Purchased Asset Document that has been modified or amended in any manner since the related Purchase Date.

2. Transaction-Specific Due Diligence Materials. With respect to any New Asset or Purchased Asset that is the subject of a proposed Additional Purchase Transaction or Future Funding Transaction, a summary memorandum outlining the proposed transaction or advance, as applicable, including potential benefits and all material underwriting risks, all Underwriting Issues and all other characteristics of the proposed transaction or advance, as applicable, that a reasonable buyer would consider material, together with the following due diligence information relating to the New Asset or, with respect to a Purchased Asset that is the subject of a proposed Additional Purchase Transaction or Future Funding Transaction, any updates to the following due diligence information reflecting changes from the related Purchase Date:

(i) the Asset Information and, if available, maps and photos;

(ii) a current rent roll and roll over schedule, if applicable;

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

(iv) copies of appraisal, environmental, engineering and any other third-party reports; provided, that, if same are not available to Seller at the time of Seller’s submission of the Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(v) a description of the underlying real estate directly or indirectly securing or supporting such Purchased Asset and the ownership structure of the borrower and the sponsor (including, without limitation, the board of directors, if applicable) and, to the extent that real property does not secure such Eligible Asset, the related collateral securing such Eligible Asset, if any;

(vi) indicative debt service coverage ratios;

(vii) indicative loan-to-value ratios;

(viii) a term sheet outlining the transaction generally;

(ix) a description of the Mortgagor, including experience with other projects (real estate owned), its ownership structure and financial statements;

(x) a description of Seller’s relationship with the Mortgagor, if any;

(xi) copies of documents evidencing such New Asset, or current drafts thereof, including, without limitation, underlying debt and security documents, guaranties, the underlying borrower’s and guarantor’s organizational documents, warrant agreements, and loan and collateral pledge agreements, as applicable, provided that, if same are not available to Seller at the time of Seller’s submission of the Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(xii) in the case of Subordinate Eligible Assets, all information described in this section 2(A) that would otherwise be provided for the Underlying Mortgage Loan if it were an Eligible Asset, and in addition, all documentation evidencing such Subordinate Eligible Asset; and

(xiii) any exceptions to the representations and warranties set forth in Exhibit VI to this Agreement.

3. Environmental and Engineering. A “Phase 1” (and, if requested by Buyer, “Phase 2”) environmental report, an asbestos survey, if applicable, and an engineering report, each in form reasonably satisfactory to Buyer, by an engineer or environmental consultant reasonably approved by Buyer.

4. Credit Memorandum. A credit memorandum, asset summary or other similar document that details cash flow underwriting, historical operating numbers, underwriting footnotes, rent roll and lease rollover schedule.

5. Appraisal. Either an appraisal approved by Buyer or a draft appraisal, each by an MAI appraiser, if applicable. If Buyer receives only a draft appraisal prior to entering into a Transaction, Seller shall deliver an appraisal approved by Buyer by an MAI appraiser on or before ten (10) calendar days after the Purchase Date. The related appraisal shall (i) be dated less than twelve (12) months prior to the proposed financing date and (ii) not be ordered by the related borrower or an Affiliate of the related borrower.

6. Opinions of Counsel. An opinion to Seller and its successors and assigns from counsel to the underlying obligor on the underlying loan transaction, as applicable, as to enforceability of the loan documents governing such transaction and such other matters as Buyer shall require (including, without limitation, opinions as to due formation, authority, choice of law and perfection of security interests).

7. Additional Real Estate Matters. To the extent obtained by Seller from the Mortgagor or the underlying obligor relating to any Eligible Asset at the origination of the Eligible Asset, such other real estate related certificates and documentation as may have been requested by Buyer, such as abstracts of all leases in effect at the real property relating to such Eligible Asset.

8. Other Documents. Any other documents as Buyer or its counsel shall reasonably deem necessary.

(b) Submission of Legal Documents. With respect to a New Asset that is an Originated Asset, no less than seven (7) calendar days prior to the proposed Purchase Date, Seller shall deliver, or cause to be delivered, to counsel for Buyer the following items, where applicable:

1. Copies of all draft Purchased Asset Documents in substantially final form, blacklined against the approved form Purchased Asset Documents.

2. Certificates or other evidence of insurance demonstrating insurance coverage in respect of the underlying real estate directly or indirectly securing or supporting such Purchased Asset of types, in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in the Purchased Asset Documents. Such certificates or other evidence shall indicate that Seller (or, as to Subordinate Eligible Assets, the lead lender on the whole loan in which Seller is a participant or holder of a note or has an equity interest in the Mortgagor, as applicable), will be named as an additional insured as its interest may appear and shall contain a loss payee endorsement in favor of such additional insured with respect to the policies required to be maintained under the Purchased Asset Documents.

3. All surveys of the underlying real estate directly or indirectly securing or supporting such Purchased Asset that are in Seller’s possession.

4. As reasonably requested by Buyer, satisfactory reports of UCC, tax lien, judgment and litigation searches and title updates conducted by search firms and/or title companies reasonably acceptable to Buyer with respect to the Eligible Asset, underlying real estate directly or indirectly securing or supporting such Eligible Asset, Seller and Mortgagor, such searches to be conducted in each location Buyer shall reasonably designate.

5. An unconditional commitment to issue a Title Policy in favor of Buyer and Buyer’s successors and/or assigns with respect to Buyer’s interest in the related real property and insuring the assignment of the Eligible Asset to Buyer, with an amount of insurance that shall be not less than the maximum principal amount of the Eligible Asset (taking into account the proposed advance), or an endorsement or confirmatory letter from the title insurance company that issued the existing title insurance policy, in favor of Buyer and Buyer’s successors and/or assigns, that amends the existing title insurance policy by stating that the amount of the insurance is not less than the maximum principal amount of the Eligible Asset (taking into account the proposed advance).

6. Certificates of occupancy and letters certifying that the property is in compliance with all applicable zoning laws, each issued by the appropriate Governmental Authority.

(c) Approval of Eligible Asset, Additional Purchase Transaction or Future Funding Transaction. Conditioned upon the timely and satisfactory completion of Seller’s requirements in clauses (a) and (b) above, Buyer shall, no less than five (5) calendar days prior to the proposed Purchase Date, date of Additional Purchase Transaction or date of Future Funding Transaction, as applicable, (i) in the case of the proposed purchase of an Eligible Asset, (A) notify Seller in writing (which may take the form of electronic mail format) that Buyer has not approved the proposed Eligible Asset as a Purchased Asset or (B) notify Seller in writing (which may take the form of electronic mail format) that Buyer has approved the proposed Eligible Asset as a Purchased Asset or (ii) in the case of a proposed Additional Purchase Transaction or Future Funding Transaction, (A) notify Seller in writing (which may take the form of electronic mail format) that Buyer has not approved the proposed Additional Purchase Transaction or Future Funding Transaction or (B) notify Seller in writing (which may take the form of electronic mail format) that Buyer has approved the proposed Additional Purchase Transaction or Future Funding Transaction. Buyer’s failure to respond to Seller on or prior to five (5) calendar days prior to the proposed Purchase Date, shall be deemed to be a denial of Seller’s request that Buyer approve the proposed Eligible Asset or proposed Additional Purchase Transaction or Future Funding Transaction, as applicable, unless Buyer and Seller has agreed otherwise in writing.

(d) Assignment Documents. No less than two (2) business days prior to the proposed Purchase Date, Seller shall have executed and delivered to Buyer, in form and substance reasonably satisfactory to Buyer and its counsel, all applicable assignment documents assigning to Buyer the proposed Eligible Asset (and in any Hedging Transactions held by Seller with respect thereto) that shall be subject to no liens except as expressly permitted by Buyer. Each of the assignment documents shall contain such representations and warranties in writing concerning the proposed Eligible Asset and such other terms as shall be satisfactory to Buyer in its sole discretion.

EXHIBIT IX

FORM OF BAILEE LETTER

                 , 201  

Re: Bailee Agreement (the “Bailee Agreement”) in connection with the pledge by [                    ] (“Seller”) to JPMorgan Chase Bank, National Association (“Buyer”)

Ladies and Gentlemen:

In consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, Buyer and [                    ] (the “Bailee”) hereby agree as follows:

(a) Seller shall deliver to the Bailee in connection with any Purchased Assets delivered to the Bailee hereunder the Custodial Delivery Certificate to which shall be attached a Purchased Asset Schedule identifying which Purchased Assets are being delivered to the Bailee hereunder.

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

(c) The Bailee shall issue and deliver to Buyer and U.S. Bank National Association (the “Custodian”) on or prior to the Funding Date by facsimile (a) in the name of Buyer, an initial trust receipt and certification in the form of Attachment 2 attached hereto (the “Bailee’s Trust Receipt and Certification”) which Bailee’s Trust Receipt and Certification shall state that the Bailee has received the documents comprising the Purchased Asset File as set forth in the Custodial Delivery Certificate.

(d) On the applicable Funding Date, in the event that Buyer fails to purchase from Seller the Purchased Assets identified in the related Custodial Delivery Certificate, Buyer shall deliver by facsimile to the Bailee at [                    ] to the attention of [                    ], an authorization (the “Facsimile Authorization”) to release the Purchased Asset Files with respect to the Purchased Assets identified therein to Seller. Upon receipt of such Facsimile Authorization, the Bailee shall release the Purchased Asset Files to Seller in accordance with Seller’s instructions.

(e) Following the Funding Date, the Bailee shall forward the Purchased Asset Files to the Custodian at [        ], by insured overnight courier for receipt by the Custodian no later than 1:00 p.m. on the third (3^rd) Business Day following the applicable Funding Date (the “Delivery Date”).

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

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

(h) In the event that the Bailee fails to produce a Mortgage Note, assignment of collateral or any other document related to a Purchased Asset that was in its possession within ten (10) business days after required or requested by Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify Seller or Buyer in accordance with the paragraph (g) above.

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

(j) Seller hereby represents, warrants and covenants that the Bailee is not an affiliate of or otherwise controlled by Seller. Notwithstanding the foregoing, the parties hereby acknowledge that the Bailee hereunder may act as

counsel to Seller in connection with a proposed transaction and [                    ], if acting as Bailee, has represented Seller in connection with negotiation, execution and delivery of the Repurchase Agreement.

(k) [Arrangements to be discussed with respect to a pledge of Purchased Assets as collateral for an obligation of Buyer held by the Bailee, such arrangements to be agreed to by Bailee in its sole discretion without obligation.]

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

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

(n) For the purpose of facilitating the execution of this Bailee Agreement as herein provided and for other purposes, this Bailee Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute and be one and the same instrument. Electronically transmitted signature pages shall be binding to the same extent.

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

(p) Capitalized terms used herein and defined herein shall have the meanings ascribed to them in the Repurchase Agreement.

Very truly yours,
PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

ACCEPTED AND AGREED:
[BAILEE]
By:
	Name:
ACCEPTED AND AGREED:

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

Buyer
By:
	Name:
	Title:

Schedule A

[List of Purchased Asset Documents]

Attachment 1

IDENTIFICATION CERTIFICATE

On this      day of             , 201  , PARLEX 4 FINANCE, LLC (the “Seller”), under that certain Bailee Agreement of even date herewith (the “Bailee Agreement”), among Seller, [                    ] (the “Bailee”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Buyer, does hereby instruct the Bailee to hold, in its capacity as Bailee, the Purchased Asset Files with respect to the Purchased Assets listed on Exhibit A hereto, which Purchased Assets shall be subject to the terms of the Bailee Agreement as of the date hereof.

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

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

PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

Exhibit A to Attachment 1

PURCHASED ASSET SCHEDULE

Attachment 2

FORM OF BAILEE’S TRUST RECEIPT AND CERTIFICATION

            , 201  

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

270 Park Avenue, 7th Floor

New York, New York 10017-2014

Attention:	Ms. Nancy S. Alto
Telephone:	(212) 834-9271
Telecopy:	(212) 834-6565

Re: Bailee Agreement, dated as of                  , 201   (the “Bailee Agreement”) among Parlex 4 Finance, LLC (the “Seller”), JPMorgan Chase Bank, National Association (the “Buyer”) and [                    ] (the “Bailee”)

Ladies and Gentlemen:

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

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

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

[                    ], BAILEE
By:
	Name:
	Title:

EXHIBIT X

FORM OF MARGIN DEFICIT NOTICE

[DATE]/[TIME]

VIA ELECTRONIC TRANSMISSION

PARLEX 4 FINANCE, LLC

[                    ]

[                    ]

Attn: [                    ]

Re: Master Repurchase Agreement, dated as of June 28, 2013 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement) by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 Finance, LLC (“Seller”).

Pursuant to Article 4(a) of the Master Repurchase Agreement, Buyer hereby notifies Seller of the existence of a Margin Deficit as of the date hereof as follows:

[Repurchase Price for specific Purchased Asset:	$
Asset Value of such Purchased Asset:	$
MARGIN DEFICIT:	$	]
[Aggregate Repurchase Price of all Purchased Assets:	$
Maximum Amount:	$
MARGIN DEFICIT:	$	]

SELLER IS REQUIRED TO CURE THE MARGIN DEFICIT SPECIFIED ABOVE IN ACCORDANCE WITH THE MASTER REPURCHASE AGREEMENT AND WITHIN THE TIME PERIOD SPECIFIED ARTICLE 4(a) THEREOF.

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:

EXHIBIT XI

EXHIBIT XI-1

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Assignees That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(t) of the Master Repurchase Agreement, dated as of October 11, 2012 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and JLC Warehouse III LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record and beneficial owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Seller(s) with a correct, complete, and accurate executed IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the applicable Seller(s), and (2) the undersigned shall have at all times furnished the applicable Seller(s) with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]
By:
	Name:
	Title:
Date:

EXHIBIT XI-2

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(t) of the Master Repurchase Agreement, dated as of October 11, 2012 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and JLC Warehouse III LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record and beneficial owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Buyer or Assignee with a correct, complete, and accurate executed IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Buyer or Assignee in writing, and (2) the undersigned shall have at all times furnished such Buyer or Assignee with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF PARTICIPANT]
By:
	Name:
	Title:
Date:

EXHIBIT XI-3

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(t) of the Master Repurchase Agreement, dated as of October 11, 2012 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and JLC Warehouse III LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such interest, (iii) with respect to such interest, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Buyer or Assignee with a correct, complete, and accurate executed IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Buyer or Assignee and (2) the undersigned shall have at all times furnished such Buyer or Assignee with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF PARTICIPANT]
By:
	Name:
	Title:
Date:

EXHIBIT XI-4

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Assignees That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(t) of the Master Repurchase Agreement, dated as of October 11, 2012 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and JLC Warehouse III LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such interest, (iii) with respect to such interest, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Seller(s) with a correct, complete, and accurate executed IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the applicable Seller(s), and (2) the undersigned shall have at all times furnished the applicable Seller(s) with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]
By:
	Name:
	Title:
Date:

EXHIBIT XII

UCC FILING JURISDICTIONS

Delaware

EXHIBIT XIII

FORM OF SERVICER NOTICE

[DATE]

[SERVICER], as Special Servicer

[ADDRESS]

Attention:                     

Re: Master Repurchase Agreement, dated as of June 28, 2013 by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 Finance, LLC (“Seller”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”); (capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement).

Ladies and Gentlemen:

[SERVICER] (the “Servicer”) is servicing certain mortgage assets sold by Seller to Buyer pursuant to the Master Repurchase Agreement (the “Purchased Assets”) pursuant to a servicing agreement dated as of [                    ] between Servicer and Seller (the “Servicing Agreement”). Servicer is hereby notified that, pursuant to the Master Repurchase Agreement, Seller has sold the Purchased Assets to Buyer on a servicing-released basis, and has granted a security interest to Buyer in the Purchased Assets.

In accordance with Seller’s requirements under the Master Repurchase Agreement, Seller hereby notifies and instructs Servicer, and Servicer hereby agrees that Servicer shall (a) segregate all amounts collected on account of the Purchased Assets, (b) hold the Purchased Assets in trust for Buyer, (c) in accordance with the terms of the Servicing Agreement, remit all such income to the Depository Account at [PNC Bank, National Association], ABA # 043000096, Account # [                    ]. Upon receipt of a notice of Event of Default under the Master Repurchase Agreement from Buyer, Servicer shall only follow the instructions of Buyer with respect to the Purchased Assets, and shall deliver to Buyer any information with respect to the Purchased Assets reasonably requested by Buyer.

Servicer hereby agrees that, notwithstanding any provision to the contrary in the Servicing Agreement or in any other agreement which exists between Servicer and Seller in respect of any Purchased Asset, (i) Servicer is servicing the Purchased Assets for the joint benefit of Seller and Buyer, (ii) Buyer is expressly intended to be a third-party beneficiary under the Servicing Agreement, and (iii) Buyer may, at any time after the occurrence and during the continuance of an Event of Default under the Master Repurchase Agreement, terminate the

Servicing Agreement and any other such agreement immediately upon the delivery of written notice thereof to Servicer and/or in any event transfer servicing to Buyer’s designee, at no cost or expense to Buyer, it being agreed that Seller will pay any and all fees required to terminate the Servicing Agreement and any other such agreement and to effectuate the transfer of servicing to the designee of Buyer in accordance with this Servicer Notice.

Notwithstanding any contrary information or direction which may be delivered to Servicer by Seller, Servicer may conclusively rely on any information, direction or notice of an Event of Default under the Master Repurchase Agreement delivered by Buyer, and, so long as an Event of Default under the Master Repurchase Agreement exists at such time, Seller shall indemnify and hold Servicer harmless for any and all claims asserted against Servicer for any actions taken in good faith by Servicer in connection with the delivery of such information, direction or notice of any such Event of Default.

No provision of this letter or any Servicing Agreement may be amended, countermanded or otherwise modified without the prior written consent of Buyer. Buyer is an intended third party beneficiary of this letter.

Please acknowledge receipt and your agreement to the terms of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following address: Parlex 4 Finance, LLC, c/o Blackstone Mortgage Trust, Inc., 345 Park Avenue, New York, NY 10154, Attention: Douglas Armer, Telephone: (212) 583-5000, Email: BXMTJPMRepo@blackstone.com.

Very truly yours,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED TO:
PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

[SERVICER]
By:
	Name:
	Title:

EXHIBIT XIV

FORM OF RELEASE LETTER

[Date]

JPMorgan Chase Bank, National Association

4 New York Plaza, 20th Floor

New York, New York 10004

Attention: Ms. Nancy S. Alto

Re: Master Repurchase Agreement, dated as of June 28, 2013 by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 Finance, LLC (“Seller”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”); (capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement).

Ladies and Gentlemen:

With respect to the Purchased Assets described in the attached Schedule A (the “Purchased Assets”) (a) we hereby certify to you that the Purchased Assets are not subject to a lien of any third party, and (b) we hereby release all right, interest or claim of any kind other than any rights under the Master Repurchase Agreement with respect to such Purchased Assets, such release to be effective automatically without further action by any party upon payment by Buyer of the amount of the Purchase Price contemplated under the Master Repurchase Agreement (calculated in accordance with the terms thereof) in accordance with the wiring instructions set forth in the Master Repurchase Agreement.

Very truly yours,
PARLEX 4 FINANCE, LLC
By:
	Name:
	Title:

Schedule A

[List of Purchased Asset Documents]

EXHIBIT XV

FORM OF COVENANT COMPLIANCE CERTIFICATE

[            ] [    ], 201[  ]

JPMorgan Chase Bank, National Association

270 Park Avenue, 7^th Floor

New York, New York 10017-2014

Attention: Chuck Y. Lee

This Covenant Compliance Certificate is furnished pursuant to that certain Master Repurchase Agreement, dated as of June 28, 2013 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”) by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 Finance, LLC (“Seller”). Unless otherwise defined herein, capitalized terms used in this Covenant Compliance Certificate have the respective meanings ascribed thereto in the Master Repurchase Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am a duly elected Responsible Officer of Seller.

2. All of the financial statements, calculations and other information set forth in this Covenant Compliance Certificate, including, without limitation, in any exhibit or other attachment hereto, are true, complete and correct as of the date hereof.

3. I have reviewed the terms of the Master Repurchase Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and financial condition of Seller during the accounting period covered by the financial statements attached (or most recently delivered to Buyer if none are attached).

4. I am not aware of any facts, or pending developments that have caused, or may in the future cause the Market Value of any Purchased Asset to decline at any time within the reasonably foreseeable future.

5. As of the date hereof, and since the date of the certificate most recently delivered pursuant to Article 12(j) of the Master Repurchase Agreement, Seller has observed or performed all of its covenants and other agreements in all material respects, and satisfied in all material respects, every condition, contained in the Master Repurchase Agreement and the related documents to be observed, performed or satisfied by it.

6. The examinations described in Paragraph 3 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of

Default or Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Covenant Compliance Certificate (including after giving effect to any pending Transactions requested to be entered into), except as set forth below.

7. As of the date hereof, each of the representations and warranties made by Seller in the Master Repurchase Agreement are true, correct and complete in all material respects with the same force and effect as if made on and as of the date hereof, except as to the extent of any exceptions approved by Buyer in writing.

8. No condition or event that constitutes a “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by Seller, however denominated, has occurred or is continuing under any Hedging Transaction.

9. Attached as Exhibit 2 hereto is a description of all interests of Affiliates of Seller in any Underlying Mortgaged Property (including without limitation, any lien, encumbrance or other debt or equity position or other interest in the Underlying Mortgaged Property that is senior or junior to, or pari passu with, a Purchased Asset in right of payment or priority).

10. Attached as Exhibit 3 hereto are the financial statements required to be delivered pursuant to Article 12 of the Master Repurchase Agreement (or, if none are required to be delivered as of the date of this Covenant Compliance Certificate, the financial statements most recently delivered pursuant to Article 12 of the Master Repurchase Agreement), which financial statements, to the best of my knowledge after due inquiry, fairly and accurately present in all material respects, the financial condition and operations of Seller as of the date or with respect to the period therein specified, determined in accordance with the requirements set forth in Article 12.

11. Attached as Exhibit 4 hereto are the calculations demonstrating compliance with the financial covenants set forth in Article 11 of the Master Repurchase Agreement.

To the extent that financial statements are being delivered in connection with this Covenant Compliance Certificate, Seller hereby makes the following representations and warranties: (i) it is in compliance with all of the terms and conditions of the Master Repurchase Agreement and (ii) it has no claim or offset against Buyer under the Transaction Documents.

To the best of my knowledge, Seller has, during the period since the delivery of the immediately preceding Covenant Compliance Certificate, observed or performed all of its covenants and other agreements in all material respects, and satisfied in all material respects every condition, contained in the Master Repurchase Agreement and the related documents to be observed, performed or satisfied by it, and I have no knowledge of the occurrence during such period, or present existence, of any condition or event which constitutes an Event of Default or Default (including after giving effect to any pending Transactions requested to be entered into), except as set forth below.

Described below are the exceptions, if any, to paragraph 10, listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Guarantor or Seller has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications, together with the financial statements, updates, reports, materials, calculations and other information set forth in any exhibit or other attachment hereto, or otherwise covered by this Covenant Compliance Certificate, are made and delivered this [    ] day of [            ], 201[  ].

Name:

Title:

EXHIBIT XVI

FORM OF RE-DIRECTION LETTER

[SELLER LETTERHEAD]

RE-DIRECTION LETTER

AS OF [                    ]

Ladies and Gentlemen:

Please refer to: (a) that certain [Loan Agreement], dated [            ] [    ], 201[  ], by and between [                    ] (the “Borrower”), as borrower, and [                    ] (the “Lender”), as lender; and (b) all documents securing or relating to that certain $[        ] loan made by the Lender to the Borrower on [            ] [    ], 201[  ] (the “Loan”).

You are advised as follows, effective as of the date of this letter.

Assignment of the Loan. The Lender has entered into a Master Repurchase Agreement, dated as of June 28, 2013 (as the same may be amended and/or restated from time to time, the “Repurchase Agreement”), with JPMorgan Chase Bank, National Association (“JPMorgan”), 270 Park Avenue, 10th Floor, New York, New York 10017, and has assigned its rights and interests in the Loan (and all of its rights and remedies in respect of the Loan) to JPMorgan, subject to the terms of the Repurchase Agreement. This assignment shall remain in effect unless and until JPMorgan has notified Borrower otherwise in writing.

Direction of Funds. In connection with Borrower’s obligations under the Loan, Lender hereby directs Borrower to disburse, by wire transfer, any and all payments to be made under or in respect of the Loan to the following account, for the benefit of JPMorgan:

ABA # 121000248

Account # [                    ]

Attn: [Insert information regarding Depository Account]

Acct Name: “Midland Loan Services, a Division of PNC Bank, National Association on behalf of Parlex 2 Finance, LLC for the benefit of JPMorgan Chase Bank, National Association, as Repurchase Agreement Buyer”

This direction shall remain in effect unless and until JPMorgan has notified Borrower otherwise in writing.

Modifications, Waivers, Etc. No modification, waiver, deferral, or release (in whole or in part) of any party’s obligations in respect of the Loan, or of any collateral for any obligations in respect of the Loan, shall be effective without the prior written consent of JPMorgan. Notwithstanding the foregoing, neither Seller nor Servicer shall take any action or effect any modification or amendment to any Purchased Asset without first having given prior notice thereof to Buyer in each such instance and receiving the express prior written consent of Buyer, if such notice and consent is required by the Repurchase Agreement.

Please acknowledge your acceptance of the terms and directions contained in this correspondence by executing a counterpart of this correspondence and returning it to the undersigned.

Very truly yours,

Parlex 4 Finance, LLC,

a Delaware limited liability company

By:

Name:

Title:

Date: [            ] [    ], 201[  ]

Agreed and accepted this [    ]

day of [            ], 201[  ]

By:

Name:

Title:

EX-10.13

Exhibit 10.13

GUARANTEE AGREEMENT

GUARANTEE AGREEMENT, dated as of June 28, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, this “Guarantee”), made by Blackstone Mortgage Trust, Inc., a Maryland corporation (“Guarantor”) in favor of JPMorgan Chase Bank, National Association (“Buyer”).

RECITALS

Pursuant to that certain Master Repurchase Agreement, dated as of June 28, 2013 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), between Buyer and Parlex 4 Finance, LLC (“Seller”), Seller has agreed to sell, from time to time, to Buyer certain Eligible Assets (as defined in the Repurchase Agreement, upon purchase by Buyer, each a “Purchased Asset” and, collectively, the “Purchased Assets”), upon the terms and subject to the conditions as set forth therein. Pursuant to the terms of that certain Custodial Agreement dated June 28, 2013 (the “Custodial Agreement”) by and among Buyer, Seller and U.S. Bank National Association (the “Custodian”), Custodian is required to take possession of the Purchased Assets, along with certain other documents specified in the Custodial Agreement, as Custodian of Buyer and any future purchaser, on several delivery dates, in accordance with the terms and conditions of the Custodial Agreement. Pursuant to the terms of that certain Pledge and Security Agreement dated as of June 28, 2013 (the “Pledge and Security Agreement”) made by 42-16 Partners LLC (“Parent”) in favor of Buyer, Parent has pledged to Buyer all of the Capital Stock of Seller. The Repurchase Agreement, the Custodial Agreement, the Depository Agreement, the Servicing Agreement, the Pledge and Security Agreement, the Fee Letter, this Guarantee and any other agreements executed in connection with the Repurchase Agreement shall be referred to herein as the “Governing Agreements”.

It is a condition precedent to the purchase by Buyer of the Purchased Assets pursuant to the Repurchase Agreement that Guarantor shall have executed and delivered this Guarantee with respect to the due and punctual payment and performance when due, whether at stated maturity, by acceleration of the Repurchase Date or otherwise, of all of the following: (a) all payment obligations owing by Seller to Buyer under or in connection with the Repurchase Agreement or any other Governing Agreements; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all fees and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by Buyer in the enforcement of any of the foregoing or any obligation of Guarantor hereunder; and (d) any other obligations of Seller and Parent with respect to Buyer under each of the Governing Agreements (collectively, the “Obligations”).

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer to enter into the Governing Agreements and to enter into the transaction contemplated thereunder, Guarantor hereby agrees with Buyer, as follows:

1. Defined Terms. Unless otherwise defined herein, terms that are defined in the Repurchase Agreement and used herein are so used as so defined.

“Available Borrowing Capacity” shall mean, with respect to any Person, on any date of determination, the total unrestricted borrowing capacity which may be drawn (taking into account required reserves and discounts) upon by such Person or its Subsidiaries, at such Person’s or its Subsidiaries’ sole discretion, under committed credit facilities or repurchase agreements which provide financing to such Person or its Subsidiaries.

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

“Cash Equivalents” means any of the following, to the extent owned by Guarantor or any of its Subsidiaries free and clear of all Liens and having a maturity of not greater than 90 days from the date of issuance thereof: (a) readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the government of the United States, (b) certificates of deposit of or time deposits with Buyer or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any state thereof and has combined capital and surplus of at least $1,000,000,000 or (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any state of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P.

“Cash Liquidity” shall mean, with respect to any Person, on any date of determination, the sum of (i) unrestricted cash, plus (ii) Available Borrowing Capacity, plus (iii) Cash Equivalents.

“Consolidated Net Income” shall mean, with respect to any Person, for any period, the amount of consolidated net income (or loss) of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“EBITDA” shall mean, with respect to any Person, for any period, such Person’s Consolidated Net Income, excluding the effects of such Person’s and its Subsidiaries’ interest expense with respect to Indebtedness, taxes, depreciation, amortization, asset write-ups or impairment charges, provisions for loan losses, and changes in mark-to-market value(s) (both gains and losses) of financial instruments and noncash compensation expenses, all determined on a consolidated basis in accordance with GAAP.

“Fixed Charges” shall mean, with respect to any Person, for any period, the amount of interest paid in cash with respect to Indebtedness as shown on such Person’s consolidated statement of cash flow in accordance with GAAP as offset by the amount of receipts pursuant to net receive interest rate swap agreements of such Person and its consolidated Subsidiaries during the applicable period.

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

“Indebtedness” shall mean, for any Person: (i) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (ii) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (iii) Indebtedness of others secured by a lien on the property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (iv) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; contingent or future funding obligations under any Purchased Loan or any obligations senior to, or pari passu with, any Purchased Loan; (v) Capital Lease Obligations of such Person; (vi) obligations of such Person under repurchase agreements or like arrangements; (vii) Indebtedness of others Guaranteed by such Person to the extent of such guarantee; and (viii) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person. Notwithstanding the foregoing, nonrecourse Indebtedness owing pursuant to a securitization transaction such as a REMIC securitization, a collateralized loan obligation transaction or other similar securitization shall not be considered Indebtedness for any person.

“Recourse Indebtedness” shall mean, with respect to any Person, on any date of determination, the amount of Indebtedness for which such Person has recourse liability such (such as through a guarantee agreement), exclusive of any such Indebtedness for which such recourse liability is limited to obligations relating to or under agreements containing customary nonrecourse carve-outs.

“Tangible Net Worth” shall mean, with respect to any Person, on any date of determination, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person pursuant to GAAP, minus (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and/or expenses, all on or as of such date.

“Total Assets” shall mean, with respect to any Person, on any date of determination, an amount equal to the aggregate book value of all assets owned by such Person and the proportionate share of such Person of all assets owned by Affiliates of such Person as consolidated in accordance with GAAP, less (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and expenses, all on or as of such date, and (d) the amount of nonrecourse Indebtedness owing pursuant to securitization transactions such as a REMIC securitization, a collateralized loan obligation transactions or other similar securitizations.

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2. Guarantee. (a) Guarantor hereby unconditionally and irrevocably guarantees to Buyer the prompt and complete payment and performance of the Obligations by Seller and Parent when due (whether at the stated maturity, by acceleration or otherwise), subject to applicable notice and cure periods set forth in the Governing Agreements.

(b) Notwithstanding anything in Section 2(a) to the contrary, but subject in all cases to Sections 2(c), (d) and (e) below, the maximum liability of the Guarantor hereunder and under the Repurchase Documents shall in no event collectively exceed the sum of (i) twenty-five percent (25%) of the then-currently unpaid aggregate Repurchase Price of all Purchased Assets that are Senior Mortgage Loans and (ii) one hundred percent (100%) of the then-currently unpaid aggregate Repurchase Price of all Purchased Assets that are Junior Mortgage Loans or Mezzanine Loans.

(c) Notwithstanding the foregoing, the limitation on recourse liability as set forth in Section 2(b) above SHALL BECOME NULL AND VOID and shall be of no force and effect and the Obligations shall be fully recourse to Guarantor upon the occurrence of any of the following:

(i) a voluntary bankruptcy or insolvency proceeding is commenced by Seller, Parent or Guarantor under the U.S. Bankruptcy Code or any similar federal or state law or any law of any other jurisdiction; or

(ii) an involuntary bankruptcy or insolvency proceeding is commenced against Seller, Parent or Guarantor in connection with which Seller, Parent or Guarantor or any Affiliate of any of the foregoing (alone or in any combination) has or have colluded in any way with the creditors commencing or filing such proceeding.

(d) In addition to the foregoing and notwithstanding the limitation on recourse liability set forth in subsection (b) above, Guarantor shall be liable for any actual, out-of-pocket losses, costs, claims, expenses or other liabilities incurred by Buyer arising out of or attributable to the following items:

(i) any material breach of the separateness covenants set forth in Article 11 of the Repurchase Agreement;

(ii) any material breach of any representations and warranties by Guarantor contained in any Repurchase Document or herein and any material breach by Seller, Guarantor or any of their respective Affiliates, of any representations and warranties relating to Environmental Laws, or any indemnity for costs incurred in connection with the violation of any Environmental Law, the correction of any environmental condition, or the removal of any Materials of Environmental Concern, in each case in any way affecting Seller’s or Guarantor’s properties or any of the Purchased Assets; provided that the guarantee set forth in this clause (d)(ii) shall terminate upon foreclosure and transfer or assumption of the Purchased Asset following an Event of Default under the Repurchase Agreement pursuant to a public or private sale or strict foreclosure, or other similar enforcement proceeding; or

(iii) fraud or intentional misrepresentation by Seller, Parent, Guarantor, or any other Affiliate of Seller, Parent or Guarantor in connection with the execution and the delivery of this Guarantee, the Repurchase Agreement, or any other Governing Document, or any certificate, report, financial statement or other instrument or document furnished to Buyer at the time of the closing of the Repurchase Agreement or during the term of the Repurchase Agreement.

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(e) Guarantor further agrees to pay any and all actual expenses (including, without limitation, all reasonable fees and disbursements of counsel) that may be paid or incurred by Buyer in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guarantee. This Guarantee shall remain in full force and effect until the later of (i) the date upon which the Obligations are paid in full and (ii) the termination of the Repurchase Agreement, notwithstanding that from time to time prior thereto, Seller may be free from any Obligations.

(f) No payment or payments made by Seller or any other Person or received or collected by Buyer from Seller or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder, which shall, notwithstanding any such payment or payments, remain liable for the amount of the Obligations (subject to the limitations set forth in Section 2(b)) under this Agreement until the Obligations are paid in full.

(g) Guarantor agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to Buyer on account of any liability hereunder, Guarantor will notify Buyer in writing that such payment is made under this Guarantee for such purpose.

3. Subrogation. Upon making any payment hereunder, Guarantor shall be subrogated to the rights of Buyer against Seller and in any collateral for any Obligations with respect to such payment; provided, that Guarantor shall not seek to enforce any right or receive any payment by way of subrogation until all amounts then due and payable by Seller to Buyer or any of its Affiliates under the Governing Agreements have been paid in full; provided, further, that such subrogation rights shall be subordinate in all respects to all amounts owing to Buyer under the Governing Agreements.

4. Amendments, etc. with Respect to the Obligations. Until the Obligations shall have been paid and/or performed in full, Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Obligations made by Buyer may be rescinded by Buyer and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be

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renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Buyer, and any Governing Agreement and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part (other than a termination in whole of the Repurchase Agreement, which shall automatically terminate this Guarantee other than with respect to obligations under the Governing Agreements that, by their terms, survive termination of such Governing Agreements), as Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Buyer for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Buyer shall have no obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on Seller or any other Person, and any failure by Buyer to make any such demand or to collect any payments from Seller or any such other Person or any release of Seller or such other Person shall not relieve Guarantor of its Obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Buyer against Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

5. Guarantee Absolute and Unconditional. (a) Guarantor hereby agrees that its obligations under this Guarantee constitute a guarantee of payment when due and not of collection. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Buyer upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee; and all dealings between Seller, Parent and Guarantor, on the one hand, and Buyer, on the other hand, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Guarantor waives promptness, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Seller or this Guarantee with respect to the Obligations. This Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity, regularity or enforceability of any Governing Agreement, any of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by Seller against Buyer, (iii) any requirement that Buyer exhaust any right to take any action against Seller, Parent or any other Person prior to or contemporaneously with proceeding to exercise any right against Guarantor under this Guarantee or (iv) any other circumstance whatsoever (with or without notice to or knowledge of Seller, Parent and Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of Seller for the Obligations or of Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against Guarantor, Buyer may, but shall be under no obligation, to pursue such rights and remedies that Buyer may have against Seller, Parent or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect any payments from Seller, Parent or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Seller, Parent or any such other Person or any such collateral security,

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guarantee or right of offset, shall not relieve Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Buyer against Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and its successors and assigns thereof, and shall inure to the benefit of Buyer, and its permitted successors, endorsees, transferees and assigns, until all the Obligations (subject to the limitations in Section 2(b)) shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Governing Agreements, Seller or Parent may be free from any Obligations.

(b) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to Buyer as follows:

(i) Guarantor hereby waives any defense arising by reason of, and any and all right to assert against Buyer any claim or defense based upon, an election of remedies by Buyer that in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against Seller or any other guarantor for reimbursement or contribution, and/or any other rights of Guarantor to proceed against Seller, any other guarantor or any other person or security.

(ii) Guarantor is presently informed of the financial condition of Seller and Parent and of all other circumstances that diligent inquiry would reveal and that bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed about the financial condition of Seller and Parent and of all other circumstances that bear upon the risk of nonpayment and that it will continue to rely upon sources other than Buyer for such information and will not rely upon Buyer for any such information. Guarantor hereby waives the right, if any, to require Buyer to disclose to Guarantor any information that Buyer may now or hereafter acquire concerning such condition or circumstances.

(iii) Guarantor has independently reviewed the Governing Agreements and related agreements and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Guarantee to Buyer, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any liens or security interests of any kind or nature granted by Seller, Parent or Guarantor to Buyer, now or at any time and from time to time in the future.

6. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Seller or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for Seller or any substantial part of the property of Seller, or otherwise, all as though such payments had not been made.

7. Payments. Guarantor hereby agrees that the Obligations will be paid to Buyer without set-off or counterclaim in U.S. Dollars at the address specified in writing by Buyer.

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8. Representations and Warranties. Guarantor represents and warrants that:

(a) It is duly organized, validly existing and in good standing under the laws and regulations of its jurisdiction of incorporation or organization, as the case may be, and is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of its business, except where failure to so qualify could not be reasonably likely to have a Material Adverse Effect. It has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Guarantee and the other Governing Agreements.

(b) This Guarantee has been duly executed and delivered by it, for good and valuable consideration. This Guarantee constitutes the legal, valid and binding obligations of it, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or moratorium and other limitations on creditors’ rights generally and equitable principles.

(c) Neither the execution and delivery of this Guarantee nor compliance by it with the terms, conditions and provisions of this Guarantee will conflict with or result in a breach of any of the terms, conditions or provisions of (A) its organizational documents, (B) any contractual obligation to which it is now a party or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of its assets, (C) any judgment or order, writ, injunction, decree or demand of any court applicable to it, or (D) any applicable Requirement of Law, in the case of clauses (B) or (C) above, to the extent that such conflict or breach would have a Material Adverse Effect upon its ability to perform its obligations hereunder.

(d) There is no action, suit, proceeding, investigation, or arbitration pending or, to Guarantor’s Knowledge, threatened in writing against it, any of its Affiliates or any of their respective assets that may result in a Material Adverse Effect. It is in compliance in all material respects with all Requirements of Law. Neither it nor any of its Affiliates is in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

(e) Guarantor’s execution and delivery of this Guarantee and its compliance with the terms and provisions hereof will not contravene or conflict with or result in the creation or imposition of any lien upon any of the property or assets of it pursuant to the terms of any indenture, mortgage, deed of trust, or other material agreement or instrument to which it is a party or by which it may be bound, or to which it may be subject. No consent, approval, authorization, or order of any third party is required in connection with the execution and delivery by it of this Guarantee or to consummate the transactions contemplated hereby that has not already been obtained.

(f) No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for filings, recordings or registrations already made

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or to be made in connection with Guarantor entering into this Guarantee), or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (A) the execution, delivery and performance of this Guarantee, (B) the legality, validity, binding effect or enforceability of this Guarantee against it or (C) the consummation of the transactions contemplated by this Guarantee.

(g) Except as disclosed in writing to Buyer prior to the Closing Date, (i) Guarantor has timely filed (taking into account all applicable extensions) all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes, assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, that have become due and payable except to the extent such amounts are being contested in good faith by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, (ii) there is no material claim relating to any such material taxes now pending that was made in writing by any Governmental Authority and that is not being contested in good faith as provided above, and (iv) Guarantor has not entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes. (other than ordinary course extensions of time within which to file tax returns).

(h) Except as disclosed in writing to Buyer prior to the Closing Date, there are no final non-appealable judgments against Guarantor unsatisfied of record in any court located in the United States of America in excess of $15,000,000 and no Act of Insolvency has ever occurred with respect to it.

Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by it on and as of the Closing Date and on each Purchase Date under the Repurchase Agreement.

9. Financial Covenants. Guarantor shall maintain the following covenants at all times following the Closing Date until the Repurchase Obligations have been paid in full:

(a) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Guarantor’s EBITDA during the previous four (4) fiscal quarters to (ii) Guarantor’s Fixed Charges during the same such previous four (4) fiscal quarters shall not be less than 1.40 to 1.00 as determined as soon as practicable after the end of each fiscal quarter, but in no event later than forty-five (45) days after the last day the applicable fiscal quarter.

(b) Minimum Tangible Net Worth. Guarantor’s Tangible Net Worth shall not fall below the sum of (i) five hundred twenty five million dollars ($525,000,000) plus (ii) seventy-five percent (75%) of the net cash proceeds of any equity issuance by Guarantor that occurs after the Closing Date.

(c) Minimum Cash Liquidity. Guarantor’s Cash Liquidity shall not fall below the greater of (i) ten million dollars ($10,000,000) or (ii) five percent (5%) of Guarantor’s Recourse Indebtedness.

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(d) Maximum Indebtedness. The ratio, expressed as a percentage, the numerator of which shall equal Guarantor’s and its Subsidiaries’ Indebtedness and the denominator of which shall equal Guarantor’s and its Subsidiaries Total Assets, shall not exceed eighty percent (80%).

Guarantor’s compliance with the covenants set forth in this paragraph 9 must be evidenced by the financial statements and by a Covenant Compliance Certificate (which may be delivered by Guarantor) in respect of the financial quarter most recently ended, in the form of Exhibit XVI to the Repurchase Agreement furnished together therewith, as provided by Seller to Buyer pursuant to Article 11(j) of the Repurchase Agreement, and compliance with all such covenants are subject to continuing verification by Buyer.

10. Further Covenants of Guarantor.

(a) Taxes. Guarantor has timely filed (taking into account all applicable extensions) all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes, assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, that have become due and payable except to the extent such amounts are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. There is no material claim relating to any such material taxes now pending that was made in writing by any Governmental Authority and that is not being contested in good faith as provided above. Guarantor has not entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes (other than ordinary course extensions of time within which to file tax returns).

(b) Patriot Act.

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

(ii) Guarantor agrees that, from time to time upon the prior written request of Buyer, it shall execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to insure compliance with the provisions hereof (including, without limitation, compliance with the USA Patriot Act of 2001 and to fully effectuate the purposes of this Agreement; provided, however, that nothing in this Section 10(a) shall be construed as requiring Buyer to conduct any inquiry or

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decreasing Guarantor’s responsibility for its statements, representations, warranties or covenants hereunder. In order to enable Buyer and its Affiliates to comply with any anti-money laundering program and related responsibilities including, but not limited to, any obligations under the USA Patriot Act of 2001 and regulations thereunder, Guarantor on behalf of itself and its Affiliates represents to Buyer and its Affiliates that neither Guarantor, nor, to Guarantor’s Knowledge, any of its Affiliates, is a Prohibited Investor, and Guarantor is not acting on behalf of or for the benefit of any Prohibited Investor. Guarantor agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation and covenant.

(c) Office of Foreign Assets Control. Guarantor warrants, represents and covenants that neither Guarantor nor any of its Affiliates are or will be an entity or person (A) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”); (B) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designed National and Blocked Persons,” (C) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO 13224; or (D) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in (A) through (D) above are herein referred to as a “Prohibited Person”). Guarantor covenants and agrees that neither it nor any of its Affiliates will knowingly (1) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person or (2) engage in or conspire to engage in any transaction that evades or avoids or that the purpose of evading or avoiding any of the prohibitions of EO 13224. Guarantor further covenants and agrees to deliver to Buyer any such certification or other evidence as may be requested by Buyer in its sole and absolute discretion, confirming that neither it nor any of its Affiliates is a Prohibited Person and neither Guarantor nor any of its Affiliates has knowingly engaged in any business transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person.

(d) Financial Reporting. Guarantor shall provide, or to cause to be provided, to Buyer the following financial and reporting information:

(i) Within forty-five (45) calendar days after the last day of each of the first three fiscal quarters in any fiscal year, a quarterly reporting package substantially in the form of Exhibit III attached to the Repurchase Agreement;

(ii) Within ninety (90) calendar days after the last day of its fiscal year, an annual reporting package substantially in the form of Exhibit IV attached to the Repurchase Agreement; and

(iii) Upon Buyer’s written request, copies of Guarantor’s consolidated Federal Income Tax returns, if any, delivered within thirty (30) days after the earlier of (A) filing or (B) the last filing extension period.

(e) Compliance with Obligations and Laws. Guarantor shall at all times (i) comply with all material contractual obligations, (ii) comply in all respects with all laws, ordinances, rules, regulations and orders (including, without limitation, environmental laws) of

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any Governmental Authority or any other federal, state, municipal or other public authority having jurisdiction over Guarantor or any of its assets and maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business.

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

(g) Change of Name; Place of Business. Guarantor shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office of Guarantor and of any change in Guarantor’s name or the places where the books and records are held not less than fifteen (15) Business Days prior to taking any such action.

11. Right of Set-off. Guarantor hereby irrevocably authorizes Buyer and its Affiliates, upon the occurrence of and during the continuance of an Event of Default, at any time and from time to time without notice to Guarantor, any such notice being expressly waived by Guarantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Buyer to or for the credit or the account of Guarantor, or any part thereof in such amounts as Buyer may elect, against and on account of the obligations and liabilities of Guarantor to Buyer hereunder and claims of every nature and description of Buyer against Guarantor, in any currency, arising under any Governing Agreement, as Buyer may elect, whether or not Buyer has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Buyer shall notify Guarantor promptly of any such set-off and the application made by Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of Buyer under this paragraph are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the Buyer may have.

12. Severability. Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

13. Paragraph Headings. The paragraph headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

14. No Waiver; Cumulative Remedies. Buyer shall not by any act (except by a written instrument pursuant to paragraph 15 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default, event of default or in any breach of any of the terms and conditions hereof. No failure to

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exercise, nor any delay in exercising, on the part of Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that Buyer would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

15. Waivers and Amendments; Successors and Assigns; Governing Law. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Buyer, except that any provision of this Guarantee may be waived by Buyer in a letter or agreement specifically waiving such terms and executed solely by Buyer. This Guarantee shall be binding upon the heirs, personal representatives, successors and assigns of Guarantor and shall inure to the benefit of Buyer, and their respective successors and assigns. THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THE INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW) APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED IN SUCH STATE. THIS CHOICE OF LAW IS MADE PURSUANT TO NEW YORK GENERAL OBLIGATION LAW SECTION 5-1401. THE PARTIES CONSENT TO THE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING IN CONNECTION WITH THIS AGREEMENT AND WAIVE ANY OBJECTION AS TO VENUE IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK. THIS CHOICE OF VENUE IS MADE PURSUANT TO NEW YORK GENERAL OBLIGATION LAW SECTION 5-1402.

16. Notices. Notices by Buyer to Guarantor shall be given in writing, addressed to Guarantor at the address or transmission number set forth under its signature below and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery or (d) by email, provided that such emailed notice must also be delivered by one of the means set forth above, to the address the address or transmission number set forth under its signature below or at such other address and person as shall be designated from time to time by Guarantor, as the case may be, in a written notice to Buyer. A notice shall be deemed to have been given: (w) in the case of hand delivery, at the time of delivery, (x) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (y) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (z) in the case of email, upon receipt of confirmation, provided that such emailed notice was also delivered as required in this Section 16. If Guarantor receives a notice that does not comply with the technical requirements for notice under this Section 16 it may elect to waive any deficiencies and treat the notice as having been properly given.

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17. SUBMISSION TO JURISDICTION; WAIVERS. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(A) SUBMITS IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER LOAN DOCUMENTS TO WHICH GUARANTOR IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO GUARANTOR AT ITS ADDRESS SET FORTH UNDER GUARANTOR’S SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED IN WRITING BY GUARANTOR; AND

(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

18. Integration. This Guarantee represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations by Buyer relative to the subject matter hereof not reflected herein.

19. Execution. This Guarantee may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Delivery by telecopier or other electronic transmission (including a .pdf e-mail transmission) of an executed counterpart of a signature page to this Guarantee shall be effective as delivery of an original executed counterpart of this Guarantee.

20. Acknowledgments. Guarantor hereby acknowledges that:

(a) It has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the related documents;

(b) Buyer has no fiduciary relationship to it, and the relationship between Buyer and Guarantor are solely that of surety and creditor; and

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(c) No joint venture exists between or among any of Buyer, on the one hand, and Seller, Parent and/or Guarantor on the other hand.

21. WAIVERS OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

BLACKSTONE MORTGAGE TRUST, INC., a Maryland Corporation
By:	/s/ Thomas C. Ruffing
	Name:	Thomas C. Ruffing
	Title:	Managing Director, Asset Management
Address:
345 Park Avenue
New York, NY 10154
Attention: Douglas Armer
Telephone: (212) 583-5000
Email: BXMTJPMRepo@blackstone.com
with a copy to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036-8704
Attention: David C. Djaha, Esq.
Telephone: (212) 841-0489
Email: David.Djaha@ropesgray.com

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EX-10.16

Exhibit 10.16

FIRST AMENDMENT TO MASTER REPURCHASE AGREEMENT

THIS FIRST AMENDMENT TO MASTER REPURCHASE AGREEMENT (this “Amendment”), dated as of July 26, 2013 (the “Effective Date”), is made by and among CITIBANK, N.A., having an address at 388 Greenwich Street, 19^th Floor, New York, New York 10013 (together with its successors and/or assigns, “Buyer”), PARLEX 2 FINANCE, LLC, a Delaware limited liability company, having an address c/o Blackstone Mortgage Trust, Inc., 345 Park Avenue, New York, New York 10154 (“Seller”) and, for the purpose of acknowledging and agreeing to the provision set forth in Section 3 hereof, BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation, having an address at 345 Park Avenue, New York, New York 10154 (“Guarantor”).

W I T N E S S E T H:

WHEREAS, Seller and Buyer have entered into that certain Master Repurchase Agreement, dated as of June 12, 2013 (as the same may be amended, supplemented, extended, restated, replaced or otherwise modified from time to time, the “Repurchase Agreement”);

WHEREAS, all capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Repurchase Agreement;

WHEREAS, Seller and Buyer desire to modify certain terms and provisions of the Repurchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of ten dollars ($10) and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Seller and Buyer covenant and agree as follows as of the Effective Date, and Guarantor acknowledges and agrees as to the provision set forth in Section 3 as of the Effective Date:

1. Modification of Repurchase Agreement. The Repurchase Agreement is hereby modified as of the Effective Date as follows:

(a) The following sentence is hereby added as clause (d) to the definition of “Eligible Loans” in Section 2 of the Repurchase Agreement:

“(d) in the event the maturity date of the subject Whole Loan or Senior Interests (or participation interests therein) shall be later than three (3) years (inclusive of all extension terms) after the expiration of the Facility Availability Period, then the conditions precedent to the exercise of any option that would extend the maturity date of such Whole Loan or Senior Interests (or participation interests therein) beyond such three (3) year period shall include extension conditions satisfactory to Buyer, including but not limited to, enhanced credit metrics relative to those in place at the time of such Purchased Loan’s origination.”

(b) The definition of “Facility Amount” in Section 2 of the Repurchase Agreement is hereby deleted in its entirety and replaced with the following:

“Facility Amount” shall mean the sum of Facility Amount – Class A and Facility Amount – Class B;

(c) Two new defined terms are added, in alphabetical order, to Section 2 of the Repurchase Agreement, as follows:

“Facility Amount – Class A” shall mean $250,000,000;

“Facility Amount – Class B” shall mean $250,000,000;

(d) The definition of “Facility Availability Period” in Section 2 of the Repurchase Agreement is hereby deleted in its entirety and replaced with the following:

“Facility Availability Period” shall mean, with respect to any Purchased Loan, the Facility Availability Period – Class A or the Facility Availability Period – Class B, as applicable.

(e) Two new defined terms are added, in alphabetical order, to Section 2 of the Repurchase Agreement, as follows:

“Facility Availability Period – Class A” shall be solely applicable to each Purchased Loan – Class A and shall mean the twelve (12) month period commencing on the Effective Date of the First Amendment to this Agreement and ending on the one (1) year anniversary of such date (i.e. July 26, 2014) (or if such day is not a Business Day, the next succeeding Business Day). Notwithstanding anything herein to the contrary, at any time during the Facility Availability Period – Class A, Seller may request an extension of the Facility Availability Period – Class A, which extension shall be in Buyer’s sole discretion and subject to terms and conditions determined by Buyer in its sole discretion.

“Facility Availability Period – Class B” shall be solely applicable to each Purchased Loan – Class B and shall mean the period commencing on the Facility Commencement Date and ending on the three (3) year anniversary of the Facility Commencement Date (or if such day is not a Business Day, the next succeeding Business Day). Notwithstanding anything herein to the contrary, at any time during the Facility Availability Period – Class B, Seller may request an extension of the Facility Availability Period – Class B, which extension shall be in Buyer’s sole discretion and subject to terms and conditions determined by Buyer in its sole discretion.

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(f) The following defined term is hereby added, in alphabetical order, to Section 2 of the Repurchase Agreement, as follows:

“Facility Commencement Date” shall mean June 12, 2013.

(g) The definition of “Purchased Loans” in Section 2 of the Repurchase Agreement is hereby deleted in its entirety and replaced with the following:

“Purchased Loans” shall mean (i) with respect to any Transaction, the Eligible Loan (i.e. either a Purchased Loan – Class A or a Purchased Loan – Class B) sold by Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Loans sold by Seller to Buyer (i.e. all Purchased Loans – Class A and all Purchased Loans – Class B).

(h) Two new defined terms are hereby added, in alphabetical order, to Section 2 of the Repurchase Agreement, as follows:

“Purchased Loan – Class A” shall mean a Purchased Loan categorized as a “Class A” Purchased Loan on the related executed Confirmation.

“Purchased Loan – Class B” shall mean a Purchased Loan categorized as a “Class B” Purchased Loan on the related executed Confirmation.

(i) The definition of “Facility Expiration Date” in Section 2 of the Repurchase Agreement is hereby deleted in its entirety and replaced with the following:

“Facility Expiration Date” shall mean the later to occur of the Facility Expiration Date – Class A and the Facility Expiration Date – Class B.

(j) Two new defined terms are hereby added, in alphabetical order, to Section 2 of the Repurchase Agreement, as follows:

“Facility Expiration Date – Class A” shall mean the last day of the Facility Availability Period – Class A; provided, that the Facility Expiration Date – Class A shall be extendible by Seller on an annual basis thereafter (i.e. for consecutive twelve (12) month periods), subject to the following:

(a) Seller delivers to Buyer a written request of the extension of the Facility Expiration Date – Class A no earlier than ninety (90) nor later than thirty (30) days before the then current Facility Expiration Date – Class A,

(b) no Default or Event of Default has occurred and is continuing on the date the request to extend is delivered or on the then current Facility Expiration Date – Class A,

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(c) no Margin Deficit exists that has not been satisfied,

(d) the Concentration Limit is satisfied on the date the request to extend is delivered and on the then current Facility Expiration Date – Class A (except to the extent waived or otherwise approved by Buyer), and

(e) Seller shall have paid to Buyer the Extension Fee on or before the then current Facility Expiration Date – Class A; provided, however, that the Extension Fee with respect to extending the Facility Availability Period – Class A shall only accrue and be due and payable from and after the occurrence of Facility Expiration Date – Class B.

“Facility Expiration Date – Class B” shall mean the last day of the Facility Availability Period – Class B; provided, that the Facility Expiration Date – Class B shall be extendible by Seller on an annual basis thereafter (i.e. for consecutive twelve (12) month periods), subject to the following:

(a) Seller delivers to Buyer a written request of the extension of the Facility Expiration Date – Class A no earlier than ninety (90) nor later than thirty (30) days before the then current Facility Expiration Date – Class B,

(b) no Default or Event of Default has occurred and is continuing on the date the request to extend is delivered or on the then current Facility Expiration Date – Class B,

(c) no Margin Deficit exists that has not been satisfied,

(d) the Concentration Limit is satisfied on the date the request to extend is delivered and on the then current Facility Expiration Date – Class B (except to the extent waived or otherwise approved by Buyer), and

(e) Seller shall have paid to Buyer the Extension Fee on or before the then current Facility Expiration Date – Class B.

(k) The following language is hereby inserted in Section 3(a), at the end of clause (i) in the first sentence and immediately prior to the phrase “and (ii)”: “…and the aggregate outstanding Purchase Prices at any time for all Purchased Loans – Class A shall not exceed the Facility Amount – Class A, and the aggregate outstanding Purchase Prices at any time for all Purchased Loans – Class B shall not exceed the Facility Amount – Class B”.

(l) The items listed in Section 3(b) of the Repurchase Agreement to be set forth in the Confirmation is hereby amended as follows: (a) subclauses (iii)-(ix) are hereby renumbered to be subclauses (iv)-(x) and (b) a new subclause (iii) is inserted to read as follows: “(iii) the classification of such Purchased Loan as either a Purchased Loan – Class A or a Purchased Loan – Class B,”.

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(m) The following sentence is hereby added to the end of Section 3(c) of the Repurchase Agreement, as follows:

“Notwithstanding anything to the contrary set forth herein, (i) no Purchased Loan shall be classified as both a Purchased Loan – Class A and a Purchased Loan – Class B and (ii) upon classification as either a Purchased Loan – Class A or a Purchased Loan – Class B, no Purchased Loan shall be re-classified unless permitted by Buyer in Buyer’s sole discretion.”

(n) The phrase “At any time prior to the Facility Expiration Date…” at the beginning of Sections 4(c) and 4(e) is hereby deleted in both places and replaced with the phrase “At any time during the applicable Facility Availability Period…”.

(o) The phrase: “…during the Facility Availability Period” in Section 5(d) and twice in Section 5(e) is hereby deleted in all three places and replaced with the phrase: “…prior to the Facility Expiration Date”.

(p) The phrase “Following the end of the Facility Availability Period…” at the beginning of Section 5(f) is hereby deleted and replaced with the phrase: “After the Facility Expiration Date…”.

2. Seller’s Representations. Seller has taken all necessary action to authorize the execution, delivery and performance of this Amendment. This Amendment has been duly executed and delivered by or on behalf of Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles. No Event of Default has occurred and is continuing, and no Event of Default will occur as a result of the execution, delivery and performance by Seller of this Amendment. Any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Seller of this Amendment has been obtained and is in full force and effect (other than consents, approvals, authorizations, orders, registrations or qualifications that if not obtained, are not reasonably likely to have a Material Adverse Effect).

3. Reaffirmation of Guaranty. Guarantor has executed this Amendment for the purpose of acknowledging and agreeing that, notwithstanding the execution and delivery of this Amendment and the amendment of the Repurchase Agreement hereunder, all of Guarantor’s obligations under the Guaranty remain in full force and effect and the same are hereby irrevocably and unconditionally ratified and confirmed by Guarantor in all respects.

4. Full Force and Effect. Except as expressly modified hereby, all of the terms, covenants and conditions of the Repurchase Agreement and the other Transaction Documents remain unmodified and in full force and effect and are hereby ratified and confirmed by Seller.

5

Any inconsistency between this Amendment and the Repurchase Agreement (as it existed before this Amendment) shall be resolved in favor of this Amendment, whether or not this Amendment specifically modifies the particular provision(s) in the Repurchase Agreement inconsistent with this Amendment. All references to the “Agreement” in the Repurchase Agreement or to the “Repurchase Agreement” in any of the other Transaction Documents shall mean and refer to the Repurchase Agreement as modified and amended hereby.

5. No Waiver. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Buyer under the Repurchase Agreement, the Guaranty, any of the other Transaction Documents or any other document, instrument or agreement executed and/or delivered in connection therewith.

6. Headings. Each of the captions contained in this Amendment are for the convenience of reference only and shall not define or limit the provisions hereof.

7. Counterparts. This Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures

8. Governing Law. This Amendment shall be governed in accordance with the terms and provisions of Section 20 of the Repurchase Agreement.

[No Further Text on this Page; Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized representatives as of the day and year first above written and effective as of the Effective Date.

SELLER:
PARLEX 2 FINANCE, LLC,
a Delaware limited liability company
By:	/s/ Douglas Armer
	Name:	Douglas Armer
	Title:	Principal, Head of Capital Markets
GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Thomas C. Ruffing
	Name:	Thomas C. Ruffing
	Title:	Managing Director, Asset Management

[Signatures Continued on Next Page]

BUYER:
CITIBANK, N.A.
By:	/s/ Richard N. Schlenger
	Name:	Richard B. Schlenger
	Title:	Authorized Signatory

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen D. Plavin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Blackstone Mortgage Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2013

/s/ Stephen D. Plavin

Stephen D. Plavin

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Geoffrey G. Jervis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Blackstone Mortgage Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2013

/s/ Geoffrey G. Jervis

Geoffrey G. Jervis

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Blackstone Mortgage Trust, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen D. Plavin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stephen D. Plavin

Stephen D. Plavin

Chief Executive Officer

July 30, 2013

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Blackstone Mortgage Trust, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Geoffrey G. Jervis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Geoffrey G. Jervis

Geoffrey G. Jervis

Chief Financial Officer

July 30, 2013

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

Exhibit 99.1

SECTION 13(r) DISCLOSURE

After Blackstone Mortgage Trust, Inc. (“BXMT”) filed its Form 10-Q for the period ended March 31, 2013, Hilton Worldwide, Inc. (“Hilton”), which may be considered an affiliate of The Blackstone Group L.P. (“Blackstone”), and therefore an affiliate of BXMT, provided the disclosure reproduced below in connection with activities during the first fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“During the reporting period, the Iranian Ministry of Youth and Sports purchased a number of room nights at the Hilton Ankara, Turkey, which is leased by a foreign affiliate of Hilton. Revenue received by Hilton for these hotel stays was approximately $4,360 and net profit was approximately $1,700. During calendar year 2012, the Embassy of Iran purchased a number of room nights at the hotel and organized a concert event in the hotel ballroom. Revenue received by Hilton for the services provided to the Embassy of Iran in 2012 was approximately $11,070 and net profit was approximately $4,300. Hilton believes that the hotel stays were exempt from the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560, pursuant to the International Emergency Economic Powers Act (“IEEPA”). The Hilton Ankara intends to continue engaging in future similar transactions to the extent they remain permissible under IEEPA.

Also during the reporting period, certain individual employees at two Hilton-branded hotels in the United Arab Emirates received routine wage payments as direct deposits to their personal accounts at Bank Melli, an entity identified on the Specially Designated Nationals and Blocked Persons List (“SDN List”) maintained by the Office of Foreign Assets Control in the U.S. Department of the Treasury. In addition, certain individual employees at these hotels received routine wage payments as direct deposits to their personal accounts at Bank Melli during calendar year 2012. Both of these hotels are owned by a third party, staffed by employees of the third-party owner and operated pursuant to a management agreement between the owner and a Hilton affiliate. In each case, these payments originated from the third-party owner’s account to the personal accounts of the employees at their chosen bank. No revenues or net profits are associated with these transactions. Both hotels have advised Hilton that they will discontinue making direct deposits to accounts at Bank Melli.

During the reporting period, several individuals stayed at the DoubleTree Kuala Lumpur, Malaysia, pursuant to a rate agreement between the hotel and Mahan Air, an entity identified on the SDN List. This hotel is staffed by employees of the third-party owner and operated pursuant to a management agreement between the owner and a Hilton affiliate. Under the agreement, which was entered into in the name of the owner, the hotel reserved a number of rooms for Mahan Air crew members at the DoubleTree Kuala Lumpur several times each week. Revenue received by Hilton attributable to Mahan Air crew hotel stays during the reporting period was approximately $1,550. The DoubleTree Kuala Lumpur also reserved a number of rooms for Mahan Air crew members during calendar year 2012. Revenue received by Hilton attributable to Mahan Air crew hotel stays in 2012 was approximately $3,820. Hilton considers its net profit on management fees to be approximately the same as its revenue. The DoubleTree Kuala Lumpur has terminated the agreement and does not intend to engage in any future transactions with Mahan Air.”

After BXMT filed its Form 10-Q for the period ended March 31, 2013, SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems, Inc. (collectively referred to herein as “SunGard”), which may be considered affiliates of Blackstone, and therefore affiliates of BXMT, provided the disclosure reproduced below in connection with activities during the first fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“As previously reported on our Annual Report on Form 10-K for the year ended December 31, 2012, pursuant to Section 13(r)(1)(D)(i) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during 2012 a U.K. subsidiary of ours provided certain limited disaster recovery services and hosted co-location of some hardware at our premises in London for Bank Saderat PLC, a bank incorporated and based in the U.K. Bank Saderat PLC is identified on the U.S. Treasury Department’s List of Specially Designated Nationals and Blocked Persons pursuant to Executive Order No. 13224. Our subsidiary terminated this contract in the first quarter of 2013, and we do not otherwise intend to enter into any Iran-related activity. The gross revenue and net profits attributable to these activities in the first quarter of 2013 were less then £5,000 each.”

After BXMT filed its Form 10-Q for the period ended March 31, 2013, Travelport Limited, which may be considered an affiliate of Blackstone, and therefore an affiliate of BXMT, provided the disclosure reproduced below in connection with activities during the first fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“As part of our global business in the travel industry, we provide certain passenger travel-related GDS and airline IT services to Iran Air. We also provide certain airline IT services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant to a statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the arrangement of travel for individuals.”

Travelport has not provided us with gross revenues and net profits attributable to the activities described above.

2

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Fair Values - Schedule of Range of Key Assumptions for Each Type of Loans Receivable (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	15.00%
Book Value	$ 117,549
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book Value	51,700
Book Value Sensitivity to 100 bps Discount Rate Increase	(0.30%)
Hotel [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	8.00%
Recovery Percentage	84.00%
Hotel [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	12.00%
Recovery Percentage	100.00%
Mixed Use / Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	10.00%
Recovery Percentage	100.00%
Book Value	24,100
Book Value Sensitivity to 100 bps Discount Rate Increase	(0.10%)
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book Value	$ 41,700
Book Value Sensitivity to 100 bps Discount Rate Increase	0.05%
Office [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	7.00%
Recovery Percentage	69.00%
Office [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	20.00%
Recovery Percentage	100.00%

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Stockholders' Equity - Schedule of Basic and Diluted Earnings Per Share, or EPS, Based on the Weighted Average of Both Restricted and Unrestricted Class A Common Stock Outstanding (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net income (loss)	$ 2,748	$ 2,283	$ (367)	$ 68,836
Weighted average shares outstanding	12,401,274	2,289,352	7,734,774	2,286,582
Warrants and options outstanding for the purchase of class A common stock		153,334		148,757
Weighted average shares outstanding, diluted	12,401,274	2,442,686	7,734,774	2,435,339
Per share amount, basic	$ 0.22	$ 1.00	$ (0.05)	$ 30.10
Per share amount, diluted	$ 0.22	$ 0.93	$ (0.05)	$ 28.27

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General and Administrative Expenses - Schedule of General and Administrative Expenses (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
General and Administrative Expenses
Management fees to affiliates			$ 983,000
Professional services			1,267,000	802,000
Operating and other costs			975,000	954,000
Subtotal			3,225,000	1,756,000
Non-cash compensation expenses
Management incentive awards plan - CT Legacy Partners			1,511,000	181,000
Subtotal			1,586,000	503,000
Expenses of consolidated securitization vehicles			654,000	64,000
Total	3,427,000	1,567,000	5,465,000	2,323,000
Director [Member]
Non-cash compensation expenses
Stock-based compensation			75,000	112,000
Employee [Member]
Non-cash compensation expenses
Stock-based compensation				$ 210,000

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Subsequent Events - Additional Information (Detail) (USD $)				1 Months Ended
	Jun. 30, 2013	Jun. 07, 2013 Wells Fargo [Member]	Jun. 12, 2013 Citibank [Member]	Jul. 26, 2013 Subsequent Event [Member] Citibank [Member] Second Tranche [Member]	Jun. 30, 2013 Repurchase Agreements [Member]	Jun. 30, 2013 Repurchase Agreements [Member] Subsequent Event [Member]	Jun. 30, 2013 Repurchase Agreements [Member] Subsequent Event [Member] Wells Fargo [Member]
Subsequent Event [Line Items]
Total loans commitments						$ 289,100,000
Aggregate loan commitments funded						233,300,000
Borrowings under existing repurchase facilities					165,239,000	254,000,000
Facility Size	$ 1,000,000,000	$ 250,000,000	$ 250,000,000	$ 250,000,000	$ 1,000,000,000		$ 91,800,000
Availability period				1 year

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Debt Obligations

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt Obligations

Note 10. Debt Obligations

Secured Notes

In conjunction with our March 2011 Restructuring and the corresponding satisfaction of our senior credit facility and junior subordinated notes, certain wholly-owned subsidiaries of ours issued secured notes to these former creditors, which secured notes are non-recourse to us. The secured notes had an aggregate initial face value of $7.8 million and are secured by 93.5% of our equity interests in the class A-1 and class A-2 common shares of CT Legacy Partners, which represents 48.3% of the total outstanding class A-1 and class A-2 common shares of CT Legacy Partners. The secured notes mature on March 31, 2016 and bear interest at a rate of 8.2% per annum, which interest may be deferred until maturity. All distributions we receive from our equity interests in the common shares of CT Legacy Partners which serve as collateral under the secured notes must be used to pay, or prepay, interest and principal due thereunder, and only after the notes’ full satisfaction will we receive any cash flow from the common equity interests in CT Legacy Partners that serve as collateral for the notes. Any prepayment, or partial prepayment, of the secured notes will incur a prepayment premium resulting in a total payment of principal and interest under the secured notes of $11.1 million.

We had secured notes outstanding with an accreted book value of $8.8 million and $8.5 million as of June 30, 2013 and December 31, 2012, respectively.

Repurchase Obligations

During the second quarter of 2013, we entered into $1.0 billion of master repurchase agreements with four counterparties. As of June 30, 2013, we had aggregate borrowings of $165.2 million outstanding under these facilities, with a weighted-average cash coupon, excluding associated fees and expenses, of LIBOR plus 1.98% per annum and a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.5 years. The following table details the repurchase obligations outstanding as of June 30, 2013 ($ in thousands):

			Collateral Assets				Repurchase Balances
Repurchase Lender	Facility Size		Principal Balance		Net Book Value		Maximum Borrowings		Current Borrowings		Available Borrowings  (1)
Bank of America	$	250,000	$	126,300	$	125,557	$	101,040	$	46,400	$	54,640
Wells Fargo		250,000		300,000		298,533		250,000		—		250,000
Citibank		250,000		156,438		156,039		118,839		118,839		—
JP Morgan		250,000		—		—		—		—		—
Total	$	1,000,000	$	582,738	$	580,129	$	469,879	$	165,239	$	304,640

(1) Available borrowings is based on assets pledged as collateral under credit facilities as of June 30, 2013. There were two loans with an aggregate principal balance of $173.8 million as of June 30, 2013 that were not pledged under repurchase agreements, and therefore are available to be pledged as collateral in the future.

On May 21, 2013, we entered into a $250.0 million master repurchase agreement with Bank of America. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 1.75% and 3.25% depending on the attributes of the collateral loans. The initial maturity date of the facility is May 21, 2016, subject to two one-year extension options, each of which may be exercised by us. Obligations under this repurchase agreement are not recourse to us, except that we guarantee 50% of the advances related to senior collateral and 100% of the advances related to mezzanine and junior mortgage collateral.

On June 7, 2013, we entered into a $250.0 million, asset specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.50%. The initial maturity date of the facility is June 7, 2016, which may be extended pursuant to (i) two one-year extension options, each of which may be exercised by us, and (ii) an additional one-year extension option, contingent upon notice regarding the failure of the collateral mortgage loan to be repaid at its final maturity. We do not guarantee the obligations under this repurchase agreement.

On June 12, 2013, we entered into a $250.0 million master repurchase agreement with Citibank. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 2.25% depending on the attributes of the collateral loans. The initial facility expiration date is June 12, 2016, which may be extended annually by us. If upon the initial facility expiration date, Citibank does not extend the facility availability period, in its sole discretion, then no new advances may be drawn and all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. In either case, individual advances mature upon the maturity date of the respective collateral maturity dates. We guarantee 25% of the advances under this facility. Otherwise, obligations under this repurchase agreement are not recourse to us.

On June 28, 2013, we entered into a $250.0 million master repurchase agreement with JP Morgan. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 3.25% depending on the attributes of the collateral loans. The repurchase agreement specifies a one-year availability period, during which new advances can be made and which availability period is renewable at the discretion of JP Morgan. Maturity dates for individual advances are tied to their respective collateral loan maturity dates subject to annual renewal at our discretion. In the event that the availability period is not renewed, it is followed by a two year ‘stabilization’ period and then a ‘term out’ period, during which all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. Obligations under this repurchase agreement are not recourse to us, except that we guarantee 25% of the advances related to senior mortgage collateral and 100% of the advances related to mezzanine and junior mortgage collateral.

Each of the guarantees related to our master repurchase agreements contain the following uniform financial covenants: (i) our ratio of EBITDA to fixed charges shall be not less than 1.40 to 1.0; (ii) our tangible net worth shall not be less than $525.0 million plus 75% of the net cash proceeds of future equity issuances; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 80% of our total assets. As of June 30, 2013, we were in compliance with all applicable covenants.

The weighted average outstanding repurchase obligation balance for the three months ended June 30, 2013 was $28.3 million.

Repurchase Obligations - CT Legacy Partners

As of March 31, 2013, CT Legacy Partners was party to a repurchase facility with JP Morgan with an outstanding balance of $20.2 million. On June 5, 2013, CT Legacy Partners repaid the outstanding balance and terminated the repurchase facility. CT Legacy Partners has no outstanding debt obligations as of June 30, 2013.

Securitized Debt Obligations

The balances of each of our consolidated securitization vehicles’ outstanding securitized debt obligations, their respective coupons and all-in effective costs, including the amortization of fees and expenses, were as follows ($ in thousands):

	June  30, 2013				December 31, 2012		June  30, 2013
Non-Recourse Securitized Debt Obligations	Principal Balance		Book Value		Book Value		Coupon  (1)			All-In Cost  (1)			Maturity Date  (2)
CT CDO I	$	74,472	$	74,472	$	91,131		1.79	%		1.79	%		July 2039
GSMS 2006-FL8A		—		—		48,053		—			—			N/A
Total/Weighted Average	$	74,472	$	74,472	$	139,184		1.79	%		1.79	%		July 2039

(1) Represents a weighted average for the facility, assuming LIBOR of 0.19% at June 30, 2013 for floating rate debt obligations.

(2) Maturity date represent the contractual maturity of the securitization trust. Repayment of securitized debt is a function of collateral cash flows which are disbursed in accordance with the contractual provisions of each trust, and is generally expected to occur prior to the maturity date above.

As of June 30, 2013, loans receivable with an aggregate book value of $80.8 million served as collateral for the non-recourse debt and equity securities issued by our consolidated securitizations vehicles. As of December 31, 2012, loans receivable with an aggregate book value of $141.5 million served as collateral for the securities issued by these same vehicles.

Our consolidated securitization vehicle, CT CDO I, is subject to interest coverage and overcollateralization tests which, when breached, provide for hyper-amortization of the senior notes by a redirection of cash flow that would otherwise have been paid to the subordinate classes, some of which are owned by us. Furthermore, CT CDO I provides for the re-classification of interest proceeds from impaired collateral as principal proceeds, which also serve to hyper-amortize the senior notes sold. As a result of collateral asset impairments and the related breaches of these interest coverage and overcollateralization tests, we currently do not receive any cash payments from CT CDO I.

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Loans Held-For-Sale - Schedule of Activity Relating to Our Loans Held-for-Sale (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Loans Held-for-Sale, Net
Ending Balance, book	$ 3,800
Gross Book Value [Member]
Loans Held-for-Sale, Net
Beginning Balance, gross
Reclassification from loans receivable	6,601
Valuation allowance on loans held-for-sale	0
Ending Balance, gross	6,601
Valuation Allowance [Member]
Loans Held-for-Sale, Net
Beginning Balance, allowance
Reclassification from loans receivable	(4,601)
Valuation allowance on loans held-for-sale	1,800
Ending Balance, allowance	(2,801)
Net Book Value [Member]
Loans Held-for-Sale, Net
Beginning Balance, book
Reclassification from loans receivable	2,000
Valuation allowance on loans held-for-sale	1,800
Ending Balance, book	$ 3,800

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income from loans and other investments:
Interest and related income	$ 6,017	$ 6,763	$ 7,473	$ 21,479
Less: Interest and related expenses	1,306	5,413	2,083	28,754
Income (loss) from loans and other investments, net	4,711	1,350	5,390	(7,275)
Other expenses:
General and administrative	3,427	1,567	5,465	2,323
Total other expenses	3,427	1,567	5,465	2,323
Total other-than-temporary impairments of securities
Portion of other-than-temporary impairments of securities recognized in other comprehensive income				(160)
Net impairments recognized in earnings				(160)
Recovery of provision for loan losses				8
Valuation allowance on loans held-for-sale	2,000		1,800
Unrealized gain on investments at fair value	4,000		4,000
Gain on extinguishment of debt	38		38
Fair value adjustment on investment in CT Legacy Asset		3,704		7,657
Gain on deconsolidation of subsidiary				146,380
Income from equity investments in unconsolidated subsidiaries		205		901
Income before income taxes	7,322	3,692	5,763	145,188
Income tax provision	554		593	301
Income from continuing operations	6,768	3,692	5,170	144,887
Loss from discontinued operations, net of tax		(341)		(914)
Net Income	6,768	3,351	5,170	143,973
Net income attributable to non-controlling interests	(4,020)	(1,068)	(5,537)	(75,137)
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.	$ 2,748	$ 2,283	$ (367)	$ 68,836
Income (loss) from continuing operations per share of common stock:
Basic	$ 0.22	$ 1.15	$ (0.05)	$ 30.50
Diluted	$ 0.22	$ 1.08	$ (0.05)	$ 28.65
Loss from discontinued operations per share of common stock:
Basic		$ (0.15)		$ (0.40)
Diluted		$ (0.15)		$ (0.38)
Net income (loss) per share of common stock:
Basic	$ 0.22	$ 1.00	$ (0.05)	$ 30.10
Diluted	$ 0.22	$ 0.93	$ (0.05)	$ 28.27
Weighted average shares of common stock outstanding:
Basic	12,401,274	2,289,352	7,734,774	2,286,582
Diluted	12,401,274	2,442,686	7,734,774	2,435,339

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Corporate Transactions

6 Months Ended

Jun. 30, 2013

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Corporate Transactions

Note 3. Corporate Transactions

Blackstone Loan Warehouse Joint Venture

On May 13, 2013, we entered into a joint venture, 42-16 Partners, LLC, or 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was controlled by us and owned 16.7% by us and 83.3% by an affiliate of our Manager, and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate of our Manager using proceeds from the sale of our class A common stock and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary.

CT Legacy Partners Merger

To maintain its tax efficiency, on March 20, 2013, CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, was merged with and into CT Legacy Partners, LLC, or CT Legacy Partners, and whereby CT Legacy Partners was the surviving entity, effective as of March 22, 2013. We refer to this transaction as the Merger. As a result of the Merger, all outstanding shares of class A-1 common stock, class A-2 common stock, class B common stock, and class A preferred stock of CT Legacy REIT were converted into limited liability company shares, or LLC Shares, in CT Legacy Partners. These LLC Shares have economic and voting rights equivalent to the corresponding shares of stock of CT Legacy REIT. In addition, all outstanding shares of class B preferred stock of CT Legacy REIT were redeemed on March 21, 2013 for an aggregate $147,000, which amount is comprised of the shares’ par value, liquidation preference, and accrued dividends thereon.

As a result of the Merger, we have consolidated CT Legacy Partners as of March 20, 2013 and, therefore, the remaining legacy assets and liabilities from our comprehensive debt restructuring on March 31, 2011, which we refer to as our March 2011 Restructuring. See Note 8 and Note 12 for further discussion of CT Legacy Partners.

Sale of Investment Management Platform

On December 19, 2012, pursuant to a purchase and sale agreement, dated as of September 27, 2012, or Purchase Agreement, by and between us and Blackstone, we completed the disposition of our investment management and special servicing business for a purchase price of $21.4 million. The sale included our equity interests in CT Investment Management Co., LLC, or CTIMCO, our related private investment fund co-investments, and 100% of the outstanding class A preferred stock of CT Legacy REIT. We refer the entire transaction as our Investment Management Business Sale. Pursuant to the terms of the Purchase Agreement, on December 19, 2012, we entered into a management agreement with our Manager, which was amended and restated as of March 26, 2013, pursuant to which we are now managed by our Manager pursuant to the terms and conditions of the management agreement. In addition, Blackstone received the right to designate two members of our board of directors, and exercised that right by designating an employee and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012. As a result of the Investment Management Business Sale, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations. See Note 14 for a further discussion of discontinued operations.

On December 19, 2012, we also closed our sale to Blackstone of 500,000 shares of our class A common stock for a purchase price of $10.0 million.

In connection with the consummation of the Investment Management Business Sale and the closing of our sale of 500,000 shares of class A common stock to Blackstone, we paid a $20.00 per share special cash dividend on December 20, 2012 to holders of record of our class A common stock at the close of business on November 12, 2012.

The assets we retained following our Investment Management Business Sale consisted primarily of: (i) cash and cash equivalents, (ii) our interests in CT Legacy Partners, a vehicle we formed to own and finance certain legacy assets that we retained in connection with a comprehensive debt restructuring in 2011, (iii) our carried interest in CTOPI, a private investment fund that was previously under our management and is now managed by an affiliate of our Manager, and (iv) our subordinated interests in certain collateral debt obligations, or CT CDOs.

CT CDO Deconsolidation

On December 19, 2012, as a result of the Investment Management Business Sale, we are no longer the collateral manager for certain collateralized debt obligations, or CT CDOs, nor the special servicer on their collateral assets. Due to the externalization of these management functions, and our lack of material economic interest in the residual equity we own in CT CDOs II and IV, we ceased to be the primary beneficiary of these entities and, therefore, discontinued the consolidation of CT CDOs II and IV, which we refer to as the CT CDO Deconsolidation. We recognized a gain of $53.9 million on the deconsolidation of CT CDOs II and IV, which was due primarily to the reversal of charges to shareholders’ equity resulting from losses previously recorded in excess of our economic interests in these non-recourse securitization vehicles.

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Fair Values

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Values

Note 17. Fair Values

Assets Recorded at Fair Value

The following table summarizes our assets that are recorded at fair value as of June 30, 2013 ($ in thousands):

			Fair Value Measurements Using
	Total Fair Value  at June 30, 2013		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Loans held-for-sale, net	$	3,800	$	—	$	—	$	3,800
Loans receivable, at fair value	$	117,549	$	—	$	—	$	117,549
Securities, at fair value (1)	$	15,461	$	—	$	1,925	$	13,536
Measured on a non-recurring basis:
Impaired loans receivable (2)	$	—	$	—	$	—	$	—

(1) Other assets, at fair value include securities and other assets carried at fair value.

(2) All impaired loans receivable have a 100% loan loss reserve and are held by consolidated securitization vehicles as of June 30, 2013.

The following table summarizes our assets that are recorded at fair value as of December 31, 2012 ($ in thousands):

			Fair Value Measurements Using
	Total Fair Value at December 31, 2012		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Investment in CT Legacy Asset	$	132,000	$	—	$	—	$	132,000
Measured on a non-recurring basis:
Impaired loans receivable (1)	$	2,000	$	—	$	—	$	2,000

(1) Impaired loans receivable have a 92% loan loss reserve and are held by consolidated securitization vehicles as of December 31, 2013.

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Loans Held-for-Sale, net		Loans Receivable, at fair value			Other assets, at  fair value (1)			Investment in CT  Legacy Assets
December 31, 2012	$	—	$	—		$	—		$	132,000
Consolidation of CT Legacy Partners		—		150,332			15,761			(132,000	)
Transfer from loans receivable, net		2,000		—			—			—
Principal paydowns		—		(36,930	)		(349	)		—
Deferred interest		—		195			—			—
Adjustments to fair value included in earnings:
Valuation allowance on loans held-for-sale		1,800		—			—			—
Unrealized gain on investments at fair value		—		3,951			49			—
June 30, 2013	$	3,800	$	117,549		$	15,461		$	—

(1) Other assets include securities and other assets carried at fair value.

The following describes the key assumptions used in arriving at the fair value of each type of asset that was recorded at fair value as of June 30, 2013 and December 31, 2012. There were no liabilities recorded at fair value as of June 30, 2013 or December 31, 2012. See Note 2 for further discussion regarding fair value measurement.

Loans held-for-sale - Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

Loans receivable, at fair value - The following table lists the range of key assumptions for each type of loans receivable as of June 30, 2013 ($ in millions):

	Assumption Ranges for Significant				Book Value
	Unobservable Inputs (Level 3) (1)				Sensitivity to a
		Recovery			100bps Discount
Collateral Type	Discount Rate	Percentage (2)	Book Value		Rate Increase
Hotel	8% -12%	84%- 100%	$	51.7		(0.3%	)
Mixed Use / Other	10%	100%		24.1		(0.1%	)
Office	7%- 20%	69%- 100%		41.7		0.05	%
			$	117.5

(1) Excludes loans for which there is no expectation of future cash flows.

(2) Represents the proportion of the principal expected to be collected relative to the loan balance as of June 30, 2013.

Other assets, at fair value - Other assets include securities and other assets carried at fair value. As of June 30, 2013, all other assets were valued by obtaining assessments from third-party dealers.

Impaired loans receivable - Our impaired loans receivables, which are held by our consolidated securitization vehicles, include two subordinate interests in mortgage loans with an aggregate principal balance of $18.1 million. These hotel loans are in maturity default as of June 30, 2013. The range of key assumptions used for arriving at the fair value of these loans included capitalization rates between 9% and 15% and assumed occupancy rates between 75% and 83%.

Investment in CT Legacy Asset - We elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset, at December 31, 2012. We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. The key assumptions for significant unobservable inputs were: (i) a discount rate of 15% and (ii) loss severities applied to the underlying assets.

Fair Value of Financial Instruments

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. The following table details the carrying amount, face amount, and approximate fair value of the financial instruments described in Note 2. All fair value estimates, except for cash and cash equivalents, are measured using significant unobservable inputs, or Level 3 inputs, as further described above. ($ in thousands):

	June 30, 2013						December 31, 2012
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	59,746	$	59,746	$	59,746	$	15,423	$	15,423	$	15,423
Restricted cash		21,972		21,972		21,972		14,246		14,246		14,246
Loans receivable, net		830,101		851,716		827,152		141,500		164,180		133,682
Financial liabilities:
Secured notes		8,848		8,848		7,827		8,497		8,497		7,374
Repurchase obligations		165,239		165,239		165,239		—		—		—
Securitized debt obligations		74,472		74,472		51,454		139,184		139,184		89,880

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Debt Obligations - Balances of Each Entity's Outstanding Securitized Debt Obligations, their Respective Coupons and All-in Effective Costs, Including Amortization of Fees and Expenses (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Securitization Vehicles [Line Items]
Principal Balance	$ 74,472
Book Value, beginning year	139,184
Book Value, ending year	74,472
Coupon	1.79%
All-In Cost	1.79%
Maturity Date	Jul. 31, 2039
CT CDO I [Member]
Securitization Vehicles [Line Items]
Principal Balance	74,472
Book Value, beginning year	91,131
Book Value, ending year	74,472
Coupon	1.79%
All-In Cost	1.79%
Maturity Date	Jul. 31, 2039
GSMS 2006-FL8A [Member]
Securitization Vehicles [Line Items]
Principal Balance
Book Value, beginning year	48,053
Book Value, ending year
Coupon
All-In Cost
Maturity Date	Jul. 31, 2039

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Loans Receivable, At Fair Value - Overall Statistics for Loans Receivable Portfolio Held at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013 Investment	Dec. 31, 2012 Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 830,101	$ 141,500
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	13	7
Net book value	830,101	141,500
Wtd. Avg. cash coupon	L+4.38 %	L+2.51 %
Wtd. Avg. all-in yield	L+5.27 %	L+4.53 %
CT Legacy Partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	117,549
CT Legacy Partners [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	11
Net book value	117,549
Wtd. Avg. maximum maturity (years)	9 months 18 days
Wtd. Avg. cash coupon	4.74%
Wtd. Avg. all-in yield	5.34%
CT Legacy Partners [Member] | Fixed Rate [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	3
Net book value	24,000
Wtd. Avg. maximum maturity (years)	1 year 4 months 24 days
Wtd. Avg. cash coupon	8.14%
Wtd. Avg. all-in yield	8.12%
CT Legacy Partners [Member] | Floating Rate [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	8
Net book value	$ 94,000
Wtd. Avg. cash coupon	L+3.90 %
Wtd. Avg. all-in yield	L+4.64 %
Wtd. Avg. maximum maturity (years)	7 months 6 days

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 11. Derivative Financial Instruments

We may, in the normal course of business, enter into interest rate derivative financial instruments to manage, or hedge, cash flow variability caused by interest rate fluctuations. As of, and during the six months ended, June 30, 2013, we were not party to any such derivative financial instruments. However, our consolidated subsidiary, CT Legacy Partners, was party to five interest rate swaps which it terminated in June 2013. A gain of $136,000 resulting from the termination is included as a component of interest expense on our consolidated statements of operations for the six months ended June 30, 2013. CT Legacy Partners is no longer party to any derivative financial instruments as of June 30, 2013.

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Fair Values - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Significant unobservable inputs, discount rate	15.00%
Hotel [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Balance	$ 18.1
Number of loans - reported at fair value	2
Minimum [Member] | Hotel [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Capitalization rates	9.00%
Occupancy rates	75.00%
Significant unobservable inputs, discount rate	8.00%
Maximum [Member] | Hotel [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Capitalization rates	15.00%
Occupancy rates	83.00%
Significant unobservable inputs, discount rate	12.00%

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Loans Receivable - Types of Loans in Loan Portfolio, as Well as Property Type and Geographic Distribution of Properties Securing these Loans (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 830,101	$ 141,500
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	753,101	62,500
Percentage of Book Value	91.00%	44.00%
Subordinated Interests in Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	77,000	79,000
Percentage of Book Value	9.00%	56.00%
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	830,101	141,500
Loans Receivable [Member] | Asset [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	830,101	141,500
Percentage of Book Value	100.00%	100.00%
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	413,648	111,500
Percentage of Book Value	49.00%	79.00%
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	162,885	30,000
Percentage of Book Value	20.00%	21.00%
Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	189,557
Percentage of Book Value	23.00%
Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	64,011
Percentage of Book Value	8.00%
West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	454,091	92,500
Percentage of Book Value	54.00%	65.00%
Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	227,034	27,000
Percentage of Book Value	27.00%	19.00%
Southeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	93,000	12,404
Percentage of Book Value	12.00%	9.00%
Midwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	48,380
Percentage of Book Value	6.00%
Southwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 7,596	$ 9,596
Percentage of Book Value	1.00%	7.00%

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Discontinued Operations - Schedule of the Components of Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Discontinued Operations
General and administrative expenses	$ 3,427	$ 1,567	$ 5,465	$ 2,323
Loss from discontinued operations		(341)		(914)
Discontinued Operations [Member]
Discontinued Operations
Servicing fees		1,365		3,385
Management fees from affiliates		1,610		3,195
Total revenues		2,975		6,580
General and administrative expenses		3,173		6,729
Loss from discontinued operations before income taxes		(199)		(149)
Income tax provision		(143)		(766)
Loss from discontinued operations		$ (341)		$ (914)

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Loans Receivable, At Fair Value - Overall Statistics for Loans Receivable Portfolio Held at Fair Value (Parenthetical) (Detail) (LIBOR [Member])	Jun. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR Loans rate	0.19%	0.21%
Floating Rate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR Loans rate	0.19%
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR Loans rate	0.20%
Minimum [Member] | Floating Rate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR Loans rate	2.00%

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Fair Values (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Assets that are Recorded at Fair Value

The following table summarizes our assets that are recorded at fair value as of June 30, 2013 ($ in thousands):

			Fair Value Measurements Using
	Total Fair Value  at June 30, 2013		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Loans held-for-sale, net	$	3,800	$	—	$	—	$	3,800
Loans receivable, at fair value	$	117,549	$	—	$	—	$	117,549
Securities, at fair value (1)	$	15,461	$	—	$	1,925	$	13,536
Measured on a non-recurring basis:
Impaired loans receivable (2)	$	—	$	—	$	—	$	—

(1) Other assets, at fair value include securities and other assets carried at fair value.

(2) All impaired loans receivable have a 100% loan loss reserve and are held by consolidated securitization vehicles as of June 30, 2013.

The following table summarizes our assets that are recorded at fair value as of December 31, 2012 ($ in thousands):

			Fair Value Measurements Using
	Total Fair Value at December 31, 2012		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis:
Investment in CT Legacy Asset	$	132,000	$	—	$	—	$	132,000
Measured on a non-recurring basis:
Impaired loans receivable (1)	$	2,000	$	—	$	—	$	2,000

(1) Impaired loans receivable have a 92% loan loss reserve and are held by consolidated securitization vehicles as of December 31, 2013.

Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Loans Held-for-Sale, net		Loans Receivable, at fair value			Other assets, at  fair value (1)			Investment in CT  Legacy Assets
December 31, 2012	$	—	$	—		$	—		$	132,000
Consolidation of CT Legacy Partners		—		150,332			15,761			(132,000	)
Transfer from loans receivable, net		2,000		—			—			—
Principal paydowns		—		(36,930	)		(349	)		—
Deferred interest		—		195			—			—
Adjustments to fair value included in earnings:
Valuation allowance on loans held-for-sale		1,800		—			—			—
Unrealized gain on investments at fair value		—		3,951			49			—
June 30, 2013	$	3,800	$	117,549		$	15,461		$	—

(1) Other assets include securities and other assets carried at fair value.

Schedule of Range of Key Assumptions for Each Type of Loans Receivable

The following table lists the range of key assumptions for each type of loans receivable as of June 30, 2013 ($ in millions): 

	Assumption Ranges for Significant				Book Value
	Unobservable Inputs (Level 3) (1)				Sensitivity to a
		Recovery			100bps Discount
Collateral Type	Discount Rate	Percentage (2)	Book Value		Rate Increase
Hotel	8% -12%	84%- 100%	$	51.7		(0.3%	)
Mixed Use / Other	10%	100%		24.1		(0.1%	)
Office	7%- 20%	69%- 100%		41.7		0.05	%
			$	117.5

(1) Excludes loans for which there is no expectation of future cash flows.

(2) Represents the proportion of the principal expected to be collected relative to the loan balance as of June 30, 2013.

Schedule of Details of Carrying Amount, Face Amount, and Approximate Fair Value of Financial Instruments

The following table details the carrying amount, face amount, and approximate fair value of the financial instruments described in Note 2. All fair value estimates, except for cash and cash equivalents, are measured using significant unobservable inputs, or Level 3 inputs, as further described above. ($ in thousands):

	June 30, 2013						December 31, 2012
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	59,746	$	59,746	$	59,746	$	15,423	$	15,423	$	15,423
Restricted cash		21,972		21,972		21,972		14,246		14,246		14,246
Loans receivable, net		830,101		851,716		827,152		141,500		164,180		133,682
Financial liabilities:
Secured notes		8,848		8,848		7,827		8,497		8,497		7,374
Repurchase obligations		165,239		165,239		165,239		—		—		—
Securitized debt obligations		74,472		74,472		51,454		139,184		139,184		89,880

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 20. Subsequent Events

Subsequent to quarter-end, we originated an additional five loans with total commitments of $289.1 million, of which an aggregate $233.3 million was funded at closing, and we borrowed $254.0 million under existing repurchase facilities.

Also subsequent to quarter-end, we closed two additional asset-specific repurchase agreements with Wells Fargo, which provide an aggregate $91.8 million of credit. Borrowings under these agreements are not recourse to us, and are term-matched to their collateral assets.

On July 26, 2013, we amended our master repurchase agreement with Citibank to provide for a second $250.0 million tranche of potential advances. The second tranche is subject to a one year ‘availability period,’ during which new financing transactions can be initiated. All other terms, including the maturity dates, for the second tranche advances are the same as the original $250 million tranche.

Also on July 26, 2013, we filed an S-3 universal shelf registration statement with the SEC, which permits us to periodically offer various debt and equity securities to the public. Any offerings of common stock or securities convertible into common stock remain subject to the 180-day lock-up agreement we executed in conjunction with our May 2013 offering of class A common stock.

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Segment Reporting

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

Note 19. Segment Reporting

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Our Loan Origination business commenced during 2013. Accordingly, no comparable segment data exists for 2012 or any other prior period, and we have therefore not retrospectively restated our previously reported information.

The following table presents our results of operations for each segment for the three months ended June 30, 2013 ($ in thousands):

	Loan Origination			CT Legacy Portfolio			Total
Income from loans and other investments:
Interest and related income	$	1,908		$	4,109		$	6,017
Less: Interest and related expenses		168			1,138			1,306
Income from loans and other investments, net		1,740			2,971			4,711
Other expenses:
General and administrative		2,153			1,274			3,427
Total other expenses		2,153			1,274			3,427
Valuation allowance on loans held-for-sale		—			2,000			2,000
Unrealized gain on investments at fair value		—			4,000			4,000
Gain on extinguishment of debt		—			38			38
(Loss) income before income taxes		(413	)		7,735			7,322
Income tax provision		2			552			554
Net (loss) income	($	415	)	$	7,183		$	6,768
Net income attributable to non-controlling interests		—			(4,020	)		(4,020	)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	415	)	$	3,163		$	2,748

All consolidated revenues for the three months ended June 30, 2013 were generated from external domestic sources. There were no transactions between our operating segments during the six months ended June 30, 2013.

The following table presents the key components of our results of operations for each segment for the six months ended June 30, 2013 ($ in thousands):

	Loan			Legacy
	Origination			Portfolio			Total
Income from loans and other investments:
Interest and related income	$	1,908		$	5,565		$	7,473
Less: Interest and related expenses		168			1,915			2,083
Income from loans and other investments, net		1,740			3,650			5,390
Other expenses:
General and administrative		2,883			2,582			5,465
Total other expenses		2,883			2,582			5,465
Valuation allowance on loans held-for-sale		—			1,800			1,800
Unrealized gain on investments at fair value		—			4,000			4,000
Gain on extinguishment of debt		—			38			38
(Loss) income before income taxes		(1,143	)		6,906			5,763
Income tax provision		40			553			593
Net (loss) income	($	1,183	)	$	6,353		$	5,170
Net income attributable to non-controlling interests		—			(5,537	)		(5,537	)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	1,183	)	$	816		($	367	)

All consolidated revenues for the six months ended June 30, 2013 were generated from external domestic sources. There were no transactions between our operating segments during the six months ended June 30, 2013.

The following table presents our consolidated statement of financial condition for each segment as of June 30, 2013 ($ in thousands):

	Loan Origination		Legacy Portfolio		Total
Assets
Assets:
Cash and cash equivalents	$	59,746	$	—	$	59,746
Restricted cash		—		21,972		21,972
Loans receivable, net		753,101		77,000		830,101
Loans held-for-sale, net		—		3,800		3,800
Loans receivable, at fair value		—		117,549		117,549
Equity investments in unconsolidated subsidiaries		—		23,240		23,240
Accrued interest receivable, prepaid expenses, and other assets		5,912		24,785		30,697
Total assets	$	818,759	$	268,346	$	1,087,105
Liabilities & Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	4,827	$	32,052	$	36,879
Secured notes		—		8,848		8,848
Repurchase obligations		165,239		—		165,239
Securitized debt obligations		—		74,472		74,472
Total liabilities		170,066		115,372		285,438
Equity:
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		648,693		63,996		712,689
Non-controlling interests		—		88,978		88,978
Total equity		648,693		152,974		801,667
Total liabilities and equity	$	818,759	$	268,346	$	1,087,105

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Loans Receivable - Overall Statistics for Loan Receivables Portfolio (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013 Investment	Dec. 31, 2012 Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 830,101	$ 141,500
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	13	7
Principal Balance	851,716	164,180
Net book value	$ 830,101	$ 141,500
Wtd. Avg. cash coupon	L+4.38 %	L+2.51 %
Wtd. Avg. all-in yield	L+5.27 %	L+4.53 %
Wtd. Avg. maximum maturity (years)	3 years 8 months 12 days	8 months 12 days

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Debt Obligations (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Repurchase Obligations Outstanding

The following table details the repurchase obligations outstanding as of June 30, 2013 ($ in thousands):

			Collateral Assets				Repurchase Balances
Repurchase Lender	Facility Size		Principal Balance		Net Book Value		Maximum Borrowings		Current Borrowings		Available Borrowings  (1)
Bank of America	$	250,000	$	126,300	$	125,557	$	101,040	$	46,400	$	54,640
Wells Fargo		250,000		300,000		298,533		250,000		—		250,000
Citibank		250,000		156,438		156,039		118,839		118,839		—
JP Morgan		250,000		—		—		—		—		—
Total	$	1,000,000	$	582,738	$	580,129	$	469,879	$	165,239	$	304,640

(1) Available borrowings is based on assets pledged as collateral under credit facilities as of June 30, 2013. There were two loans with an aggregate principal balance of $173.8 million as of June 30, 2013 that were not pledged under repurchase agreements, and therefore are available to be pledged as collateral in the future.

Balances of Each Entity's Outstanding Securitized Debt Obligations, their Respective Coupons and All-in Effective Costs, Including Amortization of Fees and Expenses

The balances of each of our consolidated securitization vehicles’ outstanding securitized debt obligations, their respective coupons and all-in effective costs, including the amortization of fees and expenses, were as follows ($ in thousands):

	June  30, 2013				December 31, 2012		June  30, 2013
Non-Recourse Securitized Debt Obligations	Principal Balance		Book Value		Book Value		Coupon  (1)			All-In Cost  (1)			Maturity Date  (2)
CT CDO I	$	74,472	$	74,472	$	91,131		1.79	%		1.79	%		July 2039
GSMS 2006-FL8A		—		—		48,053		—			—			N/A
Total/Weighted Average	$	74,472	$	74,472	$	139,184		1.79	%		1.79	%		July 2039

(1) Represents a weighted average for the facility, assuming LIBOR of 0.19% at June 30, 2013 for floating rate debt obligations.

(2) Maturity date represent the contractual maturity of the securitization trust. Repayment of securitized debt is a function of collateral cash flows which are disbursed in accordance with the contractual provisions of each trust, and is generally expected to occur prior to the maturity date above.

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Organization - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013 Segment
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of operating segments	2

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Loans Receivable - Types of Loans in Loan Portfolio, as Well as Property Type and Geographic Distribution of Properties Securing these Loans (Parenthetical) (Detail) (Senior Mortgages Loans [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgages with aggregate principal balance and net book value	$ 91.1

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Loans Held-For-Sale (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule of Activity Relating to Our Loans Held-for-Sale

Activity relating to our loans held-for-sale for the six months ended June 30, 2013 was as follows ($ in thousands):

	Gross Book Value		Valuation Allowance			Net Book Value
December 31, 2012	$	—	$	—		$	—
Reclassification from loans receivable		6,601		(4,601	)		2,000
Valuation allowance on loans held-for-sale		—		1,800			1,800
June 30, 2013	$	6,601	($	2,801	)	$	3,800

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Debt Obligations - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended			0 Months Ended			0 Months Ended		1 Months Ended			6 Months Ended	0 Months Ended		1 Months Ended		0 Months Ended		1 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	May 21, 2013 Bank of America [Member]	May 21, 2013 Bank of America [Member] Senior Collateral [Member]	May 21, 2013 Bank of America [Member] Mezzanine And Junior Mortgage Collateral [Member]	Jun. 07, 2013 Wells Fargo [Member]	Jun. 12, 2013 Citibank [Member]	Jun. 28, 2013 JP Morgan [Member]	Jun. 28, 2013 JP Morgan [Member] Senior Collateral [Member]	Jun. 28, 2013 JP Morgan [Member] Mezzanine And Junior Mortgage Collateral [Member]	Jun. 30, 2013 Minimum [Member]	May 21, 2013 Minimum [Member] Bank of America [Member]	Jun. 12, 2013 Minimum [Member] Citibank [Member]	Jun. 28, 2013 Minimum [Member] JP Morgan [Member]	Jun. 30, 2013 Maximum [Member]	May 21, 2013 Maximum [Member] Bank of America [Member]	Jun. 12, 2013 Maximum [Member] Citibank [Member]	Jun. 28, 2013 Maximum [Member] JP Morgan [Member]	Jun. 30, 2013 March 2011 Restructuring [Member]
Debt Instrument [Line Items]
Secured notes face amount																					$ 7,800,000
Equity interests in common stock																					93.50%
Total common stock outstanding																					48.30%
Interest rate	1.79%	1.79%																			8.20%
Maturity Date		Jul. 31, 2039																			Mar. 31, 2016
Prepayment premium of total payment of principal and interest																					11,100,000
Secured notes, outstanding	8,848,000	8,848,000		8,497,000
Facility Size	1,000,000,000	1,000,000,000			250,000,000			250,000,000	250,000,000	250,000,000
Aggregate borrowings	165,200,000	165,200,000
Description of interest rate	LIBOR plus 1.98% per annum							LIBOR plus 2.50%
Weighted-average initial maturity	2 years 6 months
Maturity period					The initial maturity date of the facility is May 21, 2016, subject to two one-year extension options			The initial maturity date of the facility is June 7, 2016, which may be extended pursuant to (i) two one-year extension options, each of which may be exercised by us, and (ii) an additional one-year extension option, contingent upon notice regarding the failure of the collateral mortgage loan to be repaid at its final maturity.	The initial facility expiration date is June 12, 2016, which may be extended annually by us.	The repurchase agreement specifies a one-year availability period, during which new advances can be made and which availability period is renewable at the discretion of JP Morgan.
LIBOR basis spread on debt obligation														1.75%	2.00%	2.00%		3.25%	2.25%	3.25%
Percentage of recourse debt						50.00%	100.00%		25.00%		25.00%	100.00%
Covenants, EBITDA to fixed charges													1.40
Covenants, minimum tangible net worth	525,000,000	525,000,000
Covenants, percentage of tangible assets on cash proceeds from equity issuances		75.00%
Covenants, minimum cash liquidity amount													10,000,000
Covenants, percentage of recourse indebtedness	5.00%	5.00%
Covenants, indebtedness to total assets																	80.00%
Weighted average outstanding repurchase obligation	28,300,000
Repurchase obligations	165,239,000	165,239,000	20,200,000
Loans receivable, CT CDOs	$ 80,800,000	$ 80,800,000		$ 141,500,000

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Stockholders' Equity - Schedule of Primary Components of Accumulated Other Comprehensive Loss (Parenthetical) (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Accumulated Other Comprehensive Loss [Abstract]
Other-than-temporary impairments of securities	$ 391,000

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Equity Investments in Unconsolidated Subsidiaries - Activity Relating to Our Equity Investments in Unconsolidated Subsidiaries (Parenthetical) (Detail) (CT Opportunity Partners I, LP [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
CT Opportunity Partners I, LP [Member]
Investments in Equity Accounted Investees [Line Items]
Advance distribution of incentive compensation	$ 1.4

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Cash and Cash Equivalents, Including Restricted Cash - Schedule of Cash and Cash Equivalents, Including Restricted Cash Balances (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Credit Rating [Line Items]
Cash	$ 59,746	$ 15,423	$ 34,604	$ 34,818
Restricted cash	21,972	14,246
Total	81,718	29,669
Bank of America [Member] | A-1 Credit Rating [Member]
Credit Rating [Line Items]
Cash	59,746	15,423
Restricted cash	$ 21,972	$ 14,246

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Derivative Financial Instruments - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013 Contract
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Gain on termination of residual interest rate swaps	$ 136,000
Number Of Interest Rate Swap Agreements Terminated	5

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Transactions with Related Parties

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Transactions with Related Parties

Note 18. Transactions with Related Parties

Transactions Related to Our Manager

As further described in Note 3, in December 2012 we concluded multiple, related transactions with Blackstone and its affiliates, including: (i) the Investment Management Business Sale, (ii) the sale of 500,000 shares of our class A common stock for $20.00 per share, and (iii) the execution of a new external management agreement with our Manager. In addition, Blackstone received the right to designate two members of our board of directors, and exercised that right by designating an employee and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012.

On March 26, 2013, we amended the external management agreement with our Manager to, among other things, amend our investment guidelines to permit the investment risk management committee of our board of directors, which consists of only independent directors, to approve any proposed investment by our Manager.

As of June 30, 2013, our consolidated balance sheet included $920,000 of accrued management fees payable to our Manager. During the six months ended June 30, 2013, we paid $71,000 of management fees to our Manager. In addition, as of June 30, 2013, our consolidated balance sheet includes $382,000 of preferred distributions payable by CT Legacy Partners to an affiliate of our Manager. During the six months ended June 30, 2013, CT Legacy Partners made aggregate preferred distributions of $2.3 million to an affiliate of our Manager.

During the six months ended June 30, 2013, our consolidated securitization vehicles paid $651,000 of special servicing fees to CTIMCO, which is an affiliate of our Manager.

There may be conflicts between us and our Manager with respect to certain of the investments in the CT Legacy Partners and CTOPI portfolios where an affiliate of our Manager holds a related investment that is senior, junior, or pari passu to the investments held by these portfolios.

The management agreement with our Manager excludes from the management fee calculation our interests in CT Legacy Partners, CTOPI, and our CT CDOs, which may result in further conflicts between the economic interests of us and our Manager. Certain of our former employees are now employed by an affiliate of our Manager. See Note 13 for further discussion of the management agreement with our Manager.

On May 13, 2013, we entered into a joint venture, 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was owned 16.7% by us and 83.3% by an affiliate of our Manager, and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate our Manager using proceeds from the sale of our class A common stock and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary. We recorded a $193,000 charge to non-controlling interest as a result of the purchase of these equity interests at their fair value, rather than GAAP book value.

An affiliate of our Manager purchased 1,960,784 shares of our class A common stock as part of our stock offering on May 22, 2013. These shares were purchased for $25.50 each, the same price offered to non-affiliated purchasers. This affiliate owned class A common stock representing 8.5% of outstanding class A common stock and stock units as of July 25, 2013.

Other Related Party Transactions

In conjunction with the Investment Management Business Sale, we entered into a letter agreement with W.R. Berkley Corporation, or WRBC, pursuant to which we agreed not to undertake any offering of our class A common stock, or other equity securities, in an aggregate amount greater than $30.0 million without prior approval of a majority of the independent members of our board of directors. This approval was obtained in conjunction with our May 2013 offering of Class A common stock, and no further approval requirement remains. WRBC beneficially owned class A common stock representing approximately 1.3% of our outstanding class A common stock and stock units as of July 25, 2013, and a member of our board of directors is an employee of WRBC.

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Consolidated Statements of Changes in (Deficit) Equity (Unaudited) (USD $) In Thousands	Total	Class A Common Stock [Member]	Restricted Class A Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Accumulated Deficit [Member]	Total Blackstone Mortgage Trust, Inc. Stockholders' (Deficit) Equity [Member]	Noncontrolling Interests [Member]
Balance, beginning at Dec. 31, 2011	$ (128,939)	$ 220	$ 2	$ 597,049	$ (40,584)	$ (667,111)	$ (110,424)	$ (18,515)
Net (loss) income	143,973					68,836	68,836	75,137
Other comprehensive income	5,622				5,612		5,612	10
Deconsolidation of CT Legacy Asset	1,293				1,293		1,293
Distributions to noncontrolling interests	(7)							(7)
Restricted class A common stock earned, net of shares deferred	185		3	182			185
Deferred directors' compensation	113			113			113
Balance, ending at Jun. 30, 2012	22,240	220	5	597,344	(33,679)	(598,275)	(34,385)	56,625
Balance, beginning at Dec. 31, 2012	153,453	293		609,002		(535,851)	73,444	80,009
Net (loss) income	5,170					(367)	(367)	5,537
Consolidation of subsidiary	11,962					5,727	5,727	6,235
Contributions from non-controlling interests	15,000							15,000
Purchase of and distributions to non-controlling interests	(17,803)							(17,803)
Proceeds from offering of common stock	633,810	258		633,552			633,810
Reverse stock split		(263)		263
Deferred directors' compensation	75			75			75
Balance, ending at Jun. 30, 2013	$ 801,667	$ 288		$ 1,242,892		$ (530,491)	$ 712,689	$ 88,978

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Organization

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Organization

Note 1. Organization

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

We are a real estate finance company that primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. We are externally managed by BXMT Advisors L.L.C., which we refer to as our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” We are headquartered in New York City.

We conduct our operations as a real estate investment trust, or REIT, for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries. Our business is organized into two operating segments, the Loan Origination segment and the CT Legacy Portfolio segment.

On April 26, 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected on May 6, 2013 concurrently with a one-for-ten reverse stock split of our class A common stock. Except where the context indicates otherwise, all class A common stock numbers herein have been adjusted to give retroactive effect to the reverse stock split.

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Cash and Cash Equivalents, Including Restricted Cash

6 Months Ended

Jun. 30, 2013

Cash And Cash Equivalents [Abstract]

Cash and Cash Equivalents, Including Restricted Cash

Note 4. Cash and Cash Equivalents, Including Restricted Cash

As discussed in Note 2, we place our cash and cash equivalents, including restricted cash, with high credit quality institutions to minimize credit risk exposure. The following table outlines details of our cash and cash equivalents, including restricted cash balances as of June 30, 2013 and December 31, 2012.

			Balance as of
Asset Type	Depository	Credit Rating(1)	June 30, 2013		December 31, 2012
Cash	Bank of America	A-1	$	59,746	$	15,423
Restricted Cash	Bank of America	A-1		21,972		14,246
Total			$	81,718	$	29,669

(1) Represents the short-term credit rating for the Bank of America, N.A. legal entity as issued by Standard & Poor’s as of May 16, 2013.

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Stockholders' Equity - Schedule of the Components of Non-controlling Interests (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Gross investment in CT Legacy Partners:
Restricted cash	$ 21,972	$ 14,246
Loans receivable, at fair value	117,549
Accrued interest receivable, prepaid expenses, and other assets	30,697	5,868
Accounts payable, accrued expenses and other liabilities	36,879	21,209
Non-controlling interests in CT Legacy Partners	88,978	80,009
Noncontrolling Interests [Member]
Gross investment in CT Legacy Partners:
Restricted cash	21,972
Loans receivable, at fair value	117,549
Accrued interest receivable, prepaid expenses, and other assets	21,948
Accounts payable, accrued expenses and other liabilities	(485)
Investment in CT Legacy REIT, Gross	160,984
Equity interests owned by Blackstone Mortgage Trust, Inc.	(72,006)
Non-controlling interests in CT Legacy Partners	$ 88,978

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the consolidated financial statements are presented fairly and that estimates made in preparing its consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and the related management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities and Exchange Commission.

Principles of Consolidation and Basis of Presentation

The accompanying financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, and variable interest entities, or VIEs, in which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Certain of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest, and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary, and is generally the entity with (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and therefore a further disaggregated presentation would not be more meaningful.

Our CT Legacy Partners, LLC, or CT Legacy Partners, subsidiary accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and securities investments of CT Legacy Partners at fair value on our consolidated balance sheet.

As more fully described in Note 3, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Certain reclassifications have been made in the presentation of the prior period consolidated financial statements to conform to the June 30, 2013 presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

Revenue Recognition

Interest income from our loans receivable is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.

Cash and Cash Equivalents

Cash and cash equivalents represents cash on hand, cash held in banks and liquid investments with original maturities of three months or less. We place our cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. We may have bank balances in excess of federally insured amounts. We have not experienced, and do not expect, any losses on our demand deposits, commercial paper or money market investments.

Restricted Cash

We classify the cash balances held by CT Legacy Partners as restricted because, while these cash balances are available for use by CT Legacy Partners for operations, debt service, or other purposes, they cannot be used by us until our allocable share is distributed from CT Legacy Partners, and cannot be commingled with any of our other, unrestricted cash balances.

Loans Receivable, Provision for Loan Losses, Loans Held-for-Sale and Related Allowance

We purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment on these loans is measured by comparing the estimated fair value of the underlying collateral to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders and other factors deemed necessary by our Manager. Actual losses, if any, could ultimately differ from these estimates.

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated one through eight, which ratings are defined as follows:

1 -	Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in-place debt yield, and stable projected cash flow.
2 -	Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.
3 -	Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.
4 -	Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.
5 -	Low Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 15% probability of default or principal loss.
6 -	Medium Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 33% probability of default or principal loss.
7 -	High Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 67% or higher probability of default or principal loss.
8 -	In Default: A loan which is in contractual default and/or which has a very high likelihood of principal loss.

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis and fair value less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statement of operations as a valuation allowance on loans held-for-sale.

Equity Investments in Unconsolidated Subsidiaries

Our carried interest in CT Opportunity Partners I, LP, or CTOPI is accounted for using the equity method. CTOPI’s assets and liabilities are not consolidated into our financial statements due to our determination that (i) it is not a VIE and (ii) the investors have sufficient rights to preclude consolidation by us. As such, we report our allocable percentage of the net assets of CTOPI on our consolidated balance sheet. We have deferred the recognition of income from CTOPI until cash is collected or appropriate contingencies have been eliminated and, therefore do not recognize any income from equity investments in unconsolidated subsidiaries.

Deferred Financing Costs

The deferred financing costs that are included in prepaid expenses and other assets on our consolidated balance sheets include issuance costs related to our debt obligations, and are amortized using the effective interest method, or a method that approximates the effective interest method, over the life of the related obligations.

Repurchase Obligations

We record investments financed with repurchase obligations as separate assets and the related borrowings under any repurchase agreements recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the repurchase obligations are reported separately on our consolidated statements of operations.

Interest Rate Derivative Financial Instruments

In the normal course of business, we use interest rate derivative financial instruments to manage, or hedge, cash flow variability caused by interest rate fluctuations. Specifically, we may use interest rate swaps to convert floating rate liabilities that are financing fixed rate assets into fixed rate liabilities. The differential to be paid or received on these agreements is recognized on the accrual basis as an adjustment to the interest expense related to the attendant liability. In cases where interest rate swap agreements are terminated early, any gain or loss is generally amortized over the remaining life of the hedged item. These swap agreements must be effective in reducing the variability of cash flows of the hedged items in order to qualify for the aforementioned hedge accounting treatment. Changes in the fair value of effective cash flow hedges are reflected on our consolidated financial statements through accumulated other comprehensive income (loss) and do not affect our net income (loss). To the extent a derivative does not qualify for hedge accounting, and is deemed a non-hedge derivative, the changes in its fair value are included in net income (loss).

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or the Codification, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

The “Fair Value Measurement and Disclosures” Topic of the Codification also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

• Level 1 - Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

• Level 2 - Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs such as interest rates, yield curves, credit risks, and default rates.

• Level 3 - Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third parties when determining fair value and generally represent anything which does not meet the criteria of Levels 1 and 2.

Each type of asset recorded at fair value using Level 3 inputs are determined by an internal committee comprised of members of senior management of our Manager, including our chief executive officer, chief financial officer, and other senior officers.

Certain of our assets and liabilities are measured at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets and liabilities that are measured at fair value are discussed further in Note 17. Generally, loans held-for-sale, loans receivable, and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability which was recorded at fair value as of June 30, 2013 and December 31, 2012:

Loans held-for-sale: Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

Loans receivable, at fair value: Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value: CT Legacy Partners’ other assets are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans: The loans identified for impairment are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of fair value of the underlying collateral less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders and other factors deemed necessary by our Manager.

Investment in CT Legacy Asset: We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets, and then applied the proceeds to first satisfy the related repurchase facility.

We are also required by GAAP to disclose fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents: The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash: The carrying amount of restricted cash approximates fair value.

Loans receivable, net: Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors including capitalization rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders and indications of market value from other market participants.

Secured notes: These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations: These facilities were recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Securitized debt obligations: These obligations are recorded at the face value of outstanding obligations to third-parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third-party dealers.

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. Many of these requirements, however, are highly technical and complex. If we were to fail to meet these requirements, we may be subject to federal, state and local income tax on current and past income, and penalties. See Note 15 for additional information.

Accounting for Stock-Based Compensation

Stock-based compensation expense is recognized in net income using a fair value measurement method, which we determine with the assistance of a third-party appraisal firm. Compensation expense for the time vesting of stock-based compensation grants is recognized on the accelerated attribution method and compensation expense for performance vesting of stock-based compensation grants is recognized on a straight line basis.

The fair value of the performance vesting restricted class A common stock is measured on the grant date using a Monte Carlo simulation to estimate the probability of the market vesting conditions being satisfied. The Monte Carlo simulation is run approximately 100,000 times. For each simulation, the payoff is calculated at the settlement date, and is then discounted to the grant date at a risk-free interest rate. The average of the values over all simulations is the expected value of the restricted class A common stock on the grant date. The valuation is performed in a risk-neutral framework, so no assumption is made with respect to an equity risk premium. Significant assumptions used in the valuation include an expected term and stock price volatility, an estimated risk-free interest rate and an estimated dividend growth rate.

Comprehensive Income

The primary component of comprehensive income other than net income is the unrealized gains and losses on derivative financial instruments.

Earnings per Share of Common Stock

Basic earnings per share, or EPS, is computed based on the net earnings allocable to common stock and stock units, divided by the weighted average number of shares of common stock and stock units outstanding during the period. Diluted EPS is determined using the treasury stock method, and is based on the net earnings allocable to common stock and stock units, divided by the weighted average number of shares of common stock, stock units and potentially dilutive common stock options and warrants. On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. Our earnings per share disclosures have been retroactively adjusted to reflect the reverse stock split.

We have separately determined EPS and diluted EPS for income (loss) from continuing operations and for net income (loss) allocable to common stockholders. See Note 12 for additional discussion of earnings per share.

Recent Accounting Pronouncements

In January 2013, the FASB issued Accounting Standards Update 2013-01, “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities,” or ASU 2013-01. ASU 2013-01 was developed to clarify which instruments and transactions are subject to the offsetting disclosure requirements set forth by Accounting Standards Update 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” ASU 2013-01 is effective for the first interim or annual period beginning on or after January 1, 2013, and should be applied retrospectively for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial statements.

In February 2013, the FASB issued Accounting Standards Update 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” or ASU 2013-02. ASU 2013-02 implements the previously deferred requirement to disclose reclassification adjustments into and out of accumulated other comprehensive income in either a note or on the face of the financial statements. ASU 2013-02 is effective for the first interim or annual period beginning after December 15, 2012, and should be applied prospectively. As we no longer have a balance of accumulated other comprehensive income, the adoption of ASU 2013-02 did not have a material impact on our consolidated financial statements.

In June 2013, the FASB issued Accounting Standards Update 2013-08, “Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” or ASU 2013-08. ASU 2013-08 amends the criteria for qualification as an investment company under Topic 946 of the FASB Accounting Standards Codification, or Topic 946, and requires additional disclosure by investment companies. ASU 2013-08 is effective for the first interim or annual period beginning after December 15, 2013, and should be applied prospectively. We currently consolidate CT Legacy Partners, which accounts for its operations as an investment company under Topic 946. We do not expect the adoption of ASU 2013-08 to impact CT Legacy Partners’ status as an investment company. Further, because ASU 2013-08 specifically excludes REITs from its scope, it will not otherwise impact our consolidated financial statements.

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Summary of Significant Accounting Policies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013
Risk Level, Low [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Probability of default or principal loss - high	15.00%
Risk Level, Medium [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Probability of default or principal loss - high	33.00%
Risk Level, High [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Probability of default or principal loss - high	67.00%
Class A Common Stock [Member]
Financing Receivable, Recorded Investment [Line Items]
Description of reverse stock split	On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The accompanying financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, and variable interest entities, or VIEs, in which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Certain of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest, and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary, and is generally the entity with (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and therefore a further disaggregated presentation would not be more meaningful.

Our CT Legacy Partners, LLC, or CT Legacy Partners, subsidiary accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and securities investments of CT Legacy Partners at fair value on our consolidated balance sheet.

As more fully described in Note 3, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Certain reclassifications have been made in the presentation of the prior period consolidated financial statements to conform to the June 30, 2013 presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

Revenue Recognition

Revenue Recognition

Interest income from our loans receivable is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents represents cash on hand, cash held in banks and liquid investments with original maturities of three months or less. We place our cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. We may have bank balances in excess of federally insured amounts. We have not experienced, and do not expect, any losses on our demand deposits, commercial paper or money market investments.

Restricted Cash

Restricted Cash

We classify the cash balances held by CT Legacy Partners as restricted because, while these cash balances are available for use by CT Legacy Partners for operations, debt service, or other purposes, they cannot be used by us until our allocable share is distributed from CT Legacy Partners, and cannot be commingled with any of our other, unrestricted cash balances.

Loans Receivable, Provision for Loan Losses, Loans Held-for-Sale and Related Allowance

Loans Receivable, Provision for Loan Losses, Loans Held-for-Sale and Related Allowance

We purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment on these loans is measured by comparing the estimated fair value of the underlying collateral to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders and other factors deemed necessary by our Manager. Actual losses, if any, could ultimately differ from these estimates.

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated one through eight, which ratings are defined as follows:

1 -	Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in-place debt yield, and stable projected cash flow.
2 -	Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.
3 -	Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.
4 -	Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.
5 -	Low Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 15% probability of default or principal loss.
6 -	Medium Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 33% probability of default or principal loss.
7 -	High Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 67% or higher probability of default or principal loss.
8 -	In Default: A loan which is in contractual default and/or which has a very high likelihood of principal loss.

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis and fair value less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statement of operations as a valuation allowance on loans held-for-sale.

Equity Investments in Unconsolidated Subsidiaries

Equity Investments in Unconsolidated Subsidiaries

Our carried interest in CT Opportunity Partners I, LP, or CTOPI is accounted for using the equity method. CTOPI’s assets and liabilities are not consolidated into our financial statements due to our determination that (i) it is not a VIE and (ii) the investors have sufficient rights to preclude consolidation by us. As such, we report our allocable percentage of the net assets of CTOPI on our consolidated balance sheet. We have deferred the recognition of income from CTOPI until cash is collected or appropriate contingencies have been eliminated and, therefore do not recognize any income from equity investments in unconsolidated subsidiaries.

Deferred Financing Costs

Deferred Financing Costs

The deferred financing costs that are included in prepaid expenses and other assets on our consolidated balance sheets include issuance costs related to our debt obligations, and are amortized using the effective interest method, or a method that approximates the effective interest method, over the life of the related obligations.

Repurchase Obligations

Repurchase Obligations

We record investments financed with repurchase obligations as separate assets and the related borrowings under any repurchase agreements recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the repurchase obligations are reported separately on our consolidated statements of operations.

Interest Rate Derivative Financial Instruments

Interest Rate Derivative Financial Instruments

In the normal course of business, we use interest rate derivative financial instruments to manage, or hedge, cash flow variability caused by interest rate fluctuations. Specifically, we may use interest rate swaps to convert floating rate liabilities that are financing fixed rate assets into fixed rate liabilities. The differential to be paid or received on these agreements is recognized on the accrual basis as an adjustment to the interest expense related to the attendant liability. In cases where interest rate swap agreements are terminated early, any gain or loss is generally amortized over the remaining life of the hedged item. These swap agreements must be effective in reducing the variability of cash flows of the hedged items in order to qualify for the aforementioned hedge accounting treatment. Changes in the fair value of effective cash flow hedges are reflected on our consolidated financial statements through accumulated other comprehensive income (loss) and do not affect our net income (loss). To the extent a derivative does not qualify for hedge accounting, and is deemed a non-hedge derivative, the changes in its fair value are included in net income (loss).

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or the Codification, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

The “Fair Value Measurement and Disclosures” Topic of the Codification also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

• Level 1 - Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

• Level 2 - Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs such as interest rates, yield curves, credit risks, and default rates.

• Level 3 - Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third parties when determining fair value and generally represent anything which does not meet the criteria of Levels 1 and 2.

Each type of asset recorded at fair value using Level 3 inputs are determined by an internal committee comprised of members of senior management of our Manager, including our chief executive officer, chief financial officer, and other senior officers.

Certain of our assets and liabilities are measured at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets and liabilities that are measured at fair value are discussed further in Note 17. Generally, loans held-for-sale, loans receivable, and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability which was recorded at fair value as of June 30, 2013 and December 31, 2012:

Loans held-for-sale: Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

Loans receivable, at fair value: Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value: CT Legacy Partners’ other assets are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans: The loans identified for impairment are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of fair value of the underlying collateral less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders and other factors deemed necessary by our Manager.

Investment in CT Legacy Asset: We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets, and then applied the proceeds to first satisfy the related repurchase facility.

We are also required by GAAP to disclose fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents: The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash: The carrying amount of restricted cash approximates fair value.

Loans receivable, net: Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors including capitalization rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders and indications of market value from other market participants.

Secured notes: These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations: These facilities were recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Securitized debt obligations: These obligations are recorded at the face value of outstanding obligations to third-parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third-party dealers.

Income Taxes

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. Many of these requirements, however, are highly technical and complex. If we were to fail to meet these requirements, we may be subject to federal, state and local income tax on current and past income, and penalties. See Note 15 for additional information.

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Stock-based compensation expense is recognized in net income using a fair value measurement method, which we determine with the assistance of a third-party appraisal firm. Compensation expense for the time vesting of stock-based compensation grants is recognized on the accelerated attribution method and compensation expense for performance vesting of stock-based compensation grants is recognized on a straight line basis.

The fair value of the performance vesting restricted class A common stock is measured on the grant date using a Monte Carlo simulation to estimate the probability of the market vesting conditions being satisfied. The Monte Carlo simulation is run approximately 100,000 times. For each simulation, the payoff is calculated at the settlement date, and is then discounted to the grant date at a risk-free interest rate. The average of the values over all simulations is the expected value of the restricted class A common stock on the grant date. The valuation is performed in a risk-neutral framework, so no assumption is made with respect to an equity risk premium. Significant assumptions used in the valuation include an expected term and stock price volatility, an estimated risk-free interest rate and an estimated dividend growth rate.

Comprehensive Income

Comprehensive Income

The primary component of comprehensive income other than net income is the unrealized gains and losses on derivative financial instruments.

Earnings per Share of Common Stock

Earnings per Share of Common Stock

Basic earnings per share, or EPS, is computed based on the net earnings allocable to common stock and stock units, divided by the weighted average number of shares of common stock and stock units outstanding during the period. Diluted EPS is determined using the treasury stock method, and is based on the net earnings allocable to common stock and stock units, divided by the weighted average number of shares of common stock, stock units and potentially dilutive common stock options and warrants. On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. Our earnings per share disclosures have been retroactively adjusted to reflect the reverse stock split.

We have separately determined EPS and diluted EPS for income (loss) from continuing operations and for net income (loss) allocable to common stockholders. See Note 12 for additional discussion of earnings per share.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2013, the FASB issued Accounting Standards Update 2013-01, “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities,” or ASU 2013-01. ASU 2013-01 was developed to clarify which instruments and transactions are subject to the offsetting disclosure requirements set forth by Accounting Standards Update 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” ASU 2013-01 is effective for the first interim or annual period beginning on or after January 1, 2013, and should be applied retrospectively for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial statements.

In February 2013, the FASB issued Accounting Standards Update 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” or ASU 2013-02. ASU 2013-02 implements the previously deferred requirement to disclose reclassification adjustments into and out of accumulated other comprehensive income in either a note or on the face of the financial statements. ASU 2013-02 is effective for the first interim or annual period beginning after December 15, 2012, and should be applied prospectively. As we no longer have a balance of accumulated other comprehensive income, the adoption of ASU 2013-02 did not have a material impact on our consolidated financial statements.

In June 2013, the FASB issued Accounting Standards Update 2013-08, “Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” or ASU 2013-08. ASU 2013-08 amends the criteria for qualification as an investment company under Topic 946 of the FASB Accounting Standards Codification, or Topic 946, and requires additional disclosure by investment companies. ASU 2013-08 is effective for the first interim or annual period beginning after December 15, 2013, and should be applied prospectively. We currently consolidate CT Legacy Partners, which accounts for its operations as an investment company under Topic 946. We do not expect the adoption of ASU 2013-08 to impact CT Legacy Partners’ status as an investment company. Further, because ASU 2013-08 specifically excludes REITs from its scope, it will not otherwise impact our consolidated financial statements.

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Loans Receivable, At Fair Value (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Overall Statistics for Loans Receivable Portfolio Held at Fair Value

The following table details overall statistics for CT Legacy Partners’ loans receivable, which is held at fair value as of June 30, 2013 ($ in millions):

	Loans Receivable, at Fair Value
	Floating Rate			Fixed Rate			Total
Number of loans		8			3			11
Net Book Value	$	94		$	24		$	118
Wtd. Avg. cash coupon (1)		L+3.90	%		8.14	%		4.74	%
Wtd. Avg. all-in yield (1)		L+4.64	%		8.12	%		5.34	%
Wtd. Avg. maximum maturity (years) (2)		0.6			1.4			0.8

(1) Floating rate loans are indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013; however, certain of our loans receivable earn interest based on a minimum LIBOR of 2.0%. Amounts exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

Types of Loans in Loan Portfolio, as the Property Type and Geographic Distribution of the Properties Securing these Loans

The tables below detail the types of loans in CT Legacy Partners’ loan portfolio, as well as the property type and geographic distribution of the properties securing these loans, as of June 30, 2013 ($ in thousands):

	June 30, 2013
Asset Type	Net Book Value		Percentage
Subordinate interests in mortgages	$	49,695		42	%
Mezzanine loans		41,043		35
Senior mortgages		26,811		23
Total	$	117,549		100	%

Property Type	Net Book Value		Percentage
Hotel	$	51,761		44	%
Office		41,682		35
Other		24,106		21
Total	$	117,549		100	%

Geographic Location	Net Book Value		Percentage
Northeast	$	41,682		35	%
Northwest		24,106		21
West		14,302		12
Southeast		11,869		10
International		25,590		22
Total	$	117,549		100	%

Schedule of Loans Receivable on Nonaccrual Status

The following table details our loans receivable which are on nonaccrual status as of June 30, 2013 ($ in thousands):

Non-Accrual Loans Receivable as of June 30, 2013
Asset Type	Principal Balance		Net Book  Value
Senior Mortgage Loans	$	—	$	—
Subordinate Interests in Mortgages		43,448		—
Mezzanine & Other Loans		69,146		11,869
Total	$	112,594	$	11,869

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Stockholders' Equity - Schedule of Primary Components of Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Accumulated Other Comprehensive Loss [Line Items]
Unrealized gain on derivative financial instruments	$ 1,965	$ 3,749
Ineffective portion of cash flow hedges		2,481
Amortization of net unrealized gains on securities	(8)	(765)
Amortization of net deferred gains on settlement of swaps		56
Mark-to Market on Interest Rate Hedges [Member]
Accumulated Other Comprehensive Loss [Line Items]
Balance, beginning		(27,423)
Unrealized gain on derivative financial instruments		3,749
Ineffective portion of cash flow hedges		2,481
Amortization of net unrealized gains on securities
Amortization of net deferred gains on settlement of swaps
Other-than-temporary impairments of securities
Deconsolidation of CT Legacy Assets
Balance, ending	(21,193)	(21,193)
Accumulated other comprehensive loss as of June 30, 2012	(21,193)	(21,193)
Deferred Gains on Settled Hedges [Member]
Accumulated Other Comprehensive Loss [Line Items]
Balance, beginning		56
Unrealized gain on derivative financial instruments
Ineffective portion of cash flow hedges
Amortization of net unrealized gains on securities
Amortization of net deferred gains on settlement of swaps		(56)
Other-than-temporary impairments of securities
Deconsolidation of CT Legacy Assets
Balance, ending
Accumulated other comprehensive loss as of June 30, 2012
Other than Temporary Impairments [Member]
Accumulated Other Comprehensive Loss [Line Items]
Balance, beginning		(16,578)
Unrealized gain on derivative financial instruments
Ineffective portion of cash flow hedges
Amortization of net unrealized gains on securities
Amortization of net deferred gains on settlement of swaps
Other-than-temporary impairments of securities		203
Deconsolidation of CT Legacy Assets		3,879
Balance, ending	(12,496)	(12,496)
Accumulated other comprehensive loss as of June 30, 2012	(12,496)	(12,496)
Unrealized Gains on Securities [Member]
Accumulated Other Comprehensive Loss [Line Items]
Balance, beginning		3,361
Unrealized gain on derivative financial instruments
Ineffective portion of cash flow hedges
Amortization of net unrealized gains on securities		(765)
Amortization of net deferred gains on settlement of swaps
Other-than-temporary impairments of securities
Deconsolidation of CT Legacy Assets		(2,586)
Balance, ending	10	10
Accumulated other comprehensive loss as of June 30, 2012	10	10
Accumulated Other Comprehensive (Loss) Income [Member]
Accumulated Other Comprehensive Loss [Line Items]
Balance, beginning		(40,584)
Unrealized gain on derivative financial instruments		3,749
Ineffective portion of cash flow hedges		2,481
Amortization of net unrealized gains on securities		(765)
Amortization of net deferred gains on settlement of swaps		(56)
Other-than-temporary impairments of securities		203
Deconsolidation of CT Legacy Assets		1,293
Balance, ending	(33,679)	(33,679)
Allocation to non-controlling interest
Accumulated other comprehensive loss as of June 30, 2012	$ (33,679)	$ (33,679)

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

Schedule of the Components of Discontinued Operations

The following table provides additional information on the components of discontinued operations for the six months ended June 30, 2013 and 2012 ($ in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
Discontinued Operations	2013		2012			2013		2012
Servicing fees	$	—	$	1,365		$	—	$	3,385
Management fees from affiliates		—		1,610			—		3,195
Total revenues		—		2,975			—		6,580
General and administrative expenses		—		3,173			—		6,729
Loss from discontinued operations before income taxes		—		(199	)		—		(149	)
Income tax provision		—		(143	)		—		(766	)
Loss from discontinued operations	$	—	($	341	)	$	—	($	914	)

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Stockholders' Equity - Additional Information (Detail) (USD $)	1 Months Ended	6 Months Ended		1 Months Ended	6 Months Ended
	May 06, 2013	Jun. 30, 2013	Dec. 31, 2012	May 29, 2013 Class A Common Stock [Member]	Jun. 30, 2013 Class A Common Stock [Member]	May 06, 2013 Class A Common Stock [Member]
Increase in stockholders' equity		$ 639,200,000
Stockholders' Equity		712,689,000	73,444,000
Total stock, shares authorized		200,000,000
Common stock, shares authorized		100,000,000	100,000,000
Preferred stock, shares authorized		100,000,000
Common stock, shares outstanding		28,802,000	2,927,000			2,926,651
Reverse stock split ratio	0.1				0.1
Description reverse stock split					On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013.
Reclassification of common stock to additional paid-in-capital					263,000
Additional shares issued				25,875,000
Additional shares, purchase price				$ 25.50
Issuance of additional shares, net proceeds after underwriter discounts and other offering expenses				$ 633,800,000
Common stock and stock units, shares issued and outstanding		28,894,475

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Loans Receivable, At Fair Value - Additional Information (Detail) (USD $)	Jun. 30, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal Balance aggregate fair value	$ 117,549,000
CT Legacy Partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio of loans aggregate principal	220,700,000
Principal Balance aggregate fair value	$ 117,500,000

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Loans Receivable - Allocates Net Book Value and Principal Balance of Loans Receivable Based on Internal Risk Ratings (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013 SecurityLoan	Dec. 31, 2012 SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book Value, net	$ 830,101	$ 141,500
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	13	7
Principal Balance	851,716	164,180
Book Value, net	830,101	141,500
Risk Rating 1-3 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	9	2
Principal Balance	776,637	47,000
Book Value, net	773,101	47,000
Risk Rating 4-5 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	2	2
Principal Balance	57,000	92,500
Book Value, net	57,000	92,500
Risk Rating 6-8 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	2	3
Principal Balance	18,079	24,680
Book Value, net		$ 2,000

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Loans Receivable - Activity Relating to Loans Receivable (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan originations	$ 756,638
Gross Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	164,180
Loan originations	756,638
Deferred origination fees and expenses	(3,776)
Amortization of deferred fees and expenses	239
Loan satisfactions	(62,500)
Partial loan repayments
Reclassification to loans held-for-sale	(6,601)
Balance	848,180
Provision for Loan Losses [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	(22,680)
Loan originations
Deferred origination fees and expenses
Amortization of deferred fees and expenses
Loan satisfactions
Partial loan repayments
Reclassification to loans held-for-sale	4,601
Balance	(18,079)
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance	141,500
Loan originations	756,638
Deferred origination fees and expenses	(3,776)
Amortization of deferred fees and expenses	239
Loan satisfactions	(62,500)
Partial loan repayments
Reclassification to loans held-for-sale	(2,000)
Balance	$ 830,101

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	28,802,000	2,927,000
Common stock, shares outstanding	28,802,000	2,927,000

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Loans Receivable, At Fair Value

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Loans Receivable, At Fair Value

Note 7. Loans Receivable, At Fair Value

We record CT Legacy Partners’ loans receivable investments at fair value, which are determined using internal financial model-based estimations. The CT Legacy Partners loans receivable portfolio included eleven loans with an aggregate principal balance of $220.7 million, which were reported at their aggregate fair value of $117.5 million as of June 30, 2013. As of December 31, 2012, there were no loans receivables at fair value because we accounted for CT Legacy Partners as a non-consolidated subsidiary. Refer to Note 3 and Note 8 for additional discussion of CT Legacy Partners. See Note 17 for further discussion of fair value and Note 19 for an allocation of our loans receivable between our operating segments.

The following table details overall statistics for CT Legacy Partners’ loans receivable, which is held at fair value as of June 30, 2013 ($ in millions):

	Loans Receivable, at Fair Value
	Floating Rate			Fixed Rate			Total
Number of loans		8			3			11
Net Book Value	$	94		$	24		$	118
Wtd. Avg. cash coupon (1)		L+3.90	%		8.14	%		4.74	%
Wtd. Avg. all-in yield (1)		L+4.64	%		8.12	%		5.34	%
Wtd. Avg. maximum maturity (years) (2)		0.6			1.4			0.8

(1) Floating rate loans are indexed to LIBOR as of June 30, 2013. LIBOR was 0.19% as of June 30, 2013; however, certain of our loans receivable earn interest based on a minimum LIBOR of 2.0%. Amounts exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

The tables below detail the types of loans in CT Legacy Partners’ loan portfolio, as well as the property type and geographic distribution of the properties securing these loans, as of June 30, 2013 ($ in thousands):

	June 30, 2013
Asset Type	Net Book Value		Percentage
Subordinate interests in mortgages	$	49,695		42	%
Mezzanine loans		41,043		35
Senior mortgages		26,811		23
Total	$	117,549		100	%

Property Type	Net Book Value		Percentage
Hotel	$	51,761		44	%
Office		41,682		35
Other		24,106		21
Total	$	117,549		100	%

Geographic Location	Net Book Value		Percentage
Northeast	$	41,682		35	%
Northwest		24,106		21
West		14,302		12
Southeast		11,869		10
International		25,590		22
Total	$	117,549		100	%

Nonaccrual loans

In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans which are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. We do not have any material interest receivable accrued on nonperforming loans as of June 30, 2013.

The following table details our loans receivable which are on nonaccrual status as of June 30, 2013 ($ in thousands):

Non-Accrual Loans Receivable as of June 30, 2013
Asset Type	Principal Balance		Net Book  Value
Senior Mortgage Loans	$	—	$	—
Subordinate Interests in Mortgages		43,448		—
Mezzanine & Other Loans		69,146		11,869
Total	$	112,594	$	11,869

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net income	$ 6,768	$ 3,351	$ 5,170	$ 143,973
Other comprehensive income:
Unrealized gain on derivative financial instruments		1,965		3,749
Gain on interest rate swaps no longer designated as cash flow hedges				2,481
Amortization of unrealized gains and losses on securities		(8)		(765)
Amortization of deferred gains and losses on settlement of swaps				(56)
Other-than-temporary impairments of securities related to fair value adjustments in excess of expected credit losses, net of amortization		(174)		213
Other comprehensive income		1,783		5,622
Comprehensive income	6,768	5,134	5,170	149,595
Less: Comprehensive income attributable to non-controlling interests	(4,020)	(1,068)	(5,537)	(75,147)
Comprehensive income (loss) attributable to Blackstone Mortgage Trust, Inc.	$ 2,748	$ 4,066	$ (367)	$ 74,448

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Loans Receivable, At Fair Value - Types of Loans in Loan Portfolio, as the Property Type and Geographic Distribution of the Properties Securing these Loans (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 830,101	$ 141,500
Subordinated Interests in Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	77,000	79,000
Percentage	9.00%	56.00%
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	753,101	62,500
Percentage	91.00%	44.00%
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	830,101	141,500
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	162,885	30,000
Percentage	20.00%	21.00%
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	413,648	111,500
Percentage	49.00%	79.00%
Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	227,034	27,000
Percentage	27.00%	19.00%
West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	454,091	92,500
Percentage	54.00%	65.00%
Southeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	93,000	12,404
Percentage	12.00%	9.00%
CT Legacy Partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	117,549
Percentage	100.00%
CT Legacy Partners [Member] | Subordinated Interests in Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	49,695
Percentage	42.00%
CT Legacy Partners [Member] | Mezzanine loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	41,043
Percentage	35.00%
CT Legacy Partners [Member] | Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	26,811
Percentage	23.00%
CT Legacy Partners [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	117,549
Percentage	100.00%
CT Legacy Partners [Member] | Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	51,761
Percentage	44.00%
CT Legacy Partners [Member] | Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	41,682
Percentage	35.00%
CT Legacy Partners [Member] | Mixed Use / Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	24,106
Percentage	21.00%
CT Legacy Partners [Member] | Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	41,682
Percentage	35.00%
CT Legacy Partners [Member] | Northwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	24,106
Percentage	21.00%
CT Legacy Partners [Member] | West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	14,302
Percentage	12.00%
CT Legacy Partners [Member] | Southeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	11,869
Percentage	10.00%
CT Legacy Partners [Member] | International [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 25,590
Percentage	22.00%

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Assets
Cash and cash equivalents	$ 59,746	$ 15,423
Restricted cash	21,972	14,246
Loans receivable, net	830,101	141,500
Loans held-for-sale, net	3,800
Loans receivable, at fair value	117,549
Investment in CT Legacy Asset, at fair value		132,000
Equity investments in unconsolidated subsidiaries	23,240	13,306
Accrued interest receivable, prepaid expenses and other assets	30,697	5,868
Total assets	1,087,105	322,343
Liabilities:
Accounts payable, accrued expenses and other liabilities	36,879	21,209
Secured notes	8,848	8,497
Repurchase obligations	165,239
Securitized debt obligations	74,472	139,184
Total liabilities	285,438	168,890
Equity:
Class A common stock, $0.10 par value, 100,000 shares authorized, 28,802 and 2,927 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively	288	293
Additional paid-in capital	1,242,892	609,002
Accumulated deficit	(530,491)	(535,851)
Total Blackstone Mortgage Trust, Inc. stockholders' equity	712,689	73,444
Non-controlling interests	88,978	80,009
Total equity	801,667	153,453
Total liabilities and equity	1,087,105	322,343
Variable Interest Entity, Primary Beneficiary [Member]
Assets
Loans receivable, net	77,000	141,500
Loans held-for-sale, net	3,800
Accrued interest receivable, prepaid expenses and other assets	2,838	4,021
Total assets	83,638	145,521
Liabilities:
Accounts payable, accrued expenses and other liabilities	155	88
Securitized debt obligations	74,472	139,184
Total liabilities	$ 74,627	$ 139,272

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Loans Receivable - Allocation of Loans Receivable by Both Loan Type and Internal Risk Ratings (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013 SecurityLoan	Dec. 31, 2012 SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book Value, net	$ 830,101	$ 141,500
Subordinated Interests in Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	5	6
Principal Balance	95,079	101,680
Book Value, net	77,000	79,000
Subordinated Interests in Mortgages [Member] | Risk Rating 1-3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	1	2
Principal Balance	20,000	47,000
Book Value, net	20,000	47,000
Subordinated Interests in Mortgages [Member] | Risk Rating 4-5 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	2	1
Principal Balance	57,000	30,000
Book Value, net	57,000	30,000
Subordinated Interests in Mortgages [Member] | Risk Rating 6-8 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	2	3
Principal Balance	18,079	24,680
Book Value, net		2,000
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	8	1
Principal Balance	756,638	62,500
Book Value, net	753,101	62,500
Senior Mortgages Loans [Member] | Risk Rating 1-3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	8
Principal Balance	756,638
Book Value, net	753,101
Senior Mortgages Loans [Member] | Risk Rating 4-5 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans		1
Principal Balance		62,500
Book Value, net		$ 62,500

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General and Administrative Expenses - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Base management fee, per annum	$ 250,000
Management fee - percent of outstanding Equity balance	1.50%
Incentive fee computation- percent of the product per agreement	20.00%
Incentive fee computation- percent of outstanding Equity per annum	7.00%
Management fees	983,000
Manager [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Management fees	982,500
Incentive Awards Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Percentage of the dividends paid to common equity holders created employee pool	6.75%
Percentage of granted incentive compensation to employees	92.00%
Percentage of grants vesting schedule	82.00%
Description of incentive management fee grants to employees vesting schedule	(i) 25% vests on the date of grant, (ii) 25% vests in March 2013, (iii) 25% vests in March 2014, and (iv) the remainder vests upon our receipt of distributions from CT Legacy Partners. The remaining 18% of these grants vest upon our receipt of distributions from CT Legacy Partners.
Percentage of grants vesting upon receipt of dividends	18.00%
Accrued payable, awards	$ 6,800,000	$ 5,300,000

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Stockholders' Equity - Schedule of the Details the Movement in Our Outstanding Class A Common Stock and Restricted Class A Common Stock (Parenthetical) (Detail) (Class A Common Stock [Member])	Jun. 30, 2013	Jun. 30, 2012
Class A Common Stock [Member]
Deferred stock units held by directors	93,000	66,000

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Cash and Cash Equivalents, Including Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2013

Cash And Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents, Including Restricted Cash Balances

The following table outlines details of our cash and cash equivalents, including restricted cash balances as of June 30, 2013 and December 31, 2012.

			Balance as of
Asset Type	Depository	Credit Rating(1)	June 30, 2013		December 31, 2012
Cash	Bank of America	A-1	$	59,746	$	15,423
Restricted Cash	Bank of America	A-1		21,972		14,246
Total			$	81,718	$	29,669

(1) Represents the short-term credit rating for the Bank of America, N.A. legal entity as issued by Standard & Poor’s as of May 16, 2013.

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Stock-Based Incentive Plans

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Incentive Plans

Note 16. Stock-Based Incentive Plans

We do not have any employees following the consummation of the Investment Management Business Sale on December 19, 2012, as described in Note 1. However, as of June 30, 2013, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors are compensated, in part, through the issuance of stock-based instruments. In addition, certain of our former employees continue to participate in the CTOPI incentive management fee grants and the CT Legacy Partners management incentive awards plan.

We had stock-based incentive awards outstanding under four benefit plans as of June 30, 2013: (i) our amended and restated 1997 non-employee director stock plan, or 1997 Plan, (ii) our 2007 long-term incentive plan, or 2007 Plan, (iii) our 2011 long-term incentive plan, or 2011 Plan, and (iv) our 2013 stock incentive plan, or 2013 Plan. No awards have been granted under our 2013 manager incentive plan, or 2013 Manager Plan, as of June 30, 2013. We refer to our 1997 Plan, our 2007 Plan, and our 2011 Plan as our Expired Plans and we refer to our 2013 Plan and 2013 Manager Plan as our Current Plans.

Our Expired Plans have expired and no new awards may be issued under them. Under our Current Plans, a maximum of 2,160,106 shares of our class A common stock may be issued to our Manager, our directors and officers, and certain employees of affiliates of our Manager. As of June 30, 2013, there were 2,158,646 shares available under the Current Plans.

Awards outstanding under these plans as of June 30, 2013 was comprised entirely of 93,000 deferred stock units granted to certain members of our board of directors in lieu of cash compensation for services and in lieu of dividends earned on previously granted stock units. Awards outstanding under Expired Plans have been adjusted to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See Note 12 for further discussion of our reverse stock split.

See Notes 9 and 13 for additional discussion of the CTOPI incentive management fee grants and the CT Legacy Partners management incentive awards plan, respectively.

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Loans Receivable - Additional Information (Detail) (USD $)	6 Months Ended					12 Months Ended				6 Months Ended	12 Months Ended	6 Months Ended
	Jun. 30, 2013 SecurityLoan	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2013 Loan Origination [Member]	Jun. 30, 2013 Legacy Portfolio [Member]	Dec. 31, 2012 Subordinated Interests in Mortgages [Member]	Jun. 30, 2013 Subordinated Interests in Mortgages [Member]	Jun. 30, 2013 Subordinated Interests in Mortgages [Member] Interest Payments [Member]	Dec. 31, 2012 Subordinated Interests in Mortgages [Member] Interest Payments [Member]	Jun. 30, 2013 Subordinated Interests in Mortgages [Member] Contractual Payments [Member]	Dec. 31, 2012 Subordinated Interests in Mortgages [Member] Contractual Payments [Member]	Jun. 30, 2013 Subordinated Interests in Mortgages [Member] Nonaccrual Status [Member]	Dec. 31, 2012 Subordinated Interests in Mortgages [Member] Nonaccrual Status [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book Value, net	$ 830,101,000		$ 141,500,000	$ 753,101,000	$ 77,000,000	$ 79,000,000	$ 77,000,000	$ 7,500,000	$ 7,500,000
Unfunded commitments	8,600,000
Commitment termination period	2016-06
Gross book value										10,600,000	17,200,000
Loss reserves on loans						92.00%	100.00%
Net book value of loans						2,000,000
Net book value of loans in maturity default	27,000,000
Number of loans in maturity default	1
Income on impaired subordinate interests in mortgage loans		290,000
Average net book value		3,300,000
Aggregate principal balance												18,100,000	24,700,000
Aggregate net book value												$ 0	$ 2,000,000
Number of days past due for recognizing interest on loans as non accrued												90 days

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Stockholders' Equity - Schedule of Basic and Diluted Earnings Per Share, Continuing Operations (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Income from continuing operations	$ 6,768	$ 3,692	$ 5,170	$ 144,887
Net income attributable to non-controlling interests	(4,020)	(1,068)	(5,537)	(75,137)
Income (loss) from continuing operations attributable to Blackstone Mortgage Trust, Inc.	$ 2,748	$ 2,624	$ (367)	$ 69,750
Weighted average shares outstanding	12,401,274	2,289,352	7,734,774	2,286,582
Warrants and options outstanding for the purchase of class A common stock		153,334		148,757
Weighted average shares outstanding, diluted	12,401,274	2,442,686	7,734,774	2,435,339
Per share amount, basic	$ 0.22	$ 1.15	$ (0.05)	$ 30.50
Per share amount, diluted	$ 0.22	$ 1.08	$ (0.05)	$ 28.65

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Loans Held-For-Sale - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended	3 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Mar. 31, 2013 Subordinated Interests in Mortgages [Member]	Mar. 31, 2013 Loans Held-for-Sale, Net [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount reclassified on subordinate mortgage loan			$ 6,600	$ 4,600
Recovery of valuation allowance on loans held for sale	$ 2,000	$ 1,800

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Debt Obligations - Repurchase Obligations Outstanding (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Credit Facilities [Line Items]
Facility Size	$ 1,000,000
Principal Balance	173,800
Repurchase Agreements [Member]
Credit Facilities [Line Items]
Facility Size	1,000,000
Principal Balance	582,738
Net Book Value	580,129
Maximum Borrowings	469,879
Current Borrowings	165,239
Available Borrowings	304,640
Repurchase Agreements [Member] | Bank of America [Member]
Credit Facilities [Line Items]
Facility Size	250,000
Principal Balance	126,300
Net Book Value	125,557
Maximum Borrowings	101,040
Current Borrowings	46,400
Available Borrowings	54,640
Repurchase Agreements [Member] | Wells Fargo [Member]
Credit Facilities [Line Items]
Facility Size	250,000
Principal Balance	300,000
Net Book Value	298,533
Maximum Borrowings	250,000
Current Borrowings
Available Borrowings	250,000
Repurchase Agreements [Member] | Citibank [Member]
Credit Facilities [Line Items]
Facility Size	250,000
Principal Balance	156,438
Net Book Value	156,039
Maximum Borrowings	118,839
Current Borrowings	118,839
Available Borrowings
Repurchase Agreements [Member] | JP Morgan [Member]
Credit Facilities [Line Items]
Facility Size	250,000
Principal Balance
Net Book Value
Maximum Borrowings
Current Borrowings
Available Borrowings

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Results of Operations for Each Segment

The following table presents our results of operations for each segment for the three months ended June 30, 2013 ($ in thousands):

	Loan Origination			CT Legacy Portfolio			Total
Income from loans and other investments:
Interest and related income	$	1,908		$	4,109		$	6,017
Less: Interest and related expenses		168			1,138			1,306
Income from loans and other investments, net		1,740			2,971			4,711
Other expenses:
General and administrative		2,153			1,274			3,427
Total other expenses		2,153			1,274			3,427
Valuation allowance on loans held-for-sale		—			2,000			2,000
Unrealized gain on investments at fair value		—			4,000			4,000
Gain on extinguishment of debt		—			38			38
(Loss) income before income taxes		(413	)		7,735			7,322
Income tax provision		2			552			554
Net (loss) income	($	415	)	$	7,183		$	6,768
Net income attributable to non-controlling interests		—			(4,020	)		(4,020	)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	415	)	$	3,163		$	2,748

The following table presents the key components of our results of operations for each segment for the six months ended June 30, 2013 ($ in thousands):

	Loan			Legacy
	Origination			Portfolio			Total
Income from loans and other investments:
Interest and related income	$	1,908		$	5,565		$	7,473
Less: Interest and related expenses		168			1,915			2,083
Income from loans and other investments, net		1,740			3,650			5,390
Other expenses:
General and administrative		2,883			2,582			5,465
Total other expenses		2,883			2,582			5,465
Valuation allowance on loans held-for-sale		—			1,800			1,800
Unrealized gain on investments at fair value		—			4,000			4,000
Gain on extinguishment of debt		—			38			38
(Loss) income before income taxes		(1,143	)		6,906			5,763
Income tax provision		40			553			593
Net (loss) income	($	1,183	)	$	6,353		$	5,170
Net income attributable to non-controlling interests		—			(5,537	)		(5,537	)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	($	1,183	)	$	816		($	367	)

Summary of Consolidated Statement of Financial Condition for Each Segment

The following table presents our consolidated statement of financial condition for each segment as of June 30, 2013 ($ in thousands):

	Loan Origination		Legacy Portfolio		Total
Assets
Assets:
Cash and cash equivalents	$	59,746	$	—	$	59,746
Restricted cash		—		21,972		21,972
Loans receivable, net		753,101		77,000		830,101
Loans held-for-sale, net		—		3,800		3,800
Loans receivable, at fair value		—		117,549		117,549
Equity investments in unconsolidated subsidiaries		—		23,240		23,240
Accrued interest receivable, prepaid expenses, and other assets		5,912		24,785		30,697
Total assets	$	818,759	$	268,346	$	1,087,105
Liabilities & Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	4,827	$	32,052	$	36,879
Secured notes		—		8,848		8,848
Repurchase obligations		165,239		—		165,239
Securitized debt obligations		—		74,472		74,472
Total liabilities		170,066		115,372		285,438
Equity:
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		648,693		63,996		712,689
Non-controlling interests		—		88,978		88,978
Total equity		648,693		152,974		801,667
Total liabilities and equity	$	818,759	$	268,346	$	1,087,105

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Schedule of Primary Components of Accumulated Other Comprehensive Loss

The following table details the primary components of accumulated other comprehensive loss as of June 30, 2012, and significant activity for the six months ended June 30, 2012 ($ in thousands):

Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2011	($	27,423	)	$	56		($	16,578	)	$	3,361		($	40,584	)
Unrealized gain on derivative financial instruments		3,749			—			—			—			3,749
Ineffective portion of cash flow hedges (1)		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(765	)		(765	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities (2)		—			—			203			—			203
Deconsolidation of CT Legacy Assets (3)		—			—			3,879			(2,586	)		1,293
Total as of June 30, 2012	($	21,193	)	$	—		($	12,496	)	$	10		($	33,679	)
Allocation to non-controlling interest (3)														—
Accumulated other comprehensive loss as of June 30, 2012													($	33,679	)

(1) As a result of the deconsolidation of CT Legacy Assets in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Assets was reclassified to interest expense.

(2) Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments of $391,000.

(3) As further described in Note 1 above, we deconsolidated CT Legacy Assets in the first quarter of 2012. As a result, the balances of accumulated other comprehensive income related to CT Legacy Assets, including those allocable to non-controlling interests are no longer included in our consolidated financial statements.

Schedule of Components of Non-controlling Interests

The following table details the components of non-controlling interests as of June 30, 2013 ($ in thousands):

Non-controlling Interests in CT Legacy Partners as of June 30, 2013
Gross investment in CT Legacy Partners:
Restricted cash	$	21,972
Loans receivable, at fair value		117,549
Accrued interest receivable, prepaid expenses, and other assets		21,948
Accounts payable, accrued expenses and other liabilities		(485	)
	$	160,984
Equity interests owned by Blackstone Mortgage Trust, Inc.		(72,006	)
Non-controlling interests in CT Legacy Partners	$	88,978

Schedule of Details Movement in Our Outstanding Class A Common Stock and Restricted Class A Common Stock

The following table details the movement in our outstanding shares of class A common stock, restricted class A common stock, and deferred stock units for the six months ended June 30, 2013 and June 30, 2012:

	Six Months Ended June 30,
Common Stock Outstanding (1)(2)(3)	2013		2012
Beginning balance		3,016,407		2,277,344
Issuance of class A common stock		25,875,000		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		—		36,400
Issuance of deferred stock units		3,068		3,578
Ending balance		28,894,475		2,317,322

(1) Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2) Total class A common stock includes deferred stock units held by members of our board of directors of 93,000, and 66,000 as of June 30, 2013 and 2012, respectively.

(3) Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Schedule of Basic and Diluted Earnings Per Share, or EPS, Based on Weighted Average of Both Restricted and Unrestricted Class A Common Stock Outstanding

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted average of both restricted and unrestricted class A common stock outstanding, for the three and six months ended June 30, 2013 and 2012 ($ in thousands, except share and per share amounts):

	Net Income (Loss) per Share of Common Stock (1)
	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013			2012
Net income (loss)	$	2,748	$	2,283	($	367	)	$	68,836
Weighted average shares outstanding		12,401,274		2,289,352		7,734,774			2,286,582
Warrants and options outstanding for the purchase of class A common stock		—		153,334		—			148,757
Weighted average shares outstanding, diluted		12,401,274		2,442,686		7,734,774			2,435,339
Per share amount, basic	$	0.22	$	1.00	($	0.05	)	$	30.10
Per share amount, diluted	$	0.22	$	0.93	($	0.05	)	$	28.27

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Schedule of Basic and Diluted Earnings Per Share, Continuing Operations

The following table sets forth the calculation of basic and diluted income from continuing operations per share of class A common stock based on the weighted average of both restricted and unrestricted class A common stock outstanding, for the three and six months ended June 30, 2013 and 2012 ($ in thousands, except share and per share amounts):

	Income (Loss) from Continuing Operations per Share of Common Stock (1)
	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income from continuing operations	$	6,768		$	3,692		$	5,170		$	144,887
Net income attributable to non-controlling interests		(4,020	)		(1,068	)		(5,537	)		(75,137	)
Income (loss) from continuing operations attributable to Blackstone Mortgage Trust, Inc.	$	2,748		$	2,624		($	367	)	$	69,750
Weighted average shares outstanding		12,401,274			2,289,352			7,734,774			2,286,582
Warrants and options outstanding for the purchase of class A common stock		—			153,334			—			148,757
Weighted average shares outstanding, diluted		12,401,274			2,442,686			7,734,774			2,435,339
Per share amount, basic	$	0.22		$	1.15		($	0.05	)	$	30.50
Per share amount, diluted	$	0.22		$	1.08		($	0.05	)	$	28.67

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

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General and Administrative Expenses (Tables)

6 Months Ended

Jun. 30, 2013

Other Income And Expenses [Abstract]

Schedule of General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2013 and 2012 consisted of the following ($ in thousands):

	Six Months Ended June 30,
General and Administrative Expenses	2013		2012
Management fees to affiliates	$	983	$	—
Professional services		1,267		802
Operating and other costs		975		954
Subtotal		3,225		1,756
Non-cash compensation expenses
Management incentive awards plan - CT Legacy Partners (1)		1,511		181
Director stock-based compensation		75		112
Employee stock-based compensation		—		210
Subtotal		1,586		503
Expenses of consolidated securitization vehicles		654		64
Total	$	5,465	$	2,323

(1) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See below for discussion of the CT Legacy Partners management incentive awards plan.

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Loans Held-For-Sale

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Loans Held-For-Sale

Note 6. Loans Held-For-Sale

Activity relating to our loans held-for-sale for the six months ended June 30, 2013 was as follows ($ in thousands):

	Gross Book Value		Valuation Allowance			Net Book Value
December 31, 2012	$	—	$	—		$	—
Reclassification from loans receivable		6,601		(4,601	)		2,000
Valuation allowance on loans held-for-sale		—		1,800			1,800
June 30, 2013	$	6,601	($	2,801	)	$	3,800

During the first quarter of 2013, we reclassified a $6.6 million subordinate mortgage loan and its related $4.6 million reserve for loan losses to loans held-for-sale. During the six months ended June 30, 2013, we recorded a $1.8 million valuation adjustment to reflect this loan at its approximate fair value as of June 30, 2013.

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Equity Investments in Unconsolidated Subsidiaries - Activity Relating to Our Equity Investments in Unconsolidated Subsidiaries (Detail) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 CTOPI Carried Interest [Member]
Investments in Equity Accounted Investees [Line Items]
Beginning Balance	$ 23,240	$ 13,306	$ 13,306
Incentive income allocation			9,934
Ending Balance	$ 23,240	$ 13,306	$ 23,240

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Transactions with Related Parties - Additional Information (Detail) (USD $)	0 Months Ended	6 Months Ended					6 Months Ended				6 Months Ended			1 Months Ended
	May 13, 2013	Jun. 30, 2013	Jun. 30, 2012	May 30, 2013	Dec. 31, 2012	May 31, 2013 Class A Common Stock [Member]	Jun. 30, 2013 Affiliate of Manager [Member]	May 13, 2013 Affiliate of Manager [Member]	Jun. 30, 2013 Affiliate of Manager [Member] Class A Common Stock [Member]	May 22, 2013 Affiliate of Manager [Member] Class A Common Stock [Member]	Jun. 30, 2013 Affiliate of our Manager [Member]	Jun. 30, 2013 W. R. Berkley Corporation [Member]	May 13, 2013 Blackstone [Member]	Dec. 20, 2012 Sale to Holdings III [Member]
Related Party Transaction Due From To Related Party [Line Items]
Class A common shares acquired by Holdings III, price per share														$ 20.00
Class A common shares acquired by Holdings III, shares		25,875,000												500,000
Accrued management fees payable							$ 920,000
Management fees paid to Manager							71,000
Preferred distributions payable to affiliate of our Manager											382,000
Payments of preferred distributions to affiliate of our Manager											2,300,000
Special servicing fees											651,000
Joint venture agreement date	May 13, 2013
Percentage of equity interest purchased	100.00%			100.00%				83.30%					16.70%
Joint venture agreement end date	May 30, 2013
Charge to noncontrolling interest from purchase of equity interests at fair value	193,000
Common stock, shares issued		28,802,000			2,927,000	25,875,000				1,960,784
Common stock, par value		$ 0.10			$ 0.10					$ 25.50
Common stock, shares outstanding percentage									8.50%
Aggregate amount of offering as stated in letter agreement, threshold												$ 30,000,000
Beneficially owned common stock and stock units (as a percent)												1.30%

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Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Activity Relating to Loans Receivable

Activity relating to our loans receivable for the six months ended June 30, 2013 was as follows ($ in thousands):

	Gross Book Value			Provision for Loan Losses			Net Book Value
December 31, 2012	$	164,180		($	22,680	)	$	141,500
Loan originations		756,638			—			756,638
Deferred origination fees and expenses		(3,776	)		—			(3,776	)
Amortization of deferred fees and expenses		239			—			239
Loan satisfactions		(62,500	)		—			(62,500	)
Partial loan repayments		—			—			—
Reclassification to loans held-for-sale		(6,601	)		4,601			(2,000	)
June 30, 2013	$	848,180		($	18,079	)	$	830,101

Overall Statistics for Loan Receivables Portfolio

The following table details overall statistics for our loans receivable portfolio as of June 30, 2013 and December 31, 2012 ($ in thousands):

	June 30, 2013			December 31, 2012
Number of loans		13			7
Principal balance	$	851,716		$	164,180
Net book value	$	830,101		$	141,500
Wtd. Avg. cash coupon (1)		L+4.38	%		L+2.51	%
Wtd. Avg. all-in yield (1)		L+5.27	%		L+4.53	%
Wtd. Avg. maximum maturity (years) (2)		3.7			0.7

(1) All loans are floating rate loans indexed to LIBOR as of both June 30, 2013 and December 31, 2012. LIBOR was 0.19% and 0.21% as of June 30, 2013 and December 31, 2012, respectively; however, certain of our loans receivable earn interest based on a minimum LIBOR ranging from 0.20% to 1.00%. Amounts exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

Types of Loans in Loan Portfolio, as Well as Property Type and Geographic Distribution of Properties Securing these Loans

The tables below detail the types of loans in our loan portfolio, as well as the property type and geographic distribution of the properties securing these loans, as of June 30, 2013 and December 31, 2012 ($ in thousands):

	June 30, 2013					December 31, 2012
	Net Book					Net Book
Asset Type	Value		Percentage			Value		Percentage
Senior mortgages (1)	$	753,101		91	%	$	62,500		44	%
Subordinate interests in mortgages		77,000		9			79,000		56
Total	$	830,101		100	%	$	141,500		100	%
Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	413,648		49	%	$	111,500		79	%
Hotel		162,885		20			30,000		21
Multifamily		189,557		23			—		—
Land		64,011		8			—		—
Total	$	830,101		100	%	$	141,500		100	%
Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
West	$	454,091		54	%	$	92,500		65	%
Northeast		227,034		27			27,000		19
Southeast		93,000		12			12,404		9
Midwest		48,380		6			—		—
Southwest		7,596		1			9,596		7
Total	$	830,101		100	%	$	141,500		100	%

(1) Senior mortgages include two pari passu participations in mortgages with a combined book value of $91.1 million as of June 30, 2013.

Allocates Net Book Value and Principal Balance of Loans Receivable Based on Internal Risk Ratings

The following table allocates the net book value and principal balance of our loans receivable based on our internal risk ratings as of June 30, 2013 and December 31, 2012 ($ in thousands):

	Loans Receivable as of June 30, 2013						Loans Receivable as of December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 - 3		9	$	776,637	$	773,101		2	$	47,000	$	47,000
4 - 5		2		57,000		57,000		2		92,500		92,500
6 - 8		2		18,079		—		3		24,680		2,000
Total		13	$	851,716	$	830,101		7	$	164,180	$	141,500

Allocation of Loans Receivable by Both Loan Type and Internal Risk Ratings

The following tables further allocate our loans receivable by both loan type and our internal risk ratings as of June 30, 2013 and December 31, 2012 ($ in thousands):

	Senior Mortgage Loans (1)
	as of June 30, 2013						as of December 31, 2012
Risk Rating	Number of  Loans		Principal Balance		Net Book  Value		Number of Loans		Principal Balance		Net Book  Value
1 - 3		8	$	756,638	$	753,101		—	$	—	$	—
4 - 5		—		—		—		1		62,500		62,500
Total		8	$	756,638	$	753,101		1	$	62,500	$	62,500

(1) Senior mortgage loans include two pari passu participations with an aggregate principal balance and net book value of $91.1 million.

	Subordinate Interests in Mortgages
	as of June 30, 2013						as of December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book  Value		Number of Loans		Principal Balance		Net Book  Value
1 - 3		1	$	20,000	$	20,000		2	$	47,000	$	47,000
4 - 5		2		57,000		57,000		1		30,000		30,000
6 - 8		2		18,079		—		3		24,680		2,000
Total		5	$	95,079	$	77,000		6	$	101,680	$	79,000

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Corporate Transactions - Additional Information (Detail) (USD $)	0 Months Ended	6 Months Ended		0 Months Ended
	May 13, 2013	Jun. 30, 2012	May 30, 2013	Dec. 20, 2012 Sale to Holdings III [Member]	Dec. 19, 2012 Sale to Holdings III [Member]	Dec. 19, 2012 CT CDOs II and IV [Member]	Dec. 19, 2012 CT Legacy REIT [Member]	Mar. 21, 2013 CT Legacy REIT [Member]	May 13, 2013 Blackstone [Member]	May 13, 2013 Affiliate of Manager [Member]
Subsidiary or Equity Method Investee [Line Items]
Joint venture agreement date	May 13, 2013
Percentage of equity interest purchased	100.00%		100.00%						16.70%	83.30%
Joint venture agreement end date	May 30, 2013
Preferred stock redemption amount								$ 147,000
Purchase agreement, purchase price					21,400,000
Sale of outstanding class A preferred stock							100.00%
Class A common shares acquired by Holdings III, shares					500,000
Class A common shares acquired by Holdings III					10,000,000
Special cash dividend declared, per share				$ 20.00
Gain on deconsolidation		$ 146,380,000				$ 53,900,000

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Equity Investments in Unconsolidated Subsidiaries

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Equity Investments in Unconsolidated Subsidiaries

Note 9. Equity Investments in Unconsolidated Subsidiaries

As of June 30, 2013, our equity investments in unconsolidated subsidiaries consisted solely of our carried interest in CTOPI, a fund sponsored and managed by CTIMCO. Historically, this balance has also included our co-investments in investment management vehicles that were sponsored and managed by CTIMCO. As described in Note 3, we sold two such co-investments to an affiliate of Blackstone in December 2012 in conjunction with our Investment Management Business Sale; however, we retained 100% of our carried interest in CTOPI.

Activity relating to our equity investments in unconsolidated subsidiaries for the six months ended June 30, 2013 was as follows ($ in thousands):

	CTOPI Carried Interest  (1)
Total as of December 31, 2012	$	13,306
Incentive income allocation (2)		9,934
Total as of June 30, 2013	$	23,240

(1) The allocation of carried interest from CTOPI is net of a $1.4 million advance distribution of incentive compensation to satisfy our 2012 income tax obligation related to the allocation of taxable income in respect of our carried interest in CTOPI.

(2) We have deferred the recognition of incentive income allocated to us from CTOPI in respect of our carried interest in CTOPI, and recorded an offsetting liability as a component of accounts payable and other liabilities on our consolidated balance sheet.

Our carried interest in CTOPI entitles us to earn incentive compensation in an amount equal to 17.7% of the fund’s profits, after a 9% preferred return and 100% return of capital to the CTOPI partners. As of June 30, 2013, we had been allocated $24.6 million of incentive compensation from CTOPI based on a hypothetical liquidation of the fund at its net asset value.

Accordingly, we have recognized this allocation as an equity investment in CTOPI on our consolidated balance sheet; however, we have deferred the recognition of income until cash is collected or appropriate contingencies have been eliminated.

The CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. We refer to these distributions as CTOPI Tax Advances. During 2012, we received one such CTOPI Tax Advance of $1.4 million. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these CTOPI Tax Advances to the fund. As of June 30, 2013, our maximum exposure to loss from CTOPI was $1.4 million, the amount of CTOPI Tax Advances we have received from CTOPI.

CTOPI Incentive Management Fee Grants

In January 2011, we created a management compensation pool for employees equal to 45% of the CTOPI incentive management fee received by us. As of June 30, 2013, we had granted 96% of the pool to our former employees, and the remainder remained unallocated. If any awards remain unallocated at the time incentive management fees are received by us, any amounts otherwise payable to the unallocated awards will be distributed pro-rata to the plan participants then employed by an affiliate of our Manager.

Approximately 96% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) one-third on the date of grant; (ii) one-third on September 13, 2012; and (iii) the remainder vests upon our receipt of incentive management fees from CTOPI. The remaining 4% of these grants vest solely upon our receipt of incentive management fees from CTOPI or the disposition of certain investments owned by CTOPI.

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Segment Reporting - Summary of Consolidated Statement of Financial Condition for Each Segment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Assets:
Cash and cash equivalents	$ 59,746		$ 15,423	$ 34,604	$ 34,818
Restricted cash	21,972		14,246
Loans receivable, net	830,101		141,500
Loans held-for-sale, net	3,800
Loans receivable, at fair value	117,549
Equity investments in unconsolidated subsidiaries	23,240		13,306
Accrued interest receivable, prepaid expenses, and other assets	30,697
Total assets	1,087,105		322,343
Liabilities:
Accounts payable, accrued expenses and other liabilities	36,879
Secured notes	8,848		8,497
Repurchase obligations	165,239	20,200
Securitized debt obligations	74,472		139,184
Total liabilities	285,438		168,890
Equity:
Total Blackstone Mortgage Trust, Inc. stockholders' equity	712,689		73,444
Non-controlling interests	88,978		80,009
Total equity	801,667		153,453	22,240	(128,939)
Total liabilities and equity	1,087,105		322,343
Loan Origination [Member]
Assets:
Loans receivable, net	753,101
Legacy Portfolio [Member]
Assets:
Loans receivable, net	77,000
Operating Segments [Member] | Loan Origination [Member]
Assets:
Cash and cash equivalents	59,746
Restricted cash
Loans receivable, net	753,101
Loans held-for-sale, net
Equity investments in unconsolidated subsidiaries
Accrued interest receivable, prepaid expenses, and other assets	5,912
Total assets	818,759
Liabilities:
Accounts payable, accrued expenses and other liabilities	4,827
Secured notes
Repurchase obligations	165,239
Securitized debt obligations
Total liabilities	170,066
Equity:
Total Blackstone Mortgage Trust, Inc. stockholders' equity	648,693
Non-controlling interests
Total equity	648,693
Total liabilities and equity	818,759
Operating Segments [Member] | Legacy Portfolio [Member]
Assets:
Cash and cash equivalents
Restricted cash	21,972
Loans receivable, net	77,000
Loans held-for-sale, net	3,800
Loans receivable, at fair value	117,549
Equity investments in unconsolidated subsidiaries	23,240
Accrued interest receivable, prepaid expenses, and other assets	24,785
Total assets	268,346
Liabilities:
Accounts payable, accrued expenses and other liabilities	32,052
Secured notes	8,848
Repurchase obligations
Securitized debt obligations	74,472
Total liabilities	115,372
Equity:
Total Blackstone Mortgage Trust, Inc. stockholders' equity	63,996
Non-controlling interests	88,978
Total equity	152,974
Total liabilities and equity	$ 268,346

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Stockholders' Equity - Schedule of the Details the Movement in Our Outstanding Class A Common Stock and Restricted Class A Common Stock (Detail)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Statement Of Stockholders Equity [Abstract]
Beginning balance	3,016,407	2,277,344
Issuance of class A common stock	25,875,000
Issuance of restricted class A common stock, net		36,400
Issuance of deferred stock units	3,068	3,578
Ending balance	28,894,475	2,317,322

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Loans Receivable

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Loans Receivable

Note 5. Loans Receivable

As of June 30, 2013, our consolidated balance sheet includes $753.1 million of loans receivable related to our Loan Originations segment and $77.0 million of loans receivable owned by CT CDO I, a consolidated securitization vehicle included in our CT Legacy Portfolio segment. See Note 19 for further discussion of our operating segments.

Activity relating to our loans receivable for the six months ended June 30, 2013 was as follows ($ in thousands):

	Gross Book Value			Provision for Loan Losses			Net Book Value
December 31, 2012	$	164,180		($	22,680	)	$	141,500
Loan originations		756,638			—			756,638
Deferred origination fees and expenses		(3,776	)		—			(3,776	)
Amortization of deferred fees and expenses		239			—			239
Loan satisfactions		(62,500	)		—			(62,500	)
Partial loan repayments		—			—			—
Reclassification to loans held-for-sale		(6,601	)		4,601			(2,000	)
June 30, 2013	$	848,180		($	18,079	)	$	830,101

As of June 30, 2013, we had unfunded commitments of $8.6 million related to one senior mortgage loan, which amounts will only be funded to finance lease-related or capital expenditures by the borrower until the commitment terminates in June 2016.

The following table details overall statistics for our loans receivable portfolio as of June 30, 2013 and December 31, 2012 ($ in thousands):

	June 30, 2013			December 31, 2012
Number of loans		13			7
Principal balance	$	851,716		$	164,180
Net book value	$	830,101		$	141,500
Wtd. Avg. cash coupon (1)		L+4.38	%		L+2.51	%
Wtd. Avg. all-in yield (1)		L+5.27	%		L+4.53	%
Wtd. Avg. maximum maturity (years) (2)		3.7			0.7

(1) All loans are floating rate loans indexed to LIBOR as of both June 30, 2013 and December 31, 2012. LIBOR was 0.19% and 0.21% as of June 30, 2013 and December 31, 2012, respectively; however, certain of our loans receivable earn interest based on a minimum LIBOR ranging from 0.20% to 1.00%. Amounts exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

The tables below detail the types of loans in our loan portfolio, as well as the property type and geographic distribution of the properties securing these loans, as of June 30, 2013 and December 31, 2012 ($ in thousands):

	June 30, 2013					December 31, 2012
Asset Type	Net Book Value		Percentage			Net Book Value		Percentage
Senior mortgages (1)	$	753,101		91	%	$	62,500		44	%
Subordinate interests in mortgages		77,000		9			79,000		56
Total	$	830,101		100	%	$	141,500		100	%

Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	413,648		49	%	$	111,500		79	%
Hotel		162,885		20			30,000		21
Multifamily		189,557		23			—		—
Land		64,011		8			—		—
Total	$	830,101		100	%	$	141,500		100	%

Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
West	$	454,091		54	%	$	92,500		65	%
Northeast		227,034		27			27,000		19
Southeast		93,000		12			12,404		9
Midwest		48,380		6			—		—
Southwest		7,596		1			9,596		7
Total	$	830,101		100	%	$	141,500		100	%

(1) Senior mortgages include two pari passu participations in mortgages with a combined book value of $91.1 million as of June 30, 2013.

Loan risk ratings

Quarterly, our Manager evaluates our loan portfolio as described in Note 2. In conjunction with our quarterly loan portfolio review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors including risk of loss, current LTV, collateral performance, structure, exit plan, and sponsorship. Loans are rated one (less risk) through eight (greater risk), which ratings are defined in Note 2.

The following table allocates the net book value and principal balance of our loans receivable based on our internal risk ratings as of June 30, 2013 and December 31, 2012 ($ in thousands):

	Loans Receivable as of June 30, 2013						Loans Receivable as of December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1- 3		9	$	776,637	$	773,101		2	$	47,000	$	47,000
4 - 5		2		57,000		57,000		2		92,500		92,500
6 - 8		2		18,079		—		3		24,680		2,000
Total		13	$	851,716	$	830,101		7	$	164,180	$	141,500

In making this risk assessment, one of the primary factors we consider is how senior or junior each loan is relative to other debt obligations of the borrower. The following tables further allocate our loans receivable by both loan type and our internal risk ratings as of June 30, 2013 and December 31, 2012 ($ in thousands):

	Senior Mortgage Loans (1)
	as of June 30, 2013						as of December 31, 2012
Risk Rating	Number of  Loans		Principal Balance		Net Book  Value		Number of Loans		Principal Balance		Net Book  Value
1 - 3		8	$	756,638	$	753,101		—	$	—	$	—
4 - 5		—		—		—		1		62,500		62,500
Total		8	$	756,638	$	753,101		1	$	62,500	$	62,500

(1) Senior mortgage loans include two pari passu participations with an aggregate principal balance and net book value of $91.1 million.

	Subordinate Interests in Mortgages
	as of June 30, 2013						as of December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book  Value		Number of Loans		Principal Balance		Net Book  Value
1 - 3		1	$	20,000	$	20,000		2	$	47,000	$	47,000
4 - 5		2		57,000		57,000		1		30,000		30,000
6 - 8		2		18,079		—		3		24,680		2,000
Total		5	$	95,079	$	77,000		6	$	101,680	$	79,000

Loan impairments

We do not have any loan impairments in our Loan Origination segment. As of June 30, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one impaired subordinate interest in a mortgage loan with a gross book value of $7.5 million that is current in its interest payments and one impaired subordinate interest in a mortgage loan with a gross book value of $10.6 million that is delinquent on its contractual payments. We have taken 100% loan loss reserve on each of these loans.

As of December 31, 2012, consolidated securitization vehicles in our CT Legacy Portfolio segment had one impaired subordinate interest in a mortgage loan with a gross book value of $7.5 million that was current in its interest payments and two impaired subordinate interest in a mortgage loans with a combined gross book value of $17.2 million that was delinquent on their contractual payments. We had an aggregate 92% loan loss reserve on these loans resulting in a net book value of $2.0 million.

Generally, we have recorded loan loss reserves for all loans which are in maturity default, or otherwise have past-due principal payments. We do not have any loans in maturity default or with past-due principal payments in our Loan Origination segment. As of June 30, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one loan with a net book value of $27.0 million which was in maturity default but had no reserve recorded. We expect to collect all principal and interest due under this loan.

There was no income recorded on impaired loans during the six months ended June 30, 2013. We recorded $290,000 of income on impaired subordinate interests in mortgage loans with an average net book value of $3.3 million during the six months ended June 30, 2012. Substantially all income recorded on impaired loans during the period was received in cash.

Nonaccrual loans

We do not have any nonaccrual loans in our Loan Origination segment. Consolidated securitization vehicles in our CT Legacy Portfolio segment had subordinate interests in mortgages on nonaccrual status with an aggregate principal balance of $18.1 million and an aggregate net book value of zero as of June 30, 2013. Consolidated securitization vehicles in our CT Legacy Portfolio segment had subordinate interests in mortgages on nonaccrual status with an aggregate principal balance of $24.7 million and an aggregate net book value of $2.0 million as of December 31, 2012. In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans which are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. Accordingly, we do not have any material interest receivable accrued on nonperforming loans as of June 30, 2013 or December 31, 2012.

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income	$ 5,170	$ 143,973
Adjustments to reconcile net income to net cash provided by operating activities:
Net impairments recognized in earnings		160
Recovery of provision for loan losses		(8)
Valuation allowance on loans held-for-sale	(1,800)
Unrealized gain on investments at fair value	(4,000)
Gain on extinguishment of debt	(38)
Fair value adjustment on investment in CT Legacy Asset		(7,657)
Gain on deconsolidation of subsidiary		(146,380)
Income from equity investments in unconsolidated subsidiaries		(901)
Distributions of income from unconsolidated subsidiaries		1,710
Distributions from CT Legacy Asset		6,634
Non-cash compensation expense	1,586	504
Amortization of premiums/discounts on loans and securities and deferred interest on loans	(434)	(393)
Amortization of deferred gains and losses on settlement of swaps		(56)
Amortization of deferred financing costs and premiums/discounts on debt obligations	401	9,846
Loss on interest rate swaps not designated as cash flow hedges	4	2,772
Changes in assets and liabilities, net:
Deferred origination fees and other revenue	4,219
Accrued interest receivable	1,309	(3,785)
Deferred income taxes		(1,458)
Prepaid expenses and other assets	896	2,622
Accounts payable and accrued expenses	1,289	(1,075)
Net cash provided by operating activities	8,602	6,508
Cash flows from investing activities:
Origination/purchase of loans receivable	(756,638)
Principal collections and proceeds from securities	349	28,122
Principal collections of loans receivable	96,546	83,245
Contributions to unconsolidated subsidiaries		(4,030)
Distributions from unconsolidated subsidiaries		677
Increase in restricted cash	(7,726)	(2,448)
Net cash (used in) provided by investing activities	(667,469)	105,566
Cash flows from financing activities:
Borrowings under repurchase obligations	216,464	123,977
Repayments under repurchase obligations	(71,439)	(58,464)
Repayments under mezzanine loan		(63,000)
Repayment of securitized debt obligations	(64,674)	(114,768)
Payment of deferred financing costs	(2,175)
Contributions from non-controlling interests	15,000
Purchase of and distributions to non-controlling interests	(17,672)	(8)
Settlement of interest rate swaps	(6,123)
Vesting of restricted class A common stock		(25)
Proceeds from issuance of common stock	633,810
Net cash provided by (used in) financing activities	703,191	(112,288)
Net increase (decrease) in cash and cash equivalents	44,323	(214)
Cash and cash equivalents at beginning of period	15,423	34,818
Cash and cash equivalents at end of period	59,746	34,604
Supplemental disclosure of cash flows information
Payments of interest	(1,434)	(17,105)
Payments of income taxes	(410)	(1,119)
Supplemental disclosure of non-cash investing and financing activities
(Consolidation) deconsolidation of subsidiaries	$ (38,913)	$ 122,308

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Segment Reporting - Results of Operations for Each Segment (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income from loans and other investments:
Interest and related income	$ 6,017,000	$ 6,763,000	$ 7,473,000	$ 21,479,000
Less: Interest and related expenses	1,306,000	5,413,000	2,083,000	28,754,000
Income from loans and other investments, net	4,711,000	1,350,000	5,390,000	(7,275,000)
Other expenses:
General and administrative	3,427,000	1,567,000	5,465,000	2,323,000
Total other expenses	3,427,000	1,567,000	5,465,000	2,323,000
Valuation allowance on loans held-for-sale	2,000,000		1,800,000
Unrealized gain on investments at fair value	4,000,000		4,000,000
Gain on extinguishment of debt	38,000		38,000
Income before income taxes	7,322,000	3,692,000	5,763,000	145,188,000
Income tax provision	554,000		593,000	301,000
Net Income	6,768,000	3,351,000	5,170,000	143,973,000
Net income attributable to non-controlling interests	(4,020,000)	(1,068,000)	(5,537,000)	(75,137,000)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	2,748,000	2,283,000	(367,000)	68,836,000
Operating Segments [Member] | Loan Origination [Member]
Income from loans and other investments:
Interest and related income	1,908,000		1,908,000
Less: Interest and related expenses	168,000		168,000
Income from loans and other investments, net	1,740,000		1,740,000
Other expenses:
General and administrative	2,153,000		2,883,000
Total other expenses	2,153,000		2,883,000
Valuation allowance on loans held-for-sale
Unrealized gain on investments at fair value
Gain on extinguishment of debt
Income before income taxes	(413,000)		(1,143,000)
Income tax provision	2,000		40,000
Net Income	(415,000)		(1,183,000)
Net income attributable to non-controlling interests
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	(415,000)		(1,183,000)
Operating Segments [Member] | Legacy Portfolio [Member]
Income from loans and other investments:
Interest and related income	4,109,000		5,565,000
Less: Interest and related expenses	1,138,000		1,915,000
Income from loans and other investments, net	2,971,000		3,650,000
Other expenses:
General and administrative	1,274,000		2,582,000
Total other expenses	1,274,000		2,582,000
Valuation allowance on loans held-for-sale	2,000,000		1,800,000
Unrealized gain on investments at fair value	4,000,000		4,000,000
Gain on extinguishment of debt	38,000		38,000
Income before income taxes	7,735,000		6,906,000
Income tax provision	552,000		553,000
Net Income	7,183,000		6,353,000
Net income attributable to non-controlling interests	(4,020,000)		(5,537,000)
Net (loss) income attributable to Blackstone Mortgage Trust, Inc.	$ 3,163,000		$ 816,000

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Loans Receivable - Allocation of Loans Receivable by Both Loan Type and Internal Risk Ratings (Parenthetical) (Detail) (Senior Mortgages Loans [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgages with aggregate principal balance and net book value	$ 91.1

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Loans Receivable - Overall Statistics for Loan Receivables Portfolio (Parenthetical) (Detail) (LIBOR [Member])	Jun. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR rate	0.19%	0.21%
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR rate	0.20%
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR rate	1.00%

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Stock-Based Incentive Plans - Additional Information (Detail)	1 Months Ended	6 Months Ended	1 Months Ended
	May 06, 2013	Jun. 30, 2013 Class A Common Stock [Member]	May 06, 2013 Expired Plans [Member]	Jun. 30, 2013 2013 Plan [Member]	Jun. 30, 2013 2013 Manager Plan [Member] Maximum [Member] Class A Common Stock [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Maximum number of shares available under plan				2,158,646	2,160,106
Awards outstanding, deferred stock units				93,000
Description reverse stock split		On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013.	Awards outstanding under Expired Plans have been adjusted to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013.
Reverse stock split conversion ratio	0.1	0.1

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Equity Investments in Unconsolidated Subsidiaries (Tables)

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Activity Relating to Our Equity Investments in Unconsolidated Subsidiaries

Activity relating to our equity investments in unconsolidated subsidiaries for the six months ended June 30, 2013 was as follows ($ in thousands):

	CTOPI Carried Interest  (1)
Total as of December 31, 2012	$	13,306
Incentive income allocation (2)		9,934
Total as of June 30, 2013	$	23,240

(1) The allocation of carried interest from CTOPI is net of a $1.4 million advance distribution of incentive compensation to satisfy our 2012 income tax obligation related to the allocation of taxable income in respect of our carried interest in CTOPI.

(2) We have deferred the recognition of incentive income allocated to us from CTOPI in respect of our carried interest in CTOPI, and recorded an offsetting liability as a component of accounts payable and other liabilities on our consolidated balance sheet.

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended				6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	May 31, 2013 Class A Common Stock [Member]	Jun. 30, 2013 REIT [Member]	Dec. 31, 2012 Total Capital Loss Carryforwards [Member]	Dec. 31, 2012 Capital Loss Carryforwards Expiring 2013 [Member]	Dec. 31, 2012 Capital Loss Carryforwards Expiring 2014 [Member]	Dec. 31, 2012 Capital Loss Carryforwards Expiring 2015 [Member]	Dec. 31, 2012 Capital Loss Carryforwards Expiring 2017 [Member]
Annual distribution of net taxable income for U.S. federal income tax not to apply to our earnings that we distribute (percent)		90.00%
Net taxable income subject to distribution (percent)		100.00%
Excise tax rate		4.00%
Income tax provision	$ 554,000	$ 593,000	$ 301,000			$ 554,000
Common stock, shares issued	28,802,000	28,802,000		2,927,000	25,875,000
Net operating loss carried forward				161,500,000
Net capital losses carried forward							$ 121,400,000	$ 2,000,000	$ 87,400,000	$ 31,400,000	$ 618,000
NOL expiration date		Expires in 2029

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Fair Values - Schedule of Details of Carrying Amount, Face Amount, and Approximate Fair Value of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Financial assets:
Loans receivable, net	$ 117,549
Financial liabilities:
Repurchase obligations	165,200
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	59,746	15,423
Restricted cash	21,972	14,246
Loans receivable, net	830,101	141,500
Financial liabilities:
Secured notes	8,848	8,497
Repurchase obligations	165,239
Securitized debt obligations	74,472	139,184
Face Amount [Member]
Financial assets:
Cash and cash equivalents	59,746	15,423
Restricted cash	21,972	14,246
Loans receivable, net	851,716	164,180
Financial liabilities:
Secured notes	8,848	8,497
Repurchase obligations	165,239
Securitized debt obligations	74,472	139,184
Fair Value [Member]
Financial assets:
Cash and cash equivalents	59,746	15,423
Restricted cash	21,972	14,246
Loans receivable, net	827,152	133,682
Financial liabilities:
Secured notes	7,827	7,374
Repurchase obligations	165,239
Securitized debt obligations	$ 51,454	$ 89,880

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Debt Obligations - Repurchase Obligations Outstanding (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013 SecurityLoan
Debt Disclosure [Abstract]
Number of loans not pledged under repurchase agreements	2
Aggregate principal balance	$ 173.8

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Loans Receivable, At Fair Value - Schedule of Loans Receivable on Nonaccrual Status (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal Balance
Net Book Value
Subordinated Interests in Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal Balance	43,448
Net Book Value
Mezzanine and Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal Balance	69,146
Net Book Value	11,869
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal Balance	112,594
Net Book Value	$ 11,869

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Fair Values - Assets that are Recorded at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Measured on a recurring basis:
Loans receivable, at fair value	$ 117,549
Investment in CT Legacy Asset		132,000
Recurring [Member] | Total Fair Value [Member]
Measured on a recurring basis:
Loans held-for-sale, net	3,800
Loans receivable, at fair value	117,549
Securities, at fair value	15,461
Investment in CT Legacy Asset		132,000
Recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Measured on a recurring basis:
Loans held-for-sale, net
Loans receivable, at fair value
Securities, at fair value
Investment in CT Legacy Asset
Recurring [Member] | Other Observable Inputs (Level 2) [Member]
Measured on a recurring basis:
Loans held-for-sale, net
Loans receivable, at fair value
Securities, at fair value	1,925
Investment in CT Legacy Asset
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Measured on a recurring basis:
Loans held-for-sale, net	3,800
Loans receivable, at fair value	117,549
Securities, at fair value	13,536
Investment in CT Legacy Asset		132,000
Non-recurring [Member] | Total Fair Value [Member]
Measured on a non-recurring basis:
Impaired loans receivable		2,000
Non-recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Measured on a non-recurring basis:
Impaired loans receivable
Non-recurring [Member] | Other Observable Inputs (Level 2) [Member]
Measured on a non-recurring basis:
Impaired loans receivable
Non-recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Measured on a non-recurring basis:
Impaired loans receivable		$ 2,000

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Stockholders' Equity

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Stockholders' Equity

Note 12. Stockholders’ Equity

Balance Sheet Data

Stockholders’ Equity increased $639.2 million during the first six months of 2013 to $712.7 million. This increase was primarily driven by the issuance of additional shares of class A common stock. See below for further discussion on the share issuance.

Accumulated Other Comprehensive Loss

We did not have any accumulated other comprehensive income or loss as of December 31, 2012 or June 30, 2013. The following table details the primary components of accumulated other comprehensive loss as of June 30, 2012, and significant activity for the six months ended June 30, 2012 ($ in thousands):

Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2011	($	27,423	)	$	56		($	16,578	)	$	3,361		($	40,584	)
Unrealized gain on derivative financial instruments		3,749			—			—			—			3,749
Ineffective portion of cash flow hedges (1)		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(765	)		(765	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities (2)		—			—			203			—			203
Deconsolidation of CT Legacy Assets (3)		—			—			3,879			(2,586	)		1,293
Total as of June 30, 2012	($	21,193	)	$	—		($	12,496	)	$	10		($	33,679	)
Allocation to non-controlling interest (3)														—
Accumulated other comprehensive loss as of June 30, 2012													($	33,679	)

(1) As a result of the deconsolidation of CT Legacy Assets in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Assets was reclassified to interest expense.

(2) Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments of $391,000.

(3) As further described in Note 1 above, we deconsolidated CT Legacy Assets in the first quarter of 2012. As a result, the balances of accumulated other comprehensive income related to CT Legacy Assets, including those allocable to non-controlling interests are no longer included in our consolidated financial statements.

Non-controlling Interests

The non-controlling interests included on our consolidated balance sheet represent the equity interests in CT Legacy Partners that are not owned by us, as described in Note 8. CT Legacy Partners’ outstanding common stock includes class A-1 common shares, class A-2 common shares, and subordinate class B common shares. A portion of CT Legacy Partners’ consolidated equity and results of operations are allocated to these non-controlling interests based on their pro-rata ownership of CT Legacy Partners.

The following table details the components of non-controlling interests as of June 30, 2013 ($ in thousands):

Non-controlling Interests in CT Legacy Partners as of June 30, 2013
Gross investment in CT Legacy Partners:
Restricted cash	$	21,972
Loans receivable, at fair value		117,549
Accrued interest receivable, prepaid expenses, and other assets		21,948
Accounts payable, accrued expenses and other liabilities		(485	)
	$	160,984
Equity interests owned by Blackstone Mortgage Trust, Inc.		(72,006	)
Non-controlling interests in CT Legacy Partners	$	88,978

Share and Share Equivalents

Authorized Capital

We have the authority to issue up to 200,000,000 shares of stock, consisting of 100,000,000 shares of class A common stock and 100,000,000 shares of preferred stock. Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval. In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock.

Reverse Stock Split

On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. As a result of the reverse stock split, the number of outstanding shares of our class A common stock was reduced to 2,926,651. In addition, there was a reclassification of $263,000 from the par value of our class A common stock to additional paid-in capital to reflect the impact of the reverse stock split.

Class A Common Stock and Deferred Stock Units

Holders of shares of class A common stock are entitled to vote on all matters submitted to a vote of stockholders, subject to the voting rights of any outstanding shares of preferred stock. Holders of record of shares of class A common stock on the record date fixed by our board of directors are entitled to receive such dividends as may be authorized by our board of directors and declared by us, subject to the rights of the holders of any shares of outstanding preferred stock. On May 29, 2013, we issued 25,875,000 shares of class A common stock at a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses. A total of 28,894,475 shares of class A common stock and stock units were issued and outstanding as of June 30, 2013.

In addition to our class A common stock, we also issue deferred stock units to certain members of our board of directors in lieu of cash compensation for services rendered. These deferred stock units are non-voting, but carry the right to receive dividends in the form of additional deferred stock units in an amount equivalent to the cash dividends paid to holders of shares of class A common stock.

The following table details the movement in our outstanding shares of class A common stock, restricted class A common stock, and deferred stock units for the six months ended June 30, 2013 and June 30, 2012:

	Six Months Ended June 30,
Common Stock Outstanding (1)(2)(3)	2013		2012
Beginning balance		3,016,407		2,277,344
Issuance of class A common stock		25,875,000		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		—		36,400
Issuance of deferred stock units		3,068		3,578
Ending balance		28,894,475		2,317,322

(1) Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2) Total class A common stock includes deferred stock units held by members of our board of directors of 93,000, and 66,000 as of June 30, 2013 and 2012, respectively.

(3) Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Preferred Stock

We have not issued any shares of preferred stock since we repurchased all of our previously issued and outstanding preferred stock in 2001.

Dividends

We generally intend to distribute each year substantially all of our taxable income (which does not necessarily equal net income as calculated in accordance with GAAP) to our stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

Our dividend policy remains subject to revision at the discretion of our board of directors. All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

No dividends were declared during the six months ended June 30, 2013 or 2012.

Earnings Per Share

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted average of both restricted and unrestricted class A common stock outstanding, for the three and six months ended June 30, 2013 and 2012 ($ in thousands, except share and per share amounts):

	Net Income (Loss) per Share of Common Stock (1)
	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013			2012
Net income (loss)	$	2,748	$	2,283	($	367	)	$	68,836
Weighted average shares outstanding		12,401,274		2,289,352		7,734,774			2,286,582
Warrants and options outstanding for the purchase of class A common stock		—		153,334		—			148,757
Weighted average shares outstanding, diluted		12,401,274		2,442,686		7,734,774			2,435,339
Per share amount, basic	$	0.22	$	1.00	($	0.05	)	$	30.10
Per share amount, diluted	$	0.22	$	0.93	($	0.05	)	$	28.27

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Refer to Note 19 for a breakdown of our results of operations for each of our operating segments.

The following table sets forth the calculation of basic and diluted income from continuing operations per share of class A common stock based on the weighted average of both restricted and unrestricted class A common stock outstanding, for the three and six months ended June 30, 2013 and 2012 ($ in thousands, except share and per share amounts):

	Income (Loss) from Continuing Operations per Share of Common Stock (1)
	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income from continuing operations	$	6,768		$	3,692		$	5,170		$	144,887
Net income attributable to non-controlling interests		(4,020	)		(1,068	)		(5,537	)		(75,137	)
Income (loss) from continuing operations attributable to Blackstone Mortgage Trust, Inc.	$	2,748		$	2,624		($	367	)	$	69,750
Weighted average shares outstanding		12,401,274			2,289,352			7,734,774			2,286,582
Warrants and options outstanding for the purchase of class A common stock		—			153,334			—			148,757
Weighted average shares outstanding, diluted		12,401,274			2,442,686			7,734,774			2,435,339
Per share amount, basic	$	0.22		$	1.15		($	0.05	)	$	30.50
Per share amount, diluted	$	0.22		$	1.08		($	0.05	)	$	28.67

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Refer to Note 19 for a breakdown of our results of operations for each of our operating segments.

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Investment in CT Legacy Asset, at Fair Value

6 Months Ended

Jun. 30, 2013

Investments Schedule [Abstract]

Investment in CT Legacy Asset, at Fair Value

Note 8. Investment in CT Legacy Asset, at Fair Value

As a result of the merger effective on March 22, 2013, we began consolidating CT Legacy Partners and its subsidiary, CT Legacy Asset, LLC or CT Legacy Asset. Previously, we accounted for CT Legacy Asset on a non-consolidated basis, and as of December 31, 2012, our consolidated balance sheet included a net investment in CT Legacy Asset of $132.0 million. We have elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset due to our determination that the fair value of the investment in CT Legacy Asset, as a net liquidating portfolio of assets, is more meaningful and indicative of our interests in CT Legacy Asset than equity method accounting. Following its consolidation, the loans receivable and repurchase obligations of CT Legacy Partners, as well as its other assets and liabilities, are included in our consolidated balance sheet. See Note 3 for additional discussion of the consolidation of CT Legacy Partners and Note 7 and Note 10 for further discussion of CT Legacy Partners’ loan receivables and repurchase obligation, respectively.

CT Legacy Partners

CT Legacy Partners holds a portion of our legacy portfolio, which we had previously transferred to CT Legacy REIT (the predecessor of CT Legacy Partners) in connection with our March 2011 Restructuring. CT Legacy Partners is beneficially owned 52% by us and 48% by our former lenders. In addition, CT Legacy Partners has issued class B common shares, a subordinate class of equity which entitles its holders to receive approximately 25% of the dividends that would otherwise be payable to us on our equity interest in CT Legacy Partners, after aggregate cash distributions of $50.0 million have been paid to all other classes of common equity. Further, CT Legacy Partners has issued class A preferred shares which entitle its holder to cumulative preferred distributions in an amount generally equal to the greater of (i) 2.5% of certain of CT Legacy Partners’ assets, and (ii) $1.0 million per annum.

Our equity interest in CT Legacy Partners is comprised of 4,393,750 class A-1 common shares, 775,000 class A-2 common shares, and 118,651 class B common shares. The outstanding common shares of CT Legacy Partners are comprised of 4.4 million class A-1 common shares, 5.6 million class A-2 common shares, and 1.5 million class B common shares. The equity interests of other members of CT Legacy Partners are reflected as non-controlling interests on our consolidated balance sheet. As of June 30, 2013, CT Legacy Partners had not made any distribution payments to its common equity holders.

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Debt Obligations - Balances of Each Entity's Outstanding Securitized Debt Obligations, their Respective Coupons and All-in Effective Costs, Including Amortization of Fees and Expenses (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2013
Receivables [Abstract]
LIBOR basis spread on debt obligations	0.0019

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 15. Income Taxes

We made an election to be taxed as a REIT, effective January 1, 2003, under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of June 30, 2013 and December 31, 2012, we were in compliance with all REIT requirements.

During the six months ended June 30, 2013, we recorded a current income tax provision of $593,000. Of the total current income tax provision, $554,000 was due to activities of taxable REIT subsidiaries. As a result of our sale of CTIMCO we no longer have any deferred tax assets or liabilities as of December 31, 2012.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our net operating losses, or NOLs, and net capital losses, or NCLs, is significantly limited by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust, Inc. As of December 31, 2012, we had net operating losses, or NOLs, of $161.5 million and net capital losses, or NCLs, of $121.4 million available to be carried forward and utilized in current or future periods. If we are unable to utilize our NOLs, they will expire in 2029. If we are unable to utilize our NCLs, $2.0 million will expire in 2013, $87.4 million will expire in 2014, $31.4 million will expire in 2015, and $618,000 will expire in 2017.

As of June 30, 2013, tax years 2009 through 2012 remain subject to examination by taxing authorities.

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General and Administrative Expenses

6 Months Ended

Jun. 30, 2013

Other Income And Expenses [Abstract]

General and Administrative Expenses

Note 13. General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2013 and 2012 consisted of the following ($ in thousands):

	Six Months Ended June 30,
General and Administrative Expenses	2013		2012
Management fees to affiliates	$	983	$	—
Professional services		1,267		802
Operating and other costs		975		954
Subtotal		3,225		1,756
Non-cash compensation expenses
Management incentive awards plan - CT Legacy Partners (1)		1,511		181
Director stock-based compensation		75		112
Employee stock-based compensation		—		210
Subtotal		1,586		503
Expenses of consolidated securitization vehicles		654		64
Total	$	5,465	$	2,323

(1) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See below for discussion of the CT Legacy Partners management incentive awards plan.

As a result of our Investment Management Business Sale, the operating expenses related to our investment management business have been reclassified to income (loss) from discontinued operations on our consolidated statements of operations. See Note 3 for further discussion of the Investment Management Business Sale.

In conjunction with the Investment Management Business Sale, we entered into a new management agreement with our Manager, which was amended and restated as of March 26, 2013, pursuant to which our Manager earns a base management fee in an amount equal to the greater of (a) $250,000 per annum and (b) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the management agreement with our Manager. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (a) 20% and (b) the excess of (i) our Core Earnings (as defined in the management agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) over (ii) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period (or the period since the date of the first offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio.

During the six months ended June 30, 2013, we incurred $982,500 of management fees payable to our Manager, which are included in general and administrative expenses. We did not incur any incentive fees payable to our Manager during the six months ended June 30, 2013.

CT Legacy Partners Management Incentive Awards Plan

In conjunction with our March 2011 Restructuring, we created an employee pool for up to 6.75% of the distributions paid to the common equity holders of CT Legacy Partners (subject to certain caps and priority distributions). As of June 30, 2013, incentive awards for 92% of the pool were granted to our former employees, and the remainder remains unallocated. If any awards remain unallocated at the time distributions are paid, any amounts otherwise payable to the unallocated awards will be distributed pro-rata to the plan participants then employed by an affiliate of our Manager.

Approximately 82% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) 25% vests on the date of grant, (ii) 25% vests in March 2013, (iii) 25% vests in March 2014, and (iv) the remainder vests upon our receipt of distributions from CT Legacy Partners. The remaining 18% of these grants vest upon our receipt of distributions from CT Legacy Partners.

We accrue a liability for the amounts due under these grants based on the value of CT Legacy Partners and the periodic vesting of the awards granted. Accrued payables for these awards were $6.8 million and $5.3 million as of June 30, 2013 and December 31, 2012, respectively.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 24, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Is Entity's Reporting Status Current?	Yes
Well-known seasoned issuer?	No
Entity Voluntary Filers?	No
Trading Symbol	BXMT
Entity Registrant Name	BLACKSTONE MORTGAGE TRUST, INC.
Entity Central Index Key	0001061630
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		28,801,651

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Fair Values - Assets that are Recorded at Fair Value (Parenthetical) (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Fair Value Disclosures [Abstract]
Loan loss reserve held by securitization vehicles	100.00%	92.00%

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Discontinued Operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

Note 14. Discontinued Operations

As more fully described in Note 3, we sold our investment management business, CTIMCO, to an affiliate of Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to loss from discontinued operations on our consolidated statement of operations.

The following table provides additional information on the components of discontinued operations for the six months ended June 30, 2013 and 2012 ($ in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
Discontinued Operations	2013		2012			2013		2012
Servicing fees	$	—	$	1,365		$	—	$	3,385
Management fees from affiliates		—		1,610			—		3,195
Total revenues		—		2,975			—		6,580
General and administrative expenses		—		3,173			—		6,729
Loss from discontinued operations before income taxes		—		(199	)		—		(149	)
Income tax provision		—		(143	)		—		(766	)
Loss from discontinued operations	$	—	($	341	)	$	—	($	914	)

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Equity Investments in Unconsolidated Subsidiaries - Additional Information (Detail) (CT Opportunity Partners I, LP [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jan. 31, 2011
CT Opportunity Partners I, LP [Member]
Investments in Equity Accounted Investees [Line Items]
Carried interest	100.00%
Incentive compensation, percentage of funds profit	17.70%
Preferred return	9.00%
Return of capital to partners	100.00%
Incentive compensation	$ 24.6
Maximum exposure to loss from equity investment	$ 1.4
Percentage of incentive management fee pool for employees		45.00%
Percentage of granted incentive compensation to employees	96.00%
Percentage of grants vesting schedule	96.00%
Percentage of grants vesting upon receipt of dividends	4.00%
Description of incentive management fee grants to employees vesting schedule	(i) one-third on the date of grant; (ii) one-third on September 13, 2012; and (iii) the remainder vests upon our receipt of incentive management fees from CTOPI. The remaining 4% of these grants vest solely upon our receipt of incentive management fees from CTOPI or the disposition of certain investments owned by CTOPI.

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Investment in CT Legacy Asset, at Fair Value - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Net investment in CT Legacy Asset		$ 132,000,000
Beneficial ownership of CT Legacy Partners	52.00%
Percentage of class B common stock dividends payable to holders	25.00%
Aggregate cash distributions to all other classes of stock	50,000,000
Cumulative preferred stock distributions, amount	$ 1,000,000
Cumulative preferred stock distributions, percent of assets	2.50%
Common stock, shares outstanding	28,802,000	2,927,000
Common Class A-1 [Member]
Equity interest in subsidiary, number of shares	4,393,750
Common stock, shares outstanding	4,400,000
Common Class A-2 [Member]
Equity interest in subsidiary, number of shares	775,000
Common stock, shares outstanding	5,600,000
Common Class B [Member]
Equity interest in subsidiary, number of shares	118,651
Common stock, shares outstanding	1,500,000
Former Lenders Under Credit Facility [Member]
Beneficial ownership of CT Legacy Partners	48.00%

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Fair Values - Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Unrealized gain on investments at fair value	$ 4,000	$ 4,000
Loans Held-for-Sale, Net [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period
Consolidation of CT Legacy Partners
Transfer from loans receivable, net		2,000
Principal paydowns
Deferred interest
Valuation allowance on loans held-for-sale		1,800
Unrealized gain on investments at fair value
End of Period	3,800	3,800
Loans Receivable [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period
Consolidation of CT Legacy Partners		150,332
Transfer from loans receivable, net
Principal paydowns		(36,930)
Deferred interest		195
Valuation allowance on loans held-for-sale
Unrealized gain on investments at fair value		3,951
End of Period	117,549	117,549
Other Assets, at Fair Value [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period
Consolidation of CT Legacy Partners		15,761
Transfer from loans receivable, net
Principal paydowns		(349)
Deferred interest
Valuation allowance on loans held-for-sale
Unrealized gain on investments at fair value		49
End of Period	15,461	15,461
Investment in CT Legacy Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period		132,000
Consolidation of CT Legacy Partners		(132,000)
Transfer from loans receivable, net
Principal paydowns
Deferred interest
Valuation allowance on loans held-for-sale
Unrealized gain on investments at fair value
End of Period