10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017

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: 001-14788

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, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 655-0220

(Registrant’s telephone number, including area code)

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  ☒    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  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and emerging growth 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	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

The number of the Registrant’s outstanding shares of class A common stock, par value $0.01 per share, as of April 18, 2017 was 94,827,579.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	2
	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of March 31, 2017 and December  31, 2016	2
	Consolidated Statements of Operations for the Three Months Ended March  31, 2017 and 2016	3
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016	4
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2017 and 2016	5
	Consolidated Statements of Cash Flows for the Three Months Ended March  31, 2017 and 2016	6
	Notes to Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	51
ITEM 4.	CONTROLS AND PROCEDURES	53
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	54
ITEM 1A.	RISK FACTORS	54
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	54
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	54
ITEM 4.	MINE SAFETY DISCLOSURES	54
ITEM 5.	OTHER INFORMATION	54
ITEM 6.	EXHIBITS	55
SIGNATURES		57

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

	March 31,			December 31,
	2017			2016
Assets
Cash and cash equivalents	$	64,275		$	75,567
Loans receivable, net		8,721,768			8,692,978
Other assets		168,616			44,070
Total Assets	$	8,954,659		$	8,812,615
Liabilities and Equity
Secured debt agreements, net	$	5,760,191		$	5,716,354
Loan participations sold, net		354,131			348,077
Convertible notes, net		167,475			166,762
Other liabilities		176,880			87,819
Total Liabilities		6,458,677			6,319,012
Commitments and contingencies		—			—
Equity
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 94,818,348 and 94,540,263 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively		948			945
Additional paid-in capital		3,096,006			3,089,997
Accumulated other comprehensive loss		(52,357	)		(56,202	)
Accumulated deficit		(548,615	)		(541,137	)
Total Equity		2,495,982			2,493,603
Total Liabilities and Equity	$	8,954,659		$	8,812,615

See accompanying notes to consolidated financial statements.

2

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

	Three Months Ended March 31,
	2017		2016
Income from loans and other investments
Interest and related income	$	118,517	$	123,025
Less: Interest and related expenses		46,674		45,381
Income from loans and other investments, net		71,843		77,644
Other expenses
Management and incentive fees		12,921		13,613
General and administrative expenses		7,428		6,795
Total other expenses		20,349		20,408
Gain on investments at fair value		—		66
Income from equity investment in unconsolidated subsidiary		—		138
Income before income taxes		51,494		57,440
Income tax provision		89		241
Net income		51,405		57,199
Net income attributable to non-controlling interests		—		(152	)
Net income attributable to Blackstone Mortgage Trust, Inc.	$	51,405	$	57,047
Net income per share of common stock basic and diluted	$	0.54	$	0.61
Weighted-average shares of common stock outstanding, basic and diluted		94,993,386		94,067,769
Dividends declared per share of common stock	$	0.62	$	0.62

See accompanying notes to consolidated financial statements.

3

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended March 31,
	2017			2016
Net income	$	51,405		$	57,199
Other comprehensive income
Unrealized gain on foreign currency remeasurement		7,770			5,979
Realized and unrealized loss on derivative financial instruments		(3,925	)		(6,666	)
Other comprehensive income (loss)		3,845			(687	)
Comprehensive income		55,250			56,512
Comprehensive income attributable to non-controlling interests		—			(152	)
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$	55,250		$	56,360

See accompanying notes to consolidated financial statements.

4

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)

	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Gain			Accumulated Deficit			Stockholders’ Equity			Non-controlling Interests			Total Equity
Balance at December 31, 2015	$	937	$	3,070,200	$	(32,758	)	$	(545,791	)	$	2,492,588		$	13,143		$	2,505,731
Shares of class A common stock issued, net		2		—		—			—			2			—			2
Restricted class A common stock earned		—		4,593		—			—			4,593			—			4,593
Dividends reinvested		—		88		—			(82	)		6			—			6
Deferred directors’ compensation		—		94		—			—			94			—			94
Other comprehensive loss		—		—		(687	)		—			(687	)		—			(687	)
Net income		—		—		—			57,047			57,047			152			57,199
Dividends declared on common stock		—		—		—			(58,226	)		(58,226	)		—			(58,226	)
Distributions to non-controlling interests		—		—		—			—			—			(6,879	)		(6,879	)
Balance at March 31, 2016	$	939	$	3,074,975	$	(33,445	)	$	(547,052	)	$	2,495,417		$	6,416		$	2,501,833
Balance at December 31, 2016	$	945	$	3,089,997	$	(56,202	)	$	(541,137	)	$	2,493,603		$	—		$	2,493,603
Shares of class A common stock issued, net		3		—		—			—			3			—			3
Restricted class A common stock earned		—		5,810		—			—			5,810			—			5,810
Dividends reinvested		—		105		—			(96	)		9			—			9
Deferred directors’ compensation		—		94		—			—			94			—			94
Other comprehensive income		—		—		3,845			—			3,845			—			3,845
Net income		—		—		—			51,405			51,405			—			51,405
Dividends declared on common stock		—		—		—			(58,787	)		(58,787	)		—			(58,787	)
Balance at March 31, 2017	$	948	$	3,096,006	$	(52,357	)	$	(548,615	)	$	2,495,982		$	—		$	2,495,982

See accompanying notes to consolidated financial statements.

5

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended March 31,
	2017			2016
Cash flows from operating activities
Net income	$	51,405		$	57,199
Adjustments to reconcile net income to net cash provided by operating activities
Non-cash compensation expense		5,907			4,852
Amortization of deferred fees on loans		(8,808	)		(8,954	)
Amortization of deferred financing costs and premiums/ discount on debt obligations		4,535			4,053
Income from equity investment in unconsolidated subsidiary		—			(138	)
Distributions of income from unconsolidated subsidiary		—			6,837
Gain on investments at fair value		—			(66	)
Changes in assets and liabilities, net
Other assets		1,699			4,254
Other liabilities		2,636			(2,256	)
Net cash provided by operating activities		57,374			65,781
Cash flows from investing activities
Origination and fundings of loans receivable		(702,353	)		(586,066	)
Principal collections and sales proceeds from loans receivable and other assets		567,321			420,513
Origination and exit fees received on loans receivable		12,429			10,424
Receipts under derivative financial instruments		1,903			—
Payments under derivative financial instruments		(3,752	)		—
Change in restricted cash		—			9,122
Net cash used in investing activities		(124,452	)		(146,007	)

continued…

See accompanying notes to consolidated financial statements.

6

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended March 31,
	2017			2016
Cash flows from financing activities
Borrowings under secured debt agreements	$	789,865		$	629,897
Repayments under secured debt agreements		(672,161	)		(466,536	)
Repayment of loan participations		—			(9,600	)
Payment of deferred financing costs		(3,895	)		(5,260	)
Receipts under derivative financial instruments		—			11,478
Payments under derivative financial instruments		—			(3,260	)
Distributions to non-controlling interests		—			(6,879	)
Net proceeds from issuance of class A common stock		8			6
Dividends paid on class A common stock		(58,615	)		(58,097	)
Net cash provided by financing activities		55,202			91,749
Net (decrease) increase in cash and cash equivalents		(11,876	)		11,523
Cash and cash equivalents at beginning of period		75,567			96,450
Effects of currency translation on cash and cash equivalents		584			2,649
Cash and cash equivalents at end of period	$	64,275		$	110,622
Supplemental disclosure of cash flows information
Payments of interest	$	(39,287	)	$	(38,121	)
Payments of income taxes	$	(50	)	$	(151	)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	$	(58,787	)	$	(58,226	)
Participations sold, net	$	—		$	(9,600	)
Loan principal payments held by servicer, net	$	42,715		$	75,378

See accompanying notes to consolidated financial statements.

7

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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.

Blackstone Mortgage Trust is a real estate finance company that originates and purchases senior loans collateralized by properties in North America and Europe. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust, or REIT, 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 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 an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

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 of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, 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 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the Securities and Exchange Commission, or the SEC.

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. 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 affect 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.

As of both March 31, 2017 and December 31, 2016, we did not consolidate any VIEs.

Use of Estimates

The preparation of consolidated 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 as of 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 portfolio is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred until the loan is advanced and is then recorded over the term of the loan as an

8

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents.

Loans Receivable and Provision for Loan Losses

We originate and purchase 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 to us pursuant 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 of these loans, which are collateral dependent, is measured by comparing the estimated 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. 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 risk factors of each loan, and assigns a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 -	Very Low Risk
2 -	Low Risk
3 -	Medium Risk
4 -	High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.
5 -	Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

During the second quarter of 2015, we acquired a portfolio of loans from General Electric Capital Corporation and certain of its affiliates, or the GE portfolio, for a total purchase price of $4.7 billion. We allocated the aggregate purchase price between each loan based on its fair value relative to the overall portfolio, which allocation resulted in purchase discounts or premiums determined on an asset-by-asset basis. Each loan accretes from its allocated purchase price to its expected collection value over the life of the loan, consistent with the other loans in our portfolio.

Equity Investment in Unconsolidated Subsidiary

Our carried interest in CT Opportunity Partners I, LP, or CTOPI, was accounted for using the equity method. CTOPI’s assets and liabilities were not consolidated into our financial statements due to our determination that (i) it was not a VIE and (ii) the other investors in CTOPI had sufficient rights to preclude consolidation by us. As such, we reported our allocable percentage of the net assets of CTOPI on our consolidated balance sheets. The investment was fully realized as of December 31, 2016 and we no longer have any equity investments in unconsolidated subsidiaries in our consolidated financial statements.

9

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. Changes in the fair value of the effective portion of our hedges are reflected in accumulated other comprehensive income (loss) on our consolidated financial statements. Changes in the fair value of the ineffective portion of our hedges are included in net income. Amounts are reclassified out of accumulated other comprehensive income (loss) and into net income when the hedged item is sold, substantially liquidated, or de-designated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its value are included in net income.

Secured Debt Agreements

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

Senior Loan Participations

In certain instances, we finance our loans through the non-recourse syndication of a senior loan interest to a third-party. Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining subordinate loan and not the non-consolidated senior interest we sold.

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

10

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic, or ASC 820, 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.

ASC 820 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 that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee composed of members of senior management of our Manager, including our Chief Executive Officer, Chief Financial Officer, and other senior officers.

Certain of our other assets are reported 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 that are recorded at fair value are discussed further in Note 14. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may 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.

We are also required by GAAP to disclose fair value information about financial instruments, that are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

• Loans receivable, net: The fair values of these loans were estimated by our Manager based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount 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.

11

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

• Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

• Secured debt agreements, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

• Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

• Convertible notes, net: The convertible notes are actively traded and their fair values were obtained using quoted market prices.

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. 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. Refer to Note 12 for additional information.

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain individuals employed by an affiliate of our Manager that vest over the life of the awards, as well as deferred stock units issued to certain members of our Board of Directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 13 for additional information.

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units. Refer to Note 10 for additional discussion of earnings per share.

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income.

Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” or ASU 2016-18. ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and is to be applied retrospectively. Upon the adoption of the new guidance, we will change the presentation of restricted cash in our statement of cash flows to conform to the new requirements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 broadly amends the accounting guidance for revenue recognition. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2017, and is to be applied retrospectively. We do not anticipate that the adoption of ASU 2014-09 will have a material impact on our consolidated financial statements.

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

3. LOANS RECEIVABLE, NET

The following table details overall statistics for our loans receivable portfolio ($ in thousands):

	March 31, 2017			December 31, 2016
Number of loans		103			107
Principal balance	$	8,759,696		$	8,727,218
Net book value	$	8,721,768		$	8,692,978
Unfunded loan commitments(1)	$	1,149,842		$	882,472
Weighted-average cash coupon(2)		5.15	%		5.01	%
Weighted-average all-in yield(2)		5.57	%		5.36	%
Weighted-average maximum maturity (years)(3)		3.3			3.2

(1)	Unfunded commitments will primarily be funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments will be funded over the term of each loan, subject in certain cases to an expiration date.
(2)	As of March 31, 2017, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans by principal balance indexed to USD LIBOR. In addition, $217.8 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.22%, as of March 31, 2017. As of December 31, 2016, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans indexed to USD LIBOR. In addition, $216.3 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.27%, as of December 31, 2016. In addition to cash coupon, all-in yield includes the amortization of deferred origination fees, loan origination costs, purchase discounts, and accrual of both extension and exit fees. Cash coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.
(3)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of March 31, 2017, 59% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 41% were open to repayment by the borrower without penalty. As of December 31, 2016, 64% of our loans were subject to yield maintenance or other prepayment restrictions and 36% were open to repayment by the borrower without penalty.

Activity relating to our loans receivable portfolio was as follows ($ in thousands):

	Principal Balance			Deferred Fees / Other Items(1)			Net Book Value
December 31, 2016	$	8,727,218		$	(34,240)		$	8,692,978
Loan fundings		702,353			—			702,353
Loan repayments		(695,758	)		—			(695,758	)
Unrealized gain (loss) on foreign currency translation		25,883			(67	)		25,816
Deferred fees and other items(1)		—			(12,429	)		(12,429	)
Amortization of fees and other items(1)		—			8,808			8,808
March 31, 2017	$	8,759,696		$	(37,928	)	$	8,721,768

(1)   Other items primarily consist of purchase discounts or premiums, exit fees, and deferred origination expenses.

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(Unaudited)

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

March 31, 2017
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
Office	54	$	4,808,211	$	4,833,513	50%
Hotel	16		2,104,014		2,175,505	22
Retail	7		524,318		944,818	10
Multifamily	8		515,170		517,376	5
Manufactured housing	9		295,559		295,359	3
Condominium	1		49,276		226,478	2
Other	8		425,220		740,328	8
	103	$	8,721,768	$	9,733,377	100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
United States
Northeast	24	$	2,493,379	$	2,510,088	26%
West	23		1,998,995		2,185,476	22
Southeast	20		1,453,309		1,877,334	19
Midwest	7		702,238		704,199	7
Southwest	7		318,348		317,136	3
Northwest	2		215,617		218,088	2
Subtotal	83		7,181,886		7,812,321	79
International
United Kingdom	9		983,679		1,317,265	14
Canada	8		494,223		490,326	5
Germany	1		11,271		62,510	1
Netherlands	2		50,709		50,955	1
Subtotal	20		1,539,882		1,921,056	21
Total	103	$	8,721,768	$	9,733,377	100%

(1)   In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of March 31, 2017.

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(Unaudited)

December 31, 2016
Property Type	Number of Loans		Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
Office		55	$	4,800,609	$	4,889,456		50%
Hotel		18		1,889,732		1,957,334		20
Retail		9		769,813		1,173,592		12
Multifamily		8		521,097		523,529		5
Manufactured housing		9		296,290		296,252		3
Condominium		2		66,070		258,360		3
Other		6		349,367		658,211		7
		107	$	8,692,978	$	9,756,734		100%
Geographic Location	Number of Loans		Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
United States
Northeast		26	$	2,548,257	$	2,562,149		26%
Southeast		21		1,492,530		1,899,748		19
West		22		1,628,811		1,828,667		19
Midwest		7		695,713		698,093		7
Southwest		8		380,639		379,766		4
Northwest		3		227,747		293,564		3
Subtotal		87		6,973,697		7,661,987		78
International
United Kingdom		9		977,136		1,305,816		13
Canada		8		487,835		483,923		5
Germany		1		204,241		254,644		3
Netherlands		2		50,069		50,364		1
Subtotal		20		1,719,281		2,094,747		22
Total		107	$	8,692,978	$	9,756,734		100%

(1)   In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of December 31, 2016.

Loan Risk Ratings

As further described in Note 2, our Manager evaluates our loan portfolio on a quarterly basis. In conjunction with our quarterly loan portfolio review, our Manager assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2.

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table allocates the principal balance and net book value of our loans receivable based on our internal risk ratings ($ in thousands):

March 31, 2017							December 31, 2016
Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)		Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)
	1	6	$	303,849	$	304,170		1	8	$	361,100	$	361,574
	2	47		3,670,002		3,679,119		2	52		4,011,992		4,083,678
	3	49		4,727,107		5,729,339		3	46		4,299,026		5,290,668
	4	1		20,810		20,749		4	1		20,860		20,814
	5	—		—		—		5	—		—		—
		103	$	8,721,768	$	9,733,377			107	$	8,692,978	$	9,756,734

(1) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of both March 31, 2017 and December 31, 2016.

The weighted-average risk rating of our total loan exposure was 2.6 and 2.5 as of March 31, 2017 and December 31, 2016, respectively. The increase in weighted-average risk rating was primarily driven by repayments of loans with lower risk ratings, and not rating downgrades in the existing portfolio.

We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of March 31, 2017 or December 31, 2016.

4. EQUITY INVESTMENT IN UNCONSOLIDATED SUBSIDIARY

Our equity investment in unconsolidated subsidiary consisted solely of our carried interest in CTOPI, a fund sponsored and managed by an affiliate of our Manager. The investment was fully realized as of December 31, 2016 and we no longer have any investments in unconsolidated subsidiaries on our consolidated financial statements.

Our carried interest in CTOPI entitled us to earn promote revenue 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 recognized $138,000 of promote income from CTOPI in respect of our carried interest and recorded such amounts as income in our consolidated statements of operations during the three months ended March 31, 2016.

CTOPI Incentive Management Fee Grants

In January 2011, we created a management compensation pool for employees equal to 45% of the CTOPI promote distributions received by us. During the three months ended March 31, 2016, we recognized $170,000 of expenses under the CTOPI incentive plan. Such amounts were recognized as a component of general and administrative expenses in our consolidated statements of operations.

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

5. OTHER ASSETS AND LIABILITIES

The following table details the components of our other assets ($ in thousands):

	March 31,		December 31,
	2017		2016
Loan portfolio payments held by servicer(1)	$	135,516	$	6,294
Accrued interest receivable		30,962		32,871
Derivative assets		1,424		4,086
Prepaid expenses		700		803
Prepaid taxes		14		16
Total	$	168,616	$	44,070

(1)   Represents loan principal and interest payments held by our third-party loan servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle.

The following table details the components of our other liabilities ($ in thousands):

	March 31,		December 31,
	2017		2016
Secured debt repayments pending servicer remittance(1)	$	91,763	$	5,372
Accrued dividends payable		58,787		58,615
Accrued management and incentive fees payable		12,921		12,798
Accrued interest payable		11,673		9,049
Accounts payable and other liabilities		1,736		1,985
Total	$	176,880	$	87,819

(1)   Represents pending transfers from our third-party loan servicer that were remitted to our banking counterparties during the subsequent remittance cycle.

6. SECURED DEBT AGREEMENTS, NET

Our secured debt agreements include credit facilities, the GE portfolio acquisition facility, asset-specific financings, and a revolving credit agreement. The following table details our secured debt agreements ($ in thousands):

	Secured Debt Agreements
	Borrowings Outstanding
	March 31, 2017			December 31, 2016
Credit facilities	$	3,958,064		$	3,572,837
GE portfolio acquisition facility		1,250,524			1,479,582
Asset-specific financings		567,577			679,207
Revolving credit agreement		—			—
Total secured debt agreements	$	5,776,165		$	5,731,626
Deferred financing costs(1)		(15,974	)		(15,272	)
Net book value of secured debt	$	5,760,191		$	5,716,354

(1)   Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

Credit Facilities

During the three months ended March 31, 2017, we increased the maximum facility size of two of our credit facilities, providing an additional £250.0 million and €250.0 million of credit capacity, respectively, and we converted one of our asset-specific financings to a $500.0 million credit facility. The following tables detail our credit facilities ($ in thousands):

	March 31, 2017
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,895,248	$	1,468,184	$	1,238,872	$	229,312
MetLife		1,000,000		1,104,478		866,114		866,114		—
Bank of America		750,000		813,305		641,066		641,066		—
Citibank(4)		766,300		509,582		393,933		295,777		98,156
Deutsche Bank		500,000		374,119		278,851		278,851		—
Morgan Stanley(5)		627,500		329,767		260,623		220,969		39,654
Société Générale(6)		426,080		281,623		220,915		214,678		6,237
JP Morgan(7)		500,000		359,098		277,914		201,737		76,177
	$	6,569,880	$	5,667,220	$	4,407,600	$	3,958,064	$	449,536

	December 31, 2016
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,718,874	$	1,339,942	$	1,107,733	$	232,209
MetLife		1,000,000		1,106,017		862,454		862,454		—
Bank of America		750,000		794,881		617,694		617,694		—
JP Morgan(7)		500,000		550,560		420,414		316,219		104,195
Morgan Stanley(5)		308,500		344,056		272,221		231,930		40,291
Citibank(4)		500,000		508,989		394,677		229,629		165,048
Société Générale(6)		420,680		274,351		207,178		207,178		—
	$	5,479,180	$	5,297,728	$	4,114,580	$	3,572,837	$	541,743

(1)	Maximum facility size represents the largest amount of borrowings available under a given facility once sufficient collateral assets have been approved by the lender and pledged by us.
(2)	Represents the principal balance of the collateral assets.
(3)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(4)	As of March 31, 2017, the Citibank maximum facility size was composed of a general $500.0 million facility size denominated in U.S. Dollars plus a general €250.0 million ($266.3 million) facility size that contemplated British Pound Sterling and Euro borrowings. As of December 31, 2016, the maximum facility size was composed of a general $500.0 million facility.
(5)	As of March 31, 2017, the Morgan Stanley maximum facility size was composed of a £500.0 million facility size that was translated to $627.5 million. As of December 31, 2016, the maximum facility size was composed of a £250.0 million facility size that was translated to $308.5 million. Borrowings denominated in British Pound Sterling and Euro are contemplated under this facility.
(6)	As of March 31, 2017 and December 31, 2016, the Société Générale maximum facility size was composed of a €400.0 million facility size that was translated to $426.1 million and $420.7 million, respectively. Borrowings denominated in U.S. Dollars, British Pound Sterling, and Euro are contemplated under this facility.
(7)	As of March 31, 2017 and December 31, 2016, the JP Morgan maximum facility size was composed of a general $500.0 million facility size, under which U.S. Dollars and British Pound Sterling borrowings are contemplated.

The weighted-average outstanding balance of our credit facilities was $3.5 billion for the three months ended March 31, 2017. As of March 31, 2017, we had aggregate borrowings of $4.0 billion outstanding under our credit facilities, with a weighted-average cash

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

coupon of LIBOR plus 1.90% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.11% per annum, and a weighted-average advance rate of 78.9%. As of March 31, 2017, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

The weighted-average outstanding balance of our credit facilities was $2.9 billion for the three months ended December 31, 2016. As of December 31, 2016, we had aggregated borrowings of $3.6 billion outstanding under our credit facilities, with a weighted-average cash coupon of LIBOR plus 1.82% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.02% per annum, and a weighted-average advance rate of 79.1%. As of December 31, 2016, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

The following tables outline the key terms of our credit facilities as of March 31, 2017:

Lender	Currency	Guarantee(1)	Margin Call(2)	Term/Maturity
Wells Fargo	$	25%	Collateral marks only	Term matched(3)
MetLife	$	50%	Collateral marks only	April 22, 2022(4)
Bank of America	$	50%	Collateral marks only	May 21, 2021(5)
Citibank	$ / £/ €	25%	Collateral marks only	Term matched(3)
Deutsche Bank	$	25%	Collateral marks only	Term matched(3)
Morgan Stanley	£  / €	25%	Collateral marks only	March 1, 2020
Société Générale	$  /£/ €	25%	Collateral marks only	Term matched(3)
JP Morgan	$  / £	50%	Collateral marks only	January 7, 2019

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.
(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.
(3)	These credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.
(4)	Includes five one-year extension options which may be exercised at our sole discretion.
(5)	Includes two one-year extension options which may be exercised at our sole discretion.

Currency	Outstanding Borrowings		Potential Borrowings(1)		Index	Rate(2)	Advance Rate(3)
$		$3,639,921		$4,030,008	1-month USD LIBOR	L+1.88%	78.9%
€		€          —		€     38,269	3-month EURIBOR	n/a	77.8%
£		£   253,500		£   269,273	3-month GBP LIBOR	L+2.15%	79.0%
		$3,958,064		$4,407,600		L+1.90%	78.9%

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents weighted-average cash coupon based on borrowings outstanding.
(3)	Represents weighted-average advance rate based on the outstanding principal balance of the collateral assets pledged.

GE Portfolio Acquisition Facility

During the second quarter of 2015, concurrently with our acquisition of the GE portfolio, we entered into an agreement with Wells Fargo to provide us with secured financing for the acquired portfolio. As of March 31, 2017, this facility provided for $1.4 billion of financing, of which $1.3 billion was outstanding and an additional $171.7 million was available to finance future loan fundings in the GE portfolio. The GE portfolio acquisition facility is non-revolving and consists of a single master repurchase agreement providing for asset-specific borrowings for each collateral asset.

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Notes to Consolidated Financial Statements (continued)

(Unaudited)

The asset-specific borrowings under the GE portfolio acquisition facility were advanced at a weighted-average rate of 80% of our purchase price of the collateral assets and are repaid pro rata from collateral asset repayment proceeds. The asset-specific borrowings are currency matched to the collateral assets and accrue interest at a rate equal to the sum of (i) the applicable base rate plus (ii) a margin of 1.75%, which will increase to 1.80% and 1.85% in year four and year five, respectively. As of March 31, 2017, those borrowings were denominated in U.S. Dollars, Canadian Dollars, and British Pounds Sterling. The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options. We guarantee obligations under the GE portfolio acquisition facility in an amount equal to the greater of (i) 25% of outstanding asset-specific borrowings, and (ii) $250.0 million. We had outstanding asset-specific borrowings of $1.3 billion and $1.5 billion under the GE portfolio acquisition facility as of March 31, 2017 and December 31, 2016, respectively.

Asset-Specific Financings

The following tables detail statistics for our asset-specific financings ($ in thousands):

	March 31, 2017
Lender	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term(3)
JP Morgan(4)
Collateral assets		1	$	286,887	$	285,955		L+3.88	%		n/a		Jan. 2020
Financing provided		1		233,679		233,413		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets		2		204,617		204,548		L+4.40	%		n/a		Nov. 2020
Financing provided		2		161,163		161,123		L+2.42	%		40,291		Nov. 2020
Bank of the Ozarks
Collateral assets		2		169,986		167,510		L+6.51	%		n/a		June 2020
Financing provided		2		128,969		128,045		L+3.83	%		—		June 2020
Wells Fargo
Collateral assets		1		62,523		62,302		L+6.05	%		n/a		Dec. 2019
Financing provided		1		43,766		43,609		L+3.14	%		8,753		Dec. 2019
Total
Collateral assets		6	$	724,013	$	720,315		L+4.83	%		n/a
Financing provided		6	$	567,577	$	566,190		L+2.58	%	$	165,883

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

	December 31, 2016
Lender	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term(3)
JP Morgan(4)
Collateral assets		1	$	284,012	$	282,818		L+3.88	%		n/a		Jan. 2020
Financing provided		1		233,679		233,626		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets		2		203,656		203,555		L+4.40	%		n/a		Nov. 2020
Financing provided		2		158,652		158,609		L+2.42	%		39,663		Nov. 2020
Deutsche Bank
Collateral assets		1		183,300		180,866		L+5.18	%		n/a		Aug. 2021
Financing provided		1		135,075		133,621		L+3.03	%		66,410		Aug. 2021
Bank of the Ozarks
Collateral assets		2		143,164		140,524		L+6.42	%		n/a		Apr. 2020
Financing provided		2		108,435		107,323		L+3.68	%		—		Apr. 2020
Wells Fargo
Collateral assets		1		61,951		61,654		L+6.05	%		n/a		Dec. 2019
Financing provided		1		43,366		43,154		L+2.97	%		8,673		Dec. 2019
Total
Collateral assets		7	$	876,083	$	869,417		L+4.84	%		n/a
Financing provided		7	$	679,207	$	676,333		L+2.60	%	$	231,585

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

The weighted-average outstanding balance of our asset-specific financings was $696.4 million for the three months ended March 31, 2017 and $606.9 million for the three months ended December 31, 2016.

Revolving Credit Agreement

During the second quarter of 2016, we entered into a $125.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to six months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The initial maturity date of the facility is April 4, 2018 and is subject to two one-year extension options, exercisable at our option.

During the three months ended March 31, 2017, we had no borrowings under the revolving credit agreement and we recorded interest expense of $240,000, including $126,000 of amortization of deferred fees and expenses.

During the three months ended December 31, 2016, the weighted-average outstanding borrowings under the revolving credit agreement were $35.3 million and we recorded interest expense of $506,000, including $128,000 of amortization of deferred fees and expenses. As of December 31, 2016 we had no outstanding borrowings under the agreement.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $1.9 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to March 31, 2017; (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 83.33% of our total assets. As of March 31, 2017 and December 31, 2016, we were in compliance with these covenants.

7. LOAN PARTICIPATIONS SOLD, NET

The financing of a loan by the non-recourse sale of a senior interest in the loan through a participation agreement generally does not qualify as a sale under GAAP. Therefore, in the instance of such sales, we present the whole loan as an asset and the loan participation sold as a liability on our consolidated balance sheet until the loan is repaid. The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation. The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

The following tables detail statistics for our loan participations sold ($ in thousands):

	March 31, 2017
Loan Participations Sold	Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term
Total loan	1	$	426,700	$	423,575		L+4.48	%		n/a	Dec. 2019
Senior participation(3)(4)	1		355,583		354,131		L+2.72	%	$	30,120	Dec. 2019
	December 31, 2016
Loan Participations Sold	Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term
Total loan	1	$	419,560	$	416,233		L+4.48	%		n/a	Dec. 2019
Senior participation(3)(4)	1		349,633		348,077		L+2.72	%	$	29,616	Dec. 2019

(1)	Our floating rate loans and related liabilities were indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	Other than one instance where we entered into a related guarantee agreement for £24.0 million ($30.1 million and $29.6 million as of March 31, 2017 and December 31, 2016, respectively), our loan participations sold are non-recourse to us.
(3)	During the three months ended March 31, 2017 and December 31, 2016, we recorded $2.6 million and $2.9 million, respectively, of interest expense related to our loan participations sold, of which $2.5 million and $2.8 million was paid in cash.
(4)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $1.5 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively.

8. CONVERTIBLE NOTES, NET

In November 2013, we issued $172.5 million of 5.25% convertible senior notes due on December 1, 2018, or Convertible Notes. The Convertible Notes’ issuance costs are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cost of the Convertible Notes is 5.87% per annum.

The Convertible Notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on August 31, 2018, at the applicable conversion rate in effect on the conversion date. Thereafter, the Convertible Notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. The Convertible Notes were not convertible as of March 31, 2017. The conversion rate was initially set to equal 34.8943 shares of class A common stock per $1,000 principal amount of Convertible Notes, which was equivalent to an initial conversion price of

23

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

$28.66 per share of class A common stock, subject to adjustment upon the occurrence of certain events. As a result of exceeding the cumulative dividend threshold as defined in the Convertible Notes Supplemental Indenture, the conversion rate was adjusted on September 28, 2016 to 35.7236 shares of Class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $27.99 per share of class A common stock. We may not redeem the Convertible Notes prior to maturity. The last reported sale price of our Class A common stock of $30.96 on March 31, 2017 was greater than the per share conversion price of the Convertible Notes. We have the intent and ability to settle the Convertible Notes in cash and, as a result, the Convertible Notes did not have any impact on our diluted earnings per share.

Upon issuance of the Convertible Notes, we recorded a $9.1 million discount based on the implied value of the conversion option and an assumed effective interest rate of 6.50%, as well as $4.1 million of initial issuance costs. Including the amortization of this discount and the issuance costs, our total cost of the Convertible Notes is 7.16% per annum. During the three months ended March 31, 2017, we incurred total interest on our Convertible Notes of $3.0 million, of which $2.3 million related to cash coupon and $713,000 related to the amortization of discount and certain issuance costs. During the three months ended March 31, 2016, we incurred total interest on our Convertible Notes of $3.0 million, of which $2.3 million related to cash coupon and $670,000 related to the amortization of discount and certain issuance costs.

As of March 31, 2017, the Convertible Notes were carried on our consolidated balance sheet at $167.5 million, net of an unamortized discount of $4.8 million and deferred financing costs of $180,000. As of December 31, 2016, the Convertible Notes were carried on our consolidated balance sheet at $166.8 million, net of an unamortized discount of $5.5 million and deferred financing costs of $206,000. Accrued interest payable for the Convertible Notes was $3.0 million and $755,000 as of March 31, 2017 and December 31, 2016, respectively. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

9. DERIVATIVE FINANCIAL INSTRUMENTS

The sole objective of our use of derivative financial instruments is to minimize the risks and/or costs associated with our investments and/or financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815 – “Derivatives and Hedging.” Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks. For more information on the accounting for designated and non-designated hedges, refer to Note 2.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations.

Net Investment Hedges of Foreign Currency Risk

Certain of our international investments expose us to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional currency, the U.S. Dollar. We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. Dollar.

The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amount in thousands):

March 31, 2017				December 31, 2016
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Sell GBP Forward	1	£	141,900	Sell GBP Forward	2	£	141,900
Sell CAD Forward	1	C$	122,900	Sell CAD Forward	2	C$	122,900
				Sell EUR Forward	1	€	44,900

24

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Cash Flow Hedges of Interest Rate Risk

Certain of our financing transactions expose us to a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate caps and swaps, and may also include interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk associated with our borrowings where there is potential for an index mismatch.

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

March 31, 2017
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps(1)	4	C$	108,271	1.0%	CDOR	2.2
Interest Rate Caps	19	$	633,903	2.0%	USD LIBOR	0.2
Interest Rate Caps	6	C$	304,931	2.0%	CDOR	0.2
Interest Rate Caps	1	£	15,142	2.0%	GBP LIBOR	0.1
December 31, 2016
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps(1)	4	C$	108,271	1.0%	CDOR	2.4
Interest Rate Caps	21	$	802,256	2.0%	USD LIBOR	0.4
Interest Rate Caps	5	C$	400,035	2.0%	CDOR	0.4
Interest Rate Caps	1	£	15,142	2.0%	GBP LIBOR	0.3

(1) Two of our interest rate swaps totaling C$91.0 million ($68.3 million and $67.7 million as of March 31, 2017 and December 31, 2016, respectively) do not become effective until June 1, 2017.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt. During the twelve months following March 31, 2017, we estimate that an additional $470,000 will be reclassified from accumulated other comprehensive income as an increase to interest expense. Additionally, during the three months ended March 31, 2017 and 2016, we did not record any hedge ineffectiveness in our consolidated statements of operations.

Non-designated Hedges

During the three months ended March 31, 2017 and 2016, we recorded gains of $90,000 and losses of $976,000, respectively, related to non-designated hedges that were reported as a component of interest expense in our consolidated financial statements.

25

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following tables summarize our non-designated hedges (notional amount in thousands):

March 31, 2017
Non-designated Hedges	Number of Instruments	Notional Amount
Interest Rate Caps	2	$	72,960
Interest Rate Caps	1	C$	18,327
Buy GBP / Sell EUR Forward	1	€	12,857
December 31, 2016
Non-designated Hedges	Number of Instruments	Notional Amount
Interest Rate Caps	3	$	256,875
Interest Rate Caps	2	C$	37,221
Buy GBP / Sell EUR Forward	1	€	12,857

Valuation of Derivative Instruments

The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

	Fair Value of Derivatives in an Asset Position(1) as of				Fair Value of Derivatives in a Liability Position(2) as of
	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	1,174	$	3,268	$	—	$	210
Interest rate derivatives		236		331		—		—
Total derivatives designated as hedging instruments	$	1,410	$	3,599	$	—	$	210
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	14	$	487	$	—	$	—
Interest rate derivatives		—		—		—		—
Total derivatives not designated as hedging instruments	$	14	$	487	$	—	$	—
Total Derivatives	$	1,424	$	4,086	$	—	$	210

(1) Included in other assets in our consolidated balance sheets.

(2) Included in other liabilities in our consolidated balance sheets.

26

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)						Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Hedging Relationships	Three Months Ended March 31,								Three Months Ended March 31,
	2017			2016					2017			2016
Net Investment
Foreign exchange contracts(1)	$	(4,294	)	$	(6,470	)		Interest Expense	$	—		$	—
Cash Flow Hedges
Interest rate derivatives		(105	)		(196	)		Interest Expense		(474	)		(27	)
Total	$	(4,399	)	$	(6,666	)			$	(474	)	$	(27	)

(1)   During the three months ended March 31, 2017 and 2016, we paid net cash settlements of $1.8 million and received $8.2 million on our foreign currency forward contracts, respectively. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.

Credit-Risk Related Contingent Features

We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of March 31, 2017, we were in a net asset position with each such derivative counterparty.

10. EQUITY

Stock and Stock Equivalents

Authorized Capital

As of March 31, 2017, we had the authority to issue up to 300,000,000 shares of stock, consisting of 200,000,000 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. We did not have any shares of preferred stock issued and outstanding as of March 31, 2017.

Class A Common Stock and Deferred Stock Units

Holders of shares of our class A common stock are entitled to vote on all matters submitted to a vote of stockholders and are entitled to receive such dividends as may be authorized by our board of directors and declared by us, in all cases subject to the rights of the holders of shares of outstanding preferred stock, if any.

We also issue restricted class A common stock under our stock-based incentive plans. Refer to Note 13 for additional discussion of these long-term incentive plans. 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.

27

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the movement in our outstanding shares of class A common stock, including restricted class A common stock and deferred stock units:

	Three Months Ended March 31,
Common Stock Outstanding(1)	2017		2016
Beginning balance		94,709,290		93,843,847
Issuance of class A common stock(2)		270		285
Issuance of restricted class A common stock, net		277,815		209,798
Issuance of deferred stock units		6,415		7,322
Ending balance		94,993,790		94,061,252

(1) Includes deferred stock units held by members of our board of directors of 175,442 and 148,843 as of March 31, 2017 and 2016, respectively.

(2) Consists of 270 and 285 shares under our dividend reinvestment program during the three months ended March 31, 2017 and 2016, respectively.

Dividend Reinvestment and Direct Stock Purchase Plan

On March 25, 2014, we adopted a dividend reinvestment and direct stock purchase plan, under which we registered and reserved for issuance, in the aggregate, 10,000,000 shares of class A common stock. Under the dividend reinvestment component of this plan, our class A common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of class A common stock. The direct stock purchase component allows stockholders and new investors, subject to our approval, to purchase shares of class A common stock directly from us. During the three months ended March 31, 2017 and 2016, we issued 270 shares and 285 shares, respectively, of class A common stock under the dividend reinvestment component of the plan. As of March 31, 2017, a total of 9,998,057 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

At the Market Stock Offering Program

On May 9, 2014, we entered into equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $200.0 million of our class A common stock. On July 29, 2016, in connection with filing a new universal shelf registration statement on Form S-3, we entered into amendments to each of the ATM Agreements. Sales of class A common stock made pursuant to the ATM Agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended. Actual sales will depend on a variety of factors including market conditions, the trading price of our class A common stock, our capital needs, and our determination of the appropriate sources of funding to meet such needs. We did not sell any shares of our class A common stock under the ATM Agreements during the three months ended March 31, 2017 and 2016. As of March 31, 2017, sales of our class A common stock with an aggregate sales price of $188.6 million remained available for issuance under the ATM Agreements.

Dividends

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year 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.

28

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

On March 15, 2017, we declared a dividend of $0.62 per share, or $58.8 million, that was paid on April 17, 2017, to stockholders of record as of March 31, 2017. The following table details our dividend activity ($ in thousands, except per share data):

	Three Months Ended March 31,
	2017		2016
Dividends declared per share of common stock	$	0.62	$	0.62
Total dividends declared	$	58,787	$	58,226

Earnings Per Share

We calculate our basic and diluted earnings per share using the two-class method for all periods presented as the unvested shares of our restricted class A common stock qualify as participating securities, as defined by GAAP. These restricted shares have the same rights as our other shares of class A common stock, including participating in any dividends, and therefore have been included in our basic and diluted net income per share calculation. Our Convertible Notes are excluded from dilutive earnings per share as we have the intent and ability to settle these instruments in cash.

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 ($ in thousands, except per share data):

	Three Months Ended March 31,
	2017		2016
Net income(1)	$	51,405	$	57,047
Weighted-average shares outstanding, basic and diluted		94,993,386		94,067,769
Per share amount, basic and diluted	$	0.54	$	0.61

(1)   Represents net income attributable to Blackstone Mortgage Trust, Inc.

Other Balance Sheet Items

Accumulated Other Comprehensive Loss

As of March 31, 2017, total accumulated other comprehensive loss was $52.4 million, primarily representing (i) $99.7 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $47.3 million of net realized and unrealized gains related to changes in the fair value of derivative instruments. As of December 31, 2016, total accumulated other comprehensive loss was $56.2 million, primarily representing (i) $107.5 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $51.3 million of net realized and unrealized gains related to changes in the fair value of derivative instruments.

11. OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our outstanding equity balance, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

During the three months ended March 31, 2017 and 2016, we incurred $9.6 million and $9.5 million, respectively, of management fees payable to our Manager. In addition, during the three months ended March 31, 2017 and 2016, we incurred $3.3 million and $4.2 million, respectively, of incentive fees payable to our Manager.

As of March 31, 2017 and December 31, 2016 we had accrued management and incentive fees payable to our Manager of $12.9 million and $12.8 million, respectively.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended March 31,
	2017		2016
Professional services	$	1,017	$	890
Operating and other costs		445		869
Subtotal		1,462		1,759
Non-cash and CT Legacy Portfolio compensation expenses
Management incentive awards plan - CTOPI(1)		—		170
Management incentive awards plan - CT Legacy Partners(2)		—		129
Restricted class A common stock earned		5,813		4,593
Director stock-based compensation		94		94
Subtotal		5,907		4,986
Total BXMT expenses		7,369		6,745
Other expenses		59		50
Total general and administrative expenses	$	7,428	$	6,795

(1) Represents the portion of CTOPI promote revenue recorded under compensation awards. See Note 4 for further discussion.

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

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 our subsidiary, CT Legacy Partners (subject to certain caps and priority distributions). During the three months ended March 31, 2016 we recognized $129,000 of expenses under the CT Legacy Partners incentive plan. Our investment in CT Legacy Partners was substantially realized as of December 31, 2016.

12. INCOME TAXES

We elected 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 March 31, 2017 and December 31, 2016, we were in compliance with all REIT requirements.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

During the three months ended March 31, 2017 and 2016, we recorded a current income tax provision of $89,000 and $241,000, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes. We did not have any deferred tax assets or liabilities as of March 31, 2017 or December 31, 2016.

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, is generally limited to $2.0 million per annum by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust. As of December 31, 2016, we had estimated NOLs of $159.0 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.

As of March 31, 2017, tax years 2013 through 2016 remain subject to examination by taxing authorities.

13. STOCK-BASED INCENTIVE PLANS

We do not have any employees as we are externally managed by our Manager. However, as of March 31, 2017, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through the issuance of stock-based instruments.

We had stock-based incentive awards outstanding under seven benefit plans as of March 31, 2017: (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; (iv) our 2013 stock incentive plan, or 2013 Plan; (v) our 2013 manager incentive plan, or 2013 Manager Plan; (vi) our 2016 stock incentive plan, or 2016 Plan; and (vii) our 2016 manager incentive plan, or 2016 Manager Plan. We refer to our 1997 Plan, our 2007 Plan, our 2011 Plan, our 2013 Plan, and our 2013 Manager Plan, collectively, as our Expired Plans and we refer to our 2016 Plan and 2016 Manager Plan, collectively, 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 2,400,000 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 March 31, 2017, there were 1,471,955 shares available under the Current Plans.

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2016		1,309,995		$	28.68
Granted		280,938			30.54
Vested		(111,699	)		27.77
Forfeited		(3,123	)		27.37
Balance as of March 31, 2017		1,476,111		$	29.11

These shares generally vest in installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of the Current Plans. The 1,476,111 shares of restricted class A common stock outstanding as of March 31, 2017 will vest as follows: 636,317 shares will vest in 2017; 537,562 shares will vest in 2018; and 302,232 shares will vest in 2019. As of March 31, 2017, total unrecognized compensation cost relating to nonvested share-based compensation arrangements was $45.7 million based on the March 31, 2017 closing price of our class A common stock of $30.96. This cost is expected to be recognized over a weighted average period of 1.2 years from March 31, 2017.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

14. FAIR VALUES

Assets and Liabilities Measured at Fair Value

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	March 31, 2017								December 31, 2016
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets
Derivatives	$	—	$	1,424	$	—	$	1,424	$	—	$	4,086	$	—	$	4,086
Liabilities
Derivatives	$	—	$	—	$	—	$	—	$	—	$	210	$	—	$	210

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):

	Three Months Ended March 31,
	2017		2016(1)
January 1,	$	—	$	12,561
Proceeds from investment realizations		—		(2,406	)
Adjustments to fair value included in earnings
Gain on investments at fair value		—		66
March 31,	$	—	$	10,221

(1) All assets measured at fair value on a recurring basis using Level 3 inputs were included as a component of other assets in the consolidated Balance Sheets.

Refer to Note 2 for further discussion regarding fair value measurement.

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 fair value of the financial instruments described in Note 2 ($ in thousands):

	March 31, 2017						December 31, 2016
	Carrying		Face		Fair		Carrying		Face		Fair
	Amount		Amount		Value		Amount		Amount		Value
Financial assets
Cash and cash equivalents	$	64,275	$	64,275	$	64,275	$	75,567	$	75,567	$	75,567
Loans receivable, net		8,721,768		8,759,696		8,765,688		8,692,978		8,727,218		8,733,784
Financial liabilities
Secured debt agreements, net		5,760,191		5,776,165		5,776,165		5,716,354		5,731,626		5,731,626
Loan participations sold, net		354,131		355,583		355,583		348,077		349,633		349,633
Convertible notes, net		167,475		172,500		194,870		166,762		172,500		191,763

Estimates of fair value for cash and cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

15. TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2017, and will be automatically renewed for a one-year term each anniversary thereafter unless earlier terminated.

As of March 31, 2017 and December 31, 2016, our consolidated balance sheet included $12.9 million and $12.8 million of accrued management and incentive fees payable to our Manager, respectively. During the three months ended March 31, 2017, we paid $12.8 million, of management and incentive fees to our Manager, compared to $14.4 million during the same period of 2016. In addition, during the three months ended March 31, 2017, we reimbursed our Manager for $93,000 of expenses incurred on our behalf compared to $320,000 during the same period of 2016. During the three months ended March 31, 2016, CT Legacy Partners made aggregate preferred distributions of $224,000 to an affiliate of our Manager.

As of March 31, 2017, our Manager held 719,903 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $20.9 million. The shares vest in installments over three years from the date of issuance. During the three months ended March 31, 2017 and 2016, we recorded non-cash expense related to shares held by our Manager of $2.9 million and $2.1 million, respectively. We did not issue any shares of restricted class A common stock to our Manager during the three months ended March 31, 2017 or 2016, respectively. Refer to Note 13 for further details.

During the three months ended March 31, 2017, we originated two loans whereby each respective borrower engaged an affiliate of our Manager to act as title insurance agent in connection with each transaction. We did not incur any expenses or receive any revenues as a result of this transaction. We did not have any similar transactions during the three months ended March 31, 2016.

During the three months ended March 31, 2017 and 2016, we incurred $88,000 and $90,000, respectively, of expenses for various administrative and capital market data services to third-party service providers that are affiliates of our Manager.

16. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of March 31, 2017, we had unfunded commitments of $1.1 billion related to 58 loans receivable, which amounts will generally be funded to finance lease-related or capital expenditures by our borrowers. These future commitments will expire variously over the next four years.

Litigation

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2017, we were not involved in any material legal proceedings.

Board of Directors’ Compensation

As of March 31, 2017, of the eight members of our board of directors, our five independent directors are entitled to annual compensation of $125,000 each. The other three board members, including our chairman and our chief executive officer, serve as directors without compensation for such service. As of March 31, 2017, the annual compensation for our directors was paid 40% in cash and 60% in the form of deferred stock units. In addition, the member of our board of directors that serves as the chairperson of the audit committee of our board of directors receives additional annual cash compensation of $12,000. Compensation to the board of directors is payable in four equal quarterly installments.

In April 2017, our board of directors approved changes to the compensation of our five independent directors which will be effective as of the beginning of the third quarter of 2017. The other three board members, including our chairman and our chief executive officer, will continue to serve as directors without compensation for such service. These changes will increase the annual compensation of our directors from $125,000 to $175,000 and will be paid $75,000 in cash and $100,000 in the form of deferred stock units. In addition, the chair of our audit committee will receive an increase in the additional annual cash compensation from $12,000 to $20,000, the other members of our audit committee will receive additional annual cash compensation of $10,000, and the chairs of each of our compensation and corporate governance committees will receive additional annual cash compensation of $10,000.

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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, 2016 and elsewhere in this quarterly report on Form 10-Q.

Introduction

Blackstone Mortgage Trust is a real estate finance company that originates and purchases senior loans collateralized by properties in North America and Europe. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust, or REIT, 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 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 an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

I. Key Financial Measures and Indicators

As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Core Earnings, and book value per share. For the three months ended March 31, 2017 we recorded earnings per share of $0.54, declared a dividend of $0.62 per share, and reported $0.61 per share of Core Earnings. In addition, our book value per share as of March 31, 2017 was $26.28. As further described below, Core Earnings is a measure that is not prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. We use Core Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan activity and operations.

Earnings Per Share and Dividends Declared

The following table sets forth the calculation of basic and diluted net income per share and dividends per share ($ in thousands, except per share data):

	Three Months Ended
	March 31, 2017		December 31, 2016
Net income (1)	$	51,405	$	53,375
Weighted-average shares outstanding, basic and diluted		94,993,386		94,455,518
Net income per share, basic and diluted	$	0.54	$	0.57
Dividends per share	$	0.62	$	0.62

(1) Represents net income attributable to Blackstone Mortgage Trust, Inc.

Core Earnings

Core Earnings is a non-GAAP measure, which we define as GAAP net income (loss), including realized gains and losses not otherwise included in GAAP net income (loss), and excluding (i) net income (loss) attributable to our CT Legacy Portfolio, (ii) non-cash equity compensation expense, (iii) depreciation and amortization, (iv) unrealized gains (losses), and (v) certain non-cash items. Core Earnings may also be adjusted from time to time to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as determined by our Manager, subject to approval by a majority of our independent directors.

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We believe that Core Earnings provides meaningful information to consider in addition to our net income and cash flow from operating activities determined in accordance with GAAP. This adjusted measure helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. Although, according to the management agreement between our Manager and us, or our Management Agreement, we calculate the incentive and base management fees due to our Manager using Core Earnings before incentive fees expense, we report Core Earnings after incentive fee expense, as we believe this is a more meaningful presentation of the economic performance of our class A common stock.

Core Earnings does not represent net income or cash generated from operating activities and should not be considered as an alternative to GAAP net income, or an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. In addition, our methodology for calculating Core Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Core Earnings may not be comparable to the Core Earnings reported by other companies.

The following table provides a reconciliation of Core Earnings to GAAP net income ($ in thousands, except per share data):

	Three Months Ended
	March 31, 2017			December 31, 2016
Net income(1)	$	51,405		$	53,375
CT Legacy Portfolio net income		—			(502	)
Non-cash compensation expense		5,907			4,955
GE purchase discount accretion adjustment(2)		(216	)		(320	)
Other items		1,024			742
Core Earnings	$	58,120		$	58,250
Weighted-average shares outstanding, basic and diluted		94,993,386			94,455,518
Core Earnings per share, basic and diluted	$	0.61		$	0.62

(1) Represents net income attributable to Blackstone Mortgage Trust.

(2) Adjustment in respect of the deferral in Core Earnings of the accretion of a total $9.1 million of purchase discount attributable to a certain pool of GE portfolio loans pending the repayment of those loans.

Book Value Per Share

The following table calculates our book value per share ($ in thousands, except per share data):

	March 31, 2017		December 31, 2016
Stockholders’ equity	$	2,495,982	$	2,493,603
Shares
Class A common stock		94,818,348		94,540,263
Deferred stock units		175,442		169,027
Total outstanding		94,993,790		94,709,290
Book value per share	$	26.28	$	26.33

II. Loan Portfolio

During the quarter ended March 31, 2017, we originated $997.7 million of loans. Loan fundings during the quarter totaled $725.2 million, including $22.9 million of non-consolidated senior interests. Loan repayments during the quarter totaled $780.8 million, including $85.1 million of non-consolidated senior interests. We generated interest income of $118.5 million and incurred interest expense of $46.7 million during the quarter, which resulted in $71.8 million of net interest income during the three months ended March 31, 2017.

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Portfolio Overview

The following table details our loan origination activity ($ in thousands):

	Three Months Ended			Three Months Ended
	March 31, 2017			December 31, 2016
Loan originations(1)	$	997,710		$	825,792
Loan fundings(2)	$	725,230		$	888,058
Loan repayments(3)		(780,813	)		(476,113	)
Total net (repayments) fundings	$	(55,583	)	$	411,945

(1) Includes new loan originations and additional commitments made under existing loans.

(2) Loan fundings during the three months ended March 31, 2017 and December 31, 2016 include $22.9 million and $36.8 million, respectively, of additional fundings under related non-consolidated senior interests.

(3) Loan repayments during the three months ended March 31, 2017 and December 31, 2016 include $85.1 million and $44.2 million, respectively, of additional repayments under related non-consolidated senior interests.

The following table details overall statistics for our loan portfolio as of March 31, 2017 ($ in thousands):

				Total Loan Exposure(1)
	Balance Sheet Portfolio			Total Loan Portfolio			Floating Rate Loans			Fixed Rate Loans
Number of loans		103			103			88			15
Principal balance	$	8,759,696		$	9,733,377		$	8,847,683		$	885,694
Net book value	$	8,721,768		$	9,691,875		$	8,806,849		$	885,026
Unfunded loan commitments(2)	$	1,149,842		$	1,223,322		$	1,223,322		$	—
Weighted-average cash coupon(3)		5.15	%		4.97	%		L + 4.06	%		4.82	%
Weighted-average all-in yield(3)		5.57	%		5.43	%		L + 4.48	%		5.69	%
Weighted-average maximum maturity (years)(4)		3.3			3.4			3.3			4.2
Loan to value (LTV)(5)		61.6	%		60.9	%		60.1	%		69.2	%

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests that are not included in our balance sheet portfolio.
(2)	Unfunded commitments will primarily be funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments will be funded over the term of each loan, subject in certain cases to an expiration date.
(3)	As of March 31, 2017, our floating rate loans were indexed to various benchmark rates, with 85% of floating rate loans by principal balance indexed to USD LIBOR based on total loan exposure. In addition, $217.8 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.22%, as of March 31, 2017. In addition to cash coupon, all-in yield includes the amortization of deferred origination fees, loan origination costs, purchase discounts, and accrual of both extension and exit fees. Cash coupon and all-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.
(4)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of March 31, 2017, based on total loan exposure, 62% of our loans were subject to yield maintenance or other prepayment restrictions and 38% were open to repayment by the borrower without penalty.
(5)	Based on LTV as of the dates loans were originated or acquired by us.

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The charts below detail the geographic distribution and types of properties securing these loans, as of March 31, 2017:

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

Asset Management

We actively manage the investments in our loan portfolio and exercise the rights afforded to us as a lender, including 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” and “5,” from less risk to greater risk. The following table allocates the principal balance and total loan exposure balances based on our internal risk ratings ($ in thousands):

	March 31, 2017
Risk Rating	Number of Loans	Net Book Value		Total Loan Exposure(1)
1	6	$	303,849	$	304,170
2	47		3,670,002		3,679,119
3	49		4,727,107		5,729,339
4	1		20,810		20,749
5	—		—		—
	103	$	8,721,768	$	9,733,377

(1) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of March 31, 2017.

The weighted-average risk rating of our total loan exposure was 2.6 and 2.5 as of March 31, 2017 and December 31, 2016, respectively. The increase in weighted-average risk rating was primarily driven by repayments of loans with lower risk ratings, and not rating downgrades in the existing portfolio.

Portfolio Financing

Our portfolio financing arrangements include credit facilities, the GE portfolio acquisition facility, asset-specific financings, a revolving credit agreement, loan participations sold, and non-consolidated senior interests.

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The following table details our portfolio financing ($ in thousands):

	Portfolio Financing
	Outstanding Principal Balance
	March 31, 2017		December 31, 2016
Credit facilities	$	3,958,064	$	3,572,837
GE portfolio acquisition facility		1,250,524		1,479,582
Asset-specific financings		567,577		679,207
Revolving credit agreement		—		—
Loan participations sold		355,583		349,633
Non-consolidated senior interests		973,681		1,029,516
Total portfolio financing	$	7,105,429	$	7,110,775

Credit Facilities

The following table details our credit facilities ($ in thousands):

	March 31, 2017
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,895,248	$	1,468,184	$	1,238,872	$	229,312
MetLife		1,000,000		1,104,478		866,114		866,114		—
Bank of America		750,000		813,305		641,066		641,066		—
Citibank(4)		766,300		509,582		393,933		295,777		98,156
Deutsche Bank		500,000		374,119		278,851		278,851		—
Morgan Stanley(5)		627,500		329,767		260,623		220,969		39,654
Société Générale(6)		426,080		281,623		220,915		214,678		6,237
JP Morgan(7)		500,000		359,098		277,914		201,737		76,177
	$	6,569,880	$	5,667,220	$	4,407,600	$	3,958,064	$	449,536

(1)	Maximum facility size represents the largest amount of borrowings available under a given facility once sufficient collateral assets have been approved by the lender and pledged by us.
(2)	Represents the principal balance of the collateral assets.
(3)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(4)	As of March 31, 2017, the Citibank maximum facility size was composed of a general $500.0 million facility size denominated in U.S. Dollars plus a general €250.0 million ($266.3 million) facility size that contemplated British Pound Sterling and Euro borrowings.
(5)	As of March 31, 2017, the Morgan Stanley maximum facility size was composed of a £500.0 million facility size that was translated to $627.5 million. Borrowings denominated in British Pound Sterling and Euro are contemplated under this facility.
(6)	As of March 31, 2017, the Société Générale maximum facility size was composed of a €400.0 million facility size that was translated to $426.1 million. Borrowings denominated in U.S. Dollars, British Pound Sterling, and Euro are contemplated under this facility.
(7)	As of March 31, 2017, the JP Morgan maximum facility size was composed of a general $500.0 million facility size, under which U.S. Dollars and British Pound Sterling borrowings are contemplated.

The weighted-average outstanding balance of our credit facilities was $3.5 billion for the three months ended March 31, 2017. As of March 31, 2017, we had aggregate borrowings of $4.0 billion outstanding under our credit facilities, with a weighted-average cash coupon of LIBOR plus 1.90% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.11% per annum, and a weighted-average advance rate of 78.9%. As of March 31, 2017, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

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GE Portfolio Acquisition Facility

During the second quarter of 2015, concurrently with our acquisition of the GE portfolio, we entered into an agreement with Wells Fargo to provide us with secured financing for the acquired portfolio. As of March 31, 2017, this facility provided for $1.4 billion of financing, of which $1.3 billion was outstanding and an additional $171.7 million was available to finance future loan fundings in the GE portfolio. The GE portfolio acquisition facility is non-revolving and consists of a single master repurchase agreement providing for asset-specific borrowings for each collateral asset.

The asset-specific borrowings under the GE portfolio acquisition facility were advanced at a weighted-average rate of 80% of our purchase price of the collateral assets and are repaid pro rata from collateral asset repayment proceeds. The asset-specific borrowings are currency matched to the collateral assets and accrue interest at a rate equal to the sum of (i) the applicable base rate plus (ii) a margin of 1.75%, which will increase to 1.80% and 1.85% in year four and year five, respectively. As of March 31, 2017, those borrowings were denominated in U.S. Dollars, Canadian Dollars, and British Pounds Sterling. The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options. We guarantee obligations under the GE portfolio acquisition facility in an amount equal to the greater of (i) 25% of outstanding asset-specific borrowings, and (ii) $250.0 million. We had outstanding asset-specific borrowings of $1.3 billion and $1.5 billion under the GE portfolio acquisition facility as of March 31, 2017 and December 31, 2016, respectively.

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Asset-Specific Financings

The following table details statistics for our asset-specific financings ($ in thousands):

	March 31, 2017
		Principal		Book		Wtd. Avg.					Wtd. Avg.
Lender	Count	Balance		Value		Yield/Cost(1)			Guarantee(2)		Term(3)
JP Morgan(4)
Collateral assets	1	$	286,887	$	285,955		L+3.88	%		n/a		Jan. 2020
Financing provided	1		233,679		233,413		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets	2		204,617		204,548		L+4.40	%		n/a		Nov. 2020
Financing provided	2		161,163		161,123		L+2.42	%		40,291		Nov. 2020
Bank of the Ozarks
Collateral assets	2		169,986		167,510		L+6.51	%		n/a		June 2020
Financing provided	2		128,969		128,045		L+3.83	%		—		June 2020
Wells Fargo
Collateral assets	1		62,523		62,302		L+6.05	%		n/a		Dec. 2019
Financing provided	1		43,766		43,609		L+3.14	%		8,753		Dec. 2019
Total
Collateral assets	6	$	724,013	$	720,315		L+4.83	%		n/a
Financing provided	6	$	567,577	$	566,190		L+2.58	%	$	165,883

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

Refer to Note 6 to our consolidated financial statements for additional terms and details of our secured debt agreements, including certain financial covenants.

Revolving Credit Agreement

During the second quarter of 2016, we entered into a $125.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to six months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The initial maturity date of the facility is April 4, 2018 and is subject to two one-year extension options, exercisable at our option.

During the three months ended March 31, 2017, we had no borrowings under the revolving credit agreement and we recorded interest expense of $240,000, including $126,000 of amortization of deferred fees and expenses.

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Loan Participations Sold

The following table details statistics for our loan participations sold ($ in thousands):

March 31, 2017

Principal

Book

Wtd. Avg.

Wtd. Avg.

Loan Participations Sold

Count

Balance

Value

Yield/Cost(1)

Guarantee(2)

Term

Total loan

1

$

426,700

$

423,575

L+4.48

%

n/a

Dec. 2019

Senior participation(3)(4)

1

355,583

354,131

L+2.72

%

$

30,120

Dec. 2019

(1)	Our floating rate loans and related liabilities were indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	Other than one instance where we entered into a related guarantee agreement for £24.0 million ($30.1 million as of March 31, 2017), our loan participations sold are non-recourse to us.
(3)	During the three months ended March 31, 2017, we recorded $2.6 million of interest expense related to our loan participations sold, of which $2.5 million was paid in cash.
(4)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $1.5 million as of March 31, 2017.

Refer to Note 7 to our consolidated financial statements for additional details of our loan participations sold.

Non-Consolidated Senior Interests

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. These non-consolidated senior interests provide structural leverage for our net investments which are reflected in the form of mezzanine loans or other subordinate interests on our balance sheet and in our results of operations. The following table details the subordinate interests retained on our balance sheet and the related non-consolidated senior interests as of March 31, 2017 ($ in thousands):

March 31, 2017

Principal

Book

Wtd. Avg.

Wtd. Avg.

Non-Consolidated Senior Interests

Count

Balance

Value

Yield/Cost(1)

Guarantee

Term

Total loan

3

$

1,187,070

n/a

5.85

%

n/a

May 2021

Senior participation

3

973,681

n/a

4.25

%

n/a

May 2021

(1)   Our floating rate loans and related liabilities were indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, all-in yield/cost includes the amortization of deferred fees / financing costs.

Floating Rate Portfolio

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of March 31, 2017, 91% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. As of March 31, 2017, the remaining 9% of our loans by total loan exposure earned a fixed rate of interest, but are financed with liabilities that pay interest at floating rates, which resulted in a negative correlation to rising interest rates to the extent of our financing. In certain instances where we have financed fixed rate assets with floating rate liabilities, we have purchased interest rate swaps or caps to limit our exposure to increases in interest rates on such liabilities.

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Our liabilities are generally currency and index-matched to each collateral asset, resulting in a net exposure to movements in benchmark rates that varies by currency silo based on the relative proportion of floating rate assets and liabilities. The following table details our loan portfolio’s net exposure to interest rates by currency as of March 31, 2017 ($/£/€ /C$ in thousands):

	USD			GBP			EUR		CAD
Floating rate loans(1)	$	7,537,464		£	730,547		€	47,836	C$	456,044
Floating rate debt(1)(2)(3)		(5,612,114	)		(571,016	)		—		(512,395	)
Net floating rate exposure(4)	$	1,925,350		£	159,531		€	47,836	C$	(56,351	)

(1)	Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each case in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate.
(2)	Includes borrowings under secured debt agreements, loan participations sold, and non-consolidated senior interests.
(3)	Liabilities balance includes two interest rate swaps totaling C$17.3 million ($13.0 million as of March 31, 2017) that are used to hedge a portion of our fixed rate debt.
(4)	In addition, we have interest rate caps of $706.9 million, £15.1 million, and C$323.3 million to limit our exposure to increases in interest rates.

Convertible Notes

In November 2013, we issued $172.5 million of 5.25% convertible senior notes due on December 1, 2018, or the Convertible Notes. The Convertible Notes issuance costs, including underwriter discounts, are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cost of the Convertible Notes is 5.87%.

Refer to Notes 2 and 8 to our consolidated financial statements for additional discussion of our Convertible Notes.

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III. Our Results of Operations

Operating Results

The following table sets forth information regarding our consolidated results of operations ($ in thousands, except per share data):

	Three Months Ended March 31,					2017 vs 2016
	2017		2016			$
Income from loans and other investments
Interest and related income	$	118,517	$	123,025		$	(4,508	)
Less: Interest and related expenses		46,674		45,381			1,293
Income from loans and other investments, net		71,843		77,644			(5,801	)
Other expenses
Management and incentive fees		12,921		13,613			(692	)
General and administrative expenses		7,428		6,795			633
Total other expenses		20,349		20,408			(59	)
Gain on investments at fair value		—		66			(66	)
Income from equity investment in unconsolidated subsidiary		—		138			(138	)
Income before income taxes		51,494		57,440			(5,946	)
Income tax provision		89		241			(152	)
Net income		51,405		57,199			(5,794	)
Net income attributable to non-controlling interests		—		(152	)		152
Net income attributable to Blackstone Mortgage Trust, Inc.	$	51,405	$	57,047		$	(5,642	)
Net income per share - basic and diluted	$	0.54	$	0.61		$	(0.07	)
Dividends declared per share	$	0.62	$	0.62		$	0.00

Income from loans and other investments, net

Income from loans and other investments, net decreased $5.8 million during the three months ended March 31, 2017 compared to the corresponding period in 2016. The decrease was primarily due to the decrease in the principal balance of our loan portfolio, which decreased by $586.6 million as of March 31, 2017 compared with March 31, 2016.

Other expenses

Other expenses are composed of management and incentive fees payable to our Manager and general and administrative expenses. Other expenses decreased by $59,000 during the three months ended March 31, 2017 compared to the corresponding period in 2016 due to (i) a decrease of $778,000 of incentive fees payable to our Manager, (ii) a decrease of $311,000 of general operating expenses, and (iii) a decrease of $279,000 of compensation expenses associated with our CT Legacy Portfolio incentive plans. These were partially offset by $1.2 million of additional non-cash restricted stock amortization related to shares awarded under our long-term incentive plans.

Gain on investments at fair value

During three months ended March 31, 2016, we recognized $66,000 of net gains on investments held by CT Legacy Partners. Our investment in CT Legacy Partners was substantially realized as of December 31, 2016.

Income from equity investment in unconsolidated subsidiary

During the three months ended March 31, 2016, we recognized $138,000 of promote income from CTOPI. The investment in CTOPI was fully realized as of December 31, 2016.

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Net income attributable to non-controlling interests

During the three months ended March 31, 2016, we recognized $152,000 of net income attributable to non-controlling interests. The non-controlling interests represent the portion of CT Legacy Partners net income that is not owned by us. Our investment in CT Legacy Partners was substantially realized as of December 31, 2016.

Dividends per share

During the three months ended March 31, 2017, we declared a dividend of $0.62 per share, or $58.8 million, which was paid on April 17, 2017 to common stockholders of record as of March 31, 2017. During the three months ended March 31, 2016, we declared a dividend of $0.62 per share, or $58.2 million.

IV. Liquidity and Capital Resources

Capitalization

We have capitalized our business to date through, among other things, the issuance and sale of shares of our class A common stock, borrowings under secured debt agreements, and the issuance and sale of Convertible Notes. As of March 31, 2017, we had 94,818,348 shares of our class A common stock outstanding representing $2.5 billion of stockholders’ equity, $5.8 billion of outstanding borrowings under secured debt agreements, and $172.5 million of Convertible Notes outstanding.

As of March 31, 2017, our secured debt agreements consisted of credit facilities with an outstanding balance of $4.0 billion, the GE portfolio acquisition facility with an outstanding balance of $1.3 billion, and $567.6 million of asset-specific financings. We also finance our business through the sale of loan participations and non-consolidated senior interests. As of March 31, 2017 we had $355.6 million of loan participations sold and $1.0 billion of non-consolidated senior interests outstanding.

See Notes 6, 7, and 8 to our consolidated financial statements for additional details regarding our secured debt agreements, loan participations sold, and Convertible Notes.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents our debt-to-equity ratio and total leverage ratio:

	March 31, 2017		December 31, 2016
Debt-to-equity ratio(1)		2.4x		2.3x
Total leverage ratio(2)		2.9x		2.9x

(1)	Represents (i) total outstanding secured debt agreements and convertible notes, less cash, to (ii) total stockholders’ equity, in each case at period end.
(2)	Represents (i) total outstanding secured debt agreements, convertible notes, loan participations sold, and non-consolidated senior interests, less cash, to (ii) total stockholders’ equity, in each case at period end.

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents, available borrowings under our credit facilities and revolving credit agreement, and net receivables from servicers related to loan repayments which are set forth in the following table ($ in thousands):

	March 31, 2017		December 31, 2016
Cash and cash equivalents	$	64,275	$	75,567
Available borrowings under secured debt agreements		562,752		541,743
Loan principal payments held by servicer, net(1)		42,715		670
	$	669,742	$	617,980

(1)   Represents loan principal payments held by our third-party servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle, net of the related secured debt balance.

In addition to our current sources of liquidity, we have access to liquidity through public offerings of debt and equity securities. To facilitate such offerings, in July 2016, we filed a shelf registration statement with the Securities and Exchange Commission, or the SEC, that is effective for a term of three years and expires in July 2019. The amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit on the amount of securities we may issue. The securities covered by this registration statement include (i) class A common stock, (ii) preferred stock, (iii) debt securities, (iv) depositary shares representing preferred stock, (v) warrants, (vi) subscription rights, (vii) purchase contracts, and (viii) units consisting

44

of one or more of such securities or any combination of these securities. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

We may also access liquidity through a dividend reinvestment plan and direct stock purchase plan, under which 9,998,057 shares of class A common stock were available for issuance as of March 31, 2017, and our at-the-market stock offering program, pursuant to which we may sell, from time to time, up to $188.6 million of additional shares of our class A common stock as of March 31, 2017. Refer to Note 10 to our consolidated financial statements for additional details.

Our existing loan portfolio also provides us with liquidity as loans are repaid or sold, in whole or in part, and the proceeds from such repayments become available for us to reinvest.

Liquidity Needs

In addition to our ongoing loan origination activity, our primary liquidity needs include interest and principal payments under our $5.8 billion of outstanding borrowings under secured debt agreements, our Convertible Notes, our unfunded loan commitments, dividend distributions to our stockholders, and operating expenses.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of March 31, 2017 were as follows ($ in thousands):

			Payment Timing
	Total		Less Than		1 to 3		3 to 5		More Than
	Obligation		1 Year		Years		Years		5 Years
Unfunded loan commitments(1)	$	1,149,842	$	247,100	$	588,947	$	313,795	$	—
Principal payments under secured debt agreements(2)		5,776,165		2,318,131		3,114,583		343,451		—
Principal payments on convertible notes		172,500		—		172,500		—		—
Interest payments(2)(3)		271,708		157,621		111,254		2,833		—
Total(4)	$	7,370,215	$	2,722,852	$	3,987,284	$	660,079	$	—

(1)	The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.
(2)	The allocation of our secured debt agreements for both principal and interest payments is based on the current maturity date of each individual borrowing under the respective agreement.
(3)	Represents interest payments on our secured debt agreements and convertible notes. Future interest payment obligations are estimated assuming the amounts outstanding and the interest rates in effect as of March 31, 2017 will remain constant into the future. This is only an estimate as actual amounts borrowed and rates will vary over time.
(4)	Total does not include $355.6 million of loan participations sold and $1.0 billion of non-consolidated senior interests as the satisfaction of these liabilities will not require cash outlays from us.

We are also required to settle our foreign currency forward contracts and interest rate swaps with our derivative counterparties upon maturity which, depending on foreign exchange and interest rate movements, may result in cash received from or due to the respective counterparty. The table above does not include these amounts as they are not fixed and determinable. Refer to Note 9 to our consolidated financial statement for details regarding our derivative contracts.

We are required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses pursuant to our Management Agreement. The table above does not include the amounts payable to our Manager under our Management Agreement as they are not fixed and determinable. Refer to Note 11 to our consolidated financial statements for additional terms and details of the fees payable under our Management Agreement.

As a REIT, we generally must distribute substantially all of our net taxable income to shareholders in the form of dividends to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Our taxable income does not necessarily equal our net income as calculated in accordance with GAAP, or our Core Earnings as described above.

45

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands):

	Three Months Ended March 31,
	2017			2016
Cash flows provided by operating activities	$	57,374		$	65,781
Cash flows used in investing activities		(124,452	)		(146,007	)
Cash flows provided by financing activities		55,202			91,749
Net (decrease) increase in cash and cash equivalents	$	(11,876	)	$	11,523

We experienced a net decrease in cash of $11.9 million for the three months ended March 31, 2017, compared to a net increase of $11.5 million for the three months ended March 31, 2016. During the three months ended March 31, 2017, we borrowed a net $117.7 million under our secured debt agreements and received $567.3 million of proceeds from loan principal collections. We used the proceeds from our debt and equity financing activities to fund $702.4 million of new loans during the three months ended March 31, 2017.

Refer to Notes 6 and 7 to our consolidated financial statements for additional discussion of our secured debt obligations and participations sold. Refer to Note 3 to our consolidated financial statements for further discussion of our loan activity.

V. Other Items

Income Taxes

We elected 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 March 31, 2017 and December 31, 2016, we were in compliance with all REIT requirements.

Refer to Note 12 to our consolidated financial statements for additional discussion of our income taxes.

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 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 SEC on February 14, 2017.

Refer to Note 2 to our consolidated financial statements for the description of our significant accounting policies.

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VI. Loan Portfolio Details

The following table provides details of our loan portfolio, on a loan-by-loan basis, as of March 31, 2017 ($ in millions):

	Loan Type(1)	Origination Date(2)	Total Loan(3)		Principal Balance(3)		Net Book Value		Cash Coupon(4)		All-in Yield(4)		Maximum Maturity(5)	Location	Property Type	Loan Per SQFT /Unit /Key	LTV(2)		Risk Rating
1	Senior loan(3)	5/15/2015	$	590.0		$     504.6	$	85.2		L + 4.25%		L + 4.76%	5/15/2020	Miami	Retail	673 / sqft		36%	3
2	Senior loan(3)	8/6/2015		462.9		462.9		83.5		4.48%		5.81%	10/29/2022	Diversified - EUR	Other	n/a		71%	3
3	Senior loan	5/22/2014		426.7		426.7		423.6		L + 4.20%		L + 4.48%	12/31/2019	Diversified - UK	Hotel	115,951 / key		59%	3
4	Senior loan	5/1/2015		320.3		294.5		293.4		L + 3.45%		L + 3.83%	5/1/2020	New York	Office	376 / sqft		68%	3
5	Senior loan	1/7/2015		315.0		286.9		286.0		L + 3.50%		L + 3.88%	1/9/2020	New York	Office	246 / sqft		53%	2
6	Senior loan	6/4/2015		260.0		260.0		263.1		L + 4.34%		L + 4.20%	8/12/2020	Diversified - CAN	Hotel	40,153 / key		54%	2
7	Senior loan	3/31/2017		258.4		241.5		238.9		L + 4.15%		L + 4.54%	4/9/2022	Maui	Hotel	318,182 / key		75%	3
8	Senior loan(3)	6/30/2015		222.7		219.6		43.5		L + 4.75%		L + 5.18%	7/9/2020	San Francisco	Condo	877 / sqft		66%	3
9	Senior loan	6/23/2015		223.5		213.8		213.2		L + 3.65%		L + 4.00%	10/1/2020	Washington DC	Office	239 / sqft		72%	2
10	Senior loan	7/31/2014		215.0		198.3		198.3		L + 3.50%		L + 3.56%	8/9/2019	Chicago	Office	262 / sqft		64%	2
11	Senior loan	8/19/2016		200.0		187.5		186.9		L + 3.64%		L + 4.10%	9/9/2021	New York	Office	572 / sqft		69%	3
12	Senior loan	8/3/2016		275.9		185.6		183.4		L + 4.66%		L + 5.19%	8/9/2021	New York	Office	255 / sqft		57%	3
13	Senior loan	4/15/2016		200.0		183.1		182.0		L + 4.25%		L + 4.86%	5/9/2021	New York	Office	172 / sqft		40%	3
14	Senior loan	2/25/2014		181.0		181.0		180.5		L + 4.75%		L + 5.07%	3/9/2019	Diversified - US	Hotel	95,113 / key		58%	2
15	Senior loan	12/22/2016		204.5		171.2		169.4		L + 3.50%		L + 4.07%	1/9/2022	New York	Office	241 / sqft		66%	3
16	Senior loan	8/17/2016		187.0		169.4		167.9		L + 3.75%		L + 4.13%	9/9/2021	San Francisco	Office	493 / sqft		65%	3
17	Senior loan	6/3/2016		160.0		160.0		160.0		L + 4.42%		L + 4.42%	6/9/2021	Los Angeles	Office	86 / sqft		41%	3
18	Senior loan	3/8/2016		181.2		154.3		153.0		L + 3.55%		L + 3.90%	3/9/2021	Orange County	Office	193 / sqft		52%	3
19	Senior loan	2/17/2017		150.0		140.0		138.6		L + 4.65%		L + 5.04%	3/9/2022	Honolulu	Hotel	224,719 / key		65%	3
20	Senior loan	10/30/2013		140.0		140.0		139.7		L + 4.38%		L + 4.54%	9/9/2020	San Francisco	Hotel	215,716 / key		66%	2
21	Senior loan	10/5/2016		145.5		133.7		132.5		L + 4.35%		L + 4.84%	10/9/2021	Diversified - US	Hotel	50,413 / key		61%	2
22	Senior loan	1/30/2014		133.4		133.4		133.1		L + 4.30%		L + 5.32%	12/1/2017	New York	Hotel	212,341 / key		38%	2
23	Senior loan	12/9/2014		159.6		133.0		133.0		L + 3.80%		L + 3.80%	12/9/2019	Diversified - US	Office	79 / sqft		65%	2
24	Senior loan	10/26/2016		123.5		123.5		122.4		L + 4.20%		L + 4.56%	11/9/2021	Oakland	Office	126 / sqft		72%	2
25	Senior loan	3/4/2014		133.0		112.6		112.6		L + 4.00%		L + 5.90%	3/4/2018	London - UK	Office	641 / sqft		42%	3
26	Senior loan	2/20/2014		110.0		110.0		109.6		L + 3.95%		L + 4.16%	3/9/2021	Long Island	Office	161 / sqft		74%	2
27	Senior loan	9/30/2013		105.7		105.7		105.7		L + 3.94%		L + 3.93%	9/30/2020	New York	Multi	131,811 / unit		67%	2
28	Senior loan	6/23/2015		105.2		105.2		107.3		L + 3.30%		L + 3.91%	7/31/2017	Diversified - US	Other	259,807 / unit		57%	3
29	Senior loan	10/17/2016		104.2		104.2		103.3		L + 3.95%		L + 4.31%	10/21/2021	Diversified - UK	Other	148 / sqft		73%	3
30	Senior loan	6/24/2015		107.3		102.8		102.4		L + 4.25%		L + 4.62%	7/9/2020	Honolulu	Hotel	172,557 / key		67%	2

continued…

47

	Loan Type(1)	Origination Date(2)	Total Loan(3)		Principal Balance(3)		Net Book Value		Cash Coupon(4)			All-in Yield(4)			Maximum Maturity(5)	Location	Property Type	Loan Per SQFT /Unit /Key	LTV(2)		Risk Rating
31	Senior loan	7/28/2016		116.5		101.8		100.9		L + 3.60%			L + 4.02%		8/9/2021	Atlanta	Office	161 / sqft		70%	3
32	Senior loan	3/12/2015		101.2		101.1		100.8		L + 3.25%			L + 3.61%		3/11/2020	Orange County	Office	268 / sqft		66%	1
33	Senior loan	4/27/2016		100.8		100.8		100.3		L + 4.35%			L + 5.02%		5/9/2021	Chicago	Office	134 / sqft		74%	3
34	Senior loan	2/18/2016		100.4		100.4		99.8		L + 3.75%			L + 4.41%		4/20/2019	London - UK	Office	853 / sqft		44%	3
35	Senior loan	6/24/2015		100.0		100.0		99.8		L + 3.50%			L + 3.86%		12/1/2019	Virginia	Office	186 / sqft		43%	2
36	Senior loan	1/22/2016		128.5		96.9		96.1		L + 4.25%			L + 4.76%		2/9/2021	Los Angeles	Retail	253 / sqft		64%	3
37	Senior loan	2/12/2016		225.0		91.2		88.9		L + 5.75%			L + 7.07%		2/11/2021	Seattle	Office	121 / sqft		48%	3
38	Senior loan	5/16/2014		100.0		88.2		87.6		L + 3.85%			L + 4.21%		4/9/2022	Miami	Office	190 / sqft		67%	3
39	Senior loan	3/10/2016		99.2		88.0		87.3		L + 4.10%			L + 4.52%		4/9/2021	Chicago	Multi	582,867 / unit		63%	3
40	Senior loan	6/23/2015		87.5		87.5		87.5		L + 3.41%			L + 3.83%		7/31/2019	Virginia	Office	141 / sqft		75%	3
41	Senior loan	2/18/2015		89.9		84.5		84.5		L + 3.75%			L + 3.75%		3/9/2020	Diversified - CA	Office	174 / sqft		71%	2
42	Senior loan	5/22/2014		98.7		83.1		82.8		L + 3.75%			L + 4.07%		6/15/2021	Orange County	Office	152 / sqft		67%	2
43	Senior loan	7/11/2014		82.2		82.2		82.1		L + 3.65%			L + 4.03%		8/9/2019	Chicago	Office	159 / sqft		64%	2
44	Senior loan	10/28/2014		85.0		82.1		81.9		L + 3.75%			L + 4.12%		11/9/2019	New York	Retail	1,534 / sqft		78%	2
45	Senior loan	6/23/2015		81.4		81.4		81.8		L + 3.65%			L + 3.81%		11/30/2018	Diversified - US	Hotel	68,882 / key		83%	2
46	Senior loan	7/23/2014		80.0		78.8		78.6		L + 5.00%			L + 5.87%		8/9/2019	Atlanta	Office	157 / sqft		43%	2
47	Senior loan	5/1/2015		83.5		78.4		78.0		L + 3.95%			L + 4.20%		5/9/2020	Maryland	Hotel	200,905 / key		67%	2
48	Senior loan	1/31/2017		134.8		78.3		77.0		L + 5.00%			L + 5.47%		2/9/2022	Boston	Other	424 / sqft		60%	3
49	Senior loan	2/12/2016		100.0		77.0		76.7		L + 4.15%			L + 4.68%		3/9/2021	Long Island	Office	115 / sqft		65%	3
50	Senior loan	6/23/2015		76.2		76.0		76.1		5.10%	(6)		5.39%	(6)	8/31/2020	Diversified - FL	MHC	20,734 / unit		69%	1
51	Senior loan	6/4/2015		78.1		74.8		75.6		5.05%	(6)		5.18%	(6)	3/28/2019	Diversified - CAN	Retail	39 / sqft		74%	3
52	Senior loan	3/31/2017		91.2		66.7		65.8		L + 4.30%			L + 4.83%		4/9/2022	New York	Office	327 / sqft		64%	3
53	Senior loan	11/30/2016		79.0		63.9		63.2		L + 3.95%			L + 4.39%		12/9/2021	Chicago	Retail	1,263 / sqft		54%	3
54	Senior loan	10/6/2014		67.0		62.8		62.6		L + 4.35%			L + 4.78%		10/9/2019	Long Island	Hotel	102,091 / key		56%	2
55	Senior loan	11/17/2014		69.6		62.5		62.3		L + 5.50%			L + 6.05%		12/9/2019	Diversified - CAN	Office	53 / sqft		53%	2
56	Senior loan	3/11/2014		65.0		62.1		62.0		L + 4.50%			L + 5.00%		4/9/2019	New York	Multi	698,177 / unit		65%	3
57	Senior loan	6/29/2016		75.4		62.0		61.4		L + 3.65%			L + 4.08%		7/9/2021	Fort Lauderdale	Office	239 / sqft		64%	3
58	Senior loan	1/13/2014		60.0		60.0		59.1		L + 3.45%			L + 4.89%		6/9/2020	New York	Office	284 / sqft		53%	2
59	Senior loan	2/27/2015		73.7		58.2		58.0		L + 3.55%			L + 4.00%		2/26/2020	Chicago	Office	122 / sqft		64%	2
60	Senior loan	9/1/2016		57.9		57.9		57.5		L + 4.35%			L + 4.99%		9/1/2021	Atlanta	Multi	257,283 / unit		72%	3

continued…

48

	Loan Type(1)	Origination Date(2)	Total Loan(3)		Principal Balance(3)		Net Book Value		Cash Coupon(4)			All-in Yield(4)			Maximum Maturity(5)	Location	Property Type	Loan Per SQFT /Unit /Key	LTV(2)		Risk Rating
61	Senior loan	6/4/2015		53.4		53.4		53.3		L + 3.25%			L + 3.42%		7/6/2017	Norwich - UK	Retail	149 / sqft		55%	1
62	Senior loan	5/20/2015		52.9		52.9		53.1		L + 3.50%			L + 3.75%		12/31/2018	Chicago	Office	135 / sqft		67%	3
63	Senior loan	9/26/2014		51.0		51.0		51.0		L + 4.00%			L + 4.00%		10/9/2019	Dallas	Office	115 / sqft		70%	2
64	Senior loan	9/9/2014		56.0		50.4		50.3		L + 4.00%			L + 4.31%		9/9/2019	Ft. Lauderdale	Office	145 / sqft		71%	2
65	Senior loan	11/23/2016		55.4		50.0		49.5		L + 3.50%			L + 3.80%		12/9/2022	New York	Multi	208,333 / unit		65%	3
66	Senior loan	4/1/2014		50.0		50.0		50.0		L + 4.20%			L + 4.73%		4/9/2019	Honolulu	Hotel	161,290 / key		69%	2
67	Senior loan	5/20/2015		58.0		49.1		49.0		5.23%	(6)		5.51%	(6)	6/30/2019	Charlotte	Office	97 / sqft		71%	3
68	Senior loan	12/27/2016		57.2		48.5		47.9		L + 4.65%			L + 5.08%		1/9/2022	New York	Multi	1,212,857 / unit		64%	3
69	Senior loan	9/22/2016		46.0		45.5		45.2		L + 4.25%			L + 4.90%		10/9/2019	New York	Office	456 / sqft		51%	3
70	Senior loan	11/28/2013		59.0		45.3		45.2		L + 4.38%			L + 5.43%		1/20/2019	London - UK	Office	556 / sqft		58%	3
71	Senior loan	11/19/2015		50.0		44.6		44.5		L + 4.00%			L + 4.32%		10/9/2018	New York	Office	1,145 / sqft		57%	3
72	Senior loan	3/26/2014		43.3		42.9		42.8		L + 4.30%			L + 4.70%		4/9/2019	East Bay	Office	123 / sqft		71%	2
73	Senior loan	2/9/2017		43.6		41.6		41.1		L + 4.50%			L + 4.98%		2/9/2022	London	Office	644 / sqft		69%	3
74	Senior loan	6/11/2015		40.0		40.0		40.2		5.13%	(6)		5.36%	(6)	9/30/2020	Diversified - US	MHC	22,855 / unit		79%	2
75	Senior loan	6/26/2015		42.1		38.2		38.1		L + 3.75%			L + 4.36%		7/9/2020	San Diego	Office	174 / sqft		73%	2
76	Senior loan	8/25/2015		43.8		37.3		37.2		L + 4.50%			L + 5.13%		9/9/2018	Los Angeles	Office	166 / sqft		46%	3
77	Senior loan	5/20/2015		38.2		35.6		35.6		4.67%	(6)		5.23%	(6)	1/31/2019	Los Angeles	Office	166 / sqft		59%	2
78	Senior loan	6/11/2015		35.4		35.4		35.5		4.90%	(6)		5.12%	(6)	7/31/2019	Tampa	MHC	30,889 / unit		80%	3
79	Senior loan	6/12/2014		35.0		35.0		35.0		L + 4.00%			L + 4.61%		6/30/2018	Los Angeles	Office	40 / sqft		44%	3
80	Senior loan	6/11/2015		34.3		34.3		34.4		5.34%			5.58%		5/31/2020	Diversified - US	MHC	20,965 / unit		65%	2
81	Senior loan	10/22/2015		32.6		32.6		32.5		L + 4.50%			L + 5.03%		10/22/2018	London - UK	Office	2,395 / sqft		64%	3
82	Senior loan	5/20/2015		36.5		32.0		32.0		L + 3.60%			L + 3.77%		7/11/2019	Los Angeles	Office	388 / sqft		46%	1
83	Senior loan	12/30/2013		30.9		30.5		30.4		L + 4.50%			L + 4.75%		1/9/2019	Phoenix	Office	95 / sqft		60%	2
84	Senior loan	4/4/2014		30.7		30.0		30.0		L + 4.25%			L + 4.57%		4/9/2019	San Francisco	Office	285 / sqft		65%	2
85	Senior loan	4/17/2015		28.8		28.8		28.6		L + 4.50%			L + 4.95%		4/20/2020	Hague - NL	Hotel	93,988 / key		71%	3
86	Senior loan	5/28/2015		31.7		27.2		27.3		L + 4.35%			L + 5.20%		12/31/2017	San Jose	Office	72 / sqft		48%	3
87	Senior loan	6/4/2015		26.1		26.1		26.0		5.97%			6.88%		7/1/2017	Edmonton - CAN	MHC	29,966 / unit		49%	1
88	Senior loan	2/28/2014		26.0		26.0		25.9		L + 4.00%			L + 4.26%		3/9/2019	Phoenix	Other	130,653 / unit		69%	2
89	Senior loan	6/11/2015		26.0		26.0		25.9		5.24%(6)			5.73%(6)		11/30/2020	West Palm Beach	MHC	53,608 / unit		75%	2
90	Senior loan	6/11/2015		24.5		24.5		24.4		5.35%(6)			5.85%(6)		11/30/2020	Ft. Lauderdale	MHC	49,696 / unit		70%	2

continued…

49

	Loan Type(1)	Origination Date(2)	Total Loan(3)		Principal Balance(3)		Net Book Value		Cash Coupon(4)			All-in Yield(4)			Maximum Maturity(5)	Location	Property Type	Loan Per SQFT /Unit /Key	LTV(2)		Risk Rating
91	Senior loan	6/18/2014		22.2		22.2		22.1		L + 4.00%			L + 4.43%		7/20/2019	Diversified - NL	Office	58 / sqft		69%	2
92	Senior loan	5/28/2015		48.9		21.9		21.8		L + 4.00%			L + 5.63%		6/30/2018	Los Angeles	Office	25 / sqft		53%	3
93	Senior loan	5/20/2015		21.0		21.0		21.1		L + 4.25%			L + 4.71%		9/30/2018	Phoenix	Multi	68,554 / unit		73%	2
94	Senior loan	1/26/2017		288.0		21.0		17.6		L + 5.50%			L + 6.06%		2/9/2022	Boston	Office	56 / sqft		42%	2
95	Senior loan	5/28/2015		20.7		20.7		20.8		L + 3.95%			L + 4.51%		3/31/2019	Pittsburgh	Hotel	93,043 / key		71%	4
96	Senior loan	6/4/2015		20.1		20.1		19.9		4.50%			4.92%		12/23/2021	Montreal - CAN	Office	55 / sqft		45%	2
97	Senior loan	6/11/2015		18.1		18.1		18.0		4.95%	(6)		5.51%	(6)	11/30/2020	Ft. Lauderdale	MHC	26,430 / unit		51%	2
98	Senior loan	6/4/2015		17.2		17.2		17.2		4.63%			5.02%		3/1/2019	Ontario - CAN	Other	50,647 / unit		59%	2
99	Senior loan	6/4/2015		16.1		16.1		16.2		5.17%			5.52%		9/4/2020	Diversified - CAN	Other	3,518 / unit		61%	2
100	Senior loan	5/28/2015		15.6		15.6		15.6		L + 3.70%			L + 4.62%		8/31/2019	Albuquerque	Hotel	114,832 / key		51%	1
101	Senior loan	6/11/2015		15.0		15.0		14.9		5.33%	(6)		5.86%	(6)	9/30/2020	Tampa	MHC	39,474 / unit		64%	2
102	Senior loan	6/4/2015		13.4		13.4		13.9		L + 4.50%			L + 4.77%		12/1/2017	Toronto - CAN	Office	80 / sqft		58%	3
103	Senior loan	5/28/2015		12.8		12.8		12.8		L + 4.75%			L + 5.53%		8/31/2017	Diversified - US	Office	48 / sqft		86%	2
			$	10,956.7		$9,733.4	$	8,721.8		4.97%			5.43%		3.4 yrs					61%	2.6

(1) Senior loans include senior mortgages and similar credit quality loans, including related contiguous subordinate loans and pari passu participations in senior mortgage loans.

(2) Date loan was originated or acquired by us, and the LTV as of such date. Dates are not updated for subsequent loan modifications or upsizes.

(3) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. As of March 31, 2017, three loans in our portfolio have been financed with an aggregate $1.0 billion of non-consolidated senior interest, which are included in the table above.

(4) As of March 31, 2017, our floating rate loans were indexed to various benchmark rates, with 85% of floating rate loans by principal balance indexed to USD LIBOR. In addition, $217.8 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.22%, as of March 31, 2017. In addition to cash coupon, all-in yield includes the amortization of deferred origination fees, loan origination costs, and accrual of both extension and exit fees.

(5) Maximum maturity assumes all extension options are exercised, however our loans may be repaid prior to such date.

(6) Loan consists of one or more floating and fixed rate tranches. Coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Loan Portfolio Net Interest Income

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of March 31, 2017, 91% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. As of March 31, 2017, the remaining 9% of our loans by total loan exposure earned a fixed rate of interest, but are financed with liabilities that pay interest at floating rates, which resulted in a negative correlation to rising interest rates to the extent of our financing. In certain instances where we have financed fixed rate assets with floating rate liabilities, we have purchased interest rate swaps or caps to limit our exposure to increases in interest rates on such liabilities.

The following table projects the impact on our interest income and expense for the twelve-month period following March 31, 2017, assuming an immediate increase or decrease of both 25 and 50 basis points in the applicable interest rate benchmark by currency ($ in thousands):

Currency	Assets (Liabilities)     Subject to Interest     Rate Sensitivity(1)				25 Basis Point       Increase			25 Basis Point       Decrease			50 Basis Point       Increase			50 Basis Point       Decrease
USD(2)	$	7,537,464		Interest income	$	18,581		$	(18,545	)	$	37,161		$	(36,930	)
		(5,612,114	)	Interest expense		(14,030	)		14,030			(28,061	)		28,061
	$	1,925,350		Total	$	4,551		$	(4,515	)	$	9,100		$	(8,869	)
GBP(2)	$	916,836		Interest income	$	2,109		$	(2,011	)	$	4,401		$	(3,635	)
		(716,625	)	Interest expense		(1,792	)		1,792			(3,583	)		3,583
	$	200,211		Total	$	317		$	(219	)	$	818		$	(52	)
EUR	$	50,955		Interest income	$	—		$	—		$	87		$	—
		—		Interest expense		—			—			—			—
	$	50,955		Total	$	—		$	—		$	87		$	—
CAD(3)	$	342,427		Interest income	$	856		$	(856	)	$	1,712		$	(1,489	)
		(384,739	)	Interest expense		(962	)		962			(1,924	)		1,924
	$	(42,312	)	Total	$	(106	)	$	106		$	(212	)	$	435
				Total	$	4,762		$	(4,628	)	$	9,793		$	(8,486	)

(1) Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each case in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate.

(2) Includes borrowings under secured debt agreements, loan participations sold, and non-consolidated senior interests.

(3) Liabilities balance includes two interest rate swaps totaling C$17.3 million ($13.0 million as of March 31, 2017) that are used to hedge a portion of our fixed rate debt.

Loan Portfolio Value

As of March 31, 2017, 9% of our loans by total loan exposure earned a fixed rate of interest and as such, the values of such loans are sensitive to changes in interest rates. We generally hold all of our loans to maturity and so do not expect to realize gains or losses on our fixed rate loan portfolio as a result of movements in market interest rates.

51

Risk of Non-Performance

In addition to the risks related to fluctuations in cash flows and asset values 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. This risk is partially mitigated by various facts we consider during our underwriting process, which in certain cases include a requirement for our borrower to purchase an interest rate cap contract.

Credit Risks

Our loans and investments are also subject to credit risk. The performance and value of our loans and investments depend upon the sponsors’ 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 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 credit facilities 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 and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing, and terms of capital we raise.

Counterparty Risk

The nature of our business requires us to hold our cash and cash equivalents and obtain financing from 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 agreements with high credit-quality institutions.

The nature of our loans and investments also exposes 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 active monitoring of the asset portfolios that serve as our collateral.

Currency Risk

Our loans and investments that are denominated in a foreign currency are also subject to risks related to fluctuations in currency rates. We mitigate this exposure by matching the currency of our foreign currency assets to the currency of the borrowings that finance those assets. As a result, we substantially reduce our exposure to changes in portfolio value related to changes in foreign currency rates. In certain circumstances, we may also enter into foreign currency derivative contracts to further mitigate this exposure.

The following table outlines our assets and liabilities that are denominated in a foreign currency (£/€ /C$ in thousands):

	March 31, 2017
Foreign currency assets(1)	£	1,106,301		€	79,535	C$	662,718
Foreign currency liabilities(1)		(873,119	)		—		(530,079	)
Foreign currency contracts - notional		(141,900	)		—		(122,900	)
Net exposure to exchange rate fluctuations	£	91,282		€	79,535	C$	9,739

(1)   Balances include non-consolidated senior interests of £302.0 million

52

We estimate that a 10% appreciation of the United States Dollar relative to the British Pound Sterling and the Euro would result in a decline in our net assets in U.S. Dollar terms of $29.3 million and $8.5 million, respectively, as of March 31, 2017. Substantially all of our net asset exposure to the Canadian Dollar has been hedged with foreign currency forward contracts.

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 SEC 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 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 on Form 10-Q 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 March 31, 2017, we were not involved in any material legal proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016.

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

Section 13(r) Disclosure

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, or ITRA, which added Section 13(r) of the Exchange Act, we hereby incorporate by reference herein Exhibit 99.1 of this report, which includes disclosure publicly filed by NCR Corporation, which may be considered to have been an affiliate of Blackstone and therefore our affiliate during all or a portion of the quarter ended March 31, 2017.

54

ITEM 6. EXHIBITS

10.1	Second Amended and Restated Master Repurchase Agreement, dated as of March 31, 2017, by and among Parlex 2 Finance, LLC, Parlex 2A Finco, LLC, Parlex 2 UK Finco, LLC, Parlex 2 EUR Finco, LLC and Citibank, N.A.
10.2	Third Amendment to Limited Guaranty, dated as of March 31, 2017, made by Blackstone Mortgage Trust, Inc. in favor of Citibank, N.A.
10.3	Amendment No. 6 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 13, 2017, by and between Parlex 5 Finco, LLC and Wells Fargo Bank, National Association
10.4	Amendment No. 7 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 31, 2017, by and between Parlex 5 Finco, LLC and Wells Fargo Bank, National Association
10.5	Amended and Restated Master Repurchase and Securities Contact, dated as of June 16, 2014 by and among Parlex 6 UK Finco, LLC, Parlex 6 EUR Finco, LLC, Blackstone Mortgage Trust, Inc. and Morgan Stanley Bank, N.A.
10.6	First Amendment to Amended and Restated Master Repurchase and Securities Contract Agreement, dated as of March 29, 2017, by and among Parlex 6 UK Finco, LLC, Parlex 6 EUR Finco, LLC and Morgan Stanley Bank, N.A.
10.7	Amended and Restated Master Repurchase Agreement, dated as of February 9, 2017, by and among Parlex 15 Finco, LLC and Deutsche Bank AG, Cayman Islands Branch
10.8	Amendment No. 1 to Amended and Restated Master Repurchase Agreement and Guaranty, dated as of March 24, 2017, by and among Parlex 15 Finco, LLC, Blackstone Mortgage Trust, Inc. and Deutsche Bank AG, Cayman Islands Branch
31.1	Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 +	Certification of 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 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

55

101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

+ 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.

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.
April 25, 2017	/s/ Stephen D. Plavin
Date	Stephen D. Plavin
	Chief Executive Officer
	(Principal Executive Officer)
April 25, 2017	/s/ Anthony F. Marone, Jr.
Date	Anthony F. Marone, Jr.
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

57

EX-10.1

Exhibit 10.1

SECOND AMENDED AND RESTATED

MASTER REPURCHASE AGREEMENT

Dated as of March 31, 2017

among

PARLEX 2 FINANCE, LLC,

PARLEX 2A FINCO, LLC,

PARLEX 2 UK FINCO, LLC,

PARLEX 2 EUR FINCO, LLC,

and any other Person when such Person joins as a Seller under

this Agreement from time to time

individually and/or collectively, as the context requires, as Seller,

and

CITIBANK, N.A.,

as Buyer

TABLE OF CONTENTS

		Page
1.	APPLICABILITY		1
2.	DEFINITIONS		1
3.	INITIATION; CONFIRMATION; TERMINATION; FEES		29
4.	MARGIN MAINTENANCE		35
5.	INCOME PAYMENTS AND PRINCIPAL PAYMENTS		40
6.	SECURITY INTEREST		43
7.	PAYMENT, TRANSFER AND CUSTODY		44
8.	SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS		48
9.	INTENTIONALLY OMITTED		49
10.	REPRESENTATIONS		49
11.	NEGATIVE COVENANTS OF SELLER		54
12.	AFFIRMATIVE COVENANTS OF SELLER		55
13.	SINGLE-PURPOSE ENTITY		58
14.	EVENTS OF DEFAULT; REMEDIES		59
15.	SINGLE AGREEMENT		65
16.	RECORDING OF COMMUNICATIONS		65
17.	NOTICES AND OTHER COMMUNICATIONS		65
18.	ENTIRE AGREEMENT; SEVERABILITY		66
19.	NON-ASSIGNABILITY		66
20.	GOVERNING LAW		67
21.	NO WAIVERS, ETC.		67
22.	USE OF EMPLOYEE PLAN ASSETS		68
23.	INTENT		68
24.	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS		70
25.	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL		70
26.	NO RELIANCE		71
27.	INDEMNITY		72
28.	DUE DILIGENCE		72
29.	SERVICING		73
30.	MISCELLANEOUS		74
31.	TAXES		75
32.	JOINT AND SEVERAL OBLIGATIONS		78

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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-A	Form of Power of Attorney for U.S. Purchased Loans
EXHIBIT V-B	Form of Power of Attorney for Foreign Purchased Loans
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
EXHIBIT XI	Form of Joinder Agreement
EXHIBIT XII	Form of Facility Asset Chart

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SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of March 31, 2017, by and among PARLEX 2 FINANCE, LLC, a Delaware limited liability company (“Parlex 2”), PARLEX 2A FINCO, LLC, a Delaware limited liability company (“Parlex 2A”), PARLEX 2 UK FINCO, LLC, a Delaware limited liability company (“Parlex 2 UK”), PARLEX 2 EUR FINCO, LLC, a Delaware limited liability company (“Parlex 2 EUR”, and together with Parlex 2, Parlex 2A, Parlex 2 UK and any other Person when such Person joins as a Seller hereunder from time to time, individually and/or collectively as the context may require, “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.

This Agreement amends, restates and replaces in its entirety that certain Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014 (the “First Amendment and Restatement Date”), by and among Parlex 2, Parlex 2A and Buyer, as amended by that certain First Amendment to Amended and Restated Master Repurchase Agreement, dated as of July 28, 2016, by and among Parlex 2, Parlex 2A and Buyer (collectively, the “Original Agreement”). Seller and Buyer acknowledge and agree that the Original Agreement shall be void and of no force or effect from and after the date hereof. All Transactions (as defined in the Original Agreement) outstanding under the Original Agreement as of the Second Amendment and Restatement Date shall be deemed to be Transactions (as defined in this Agreement) outstanding under this Agreement and all Confirmations (as defined in the Original Agreement) under the Original Agreement as of the Second Amendment and Restatement Date shall be deemed to be Confirmations under this Agreement (and, accordingly, in each case, subject to the terms and conditions hereof) and all references in any Transaction Document (including, without limitation, any and all Confirmations and assignment documentation executed pursuant to the Original Agreement) to “the Agreement” or any similar formulation intended to refer to the Original Agreement shall be deemed to be references to this Agreement.

2. DEFINITIONS

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

“Acceptable Attorney” means (i) Ropes & Gray LLP, (ii) a firm of solicitors regulated by the Solicitors Regulation Authority (with respect to any Foreign Purchased Loan secured by Mortgaged Property located in England) reasonably acceptable to Buyer or (iii) any other attorney-at-law or law firm reasonably acceptable to Buyer, or notary (if required in the relevant jurisdiction) that has, in the case of each of (i), (ii) and (iii) herein, delivered at Seller’s request an Attorney’s Bailee Letter, as applicable.

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“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).

“Account Security Agreement” shall mean, with respect to a Foreign Purchased Loan, an agreement creating security over a bank account maintained by the related Mortgagor.

“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, administration 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, Thomas C. Ruffing 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 Second Amended and Restated Master Repurchase Agreement, dated as of the date first set forth above, by and among Parlex 2, Parlex 2A, Parlex 2 UK, Parlex 2 EUR and Citibank, N.A., as such agreement may be amended, modified, supplemented, and/or restated and in effect from time to time.

“Alternative Rate” shall have the meaning specified in Section 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.

“Applicable Currency” means U.S. Dollars, Pounds Sterling, Euro or such other currency permitted by Buyer, in its sole discretion, as applicable.

“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%).

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.

“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 an Appraisal Regime-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.

“Appraisal Regime” shall mean: (a) with respect to U.S. Purchased Loans, FIRREA, and (b) with respect to Foreign Purchased Loans, RICS or its equivalent in any applicable jurisdiction, as applicable.

“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.

“Assignment Documents in Blank” shall mean, for each Purchased Loan, the (i) allonge in blank (in the case of a U.S. Purchased Loan), (ii) Transfer Certificate duly executed by Seller or transferor (howsoever described) with the name of the transferee (howsoever described) and dated in blank (in the case of a Foreign Purchased Loan), (iii) omnibus assignment in blank,

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(iv) Assignment of Mortgage in blank, (v) assignment of Assignment of Leases in blank, and/or (vi) equivalent of each of the foregoing (except with respect to the Transfer Certificate referenced in clause (ii) herein, for which there shall be no equivalent) in the relevant non-U.S. jurisdiction and where so required by Buyer, duly executed by Seller with the name of the transferee or assignee (howsoever described) and dated in blank (in the case of a Foreign Purchased Loan).

“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 (in the case of U.S. Purchased Loans) or agent (in the case of Foreign Purchased Loans), as applicable, 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, individually or collectively, as the context may require, (i) that certain Deposit Account Control Agreement, dated as of June 12, 2013, among Buyer, Parlex 2, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2, as the same may be amended, modified and/or restated from time to time, (ii) that certain Deposit Account Control Agreement, dated as of January 31, 2014, among Buyer, Parlex 2A, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2A, as the same may be amended, modified and/or restated from time to time, (iii) that certain Deposit Account Control Agreement, dated as of the Second Amendment and Restatement Date, among Buyer, Parlex 2 UK, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2 UK, as the same may be amended, modified and/or restated from time to time, (iv) that certain Deposit Account Control Agreement, dated as of the Second Amendment and Restatement Date, among Buyer, Parlex 2 EUR, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2 EUR, as the same may be amended, modified and/or restated from time to time, and (v) each additional Deposit Account Control Agreement entered into among a new Seller admitted to this Agreement pursuant to a Joinder Agreement, Buyer, Servicer and the Depository and relating to a Cash Management Account established pursuant to this Agreement by such new Seller, as the same may be amended, modified and/or restated from time to time.

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“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 States of New York, Pennsylvania, Kansas or Minnesota or in London, England, or, as it relates to a specific Foreign Purchased Loan, the relevant non-U.S. jurisdiction in which the Mortgaged Property securing the related Foreign Purchased Loan is located or the laws of which otherwise govern the Purchased Loan Documents relating to the subject Foreign Purchased Loan (or as otherwise designated in the Purchased Loan Documents relating to the subject Foreign Purchased Loan and stated in the related Confirmation) 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.

“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, individually or collectively, as the context may require, with respect to each Seller, a segregated interest bearing account, in the name of such Seller for the benefit of Buyer, established at the Depository and subject to a 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 any Seller or Guarantor to any Person or entity other than an Affiliate of such entity.

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“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 and any other similar information with respect to a Foreign Purchased Loan.

“Column A” shall have the meaning specified in the definition of Facility Asset Chart.

“Column B” shall have the meaning specified in the definition of Facility Asset Chart.

“Column C” shall have the meaning specified in the definition of Facility Asset Chart.

“Column D” shall have the meaning specified in the definition of Facility Asset Chart.

“Column E” shall have the meaning specified in the definition of Facility Asset Chart.

“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: (i) with respect to U.S. Purchased Loans, (x) the aggregate outstanding Purchase Price with respect to all U.S. Purchased Loans which are participation interests shall not exceed 33% of the Facility Amount for U.S. Purchased Loans and (y) the outstanding Purchase Price with respect to any single U.S. Purchased Loan shall not exceed 25% of the Facility Amount for U.S. Purchased Loans, and (ii) with respect to Foreign Purchased Loans, (x) the aggregate outstanding Purchase Price with respect to all Foreign Purchased Loans which are participation interests shall not exceed 33% of the Facility Amount for Foreign Purchased Loans and (y) the outstanding Purchase Price with respect to any single Foreign Purchased Loan shall not exceed 30% of the Facility Amount for Foreign Purchased Loans.

“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.

“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, individually or collectively, as the context may require, (i) that certain Amended and Restated Custodial Agreement, dated as of the Second

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Amendment and Restatement Date, among the Custodian, Sellers and Buyer, as the same may be further amended, modified and/or restated from time to time, and (ii) each additional Custodial Agreement entered into among a new Seller admitted to this Agreement pursuant to a Joinder Agreement, the Custodian and Buyer, as the same may be amended, modified and/or restated from time to time.

“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 or proposed 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 or proposed Purchased Loan, as applicable, 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 and any other similar information with respect to a Foreign Purchased Loan.

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“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 (“Senior Interests”) or participation interests in such Whole Loans or Senior Interests which are (1) denominated in an Applicable Currency and (2) secured by stabilized or un-stabilized multi-family or commercial properties (including, but not limited to, office, retail, industrial and hotel properties, but excluding, with respect to potential Foreign Purchased Loans, development and heavy restructuring facilities), 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),

(c) the LTV (Aggregate Loan UPB) is 80.00% or less,

(d) a term of not more than five (5) years, and

(e) 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.

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.

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“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.

“EURIBOR” shall mean, with respect to each Pricing Rate Period, the Euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate), for a three month period, that appears (a) on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or (b) on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters, in each case as of 11:00 a.m., Brussels time, on the related Pricing Rate Determination Date (the “EURIBOR Screen Rate”). If such page or service ceases to be available, Buyer may specify another page or service displaying the relevant rate after consultation with Seller.

If the EURIBOR Screen Rate is not available, Buyer shall request the principal London office of the Reference Banks to provide (i) (other than where clause (ii) below applies) the rate at which the relevant Reference Bank believes one prime bank is quoting to another prime bank for interbank term deposits in euro within the Participating Member States for amounts of not less than the Repurchase Price of the applicable Transaction for the three month period; or (ii) if different, the rate (if any and applied to the relevant Reference Bank and the three month period) which contributors to the EURIBOR Screen Rate are asked to submit to the relevant administrator, in each case, as of 11:00 a.m., Brussels time, on the related Pricing Rate Determination Date.

If at least one such offered quotation is provided, EURIBOR with respect to the relevant Pricing Rate Period related to a Foreign Purchased Loan (GBP) shall be (i) where more than one offered quotation is provided by the Reference Banks, the arithmetic mean (rounded upwards to four decimal places) of all of such offered quotations or (ii) where only one offered quotation is provided by the Reference Banks, such offered quotation (rounded upwards to four decimal places).

If at or about noon, London time, on the related Pricing Rate Determination Date, no Reference Banks have provided quotations, then EURIBOR with respect to the relevant Pricing Rate Period related to a Foreign Purchased Loan (GBP) shall be the rate determined by Buyer, as a percentage rate per annum, of the cost to Buyer of funding an amount not less than the Repurchase Price for the applicable Transaction from whatever source it may reasonably select.

EUBIROR shall be determined by Buyer or its agent, which determination shall be conclusive absent manifest error. If the calculation of EURIBOR with respect to a Pricing Rate Period results in a EURIBOR rate of less than zero (0), EURIBOR shall be deemed to be zero (0) for all purposes of this Agreement with respect to such Pricing Rate Period.

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“EURIBO Rate” shall mean, with respect to any Pricing Rate Period pertaining to a Transaction for which EURIBOR is the applicable Pricing Rate, 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%):

EURIBOR

1 – Reserve Requirement

“EURIBOR Screen Rate” shall have the meaning set forth in the definition of EURIBOR.

“Euros” and “€ ” shall mean the lawful currency of the member states of the European Union that have adopted and retain the single currency in accordance with the Treaty establishing the European Community, as amended from time to time; provided that if any member state or states ceases to have such single currency as its lawful currency (such member state(s) being the “Exiting State(s)”), Euro and € shall, for the avoidance of doubt, mean for all purposes of this Agreement the single currency adopted and retained as the lawful currency of the remaining member states and shall not include any successor currency introduced by the Exiting State(s).

“Euro Amount” shall mean, with respect to any Foreign Purchased Loan which is not a Foreign Purchased Loan (EUR), as of any date of determination, the then outstanding Purchase Price for such Foreign Purchased Loan converted into Euro at the applicable Purchase Date Spot Rate (EUR).

“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 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.

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“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: (x) with respect to U.S. Purchased Loans, $500,000,000 and (y) with respect to Foreign Purchased Loans, € 250,000,000 (it being understood that whenever this Agreement refers to any calculation in respect of the Facility Amount for Foreign Purchased Loans, calculations of any applicable amount with respect to a Foreign Purchased Loan which is not a Foreign Purchased Loan (EUR) shall be based on the Euro Amount of such Foreign Purchased Loan).

“Facility Asset Chart” shall mean a chart in the form of Exhibit XII to this Agreement setting forth, as of any date of determination, with respect to each Purchased Loan, (i) the current outstanding Purchase Price (under the heading “Current Outstanding Buyer Purchase Prices” and referred to herein as “Column A”), (ii) the current Margin Excess (Other) (under the heading “Current Margin Excess (Other)” and referred to herein as “Column B”), (iii) the available Margin Excess (Future Funding) (under the heading “Adjusted Margin Excess (Future Fundings)” and referred to herein as “Column C”), (iv) the Maximum Purchase Price (under the heading “Total of A, B, C” and referred to herein as “Column D”), and (v) the potentially available Margin Excess (Future Funding) (under the heading “Potential Margin Excess (Future Fundings)” and referred to herein as “Column E”).

“Facility Availability Period” shall mean the period commencing on June 12, 2013 and ending on April 1, 2020 (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.

“FCA Regulations” shall have the meaning specified in Section 23(a) of this Agreement.

“FDIA” shall have the meaning specified in Section 23(f) of this Agreement.

“FDICIA” shall have the meaning specified in Section 23(g) of this Agreement.

“Fee Agreement” shall mean: (i) that certain Fourth Amended and Restated Fee Letter, dated as of the Second Amendment and Restatement Date, between Seller and Buyer, as the same may be amended, modified and/or restated from time to time (including through a Joinder Agreement), and (ii) each additional Fee Letter entered into among a new Seller admitted to this Agreement pursuant to a Joinder Agreement, the Custodian and Buyer, as the same may be amended, modified and/or restated from time to time.

“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.

“First Amendment and Restatement Date” shall have the meaning specified in Section 1 of this Agreement.

“Foreign Assignment Agreement” shall mean, with respect to a Foreign Purchased Loan, a security agreement or a security deed between the applicable Seller and Buyer pursuant to which such Seller assigns to Buyer all of its right, title and interest under and in relation to each related Purchased Loan Document relating to such Foreign Purchased Loan (including its rights against any Security Agent) and any professional report delivered with respect to a Foreign Mortgage Loan that is addressed to or capable of being relied on by such Seller.

“Foreign Purchased Loan” shall mean: (i) with respect to any Transaction, an Eligible Loan secured by Mortgaged Property located outside of the United States of America or any territory thereof and which is sold by the applicable Seller to Buyer in such Transaction and (ii) with respect to the Transactions for Foreign Purchased Loans in general, all Eligible Loans secured by Mortgaged Property located outside of the United States of America or any territory thereof and which are sold by the applicable Sellers to Buyer.

“Foreign Purchased Loan (EUR)” shall mean a Foreign Purchased Loan denominated in Euros.

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“Foreign Purchased Loan (GBP)” shall mean a Foreign Purchased Loan denominated in Pounds Sterling.

“Foreign Sanctions Authority” shall mean the Financial Conduct Authority, the Foreign & Commonwealth Office, Her Majesty’s Treasury of the United Kingdom, the United Nations or any other analogous Governmental Authority in any applicable non-U.S. jurisdiction in which a Mortgaged Property securing a Purchased Loan is located.

“Foreign Sanctions List” shall mean any sanctions or “black” list maintained by a Foreign Sanctions Authority.

“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 over the applicable Person 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).

“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 June 12, 2013, from Guarantor in favor of Buyer, as amended by that certain First Amendment to Limited Guaranty, dated as of November 20, 2013, from Guarantor in favor of Buyer, as further amended by that certain Second Amendment to Limited Guaranty, dated as of February 24, 2014, from Guarantor in favor of Buyer, as further amended by that certain Third Amendment to Limited Guaranty, dated as of the Second Amendment and Restatement Date, from Guarantor in favor of Buyer, as the same may be further amended, modified and/or restated from time to time.

“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.

“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.

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“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.

“Index Rate” shall mean the EURIBO Rate or LIBO Rate, as applicable.

“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.

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“Insolvency Regulation” shall have the meaning specified in Section 10(b)(xxii).

“Insurance Rating Requirements” shall have the meaning specified in Exhibit VI.

“Irrevocable Direction Letter” shall have the meaning specified in Section 5(b).

“Joinder Agreement” shall have the meaning specified in the definition of Seller.”

“Junior Interest” shall have the meaning specified in Exhibit VI.

“LIBOR” shall mean:

(a) With respect to each Pricing Rate Period related to any U.S. Purchased Loan, 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 Reference Banks 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 with respect to the relevant Pricing Rate Period related to a U.S. Purchased Loan, 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 with respect to the relevant Pricing Rate Period related to a U.S. Purchased Loan shall be the arithmetic mean of such rates. LIBOR with respect to each Pricing Rate Period related to any U.S. Purchased Loan shall be determined by Buyer or its agent, which determination shall be conclusive absent manifest error; and

(b)    With respect to each Pricing Rate Period related to any Foreign Purchased Loan (GBP), the London interbank offered rate administered by ICE Benchmark Administration Limited (or any person which takes over the administration of that rate) for deposits in Pounds Sterling for a three month period that appears page LIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters as of 11:00 a.m., London time, on the related Pricing Rate Determination Date (the “LIBOR Screen Rate”). If the LIBOR Screen Rate ceases to be available, Buyer may specify another page or service displaying the relevant rate after consultation with Seller. If the LIBOR Screen Rate is unavailable, Buyer shall request the principal London office of the Reference Banks to provide (i) if the Reference Bank is a contributor to the LIBOR Screen Rate and it consists of a single figure, the rate applied to the relevant Reference Bank and Pounds Sterling in amounts not less than the Repurchase Price of the applicable Transaction for a three-month

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period, or (ii) in any other case, the rate at which the relevant Reference Bank could fund itself in in Pounds Sterling for amounts of not less than the Repurchase Price of the applicable Transaction for a three-month period with reference to the unsecured wholesale funding market as of 11:00 a.m., Brussels time, on the related Pricing Rate Determination Date.

If at least one such offered quotation is provided, LIBOR with respect to the relevant Pricing Rate Period related to a Foreign Purchased Loan (GBP) shall be (i) where more than one offered quotation is provided by the Reference Banks, the arithmetic mean (rounded upwards to four decimal places) of all of such offered quotations or (ii) where only one offered quotation is provided by the Reference Banks, such offered quotation (rounded upwards to four decimal places).

If at or about noon, London time, on the related Pricing Rate Determination Date, no Reference Banks have provided quotations, then LIBOR with respect to the relevant Pricing Rate Period related to a Foreign Purchased Loan (GBP) shall be the rate determined by Buyer, as a percentage rate per annum, of the cost to Buyer of funding an amount not less than the Repurchase Price for the applicable Transaction from whatever source it may reasonably select.

LIBOR with respect to each Pricing Rate Period related to any Foreign Purchased Loan (GBP) shall be determined by Buyer or its agent, which determination shall be conclusive absent manifest error.

If the calculation of LIBOR pursuant to this definition with respect to a Pricing Rate Period related to a Purchased Loan sold by Seller to Buyer in a Transaction after the Second Amendment and Restatement Date results in a LIBOR rate of less than zero (0), LIBOR shall be deemed to be zero (0) for all purposes of this Agreement with respect to such Pricing Rate Period.

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

LIBOR

1 – Reserve Requirement

“LIBOR Screen Rate” shall have the meaning set forth in the definition of LIBOR.

“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 or proposed 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 or proposed 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 or proposed Purchased Loan as

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determined by Buyer as of the Purchase Date in its sole discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan. 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 (Loan UPB)” shall mean, with respect to any Purchased Loan or proposed Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the unpaid principal balance of such Purchased Loan or proposed Purchased Loan, as applicable, and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan or proposed Purchased Loan, as applicable, as determined by Buyer as of the Purchase Date in its sole discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan. 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 such 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 as of the Purchase Date in its sole discretion and at all times thereafter in Buyer’s commercially reasonable discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan. 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.

“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 Maximum 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. For the avoidance of doubt, the Market Value of any Purchased Loan shall be denominated in the same Applicable Currency as the Purchase Price of such Purchased Loan and, if determined in a currency other than such Applicable Currency, shall be converted to such Applicable Currency for the purposes herein based on the applicable Purchase Date Spot Rate with respect to 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 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 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 commercially reasonable discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan.

“Maximum Purchase Price” shall have the meaning set forth in the Fee Agreement.

“Maximum Purchase Price Percentage” shall have the meaning set forth in the Fee Agreement.

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“Mortgage” shall mean: (x) with respect to U.S. Purchased Loans, 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, and (y) with respect to Foreign Purchased Loans, the related debenture or equivalent security deed or other instrument creating a first priority lien or a first priority security interest in an estate in fee simple in real property and the improvements thereon, securing a mortgage note or similar evidence of indebtedness and any other security deed or other instrument, in each case securing indebtedness under applicable Requirements of Law in the relevant non-U.S. jurisdiction.

“Mortgage Note” shall mean: (x) with respect to U.S. Purchased Loans, a note or other evidence of indebtedness of a Mortgagor secured by a Mortgage in connection with such U.S. Purchased Loan, and (y) with respect to Foreign Purchased Loans, any evidence of indebtedness of a Mortgagor (including, without limitation, the applicable facility or loan agreement).

“Mortgaged Property” shall mean the real property securing repayment of the debt evidenced by (x) with respect to U.S. Purchased Loans, a Mortgage Note, and (y) with respect to Foreign Purchased Loans, a Mortgage.

“Mortgagee” shall mean the record holder of (x) with respect to U.S. Purchased Loans, a Mortgage Note secured by a Mortgage, and (y) with respect to Foreign Purchased Loans, a Mortgage.

“Mortgagor” shall mean the obligor (x) with respect to U.S. Purchased Loans, on a Mortgage Note and the grantor of the related Mortgage, and (y) with respect to Foreign Purchased Loans, that is expressed in the loan agreement for the relevant Foreign Purchased Loan to be the legal or beneficial owner of the relevant Mortgaged Property.

“MTM Representations” shall mean the representations and warranties set forth as items 11, 12, 14, 25, 35, 36, 37, 42, 47, 50 and 55 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.

“Omnibus Amendment” shall mean that certain Omnibus Amendment to Other Transaction Documents and Reaffirmation of Guaranty dated as of the First Amendment and Restatement Date, by and among Seller, Guarantor and Buyer.

“Original Agreement” shall have the meaning set forth in Section 1 of this Agreement.

“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

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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 (including, without limitation, United Kingdom stamp duty and stamp duty reserve tax) 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.

“Parlex 2” shall have the meaning set forth in the preamble of this Agreement.

“Parlex 2A” shall have the meaning set forth in the preamble of this Agreement.

“Parlex 2 EUR” shall have the meaning set forth in the preamble of this Agreement.

“Parlex 2 UK” shall have the meaning set forth in the preamble of this Agreement.

“Participant Register” shall have the meaning specified in Section 19(d).

“Participating Member State” shall mean any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

“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 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.

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“Plan Party” shall have the meaning specified in Section 22(a) of this Agreement.

“Pounds Sterling” shall mean the lawful currency for the time being of the United Kingdom.

“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). Price Differential shall be payable in the Applicable Currency of the Purchase Price of the applicable Purchased Loan.

“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.

“Pricing Rate” shall mean, for any Pricing Rate Period, an annual rate equal to the Index Rate for such Pricing Rate Period (as specified in the related Confirmation) 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.

“Prohibited Person” shall mean any (1) person or entity who is on the OFAC List or any Foreign Sanctions 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

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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.

“Property Report” shall mean, with respect to a Foreign Purchased Loan, any certificate or report title in relation to the related Mortgaged Property that is delivered as a condition precedent to the making of the related Foreign Purchased Loan under the loan agreement for such Foreign Purchased Loan.

“Purchase Date” shall mean any date on which a Purchased Loan is to be transferred by Seller to Buyer.

“Purchase Date Spot Rate (EUR)” shall mean with respect to any Purchased Loan which is not a Foreign Purchased Loan (EUR), the Spot Rate for converting the Applicable Currency of such Purchased Loan to Euro on the related Purchase Date (which shall be set forth in the applicable Confirmation).

“Purchase Date Spot Rate (GBP)” shall mean with respect to any Purchased Loan which is not a Foreign Purchased Loan (GBP), the Spot Rate for converting the Applicable Currency of such Purchased Loan to Pounds Sterling on the related Purchase Date (which shall be set forth in the applicable Confirmation)

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“Purchase Date Spot Rate” shall mean the Purchase Date Spot Date (EUR) or the Purchase Date Spot Rate (GBP), as applicable.

“Purchase Price” shall mean, with respect to any Purchased Loan, the price at which such Purchased Loan is transferred by Seller to Buyer on the applicable Purchase Date (paid in the same Applicable Currency as the related Whole Loan or Senior Interest (or participation interest therein) and stated on the related Confirmation), as adjusted after the Purchase Date, all as set forth below and not to exceed the Maximum Purchase Price. The Purchase Price as of the Purchase Date for any Purchased Loan shall be the amount set forth on the applicable Confirmation (expressed in the same Applicable Currency as the related Whole Loan or Senior Interest (or participation interest therein)) 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%. The Purchase Price of any Purchased Loan shall thereafter only be modified to be (a) increased by any Margin Excess transferred by Buyer to Seller pursuant to Section 4(c) or 4(e) of this Agreement, not to exceed the Maximum Purchase Price, and (b) reduced by any amount applied to reduce such Purchase Price pursuant to Section 3(f), 4(a) or 5 of this Agreement (or, in the case of Principal Payments made in respect of such Purchased Loan, remitted to the applicable Cash Management Account for application to reduce such Purchase Price pursuant to Section 5(e)).

“Purchase Price Percentage” shall mean, with respect to each Purchased Loan, the amount, expressed as a percentage, determined by dividing (i) the outstanding Purchase Price of such Purchased Loan as of any date of determination hereunder by (ii) the Market Value of such Purchased Loan as of such date, not to exceed the Maximum Purchase Price Percentage.

“Purchased Loan” shall mean a Foreign Purchased Loan or a U.S. Purchased Loan, as applicable.

“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 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.

“Reference Banks” shall mean any four major reference banks in the London interbank market selected by Buyer.

“Register” shall have the meaning specified in Section 19(c).

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“REMIC” shall mean a real estate mortgage investment conduit, within the meaning of Section 860D(a) of the Code.

“Remittance Date” shall mean: (x) with respect to U.S. Purchased Loans, the seventeenth (17th) calendar day of each month, or the next succeeding Business Day, if such calendar day shall not be a Business Day, and (y) with respect to Foreign Purchased Loans, January 25, April 25, July 25 and October 25, or the next succeeding Business Day, if such calendar day shall not be a Business Day, or, in each case, 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 (which price shall be expressed and payable in the Applicable Currency stated on the Confirmation for such Purchased Loan); 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 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.

“Required Filing” shall mean, with respect to any Foreign Purchased Loan, to the extent applicable, (x) registration of particulars of the related Mortgage at the Companies Registration Office under the Companies Act 2006 and payment of associated fees, (y) registration of the related Mortgage at the Land Registry or Land Charges Registry in England and Wales and payment of associated fees and (z) registration of the related Mortgage with any analogous Governmental Authority in the applicable non-U.S. jurisdiction in which the Mortgaged Property securing the related Mortgage is located.

“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

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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.

“RICS” shall mean the then-current Statements of Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors.

“SEC” shall have the meaning specified in Exhibit VI.

“Second Amendment and Restatement Date” shall mean March 31, 2017.

“Security Agent” shall mean, with respect to a Foreign Purchased Loan that is in syndicated form, a security agent or a security trustee appointed by the lenders under such Foreign Purchased Loan to hold the benefit of any security agreements relating to such Foreign Purchased Loan on their behalf.

“Seller” shall mean, collectively, Parlex 2, Parlex 2A, Parlex 2 UK, Parlex 2 EUR and each other Person as and when same may be approved by Buyer in its sole discretion from time to time and admitted to this Agreement as a Seller by a joinder agreement executed and delivered by Buyer, Seller and such approved other Seller in the form of Exhibit XI to this Agreement (a “Joinder Agreement”).

“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, individually or collectively, as the context may require, (i) that certain Servicing Agreement, dated as of June 12, 2013, among Parlex 2, Buyer and Servicer, as the same may be amended, modified and/or restated from time to time, (ii) that certain Servicing Agreement, dated as of January 31, 2014, among Parlex 2A, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, (iii) that certain Servicing Agreement, dated as of the Second Amendment and Restatement Date, among Parlex 2 UK, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, (iv) that certain Servicing Agreement, dated as of the Second Amendment and Restatement Date, among Parlex 2 EUR, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, and (v) any other servicing agreement entered into by a Seller, Buyer and any Servicer approved by Buyer for the servicing of Purchased Loans, as the same may be amended, modified and/or restated from time to time.

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“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; (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 (a) increases which are derived from accrual or capitalization of deferred interest which is added to principal or protective advances or (b) increases resulting from future fundings made pursuant to the Purchased Loan Documents,

(iii)    modifies the amount or timing of any regularly scheduled payments of principal and non-contingent interest of the Purchased Loan in question, provided, however, that Seller may, without the consent of Buyer change the scheduled payment date of a Purchased Loan within any given calendar month,

(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,

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(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.

“Single Purpose Entity” shall have the meaning specified in Exhibit VI.

“SIPA” shall have the meaning specified in Section 24(a) of this Agreement.

“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.

“Spot Rate” shall mean, with respect to an Applicable Currency, as of any date of determination, the rate quoted as the spot rate for the purchase of such Applicable Currency with another Applicable Currency at or about 11:00 a.m., London time, on the date that is two (2) Business Days prior to the date as of which the foreign exchange computation is made as obtained from the applicable screen on Bloomberg.

“Standard Qualifications” shall have the meaning specified in Exhibit VI.

“Survey” shall mean: (x) with respect to U.S. Purchased Loans, a certified ALTA/ACSM (or applicable state standards for the state in which the Mortgaged Property is located) survey of a Mortgaged Property prepared by a registered independent surveyor or engineer, and (y) with respect to Foreign Purchased Loans, a valuation of such Mortgaged Property by a valuer prepared on the basis of the market value as that term is defined in the then current Statements of Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors or its equivalent in any applicable jurisdiction, in each case, in form and content satisfactory to Buyer in its commercially reasonable discretion and, in the case of the foregoing clause (x), in form and content satisfactory to the company issuing the Title Policy for such Mortgaged Property.

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“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, any Custodial Agreement, any Blocked Account Agreement, any Servicing Agreement, any Joinder Agreement, the Omnibus Amendment, all Confirmations executed pursuant to this Agreement or the Original 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.

“Transaction Request” shall mean a request to enter into a Transaction, in the form of Exhibit VIII attached hereto.

“Transfer Certificate” shall mean, with respect to a Foreign Purchased Loan, any form of transfer or substitution certificate or assignment agreement that is scheduled to the related loan agreement or other equivalent agreement for such Foreign Purchased Loan and that is used to effect the legal transfer or assignment of such Foreign Purchased Loan.

“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. Dollars” and “$” shall mean the lawful currency of the United States of America.

“U.S. Person” shall mean a “United States person” as defined in Section 7701(a)(30) of the Code.

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“U.S. Purchased Loan” shall mean: (i) with respect to any Transaction, an Eligible Loan secured by Mortgaged Property located in the United States of America or any territory thereof and which is sold by the applicable Seller to Buyer in such Transaction and (ii) with respect to the Transactions for U.S. Purchased Loans in general, all Eligible Loans secured by Mortgaged Property located in the United States of America or any territory thereof and which are sold by the applicable Sellers to Buyer.

“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 U.S. Purchased Loans shall not exceed the Facility Amount for U.S. Purchased Loans, (ii) the aggregate outstanding Purchase Price at any time for all Foreign Purchased Loans shall not exceed the Facility Amount for Foreign Purchased Loans, and (iii) 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 such 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 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 or its designee against the transfer of the Purchase Price (which Purchase Price shall be funded in the Applicable Currency of the related Whole Loan or Senior Interest (or participation interest therein) and stated on the applicable Confirmation) to an account of Seller or as directed by Seller in writing (and subject to the last sentence of Section 17).

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(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 (which initial Purchase Price and the Maximum Purchase Price shall be expressed and payable in the same Applicable Currency as the related 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),

(ix) the Applicable Currency (which shall be the same Applicable Currency as the related Purchased Loan),

(x) the applicable Purchase Date Spot Rates, and

(xi) 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 under the UCC and, with respect to any Foreign Purchased Loan, the equivalent Requirements of Law under the relevant non-U.S. jurisdiction, bankruptcy safe harbor and the Investment Company Act of 1940) and closing documentation as Buyer may reasonably request pursuant to this Agreement (including, with respect to any Foreign Purchased Loan, a Foreign Assignment Agreement and such other closing documentation necessary to transfer such Foreign Purchased Loan to Buyer and perfect the security interest therein granted by Seller in favor of Buyer in the relevant non-U.S. jurisdiction);

(D) Seller shall have paid to Buyer (x) the Funding Fee then due and payable with respect to such Transaction pursuant to the Fee Agreement 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;

(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 applicable Concentration Limits is satisfied (unless waived by Buyer).

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(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.

(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 Agreement 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.

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(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 (or, with respect to any Foreign Purchased Loan, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Loan as of the date of determination), Seller shall have the right, from time to time, to transfer cash (in the Applicable Currency of the related Purchased Loan) 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).

(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 Index 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

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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 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 Index 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

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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 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, (x) the aggregate Market Value of all U.S. Purchased Loans shall be less than the sum of the Margin Amounts calculated individually with respect to each U.S. Purchased Loan, (y) the aggregate Market Value of all Foreign Purchased Loans (EUR) shall be less than the sum of the Margin Amounts calculated individually with respect to each Foreign Purchased Loan (EUR) or (z) the aggregate Market Value of all Foreign Purchased Loans (GBP) shall be less than the sum of the Margin Amounts calculated individually with respect to each Foreign Purchased Loan (GBP) (each of the foregoing clauses (x), (y) and (z), a “Margin Deficit”), then in any such case Buyer may by notice to Seller in writing (including therein a description of the then-current Market Value calculation for the Purchased Loan for which a Margin Deficit exists, together with a description of the then-current Market Value calculation for all other Purchased Loans) require Seller to cure such Margin Deficit by any of the following methods selected by Seller:

(i) transferring to Buyer additional cash collateral in an amount at least equal to the sum of the amounts, calculated individually for each U.S. Purchased Loan, Foreign Purchased Loan (EUR) or Foreign Purchased Loan (GBP), as applicable, 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 Maximum 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 U.S. Purchased Loan, Foreign Purchased Loan (EUR) or Foreign Purchased Loan (GBP), as

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applicable, such that the aggregate Market Value of the U.S. Purchased Loans, Foreign Purchased Loans (EUR) or Foreign Purchased Loans (GBP), as applicable, is at least equal to or is greater than the sum of the Margin Amounts of the U.S. Purchased Loans, Foreign Purchased Loans (EUR) or Foreign Purchased Loans (GBP), as applicable; or

(iii) doing an early repurchase on an Early Repurchase Date of any U.S. Purchased Loan, Foreign Purchased Loan (EUR) or Foreign Purchased Loan (GBP), as applicable, 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.

With respect to this Section 4(a), such payments and/or reductions shall be made by Seller in the Applicable Currency of the related Purchased Loan(s) with respect to which such Margin Deficit exists. 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 such 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 (and in the Applicable Currency) 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.

(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, by wire transfer to an account of Seller or as directed by Seller in writing (and subject to the last sentence of Section 17), cash (in the Applicable Currency of such Purchased Loan) in an amount equal to the product of a percentage, not to exceed the applicable Maximum 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

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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 (or, with respect to any Foreign Purchased Loan, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Loan as of the date of determination);

(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.

In addition to and in no way limiting Seller’s right to submit to Buyer a Request for Margin Excess in accordance with this Section 4(c), concurrent with or following a future funding made by Seller to a Mortgagor under a Purchased Loan, Seller may submit to Buyer a written request that Buyer, after applying all of the Future Funding Conditions Precedent referred to above, provide Seller with an indication of the amount of availability created with respect to such Purchased Loan by Seller making such future funding.

(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) (and subject to the last sentence of Section 17) 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 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.

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(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 with respect to such Purchased Loan, 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 of such Purchased Loan 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 of such Purchased Loan (the difference between the actual outstanding Purchase Price (or outstanding Purchase Price less cash collateral transferred, as the case may be), and the Maximum Purchase Price, the “Margin Excess (Other)”),

then Seller in either case 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) (in the Applicable Currency of the Purchased Loan for which such Margin Excess (Other) exists), by wire transfer to an account of Seller or designated by Seller in writing (and subject to the last sentence of Section 17); 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 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 (or, with respect to any Foreign Purchased Loan, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Loan as of the date of determination); and

(iv) following such increase in the outstanding Purchase Price attributable to such Margin Excess (Other), no Margin Deficit shall exist.

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(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) by no later than the close of business on the next succeeding Business Day following the Business Day on which Buyer has completed its calculation of Market Value, or (y) Section 4(e) 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, or any increase to the Market Value of a Purchased Loan, in each case pursuant to Section 4(c) and 4(d) or 4(e) and 4(f), as applicable, Buyer and Seller shall revise the Confirmation to reflect the revised outstanding Purchase Price, Maximum Purchase Price, Purchase Price Percentage, and Maximum Purchase Price Percentage for such Purchased Loan, as applicable, and any other necessary modifications to the terms set forth on the existing Confirmation.

(h)    In the event Seller requests to enter into a Transaction with Buyer with respect to any Eligible Loan which includes Margin Excess (Future Funding) obligations approved by Buyer, or Seller requests a Margin Excess (Future Funding) with respect to any Purchased Loan, and the result of such Transaction with respect to such Eligible Loan or the funding of such Margin Excess (Future Funding) with respect to such Purchased Loan would be that, the sum of Column A plus Column B plus Column C calculated with respect to all U.S. Purchased Loans or all Foreign Purchased Loans, as the case may be, collectively (including for this purpose, such Eligible Loan) would exceed the Facility Amount for U.S. Purchased Loans or for Foreign Purchased Loans, as applicable, then Seller may notify Buyer in writing that Seller elects to reallocate downward, in its sole discretion, the amount referenced in Column C with respect to any U.S. Purchased Loan or Foreign Purchased Loan, as applicable, by an amount necessary for the sum of Column A plus Column B plus Column C calculated with respect to all U.S. Purchased Loans or all Foreign Purchased Loans, as applicable, collectively (including for this purpose, such Eligible Loan) not to exceed, with respect to all U.S. Purchased Loans or all Foreign Purchased Loans, as applicable, collectively (including for this purpose, such Eligible Loan), the Facility Amount for U.S. Purchased Loans or Foreign Purchased Loans, as applicable. Notwithstanding the foregoing, Seller shall be permitted, at any time and from time to time, upon written notice to Buyer, to reallocate upward or downward the amount referenced in Column C with respect to any U.S. Purchased Loan or Foreign Purchased Loan so long as (a) the sum of Column A plus Column B plus Column C calculated with respect to all U.S. Purchased Loans or all Foreign Purchased Loans, as applicable, collectively, does not exceed the Facility Amount for U.S. Purchased Loans or Foreign Purchased Loans, as applicable, and (b) any upward reallocation of the amount referenced in Column C for any U.S. Purchased Loan or Foreign Purchased Loan, as applicable, does not exceed the amount referenced in Column E with respect to such Purchased Loan. Upon making any such reallocations, Seller shall promptly deliver to Buyer (by e-mail) a Facility Asset Chart, which then-current Facility Asset Chart shall represent the definitive allocation of Buyer’s Margin Excess (Future Funding) obligations with respect to

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all Purchased Loans. Notwithstanding anything to the contrary set forth in this Agreement or any other Transaction Document, Buyer and Seller hereby acknowledge and agree that, as of any date of determination, (i) the amount referenced in Column C of the then-current version of the Facility Asset Chart with respect to any Purchased Loan shall be the maximum amount of Margin Excess (Future Funding) that Buyer would be obligated to transfer to Seller with respect to such Purchased Loan upon satisfaction of the Future Funding Conditions Precedent, in accordance with Sections 4(c) and (d) of this Agreement, and (ii) the sum of Column A plus Column B plus Column C calculated with respect to each Purchased Loan individually, as reflected in Column D, shall not exceed, with respect to all Purchased Loans collectively, the Facility Amount.

5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)    Each Cash Management Account shall be established at the Depository, which (i) in the case of the Cash Management Account established by Parlex 2, shall have been established on June 12, 2013, (ii) in the case of the Cash Management Account established by Parlex 2A, shall have been established on January 31, 2014, (iii) in the case of the Cash Management Account established by Parlex 2 UK, shall have been established on the Second Amendment and Restatement Date, (iv) in the case of the Cash Management Account established by Parlex 2 EUR, shall have been established on the Second Amendment and Restatement Date, and (v) in the case of any Cash Management Account established by any Person that joins as a Seller under this Agreement from time to time, shall be established concurrently with the execution and delivery of the Joinder Agreement by which such Person joins as a Seller under this Agreement. Buyer shall have sole dominion and control over each 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 applicable 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 or similar Person (however described) 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 applicable 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 applicable 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 applicable Cash Management Account and (ii) deposit in the applicable 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.

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(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 applicable Blocked Account Agreement (or in accordance with such other direction and instruction of Seller which is reasonably approved by Buyer).

(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 received by the Depository shall be paid, pursuant to the withdrawal instructions of Seller that have been approved by Buyer, either (x) with respect to scheduled Principal Payments (other than Principal Payments in full), on the next Remittance Date or (y) with respect to unscheduled Principal Payments and scheduled Principal Payments in full, on the first (1^st) Business Day immediately following the date such Principal Payment was deposited in the applicable Cash Management Account), 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 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 any Purchased Loan and the associated Hedging Transactions shall be applied, pursuant to the withdrawal instructions of Seller that have been approved by Buyer (which withdrawal instructions shall set forth the applicable Spot Rate(s) referenced in clause (vii) below), 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 denominated in the same Applicable Currency as the Purchased Loan from which the Income was received as of such Business Day, such payment to be allocated amongst all such Purchased Loans on a pro rata basis based upon the outstanding Purchase Price of each such Purchased Loan;

(iv) fourth, to pay the amount, if any, payable by Seller in the event any Hedging Transaction is being terminated as of such date;

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(v) fifth, to make a payment to Buyer in reduction of the outstanding Purchase Price of the Purchased Loan from which the Income was received;

(vi) sixth, to make a payment to Buyer in reduction of the outstanding Purchase Price of all of the Purchased Loans denominated in the same Applicable Currency as the Purchased Loan from which the Income was received, such payment to be allocated amongst all such Purchased Loans on a pro rata basis based upon the outstanding Purchase Price of each such Purchased Loan;

(vii) seventh, to make a payment to Buyer in reduction of the outstanding Purchase Price of all of the Purchased Loans denominated in an Applicable Currency different than the Applicable Currency of the Purchased Loan from which the Income was received, such payment to be allocated amongst all such Purchased Loans on a pro rata basis based upon the outstanding Purchase Price of each such Purchased Loan (which pro rata allocation shall be calculated based on the then-current equivalent of such Purchase Price in the Applicable Currency of the Purchased Loan from which the Income was received based on the applicable Spot Rate as of the date of determination); and

(viii) eighth, 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 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 applicable 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;

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(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;

(b)    the Hedging Transactions, if any, entered into pursuant to this Agreement;

(c)    each 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 each Cash Management Account;

(d)    the Foreign Assignment Agreement, if any;

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

(f)    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.

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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, the equivalent under applicable Requirements of Law in the relevant non-U.S. jurisdiction (with respect to Foreign Purchased Loans) 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 applicable Requirements of Law in the relevant jurisdiction (including, with respect to U.S. Purchased Loans, 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 and by any Foreign Assignment Agreement, UCC financing statements and continuation statements or their equivalent under applicable Requirements of Law in the relevant non-U.S. jurisdiction (with respect to Foreign Purchased Loans) (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 and by any Foreign Assignment Agreement (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 (and subject to the last sentence of Section 17).

(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 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):

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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 and/or assignments (including, with respect to Foreign Purchased Loans, copies of all Transfer Certificates duly executed by the relevant parties).

(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 (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or regulations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction to perfect a valid first priority security in the Mortgaged Property).

(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 (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction).

(v) An original of the Assignment Documents in Blank.

(vi) An original of the Foreign Assignment Agreement.

(vii) 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 (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or regulations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction to perfect a valid first priority security in the Mortgaged Property).

(viii) 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).

(ix) An original or copy of any security agreement, chattel mortgage or equivalent document executed in connection with the Purchased Loan and,

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together, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction necessary to perfect a valid first priority security interest in the relevant Mortgaged Property.

(x) 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 (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction necessary to perfect a valid first priority security interest in the relevant Mortgaged Property).

(xi) 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 (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction).

(xii) A copy of the UCC financing statements and all necessary UCC continuation statements (or, with respect to Foreign Purchased Loans, their equivalent under applicable Requirements of Law in the relevant non-U.S. jurisdiction) with evidence of filing or submission for filing thereon, and UCC assignments (or, with respect to Foreign Purchased Loans, their equivalent under applicable Requirements of Law in the relevant non-U.S. jurisdiction) prepared by Seller in blank, which UCC assignments or such equivalent shall be in form and substance acceptable for filing.

(xiii) An environmental indemnity agreement (if any).

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

(xv) A survey of the Mortgaged Property (if any) as accepted by the title company for issuance of the Title Policy (or, with respect to Foreign Purchased Loans, by Buyer).

(xvi) With respect to Foreign Purchased Loans, a Property Report and an overview thereon prepared by Seller’s counsel addressed to or capable of being relied on by Buyer or its designee upon registration of Buyer or its designee, as lender of record (if available).

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

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(xviii) 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-A or Exhibit V-B attached hereto, as applicable, irrevocably appointing Buyer or its designee 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 Default, to take the actions described therein, on the terms and conditions set forth therein. 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 or its designee’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 (or its designee) 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 or its designee’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

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directly, with the Custodian. The Purchased Loan Files shall be maintained in accordance with the applicable 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 and/or its designee shall exercise all voting and corporate rights with respect to the Purchased Loans in accordance with Seller’s written instructions; provided, however, that Buyer and/or its designee, 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. The rights of Buyer as described in Section 3.07 of the Servicing Agreement in relation to the consideration of and provision to the Servicer of any consents, authorizations, directions and/or instructions shall constitute the exercise of voting and corporate rights with respect to the Purchased Loans for the purpose of this Section 7(c). Upon the occurrence and during the continuation of an Event of Default, Buyer and/or its designee, 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 (or its designee) on the applicable Purchase Date, and Buyer (or its designee) 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 (or its designee) 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 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 (or its designee) 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.

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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 jurisdiction 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.

(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

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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 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 (together, with respect to any Foreign Purchased Loan, with the relevant Foreign Assignment 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.

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(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, the Transfer Certificate and any other documents required to be delivered under this Agreement and the applicable 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, 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.

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(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 federal and other material tax returns which are required to be filed with respect to Seller and have paid all 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.

(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.

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(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 and each Foreign Sanctions Authority. 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, the U.S. Department of Commerce, the U.S. Department of State and any Foreign Sanctions Authority. 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).

(xxii) Centre of Main Interests. Seller warrants, represents and covenants that it has not (A) taken any action that would cause its “centre of main interests” (as such term is used in Section 3(1) of the European Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings (the “Insolvency Regulation”)) to be located in the United Kingdom or Europe or (B) registered as a company in any jurisdiction other than Delaware.

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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;

(h)    enter into any Hedging Transactions other than to the extent required under Section 12(e) (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);

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(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; or

(h)    take any action that will cause its “centre of main interests” (as such term is used in the Insolvency Regulation) to be located in the United Kingdom or Europe or register as a company in any jurisdiction other than Delaware.

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 or their equivalent under applicable Requirements of Law in any relevant non-U.S. jurisdiction 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

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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;

(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 Second Amended and Restated Management Agreement, dated as of October 23, 2014, 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 Seller is included as part of a consolidated, unitary, combined or similar tax return, or if 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

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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.

(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)    Except as expressly permitted under this Agreement, 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;

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(ii) Seller fails to cure a Margin Deficit in accordance with Section 4 hereof;

(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 (or its designee) 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 (or its designee) 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 applicable 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

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and continues unremedied for ten (10) Business Days after the earlier of receipt of written notice thereof from Buyer or 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 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 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) the lesser of (i) 5% of Tangible Net Worth (as such term is defined in the Guaranty) and (ii) $25,000,000 (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) the lesser of (i) 5% of Tangible Net Worth (as such term is defined in the Guaranty) and (ii) $25,000,000 (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,

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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 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

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(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 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

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New York or, with respect to any Foreign Purchased Loan, the equivalent Requirement of Law in the relevant non-U.S. jurisdiction, to the extent that the UCC or such other Requirement of Law is applicable, and the right to offset any mutual debt and claim and the right to appropriate the Purchased Loans in accordance with this Section 12(b)(vi)), 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. The parties hereto agree that the method of valuation of Purchased Loans provided for in this Section 12(b)(vi) shall constitute a commercially reasonable method of valuation for the purposes of the FCA Regulations.

(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)

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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).

(x) With respect to any Foreign Purchased Loan, Buyer may take any steps necessary to vest all or any of such Foreign Purchased Loan in the name of Buyer (or its designee) including completing and submitting any Transfer Certificate to the relevant facility agent and making payment of any transfer fees. Seller hereby agrees that any such transfer fees paid by Buyer will constitute “Indemnified Amounts” for the purposes of Section 27 of this Agreement.

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 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, United States Postal Service or Royal Mail, 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

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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.

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.

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(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 Seller at any reasonable time and from time to time upon reasonable request.

(d)    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 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 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. The parties hereto intend that the provisions of section 5-1401 of the New York General Obligations Law shall apply to this Agreement.

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

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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 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”. The parties intend and recognize that the arrangements under this Agreement are to constitute a “title transfer financial collateral arrangement” or a “security financial collateral arrangement” for the purposes of the Financial Collateral Arrangements (No 2) Regulations 2003 (the “FCA Regulations”).

(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)

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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.

(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

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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;

(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

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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.

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

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(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 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. This Section 27 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

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

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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 (1) with respect to each U.S. Purchased Loan, $15,000 with respect to any individual Eligible Loan without Seller’s prior consent and (2) with respect to each Foreign Purchased Loan, an amount to be agreed upon in writing by Seller and Buyer prior to the commencement of due diligence, each acting reasonably 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 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).

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(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 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.

(e)    The payment of servicing fees under any Servicing Agreement shall be solely the obligation of Seller.

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 or, with respect to Foreign Purchased Loans, the equivalent Requirements of Law in the relevant non-U.S. jurisdiction.

(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

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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 each 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.

(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

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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 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 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 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 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) Buyer shall deliver to 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) Buyer shall deliver to Seller two (2) executed originals of IRS Forms W-8ECI, W-8BEN, W-8BEN-E, 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 Buyer (or any assignee or participant thereof) under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if

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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 Buyer and 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.

(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)    Buyer on the one hand, and each of Parlex 2 UK and Parlex 2 EUR (as relevant) on the other hand, each confirm that it will take all steps (including without limitation the completion of procedural formalities) reasonably required by the other such that payments by the obligors in respect of the Foreign Purchased Loans can be made without deduction or withholding for or on account of tax so far as legally permissible.

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(j)    Buyer (and each of its designees) and Parlex 2 UK each confirm that it is entitled to full exemption from tax imposed by the United Kingdom on interest under the terms of the double taxation agreement between the United Kingdom and the United States of America.

(k)    Buyer agrees that, so long as no Event of Default has occurred and is continuing, it will promptly notify Seller if Buyer (or its designee) assigns or otherwise transfers any interest in any Foreign Purchased Loan where it is aware that to do so could result in any increased deduction or withholding for or on account of tax from amounts payable by the obligors in respect of such Foreign Purchased Loan.

(l)    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.

32. JOINT AND SEVERAL OBLIGATIONS

(a)    Each Seller hereby acknowledges and agrees that (i) each Seller shall be jointly and severally liable to Buyer to the maximum extent permitted by Requirement of Law for all Repurchase Obligations, (ii) the liability of each Seller with respect to the Repurchase Obligations (A) shall be absolute and unconditional to the extent set forth in this Agreement and the other Transaction Documents and shall remain in full force and effect (or be reinstated) until all Repurchase Obligations shall have been paid, performed and/or satisfied, as applicable, in full, and (B) until such payment, performance and/or satisfaction, as applicable, has occurred, shall not be discharged, affected, modified or impaired on the occurrence from time to time of any event, including any of the following, whether or not with notice to or the consent of each Seller, (1) the waiver, compromise, settlement, release, termination or amendment (including any extension or postponement of the time for payment, performance, satisfaction, renewal or refinancing) of any of the Repurchase Obligations (other than a waiver, compromise, settlement, release or termination in full of the Repurchase Obligations), (2) the failure to give notice to each Seller of the occurrence of an Event of Default, (3) the release, substitution or exchange by Buyer of any Purchased Loan (whether with or without consideration) or the acceptance by Buyer of any additional collateral or the availability or claimed availability of any other collateral or source of repayment or any non-perfection or other impairment of collateral, (4) the release of any Person primarily or secondarily liable for all or any part of the Repurchase Obligations, whether by Buyer or in connection with any Act of Insolvency affecting any Seller or any other Person who, or any of whose property, shall at the time in question be obligated in respect of the Repurchase Obligations or any part thereof, or (5) to the extent permitted by Requirement of Law, any other event, occurrence, action or circumstance that would, in the absence of this Section 32, result in the release or discharge of any or all Sellers from the performance or observance of any Repurchase Obligation, (iii) Buyer shall not be required first to initiate any suit or to exhaust its remedies against any Seller or any other Person to become liable, or against any of the Purchased Loans, in order to enforce the Transaction Documents and each Seller expressly agrees that, notwithstanding the occurrence of any of the foregoing, each Seller shall be and remain directly and primarily liable for all sums due under any of the Transaction Documents, (iv) when making any demand hereunder against any Seller, Buyer may, but shall be under no obligation to, make a similar demand on any other Seller, and any failure by Buyer to make any such demand or to collect any payments from any other Seller, or

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any release of any such other Seller shall not relieve any Seller in a respect of which a demand or collection is not made or Sellers not so released of their obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Buyer against Sellers, and (v) on disposition by Buyer of any property encumbered by any Purchased Loans, each Seller shall be and shall remain jointly and severally liable for any deficiency to the extent set forth in this Agreement and the other Transaction Documents.

(b)    Buyer hereby acknowledges and agrees that the provisions of this Section 32 and the obligation of each Seller to be jointly and severally liable for the Repurchase Obligations do not and shall not violate any of the provisions of Section 13 of this Agreement or otherwise cause any Seller to no longer be a Special Purpose Entity.

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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 Signatory

[SIGNATURES CONTINUE ON NEXT PAGE]

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SELLER:
PARLEX 2 FINANCE, LLC,
a Delaware limited liability company
By:	/s/ Douglas N. Armer
Name:	Douglas N. Armer
Title:	Managing Director, Head of Capital Markets and Treasurer
PARLEX 2A FINCO, LLC,
a Delaware limited liability company
By:	/s/ Douglas N. Armer
Name:	Douglas N. Armer
Title:	Managing Director, Head of Capital Markets and Treasurer
PARLEX 2 UK FINCO, LLC,
a Delaware limited liability company
By:	/s/ Douglas N. Armer
Name:	Douglas N. Armer
Title:	Managing Director, Head of Capital Markets and Treasurer
PARLEX 2 EUR FINCO, LLC,
a Delaware limited liability company
By:	/s/ Douglas N. Armer
Name:	Douglas N. Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

EX-10.2

Exhibit 10.2

THIRD AMENDMENT TO LIMITED GUARANTY

THIS THIRD AMENDMENT TO LIMITED GUARANTY (this “Amendment”) is made as of March 31, 2017 (the “Effective Date”), by and between BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation (“Guarantor”), and CITIBANK, N.A., a national banking association (“Buyer”).

RECITALS:

WHEREAS, Parlex 2 Finance, LLC, a Delaware limited liability company (“Parlex 2”), Parlex 2A Finco, LLC, a Delaware limited liability company (“Parlex 2A” and together with Parlex 2, “Original Sellers”), and Buyer entered into that certain Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014, as amended by that certain First Amendment to Amended and Restated Master Repurchase Agreement dated as of July 28, 2016, by and among Original Sellers and Buyer (collectively, the “First A&R Repurchase Agreement”), which First A&R Repurchase Agreement amended, restated and replaced in its entirety that certain Repurchase Agreement, dated as of June 12, 2013 (the “Original Repurchase Agreement”), as amended by that certain First Amendment to Master Repurchase Agreement, dated as of July 26, 2013, that certain Second Amendment to Master Repurchase Agreement, dated as of September 11, 2013, that certain Third Amendment to Master Repurchase Agreement, dated as of November 20, 2013, that certain Fourth Amendment to Master Repurchase Agreement, dated as of January 31, 2014, and that certain Joinder Agreement, dated as of January 31, 2014 between Buyer, Parlex 2 and Parlex 2A);

WHEREAS, in connection with the Original Repurchase Agreement, Guarantor entered into that certain Limited Guaranty dated as of June 12, 2013, as amended by that certain First Amendment to Limited Guaranty dated as of November 20, 2013, as further amended by that certain Second Amendment to Limited Guaranty, dated as of February 24, 2014 (collectively, and as the same may be further amended, supplemented or otherwise modified from time to time, the “Guaranty”), in favor of Buyer, guaranteeing certain obligations of Original Sellers;

WHEREAS, concurrently with the Effective Date, Original Sellers, Parlex 2 UK Finco, LLC and Parlex 2 EUR Finco, LLC, each a Delaware limited liability company, and Buyer have entered into that certain Second Amended and Restated Master Repurchase Agreement (as the same may be amended, supplemented, extended, restated, replaced or otherwise modified from time to time, the “Second A&R Repurchase Agreement”), which Second A&R Repurchase Agreement amended, restated and replaced in its entirety the Original Repurchase Agreement. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Guaranty or the Second A&R Repurchase Agreement, as applicable; and

WHEREAS, in connection with the Second A&R Repurchase Agreement, the parties hereto desire to (i) modify certain terms and provisions of the Guaranty as set forth herein, (ii) reaffirm the obligations of Guarantor under the Guaranty and (iii) amend and enter into certain other Transaction Documents.

NOW THEREFORE, in consideration of the foregoing and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby consent and agree as follows:

AGREEMENT:

1.    AMENDMENTS TO GUARANTY. The Guaranty is hereby amended and modified as follows:

(a) Any references to, and any definition of, the “Repurchase Agreement” in the Guaranty shall mean, and such definition is hereby amended to refer to, the Second A&R Repurchase Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

2.    REAFFIRMATION OF GUARANTY. Guarantor hereby (i) acknowledges and consents to the Second A&R Repurchase Agreement and the execution and delivery of this Amendment and (ii) represents, warrants and covenants that notwithstanding the execution and delivery of this Amendment and the Second A&R Repurchase Agreement, 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.

3.    GUARANTOR’S REPRESENTATIONS. Guarantor represents and warrants that (i) Guarantor has taken all necessary action to authorize the execution, delivery and performance of this Amendment, (ii) this Amendment has been duly executed and delivered by or on behalf of Guarantor and constitutes the legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles, (iii) 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 Guarantor of this Amendment, and (iv) any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Guarantor 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).

4.    GOVERNING LAW; WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. This Amendment shall be governed in accordance with the terms and provisions of Sections 19, 21 and 27(c) of the Guaranty, mutatis mutandis.

5.    SEVERABILITY. Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable 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 Amendment.

6.    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.

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7.    SUCCESSORS AND ASSIGNS. This Amendment shall inure to the benefit of and shall be binding on the parties hereto and their respective successors and assigns.

8.    AMENDMENTS. This Amendment may not be modified, amended, waived, changed or terminated orally, but only by an agreement in writing signed by the party against whom the enforcement of the modification, amendment, waiver, change or termination is sought.

[NO FURTHER TEXT ON THIS PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized representatives, all as of the day and year first above written.

GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Douglas N. Armer
Name:	Douglas N. Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

[Signatures Continued on Next Page]

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BUYER:
CITIBANK, N.A.
By:	/s/ Richard B. Schlenger
Name:	Richard B. Schlenger
Title:	Authorized Signatory

5

EX-10.3

Exhibit 10.3

AMENDMENT NO. 6 TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES CONTRACT

AMENDMENT NO. 6 TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES CONTRACT, dated as of March 13, 2017 (this “Amendment”), between PARLEX 5 FINCO, LLC, a Delaware limited liability company (“Seller”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).

RECITALS

WHEREAS, Seller and Buyer are parties to that certain Amended and Restated Master Repurchase and Securities Contract, dated as of April 4, 2014 (as amended by that certain Amendment No. 1 to Amended and Restated Master Repurchase and Securities Contract, dated as of October 23, 2014, as further amended by that certain Amendment No. 2 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 13, 2015, as further amended by that certain Amendment No. 3 to Amended and Restated Master Repurchase and Securities Contract, dated as of April 14, 2015, as further amended by that certain Amendment No. 4 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 11, 2016, as further amended by that certain Amendment No. 5 to Amended and Restated Master Repurchase and Securities Contract, dated as of June 30, 2016, as amended hereby and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”);

WHEREAS, Seller has requested, and Buyer has agreed, to amend the Repurchase Agreement as set forth in this Amendment and Blackstone Mortgage Trust, Inc. (“Guarantor”) agrees to make the acknowledgements set forth herein.

Therefore, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as follows:

SECTION 1.    Amendment to Repurchase Agreement. The defined term “Funding Expiration Date”, as set forth in Article 2 of the Repurchase Agreement, is hereby amended and restated in its entirety to read as follows:

“Funding Expiration Date”: April 12 2017; provided that, in the event that Seller requests an extension of the Funding Expiration Date, such request may be approved or denied by Buyer for any reason or for no reason, as determined in Buyer’s sole and absolute discretion, and it is expressly acknowledged and agreed that Buyer has no obligation to consider or grant any such request.

SECTION 2.    Amendment Effective Date. This Amendment and its provisions shall become effective on the date first set forth above (the “Amendment Effective Date”), which is the date that this Amendment was executed and delivered by a duly authorized officer of each of Seller, Buyer and Guarantor, along with the delivery of a secretary certificate and bring down letters affirming the opinions as to corporate, enforceability and bankruptcy matters provided to Buyer on the Closing Date, each dated as of the Amendment Effective Date.

SECTION 3.    Representations, Warranties and Covenants. Seller hereby represents and warrants to Buyer, as of the Amendment Effective Date, that (i) it is in full compliance with all of the terms and provisions and its undertakings and obligations set forth in the Repurchase Agreement and each other Repurchase Document to which it is a party on its part to be observed or performed, and (ii) no Default or Event of Default has occurred or is continuing. Seller hereby confirms and reaffirms its representations, warranties and covenants contained in each Repurchase Document to which it is a party.

SECTION 4.    Acknowledgments of Guarantor. Guarantor hereby acknowledges (a) the execution and delivery of this Amendment and agrees that it continues to be bound by that certain Guarantee Agreement, dated as of March 13, 2014 (the “Guarantee Agreement”), made by Guarantor in favor of Buyer, notwithstanding the execution and delivery of this Amendment and the impact of the changes set forth herein, and (b) that, as of the date hereof Buyer is in compliance with its undertakings and obligations under the Repurchase Agreement, the Guarantee Agreement and each of the other Repurchase Documents.

SECTION 5.    Limited Effect. Except as expressly amended and modified by this Amendment, the Repurchase Agreement and each of the other Repurchase Documents shall continue to be, and shall remain, in full force and effect in accordance with their respective terms; provided, however, that upon the Amendment Effective Date, each (x) reference therein and herein to the “Repurchase Documents” shall be deemed to include, in any event, this Amendment, (y) each reference to the “Repurchase Agreement” in any of the Repurchase Documents shall be deemed to be a reference to the Repurchase Agreement, as amended hereby, and (z) each reference in the Repurchase Agreement to “this Agreement”, this “Repurchase Agreement”, this “Amended and Restated Repurchase Agreement”, “hereof”, “herein” or words of similar effect in referring to the Repurchase Agreement shall be deemed to be references to the Repurchase Agreement, as amended by this Amendment.

SECTION 6.    Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of a manually executed original counterpart thereof.

SECTION 7.    Expenses. Seller and Guarantor agree to pay and reimburse Buyer for all out-of-pocket costs and expenses incurred by Buyer in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the fees and disbursements of Cadwalader, Wickersham & Taft LLP, counsel to Buyer

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SECTION 8.    GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

SELLER:
PARLEX 5 FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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BUYER:
WELLS FARGO BANK, N.A., a national banking association
By:	/s/ Allen Lewis
Name:	Allen Lewis
Title:	Managing Director

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With respect to the acknowledgments set forth in Section 4 herein:
GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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EX-10.4

Exhibit 10.4

AMENDMENT NO. 7 TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES CONTRACT

AMENDMENT NO. 7 TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES CONTRACT, dated as of March 31, 2017 (this “Amendment”), between PARLEX 5 FINCO, LLC, a Delaware limited liability company (“Seller”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).

RECITALS

WHEREAS, Seller and Buyer are parties to that certain Amended and Restated Master Repurchase and Securities Contract, dated as of April 4, 2014 (as amended by that certain Amendment No. 1 to Amended and Restated Master Repurchase and Securities Contract, dated as of October 23, 2014, as further amended by that certain Amendment No. 2 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 13, 2015, as further amended by that certain Amendment No. 3 to Amended and Restated Master Repurchase and Securities Contract, dated as of April 14, 2015, as further amended by that certain Amendment No. 4 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 11, 2016, as further amended by that certain Amendment No. 5 to Amended and Restated Master Repurchase and Securities Contract, dated as of June 30, 2016, as further amended by that certain Amendment No. 6 to Amended and Restated Master Repurchase and Securities Contract, dated as of March 13, 2017, as amended hereby and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”);

WHEREAS, Seller has requested, and Buyer has agreed, to amend the Repurchase Agreement as set forth in this Amendment and Blackstone Mortgage Trust, Inc. (“Guarantor”) agrees to make the acknowledgements set forth herein.

Therefore, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as follows:

SECTION 1.    Amendments to Repurchase Agreement.

(a)    The defined terms “Anti-Terrorism Laws” and “Sanctioned Entity”, each as forth in Article 2 of the Repurchase Agreement, are each hereby deleted in their entirety.

(b)    Clause (f) of the definition of “Eligible Asset”, as set forth in Section 2.01 of the Repurchase Agreement, is hereby amended and restated in its entirety to read as follows:

(f)    with respect to such Asset, none of the Underlying Obligors (and any of their respective Affiliates) related to such Asset are Sanctioned Targets;

(c)    The defined terms “Funding Expiration Date” and “Requirements of Law”, each as set forth in Article 2 of the Repurchase Agreement, are each hereby amended and restated in their entirety to read as follows:

“Funding Expiration Date”: March 13, 2018; provided that, in the event that Seller requests an extension of the Funding Expiration Date, such request may be approved or denied by Buyer for any reason or for no reason, as determined in Buyer’s sole and absolute discretion, and it is expressly acknowledged and agreed that Buyer has no obligation to consider or grant any such request.

“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, without limitation, Environmental Laws, ERISA, Anti-Corruption Laws, Anti-Money Laundering Laws, Sanctions, 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 having proper jurisdiction over such Person or such Person’s property or assets.

(d)    The following new defined terms “AML Entity”, “Anti-Corruption Law”, “Anti-Money Laundering Law”, “Investor”, “Sanction” and “Sanctioned Target” are each hereby added to Section 2.01 of the Repurchase Agreement in correct alphabetical order:

“AML Entity”: Each of Seller, all Affiliates of Seller, Pledgor, all Affiliates of Pledgor, Guarantor and all Subsidiaries of Guarantor.

“Anti-Corruption Law”: The U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act, the Canadian Corruption of Foreign Public Officials Act or any other anti-bribery or anti-corruption laws, regulations or ordinances in any jurisdiction in which Seller or any of its Affiliates is located or doing business.

“Anti-Money Laundering Laws”: The applicable laws or regulations in any jurisdiction in which Seller or Guarantor is located or doing business that relate to money laundering, any predicate crime to money laundering or any financial record keeping and reporting requirements related thereto.

“Investor”: Any Person that either (i) is admitted to Seller as a member in accordance with the applicable operating agreement or limited liability company agreement of Seller, or (ii) owns an Equity Interest in Guarantor.

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“Sanction” or “Sanctions”: Individually and collectively, any and all economic or financial sanctions, trade embargoes and anti-terrorism laws, imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by the U.S. Treasury Department Office of Foreign Assets Control (OFAC), the U.S. State Department, the U.S. Department of Commerce, or through any existing or future Executive Order, (b) the United Nations Security Council, (c) the European Union, (d) the United Kingdom, or (e) any other governmental authorities with jurisdiction over any of the AML Entities.

“Sanctioned Target”: Any Person, group, sector, territory, or country that is the target of any Sanctions, including without limitation, any legal entity that is deemed to be the target of any Sanctions based upon the direct or indirect ownership or control of such entity by any other Sanctioned Target.

(e)    Section 6.01(d) of the Repurchase Agreement is hereby amended and restated in its entirety to read as follows:

(d) Buyer has completed to its satisfaction such due diligence (including, Buyer’s “Know Your Customer”, Anti-Corruption Laws, Sanctions and Anti-Money Laundering Laws diligence) and modeling as Buyer may require;

(f)    The second and third full sentences of Section 7.06 of the Repurchase Agreement are hereby amended and restated in their entirety to read as follows:

No AML Entity (i) is in violation of any Sanctions or (ii) is a Sanctioned Target. The proceeds of any Transaction have not been and will not be used, directly or indirectly, to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Target or otherwise in violation of Sanctions, Anti-Corruptions Laws or Anti-Money Laundering Laws.

(g)    The following new Sections 7.19 and 7.20 are hereby added to the end of Article 7 of the Repurchase Agreement in correct numerical order:

Section 7.19    Anti-Money Laundering Laws. and Anti-Corruption Laws. The operations of each of Seller and Guarantor are, and have been, conducted at all times in compliance with all applicable Anti-Money Laundering Laws. and Anti-Corruption Laws. No litigation, regulatory or administrative proceedings of or before any court, tribunal or agency with respect to any Anti-Money Laundering Laws or Anti-Corruption Laws have been started or (to its knowledge and belief, after due inquiry) threatened against any AML Entity.

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Section 7.20    Sanctions. No AML Entity (a) is a Sanctioned Target, (b) is controlled by or is acting on behalf of a Sanctioned Target or (c) is under investigation for an alleged breach of Sanctions by a governmental authority that enforces Sanctions. To Seller’s Knowledge, no Investor is a Sanctioned Target.

(h)    The third full sentence of Section 8.02 of the Repurchase Agreement is hereby deleted in its entirety.

(i)    The following new Sections 8.12 and 8.13 are hereby added to the end of Article 8 of the Repurchase Agreement in correct numerical order:

Section 8.12    Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.

(a)    The proceeds of any Transaction shall not be used, directly or indirectly, for any purpose which would breach any applicable Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.

(b)    Seller and Guarantor shall (i) conduct its business in compliance with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions; and (ii) maintain policies and procedures designed to promote and achieve compliance with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.

(c)    The repurchase of any Purchased Asset or any other payment due to Buyer under this Agreement or any other Repurchase Document shall not be funded, directly or indirectly, with proceeds derived from a transaction that would be prohibited by Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions, or in any manner that would cause Seller, Guarantor or any Affiliates of Seller or Guarantor to be in breach of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.

(d)    Seller shall conduct or cause to be conducted the requisite due diligence in connection with the origination or acquisition of each Purchased Asset for purposes of complying with all applicable Anti-Money Laundering 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 underlying Mortgaged Property, and will maintain sufficient information to identify such Person for purposes of such Anti-Money Laundering Laws.

Section 8.13    Compliance with Sanctions. The proceeds of any Transaction hereunder will not, directly or indirectly, be used to lend, contribute, or otherwise be made available to any Sanctioned Target or any Person (i) to fund any activities or business of or with a Sanctioned Target, or (ii) be used in any manner that would be prohibited by Sanctions or would otherwise cause Buyer to be in breach of any

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Sanctions. Seller and Guarantor shall comply with all applicable Sanctions, and shall maintain policies and procedures reasonably designed to ensure compliance with Sanctions. Seller or Guarantor shall notify the Buyer in writing not more than one (1) Business Day after becoming aware of any breach of Section 7.20 or this Section 8.13.

(j)    The following new sentence is hereby added to the end of Section 18.15(b) of the Repurchase Agreement:

Seller and Guarantor shall, promptly upon Buyer’s request, deliver documentation in form and substance satisfactory to Buyer which Buyer deems necessary or desirable to evidence compliance with all applicable “know your customer” due diligence checks.

SECTION 2.    Amendment Effective Date. This Amendment and its provisions shall become effective on the date first set forth above (the “Amendment Effective Date”), which is the date that this Amendment was executed and delivered by a duly authorized officer of each of Seller, Buyer and Guarantor, along with the delivery of a secretary certificate and bring down letters affirming the opinions as to corporate, enforceability and bankruptcy matters provided to Buyer on the Closing Date, each dated as of the Amendment Effective Date.

SECTION 3.    Representations, Warranties and Covenants. Seller hereby represents and warrants to Buyer, as of the Amendment Effective Date, that (i) it is in full compliance with all of the terms and provisions and its undertakings and obligations set forth in the Repurchase Agreement and each other Repurchase Document to which it is a party on its part to be observed or performed, and (ii) no Default or Event of Default has occurred or is continuing. Seller hereby confirms and reaffirms its representations, warranties and covenants contained in each Repurchase Document to which it is a party.

SECTION 4.    Acknowledgments of Guarantor. Guarantor hereby acknowledges (a) the execution and delivery of this Amendment and agrees that it continues to be bound by that certain Guarantee Agreement, dated as of March 13, 2014 (the “Guarantee Agreement”), made by Guarantor in favor of Buyer, notwithstanding the execution and delivery of this Amendment and the impact of the changes set forth herein, and (b) that, as of the date hereof Buyer is in compliance with its undertakings and obligations under the Repurchase Agreement, the Guarantee Agreement and each of the other Repurchase Documents.

SECTION 5.    Limited Effect. Except as expressly amended and modified by this Amendment, the Repurchase Agreement and each of the other Repurchase Documents shall continue to be, and shall remain, in full force and effect in accordance with their respective terms; provided, however, that upon the Amendment Effective Date, each (x) reference therein and herein to the “Repurchase Documents” shall be deemed to include, in any event, this Amendment, (y) each reference to the “Repurchase Agreement” in any of the Repurchase Documents shall be deemed to be a reference to the Repurchase Agreement, as amended hereby, and (z) each reference in the Repurchase Agreement to “this Agreement”, this “Repurchase Agreement”, this “Amended and Restated Repurchase Agreement”, “hereof”, “herein” or words of similar effect in referring to the Repurchase Agreement shall be deemed to be references to the Repurchase Agreement, as amended by this Amendment.

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SECTION 6.    No Novation, Effect of Agreement. Seller and Buyer have entered into this Amendment solely to amend the terms of the Repurchase Agreement and do not intend this Amendment or the transactions contemplated hereby to be, and this Amendment and the transactions contemplated hereby shall not be construed to be, a novation of any of the obligations owing by Seller, Guarantor or Pledgor (the “Repurchase Parties”) under or in connection with the Repurchase Agreement, the Fee Letter, the Pledge Agreement or any of the other Repurchase Documents to which any Repurchase Party is a party. It is the intention of each of the parties hereto that (i) the perfection and priority of all security interests securing the payment of the Repurchase Obligations of the Repurchase Parties under the Repurchase Agreement and the Pledge Agreement are preserved, (ii) the liens and security interests granted under the Repurchase Agreement and the Pledge Agreement continue in full force and effect, and (iii) any reference to the Repurchase Agreement in any such Repurchase Document shall be deemed to also reference this Amendment.

SECTION 7.    Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of a manually executed original counterpart thereof.

SECTION 8.    Expenses. Seller and Guarantor agree to pay and reimburse Buyer for all out-of-pocket costs and expenses incurred by Buyer in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the fees and disbursements of Cadwalader, Wickersham & Taft LLP, counsel to Buyer

SECTION 9.    GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

SELLER:
PARLEX 5 FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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BUYER:
WELLS FARGO BANK, N.A., a national banking association
By:	/s/ Allen Lewis
Name:	Allen Lewis
Title:	Managing Director

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With respect to the acknowledgments set forth in Section 4 herein:
GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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EX-10.5

Exhibit 10.5

AMENDED AND RESTATED MASTER REPURCHASE

AND

SECURITIES CONTRACT AGREEMENT

between

PARLEX 6 UK FINCO, LLC and PARLEX 6 EUR FINCO, LLC,

individually and/or collectively as the context requires, as Seller,

BLACKSTONE MORTGAGE TRUST, INC.,

as Guarantor,

and

MORGAN STANLEY BANK, N.A.,

as Buyer

Paul Hastings LLP

75 East 55th Street

New York, NY 10022

Dated: June 16, 2014

ARTICLE 1.	APPLICABILITY	1
ARTICLE 2.	DEFINITIONS	1
ARTICLE 3.	INITIATION; CONFIRMATION; TERMINATION; FEES	21
ARTICLE 4.	MARGIN MAINTENANCE	34
ARTICLE 5.	INCOME PAYMENTS AND PRINCIPAL PAYMENTS	35
ARTICLE 6.	SECURITY INTEREST	37
ARTICLE 7.	PAYMENT, TRANSFER AND CUSTODY	39
ARTICLE 8.	SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS	42
ARTICLE 9.	REPRESENTATIONS AND WARRANTIES	42
ARTICLE 10.	NEGATIVE COVENANTS OF SELLER	49
ARTICLE 11.	AFFIRMATIVE COVENANTS OF SELLER	50
ARTICLE 12.	EVENTS OF DEFAULT; REMEDIES	57
ARTICLE 13.	SINGLE AGREEMENT	63
ARTICLE 14.	RECORDING OF COMMUNICATIONS	63
ARTICLE 15.	NOTICES AND OTHER COMMUNICATIONS	64
ARTICLE 16.	ENTIRE AGREEMENT; SEVERABILITY	64
ARTICLE 17.	NON ASSIGNABILITY	64
ARTICLE 18.	GOVERNING LAW	66
ARTICLE 19.	NO WAIVERS, ETC	66
ARTICLE 20.	USE OF EMPLOYEE PLAN ASSETS	66
ARTICLE 21.	INTENT	67
ARTICLE 22.	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	68
ARTICLE 23.	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	68
ARTICLE 24.	NO RELIANCE	69
ARTICLE 25.	INDEMNITY	70
ARTICLE 26.	DUE DILIGENCE	71
ARTICLE 27.	SERVICING	71
ARTICLE 28.	MISCELLANEOUS	72
ARTICLE 29.	JOINDER OF ADDITIONAL SELLERS	75
ARTICLE 30.	ADDITIONAL JURISDICTIONS	75

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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX I	Names and Addresses for Communications between Parties
ANNEX II	Wire Instructions of Buyer and Seller
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	Forms of Power of Attorney
EXHIBIT V	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VI	Advance Procedures
EXHIBIT VII	Form of Margin Deficit Notice
EXHIBIT VIII	Tax Compliance Certificates
EXHIBIT IX	UCC Filing Jurisdictions
EXHIBIT X	Form of Release Letter
EXHIBIT XI	Covenant Compliance Certificate
EXHIBIT XII	Form of Re-Direction Letter
EXHIBIT XIII	Form of Undertaking Letter
EXHIBIT XIV	Form of Security Deed
EXHIBIT XV	Custodial Delivery
EXHIBIT XVI	Form of Bailee Letter
EXHIBIT XVII	Prohibited Transferees
EXHIBIT XVIII	Form of Seller Joinder Agreement
EXHIBIT XIX	Form of Confirmation of Supplemental Provisions

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AMENDED AND RESTATED MASTER REPURCHASE

AND SECURITIES CONTRACT AGREEMENT

THIS AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT (this “Agreement”), dated as of June 16, 2014, by and between MORGAN STANLEY BANK, N.A., a national banking association organized under the laws of the United States (“Buyer”), PARLEX 6 UK FINCO, LLC, a Delaware limited liability company (“UK Seller”), and PARLEX 6 EUR FINCO, LLC, a Delaware limited liability company (“EUR Seller” and, together with UK Seller, individually and/or collectively as the context requires, “Seller”) amends and restates in its entirety, that certain Master Repurchase and Securities Contract Agreement, dated as of March 3, 2014, by and between Buyer and Seller.

ARTICLE 1.

APPLICABILITY

From time to time the parties hereto may enter into transactions in which Seller and Buyer agree to the transfer from Seller to Buyer 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, Herbert Smith Freehills LLP, or any other attorney at law, or notary (if required in the relevant jurisdiction) that has delivered at Seller’s request an Undertaking Letter or a Bailee Letter, as applicable, with the exception of an attorney or notary that is not satisfactory to Buyer, as specified in a written notice from Buyer to Seller.

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

“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

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another which is consented to, not timely contested or results in entry of an order for relief that, in the case of an action not initiated by or on behalf of or with the consent of Seller, is not dismissed or stayed within thirty (30) 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 Jurisdiction” shall mean each jurisdiction relating to an Asset other than the United Kingdom or the Netherlands.

“Advance Rate” shall mean, with respect to each Transaction, the amount, expressed as a percentage, determined by dividing (a) the Purchase Price of a Purchased Asset as of the date of determination by (b) the Market Value of such Purchased Asset on such date; provided, however, the Advance Rate for any Purchased Asset shall not exceed the Maximum Advance Rate (as defined in the Fee Letter) for such Purchased Asset.

“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. Control shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative thereto, or (ii) any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

“Affiliated Hedge Counterparty” shall mean Morgan Stanley Bank, N.A., or any Affiliate thereof, in its capacity as a party to any Hedging Transaction with Seller.

“Agreement” shall have the meaning assigned thereto in the Preamble.

“Alternative Rate” shall have the meaning specified in Article 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.

“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)(xxx) of this Agreement.

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“Applicable Spread” shall mean:

(i)    so long as no Event of Default shall have occurred and be continuing, the amount set forth in the Fee Letter as being the “Applicable Spread, and

(ii)    after the occurrence and during the continuance of an Event of Default, the (x) applicable incremental percentage described in clause (i) of this definition, plus (y) five percent (5%).

“Approved Valuation” shall mean a valuation in form and substance satisfactory to the Buyer, prepared by and issued by a Valuer valuing the Mortgagor’s interests in the relevant mortgaged property carried out on a market value basis as defined in the then current Royal Institution of Chartered Surveyors Appraisal and Valuation Manual in association with the Incorporated Society of Valuers and Auctioneers and the Institute of Revenues Rating and Valuation, Practice Statement 4 (or its successor) (or its equivalent in any applicable Additional Jurisdiction).

“Assets” shall have the meaning specified in Article 1 of this Agreement.

“Assignee” shall have the meaning set forth in Article 17(a) of this Agreement.

“Bailee Letter” shall mean a letter substantially in the form as Exhibit XVI from an Acceptable Attorney or another Person acceptable to Buyer in its sole discretion, in form and substance customary in the relevant jurisdiction, and in each case acceptable to Buyer in its sole discretion, wherein such Acceptable Attorney or other Person described above in possession of a Purchased Asset File (i) acknowledges receipt of such Purchased Asset File, (ii) confirms that such Acceptable Attorney or other Person acceptable to Buyer is holding the same as bailee or agent on behalf of Buyer under such letter and (iii) agrees that such Acceptable Attorney or other Person described above shall deliver such Purchased Asset File to the Custodian, or as otherwise directed by Buyer, by not later than the third (3rd) Business Day following the Purchase Date for the related Purchased Asset.

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

“Base Currency” shall mean British Pound Sterling.

“Breakage Costs” shall have the meaning assigned thereto in Article 3(l).

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) a day in which the New York Stock Exchange or banks in the States of New York are authorized or obligated by law or executive order to be closed. Notwithstanding the foregoing sentence, when used with respect to the determination of IBOR, “Business Day” shall only be a day on which commercial banks are open for international business (including dealings in U.S. Dollar deposits) in London, England.

“Buyer” shall mean Morgan Stanley Bank, N.A., or any successor or assign.

“Buyer’s Margin Amount” shall mean with respect to any Transaction and any Purchased Asset on any date, the Maximum Advance Rate attributable to such Purchased Asset, multiplied by the Market Value of such Purchased Asset as of the date of determination.

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“Capital Stock” shall mean any and all shares, interests, 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.

“Capitalized 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 obligation shall be the capitalized amount thereof, determined in accordance with GAAP.

“Change of Control” shall mean 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 “1934 Act”)) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a percentage of the total voting power of all classes of Capital Stock of Seller entitled to vote generally in the election of directors, members or partners of 20% or more other than Affiliates of Guarantor or related funds of The Blackstone Group L.P. or to the extent such interests are obtained through public market offering or secondary market trading, 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.

“Closing Date” shall mean March 3, 2014.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collateral” shall have the meaning specified in Article 6(b) of this Agreement.

“Collection Account” shall mean the Mortgagor’s account controlled by the security trustee (or the equivalent under the applicable jurisdiction) of any Purchased Asset relating to such Purchased Asset and in accordance with the facilities agreement, debenture and other loan documents related thereto.

“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 immediately preceding Remittance Date and continuing to and including the calendar day immediately preceding the following Remittance Date.

“Confirmation” shall have the meaning specified in Article 3(b)(iii) of this Agreement.

“Confirmation of Supplemental Provisions” shall mean a notice letter, executed by Buyer and acknowledged by Seller and Guarantor, substantially in the form set forth in Exhibit XIX, attached hereto and made a part hereof, which shall set forth additional schedules, exhibits, annexes and provisions relating to jurisdictional specific documents, covenants, representations and other requirements in connection with Eligible Assets subject to Additional Jurisdictions.

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“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.

“Covenant Compliance Certificate” shall mean a properly completed and executed Covenant Compliance Certificate in form and substance of the certificate attached hereto as Exhibit XI.

“Currency” shall mean United States Dollar, British Pound Sterling, Euro or such other currency permitted by Buyer, in its sole discretion.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the Closing Date, by and among the Custodian, Seller and Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time.

“Custodial Delivery” shall mean the form executed by Seller in order to deliver the Purchased Asset Schedule and the Purchased Asset File to Buyer or its designee (including the Custodian) pursuant to Article 7 of this Agreement, a form of which is attached hereto as Exhibit XV.

“Custodian” shall mean US Bank or any successor Custodian appointed by Buyer with the prior written consent of Seller, not to be unreasonably withheld, conditioned or delayed; provided, however, that during the existence of an Event of Default, Buyer shall appoint any successor Custodian in its sole discretion.

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

“Depository” shall mean PNC Bank, National Association, or any successor Depository appointed by Buyer with the prior written consent of Seller, not to be unreasonably withheld, conditioned or delayed; provided, however, that during the existence of an Event of Default, Buyer shall appoint any successor Depository in its sole discretion.

“Depository Account” shall mean, individually or collectively, as the context may require, the UK Depository Account, the EUR Depository Account, and any other segregated account, in the name of the applicable Seller, in trust for Buyer, established at Depository pursuant to this Agreement, and which is subject to a Depository Agreement.

“Depository Agreement” shall mean, individually or collectively, as the context may require, the UK Depository Agreement, the EUR Depository Agreement and any other deposit account control agreement or similar agreement that Buyer, Depository and any additional Seller permitted under this Agreement.

“Direct Agreement” shall mean, an agreement by and among any Buyer approved servicer or sub-servicer, Buyer and Seller, pursuant to Article 27(d) together with any replacement, modification, supplement or amendment thereof.

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

“Due Diligence Package” shall have the meaning specified in Exhibit VI(a) to this Agreement.

“Early Repurchase Date” shall have the meaning specified in Article 3(e) of this Agreement.

“Eligible Assets” shall mean any of the following types of assets or loans that are (1) acceptable to Buyer in its sole discretion (such determination of acceptability only being applicable prior to the Purchase Date for the related Purchased Asset, but shall not be a factor at any time after the Purchase Date for such Purchased Asset), (2) denominated in British Pound Sterling (or such other Currency approved by Buyer in its sole discretion), (3) to the extent any hedging is required relating to such loan, such hedging arrangement is acceptable to Buyer; and (4) secured directly or indirectly by properties that are multifamily, mixed use, industrial, office building, retail, self-storage or hospitality or such other types of properties that Buyer may agree to in its sole discretion, and are properties located in the United Kingdom, the Netherlands, either of their territories or possessions (or any other Additional Jurisdiction, in the sole discretion of Buyer, approved pursuant to Article 30 of this Agreement):

(i)    Senior Mortgage Loans;

(ii)    Participation Interests;

(iii)    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 discretion.

“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 corporation or trade or business that is a member of any group of organizations (i) described in Article 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Article 302(c)(11) of ERISA and Article 412(c)(11) of the Code and the lien created under Article 302(f) of ERISA and Article 412(n) of the Code, described in Article 414(m) or (o) of the Code of which Seller is a member.

“EURIBOR Base Rate” shall mean, with respect to each Pricing Rate Period, (i) the percentage rate per annum for deposits in Euro (with respect to the period equal or comparable to the applicable Pricing Rate Period) that appears on Reuters Screen EURIBOR01 Page (or the successor thereto) as of 11:00 a.m., London time, on the date that is two (2) Business Days prior to the beginning of such Pricing Rate Period or any other Pricing Rate Determination Date, as applicable, or (ii) if such rate does not appear on Reuters Screen EURIBOR01 Page as of 11:00 a.m. London time on such date, the arithmetic mean of the offered quotes of rates per annum obtained by Buyer from the Banking Federation of the European Union and one or more other Reference Banks for deposits in Euro (with respect to the period equal or comparable to the applicable Pricing Rate Period) at or about 11:00 a.m., London time on such date.

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

EURIBOR Base Rate

1.00 – EURIBOR Rate Reserve Percentage

“EURIBOR Rate Reserve Percentage” shall mean, for any Pricing Rate Period pertaining to a Transaction, the reserve percentage applicable two (2) Business Days before the first day of such Pricing Rate Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor thereto) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York, New York with respect to liabilities or assets consisting of or including any category of liabilities that includes deposits by reference to which the interest rate on Transactions is determined having a term comparable to such Pricing Rate Period.

“EUR Depository Account” shall mean the segregated account, in the name of EUR Seller, in trust for Buyer, established at Depository pursuant to this Agreement, and which is subject to the EUR Depository Agreement.

“EUR Depository Agreement” shall mean that certain Deposit Account Control Agreement, dated as of the date hereof, among Buyer, EUR Seller, Depository, and Primary Servicer.

“EUR Pledgor” shall mean 345-50 Partners, LLC, a Delaware limited liability company.

“EUR Primary Servicing Agreement” shall mean that certain Servicing Agreement by and among Buyer, EUR Seller and Primary Servicer, dated as of the date hereof, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time.

“EUR Seller” shall have the meaning set forth in the Recitals hereto.

“Event of Default” shall have the meaning specified in Article 12 of this Agreement.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to Buyer or any Transferee, or required to be withheld or deducted from a payment to Buyer or Transferee, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Buyer or Transferee being organized under the laws of, or having its principal office or, in the case of any Buyer or Transferee, its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Buyer or Transferee, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Buyer or Transferee under this Agreement pursuant to a law in effect on the date on which (i) such Buyer or Transferee acquires an interest hereunder (other than pursuant to an assignment request by the Seller under Article 3(u)) or (ii) Buyer or Transferee changes its lending office,

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except in each case to the extent that, pursuant to Articles 3(n) and 3(q), amounts with respect to such Taxes were payable either to Buyer’s or Transferee’s assignor immediately before such Buyer or Transferee acquired an interest hereunder or to such Buyer or Transferee immediately before it changed its lending office, (c) Taxes attributable to such Buyer or Transferee’s failure to comply with Article 3(r) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Extension Period” shall have the meaning specified in Article 3(m)(i) of this Agreement.

“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 or pursuant to Section 1471(b)(1) of the Code.

“FATF” shall have the meaning specified in the definition of “Prohibited Investor.”

“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.

“Fee Letter” shall mean that certain Amended and Restated Fee Letter dated as of the date hereof between Buyer and Seller.

“Filings” shall have the meaning specified in Article 6(d) of this Agreement.

“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.

“Foreign Assignee” shall mean an Assignee that is not a U.S. Person.

“Fraudulent Transfer Laws” shall have the meaning specified in Article 28(m) of this Agreement.

“Future Funding Advance” shall have the meaning specified in Article 3(x) of this Agreement.

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

“Governmental Authority” shall mean any national or federal government, any state, regional, local or other political subdivision thereof with jurisdiction and any 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).

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“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 and for which Buyer determines in its sole discretion requires a Hedging Transaction as a condition precedent to the related Transaction.

“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 currency 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.

“IBOR” shall mean LIBOR or EURIBOR, as the context shall require.

“IBOR Rate” shall mean LIBOR Rate or EURIBOR Rate, as the context shall require.

“Income” shall mean, with respect to any Purchased Asset at any time, (a) any collections of principal, interest, dividends, receipts or other distributions or collections, (b) all net sale proceeds received by Seller or any Affiliate of Seller in connection with a sale or liquidation of such Purchased Asset and (c) 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) calendar 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 Asset or any obligations senior to, or pari passu with, any Purchased Asset; (e) Capitalized Lease Obligations of such Person; (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 obligations transaction or other similar securitization shall not be considered Indebtedness for any Person.

“Indemnified Amounts” and “Indemnified Parties” shall have the meaning specified in Article 25 of this Agreement.

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“Indemnified Taxes” means (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 either 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 the applicable 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 either Seller or any Seller’s equityholders or Affiliates (other than as an independent director or manager of an Affiliate of a Seller that is not in the direct chain of ownership of Sellers 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 any Seller or a Seller’s equityholders or Affiliates (other than a nationally recognized company that routinely provides professional independent directors or managers and other corporate services to any Seller or any Seller’s equityholders or Affiliates in the ordinary course of business);

(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 a Seller shall not be disqualified from serving as an independent director or manager of a 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.

“Ineligible Assets” shall have the meaning specified in Article 12(c) of this Agreement.

“Investment Company Act” shall have the meaning specified in Article 9(b)(xv) of this Agreement.

“IRS” shall mean the United States Internal Revenue Service.

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“Knowledge” shall mean, as of any date of determination, the then-current actual (as distinguished from imputed or constructive) knowledge of (i) Stephen Plavin, Robert Harper, Thomas C. Ruffing or Douglas Armer (or, if following the Closing Date any such individual ceases to be an officer of or in the employ of Seller and/or Guarantor in a capacity comparable to the capacity occupied by such individual on the Closing Date, then Seller shall promptly designate another individual reasonably acceptable to Buyer for purposes of satisfying this definition), or (ii) any asset manager or employee with a title equivalent or more senior to that of “principal” within The Blackstone Group, L.P. that is responsible for the origination, acquisition and/or management of any Purchased Asset.

“LIBOR Base Rate” shall mean, with respect to each Pricing Rate Period, (i) the per annum rate for deposits in British Pound Sterling (with respect to the period equal or comparable to the applicable Pricing Rate Period) that appears on Reuters Screen LIBOR01 Page (or the successor thereto) as three-month LIBOR as of 11:00 a.m., London time, on the date that is two (2) Business Days prior to the beginning of such Pricing Rate Period or any other Pricing Rate Determinate Date, as applicable, or (ii) if such rate does not appear on Reuters Screen LIBOR01 Page as of 11:00 a.m. London time on such date, the arithmetic mean of the offered quotes of rates per annum obtained by Buyer from the principal London office of any two or more Reference Banks for deposits in British Pound Sterling (with respect to the period equal or comparable to the applicable Pricing Rate Period) at or about 11:00 a.m., London time on such date.

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

LIBOR Base Rate

1.00 – LIBOR Rate Reserve Percentage

“LIBOR Rate Reserve Percentage” shall mean, for any Pricing Rate Period pertaining to a Transaction, the reserve percentage applicable two (2) Business Days before the first day of such Pricing Rate Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor thereto) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York, New York with respect to liabilities or assets consisting of or including any category of liabilities that includes deposits by reference to which the interest rate on Transactions is determined having a term comparable to such Pricing Rate Period.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any 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.

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“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 principal balance of such Purchased Asset (which shall include such Purchased Asset and all debt senior to or pari passu with such Purchased Asset) secured, directly or indirectly, by the related Underlying Mortgaged Property, to the aggregate “as-is” market value of such Underlying Mortgaged Property as determined by Buyer in its sole discretion, or, to the extent available, based upon an Approved Valuation.

“Margin Availability” shall mean the positive difference, if any, between (a) Buyer’s Margin Amount with respect to a Purchased Asset on any date of determination minus (b) the outstanding Purchase Price of such Purchased Asset on such date of determination.

“Margin Availability Advance” shall have the meaning specified in Article 3(w).

“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).

“Market Value” shall mean, with respect to any Purchased Asset as of any relevant date, the outstanding principal balance of the Purchased Asset on such date, as adjusted by Buyer to reflect the market value for such Purchased Asset on such date, as determined by Buyer in its commercially reasonable discretion, which may take into account an Approved Valuation, but in each case based solely on material positive or negative changes (i.e., changes that impact the value of the Purchased Asset other than to a de minimus extent, and in any event, relative to Buyer’s initial underwriting or the most recent determination of Market Value) relative to the performance or condition of (i) the underlying property securing such Purchased Asset, (ii) the underlying borrower (or its sponsor(s)) in relation to the Purchased Asset and (iii) the commercial real estate market in the relevant jurisdiction relating to the underlying property (and, for the avoidance of doubt, not related to a material adverse change solely with respect to the Seller, Pledgor or Guarantor), taken in the aggregate. For the avoidance of doubt, Buyer’s determination of Market Value performed in accordance with this Agreement may result in a Market Value determination of zero for any Purchased Asset.

“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, operations or financial condition of Seller and 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 the Transaction Documents, (f) the timely payment of any amounts payable under this Agreement or (g) the Market Value, rating (if applicable) or liquidity of all of the Purchased Assets in the aggregate.

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“Maximum Facility Amount” shall mean £250,000,000; provided, that any amounts paid to Buyer on account of a Repurchase Price may be readvanced hereunder and utilized for purchasing additional Assets in accordance with the terms of this Agreement.

“Maximum Asset Exposure Threshold Breach” shall mean, with respect to any Eligible Asset, if the Advance Rate multiplied by the LTV of such Eligible Asset exceeds the Maximum Asset Exposure Threshold (as defined in the Fee Letter).

“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, charge or other instrument, creating a valid and enforceable first Lien on or a first priority ownership interest in an estate in fee simple or term of years in real property and the improvements thereon, securing evidence of indebtedness.

“Mortgagor” shall mean the obligor relating to any Senior Mortgage Loan or Participation Interest.

“MTM Representation” shall mean with respect to each jurisdiction, as applicable, the representations and warranties designated as “MTM Representations” set forth on Exhibit V hereto.

“Multiemployer Plan” shall mean a multiemployer plan defined as such in Article 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.

“OFAC” shall have the meaning specified in the definition of “Prohibited Investor.”

“Originated Asset” shall mean any Eligible Asset originated by Seller.

“Other Connection Taxes” means, with respect to the Buyer and any Transferee, Taxes imposed as a result of a present or former connection between such Buyer or Transferee and the jurisdiction imposing such Tax (other than connections arising from such Buyer or Transferee 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 Document).

“Other Taxes” means 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 or Other Connection 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(v)), and (ii) for the avoidance of doubt, any Excluded Taxes.

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“Outside Repurchase Date” shall mean March 3, 2017.

“Outside Repurchase Date Extension Conditions” shall have the meaning specified in Article 3(m) of this Agreement.

“Parallel Repurchase Facility” shall mean any repurchase facility entered into by and among Guarantor or any Subsidiary of Guarantor on the one hand, and Buyer or any of its Affiliates on the other hand, and evidenced by a master repurchase and securities contract agreement in form and substance similar to this Agreement together with additional transaction documents, similar in form and substance to the Transaction Documents.

“Parent Guaranty and Indemnity” shall mean the Amended and Restated Parent Guaranty and Indemnity, dated as of the date hereof, from Guarantor in favor of Buyer, in form and substance acceptable to Buyer.

“Participant Register” shall have the meaning assigned in Article 17(d).

“Participants” shall have the meaning specified in Article 17(a) of this Agreement.

“Participation Interest” shall mean a senior or controlling pari passu participation interest in a performing Senior Mortgage Loan.

“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 Article 302 of ERISA or Article 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 and Security Agreement” shall mean, individually or collectively as the context may require, that certain (i) Pledge and Security Agreement, dated as of the Closing Date, by UK Pledgor in favor of Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time, pledging all of UK Seller’s Capital Stock to Buyer, (ii) Pledge and Security Agreement, dated as of the date hereof, by EUR Pledgor in favor of Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time, pledging all of EUR Seller’s Capital Stock to Buyer, and (iii) any Supplemental Pledge and Security Agreement.

“Pledgor” shall mean, individually or collectively, as the context may require, UK Pledgor and EUR Pledgor, and any additional Pledgor permitted under the Transaction Documents.

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

“Pre-Purchase Due Diligence” shall have the meaning set forth in Article 3(b)(iv) hereof.

“Pre-Purchase Legal Expenses” shall mean all of the reasonable and necessary out of pocket legal fees, costs and expenses incurred by Buyer in connection with the Pre-Purchase Due Diligence associated with Buyer’s decision as to whether or not to enter into a particular Transaction.

“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). Price Differential shall be payable in the Currency of the applicable Purchased Asset.

“Pricing Rate” shall mean, for any Pricing Rate Period, an annual rate equal to the sum of (i) IBOR Rate (or such other period based upon the applicable Purchased Asset) 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.

“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate Period with respect to any Transaction, the date specified in the Confirmation relating to such transaction.

“Pricing Rate Period” shall mean, with respect to any Transaction and any Remittance Date (a) in the case of the first Pricing Rate Period, 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.

“Primary Servicer” shall mean Midland Loan Services, a Division of PNC Bank, National Association, or any other primary servicer approved by, or in the case of a termination of Primary Servicer pursuant to Article 27(c), appointed by Buyer and approved by Seller, such approval not to be unreasonably withheld, condition or delayed; provided, however, that Seller shall have no approval rights in either case during the existence of an Event of Default.

“Primary Servicing Agreement” shall mean, individually or collectively, as the context may require the UK Primary Servicing Agreement, the EUR Primary Servicing Agreement, and, if any other Primary Servicer is approved by Buyer in its sole discretion, any servicing agreement with such other Primary Servicer in respect of the Purchased Assets, which agreement is approved by Buyer in its sole discretion.

“Principal Payment” shall mean, with respect to any Purchased Asset, any principal payment or prepayment received by the Depository in respect thereof.

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“Principal Proceeds” shall mean, with respect to any Purchased Asset, any scheduled or unscheduled payment or prepayment of principal 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)(xxviii).

“Prohibited Transferee” shall mean any of the Persons listed on Exhibit XVII, as modified from time to time by mutual agreement of Buyer and Seller.

“Properties” shall mean any properties owned or leased by Seller.

“Purchase Date” shall mean, with respect to any Purchased Asset, the date on which Buyer purchases such Purchased Asset from Seller hereunder.

“Purchase Price” shall mean, with respect to any Purchased Asset, the price at which such Purchased Asset is transferred by a Seller to Buyer on the applicable Purchase Date, adjusted after the Purchase Date as set forth below. The Purchase Price as of the Purchase Date for any Purchased Asset shall be an amount (expressed and payable in the same Currency as the related Purchased Asset) 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 (a) decreased by (i) the portion of any Principal Proceeds on such Purchased Asset that are applied pursuant to Article 5 hereof to reduce such Purchase Price and (ii) any other amounts paid to Buyer by Seller to reduce such Purchase Price (including, without limitation, in accordance with Article 3(w)), and (b) increased by any Margin Availability Advance or Future Funding Advance.

“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 File” shall mean the Purchased Asset Documents being held by one or more Acceptable Attorneys and as set forth in the applicable Undertaking Letters relating to each Purchased Asset, together with any additional documents and information required to be delivered to an Acceptable Attorney pursuant to such Undertaking Letters, Buyer or its designee pursuant to this Agreement; provided that to the extent that Buyer waives, including pursuant to Article 7(c), receipt of any document in connection with the purchase of an Eligible Asset (but

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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 appropriate for the servicing of the applicable Purchased Asset.

“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 any leading international bank selected by Buyer which is regularly engaged in transactions in Eurodollar deposits in the international Eurocurrency market with an established place of business in London.

“Release Letter” shall mean a letter substantially in the form of Exhibit X 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 January 25, April 25, July 25 and October 25, 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) the date set forth in the applicable Confirmation or if such Transaction is extended, the date to which it is extended provided, that the Repurchase Date shall not be extended beyond the Outside Repurchase Date; (ii) any Early Repurchase Date for such Transaction; and (iii) the Accelerated Repurchase Date.

“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 (as increased by any other additional funds advanced in connection with such

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Purchased Asset); (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) any amounts that would be payable to (a positive amount) a Qualified Hedge Counterparty or 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 (v) if such Repurchase Date is not a Remittance Date, any Breakage Costs payable in connection with such repurchase other than with respect to the determination of a Margin Deficit. 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 to reduce such Repurchase Price and (B) any other amounts paid to Buyer by Seller to reduce such Repurchase Price.

“Requested Exceptions Report” shall have the meaning assigned thereto in Article 3(b)(iv)(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 any executive officer of Seller.

“Sanctions” shall have the meaning assigned in Article 9(b)(xxviii).

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

“Securities Contract” shall have the meaning assigned in Article 3(a)(xiii) of this Agreement.

“Security Deed” shall mean a Security Deed (or the equivalent in the relevant Additional Jurisdiction) executed and delivered on the Purchase Date by Seller in favor of Buyer for each Purchased Asset, substantially in the form attached hereto as Exhibit XIV.

“Seller” shall mean jointly and severally the entities identified as “Seller” in the Recitals hereto together with such other sellers as may be approved by Buyer in its sole discretion from time to time that become sellers pursuant to Article 29 of this Agreement.

“Seller Joinder Agreement” shall have the meaning assigned in Article 29(f) of this Agreement.

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“Senior Mortgage Loans” shall mean performing senior commercial or multifamily fixed or floating rate mortgage (or the equivalent in each relevant jurisdiction relating to an Eligible Asset) loans of no less than £15,000,000 (or the equivalent in the applicable Currency) secured by first liens or mortgages on multifamily or commercial properties.

“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-B hereto.

“Spot Rate” shall mean, with respect to a Currency, the rate determined by Buyer to be the rate quoted as the spot rate for the purchase by Buyer of such Currency with the Base Currency through Buyer’s principal foreign exchange trading office at approximately 11:00 a.m. London time on the date that is two (2) Business Days prior to the date as of which the foreign exchange computation is made; provided, that Buyer may obtain such spot rate from another financial institution following consultation with Seller if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such Currency. For purposes of calculations relating to the Maximum Facility Amount, any Transaction denominated in any Currency other than the Base Currency shall be converted to the Base Currency equivalent by using the Spot Rate quoted by Buyer on the related Purchase Date (which shall be set forth in the applicable Confirmation).

“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 and/or Guarantor.

“Supplemental Pledge and Security Agreement” shall mean a pledge and security agreement, (in substantially the same form as the Pledge and Security Agreement), dated as of the effective date of the related Seller Joinder Agreement, in favor of Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time, pledging all of the applicable Seller’s Capital Stock to Buyer.

“Taxes” means 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.

“Transaction” shall mean a Transaction, as specified in Article 1 of this Agreement.

“Transaction Documents” shall mean, collectively, this Agreement, any applicable Annexes to this Agreement, the Parent Guaranty and Indemnity, each Servicing Agreement, the Depository Agreement, each Security Deed delivered in connection with a Transaction, the Pledge and Security Agreement, the Fee Letter, all Confirmations and assignment documentation executed pursuant to this Agreement in connection with specific Transactions.

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“Transfer Certificate” shall mean with respect to each Purchased Asset, the form of transfer certificate, or assignment (at Buyer’s option if an assignment is an available option in the applicable jurisdiction) used to effectuate a legal transfer of the underlying mortgage loan and as attached to the underlying facilities agreement, or the equivalent in the applicable jurisdiction.

“Transferee” shall have the meaning set forth in Article 17(a) hereof.

“UCC” shall have the meaning specified in Article 6(d) of this Agreement.

“UK Depository Account” shall mean the segregated account, in the name of UK Seller, in trust for Buyer, established at Depository pursuant to this Agreement, and which is subject to the UK Depository Agreement.

“UK Depository Agreement” shall mean Deposit Account Control Agreement, dated as of the Closing Date, among Buyer, UK Seller, Depository, and Primary Servicer.

“UK Pledgor” shall mean 345-40 Partners, LLC, a Delaware limited liability company.

“UK Primary Servicing Agreement” shall mean that certain Amended and Restated Servicing Agreement by and among Buyer, UK Seller and Primary Servicer, dated as of the date hereof, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time.

“UK Seller” shall have the meaning set forth in the Recitals hereto.

“Underlying Mortgage Loan” shall mean, with respect to any Participation Interest, 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, as applicable; and

(b)    a Participation Interest, the mortgaged property securing the Mortgage Loan in which such Participation Interest represents a participation, as applicable;

“Undertaking Letter” shall mean one or more letters, in each case from an Acceptable Attorney or another Person acceptable to Buyer in its sole discretion, in form and substance of Exhibit XIII or as is otherwise customary in the relevant jurisdiction, and in each case acceptable to Buyer in its sole discretion, wherein such Acceptable Attorney or other Person described above in possession of a Purchased Asset File (i) acknowledges receipt of such Purchased Asset File and (ii) confirms that such Acceptable Attorney or other Person acceptable to Buyer is holding the same as agent on behalf of Buyer under such letter.

“Underwriting Issues” shall mean, with respect to any Purchased Asset as to which Seller intends to request a Transaction, all information Known by Seller, 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

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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 reasonable institutional mortgage buyer in determining whether to originate or acquire the Purchased Asset in question.

“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning specified in Article 3(r)(B)(3) of this Agreement.

“Valuer” means a reputable firm of valuers of international standing approved by the Buyer, such approval not to be unreasonably withheld, conditioned or delayed.

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”. References to “equivalent” of an amount means the equivalent in any Currency other than the Base Currency of any amount denominated in the Base Currency converted at the Spot Rate for the purchase of the Base Currency with such Currency.

ARTICLE 3.

INITIATION; CONFIRMATION; TERMINATION; FEES

Buyer’s agreement to enter into the initial Transaction relating to an Eligible Asset in any Additional Jurisdiction is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller payment of an amount equal to all fees and expenses payable hereunder, and all of the following items, each of which shall be satisfactory in form and substance to Buyer and its counsel (to the extent not previously provided):

(a)    The following documents, delivered to Buyer (to the extent not previously delivered to Buyer):

(i)    this Agreement, duly completed and executed by each of the parties hereto (including all exhibits hereto);

(ii)    the powers of attorney, duly executed by Seller, substantially in the forms set forth on Exhibit IV hereto;

(iii)    a Depository Agreement, duly completed and executed by each of the parties thereto;

(iv)    the Fee Letter;

(v)    a Parent Guaranty and Indemnity, duly completed and executed by each of the parties thereto;

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(vi)    a Pledge and Security Agreement, duly completed and executed by each of the parties thereto, together with the original certificate (if any) evidencing the ownership interest in Seller properly endorsed to Buyer;

(vii)    the Primary Servicing Agreement, duly completed and executed by each of the parties thereto;

(viii)    any and all consents and waivers applicable to Seller or to the Purchased Assets;

(ix)    UCC financing statements for filing in each of the UCC filing jurisdictions described on Exhibit IX hereto, each naming the applicable Seller or Pledgor as applicable as “Debtor” and Buyer as “Secured Party” and adequately describing as “Collateral” all of the items set forth in the definition of Collateral and 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;

(x)    any documents relating to any Hedging Transactions;

(xi)    opinions of outside counsel to Seller reasonably acceptable to Buyer (including, but not limited to, those relating to enforceability, “Securities Contract” qualification, corporate matters, applicability of the Investment Company Act of 1940 to Seller or any Affiliate of Seller and security interests under the laws of the applicable states of the United States and from outside counsel to Buyer with respect to similar matters relating to the laws of England and Wales, the Netherlands, or any Additional Jurisdiction);

(xii)    good standing certificates and certified copies of the charters and by-laws (or equivalent documents) of Seller, Pledgor and Guarantor and of all corporate or other authority for Seller and Guarantor with respect to the execution, delivery and performance of the Transaction Documents and each other document to be delivered by Seller 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);

(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 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;

(xiv)    all such other and further documents, documentation and legal opinions as Buyer in its discretion shall reasonably require including, without limitation, an English law opinion from counsel to Buyer relating to any Security Deed governed by English Law;

(xv)    a Supplemental Pledge and Security Agreement duly completed and executed by each of the parties thereto, together with the original certificate (if any) evidencing the ownership interest in the applicable Seller properly endorsed to Buyer; and

(xvi)    Confirmation of Supplemental Provisions, duly completed and executed by each of the parties thereto (including all exhibits thereto).

(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

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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 sum of (A) the unpaid Repurchase Price for all prior outstanding Transactions and (B) the requested Purchase Price for the pending Transaction, in each case, shall not exceed the Maximum Facility Amount;

(ii)    Seller shall give Buyer no less than two (2) Business Days’ prior written notice of each Transaction (including the initial Transaction), which notice shall describe the terms of the Transaction and the Purchased Assets;

(iii)    On the Purchase Date, Seller shall deliver a signed, written confirmation in the form of Exhibit I attached hereto prior to each Transaction (a “Confirmation”). Each Confirmation shall describe 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 either of the accounts of Seller described on Annex II, the Confirmation shall be signed by two (2) Responsible Officers 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 requested Currency for the Purchased Assets included in the Transaction;

(C)    the Financing Fee (as defined in the Fee Letter) for each Purchased Asset included in the Transaction;

(D)    the Repurchase Date for the Purchased Assets included in the Transaction;

(E)    whether any of the Purchased Assets are Hedge-Required Assets;

(F)    the Maximum Advance Rate and requested Advance Rate;

(G)    the Market Value and LTV of the Purchased Asset; and

(H)    any additional terms or conditions not inconsistent with this Agreement and mutually agreed upon by Buyer and Seller.

(iv)    Buyer shall have the right to review, as described in Exhibit VI hereto, 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 (“Pre-Purchase Due Diligence”). In furtherance of Buyer’s Pre-Purchase Due Diligence, Seller shall transmit via e-mail all such information relating to an Eligible Asset to eu-warehouse@morganstanley.com or such other method of delivery approved by Buyer. Buyer shall be 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. Not less than two (2) Business Days prior to the requested Purchase Date for the Transaction, Buyer shall approve an Eligible Asset in accordance with Exhibit VI hereto, which approval shall be revocable in Buyer’s sole discretion prior to the Buyer’s execution and delivery of the Confirmation on the Purchase Date. On the Purchase Date for the Transaction, which shall occur upon Buyer’s and Seller’s execution of a Confirmation with respect to an Eligible Asset, the

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Eligible Assets shall be transferred to Buyer against the transfer of the Purchase Price to an account of Seller. Buyer shall inform Seller of its approval of the deliverables required in accordance with Exhibit VI attached hereto. Upon the approval by Buyer of a particular proposed Transaction, Buyer shall deliver to Seller a signed copy of the related Confirmation described in clause (iii) above, on or before the scheduled Purchase Date of the underlying proposed Transaction, which shall serve as evidence that all conditions relating to the Proposed Transactions (as set forth in Article 3(a) or 3(b) or Exhibit VI, or elsewhere, as applicable) have been satisfied or waived by Buyer. Prior to the approval of each proposed Transaction by Buyer, unless otherwise waived by Buyer:

(A)    Buyer shall have (i) determined, in its sole discretion, that the asset proposed to be sold to Buyer by Seller in such Transaction is an Eligible Asset, (ii) determined conformity to the terms of the Transaction Documents and Buyer’s internal credit and underwriting criteria, and (iii) obtained internal credit approval, to be granted or denied in Buyer’s sole 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 the Fee Letter);

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

(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 after due inquiry (the “Requested Exceptions Report”);

(F)    Buyer shall have waived in writing all exceptions in the Requested Exceptions Report;

(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 V (with respect to all Purchased Assets) (other than any representations or warranties contained in a Requested Exceptions Report) and Article 9 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

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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 primarily serviced by the Primary Servicer, Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, fully executed by Seller and the servicer named in the related Servicing Agreement, and shall enter into a re-direction letter among Buyer, Seller and such other servicer in form and substance similar to the Re-direction Letter;

(J)    Seller shall have paid to Buyer (i) the Financing Fee related to such Transaction (which Financing Fee may be paid out of the Purchase Price funded on the Purchase Date for the applicable Transaction), and (ii) all reasonable legal fees and expenses of outside counsel and the reasonable out-of-pocket costs and expenses actually incurred by Buyer in connection with the entering into of any Transaction hereunder, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of any Transaction hereunder, which amounts, at Buyer’s option, may be withheld from the sale proceeds of any Transaction hereunder;

(K)    Buyer shall have determined, in its sole discretion, that no Margin Deficit or Maximum Asset Exposure Threshold Breach shall exist, either immediately prior to or after giving effect to the requested Transaction;

(L)    Buyer shall have received from Seller (i) a Release Letter covering each Eligible Asset to be sold to Buyer, (ii) an original Transfer Certificate, executed in blank and (iii) a Security Deed for the applicable Eligible Asset;

(M)    Buyer shall have reasonably determined that the introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law including without limitation changes in any Reserve Requirements and any other increase in cost to Buyer applicable to Buyer has not made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions;

(N)    the Repurchase Date for such Transaction is not later than the Outside Repurchase Date;

(O)    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;

(P)    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);

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(Q)    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 and a “true sale” opinion with a respect to any Purchased Asset that was not originated by Seller and was acquired by Seller from an Affiliate of Seller) as Buyer in its reasonable discretion shall reasonably require;

(R)    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;

(S)    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;

(T)    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 or 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

(U)    Buyer shall have received from (i) Custodian on each Purchase Date an Asset Schedule and Exception Report (as defined in the Custodial Agreement) 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; or (ii) a Bailee Letter from an Acceptable Attorney identifying the applicable Release Letter, Security Deed and Transfer Certificate, being held on behalf of Buyer.

(c)    Upon the satisfaction of all conditions set forth in Articles 3(a) and 3(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 (which Purchase Price shall be funded in the Currency denominated on the applicable Confirmation). 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 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 discretion, and notify Seller of such rate for such period each such Pricing Rate Determination Date.

(d)    Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction 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 Maximum Advance Rate or the applicable Pricing Rate set forth in the related Confirmation, the Confirmation shall prevail.

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(e)    Seller shall be entitled to terminate a Transaction on demand and repurchase the Purchased Asset 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 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 one (1) Business Day prior to such Early Repurchase Date (unless such early repurchase is in connection with curing a Margin Defect or breach of any representation or warranty of Seller set forth in Exhibit V, or in connection with any of the events described in Article 3(h) having occurred, in which case such advance notice shall not be required),

(ii)    on such Early Repurchase Date, Seller pays to Buyer an amount equal to the sum of (x) the Repurchase Price for the applicable Purchased Asset, (y) any other amounts due and payable under this Agreement (including, without limitation, Article 3(i) of this Agreement) with respect to such Purchased Asset against transfer to Seller or its agent of the Purchased Assets and any related Hedging Transactions, and

(iii)    on such Early Repurchase Date, in addition to the amounts set forth in sub clause (ii) above, Seller pays to Buyer an amount sufficient to reduce the Purchase Price for all other Purchased Assets to an amount equal to the Buyer’s Margin Amount for each such Purchased Asset.

(f)    On the Repurchase Date for any Transaction, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Assets 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) against the simultaneous transfer of the Repurchase Price to an account of Buyer. Upon extension of the Outside Repurchase Date pursuant to Article 3(m), the Repurchase Date for any Purchased Asset shall be automatically extended to the earlier of (i) the new Outside Repurchase Date as so extended pursuant to Article 3(m) and (ii) the maturity date of the Purchased Asset (as the same may be extended pursuant to the Purchased Asset Documents for such Purchased Asset).

(g)    If prior to the first (1st) day of any Pricing Rate Period with respect to any Transaction, (i) Buyer shall have reasonably determined (which determination shall be conclusive and binding upon Seller absent manifest error) that by reason of circumstances affecting the interbank eurodollar market, adequate and reasonable means do not exist for ascertaining IBOR for such Pricing Rate Period (provided Buyer has performed (to the extent possible) the procedures for determining IBOR Rate set forth in the definition of IBOR in Article 2), or (ii) IBOR 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, then Buyer shall, by written notice to Seller, which notice shall set forth in reasonable detail such circumstances, establish the Pricing Rate at a per annum rate equal to the Federal Funds Rate plus the Applicable Spread (the “Alternative Rate”) until such notice has been withdrawn by Buyer. Buyer shall not convert any Transaction to an Alternative Rate Transaction or maintain any such Transaction as an Alternative Rate Transaction unless Buyer is converting other transactions to similarly situated sellers in a similar fashion.

(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 enter into or maintain Transactions as contemplated by the Transaction Documents, (a) the commitment of Buyer hereunder to enter into new Transactions or, if such adoption of or change in Requirement of

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Law makes it unlawful for Buyer to continue to maintain Transactions as contemplated by this Agreement, to continue Transactions as such 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; provided, however, that to the extent any such determination by Buyer and imposition of Alternative Rate Transactions apply to all sellers under similar repurchase facilities with Buyer, such determination and imposition of Alternative Rate Transactions will not be applied solely to Seller. 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(l) of this Agreement.

(i)    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 on the proposed Early Repurchase Date, after Seller has given written notice in accordance with Article 3(e), (ii) any payment of the Repurchase Price on any day other than a Remittance Date, including Breakage Costs, (iii) a 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 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 by Buyer to Seller in writing and shall be prima facie evidence of the information set forth therein, absent manifest error.

(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 Closing Date:

(i)    shall subject Buyer or any Transferee 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) under this Agreement, or 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 Requirements, other reserves, 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 IBOR 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, in the exercise of its reasonable business judgment, to be material, of entering into, continuing or maintaining Transactions or to reduce any amount receivable under the Transaction Documents in respect thereof; then, in any such case, Seller shall promptly pay Buyer, upon its demand, any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable; provided, however, that to the extent any such determination by Buyer and imposition of such increased costs apply to all sellers under similar repurchase

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facilities with Buyer, such determination and imposition of such increased costs will not be applied solely to Seller. 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.

(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 Closing Date does or shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer, to be material, then from time to time, after submission by Buyer to Seller of a written request therefor, Seller shall pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction; provided, however, that to the extent any such determination by Buyer and imposition of such increased costs apply to all sellers under similar repurchase facilities with Buyer, such determination and imposition of such increased costs will not be applied solely to Seller. 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 Outside Repurchase Date herein, upon written request of Seller prior to the then current Outside Repurchase Date, provided that all of the extension conditions listed in clause (ii) below (collectively, the “Outside Repurchase Date Extension Conditions”) shall have been satisfied, Buyer may in its sole discretion agree to extend the Outside Repurchase Date for one (1) or more additional periods of 364 additional calendar days (each, an “Extension Period”) by giving notice to Seller of such extension; provided, that any failure by Buyer to deliver such notice of extension to Seller within twenty (20) calendar days from the date Seller’s extension request is first received by Buyer shall be deemed a denial of Seller’s request to extend such Outside Repurchase Date.

(ii)    For purposes of this Article 3(m), the Outside Repurchase Date Extension Conditions shall be deemed to have been satisfied if:

(A)    Seller shall have given Buyer written notice of Seller’s request to extend the Outside Repurchase Date, (x) with respect to the initial request to extend the Outside Repurchase Date, not less than twenty (20) calendar days prior, and no more than fifty (50) calendar days prior to the first (1^st) anniversary of the Closing Date, and (y) with respect to any subsequent requests to extend the Outside Repurchase Date, not less than twenty (20) calendar days prior, and no more than fifty (50) calendar days prior to the next succeeding anniversary of the Closing Date;

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(B)    no Material Adverse Effect, Margin Deficit, Default or Event of Default under this Agreement shall have occurred and be continuing as of the date notice is given under sub clause (ii) above or as of the date Buyer agrees to extend the Outside 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; and

(C)    all representations and warranties shall be true, correct, complete and accurate in all respects as of the date of Seller’s request to extend the Outside Repurchase Date and on the date upon which Buyer agrees to extend the Outside Repurchase Date (except, in each case, for the MTM Representations and to the extent otherwise set forth on an approved Requested Exceptions Report); provided, however, that if any such representation or warranty shall become untrue, incorrect, incomplete or inaccurate following the date of Seller’s request or Buyer’s agreement to extend pursuant to this Article 3(m), Buyer agrees that it shall not rescind such extension, however Buyer may exercise any and all remedies provided under this Agreement.

(n)    Any and all payments by or on account of any obligation of Seller under this Agreement or any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. Subject to the last sentence of this Article 3(n), the relevant Seller and Buyer shall co-operate in completing any procedural formalities necessary for Income in respect of each Purchased Asset to be paid without deduction or withholding at source for or on account of Taxes, provided always that neither party shall have liability to the other for anything done (or not done, as the case may be) by it under this Article 3(n). If any applicable law (as determined in the good faith discretion of an applicable withholding agent) 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 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) the applicable Buyer or Transferee receives an amount equal to the sum it would have received had no such deduction or withholding been made. Subject to Article 21(g), no provision of this Agreement will: (i) interfere with the right of the Buyer to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; (ii) oblige the Buyer to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or (iii) oblige the Buyer to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

(o)    Seller shall timely pay, without duplication, (i) any Other Taxes imposed on such Seller to the relevant Governmental Authority in accordance with applicable law, and (ii) any Other Taxes imposed on Buyer or Transferee 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 this Article 3, Seller shall deliver to Buyer or Transferee 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 Transferee.

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(q)    Seller shall indemnify Buyer and each Transferee, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Article 3) payable or paid by Buyer or such Transferee or required to be withheld or deducted from a payment to such Buyer or Transferee 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 as to the amount of such payment or liability 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 Seller) delivered to Seller by Buyer or such Transferee shall be conclusive absent manifest error.

(r)    Any Buyer or 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 Articles 3(r)(A), (B) and (D) 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.

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 or Assignee is exempt from U.S. federal backup withholding tax;

(B)    any Foreign Assignee shall, to the extent it is legally entitled to do so, deliver to the Seller (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Assignee 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 Assignee 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 this Agreement, 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;

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(3)    in the case of a Foreign Assignee 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 VIII-1 to the effect that such Foreign Assignee 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 Assignee 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 VIII-2 or Exhibit VIII-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Assignee is a partnership and one or more direct or indirect partners of such Foreign Assignee are claiming the portfolio interest exemption, such Foreign Assignee may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit VIII-4 on behalf of each such direct and indirect partner;

(C)    any Foreign Assignee 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 Assignee 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 this Agreement 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), such Buyer or 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 Assignee has complied with Buyer or Assignee’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FACTA” shall include any amendments made to FATCA after the date of this Agreement.

Buyer and each Assignee agrees that if any form or certification 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.

(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 this Article 3 (including by the payment of additional amounts pursuant to this Article 3), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Article 3 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

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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 Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax 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 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), 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 (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(g) or payments required to be made pursuant to Article 3(i), 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 the Seller to require such assignment and delegation cease to apply.

(v)    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 any Purchased Asset without terminating the Transaction and without 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 all unpaid accrued Price Differential as of the applicable Business Day on the amount of such reduction, and (ii) Seller provides Buyer with one (1) Business Day prior notice with respect to any reduction in outstanding Purchase Price occurring on any date that is not a Remittance Date. In connection with any such reduction of outstanding Purchase Price pursuant to this Article 3(v), Buyer and Seller shall modify the existing Confirmation for the Transaction to set forth the new Advance Rate and outstanding Purchase Price for such Purchased Asset. Any transfer of cash made pursuant to this Article 3(v) shall be in an amount equal to or greater than £1,000,000.

(w)    If at any time prior to the Repurchase Date there exists Margin Availability with respect to a Purchased Asset, Seller may, on any Business Day, submit to Buyer a request that Buyer transfer cash to Seller (in the applicable Currency of the Purchased Asset) so as to increase the outstanding

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Purchase Price for such Purchased Asset in the amount (not to exceed the Margin Availability) requested by Seller (a “Margin Availability Advance”). The Margin Availability Advance shall be funded by Buyer on the date requested by Seller (which requested funding date shall one (1) Business Day following the date of Seller’s delivery of a request for a Margin Availability Advance if such request for a Margin Availability Advance is delivered by 3:00 p.m. New York City time on any Business Day). It shall be a condition to Buyer’s obligation to make any Margin Availability Advance that (i) as of the funding of such Margin Availability Advance, no Margin Deficit, Default or Event of Default has occurred and is continuing or would result from the funding of such Margin Availability Advance, and (ii) the funding of the Margin Availability Advance would not cause the aggregate outstanding Purchase Price for all Purchased Assets to exceed the Maximum Facility Amount. In connection with any funding of a Margin Availability Advance pursuant to this Article 3(w), Buyer and Seller shall modify the existing Confirmation for the applicable Transaction to set forth the new Advance Rate and outstanding Purchase Price for such Purchased Asset. Any Margin Availability Advance shall be in an amount equal to or greater than £1,000,000 (or the equivalent in the applicable Currency of the Purchased Asset).

(x)    Subject to Article 4, at any time prior to the Repurchase Date, in the event a future funding is made or is to be made by Seller pursuant to the Purchased Asset Documents for a Purchased Asset, Seller may submit to Buyer a request that Buyer transfer cash to Seller (in the applicable Currency of the Purchased Asset) in an amount not to exceed the Maximum Advance Rate multiplied by the amount of such future funding (a “Future Funding Advance”), which Future Funding Advance shall increase the outstanding Purchase Price for such Purchased Asset. It shall be a condition to Buyer’s obligation to make any Future Funding Advance that (i) as of the funding of such Future Funding Advance, no Margin Deficit, Default or Event of Default has occurred and is continuing or would result from the funding of such Future Funding Advance, (ii) the funding of the Future Funding Advance would not cause the aggregate outstanding Purchase Price for all Purchased Assets to exceed the Maximum Facility Amount, and (iii) Seller shall have demonstrated to Buyer’s reasonable satisfaction that all conditions to the future funding under the Purchased Asset Documents have been satisfied in all material respects. Buyer shall transfer cash to Seller as provided in this Article 3(x) (and in accordance with the wire instructions provided by Seller in such request) on the date requested by Seller, which date shall be no earlier than two (2) Business Days following the delivery of a modified Confirmation for the applicable Transaction (as more particularly described below) and the close of business on the Business Day immediately following the Business Day on which Buyer reasonably determines that the conditions precedent to Buyer’s obligation to make any Future Funding Advance as set forth in this Article 3(x) have been satisfied (or, in Buyer’s sole discretion, waived). In connection with any funding of a Future Funding Advance pursuant to this Article 3(x), Buyer and Seller shall modify the existing Confirmation for the applicable Transaction to set forth the new Advance Rate and outstanding Purchase Price for such Purchased Asset and any other modifications to the terms set forth on the existing Confirmation. Any Future Funding Advance shall be in an amount equal to or greater than £1,000,000 (or the equivalent in the applicable Currency of the Purchased Asset). Notwithstanding anything to the contrary herein, Buyer shall not be obligated to make any Future Funding Advance unless Seller has previously or simultaneously with Buyer’s funding of a Future Funding Advance funded or caused to be funded to the underlying borrower (or to an escrow agent or as otherwise directed by the underlying Borrower) in respect of such Purchased Asset.

ARTICLE 4.

MARGIN MAINTENANCE

(a)    If at any time Buyer’s Margin Amount for any Purchased Asset is less than the Repurchase Price for such Purchased Asset (a “Margin Deficit”), then, so long as such Margin Deficit equals or exceeds £150,000 (or the equivalent in the applicable Currency of the Purchased Asset), Buyer

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may by notice to Seller in the form of Exhibit VII (a “Margin Deficit Notice”) require Seller to (i) repurchase such Purchased Asset at its Repurchase Price, (ii) make a payment in reduction of the outstanding Purchase Price for such Purchased Asset (including by requesting a Margin Availability Advance pursuant to Section 3(w) for any other Purchased Asset for which there exists Margin Availability, and applying funds from such Margin Availability Advance to the applicable Margin Deficit, in the equivalent applicable Currency of the Purchased Asset that is the subject of the Margin Deficit) or (iii) choose any combination of the foregoing, such that, after giving effect to such transfers, repurchases and payments, Buyer’s Margin Amount for such Purchased Asset, shall be equal to or greater than the related Repurchase Price for such Purchased Asset. Seller shall perform the obligations under this Article 4(a) by the close of the next succeeding Business Day if the Margin Deficit Notice was received by Seller prior to 3:00 p.m. New York City time, or, the second (2nd) succeeding Business Day if the Margin Notice was received by Seller after 3:00 p.m. New York City time (the “Margin Deadline”).

(b)    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.

(c)    In addition to the Approved Valuations delivered by Seller in accordance with Article 11(z), Buyer shall have the right to require additional Approved Valuations from time-to-time relating to any or all of the Purchased Assets. Buyer shall request such additional Approved Valuations in writing and Seller shall procure and deliver such requested Approved Valuations within forty five (45) Business Days of receipt of such request (or such other time period as determined by the Buyer in its sole discretion). In the event that any additional Approved Valuation relating to a Purchased Asset and requested pursuant to this Article 4(c), when considered together with the other criteria used to determine Market Value in accordance with this Agreement, results in a Margin Deficit relating to the applicable Purchased Asset, then the cost of such additional valuation shall be an obligation of Seller. In the event that any additional Approved Valuation relating to a Purchased Asset and requested pursuant to this Article 4(c), when considered together with the other criteria used to determine Market Value in accordance with this Agreement, does not result in a Margin Deficit relating to the applicable Purchased Asset, then the cost of such additional valuation shall be an obligation of Buyer.

ARTICLE 5.

INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)    Each Depository Account shall be established at the Depository and shall be subject to the applicable Depository Agreement which, (i) in the case of the UK Depository Agreement, shall have been delivered on the Closing Date, and (ii) in the case of the EUR Depository Agreement, shall be executed and delivered concurrently with the execution and delivery of this Agreement. Pursuant to each Depository Agreement, Buyer shall have sole dominion and control over each Depository Account. Each Depository Account shall, at all times, be subject to the applicable Depository Agreement. All Income in respect of the Purchased Assets, as well as any interest received from the reinvestment of such Income, shall be deposited directly by the underlying obligor of each Purchased Asset or as directed by the Primary Servicer in accordance with the Primary Servicing Agreement (or by any other servicer and related direct agreement, to the extent any Purchased Asset is not serviced by the Primary Servicer). Depository shall then apply such Income in accordance with the applicable provisions of Articles 5(c) and (d) of this Agreement.

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(b)    For all Purchased Assets Seller shall deliver to each servicer or trustee, as applicable, with respect to such Purchased Asset an irrevocable direction letter in the form of Exhibit XI (the “Re-direction Letter”), instructing the applicable party with respect to such Purchased Asset to pay all amounts payable under the related Purchased Asset into the applicable Depository Account. If any such party with respect to the Purchased Asset forwards any Income with respect to a Purchased Asset to the Collection Account, rather than directly to the applicable Depository Account, Seller shall, or shall cause such Affiliate to, deliver an additional Re-direction Letter to the applicable party with respect to the Purchased Asset and make other best efforts to cause such party to forward such amounts directly to the applicable Depository Account. Any such funds on deposit in the Collection Account will be transferred to the applicable Depository Account as directed by the Primary Servicer in accordance with the Primary Servicing Agreement.

(c)    So long as no Event of Default or Margin Deficit with respect to any Purchased Asset shall have occurred and be continuing, all Income received by the Depository in respect of the Purchased Assets (other than scheduled or unscheduled Principal Payments and net sale proceeds) and the associated Hedging Transactions during each Collection Period shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i)    first, 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 or Qualified Hedge Counterparty, as applicable, under any Hedging Transaction related to a Purchased Asset;

(ii)    second, to Buyer, an amount equal to any other amounts then due and payable to Buyer or its Affiliates under any Transaction Document; and

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

(d)    So long as no Event of Default or Margin Deficit shall have occurred and be continuing, any Principal Payments 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 Payment and application of net sales proceeds, if applicable) and (B) solely with respect to any Hedging Transaction with an Affiliated Hedge Counterparty or Qualified Hedge Counterparty, as applicable, related to such Purchased Asset, to such Affiliated Hedge Counterparty or Qualified Hedge Counterparty, as applicable, an amount equal to any accrued and unpaid breakage costs 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; and

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

(e)    If Buyer shall have determined that a Margin Deficit shall have occurred and be continuing, but no Event of Default shall have occurred and be continuing, all Income (including, without limitation, any Principal Payments or any other amounts received, without regard to their source) received

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by the Depository in respect of a Purchased Asset shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i)    first, 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 or Qualified Hedge Counterparty, as applicable, any amounts then due and payable to such Affiliated Hedge Counterparty or Qualified Hedge Counterparty, as applicable, under any Hedging Transaction related to such Purchased Asset;

(ii)    second, to Buyer, an amount to reduce the Repurchase Price of such Purchased Asset until the Repurchase Price for such Purchased Asset has been reduced to the Buyer’s Margin Amount as of the date of such payment (as determined by Buyer after giving effect to all Principal Payments and application of net sale proceeds, if any, on such day);

(iii)    third, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document; and

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

(f)    If an Event of Default shall have occurred and be continuing, all Income (including, without limitation, any Principal Payments or any other amounts received, without regard to their source) 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, 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 or Qualified Hedge Counterparty, as applicable, any amounts then due and payable to an Affiliated Hedge Counterparty or Qualified Hedge Counterparty, as applicable, under any Hedging Transaction related to such Purchased Asset;

(ii)    second, to Buyer, on account of the Repurchase Price of such Purchased Asset until the Repurchase Price has been reduced to zero;

(iii)    third, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document, including, without limitation, (a) the entire Repurchase Price on all Purchase Assets (regardless of acceleration or otherwise of the Seller’s obligations), and (b) all costs of collection associated with the interpretation and enforcement of Buyer’s rights and remedies under this Agreement and all of the other Transaction Documents; and

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

For the avoidance of doubt, the obligations hereunder shall be fully recourse to Seller.

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

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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 it to Buyer 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 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;

(ii)    the Purchased Asset Documents, Servicing Agreements, Servicing Records, Servicing Rights, insurance policies relating to the Purchased Assets, and collection and escrow accounts and letters of credit relating to the Purchased Assets;

(iii)    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; and

(iv)    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 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, hereinafter referred to as the “Collateral”:

(i)    any and all interests of Seller in, to and under (A) the Depository Account and all monies from time to time on deposit in the Depository Account and (B) the Collection Account and all monies from time to time on deposit in the Collection Account;

(ii)    the Purchased Items;

(iii)    all servicing fees and rights relating to the Purchased Assets and all Servicing Records;

(iv)    any and all replacements, substitutions, distributions on, income relating to or proceeds of any and all of the foregoing; and

(v)    Seller’s rights, but not obligations, under each Hedging Transaction, if any, relating to the Purchased Assets to secure the Repurchase Obligations.

(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.

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(d)    Buyer’s security interest in the Collateral shall terminate only upon termination of Seller’s obligations under this Agreement, all Hedging Transactions and the documents delivered in connection herewith and therewith and the other Transaction Documents including, for the avoidance of doubt, Seller repurchasing each Purchased Asset. For the avoidance of doubt, Buyer’s security interest in the Collateral shall not terminate upon Buyer’s determination of the Market Value of any Purchased Asset to be zero. Upon such termination, Buyer shall 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 Collateral. 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 Delaware 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 Delaware. 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 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 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).

(e)    Seller acknowledges that neither it nor Guarantor has rights to service the Purchased Assets but only has rights as a party to the Primary 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) 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 against the simultaneous transfer of the Purchase Price in immediately available funds to an account of Seller or an Acceptable Attorney pursuant to an escrow letter or other undertaking approved by Buyer, in its sole discretion specified in the Confirmation relating to such Transaction.

(b)    On or before each Purchase Date, Seller shall deliver or cause to be delivered the Purchased Asset File to the Custodian, as applicable, or one or more Acceptable Attorneys, each pursuant to an Undertaking Letter and shall cause the applicable Release Letter, Security Deed and Transfer Certificate to the Custodian (or Bailee, as applicable). 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 Buyer a copy of each document as specified in the Purchased Asset File, pertaining to each of the Purchased Assets relating to each Transaction, 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 Buyer and to the applicable Acceptable Attorney additional copies of, originals of, documents evidencing any assumption, modification, consolidation or extension of a Purchased Asset approved in accordance with the terms of this

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Agreement, and upon receipt of any such other documents, the applicable Acceptable Attorney shall hold such other documents in accordance with the related Undertaking Letter. With respect to all of the Purchased Assets delivered by Seller to Buyer, its designee (including the Custodian), or the Acceptable Attorney, as the case may be, Seller shall have executed and delivered to Buyer each omnibus power of attorney substantially in the forms of Exhibit IV attached hereto irrevocably appointing Buyer its attorney in fact with full power to (i) complete the Transfer Certificates relating to the Purchased Assets, (ii) 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, (iii) enforce Seller’s rights under the Purchased Assets purchased by Buyer pursuant to this Agreement and to, and (iv) 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; provided that Buyer agrees not to and shall not exercise its rights under such power of attorney unless a monetary Default or an Event of Default has occurred and is continuing. The Purchased Asset Files shall be maintained in accordance with the applicable Undertaking Letter and the Custodial Agreement, as applicable. Seller or its designee shall maintain a copy of the Purchased Asset File. The books and records (including, without limitation, any computer records or tapes) of Seller shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to Buyer. The applicable Acceptable Attorney and the Custodian shall release its custody of the Purchased Asset File only in accordance with the terms of the Undertaking Letter and only if 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)    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 or Event of Default has occurred and is continuing. Upon the occurrence and during the continuation of a monetary Default or an Event of Default or with respect to the exercise of any voting or corporate rights with respect to the Purchased Assets that could materially impair the Market Value, and in each case subject to the provisions of the Purchased Asset Documents, the revocable option discussed above shall automatically terminate and thereafter 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).

(e)    Notwithstanding the rights granted to Seller pursuant to clause (d) above, Seller shall not enter into any material amendments, modifications, waivers, releases, sales, transfers, dispositions or other resolutions relating to the Purchased Assets, including, without limitation, the following actions set forth in clauses (i) through (xi) below, without the prior written consent of Buyer:

(i)    any forbearance, extension or other loan modification with respect to any Purchased Asset, including, without limitation, (A) any modification of the amount or timing of any regularly scheduled payments of principal and non-contingent interest of any Purchased Asset or (B) any change in the frequency of scheduled payments of principal and interest with respect to any Purchased Asset;

(ii)    the release, discharge or reduction of any: (A) Lien on any mortgaged property or (B) Lien or claim on any letters of credit and other non-cash collateral that is required to be maintained pursuant to the underlying Mortgage loan documents, if any;

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(iii)    the extension of credit (including increasing the terms of any existing credit) to any Person with respect to any Purchased Asset;

(iv)    any sale or other disposition of any Purchased Asset, mortgaged property or any other material property or collateral related thereto;

(v)    the incurrence of any Lien or other encumbrance other than as expressly created hereunder or under any other Transaction Document;

(vi)    the reduction of the principal amount of any Purchased Asset other than (A) with respect to a dollar-for-dollar principal payment or (B) 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 Maximum Advance Rate;

(vii)    any increase in the amount of any Purchased Asset other than increases which are derived from accrual or capitalization of deferred interest which is added to principal or protective advances;

(viii)    any subordination of the Lien priority of any Purchased Asset or the payment priority of any Purchased Asset other than a subordination required under the then-existing terms and conditions of such Purchased Asset; provided, however, that 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 do not adversely affect the rights and interest of the holder of the Purchased Asset;

(ix)    any waiver, amendment or modification of any cash management or reserve account requirements of any Purchased Asset other than changes required under the then-existing Purchased Asset documentation for such Purchased Asset;

(x)    any waiver of any due-on-sale or due-on-encumbrance provisions of any Purchased Asset other than waivers required to be given under the then-existing Purchased Asset documents for such Purchased Asset; and

(xi)    any waiver, amendment or modification of the underlying insurance requirements of any Purchased Asset.

Seller shall promptly (and in any event not later than two (2) Business Days following execution) provide Buyer with executed copies of any other amendments, modifications, waivers, releases, sales, transfers, dispositions or other resolutions relating to the Purchased Assets.

(f)    Notwithstanding the rights granted to Seller pursuant to clause (d) above, Seller shall not, and shall not permit any security trustee, Primary Servicer or any other servicer of any Purchased Asset to consent to any proposal as described in clause (e) above without the prior written consent of Buyer or waiver thereof.

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ARTICLE 8.¹

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

(a)    Title to all Purchased Assets shall pass to Buyer on the applicable Purchase Date, and Buyer shall have free and unrestricted use of all Purchased Assets, 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 Assets or otherwise selling, transferring, pledging, repledging, hypothecating, or rehypothecating the Purchased Assets, as long as no such action shall cause the tax owner of the Purchased Assets not to be the Seller (or the Guarantor, as the case may be), and provided that 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 hereof.

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

(c)    the Seller (and its Affiliates) shall not give notice of assignment to any underlying borrower or other obligor without the prior written consent of the Buyer and the parties agree and acknowledge that for the limited purposes of English law that the assignment contained in this clause is intended to take effect only as an equitable assignment unless the Buyer otherwise agrees or directs.

Notwithstanding any other provision contained herein, Buyer shall be permitted to freely sell, transfer or hypothecate any Purchased Asset to any Affiliate of Buyer, so long as no such action shall cause the tax owner of the Purchased Asset not to be the Seller (or the Guarantor, as the case may be), and provided that 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(b), (c), or (d), as applicable.

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 Authority 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 Requirement of Law applicable to it or its organizational documents or any agreement by which it is bound or by which any of its assets are

¹  Subject to additional provision under Dutch law if required by local counsel.

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affected. 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.

(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)    Intentionally Omitted.

(iv)    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 is 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 and imposed upon Seller, or (D) any applicable Requirement of Law, in the case of clauses (B), (C) or (D) above, to the extent that such conflict or breach would have a Material Adverse Effect upon Seller’s ability to perform its obligations hereunder.

(v)    Litigation; Requirements of Law. Except as otherwise disclosed in writing to Buyer prior to 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 after due inquiry, threatened against Seller, Pledgor or Guarantor or any of their respective assets, nor is there any action, suit, proceeding, investigation, or arbitration pending or threatened against Seller, Pledgor or 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, Pledgor, nor Guantor 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 applicable to and imposed upon Seller, Pledgor or Guarantor.

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

(vii)    Good Title to Purchased Assets. Immediately prior to the purchase of any Purchased Assets by Buyer from Seller, such Purchased Assets are free and clear of any lien, encumbrance or impediment to transfer (including any “adverse claim” as defined in 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 equitable owner of such Purchased Assets free of any adverse claim, but subject to the rights of Seller and obligations of Buyer under this Agreement and the other Transaction Documents. In the event the related Transaction is recharacterized as a secured financing of the Purchased Assets, the provisions of this Agreement and the relevant Security Deed are effective to create in favor of Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Purchased Assets and Buyer shall have a valid, perfected first priority security interest in the Purchased Assets subject to the rights of Seller and obligations of Buyer under the Agreement and the other Transaction Documents (and without limitation on the foregoing, Buyer, as entitlement holder, shall have a “security entitlement” to the Purchased Assets).

(viii)    No Material Adverse Effect; No Defaults. To Seller’s Knowledge, there are no post-Transaction facts or circumstances that have a Material Adverse Effect on any Purchased Asset that Seller has not notified Buyer of in writing. No Default or Event of Default has occurred or exists under or with respect to the Transaction Documents.

(ix)    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.

(x)    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 Asset to any other Person, and immediately prior to the sale of such Purchased Asset to Buyer, Seller was the sole owner of such Purchased Asset and had good and marketable title thereto, free and clear of all Liens, 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.

(B)    The provisions of this Agreement, the relevant Security Deed 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)    Each of the representations and warranties made in respect of the Purchased Assets pursuant to Exhibit V are true, complete and correct, except to the extent disclosed in a Requested Exceptions Report.

(D)    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 recording office listed on Exhibit IX 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.

(E)    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.

(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 “investment property” and all “deposit accounts” (each as defined in the Uniform Commercial Code) comprising Purchased Items or any after-acquired property related to such Purchased Items. Except to the extent disclosed in a requested Exceptions Report, the Acceptable Attorney 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.

(G)    Upon execution and delivery of the Security Deed, Buyer shall have a valid charge over and security interest in the accounts named therein and all amounts at any time on deposit therein.

(xi)    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.

(xii)    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 already been obtained or made, as applicable, and the filing of certain financing statements in respect of certain security interests).

(xiii)    Organizational Documents. Seller has delivered to Buyer certified copies of its organization documents, together with all amendments thereto, if any.

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(xiv)    No Encumbrances. There are (i) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Assets, (ii) no agreements on the part of Seller to issue, sell or distribute the Purchased Assets, and (iii) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or interest therein, except, in each of the foregoing instances, as contemplated by the Transaction Documents.

(xv)    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 (the “Investment Company Act”), 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.

(xvi)    Taxes. Seller and each Affiliate of Seller have timely filed all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by them and have paid all Taxes (whether or not shown on a return), which have become due, except for Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. Seller and each Affiliate of Seller have satisfied all of their withholding tax obligations. No tax Liens have been filed against any assets of Seller or any Affiliate of Seller and no claims are currently being asserted in writing against Seller or any Affiliate of Seller with respect to 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).

(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 and no Act of Insolvency has ever occurred with respect to Seller.

(xviii)    Solvency. Neither the Transaction Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller’s creditors. The transfer of the 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.

(xix)    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.

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

(xxi)    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, 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.

(xxii)    Hedging Transactions. 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.

(xxiii)    Intentionally Deleted.

(xxiv)    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.

(xxv)    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.

(xxvi)    Anti-Money Laundering, Anti-Corruption and Economic Sanctions.

(a)    Seller 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, (B) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), and (C) the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010, and any other applicable anti-bribery laws and regulations. No part of the proceeds

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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.

(b)    Seller agrees that, from time to time upon the prior written request of Buyer, it shall (A) 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 (B) 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, any of its Affiliates, is a Prohibited Investor and 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.

(xxvii)    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.

(xxviii)    Office of Foreign Assets Control. Seller warrants, represents and covenants that neither the Seller, any of its Affiliates or the Assets are or will be an entity or Person that is or is owned or controlled by a Person that is the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Asset Control, the United Nations Security Council, the European Union or Her Majesty’s Treasury (collectively, “Sanctions”). Seller covenants and agrees that, with respect to the Transactions under this Agreement, none of Seller or, to Seller’s Knowledge, any of its Affiliates will conduct any business, nor engage in any transaction, Assets or dealings, with any Person who is the subject of Sanctions. Seller further covenants and agrees that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions.

(xxix)    Notice Address; Jurisdiction of Organization. On the date of this Agreement, Seller’s address for notices is as specified on 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 and 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.

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(xxx)    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.

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

(a)    take any action 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 Assets (or any of them) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Assets (or any of them) with any Person other than Buyer, unless and until such Purchased Asset is repurchased by Seller in accordance with this Agreement;

(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, the other Collateral or Purchased Items, whether now owned or hereafter acquired, other than the Liens granted by Seller pursuant to Article 6 of this Agreement, the Security Deed and the Lien granted by Sponsor under the Pledge and Security Agreement or unless and until such Purchased Asset relating to such Purchased Items or Collateral is repurchased by Seller in accordance with this Agreement;

(e)    except as otherwise expressly provided 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 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 Article 7(e);

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(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 in Buyer’s sole discretion;

(h)    acquire or maintain any right or interest in any Purchased Asset or Underlying Mortgaged Property that is senior to, junior 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; or

(k)    incur any Indebtedness other than pursuant to, and in accordance with, this Agreement and the other Transaction Documents.

ARTICLE 11.

AFFIRMATIVE COVENANTS OF SELLER

On and as of the Closing Date, 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 (as determined by Seller in its commercially reasonable judgment) (i) in the business operations and/or financial condition of Seller, Pledgor or Guarantor; (ii) impacting any Purchased Asset, including, without limitation any adverse impact on maintaining regulatory (including licensing) compliance with respect to any such Purchase Asset; provided, however, that the failure to deliver such a notice within ten (10) Business Days of Seller’s Knowledge of such failure shall not give rise to a Default or Event of Default and nothing in this Article 11(a) shall relieve Seller of its other 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 (i) defend the right, title and interest of Buyer in and to the Collateral and 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 (ii) 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 immediately succeeding Business Day after obtaining 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

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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 requested by Buyer from time to time and within Seller’s possession or control or which is otherwise reasonably obtainable by Seller.

(g)    Seller will permit Buyer or its designated representative to inspect Seller’s non-privileged records with respect to the Collateral and the Purchased Items 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 unless an Event of Default has occurred and is continuing), and to make copies of extracts of any and all thereof, subject to the terms of any confidentiality agreement between Buyer and Seller. 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)    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 and necessary duly executed transfer documents to be held by Buyer hereunder as additional collateral security for the Transactions. If any sums of money or property so paid or distributed in respect of the Purchased Assets shall be received by Seller, Seller shall, until such money or property is paid or delivered to Buyer, hold such money or property 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 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 Collateral or 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 and/or Collateral, as applicable, pursuant to this Agreement, and the documents delivered in connection herewith.

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

(i)    Within 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”);

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(ii)    Within 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 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)    Upon Buyer’s request:

(A)    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 10 calendar days after Buyer’s request; and

(B)    copies of Seller’s and Guarantor’s Federal Income Tax returns, if any, delivered within 30 calendar days after the earlier of (A) filing or (B) the last filing extension period.

To the extent Seller fails to deliver any of the financial and reporting information required under this clause (j), upon becoming aware of any such deficiency, either by notice from Buyer or otherwise, Seller shall have up to ten (10) Business Days to correct such deficiencies.

(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 11 and 12, 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 or 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, including Tax liabilities, 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 or charge upon the Collateral, other than any 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; provided such contest operates to suspend collection of the contested tax and enforcement of a lien.

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(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 the places where the books and records pertaining to the Purchased Assets are held not less than fifteen (15) Business Days prior to taking any such action.

(p)    Seller will maintain records with respect to the Collateral and Purchased Items and the conduct and operation of its business with no less a degree of prudence than if the Collateral and 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 obtainable by Seller with respect to the Collateral and 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 reasonable prior notice (unless a monetary Default, a material non-monetary Default or an Event of Default shall have occurred and be 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 Assets 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 Responsible 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, to the extent that such Hedging Transactions will not give rise to non-qualifying REIT income under section 856 of the Code.

(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 and Acceptable Attorney 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);

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

(v)    pay and discharge all Taxes imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such Tax the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained;

(vi)    permit Affiliates of Buyer, upon reasonable prior notice (unless a monetary Default, a material non-monetary Default or an Event of Default shall have occurred and be continuing, in which case, no prior notice shall be required), during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its Responsible Officers, all to the extent reasonably requested by Buyer; and

(vii)    not cause or permit any Change of Control without Buyer’s prior written consent.

(u)    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 quarter (or any portion thereof) prior to the date of Buyer’s request.

(v)    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, (B) loans and other assets being assessed by Buyer as a potential Purchased Asset, and (C) such incidental personal property related to each of the foregoing;

(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)    (A) 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 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;

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(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 or any other Transaction Document 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, except, in each instance, to the extent permitted under GAAP;

(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, except as required pursuant to Section 28(m) hereof;

(xii)    except in connection with a Purchased Asset or a loan or asset being assessed by Buyer as a potential Purchased Asset, make any loans or advances to any Person, or own any stock or securities of, any Person, except as a result of the joint and several nature of the obligations of such Person as required pursuant to Section 28(m) hereof;

(xiii)    fail to (A) file its own tax returns separate from those of any other Person, except to the extent Seller is treated as a “disregarded entity” for tax purposes and is not required to file separate tax returns under applicable Legal Requirements, and (B) pay any taxes required to be paid under applicable law; provided, however, that Seller shall not have any obligation to reimburse its equity holders or their Affiliates for any taxes that such equity holders 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;

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(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, each 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;

(xix)    acquire obligations or securities of its partners, members, shareholders or other Affiliates, as applicable, except as required pursuant to Section 28(m) hereof;

(xx)    have any employees, but shall be permitted to utilize employees of its Affiliates;

(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, other than Guarantor, except as required pursuant to Section 28(m) hereof;

(xxiii)    identify itself as a department or division of any other Person;

(xxiv)    acquire obligations or securities of its members or any Affiliates, except as required pursuant to Section 28(m) hereof; or

(xxv)    except in connection with the Purchased Assets or a loan or asset being assessed by Buyer as a potential Purchased Asset, buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).

(w)    With respect to each Eligible Asset to be purchased hereunder that is an Eligible Asset, Seller shall notify Buyer in writing of the creation of any right or interest in such Eligible Asset or related 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.

(x)    Seller shall obtain customary estoppels and agreements reasonably acceptable to Buyer for each Asset that is subject to a ground lease.

(y)    Seller shall be solely responsible for the fees and expenses of the Custodian and Acceptable Attorney, Depository and each servicer (including, without limitation, the Primary Servicer) of any or all of the Purchased Assets.

(z)    By the date that is forty-five (45) calendar days following each anniversary of the Purchase Date with respect to each Purchased Asset, Seller shall, at its sole cost and expense, procure and deliver an updated Approved Valuation relating to each such Purchased Asset in each case prepared by an Approved Valuer and dated within ninety (90) days of the date on which it is delivered by Seller to Buyer.

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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) an Ineligible Asset (as hereunder defined) in accordance with Article 12(c);

(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 if sufficient Income, including Principal Proceeds which would otherwise be remitted to Buyer pursuant to Article 5 of this Agreement is on deposit in the Depository Account but the Depository fails to remit such funds to Buyer, so long as Seller causes such funds to be remitted to Buyer within two (2) Business Days of such failure;

(iii)    Seller or Guarantor shall fail to cure any Margin Deficit 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 or the terms of the Pledge and Security Agreement, or the Guarantee or any other Transaction Document, which failure is not remedied within three (3) Business Days of notice thereof;

(v)    Seller shall default in the observance or performance of its obligation in any agreement contained in Article 10 of this Agreement and, such default shall not be cured within five (5) Business Days after notice by Buyer to Seller thereof;

(vi)    an Event of Default shall have occurred and be continuing under any Parallel Repurchase Facility;

(vii)    an Act of Insolvency occurs with respect to Seller or Guarantor;

(viii)    any of the Persons included within the definition of Knowledge as set forth in Article 2 shall admit to any Person in writing of Seller’s or Guarantor’s inability to, or intention not to, perform any of its obligations hereunder;

(ix)    the Depository Agreement, the Pledge and Security Agreement, the Parent Guaranty and Indemnity 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, Guarantor or any counter-party thereto, as the case may be;

(x)    Seller or Guarantor shall be in default under (i) any Indebtedness of Seller or Guarantor, as applicable, which default (1) involves the failure to pay a matured obligation in excess of $100,000, with respect to Seller or $25,000,000, with respect to Guarantor or (2)

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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 $100,000, with respect to Seller or $25,000,000, with respect to Guarantor; or (ii) any other material contract to which Seller or Guarantor is a party which default (1) involves the failure to pay a matured obligation or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract if the aggregate amount of such obligations is $100,000, with respect to Seller or $25,000,000, with respect to Guarantor;

(xi)    (A) Seller or an ERISA Affiliate shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan 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 five (5) Business Days after notice thereof from Buyer to Seller or after Seller otherwise has Knowledge thereof, 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 after notice thereof from an Affiliated Hedge Counterparty or Qualified Hedge Counterparty to Seller;

(xiv)    any governmental, regulatory, or self-regulatory authority shall have taken any action to remove, limit, restrict, suspend or terminate the rights, privileges, or operations of Seller or Guarantor, which suspension or termination has a Material Adverse Effect in the determination of Buyer;

(xv)    any representation (other than representations and warranties of Seller set forth on Exhibit V, Article 9(b)(x)(C) or MTM Representations) made by Seller to Buyer shall have been incorrect or untrue in any respect when made or repeated or deemed to have been made or repeated and, to the extent that such incorrect or untrue representation is capable of being cured by Seller, such incorrect or untrue representation is not cured by Seller within five (5) Business Days after notification from Buyer or after Seller otherwise has Knowledge thereof;

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(xvi)    a final non appealable judgment by any court of competent jurisdiction for the payment of money (a) rendered against Seller in an amount greater than $100,000 or (b) rendered against Guarantor in an amount greater than $25,000,000, and remained undischarged or unpaid for a period of ten (10) Business Days, unless such judgment is effectively stayed by fully bonding over or other means acceptable to Buyer;

(xvii)    if Seller shall breach or fail to perform any of the covenants contained in this Agreement, other than those specifically otherwise referred to in this Article 12, and for all breaches other than the failure to transfer Income from a Collection Account to the Depository Account on a timely basis in accordance with the penultimate sentence of Article 5(b), provided, however, such breach or failure to perform shall not be an Event of Default if, to the extent any such covenant is capable of being cured by Seller, such breach or failure to perform is cured by Seller no later than five (5) Business Days after notification from Buyer or after Seller otherwise has Knowledge thereof, provided, further, if any covenant contained in this agreement provides Seller with a period of time to cure, correct or remedy any breach or failure to perform such covenant, the five (5) Business Day cure period provided in this clause (xvii) shall not modify, amend or increase such period of time provided therein;

(xviii)    the Parent Guaranty and Indemnity 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, Seller or any Affiliate of either such party; and

(xix)    the breach by Guarantor of any term, covenant (financial or otherwise) or condition set forth in the Parent Guaranty and Indemnity or of any representation, warranty, certification or covenant made or deemed made in the Parent Guaranty and Indemnity 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 solely with respect to any non-monetary breach under the Parent Guaranty and Indemnity, such breach shall not constitute an Event of Default if Guarantor cures such breach within the cure period set forth in the Parent Guaranty and Indemnity, and if no such cure period exists, within five (5) Business Days following delivery of notice of such breach by Buyer to Guarantor;

(b)    After the occurrence and during the continuance of an Event of Default the Buyer shall have no obligation to enter into any further Transactions hereunder and, 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”).

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(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 without presentment or demand of any kind, which are hereby expressly waived; 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).

(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 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 Article 12(b)(iii) shall be applied, (v) first, to the costs and expenses incurred by Buyer in connection with Seller’s default, including without limitation, all costs of collection associated with the interpretation and enforcement of Buyer’s rights and remedies under this Agreement and all of the other Transaction Documents; (w) second, to actual, out-of-pocket damages incurred by Buyer in connection with Seller’s default, (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, costs and expenses, including reasonable legal fees and expenses of

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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 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 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 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.

(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 non-judicial process, disposition of any or all of the Purchased Assets, or from any other election of remedies. Seller recognizes that non-judicial 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 a Purchased Asset is an Ineligible Asset, the related Transaction shall terminate and an Early Repurchase Date shall be deemed to occur with respect to such Purchased Asset. No later than (A) two (2) Business Days after receiving notice from Buyer that such Purchased Asset has become an Ineligible Asset or (B) three (3) Business Days after Seller’s Knowledge that such Purchased Asset has become an Ineligible Asset and Seller’s notice of same to Buyer, 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. For purposes hereof, the following factors, without limitation, shall render a Purchased Asset an “Ineligible Asset”:

(i)    any Purchased Asset that at any time Buyer determines is not an Eligible Asset as a result of any representation, warranty or material information made or provided by Seller or Guarantor being false or misleading at the time such representation or warranty was made or such material information was provided (other than MTM Representations);

(ii)    any Purchased Asset that has been released from the possession of the applicable Acceptable Attorney that issued an Undertaking Letter in connection with the related Purchased Asset for a period in excess of five (5) Business Days without the consent of Buyer;

(iii)    any Purchased Asset upon the occurrence of any Act of Insolvency with respect to any co-participant or any other Person having an interest in such Purchased Asset or any related Underlying Mortgaged Property that is senior to, or pari passu with, in right of payment or priority the rights of Buyer in such Purchased Asset

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(iv)    loans for which Seller or an Affiliate of Seller is the security trustee for such loan;

(v)    Seller’s failure to cure any deficiency noted in the Asset Schedule received from Custodian and Exception Report (as defined in the Custodial Agreement) within five (5) calendar days of Buyer’s receipt of such Asset Schedule and Exception Report; or

(vi)    any Purchased Asset which Buyer has determined the Market Value to be zero.

(d)    Upon the occurrence of any of the events listed in clause (d)(i) through (d)(x) below, Buyer may, in addition to the factors set forth in the definition of Market Value, use, in its sole discretion, the occurrence of such events in its determination of Market Value (which Market Value may be zero); provided, however, that the occurrence of any of the events listed in clause (d)(i) through (d)(x) below by itself shall not cause the termination of the related Transaction:

(i)    any Purchased Asset that is thirty (30) calendar days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related transaction documents;

(ii)    any Purchased Asset has become a specially serviced loan (or the equivalent in the relevant jurisdiction) as defined in the applicable servicing agreement;

(iii)    any Purchased Asset as to which a monetary default has occurred and is continuing;

(iv)    any Purchased Asset as to which a non-monetary event of default shall have occurred and be continuing under any document included in the Purchased Asset File for such Purchased Asset;

(v)    any Purchased Asset 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 Purchased Asset Document that (A) has not been consented to by Buyer in writing and (B) has an adverse effect on Buyer’s interest in such Purchased Asset;

(vi)    any Purchased Asset for which Buyer is relying on an Approved Valuation, the applicable valuation is not dated within ninety (90) calendar days of the proposed financing date (or such other period as approved by Buyer in Buyer’s sole discretion);

(vii)    any Purchased Asset secured by properties that cease to have appropriate planning and/or zoning approval, required insurance or similar legal compliance in the relevant jurisdiction;

(viii)    any failure by Seller to deliver the complete Monthly Reporting Package described in Article 11(j), and Seller is unable to obtain such information necessary to complete the Monthly Reporting Package; provided, however, that prior to using such failure in Buyer’s determination of Market Value, Seller shall have a period of ninety (90) calendar days from the

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date of delivery of the incomplete Monthly Reporting Package to provide any missing information; provided, further, however, that prior to using such failure in Buyer’s determination of Market Value, so long as Seller is diligently pursuing such missing information to the reasonable satisfaction of Buyer, Seller shall have an additional thirty (30) calendar days (or such other time period as determined by Buyer in its sole discretion to provide any missing information);

(ix)    any Purchased Asset upon the occurrence of any Act of Insolvency with respect to the underlying obligor; or

(x)    any MTM Representation made or provided by Seller or Guarantor is false or misleading at the time such MTM Representation was made with respect to any Purchased Asset.

For the avoidance of doubt, nothing contained in Article 12(d) above shall be construed as a limitation on other factors for determining a Margin Deficit hereunder.

ARTICLE 13.

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 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 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.

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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, (d) by telecopier (with answerback acknowledged) provided that such telecopied notice must also be delivered by one of the means set forth above, or (e) by e-mail with confirmation 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 Article 15. A notice shall be deemed to have been given: (v) in the case of hand delivery, at the time of delivery, (w) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (x) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, (y) in the case of telecopier, upon receipt of answerback confirmation, provided that such telecopied notice was also delivered as required in this Article 15, or (z) in the case of e-mail, upon confirmation of delivery. A party receiving a notice that does not comply with the technical requirements for notice under this Article 15 may elect to waive in writing 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 rights or obligations under this Agreement without the prior written consent of Buyer 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 (other than with respect to a Prohibited Transferee; provided, however, that Buyer shall not be subject to such limitation if an Event of Default has occurred and is continuing), sell to one or more banks, financial institutions or other entities (“Participants”) participating interests in any Transaction, its interest in the Purchased Assets, or any other interest of Buyer under this Agreement. Buyer may, at any time and from time to time, assign to any Person (other than a Prohibited Transferee; provided, however, that Buyer shall not be subject to such limitation if an Event of Default has occurred and is continuing) (an “Assignee” and together with Participants, each a “Transferee” and collectively, the “Transferees”) all or any part of its rights in the Purchased Assets, or any other interest of Buyer under this Agreement; provided, however, that, upon Seller’s prior written consent, Buyer may sell to a Prohibited Transferee participating interests in any Transaction, its interest in the Purchased Asset or any other interest of Buyer under this Agreement, or assign to any Prohibited Transferee all or any part of its rights in the Purchased Assets, or any other interest of Buyer under this Agreement, so long as in each case (i) Buyer shall retain control and authority over its rights and

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obligations under this Agreement or any other Transaction Document, (ii) Seller shall not be obligated to deal 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 transfer, assignment or participation. As long as no Event of Default has occurred and is continuing, the foregoing requirements in sub-clauses (i) through (iii) of the preceding sentence shall also apply to any other assignment or participation by Buyer of all or any portion of its interest in this Agreement, any Transaction or any Purchased Asset; provided, however, that the control and authority over Buyer’s rights and obligations set forth in such sub-clause (i) and the obligation of Seller to deal with any Person as set forth in such sub-clause (ii), may be collectively transferred by Buyer to an Assignee that (A) is not a Prohibited Transferee, (B) is a bank, financial institution, pension fund, insurance company or similar Person or an Affiliate of any of the foregoing which, in each case, is regularly engaged in the business of owning commercial real estate loans or operating commercial real estate properties, and (C) has acquired an interest equal to or greater than twenty-five percent (25%) of the entire interest in this Agreement, all Transactions and all Purchased Assets; provided, further, that such control and authority is transferred by Buyer in full (without Buyer retaining any such control or authority) and shall only be held by one such Assignee (and not multiple Assignees). Notwithstanding anything to the contrary contained herein, the preceding sentence shall not apply to any assignments, sales or transfers by Buyer to an Affiliate of Buyer of all or any part of Buyer’s rights in the Purchased Assets or any other interest of Buyer under this Agreement. Each of Seller and Guarantor agree to cooperate with Buyer in connection with any such assignment, transfer or sale of participating interest and to enter into such restatements of, and amendments, supplements and other modifications to, this Agreement in order to give effect to such assignment, transfer or sale.

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

(c)    The Buyer, acting solely for this purpose as an agent of Seller, shall maintain, either at its offices at 1585 Broadway, New York, New York or electronically, a copy of each assignment and a register for the recordation of the names and addresses of the Assignees, and ownership rights in the Transactions, Purchased Assets or in any other interests under this Agreement of any Assignee pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and Seller, the Buyer and the Assignees shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as the beneficial owner of the interests in the Transactions, Purchased Assets or in any other interests under this Agreement for all purposes of this Agreement. The Register shall be available for inspection by Seller, the Buyer and any Assignee, at any reasonable time and from time to time upon reasonable prior notice.

(d)    If the Buyer sells a participation it shall, acting solely for this purpose as an agent of Seller, maintain a register on which it enters the name and address of each Participant and the ownership rights in the Transactions, Purchased Assets or any other interests under this Agreement of each Participant (the “Participant Register”); provided that Buyer shall have no obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s ownership rights in the Transactions, Purchased Assets or any other interests under this Agreement) to any Person except to the extent (i) disclosing the portion of the Participant

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Register relating to a Participant with respect to which a claim for additional amounts is made under Articles 3(g), 3(h), 3(j), 3(k) or 3(l), or (ii) otherwise to the extent such disclosure is reasonably expected to be necessary to establish that such ownership rights in the Transactions or any other interests under this Agreement are in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and the Buyer shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, no sale, assignment, transfer or participation pursuant to this Article 17 shall be effective unless and until reflected in the Register or Participant Register, as applicable.

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 here from shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation of any of the foregoing, the failure to give a notice pursuant to Articles 4(a) or 4(c) hereof will not constitute a waiver of any right to do so at a later date.

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, 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.

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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 (i) 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 101 of the Bankruptcy Code, (ii) 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 (iii) that Buyer (for so long as each party is either a “financial institution,” “financial participant,” “repo participant,” “master netting participant” or other entity listed in Sections 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 contract” 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(o) and 546 of the Bankruptcy Code.

(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 or terminate this Agreement or to liquidate Assets 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 further agrees that it shall not challenge the characterization of this Agreement or any Transaction as a “repurchase agreement,” “securities contract,” and/or “master netting agreement,” or each party as a “repo participant” within the meaning of the Bankruptcy Code except in so far as the type of Purchased Assets 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

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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)    Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes (a) to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and (b) that the Purchased Assets are owned by Seller in the absence of an Event of Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law.

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 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.

(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)    PURSUANT TO, AND IN ACCORDANCE WITH, SECTION 5-1402 OF THE NEW YORK STATE GENERAL OBLIGATIONS LAW, 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,

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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 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)    SELLER 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,

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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 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.

ARTICLE 25.

INDEMNITY

Seller hereby agrees to indemnify Buyer, Buyer’s designee that is holding a Purchased Asset File on behalf of and at the direction of Buyer, Buyer’s Affiliates and each of its officers, directors, and employees (“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, incurred and paid by or asserted against any Indemnified Party in any way whatsoever arising out of or in connection with, or relating to the Transaction Documents including 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 liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses or disbursements resulting from the gross negligence, bad faith or willful misconduct of Buyer or any Indemnified Party. Without limiting the generality of the foregoing, Seller agrees to hold Buyer harmless from and indemnify Buyer against all Indemnified Amounts with respect to all Purchased Assets relating to or arising out of any violation or alleged violation of any environmental law, rule or regulation or any consumer credit laws, including without limitation ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act; provided, that Seller shall not be liable for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses or disbursements resulting from the gross negligence, bad faith or willful misconduct of Buyer or any 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 actual 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

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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 Pre-Purchase 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 and this Article 25 shall survive the termination of this Agreement and the Transactions contemplated hereby.

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, Primary Servicer and any other servicer or sub servicer 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 continuing due diligence on the Purchased Assets, which shall be paid by Seller to Buyer within thirty (30) calendar 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 Primary Servicer) shall service the Assets for the benefit of Buyer and Buyer’s successors and assigns. The appointment of each servicer of any Purchased Asset (including the Primary Servicer) shall be subject to the prior written approval of Buyer, not to be unreasonably withheld, conditioned or delayed. Seller shall cause each such servicer (including the Primary 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 Article 7(e), no servicer (including the Primary Servicer) of any of the Purchased Assets shall take any action with respect to any Purchased Asset described in Article 7(e).

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(b)    Seller agrees that Buyer is the owner of all servicing records, including, but not limited to, any and all servicing agreements (including, without limitation, the Primary 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, valuations, other closing documentation, payment history 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 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), Primary 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 servicer other than Primary Servicer pursuant to the Primary 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 such a Buyer approved 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 and sub-servicers engaged by Seller to execute a Direct Agreement with Buyer acknowledging Buyer’s security interest and agreeing that each servicer and/or sub servicer shall transfer all Income 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 Primary Servicer) or sub-servicer shall take no action with regard to such Purchased Asset other than as specifically directed by Buyer.

(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 Primary 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 via electronic transmission, promptly upon request by Buyer a Servicing Tape for the quarter (or any portion thereof) prior to the date of Buyer’s request.

ARTICLE 28.

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.

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(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.

(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 accountants, attorneys and advisors, incurred in connection with the preparation, negotiation, execution, consummation and administration 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 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 Collateral or Purchased Items and for the custody, care or preservation of the Collateral or 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 Collateral and Purchased Items in the name of Buyer or its nominee. All such expenses shall be recourse obligations of Seller to Buyer under this Agreement.

(e)    In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of such rights, Seller and Guarantor hereby grant to Buyer and its Affiliates, including the Affiliated Hedge Counterparty, if applicable, a right of offset, to secure repayment of all amounts owing to Buyer or its Affiliates by Seller, Guarantor or any Subsidiary of Guarantor under the Transaction Documents and any Hedging Transactions, 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, Guarantor or any Subsidiary of Guarantor, whether for safekeeping, custody, pledge, transmission, collection, or otherwise, and also upon any and all deposits (general or specified) and credits of Seller, Guarantor or any Subsidiary of Guarantor 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, Guarantor or any Subsidiary of Guarantor, any such notice being expressly waived, 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, Guarantor or any Subsidiary of Guarantor under the Transaction Documents or any Hedging Transactions, 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, Guarantor or any Subsidiary of Guarantor 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, Guarantor or any Subsidiary of Guarantor under the Transaction Documents and any Hedging Transaction, 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, GUARANTOR OR ANY SUBSIDIARY OF GUARANTOR UNDER THE TRANSACTION DOCUMENTS AND ANY HEDGING TRANSACTIONS, PRIOR TO EXERCISING

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THEIR RIGHT OF OFFSET WITH RESPECT TO SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF SELLER, GUARANTOR OR ANY SUBSIDIARY OF GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER, GUARANTOR OR ANY SUBSIDIARY OF GUARANTOR. For purposes of this Article 28(e), Guarantor’s Subsidiaries shall only refer to those Subsidiaries that are not organized as special purpose entities as of the date hereof under their respective organizational documents.

(f)    Seller and Guarantor agree that neither shall assert any claims against Buyer for special, indirect, consequential or punitive damages for the actual use or purported use of proceeds hereunder.

(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.

(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 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.

(m)    The obligations of each Seller hereunder (as of, and from and after, the date hereof) for the Repurchase Obligations shall be joint and several with the obligations of each other Seller to the maximum extent permitted by Requirement of Law. Notwithstanding anything in this Agreement or any other Transaction Document to the contrary, (i) the obligations of each Seller with respect to joint and several liability hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Seller’s obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the Bankruptcy Code or any provisions of applicable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such Seller, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws, and (ii) Buyer hereby acknowledges and agrees that the provisions of this Section 28(m) and the obligation of each Seller to be jointly and severally liable for the Repurchase Obligations do not and shall not violate any of the provisions of this Agreement, including Section 11(v) hereof or any other Transaction Document.

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ARTICLE 29.

JOINDER OF ADDITIONAL SELLERS

An Affiliate of Seller may become a Seller under this Agreement, and shall be bound by, and entitled to, the benefits and obligations of this Agreement as a Seller, upon the fulfillment of the following conditions:

(a)    Seller shall provide written notice to Buyer of its election to join an Affiliate as an additional Seller hereunder, such notice shall provide the name and ownership structure of such entity.

(b)    Such entity shall deliver the corporate formation and authority documents identified in Article 3(a) with respect to such entity, together with such other documents as may be reasonably requested by Buyer.

(c)    A Supplemental Pledge and Security Agreement shall be delivered with respect to such entity, together with such other documents or Transaction Documents as may be reasonably requested by Buyer.

(d)    No Material Adverse Effect, Margin Deficit, Default or Event of Default shall have occurred and be continuing, or would result from the addition of such entity as a Seller.

(e)    The representations and warranties contained in Article 9 shall be true and correct in all material respects with respect to such entity, as of the date such entity executes the Seller Joinder Agreement described below.

(f)    Such entity shall execute and deliver a Seller Joinder Agreement with respect to this Agreement, substantially in the form of Exhibit XVIII (a “Seller Joinder Agreement”).

(g)    Buyer shall have received a legal opinion, dated as of the date such entity executes the Seller Joinder Agreement described above, addressed to Buyer and its successors and/or assigns, having substantially the same coverage as those opinions delivered by Seller’s counsel pursuant to Article 3(a)(xi) on the Closing Date and substantially in a form reasonably acceptable to the Buyer.

(h)    Such entity shall provide Buyer with such other documentation or information as the Buyer may request with respect to such entity (including without limitation amendments to other Transaction Documents, if required by Buyer), and shall pay all reasonable out-of-pocket costs and expenses actually incurred by Buyer under this Article 29.

ARTICLE 30.

ADDITIONAL JURISDICTIONS

(a)    At Seller’s request, Buyer may agree, in its sole discretion, to approve Additional Jurisdictions relating to Eligible Assets in order to enter into Transactions subject to such Additional Jurisdictions. Seller shall provide Buyer with written notice of its request pursuant to this Article 30 and shall identify the requested Additional Jurisdiction(s). Upon the completion of satisfactory diligence, credit approval and consultation with legal counsel (including, without limitation, outside counsel in the

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relevant Additional Jurisdiction(s)) determined by Buyer in its sole discretion, Buyer shall notify Seller of its approval or non-approval of such requested Additional Jurisdiction(s). In the event that Buyer determines that such requested Additional Jurisdiction shall be an approved Additional Jurisdiction hereunder, the approval shall be effectuated upon the fulfillment of the following conditions:

(i)    A Confirmation of Supplemental Provisions shall be delivered, fully executed by the relevant parties thereto, together with such other documents or Transaction Documents as may be reasonably requested by Buyer;

(ii)    No Material Adverse Effect, Margin Deficit, Default or Event of Default shall have occurred and be continuing, or would result from the addition of such Additional Jurisdiction;

(iii)    The representations and warranties contained in Article 9 shall be true and correct in all material respects, as of the date of the related Confirmation of Supplemental Provisions;

(iv)    Buyer shall have received a legal opinion, dated as of the date of the related Confirmation of Supplemental Provisions described above, addressed to Buyer and its successors and/or assigns, having substantially the same coverage as those opinions delivered by Seller’s counsel pursuant to Article 3(a)(xi) on the Closing Date and substantially in a form reasonably acceptable to Buyer; and

(v)    Such entity shall provide Buyer with such other documentation or information as Buyer may request with respect to such Additional Jurisdiction, and shall pay all reasonable out-of-pocket costs and expenses actually incurred by Buyer under this Article 30.

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IN WITNESS WHEREOF, the parties have executed this Agreement as a deed as of the day first written above.

BUYER:
MORGAN STANLEY BANK, N.A., a national banking association
By:	/s/ Geoffrey Kott
Name:	Geoffrey Kott
Title:	Authorized Signatory

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SELLER:
PARLEX 6 UK FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer
PARLEX 6 EUR FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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EX-10.6

Exhibit 10.6

FIRST AMENDMENT TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT

This First Amendment to Amended and Restated Master Repurchase and Securities Contract Agreement (this “Amendment”), dated as of March 29, 2017 (the “Effective Date”), is by and among MORGAN STANLEY BANK, N.A., a national banking association, as buyer (“Buyer”), PARLEX 6 UK FINCO, LLC, a Delaware limited liability company (“UK Seller”), and PARLEX 6 EUR FINCO, LLC, a Delaware limited liability company (“EUR Seller” and, together with UK Seller, individually and/or collectively as the context requires, “Seller”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Master Repurchase Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, Seller and Buyer have entered into that certain Amended and Restated Master Repurchase and Securities Contract Agreement dated as of June 16, 2014 (the “Master Repurchase Agreement”); and

WHEREAS, Seller and Buyer wish to modify certain terms and provisions of the Master Repurchase Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1.    Amendments to Master Repurchase Agreement. The Master Repurchase Agreement is hereby amended as follows:

(a)    The definition of “Maximum Facility Amount” in Article 2 of the Master Repurchase Agreement is hereby deleted in its entirety and replaced with the following:

“Maximum Facility Amount” shall mean £500,000,000; provided, that any amounts paid to Buyer on account of a Repurchase Price may be readvanced hereunder and utilized for purchasing additional Assets in accordance with the terms of this Agreement.

(b)    The definition of “Outside Repurchase Date” in Article 2 of the Master Repurchase Agreement is hereby deleted in its entirety and replaced with the following:

“Outside Repurchase Date” shall mean March 1, 2020.

2.    Effectiveness. This Amendment shall become effective on the Effective Date which is the date on which this Amendment is executed and delivered by a duly authorized officer of each of Seller, Buyer and Guarantor, along with (a) delivery to Buyer of such other documents as Buyer reasonably requested prior to the Effective Date, including without limitation, an opinion of outside counsel to Seller reasonably acceptable to Buyer as to corporate and security interest matters and (b) receipt by Buyer of payment from Seller of an amount equal to the amount of actual costs and expenses, including, without limitation, the reasonable fees and expenses of counsel to Buyer, incurred by Buyer in connection with this Amendment and the transactions contemplated hereby.

3.    Assets Secured by Property Located in the United States. The parties acknowledge and agree that no assets or loans with respect to which the Underlying Mortgaged Property is located in any state of the United States of America or any of its territories or possessions shall be an Eligible Asset unless and until (a) the parties have duly completed and executed amended and restated Transaction Documents required by Buyer and in form and substance satisfactory to Buyer, (b) 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 counsel to Buyer, incurred by Buyer in connection with the preparation and execution of any such amended and restated Transaction Documents and any other documents prepared in connection herewith or therewith, (c) Seller shall deliver to Buyer good standing certificates and certified copies of the charters and by-laws (or equivalent documents) of Seller, Pledgor and Guarantor and of all corporate or other authority for Seller and Guarantor with respect to the execution, delivery and performance of the amended and restated Transaction Documents and (d) Seller shall deliver to Buyer all such other and further documents, documentation and legal opinions as Buyer in its discretion shall require.

4.    Continuing Effect; Reaffirmation of Parent Guaranty and Indemnity. As amended by this Amendment, all terms, covenants and provisions of the Master Repurchase Agreement are ratified and confirmed and shall remain in full force and effect. In addition, any and all guaranties and indemnities for the benefit of Buyer (including, without limitation, the Parent Guaranty and Indemnity) and agreements subordinating rights and liens to the rights and liens of Buyer, are hereby ratified and confirmed and shall not be released, diminished, impaired, reduced or adversely affected by this Amendment, and each party indemnifying Buyer, and each party subordinating any right or lien to the rights and liens of Buyer, hereby consents, acknowledges and agrees to the modifications set forth in this Amendment and waives any common law, equitable, statutory or other rights which such party might otherwise have as a result of or in connection with this Amendment.

5.    Binding Effect; No Partnership; Counterparts. The provisions of the Master Repurchase Agreement, as amended hereby, shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing herein contained shall be deemed or construed to create a partnership or joint venture between any of the parties hereto. For the purpose of facilitating the execution of this Amendment as herein provided, this Amendment may be executed simultaneously in any number of counterparts, each of which shall be deemed to be an original, and such counterparts when taken together shall constitute but one and the same instrument. Delivery of an executed counterpart in Portable Document Format (PDF) of this Amendment by email or facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

6.    Further Agreements. Seller agrees to execute and deliver such additional documents, instruments or agreements as may be reasonably requested by Buyer and as may be necessary or appropriate from time to time to effectuate the purposes of this Amendment.

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7.    Governing Law. The provisions of Article 18 of the Master Repurchase Agreement are incorporated herein by reference.

8.    Headings. The headings of the sections and subsections of this Amendment are for convenience of reference only and shall not be considered a part hereof nor shall they be deemed to limit or otherwise affect any of the terms or provisions hereof.

9.    References to Transaction Documents. All references to the Master Repurchase Agreement in any Transaction Document, or in any other document executed or delivered in connection therewith shall, from and after the execution and delivery of this Amendment, be deemed a reference to the Master Repurchase Agreement as amended hereby, unless the context expressly requires otherwise.

[NO FURTHER TEXT ON THIS PAGE]

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the day first written above.

BUYER:
MORGAN STANLEY BANK, N.A., a national banking association
By:	/s/ Vanessa Vanacker
Name:	Vanessa Vanacker
Title:	Authorised Signatory

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SELLER:
PARLEX 6 UK FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer
PARLEX 6 EUR FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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AGREED AND ACKNOWLEDGED:
GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

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EX-10.7

Exhibit 10.7

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Dated as of February 9, 2017

by and among

PARLEX 15 FINCO, LLC,

as Master Seller,

and

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH,

as Buyer

TABLE OF CONTENTS

		Page
1.	APPLICABILITY		1
2.	DEFINITIONS		2
3.	INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION		29
4.	MARGIN MAINTENANCE		37
5.	INCOME PAYMENTS AND PRINCIPAL PAYMENTS		38
6.	SECURITY INTEREST		41
7.	PAYMENT, TRANSFER AND CUSTODY		43
8.	SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS		48
9.	REPRESENTATIONS		48
10.	NEGATIVE COVENANTS OF SELLER		53
11.	AFFIRMATIVE COVENANTS OF SELLER		56
12.	SINGLE-PURPOSE ENTITY		59
13.	EVENTS OF DEFAULT; REMEDIES		62
14.	LIMITATIONS ON RECOURSE AGAINST SERIES SELLERS		69
15.	RECORDING OF COMMUNICATIONS		70
16.	NOTICES AND OTHER COMMUNICATIONS		70
17.	ENTIRE AGREEMENT; SEVERABILITY		70
18.	ASSIGNABILITY		71

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19.	GOVERNING LAW	72
20.	NO WAIVERS, ETC.	72
21.	USE OF EMPLOYEE PLAN ASSETS	72
22.	INTENT	73
23.	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	75
24.	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	75
25.	NO RELIANCE	76
26.	INDEMNITY	78
27.	DUE DILIGENCE	79
28.	SERVICING	80
29.	TAXES	81
30.	MISCELLANEOUS	84

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ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III	[Reserved]
EXHIBIT IV	Form of Custodial Delivery
EXHIBIT V	Form of Power of Attorney
EXHIBIT VI	Representations and Warranties Regarding Individual Purchased Loans
EXHIBIT VII	Organizational Chart
EXHIBIT VIII	Transaction Procedures
EXHIBIT IX	Form of Servicer Notice and Agreement
EXHIBIT X	Prohibited Transferees
EXHIBIT XI	Form of Joinder Agreement
EXHIBIT XII	Form of Bailee Agreement

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THIS AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Agreement”) is dated as of February 9, 2017, by and among PARLEX 15 FINCO, LLC, a Delaware limited liability company (“Master Seller”), and DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, a branch of a foreign banking institution (“Buyer”).

WHEREAS, the limited liability company agreement of the Master Seller provides for the establishment of one or more designated series of limited liability company interests and assets of the Master Seller (each such series that executes and delivers a Joinder Agreement (as hereinafter defined) pursuant to Section 3(n), a “Series Seller”) which may have separate rights, powers or duties with respect to specified property, including rights to profits and losses associated with such specified property and obligations under this Agreement with respect to such specified property, with the assets and obligations of each such Series Seller accounted for separately in the records of Master Seller and such Series Seller from the other assets of the Master Seller and the assets of each other Series Seller; and the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to each Series Seller shall be enforceable solely against the assets of such Series Seller except to the extent expressly provided for hereunder. Upon its execution of a Joinder Agreement pursuant to Section 3(n), each such Series Seller shall be bound by all provisions herein with respect to the assets of such Series Seller and its related obligations in respect of any Transactions. As used herein, the term “Seller” shall mean the Master Seller and/or each Series Seller, individually or collectively, as the context may require.

WHEREAS, Seller and Buyer entered into that certain Master Repurchase Agreement, dated as of August 2, 2016 (the “Existing Repurchase Agreement”).

WHEREAS, Seller and Buyer desire to amend and restate the Existing Repurchase Agreement on the Amendment and Restatement Date (as defined below) on the terms set forth herein.

NOW THEREFORE, Seller and Buyer hereby agree that the Existing Repurchase Agreement is hereby amended and restated in its entirety to read as follows:

1.    APPLICABILITY

After the Closing Date the parties hereto may enter into a transaction in which Seller agrees to transfer to Buyer the Watchtower A-Note Eligible Loan (as hereinafter defined) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Watchtower A-Note Eligible Loan at a date certain or on demand, against the transfer of funds by Seller. From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer certain Eligible Loans (as hereinafter defined) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Eligible Loans at a date certain or on demand, against the transfer of funds by Seller. Master Seller shall designate a Series Seller for each such transaction in accordance with Section 3(n) of this Agreement. 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.

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2.    DEFINITIONS

(a)    As used in this Agreement, the following terms shall have the following meanings:

“640 Broadway Eligible Loan” shall mean the whole mortgage loan specified in the related Confirmation therefor.

“1934 Act” shall have the meaning specified in Section 23(a).

“A-Note” shall mean a Mortgage Note evidencing a senior position (or pari passu senior position) in a Mortgage Loan. Payments with respect to an A-Note shall not be junior to any other Mortgage Note.

“Accelerated Repurchase Date” shall have the meaning specified in Section 13(b)(i) of this Agreement.

“Accelerated Transaction Repurchase Date” shall have the meaning specified in Section 13(c)(i) of this Agreement.

“Accepted Servicing Practices” shall mean with respect to any Purchased Loan, those mortgage servicing practices of prudent commercial mortgage lending institutions which service commercial mortgage loans of a substantially similar type as such Purchased Loan in the jurisdiction where the related Mortgaged Property is located or as otherwise defined in the applicable Servicing Agreement.

“Act of Insolvency” shall mean with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any Bankruptcy Law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, (ii) the commencement of any such case or proceeding against such party, seeking such an appointment or election, or the filing against such party of an application for a protective decree under the provisions of SIPA, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment or election, the issuance of such a protective decree or the entry of an order having a similar effect against such party, or (C) is not dismissed within 60 days, (iii) the making by such party of a general assignment for the benefit of its creditors, or (iv) the admission in writing by such party of such party’s inability to pay such party’s debts as they become due.

“Actual Original Purchase Percentage” shall mean, with respect to any Transaction, a percentage equal to the lesser of (x) the Maximum Original Purchase Percentage for such Transaction and (y) a percentage designated by Seller in its sole and absolute discretion, and set forth in the Confirmation for such Transaction.

“Additional Amounts” shall have the meaning specified in Section 29(b) of this Agreement.

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“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 Amended and Restated Master Repurchase Agreement, dated as of February 9, 2017 by and among Seller and Deutsche Bank AG, Cayman Islands Branch, as same may be amended, modified and/or restated from time to time.

“Allocable Percentage” shall mean, with respect to any Principal Payment on any Purchased Loan, a fraction (expressed as a percentage) the numerator of which is the Repurchase Price with respect to such Purchased Loan as in effect immediately prior to such Principal Payment (net of any accrued Price Differential and, unless a Facility Event of Default or a Transaction Event of Default related to such Purchased Loan has occurred and is continuing, excluding any other amounts then owing to Buyer), and the denominator of which is the outstanding principal balance of such Purchased Loan immediately prior to such Principal Payment.

“Alternative Rate” shall have the meaning specified in Section 3(f) 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.

“Amendment and Restatement Date” shall mean February 9, 2017.

“Applicable Servicer Account” shall mean, with respect to each Purchased Loan, the account(s) established by the applicable Servicer into which the related Mortgagor or other obligor shall be required to remit principal, interest and other payments due with respect to such Purchased Loan under the related Purchased Loan Documents.

“Applicable Spread” shall mean, with respect to each Transaction:

(A)    so long as no Event of Default shall have occurred and be continuing, the Applicable Spread specified in each Confirmation, and

(B)    after the occurrence and during the continuance of an Event of Default, the Applicable Spread specified in each Confirmation, plus 400 basis points (4.00%).

“Appraisal” shall mean an appraisal of the related underlying Mortgaged Property from an Independent Appraiser, complying with the requirements of Title XI of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time, and conducted in accordance with the standards of the American Appraisal Institute.

“Approved Future Funding Amounts” shall have the meaning specified in Section 3(o) of this Agreement.

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“Assignment of Leases” shall mean, with respect to any Purchased Loan, 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.

“Assignment of Mortgage” shall mean, with respect to any Purchased Loan, an assignment or notice of transfer (or equivalent instrument) of the applicable Mortgage 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.

“Available Income” shall mean, all Income other than (a) the Underlying Purchased Loan Reserves, (b) Qualified Servicing Expenses, and (c) insurance proceeds and condemnation awards from any Mortgaged Property that are not permitted to be applied to amounts due under the applicable Purchased Loan pursuant to the applicable Purchased Loan Documents.

“Bailee” shall mean Ropes & Gray LLP or any other law firm reasonably acceptable to Buyer that has delivered a Bailee Letter with respect to a Purchased Loan.

“Bailee Letter” shall mean a letter from Seller and acknowledged by Bailee and Buyer substantially in the form attached hereto as Exhibit XII.

“Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), as amended from time to time or any successor statute or rule promulgated thereto.

“Bankruptcy Laws” shall mean the Bankruptcy Code or any other United States bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or any similar statute, law, rules, regulations or similar legal requirements of any other applicable jurisdiction, in each case, as amended from time to time.

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) a day in which the New York Stock Exchange or banks in the State of New York, Kansas, Pennsylvania 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 Deutsche Bank AG, Cayman Islands Branch, or any successor or assignee thereof.

“Capital Lease Obligations” shall mean with respect to 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.

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“Cash Flow Deficiency” shall mean, for any Remittance Date, the amount (if any) by which (i) the total of all amounts due to Buyer, its Affiliates and Custodian under Sections 5(c)(i)-(iv), 5(d)(i)-(v) or 5(e)(i)-(iv), as applicable, as of such Remittance Date exceed (ii) the aggregate amount of Available Income (including Principal Payments) received by Buyer or Depository in respect of all of the Purchased Loans during such Collection Period.

“Cash Management Account” shall mean a segregated interest bearing account, entitled “Parlex 15 Finco, LLC, as Master Seller, for the benefit of Deutsche Bank AG, Cayman Islands Branch, as Buyer”, established at the Depository, bearing account number 1029151413.

“Cause” means, with respect to an Independent Manager, (i) acts or omissions by such Independent Manager that constitute willful disregard of or bad faith or gross negligence with respect to, such Independent Manager’s duties, (ii) such Independent Manager has engaged in or has been charged with, indicted or convicted for any crime or crimes of moral turpitude, fraud, or dishonesty or for any violation of any Requirement of Law, (iii) such Independent Manager no longer satisfies the requirements set forth in the definition of “Independent Manager”, (iv) the fees charged for the services of such Independent Manager are materially in excess of the fees charged by the other providers of Independent Managers listed in the definition of “Independent Manager”, (v) such Independent Manager is unable to perform his or her duties due to death, disability or incapacity or (vi) any other reason for which the prior written consent of Buyer shall have been obtained.

“Change of Control” shall mean (a) any consummation of a merger, amalgamation, or consolidation of Sponsor with or into another entity or any other reorganization occurs and more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s stock or other ownership interest in such entity outstanding immediately after such merger, amalgamation, consolidation or such other reorganization is not owned directly or indirectly by Persons who were stockholders or holders of such other ownership interests in Sponsor immediately prior to such merger, amalgamation, consolidation or other reorganization; (b) 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” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of a percentage of the total voting power of all stock or other ownership interests in Sponsor entitled to vote generally in the election of directors, members or partners of twenty percent (20%) or more other than wholly-owned Affiliates of Sponsor and related funds of The Blackstone Group L.P., or to the extent such interests are obtained through a public market offering or secondary market trading; (c) Sponsor shall cease to own and Control, of record and beneficially, directly or indirectly, one hundred percent (100%) of each class of outstanding ownership interests in Member; (d) Member shall cease to own and Control, of record and beneficially, directly, one hundred percent (100%) of each class of outstanding ownership interests in Seller; or (e) any transfer of all or substantially all of Sponsor’s assets (other than any securitization transaction or any repurchase or other similar transactions in the ordinary course of Sponsor’s business). 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 August 2, 2016.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collateral” shall have the meaning specified in Section 6 of this Agreement.

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

“Confirmation” shall have the meaning specified in Section 3(b) 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, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “Controlling,” “Controlled” and “under common Control” shall have meanings correlative thereto. For purposes of this definition, debt securities that are convertible into common stock will be treated as voting securities only when converted.

“Controlled Account Agreement” shall mean that certain Deposit Account Control Agreement, dated as of August 2, 2016, among Buyer, Master Seller (on behalf of itself and each Series Seller), Servicer and the Depository, relating to the Cash Management Account, as the same may be amended, modified and/or restated from time to time.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of August 2, 2016, by and among the Custodian, Master Seller (on behalf of itself and each Series Seller) and Buyer, as the same may be amended, modified and/or restated from time to time.

“Custodial Delivery” shall mean the form executed by Seller in order to deliver the Purchased Loan Schedule and the Purchased Loan File with respect to any Purchased Loan to Buyer or its designee (including the Bailee or the Custodian, as applicable) pursuant to Section 7, 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, prior to the occurrence or continuance of a Default or an Event of Default, the prior written consent of Seller (which consent shall not be unreasonably withheld or delayed).

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

“Default” shall mean a Facility Default or a Transaction Default.

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“Depository” shall mean PNC Bank, National Association, a national banking association, or any successor Depository appointed by Buyer with, prior to the occurrence or continuance of a Default or an Event of Default, the prior written consent of Seller (which consent shall not be unreasonably withheld or delayed).

“Diligence Materials” shall mean, collectively, (i) the Preliminary Due Diligence Package furnished by Seller to Buyer, and (ii) any other diligence materials delivered by Seller to Buyer in connection with Buyer’s review of any New Collateral, whether pursuant to a Supplemental Due Diligence List or otherwise.

“Early Repurchase Date” shall have the meaning specified in Section 3(k) of this Agreement.

“Eligibility Requirements” shall mean, with respect to any Person, that such Person has at least $100,000,000 in capital/statutory surplus or shareholders’ equity (except with respect to a pension advisory firm or similar fiduciary) and at least $500,000,000 in total assets (in name or under management), and is regularly engaged in the business of making or owning commercial real estate loans (or interests therein), mezzanine loans (or interests therein) or commercial loans (or interests therein) similar to the applicable Purchased Loan.

“Eligible Loan” shall mean a whole mortgage loan or Senior Interest (including the Watchtower A-Note Eligible Loan) in a whole mortgage loan secured by a first mortgage lien or liens on one or more commercial or multifamily properties (including, without limitation, a leasehold interest therein), as to which each of the Purchased Loan Representations are true and correct as of the Purchase Date (except for any exceptions disclosed in an Exceptions Report) and which mortgage loan or Senior Interest is approved by Buyer as of the Purchase Date, in its sole and absolute discretion, based upon all facts and circumstances considered relevant by Buyer. An “Eligible Loan” that is a Purchased Loan hereunder may, in Buyer’s sole and absolute discretion, include a junior Related Interest provided that, and only for so long as, the corresponding Senior Interest with respect to any such junior Related Interest also remains subject to the applicable Transaction for such Purchased Loan.

“Environmental Law” shall mean any present or future federal, state or local law, statute, regulation or ordinance, any judicial or administrative order or judgment thereunder, pertaining to health, industrial hygiene, hazardous substances or the environment, including, but not limited to, each of the following, as enacted as of the date hereof or as hereafter amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq.; the Toxic Substance Control Act, 15 U.S.C. §§ 2601 et seq.; the Water Pollution Control Act (also known as the Clean Water Act, 22 U.S.C. §§ 1251 et seq.), the Clean Air Act, 42 U.S.C. §§ 7401 et seq. and the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq.

“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.

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“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(b) of ERISA and Section 412(b) of the Code and the lien created under Section 303(k) of ERISA and Section 430(k)(4) of the Code, described in Section 414(m) or (o) of the Code of which Seller is a member.

“Event of Default” shall mean a Facility Event of Default or a Transaction Event of Default.

“Exceptions Report” shall mean, with respect to a Purchased Loan, a written schedule of exceptions, qualifications or modifications to the related Purchased Loan Representations furnished by Seller to Buyer, as set forth on Schedule 3 to the Confirmation for such Eligible Loan, and approved by Buyer on or prior to the related Purchase Date as evidenced by Buyer’s execution of such Confirmation.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to Buyer or required to be withheld or deducted from a payment to Buyer: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, 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 Repurchase Obligations pursuant to a law in effect on the date on which such Buyer (i) acquires such interest in the Repurchase Obligations or (ii) changes the office from which it books the Transactions, except in each case to the extent that, pursuant to Section 29, 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 29(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Repurchase Agreement” shall have the meaning specified in the Recitals to this Agreement.

“Extension Conditions” shall have the meaning specified in Section 3(p).

“Extension Options” shall have the meaning specified in Section 3(p).

“Extension Terms” shall have the meaning specified in Section 3(p).

“Extended Repurchase Date” shall mean either the First Extended Repurchase Date or the Second Extended Repurchase Date, as applicable.

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

“Facility Event of Default” shall have the meaning specified in Section 13(a)(II).

“Facility Termination Date” shall mean, as of any date, the Original Repurchase Date, or such later date as may be in effect pursuant to Section 3(p).

“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 pursuant to Section 1471(b)(1) of the Code.

“FDIA” shall have the meaning specified in Section 22(c).

“FDICIA” shall have the meaning specified in Section 22(d).

“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, 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 (3) federal funds brokers of recognized standing selected by it.

“Filings” shall have the meaning specified in Section 6 of this Agreement.

“Foreign Buyer” shall mean a Buyer that is not a U.S. Person.

“First Extended Repurchase Date” shall mean August 9, 2020 (or if such day is not a Business Day, the next succeeding Business Day).

“First Extension Term” shall have the meaning specified in Section 3(p).

“Future Funding Amount” shall mean with respect to any Purchased Loan for which a Future Funding Transaction has been duly requested by Seller pursuant to Section 3(o), the product of (a) the Maximum Original Purchase Percentage for such Purchased Loan and (b) the amount of future funding advances made under the Purchased Loan with respect to which the requested Future Funding Transaction relates; provided, in no event shall the aggregate amount so requested by Seller exceed the amount of future funding set forth on the related Confirmation for the initial Transaction relating to such Purchased Loan, multiplied by the Maximum Original Purchase Percentage for such Purchased Loan, minus all previous Future Funding Amounts funded by Buyer relating to such Purchased Loan.

“Future Funding Conditions” shall have the meaning specified in Section 3(o).

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“Future Funding Date” shall mean, with respect to any Purchased Loan, each date on which Seller is required to fund a future funding advance pursuant to the Purchased Loan Documents relating to such Purchased Loan.

“Future Funding Request Package” shall mean, with respect to one or more Future Funding Transactions, the following, to the extent applicable and available, unless any such items were previously delivered to Buyer and have not been modified since the date of each such delivery: (a) the related request for advance, executed by the Mortgagor under the related Purchased Loan (which shall include evidence of Seller’s approval of the related future funding), together with any advance request package submitted to Seller by the related Mortgagor, and any other documents that require Seller to fund; (b) the executed fund control agreement (or the executed escrow agreement, if funding through escrow); (c) certified copies of all relevant trade contracts; (d) the title policy endorsement for the advance; (e) copies of any tenant leases; (f) copies of any service contracts; (g) updated financial statements, operating statements and rent rolls; (h) evidence of required insurance; (i) engineering reports, updates to the engineering reports, and any other third-party/consultant reports or other reporting relevant to Buyer in connection with such request for advance; (j) an updated Preliminary Due Diligence Package for the related Purchased Loan; and (k) copies of any additional documentation as required in connection therewith, or as otherwise reasonably requested by Buyer.

“Future Funding Transaction” shall mean any Transaction approved by Buyer pursuant to Section 3(o).

“Future Funding Transaction Date” shall have the meaning specified in Section 3(o).

“Future Funding Transaction Request” shall have the meaning specified in Section 3(o).

“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 or any entity, authority, agency, division or department exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to a government (including any supra-national bodies such as the United Nations, European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

“Guaranty” shall mean the Guaranty, dated as of August 2, 2016, from the Sponsor to Buyer, as the same may be amended, modified and/or restated from time to time.

“Hazardous Materials” shall mean oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials or gases, including any substances which are “hazardous

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substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,” “wastes,” “regulated substances,” “industrial solid wastes,” or “pollutants” under Environmental Laws and including arsenic, perchlorate, methane and carbon monoxide.

“Income” shall mean, with respect to any Purchased Loan, and with respect to any specified period of time, the sum of (x) payments of principal, interest and other amounts due under the Purchased Loan Documents (including, without limitation, all fees payable under the Purchased Loan Documents and all funds received for deposit in any Underlying Purchased Loan Reserves), and (y) all net sale proceeds received by Seller or any Affiliate of Seller in connection with a sale of such Purchased Loan, other than any origination fees that were earned and paid on or prior to the related Purchase Date.

“Indemnified Amounts” shall have the meaning specified in Section 26.

“Indemnified Parties” shall have the meaning specified in Section 26.

“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 (a), Other Taxes.

“Indebtedness” shall mean 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; (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.

“Independent Appraiser” shall mean 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 such case, who has a minimum of five years experience in the subject property type and is acceptable to Buyer in its sole and absolute discretion, applied in good faith.

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“Independent Manager” shall mean an individual who has prior experience as an independent director, independent manager or independent member with at least three 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 Managers, another nationally-recognized company reasonably approved by Buyer, in each case that is not an Affiliate of Seller and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following:

(A)    a member, partner, equityholder, manager, director, officer or employee of Seller or any of its equityholders or Affiliates (other than as an Independent Manager of Seller or an Affiliate of Seller that is not in the direct chain of ownership of the Seller 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 Managers or managers in the ordinary course of its business);

(B)    a 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 Managers and other corporate services to Seller or any of its Affiliates in the ordinary course of its business);

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

(D)    a Person that controls (whether directly, indirectly or otherwise) any of the entities described in (A), (B) or (C) above.

“Initial Buyer” shall mean Deutsche Bank AG, Cayman Islands Branch.

“Initial Servicer” shall mean Midland Loan Services, a division of PNC Bank, National Association, a national banking association.

“Initial Servicing Agreement” shall mean that certain Servicing Agreement, dated as of August 2, 2016, by and among Initial Servicer, Buyer and Seller.

“IRS” shall mean the United States Internal Revenue Service.

“Joinder Agreement” shall have the meaning specified in Section 3(n).

“Knowledge” shall mean, as of any date of determination, the then-current actual (as distinguished from imputed or constructive) knowledge of (i) Stephen Plavin, Thomas C. Ruffing, Douglas Armer or Jonathan Pollack, (ii) (A) any asset manager at The Blackstone

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Group L.P., or (B) any employee with a title equivalent or more senior to that of “principal” within The Blackstone Group L.P., in each case, responsible for the origination, acquisition and/or management of any Purchased Loan.

“Last Endorsee” shall have the meaning specified in Section 7(b)(i).

“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

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period, that appears on Reuters Screen LIBOR01 (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 Reuters Screen LIBOR01 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 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 the City of New York 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 the 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 pursuant to the terms of this Agreement, which determination shall be conclusive absent manifest error. Notwithstanding the foregoing or any other provision in this Agreement or any other Transaction Document, in no event shall LIBOR be less than zero.

“Manager” shall mean BXMT Advisors L.L.C., a Delaware limited liability company.

“Mandatory Early Repurchase” shall have the meaning specified in Section 3(l).

“Mandatory Early Repurchase Date” shall have the meaning specified in Section 3(l).

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“Mandatory Early Repurchase Event” shall mean, with respect to any Purchased Loan, the occurrence of any of the following:

(i)    with respect to any Purchased Loan, any default or event of default on such Purchased Loan or under the related Purchased Loan Documents which remains uncured for ten (10) Business Days or longer;

(ii)    an Act of Insolvency with respect to the related Mortgagor or guarantor of such Purchased Loan;

(iii)    the occurrence and continuance of any breach of a Purchased Loan Representation (other than an MTM Representation) relating to such Purchased Loan; or

(iv)    all or any material portion of the Mortgaged Property securing such Purchased Loan shall be (A) materially damaged or destroyed by fire, flood, wind, earthquake, decay, environmental condition or other casualty or (B) taken by any Governmental Authority having jurisdiction over such Mortgaged Property as the result, in lieu or in anticipation, of the exercise of the right of condemnation or eminent domain.

“Margin Deadline” shall mean 4:00 p.m. (New York City time).

“Margin Deficit” shall have the meaning specified in Section 4(a) hereof.

“Margin Excess” shall have the meaning specified in Section 4(a) hereof.

“Margin Notice” shall have the meaning specified in Section 4(b) hereof.

“Market Value” shall mean, with respect to any Eligible Loan or Purchased Loan, as of any relevant date, the lesser of (i) the price at which such Eligible Loan or Purchased Loan may be sold in an arm’s length transaction to a third party (without regard to any unpaid interest which has accrued but is not yet due and payable), and (ii) the Principal Balance of such Eligible Loan or Purchased Loan. Buyer shall determine Market Value in its commercially reasonable discretion. For purposes of Section 4, changes in the Market Value of the 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 relating to (I) any breach of a MTM Representation or (II) the performance or condition of (x) the Mortgaged Property securing the Purchased Loan or other collateral securing or related to the Purchased Loan, (y) the Purchased Loan’s borrower (including obligors, guarantors, participants and sponsors) and the Mortgagor on any Mortgaged Property or other collateral securing the Purchased Loan, or (z) the commercial real estate market relevant to the Mortgaged Property, considered in the aggregate.

“Master Seller” shall mean Parlex 15 Finco, LLC, a Delaware limited liability company.

“Master Seller LLC Agreement” shall mean the limited liability company agreement of Master Seller, as same may be amended, modified and/or restated with Buyer’s prior written consent, and together with each completed Schedule C thereto hereafter executed with respect to each Series Seller.

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“Material Action” shall mean any amendment, consent, waiver or other modification to the terms of any Purchased Loan or the applicable Purchased Loan Documents (except to the extent required under the express terms of the related Purchased Loan Documents and in respect of which the provision of lender’s consent, waiver, forbearance or approval is not, in and of itself, a condition precedent), which would have the effect of:

(a)    decreasing the principal of, or interest on, the obligations evidenced by the related Mortgage Note, A-Note or participation certificate, as applicable, other than with respect to a principal prepayment to the extent such principal prepayment is distributed pursuant to Section 5;

(b)    (i) postponing or extending any scheduled date (other than the Underlying Loan 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 such Mortgage Note, A-Note or participation certificate, as applicable (other than postponements or extension required by the terms of the underlying Purchased Loan Documents and for which no lender consent is applicable), or (ii) extending the Underlying Loan Maturity Date thereunder to a date subsequent to the then-applicable Repurchase Date (other than extensions required by the terms of the underlying Purchased Loan Documents and for which no lender consent is applicable);

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

(d)    releasing any Mortgagor in respect of the Purchased Loan or underlying mortgage loan (other than any release required by the terms of such underlying Purchased Loan Document);

(e)    waiving a Material Default under such Purchased Loan Documents;

(f)    exercising any consent or approval right of Seller relating to the termination or appointment of any Servicer in respect of any Purchased Loan (or underlying Mortgage Loan related thereto); or

(g)    in the case of any Senior Interest, any consent, modification, waiver, forbearance, appointment, right or other action to which the Senior Interest holder has any such right under the related co-lender agreement or intercreditor agreement (including, without limitation, any right of the Senior Interest holder to participate in the selection of any appraiser in respect of the Mortgaged Property).

“Material Adverse Effect” shall mean a material adverse effect on or material adverse change in or to (a) the property, assets, business, operations, or financial condition of Seller and Sponsor taken as a whole, (b) the ability of Seller or Sponsor to pay or perform its obligations under any of the Transaction Documents to which it is a party, (c) the validity or enforceability of any of the Transaction Documents, or (d) the rights and remedies of Buyer under any of the Transaction Documents.

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“Material Default” shall mean the occurrence and continuance of any of the following defaults under the terms of any Purchased Loan Documents, regardless of whether the Seller shall have delivered notice to the related Mortgagor in respect of the applicable Purchased Loan of such default, but taking into account any cure or grace periods allowed to such Mortgagor in the applicable Purchased Loan Documents:

(a)    payment default;

(b)    maturity default;

(c)    breach of a material representation or a material covenant of which Sponsor or Seller has Knowledge;

(d)    breach of any material provisions of a related guaranty delivered by a guarantor of the obligations of a Mortgagor of which Sponsor or Seller has Knowledge; and

(e)    bankruptcy or insolvency of any Mortgagor or any guarantor of the obligations of any Mortgagor in respect of the related Purchased Loan.

“Maximum Amount” shall mean $252,714,876.29.

“Maximum Original Purchase Percentage” shall mean, with respect to any Transaction, the percentage specified as the Maximum Original Purchase Percentage in the Confirmation for such Transaction as determined by Buyer in its sole and absolute discretion as of the related Purchase Date.

“Member” shall mean 42-16 Partners, LLC, a Delaware limited liability company, which is the sole member of Master Seller.

“Mezzanine Loan” shall mean a loan made by Seller or its Affiliate secured by the direct or indirect ownership interest in a Mortgagor in connection with the origination of a Purchased Loan.

“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 or ground leasehold interest in real property and the improvements thereon, securing a mortgage note or similar evidence of indebtedness.

“Mortgage Loan” shall mean a loan made by Seller or its Affiliate to a Mortgagor and secured by a Mortgage.

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

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“Mortgaged Property” shall mean with respect to any Eligible Loan or Purchased Loan, the real property encumbered by the Mortgage(s) securing such Eligible Loan or Purchased Loan.

“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 mortgagor/grantor under the related Mortgage.

“MTM Representation” shall mean each of the representations and warranties, set forth (1) as items 11, 12, 14 and 46 on Part I of Exhibit VI attached hereto and (2) items 8 and 11 on Part II of Exhibit VI attached hereto.

“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 in the past six (6) years and which is covered by Title IV of ERISA.

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

“OFAC” shall have the meaning specified in the definition of Prohibited Person.

“OFAC Laws” shall have the meaning specified in the definition of Prohibited Person.

“Original Repurchase Date” shall mean August 9, 2019 (or if such day is not a Business Day, the next succeeding Business Day).

“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 from Buyer 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 Transaction Document).

“Other Taxes” shall mean any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under any Transaction Document or from the execution, delivery, performance, or enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

“Other Financing Agreement” shall have the meaning set forth in the Guaranty.

“Participant Register” shall have the meaning specified in Section 18(d).

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“Participation Interest” shall mean a participation interest in a Mortgage Loan.

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

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

“Plan Assets” shall have the meaning specified in Section 21(a).

“Plan Party” shall have the meaning specified in Section 21(a).

“Portfolio Interest Certificate” shall have the meaning specified in Section 29(c).

“Preferred Equity Interest” shall mean a preferred equity interest or any other subordinate debt or equity interest relating to a Mortgaged Property or Mortgagor for any Transaction.

“Preliminary Due Diligence Package” shall mean with respect to any New Collateral, Seller’s summary memorandum outlining the proposed transaction, including, to the best Knowledge of Seller, potential transaction benefits and all material underwriting risks, all Underwriting Issues and all other characteristics of the proposed transaction that a reasonable buyer would consider material, together with the following due diligence information relating to the New Collateral to be provided by Seller to Buyer pursuant to this Agreement (in each case, to the extent applicable and in Seller’s possession):

With respect to each Eligible Loan:

(i)    all material documents that relate to such Eligible Loan;

(ii)    current rent roll for the Mortgaged Property, if applicable, together with the following information: (A) recent leasing activity including related tenant improvement and leasing commission obligations, (B) a delinquency report, (C) outstanding rent abatements and concessions and (D) a description of all percentage rent, additional rent and escalations payable by tenants for taxes, operating expenses, electricity and other expenses, as applicable;

(iii)    (a) most recent audited financial statements, (b) three (3) years of operating statements, including current trailing twelve (12) month operating statement, and (c) Seller’s preliminary underwritten cash flow pro-forma for the Mortgaged Property, in each case, if available;

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(iv)    description of the Mortgaged Property and the ownership structure of the Mortgagor and the sponsor (including, without limitation, the board of directors, if applicable);

(v)    Seller’s indicative debt service coverage ratios;

(vi)    Seller’s indicative debt yield ratios;

(vii)    Seller’s indicative loan-to-value ratio;

(viii)    term sheet outlining the transaction generally including an abstract of the final terms of the proposed Eligible Loan (to the extent such information is not included in other “Preliminary Due Diligence Package” documents);

(ix)    final sources and uses schedule for the proceeds of the proposed Eligible Loan delivered in connection with the closing of the Eligible Loan;

(x)    an organizational chart of the Mortgagor showing all direct and indirect ownership interests in Mortgagor (and disclosing any direct or indirect ownership interests of Seller or its Affiliates in the Mortgagor, if any);

(xi)    an Appraisal of the Mortgaged Property, dated within six (6) months of the proposed Purchase Date;

(xii)    Seller’s credit memorandum, in a form reasonably acceptable to Buyer;

(xiii)    Seller’s underwriting model (in Excel);

(xiv)    any exceptions to the Purchased Loan Representations for such Eligible Loan, which may be contained in an internal memorandum or offering document prepared by a third party; and

(xv)    Seller’s relationship with the Mortgagor, if any;

(xvi)    current and, to the extent available, historical real estate tax bills, or an estimate of expected taxes, for the Mortgaged Property;

(xvii)    any other information reasonably requested by Buyer.

“Price Differential” shall mean, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate to the Repurchase Price (excluding Price Differential) for such Transaction (as adjusted from time to time by reductions in the Repurchase Price pursuant to the terms of this Agreement including Sections 3(e), 3(k), 4(b), 5(c)(iii), 5(d)(iii), 5(d)(v) and 5(e)(iv) and increases in the Repurchase Price pursuant to the terms of this Agreement including Sections 3(o) and/or Section 4(c)) 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).

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“Pricing Rate” shall mean for each Pricing Rate Period, an annual rate equal to the LIBO Rate for such Pricing Rate Period plus the relevant Applicable Spread for such Transaction and shall be subject to adjustment and/or conversion as provided in Sections 3(f), 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 and first Remittance Date with respect to any Transaction, the period commencing on and including the Purchase Date for such Transaction and ending on and excluding such Remittance Date, and (b) in the case of any subsequent Pricing Rate Period and Remittance Date, the period commencing on and including the prior Remittance Date and ending on and excluding such Remittance Date; provided, however, that in no event shall any Pricing Rate Period end subsequent to the Repurchase Date.

“Principal Balance” shall mean, at any date of determination, the lesser of (i) the then current outstanding principal balance of an Eligible Loan or a Purchased Loan and (ii) if Seller intends to acquire or acquires an Eligible Loan or Purchased Loan at a discount, the purchase price paid or to be paid by Seller for such Eligible Loan or Purchased Loan less all Principal Payments received thereon plus all future advances funded by or on behalf of Seller therefor.

“Principal Payment” shall mean, with respect to any Purchased Loan, any payment or prepayment of principal received by Seller or Depository in respect thereof and the proceeds of any sale of such Purchased Loan or any interest therein received by Seller or Depository.

“Prohibited Person” shall mean, at any time, any Person with whom dealings are restricted or prohibited under Sanctions, including (1) any person or entity who is listed in any Sanctions-related list of designated Persons maintained by the U.S. government (including, but not limited to, the Specially Designated Nationals list (the “SDN List”) maintained by the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”)), (2) any person or entity 50% or more directly or indirectly owned by, or controlled or acting on behalf of, a person described in clause (1), (3) any person or entity otherwise the target of the Sanctions laws, regulations, and Executive Orders administered by OFAC (collectively, the “OFAC Laws”) such that the entry into this Agreement or the performance of the obligation contemplated hereby would be prohibited if conducted by a U.S. person as that term is defined in the OFAC Laws, and (4) any person the target of Sanctions laws, regulations, and Executive Orders administered by any other Governmental Authority.

“Prohibited Transferees” shall have the meaning specified in Section 18(b).

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“Purchase Date” shall mean the date on which a Purchased Loan is to be transferred by Seller to Buyer.

“Purchase Date Market Value” shall mean, with respect to any Purchased Loan, the Market Value of such Purchased Loan as of the related Purchase Date, and which Purchase Date Market Value shall be set forth in the Confirmation for the related Transaction.

“Purchase Price” shall mean, with respect to any Purchased Loan, (i) as of the applicable Purchase Date, the price at which such Purchased Loan is transferred by Seller to Buyer on such Purchase Date, and (ii) as of any other date of determination, an amount (expressed in dollars) equal to the Purchase Price set forth in the foregoing clause (i) as increased by any Future Funding Amounts paid by Buyer and funds remitted by Buyer to or on account of Seller pursuant to Section 4(c) of this Agreement as of the date of such determination, and decreased by any payments made to Buyer to be applied in reduction of the Repurchase Price (other than Price Differential) of such Transaction pursuant to the terms of this Agreement, including Sections 3(e), 3(k), 4(b), 5(c)(iii), 5(d)(iii), 5(d)(v) and 5(e)(iv) of this Agreement.

“Purchased Loan Documents” shall mean, with respect to a Purchased Loan, the documents comprising the Purchased Loan File for such Purchased Loan, including, without limitation, with respect to the Watchtower A-Note Eligible Loan, those documents specified as Purchased Loan Documents in the related Confirmation, in each case, as each of same may be amended, modified and/or restated in accordance with this Agreement.

“Purchased Loan Event of Default” shall mean for any Purchased Loan, an “Event of Default” as defined in the Purchased Loan Documents for such Purchased Loan (or such other term as is used in such documents to describe events the occurrence of which gives the lender the right to accelerate (or causes the automatic acceleration of) such Purchased Loan); provided, however, that no “Event of Default” as defined in the Purchased Loan Documents for such Purchased Loan shall become a Purchased Loan Event of Default until the expiration of all grace periods and cure rights related thereto under the Purchased Loan Documents.

“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 Loan Representations” shall mean with respect to any Purchased Loan or prospective Purchased Loan, the representations and warranties set forth on Exhibit VI attached hereto or, if different, the representations and warranties applicable to such Purchased Loan as set forth on Schedule 2 to the Confirmation for such Purchased Loan, in each case, as modified by any exceptions to such representations and warranties disclosed in an Exceptions Report. It is acknowledged and agreed that Buyer, in its sole and absolute discretion, may from time to time, upon delivery of at least three (3) Business Days prior written notice to Seller, amend the representations and warranties set forth on Exhibit VI attached hereto applicable to any Purchased Loan prior to the related Purchase Date therefor. Any such amendment of the representations and warranties set forth on Exhibit VI shall not be effective with respect to any Purchased Loan for which the Purchase Date has occurred hereunder prior to the effective date of such amendment. Buyer may elect, in its sole and absolute discretion, to require any such

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amendment of the representations and warranties set forth on Exhibit VI to apply to all Purchased Loans with Purchase Dates occurring from and after the effective date of such amendment and, in such event, Seller and Buyer will each execute and deliver an amendment of this Agreement substituting the amended version of Exhibit VI for the version of Exhibit VI then in effect.

“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 Information.

“Purchased Loans” shall mean (i) with respect to any Transaction, the Eligible Loan or Eligible Loans sold by the applicable Series Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Loans sold by Seller to Buyer, together with all Purchased Loan Documents, Servicing Agreements, Servicing Records, Servicing Rights, insurance, collection and escrow accounts relating to any such Eligible Loans.

“Qualified Institutional Lender” shall mean one or more of the following:

(a)    an insurance company, bank, savings and loan association, investment bank, trust company, commercial credit corporation, pension plan, pension fund, pension fund advisory firm, mutual fund, real estate investment trust, governmental entity or plan, in any case, that satisfies the Eligibility Requirements, or

(b)    an investment company, money management firm or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended, which satisfies the Eligibility Requirements, or

(c)    an investment fund, limited liability company, limited partnership or general partnership in which a fund manager acceptable to Buyer in its commercially reasonable discretion acts as the general partner, managing member, or the fund manager responsible for the day to day management and operation of such investment vehicle and provided that at least fifty percent (50%) of the equity interests in such investment vehicle are owned, directly or indirectly, by one or more entities that are otherwise Qualified Institutional Lenders, or

(d)    an institution substantially similar to any of the foregoing in clauses (a), (b) or (c) above which satisfies the Eligibility Requirements.

(e)    any Person Controlled by, Controlling or under common Control with any of the Persons described in clause (a)-(d) or (f) of this definition;

(f)    an investment fund, limited liability company, limited partnership or general partnership where a fund manager acceptable to Buyer in its commercially reasonable discretion acts as general partner, managing member or fund manager and at least fifty percent (50%) of the equity interests in such investment vehicle are owned, directly or indirectly, by one or more of the following: a Qualified Transferee, an

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institutional “accredited investor”, within the meaning of Regulation D promulgated under the Securities Act of 1933, as amended, or a “qualified institutional buyer” or both within the meaning of Rule 144A promulgated under the Securities Exchange Act of 1934, as amended, provided such institutional “accredited investors” or “qualified institutional buyers” that are used to satisfy the fifty percent (50%) test set forth above in this clause (f) satisfy the financial tests set forth in of the definition of Eligibility Requirements.

“Qualified Servicing Expenses” shall mean any fees and expenses payable to any third-party Servicer that is not an Affiliate of Seller, which fees and expenses are netted by such Servicer out of collections pursuant to the Initial Servicing Agreement or any other Servicing Agreement with respect to which the related Servicer has entered into a Servicer Notice and Agreement substantially in the form attached hereto as Exhibit IX attached hereto.

“Real Estate Settlement Procedures Act” shall mean the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. §§ 2601 et seq.

“Register” shall have the meaning specified in Section 18(c) of this Agreement.

“Registrar” shall have the meaning specified in Section 18(c) of this Agreement.

“REIT” shall mean a Person satisfying the conditions and limitations set forth in Sections 856(b) and 856(c) of the Code and qualifying as a “real estate investment trust,” as defined in Section 856(a) of the Code.

“Related Interest” shall mean (a) a junior or pari passu participation interest in a commercial mortgage loan, or (b) a “B note” or other subordinate note in an “A/B” or similar structure or pari passu “A note” in a commercial mortgage loan with respect to which the Senior Interest is a Purchased Loan or prospective Purchased Loan hereunder.

“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, for any Purchased Loan, the earliest of (i) the Facility Termination Date as may be extended pursuant to Section 3(p), (ii) the date specified in the Confirmation for such Purchased Loan as may be extended pursuant to Section 3(p), (iii) if applicable, Mandatory Early Repurchase Date or Accelerated Repurchase Date, and (iv) the date that is two (2) Business Days prior to the maturity date or other earlier repayment date (under the related Purchased Loan Documents) for such Purchased Loan (or, in the case of any Senior Interest, the underlying mortgage loan), without giving effect to any extension of such maturity date, whether by modification, waiver, forbearance or otherwise (other than extensions at the related Mortgagor’s option without requiring consent of the Seller or for which the Seller’s consent may not be unreasonably withheld, conditioned or delayed) pursuant to the terms of the Purchased Loan Documents as such Purchased Loan Documents existed on the related Purchase Date) that has not been approved by Buyer in writing in its sole discretion; provided, that, solely with respect to this clause (iv), the settlement date with respect to such Repurchase Date and Purchased Loan may occur two (2) Business Days after the related Repurchase Date.

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“Repurchase Obligations” shall have the meaning specified in Section 6.

“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 (i) the then outstanding Purchase Price of such Purchased Loan, and (ii) the accrued but unpaid Price Differential with respect to such Purchased Loan as of the date of such determination.

“Repurchase Price Cap” shall mean, with respect to any Purchased Loan, an amount equal to (i) the product of (x) the then current Market Value of such Purchased Loan, and (y) the Maximum Original Purchase Percentage of such Purchased Loan, less (iii) any mandatory reductions of the Repurchase Price for such Purchased Loan required under the Confirmation therefor.

“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.

“Sanctions” shall mean economic or financial sanctions or trade embargoes or restrictive measures enacted, imposed, administered or enforced from time to time by (1) the U.S. government, including those administered by OFAC, the U.S. Department of State, and the U.S. Department of Commerce, (2) the United Nations Security Council, (3) the European Union or any of its member states, (4) Her Majesty’s Treasury, (5) the Swiss government, (6) the Canadian government, and (7) Governmental Authorities of any other country in which Buyer, Seller or Sponsor operates.

“S&P” shall mean Standard & Poor’s Global Ratings.

“SDN List” shall have the meaning specified in the definition of Prohibited Person.

“SEC” shall have the meaning specified in Section 23(a).

“Second Extended Repurchase Date” shall mean, subject to the proviso set forth in Section 3(p), August 9, 2021 (or if such day is not a Business Day, the next succeeding Business Day).

“Second Extension Term” shall have the meaning specified in Section 3(p).

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

“Senior Interest” shall mean (a) a senior (or pari passu senior) participation interest, or (b) an A-Note.

“Senior Interest Documents” shall mean, for any Senior Interest, the A-Note or participation certificate, as applicable, together with any co-lender agreements, participation agreements and/or other intercreditor agreements or other documents governing or otherwise relating to the priority, rights or obligations of such Senior Interest and the applicable Related Interest.

“Senior Interest Side Letter” shall mean, with respect to any Senior Interest proposed to be included in a Transaction hereunder, if Seller or an Affiliate of Seller shall hold any Related Interest related to such Senior Interest, a letter agreement to be entered into on or before the Purchase Date of such Senior Interest hereunder among Seller or any Affiliate of Seller that holds the Related Interest (or any portion thereof) and Buyer, in form and substance reasonably acceptable to Buyer.

“Series Seller” shall have the meaning specified in the introductory paragraph of this Agreement.

“Servicer” shall mean the servicer or subservicer under any Servicing Agreement or the Initial Servicer under the Initial Servicing Agreement, as applicable.

“Servicer Notice and Agreement” shall have the meaning specified in Section 28(a).

“Servicing Agreement” shall have the meaning specified in Section 28(a) or the Initial Servicing Agreement, as the case may be.

“Servicing Records” shall have the meaning specified in Section 28(b).

“Servicing Rights” shall mean Seller’s right, title and interest in and to any and all of the following, in each case as the same may be subject to the terms of any applicable Servicing Agreements and the provisions of the documentation for the applicable Purchased Loans: (a) any and all rights of Seller to service the Purchased Loans or to appoint (or terminate the appointment of) any third party as servicer of the Purchased Loans; (b) any payments to or monies received by or payable to Seller (as opposed to any third-party servicer) as compensation for servicing the Purchased Loans (including, without limitation, workout fees, consent fees, liquidation fee, late fees, penalties or similar amounts payable to Seller); (c) 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 Seller (individually or as servicer) thereunder (including all rights to set the compensation of any third-party servicer); (d) the right, if any, to appoint a special servicer or liquidator of the Purchased Loans; and (e) all rights of Seller to give directions with respect to the management and distribution of any collections, escrow accounts, reserve accounts or other similar payments or accounts in connection with the Purchased Loans.

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“SIPA” shall have the meaning specified in Section 23(a).

“Sponsor” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation.

“Structuring Fee” shall have the meaning specified in the Confirmation with respect to the Watchtower A-Note Eligible Loan.

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

“Survey” shall mean a certified ALTA/ACSM (or applicable state standards for the state in which the property is located) survey of a Mortgaged Property 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 Mortgaged Property.

“Taxes” means 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.

“Transaction” shall have the meaning specified in Section 1.

“Transaction Conditions Precedent” shall mean, with respect to each proposed Transaction,

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

(ii)    Seller shall have provided evidence reasonably acceptable to Buyer substantiating the acquisition cost of such asset (or, in the case of any asset purchased from an Affiliate, the original acquisition cost of such asset at the time it was acquired by an Affiliate of Seller from a non-Affiliate) (including therein reasonable supporting documentation required by Buyer, if any) or if such loan was originated by Seller, the outstanding principal balance of such loan;

(iii)    Seller shall have delivered to Buyer all information which Seller reasonably believes to be necessary for Buyer to make an informed business decision with respect to the purchase of such Purchased Loan and Seller shall have certified to Buyer that Seller has no Knowledge of any material information concerning the related Purchased Loan which is not reflected in the related Diligence Materials or otherwise disclosed to Buyer in writing;

(iv)    the representations and warranties made by Seller or Sponsor in any of the Transaction Documents (including the Purchased Loan Representations with respect to the Eligible Loans then being transferred, subject to any exceptions to such representations and warranties disclosed in an Exceptions Report) shall be true and correct in all material respects as of the Purchase Date

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for such Transaction (except to the extent such representations and warranties are made as of a particular date, in which case such representations and warranties shall be true and correct in all material respects as of such particular date);

(v)    Seller has paid all expenses of Buyer (subject to Section 27 below) then due and payable (which, upon the agreement of Buyer and Seller, may be held back from funds remitted to Seller by Buyer);

(vi)    Seller has satisfactorily completed its “Know Your Customer” and OFAC diligence (as to the related Mortgagor, guarantor and all other related parties, as determined by Buyer) and the results of such diligence shall be acceptable to Buyer in its sole discretion;

(vii)    the Servicer of the related Purchased Loan shall have entered into a Servicer Notice and Agreement substantially in the form attached hereto as Exhibit IX;

(viii)    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 the related 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 in each case, such approval shall be evidenced by Buyer’s execution and delivery of the related Confirmation;

(ix)    Master Seller shall have established the Series Seller which will be entering the proposed Transaction and executed and/or delivered to Buyer a Joinder Agreement with respect to such Series Seller and any organizational documents and amendments and any other documents and agreements required in connection with such new Series Seller or the proposed Transaction under Section 3(n);

(x)    on or prior to the Purchase Date of the Watchtower A-Note Eligible Loan, Seller shall have paid to Buyer the Structuring Fee; and

(xi)    any other conditions as may be required by Buyer.

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

“Transaction Documents” shall mean, collectively, this Agreement, the Guaranty, the Custodial Agreement, the Controlled Account Agreement, all Confirmations and Joinder Agreements executed pursuant to this Agreement in connection with specific Purchased Loans, the Servicing Agreement(s), and any and all other documents and agreements executed and delivered by Seller and/or Sponsor as required by this Agreement or any Transactions hereunder, as each may be amended, modified and/or restated from time to time.

“Transaction Event of Default” shall have the meaning set forth in Section 13(a)(II).

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“Transfer” shall have the meaning specified in Section 10(b).

“Treasury Regulations” shall mean the income tax regulations, including temporary regulations, promulgated under the Code, as such regulations are amended from time to time.

“Trust Receipt” shall mean a trust receipt issued by (i) 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 (ii) a Bailee pursuant to a bailment arrangement with counsel or other third party acceptable to Buyer in its sole discretion.

“Truth in Lending Act” shall mean the Truth in Lending Act of 1968, 15 U.S.C. §§1601 et seq.

“UCC” shall have the meaning specified in Section 6 of this Agreement.

“Underlying Loan Maturity Date” shall mean, with respect to any Purchased Loan (including, with respect to a Senior Interest, the related Mortgage Loan), the maturity date as set forth in the related Purchased Loan Documents as such Purchased Loan Documents existed on the related Purchase Date, without giving effect to any extension of such maturity date, whether by modification, waiver, forbearance or otherwise that have not been approved by Buyer in writing in its sole discretion (other than any such extensions at the option of the Mortgagor under the related Purchased Loan that do not require consent of the related lender or for which the related lender’s consent may not be unreasonably withheld, conditioned or delayed).

“Underlying Purchased Loan Reserves” shall mean, with respect to any Purchased Loan, the escrows, reserve funds or other similar amounts properly retained in accounts maintained by the Servicer of such Purchased Loan unless and until such funds are, pursuant to and in accordance with the terms of the related Purchased Loan Documents, either (i) released or otherwise available to Seller (but not if such funds are used for the purpose for which they were maintained) or (ii) released to the related Mortgagor.

“Underwriting Issues” shall mean, with respect to any Collateral as to which Seller intends to request a 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, which 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 Loan Document(s)), to a reputable nationally recognized institutional commercial mortgage loan buyer in determining whether to originate or acquire the Collateral in question.

“U.S. Person” shall mean any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning specified in Section 29(f).

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“Watchtower A-Note Eligible Loan” shall mean the Watchtower A-Note(s) specified in the related Confirmation therefor.

(b)    Under this Agreement, all accounting terms not specifically defined herein shall be construed in accordance with GAAP and all accounting determinations made and all financial statements prepared hereunder shall be made and prepared in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. The words “herein,” “hereof,” and “hereunder” and other words of similar import refer to this Agreement as a whole, including the exhibits and schedules hereto, as the same may from time to time be amended or supplemented and not to any particular paragraph, section, subsection, or clause contained in this Agreement. Each of the definitions set forth in Section 2 hereof shall be equally applicable to both the singular and plural forms of the defined terms. Unless specifically stated otherwise, all references herein to any agreements, documents or instruments shall be references to the same as amended, restated, supplemented or otherwise modified from time to time.

3.    INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION

(a)    Subject to the terms and conditions set forth in this Agreement (including, without limitation, the satisfaction of the Transaction Conditions Precedent set forth herein), Buyer agrees to consider entering into (x) a Transaction with respect to the Watchtower A-Note Eligible Loan and (y) Transactions from time to time in its sole and absolute discretion, in each case, pursuant to written request at the initiation of Master Seller as provided in this Agreement. Seller shall give Buyer written notice of each proposed Transaction and Buyer shall inform Master Seller of its determination with respect to any assets proposed to be sold to Buyer by Seller in accordance with Exhibit VIII attached hereto, which may be amended from time to time by Buyer in its sole and absolute discretion. 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 determines in its sole and absolute discretion. Buyer shall be entitled to make a determination, in its sole and absolute discretion, whether it shall or shall not purchase any or all of the Eligible Loans proposed to be sold to Buyer by Seller. In addition, Buyer shall not be required to enter into any Transaction if an Event of Default has occurred and is continuing with respect to any Transaction Documents.

(b)    Upon agreeing to enter into a Transaction hereunder, provided each of the Transaction Conditions Precedent shall have been satisfied (or waived in writing by Buyer), as determined by Buyer in its sole and absolute discretion (and evidenced by Buyer’s execution of a related Confirmation and funding of the related Purchase Price), Buyer shall promptly deliver to Master Seller a written confirmation (which shall also be in electronic form) in the form of Exhibit I attached hereto of each Transaction (a “Confirmation”). Such Confirmation shall describe each Purchased Loan to be included in such Transaction, shall identify Buyer and the applicable Series Seller for such Transaction, and shall set forth:

(i)    the Purchase Date,

(ii)    the Principal Balance,

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(iii)    the Purchase Date Market Value,

(iv)    the Actual Original Purchase Percentage,

(v)    the Maximum Original Purchase Percentage,

(vi)    the Purchase Price,

(vii)    the Repurchase Date,

(viii)    the initial Pricing Rate (including the Applicable Spread) applicable to the Transaction,

(ix)    the total future funding obligations of Seller required to be funded pursuant to the terms of the related Purchased Loan Documents; and

(x)    any additional terms or conditions not inconsistent with this Agreement.

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 Pricing Rate Determination Date for the next succeeding Pricing Rate Periods for such Transaction. Buyer or its agent shall determine 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 Pricing Rate Determination Date.

(c)    Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transactions covered thereby unless specific objection is made by Seller no more than five (5) Business Days after the date thereof (unless such period is waived in writing by Seller). 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 received by Buyer no more than five (5) Business Days after such Confirmation is received by Seller (unless such period is waived in writing by Seller).

(d)    [Reserved.]

(e)    On the applicable Repurchase Date for any Transaction, termination of such Transaction will be effected by transfer to the applicable Series Seller or its agent of the applicable Purchased Loan(s) and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Master Seller, such Series Seller or any other Series Seller pursuant to Section 5 of this Agreement), against the simultaneous transfer of the Repurchase Price for such Transaction to an account of Buyer including the Cash Management Account.

(f)    If prior to the first day of any Pricing Rate Period with respect to a Transaction, (i) Buyer shall have determined in the exercise of its reasonable business judgment

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(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, or (ii) the LIBO Rate determined or to be determined for such Pricing Rate Period will not adequately and fairly reflect the cost to Buyer (as reasonably determined and certified by Buyer) of making or maintaining Transactions during such Pricing Rate Period, Buyer shall give written notice thereof (which may be via email) 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 (i) the Federal Funds Rate plus (ii) 0.25% plus (iii) the Applicable Spread (the “Alternative Rate”). In exercising its rights and remedies under this Section 3(f), Buyer shall exercise its rights and remedies in a manner substantially similar to Buyer’s exercise of similar remedies in agreements with similarly situated customers where Buyer has comparable contractual rights

(g)    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 and to continue Transactions as such 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. In exercising its rights and remedies under this Section 3(g), Buyer shall exercise its rights and remedies in a manner substantially similar to Buyer’s exercise of similar remedies in agreements with similarly situated customers where Buyer has comparable contractual rights.

(h)    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) (including, without limitation, reasonable actual attorneys’ fees and disbursements) which Buyer may sustain or incur as a consequence of (i) default by Seller in terminating any Transaction after Seller has given a notice in accordance with Section 3(d) of a termination of a Transaction, (i) any payment of the Repurchase Price for any Purchased Loan on any day other than a Remittance Date or the Repurchase Date for such Purchased Loan (including, without limitation, any actual breakage costs and similar out of pocket costs or (iii) conversion of the Transaction to an Alternative Rate Transaction pursuant to Section 3(f) of this Agreement on a day which is not the last day of the then current Pricing Rate Period. A certificate as to such actual costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly by Buyer to Seller and shall be prima facie evidence of the information set forth therein.

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

(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” or (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, 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 which is not otherwise included in the determination of the LIBO Rate hereunder; or

(iii)    shall impose on Buyer (other than Taxes) any other condition;

and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems, in its sole and absolute discretion, to be material, of entering into, continuing or maintaining Transactions or to reduce any amount receivable under the Transaction Documents in respect thereof; then, in any such case, Seller shall promptly pay Buyer, upon its demand, any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable. If Buyer becomes entitled to claim any additional amounts pursuant to this Section 3(i), it shall, within ten (10) Business Days after Buyer has actual knowledge of such event, notify Seller in writing of the event by reason of which it has become so entitled. Such notification shall set forth in reasonable detail 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. In exercising its rights and remedies under this Section 3(i), Buyer shall exercise its rights and remedies in a manner substantially similar to Buyer’s exercise of similar remedies in agreements with similarly situated customers where Buyer has comparable contractual rights. This covenant shall survive the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Loans.

(j)    If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the Closing Date does or shall have the effect of increasing the amount of capital to be held by Buyer in respect of any Transaction hereunder or 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, Seller shall pay to Buyer 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 and shall be prima facie evidence of such additional amounts. In exercising its rights and remedies under this Section 3(j), Buyer shall exercise its rights and remedies in a manner substantially similar to Buyer’s exercise of similar remedies in agreements with similarly situated customers where Buyer has comparable contractual rights. This covenant shall survive the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Loan.

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(k)    Master Seller, on behalf of any Series Seller, shall have the right at any time, upon one (1) Business Day prior notice to Buyer, to transfer cash to Buyer for the purpose of reducing the Repurchase Price of, but not terminating, the Transaction to which such Series Seller is a party. In addition, Master Seller, on behalf of any Series Seller, shall be entitled to terminate the Transaction to which such Series Seller is a party on demand and repurchase a related Purchased Loan on any Business Day prior to related Repurchase Date provided that (i) Seller notifies Buyer in writing of its intent to terminate such Transaction no later than one (1) Business Day prior to the intended repurchase date (an “Early Repurchase Date”) unless such Early Repurchase Date, is in connection with curing a Margin Deficit or breach of any representation, warranty or covenant or in connection with any change in any Requirement of Law or application thereof which makes the Transaction unlawful in which case advance notice shall not be required, and (ii) on such Early Repurchase Date, Seller pays to Buyer an amount equal to the Repurchase Price for the applicable Purchased Loan and any other amounts due and payable under this Agreement with respect to such Purchased Loan. In connection with any reduction of outstanding Purchase Price (other than a termination of a Transaction) pursuant to this Section 3(k), Buyer and Seller shall amend and restate the existing Confirmation for the Transaction to set forth the current outstanding Purchase Price and any other changes related thereto.

(l)    Upon the occurrence of a Mandatory Early Repurchase Event with respect to any Purchased Loan, Buyer may, upon written notice to the applicable Series Seller, accelerate the Repurchase Date of such Purchased Loan to the date (the “Mandatory Early Repurchase Date”) which is three (3) Business Days following such notice, provided that such notice is sent by 3:00 p.m. (New York City time), or four (4) Business Days following such notice if such notice is sent after 3:00 p.m. (New York City time) (or such earlier date as may be required pursuant to the last sentence of this Section 3(l)), and require that the applicable Series Seller repurchase such Purchased Loan from Buyer on such Mandatory Early Repurchase Date (a “Mandatory Early Repurchase”), which repurchase by the applicable Series Seller shall be conducted pursuant to and in accordance with Section 3(e).

(m)    If Buyer shall exercise its rights under Sections 3(g), 3(i) or 3(j), then Seller shall have the right, at any time thereafter (unless Buyer has at such time waived any claims pursuant to such Sections or such Sections no longer apply) to terminate this Agreement or all Transactions hereunder and, in connection with any such termination, notwithstanding anything to the contrary contained herein or in any other Transaction Document, there shall be no exit fee or prepayment fee or premium or similar payment due.

(n)    On or before the Purchase Date for any Transaction, Member shall establish, pursuant to the provisions of the Master Seller LLC Agreement and in accordance with Delaware law, a new Series Seller to enter into such Transaction pursuant to the related Confirmation, and deliver copies of the completed Schedule C to the Master Seller LLC Agreement with respect to such Series Seller and same shall be reasonably acceptable to Buyer. On or prior to the Purchase Date for any Transaction, (i) Master Seller and such new

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Series Seller shall execute and deliver to Buyer a joinder agreement substantially in form attached hereto as Exhibit XI (a “Joinder Agreement”) pursuant to which such Series Seller shall be added as a party hereto and to the other Transaction Documents and any other documents and agreements as Buyer may reasonably require with respect to such Series Seller or in connection with such Transaction and (ii) if required by Buyer in its sole discretion, Buyer shall have filed UCC financing statements in all applicable filing offices with respect to such new Series Seller, which UCC financing statements shall be in form and substance satisfactory to Buyer and may describe the collateral as “All assets of [such new Series Seller], whether now owned or existing or hereafter acquired or arising and wheresoever located, and all proceeds and products thereof” or words to that effect, and any limitations on such collateral description.

(o)    Other than with respect to Future Funding Amounts specifically disclosed by Seller and approved by Buyer either on the related Purchase Date in the Confirmation or otherwise in writing for the applicable Purchased Loan, Buyer shall have no obligation to consider entering into any Future Funding Transaction with respect to any Purchased Loan.    With respect to Future Funding Amounts that were approved by Buyer in the related Confirmation on the Purchase Date (“Approved Future Funding Amounts”), Buyer’s agreement to enter into any related Future Funding Transaction is subject to the satisfaction of the conditions precedent set forth in this Section 3(o), both immediately prior to entering into such Future Funding Transaction and also after giving effect to the consummation thereof, and all such Future Funding Transactions shall be otherwise subject to the following terms and conditions:

(i)    With respect to any one or more Purchased Loans with Approved Future Funding Amounts, on or prior to the first (1^st) Business Day of each calendar month, Seller may submit a request to Buyer requesting a Future Funding Transaction (a “Future Funding Transaction Request”) in which, subject to the conditions precedent set forth in this Section 3(o), Buyer shall remit Future Funding Amounts requested in such Future Funding Transaction Request to or on account of Seller by no later than the tenth (10^th) Business Day following the date of the related Future Funding Transaction Request (a “Future Funding Transaction Date”); provided, however, that Buyer shall only be obligated to fund Future Funding Amounts hereunder to the extent that future funding advances made by Seller under the related Purchased Loans from and after the date of the last preceding Future Funding Transaction are equal to or in excess of $1,000,000. Seller shall notify Buyer at least two (2) Business Days prior to the requested Future Funding Transaction Date (x) whether Seller has determined that all related conditions precedent to future funding advances under the related Purchased Loan Documents have been satisfied and (y) whether Seller funded, or approved for funding, the related advance under the Purchased Loan Documents.

(ii)    In connection with any Future Funding Transaction, Buyer shall have the right to conduct an additional due diligence investigation of the Future Funding Request Package and/or the related Purchased Loan as Buyer reasonably determines. In addition, each of the following conditions shall have been satisfied (each such condition, a “Future Funding Condition”) on or before the related Future Funding Transaction Date: (a) Buyer shall have received a complete Future Funding Request Package on or prior to the date that Seller has submitted the related Future Funding Transaction Request, (b) Buyer

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shall have determined in its commercially reasonable discretion that all related conditions precedent to future funding advances under the related Purchased Loan Documents, as in effect on the related Purchase Date (or as modified thereafter in accordance with the express terms of this Agreement), have been satisfied according to the applicable standard of discretion set forth in such Purchased Loan Documents, (c) unless previously approved by Buyer, Buyer shall have approved in its commercially reasonable discretion the related Mortgagor’s budget and capital expenditure plan or any material changes thereto, (d) [reserved], (e) Buyer shall have received evidence, acceptable to Buyer in its commercially reasonable discretion, of title and lien searches relating to the Mortgaged Property performed in connection with the related future funding advances, (f) no Default or Event of Default under this Agreement, or any default or event of default (howsoever defined) on the Purchased Loan or under the related Purchased Loan Documents, shall have occurred and be continuing and no Margin Deficit under this Agreement shall be outstanding, and (g) the Future Funding Amount requested of Buyer in connection with such Future Funding Transaction shall be in an amount of no less than $500,000 (subject in all cases to the proviso set forth in the preceding clause (i)). Buyer hereby agrees to act diligently in good faith to confirm the satisfaction of the Future Funding Conditions set forth in this Section 3(o)(ii) on or prior to the related Future Funding Transaction Date. Buyer’s determination, in its commercially reasonable discretion, that the Future Funding Conditions have not been satisfied shall not affect Seller’s obligations with respect to future advances under a Purchased Loan as and when required pursuant to the related Purchased Loan Documents.

(iii)    With respect to each Future Funding Transaction, Seller and Buyer shall amend the related Confirmation to reflect the outstanding principal balance and current Purchase Price of the related Purchased Loan after giving effect to such Future Funding Transaction.

(iv)    Notwithstanding the foregoing, Seller and Buyer may, in Buyer’s sole discretion, agree from time to time to cause a Future Funding Transaction to occur on the same day as a Future Funding Date with respect to a Purchased loan, in which case the Buyer shall remit the related Future Funding Amount on the related Future Funding Date, as Seller may direct in writing, as follows: (a) if an escrow agreement has been established in connection with such Future Funding Transaction, remit the related Future Funding Amount to the related escrow account, (b) if the terms of the Purchased Loan Documents provide for a reserve account in connection with future advances, remit the related Future Funding Amount to the applicable reserve account or (c) otherwise, remit the related Future Funding Amount directly to the Mortgagor under the related Purchased Loan.

(p)    Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, provided all of the Extension Conditions shall have been satisfied, Seller shall have the option (each, an “Extension Option”) to extend the Facility Termination Date with respect to all of the Transactions (i) from the Original Repurchase Date to the First Extended Repurchase Date (the “First Extension Term”), and (ii) so long as the Facility Termination Date has been extended to the First Extended Repurchase Date, from the First Extended Repurchase Date to the Second Extended Repurchase Date (the “Second Extension

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Term”; together with the First Extension Term, collectively, the “Extension Terms”) (all of the other terms and conditions of such Transactions remaining the same); provided, that if the maturity date of the 640 Broadway Eligible Loan has been extended to January 9, 2022 pursuant to the terms of the related Purchased Loan Documents and subject to the terms of this Agreement, then the Second Extended Repurchase Date shall be, solely with respect to the 640 Broadway Eligible Loan, January 9, 2022. For purposes of the preceding sentence, the “Extension Conditions” shall be deemed to have been satisfied if:

(i)    Seller shall have given Buyer written notice, not less than fifteen (15) days prior to the then current Facility Termination Date, of Seller’s desire to extend the Facility Termination Date;

(ii)    no Default or Event of Default under this Agreement shall have occurred and be continuing as of the then current Facility Termination Date, and no due and unpaid Margin Deficit shall exist;

(iii)    all other fees and amounts then due from Seller to Buyer hereunder or the other Transaction Documents shall have been paid, including without limitation all fees payable pursuant to any Confirmation; and

(iv)    the representations and warranties made by Seller and Sponsor in each of the Transaction Documents shall be true and correct in all material respects as of the then current Facility Termination Date (except to the extent that such representations and warranties are made as of a particular date, in which case such representations and warranties shall be true and correct in all material respects as of such particular date), except as disclosed to Buyer in writing prior to the Purchase Date for any applicable Purchased Loan in an Exceptions Report.

Notwithstanding anything to the contrary but subject to the proviso set forth in this Section 3(p), upon the effectiveness of any Extension Term, the Repurchase Date of each Purchased Loan as set forth in the related Confirmation shall be deemed extended, with respect to each such Purchased Loan, to the earlier of (x) the applicable Extended Repurchase Date and (y) the date that is two (2) Business Days prior to the maturity date or other earlier repayment date (under the related Purchased Loan Documents) for such Purchased Loan (or, in the case of any Senior Interest, the underlying mortgage loan), without giving effect to any extension of such maturity date, whether by modification, waiver, forbearance or otherwise (other than extensions at the related Mortgagor’s option without requiring consent of the Seller or for which the Seller’s consent may not be unreasonably withheld, conditioned or delayed) pursuant to the terms of the Purchased Loan Documents as such Purchased Loan Documents existed on the related Purchase Date.

(q)    Notwithstanding anything to the contrary contained herein or in the Repurchase Agreement, Buyer shall not be required to purchase any Eligible Loan proposed by Seller for sale under this Agreement if, after giving effect to such Transaction and any Future Funding Amounts requested in connection therewith, the aggregate Repurchase Price (other than Price Differential) for all Transactions then outstanding would exceed the Maximum Amount.

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4.    MARGIN MAINTENANCE

(a)    Buyer shall determine the Repurchase Price Cap of each Purchased Loan on each Business Day and shall determine (i) the amount, if any, by which such Repurchase Price Cap is less than the Repurchase Price (excluding Price Differential) (a “Margin Deficit”) and (ii) the amount, if any, by which the Repurchase Price Cap exceeds the Repurchase Price (excluding Price Differential) (“Margin Excess”).

(b)    Subject to Section 4(f) hereunder, if at any time an aggregate Margin Deficit exists with respect to one or more Purchased Loans in an amount greater than the lesser of (i) $250,000 and (ii) one percent (1%) of the Repurchase Price (excluding Price Differential) of the applicable Purchased Loan, then Buyer may by written notice (which notice shall be given in accordance with Section 16 hereof) (a “Margin Notice”) to Master Seller on behalf of the applicable Series Seller(s), require the applicable Series Seller(s) to make a payment to Buyer in the amount of the Margin Deficit for such Purchased Loan(s), to be applied in reduction of the Repurchase Price of some or all of the related Purchased Loans, as determined by Buyer, by no later than the Margin Deadline on the date that is two (2) Business Days following the date of receipt of such Margin Notice. The applicable Series Seller’s failure to cure any Margin Deficit as required by this paragraph within the time periods set forth herein shall constitute a Transaction Event of Default with respect to the applicable Transaction under the Transaction Documents and shall entitle Buyer to exercise its remedies under Section 13(c) of this Agreement.

(c)    If at any time a Margin Excess exists with respect to a Purchased Loan, then Master Seller may by notice delivered to Buyer require Buyer to transfer to Master Seller on behalf of the applicable Series Seller cash in an amount up to the Margin Excess by no later than the Margin Deadline on the date that is two (2) Business Days following Buyer’s receipt of such notice from Master Seller, provided that such notice is received by 6:00 p.m. (New York City time), or three (3) Business Days following the date of Buyer’s receipt of such notice from Seller if such notice is received after 6:00 p.m. (New York City time) on such date; provided, however, that (1) any such transfer of cash shall not be in an amount less than $100,000, (2) any such transfer of cash shall not cause the Repurchase Price for the applicable Purchased Loan to exceed the Repurchase Price Cap for such Transaction, and (3) no Default or Event of Default under this Agreement shall have occurred and be continuing.

(d)    The failure of, or delay by, Buyer or Seller, on any one or more occasions, to exercise its respective rights under Section 4(b) and 4(c) of this Agreement shall not (i) change or alter the terms and conditions to which this Agreement is subject, (ii) limit the right of such party to do so at a later date, (iii) limit such party’s rights under this Agreement or otherwise existing by law, or (iv) in any way create additional rights for such party.

(e)    If Master Seller and/or any applicable Series Sellers transfer cash to Buyer on account of Margin Deficits relating to more than one Purchased Loan, but such cash is insufficient to fully satisfy such Margin Deficits (after giving effect to any netting pursuant to Section 4(f)), Buyer shall have the right to designate the Purchased Loan(s) and Margin Deficit(s) to which such payments shall be applied, in its sole and absolute discretion.

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(f)    Buyer and Master Seller acknowledge and agree that, so long as no Default or Event of Default shall have occurred and be continuing, then notwithstanding the provisions of Sections 4(a) through 4(c) hereof, Margin Excess and Margin Deficit shall be netted for all the Transactions under this Agreement, and the aggregate amount of the Margin Excess for all Transactions shall be credited against the aggregate Margin Deficit owed under Section 4(b) and only the net amount need be paid; provided, that any net payment to Master Seller shall be subject to the conditions set forth in Section 4(c).

5.    INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)    On each Remittance Date, each Series Seller shall be obligated to pay to Buyer (to the extent not paid on such date through the distributions required pursuant to Sections 5(c), (d), (e) and (f) hereof) the accrued but unpaid Price Differential for its applicable Transaction(s) due as of such Remittance Date (along with any other amounts then due and payable), by wire transfer in immediately available funds. A Cash Management Account shall be established by Master Seller, on behalf of itself and each Series Seller, at the Depository. Buyer shall have sole dominion and control over the Cash Management Account. All Available Income in respect of the Purchased Loans shall be deposited by Master Seller and each Series Seller or the applicable Servicer directly into the Cash Management Account without any further action of Buyer. All such amounts transferred into the Cash Management Account shall be remitted by the Depository in accordance with the applicable provisions of Sections 5(b), 5(c), 5(d), 5(e), 13(b)(iii) and 13(c)(iii) of this Agreement.

(b)    Seller shall cause the Servicer (other than the Initial Servicer) of each Purchased Loan to enter into a Servicer Notice and Agreement in the form attached as Exhibit IX to this Agreement (or in such other form as is acceptable to Buyer in its sole discretion), which provides, inter alia, that the Servicer shall deposit, or cause to be deposited, all Available Income with respect to such Purchased Loan into the Cash Management Account. If a Servicer forwards any Available Income with respect to a Purchased Loan to Master Seller or any Series Seller rather than directly to the Cash Management Account, Master Seller shall (i) redeliver an executed copy of the Servicer Notice and Agreement to the applicable Servicer, and make other commercially reasonable efforts to cause such Servicer to forward such amounts directly to the Cash Management Account, (ii) hold such amounts in trust for the benefit of Buyer and (iii) within two (2) Business Days after receipt thereof deposit in the Cash Management Account any such amounts.

(c)    So long as no Event of Default shall have occurred and be continuing, all Available Income received by the Depository in respect of the Purchased Loans (other than Principal Payments and net sale proceeds) during each Collection Period shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i)    first, to remit to (a) the Custodian an amount equal to any accrued and unpaid custodial fees and expenses due and payable under the Custodial Agreement, and (b) the Depository an amount equal to any accrued and unpaid fees and expenses due and payable under the Controlled Account Agreement;

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(ii)    second, to remit to Buyer an amount equal to the aggregate Price Differential which is due and payable in respect of all of the Purchased Loans as of such Remittance Date;

(iii)    third, after giving effect to Section 4(f), to make a payment to Buyer on account of any outstanding and unpaid Margin Deficit;

(iv)    fourth, to remit to Buyer on account of any unpaid fees, costs, expenses, indemnity amounts and any and all other amounts due and payable from Seller under this Agreement or the other Transaction Documents; and

(v)    fifth, to remit to Master Seller, on behalf of all applicable Series Sellers, the remainder, if any; provided that, if any Default has occurred and is continuing on such Remittance Date that has not become an Event of Default, all amounts otherwise payable to Master Seller, on behalf of the applicable Series Sellers, hereunder shall be retained in the Cash Management Account until the earlier of (x) the day on which Buyer provides written notice to Depository that such Default has been cured to the satisfaction of Buyer in its sole discretion and no other Default or Event of Default has occurred and is continuing, at which time the Depository shall apply all such amounts pursuant to this priority fifth; and (y) the expiration of the cure period applicable to such Default, at which time the Depository shall apply all such amounts pursuant to Section 5(e).

(d)    So long as no Event of Default shall have occurred and be continuing, any scheduled or unscheduled Principal Payment (including net sale proceeds) in respect of a Purchased Loan which is a portion of the Available Income received by the Depository during each Collection Period shall be applied by the Depository (1) on the Business Day following the day on which such funds are deposited in the Cash Management Account for funds deposited in the Cash Management Account by 2:00 p.m. (Central time) or (2) on the second (2^nd) Business Day following the day on which such funds are deposited in the Cash Management Account for funds deposited in the Cash Management Account after 2:00 p.m. (Central time), in the following order of priority:

(i)    first, to remit to (a) the Custodian an amount equal to any accrued and unpaid custodial fees and expenses due and payable under the Custodial Agreement, and (b) the Depository an amount equal to any accrued and unpaid fees and expenses due and payable under the Controlled Account Agreement (in each case, to the extent not paid pursuant to Section 5(c)(i) above);

(ii)    second, to remit to Buyer an amount equal to the aggregate Price Differential which has accrued and is outstanding in respect of all of the Purchased Loans as of such Remittance Date (or such other date of application) (to the extent not paid pursuant to Section 5(c)(ii) above);

(iii)    third, after giving effect to Section 4(f), to make a payment to Buyer on account of any outstanding and unpaid Margin Deficit (to the extent not paid pursuant to Section 5(c)(iii) above);

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(iv)    fourth, to remit to Buyer on account of any unpaid fees, costs, expenses, indemnity amounts and any and all other amounts due and payable from Seller under this Agreement or the other Transaction Documents (to the extent not paid pursuant to Section 5(c)(iv) above);

(v)    fifth, to make a payment to Buyer on account of the Repurchase Price (other than Price Differential paid pursuant to Sections 5(c)(ii) or 5(d)(ii) above) of each of the respective Purchased Loans in respect of which such Principal Payment(s) and/or net sales proceeds have been received, in an amount equal to the product of (A) such Principal Payment(s) and/or net sales proceeds multiplied by (B) the respective Allocable Percentages applicable thereto; and

(vi)    sixth, to remit to Master Seller, on behalf of all applicable Series Sellers, the remainder of such Principal Payment or net sale proceeds, if any; provided that, if any Default has occurred and is continuing as of such disbursement date that has not become an Event of Default, all amounts otherwise payable to Master Seller, on behalf of the applicable Series Sellers, hereunder shall be retained in the Cash Management Account until the earlier of (x) the day on which Buyer provides written notice to Depository that such Default has been cured to the satisfaction of Buyer in its sole discretion and no other Default or Event of Default has occurred and is continuing, at which time the Depository shall apply all such amounts pursuant to this priority sixth; and (y) the expiration of the cure period applicable to such Default, at which time the Depository shall apply all such amounts pursuant to Section 5(e).

(e)    If an Event of Default shall have occurred and be continuing, all Available Income (including Principal Payments and net sale proceeds) received by Buyer or the Depository in respect of the Purchased Loans during each Collection Period shall be applied by Buyer or the Depository on the Business Day following the day on which such funds are deposited in the Cash Management Account as follows:

(i)    first, to remit to (a) the Custodian in an amount equal to any accrued and unpaid custodial fees and expenses due and payable under the Custodial Agreement, and (b) the Depository in an amount equal to any accrued and unpaid fees and expenses due and payable under the Controlled Account Agreement;

(ii)    second, to remit to Buyer an amount equal to the aggregate Price Differential which is due and payable in respect of all of the Purchased Loans as of such Business Day;

(iii)    third, to remit to Buyer in an amount equal to any unpaid fees, costs, expenses, indemnity amounts and any and all other amounts due and payable from Seller under this Agreement or the other Transaction Documents;

(iv)    fourth, to make a payment to Buyer in an amount equal to (a) the Repurchase Price of each of the Purchased Loans if a Facility Event of Default exists (which amount may be allocated by Buyer to one or more of the Purchased Loans in such amounts as Buyer may determine in its sole and absolute discretion), or (b) the

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Repurchase Price of each of the Purchased Loans with respect to which a Transaction Event of Default has occurred and is continuing (but no Facility Event of Default then exists), in each case until the Repurchase Price for each of such Purchased Loans has been reduced to zero (if a Facility Event of Default shall exist or Transaction Events of Default shall exist with respect to more than one Purchased Loan, Buyer may allocate amounts under this Section 5(e)(iv) to the Repurchase Price(s) of one or more of such Purchased Loans in such amounts as Buyer may determine in its sole and absolute discretion); and

(v)    fifth, to remit to Master Seller the remainder, if any.

(f)    Notwithstanding that each Series Seller shall be responsible for its own Available Income, the distribution and allocation of Available Income in accordance with the foregoing provisions of this Section 5 may, for administrative convenience, be accomplished on an aggregate basis for all Series Sellers. In the event that the amounts remitted pursuant to Sections 5(c), (d) and (e) above on any Remittance Date are insufficient to pay the accrued Price Differential due with respect to each of the Transactions at the respective Pricing Rates as of such Remittance Date (along with any other amounts then due and payable), then Buyer, in its sole and absolute discretion, shall determine each Series Seller which had insufficient Available Income to pay all accrued and unpaid Price Differential at the applicable Pricing Rate as of such Remittance Date and Margin Deficit payments related to the Transaction(s) to which such Series Seller is a party (together with such Series Seller’s share of the custodial fees and any other joint expenses allocated ratably according to the Available Income received by each of the Series Sellers) and deliver notice (which may be delivered via email) to Master Seller, on behalf of each of the Series Sellers, on the Remittance Date of the portion of such Cash Flow Deficiency payable by the respective Series Sellers. Each applicable Series Seller shall be required to pay the portion of the Cash Flow Deficiency allocable to such Series Seller (as set forth in such notice from Buyer) to Buyer, by wire transfer in immediately available funds within one (1) Business Day after such Remittance Date. If any Series Seller shall fail to pay the portion of the Cash Flow Deficiency due from such Series Seller within one (1) Business Day after such Remittance Date, such failure shall constitute a Transaction Event of Default with respect to the Transaction(s) to which each such Series Seller is a party.

(g)    All Underlying Purchased Loan Reserves for any Purchased Loan must be held with the applicable Servicer in accordance with Section 28 in segregated accounts held for the benefit of Seller or otherwise subject to control agreements approved by the Buyer. In the event that no Servicer holds any such Underlying Purchased Loan Reserves for a Purchased Loan and Seller would otherwise hold the Underlying Purchased Loan Reserves directly, it shall forward such Underlying Purchased Loan Reserves to the Cash Management Account to be held and applied in accordance with the applicable Purchased Loan Documents.

6.    SECURITY INTEREST

Buyer and Seller intend, for all purposes other than those described in Section 22(e), that all Transactions hereunder be sales to Buyer of the Purchased Loans and not loans from Buyer to Seller secured by the Purchased Loans. However, in the event any such Transaction is deemed to be a loan (except in the case of the grant of security interests by Seller

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under clause (b) below, which shall be unconditional as of the Closing Date), Master Seller, on behalf of itself and with respect to each Series Seller, hereby pledges all of its right, title, and interest in, to and under and grants a lien on, and security interest in (which lien and security interest shall be of first priority), all of its right, title, and 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 other Transaction Documents (the “Repurchase Obligations”) (it being understood that the grant of security interest in any items described below which are otherwise sold to Buyer pursuant to any Transaction hereunder is made to secure Buyer’s interest therein in the event any such Transaction is deemed to be a loan):

(a)    the Purchased Loans, Servicing Agreements, Servicing Records, Servicing Rights, insurance relating to the Purchased Loans, and collection and escrow accounts relating to the Purchased Loans;

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

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

(d)    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.

For purposes of the grant of the security interest pursuant to Section 6 of this Agreement, 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 necessary to perfect and maintain perfection and priority of the security interest granted hereby, UCC financing statements and continuation statements (collectively, the “Filings”), 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.

Seller hereby irrevocably authorizes Buyer at any time and from time to time to file in any filing office in any appropriate jurisdiction any initial financing statements and amendments thereto that (1) indicate the Collateral (i) as all Purchased Loans or words of similar effect, regardless of whether the description of the Purchased Loans in such financing statements includes every component set forth in the definition, or (ii) as being of an equal or lesser scope or with greater detail, and (2) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Seller is an organization, the type of organization and any organization identification number issued to Seller. Seller also ratifies its authorization for Buyer to have filed in any jurisdiction any initial financing statements or amendments thereto if filed prior to

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the date hereof. Without limiting the foregoing, Seller also hereby irrevocably authorizes the Buyer and its counsel to file UCC financing statements in form and substance satisfactory to the Buyer, describing the collateral as “All assets of Master Seller and all assets of each series of interests now or hereafter established by Master Seller or its member, in each case, whether now owned or existing or hereafter acquired or arising and wheresoever located, and all proceeds and products thereof” or words to that effect, and any limitations on such collateral description.

Buyer’s security interest in a Purchased Loan, or the Collateral as a whole, shall terminate only upon (i) in the case of an individual Purchased Loan, the repurchase thereof in accordance with this Agreement and (ii) in the case of the Collateral as a whole, the termination of Seller’s obligations under this Agreement and the documents delivered in connection herewith and therewith. Upon any such termination, Buyer shall deliver to Seller such UCC termination statements and other release documents as may be commercially reasonable to evidence the release of Buyer’s lien on and security interest in the applicable Purchased Loan, or the Collateral, as applicable and to return the Purchased Documents for the applicable Purchased Loan to Seller.

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 to an account of Seller or as otherwise specified in the Confirmation relating to such Transaction of the difference between (i) the Purchase Price for the Purchased Loan(s) minus (ii) any and all fees, costs and expenses including, without limitation, reasonable attorneys’ fees and disbursements payable to Buyer in connection with such Transaction (if and to the extent that Buyer requires that Seller pay such fees, costs and expenses on the Purchase Date for such Transaction).

(b)    On or before such Purchase Date, Seller shall deliver or cause to be delivered to Buyer or its designee (including the Bailee or the Custodian) the Custodial Delivery in the form attached hereto as Exhibit IV. In connection with each sale, transfer, conveyance and assignment of a Purchased Loan, on or prior to each Purchase Date with respect to such Purchased Loan, Seller shall deliver or cause to be delivered and released to the Custodian or Bailee, as applicable, and shall cause the Custodian or Bailee, as applicable, to deliver a Trust Receipt on the Purchase Date concerning the receipt of, the following documents (collectively, the “Purchased Loan File”) pertaining to each of the Purchased Loans identified in the Custodial Delivery delivered therewith; provided, that Seller shall deliver a certificate of an Authorized Representative of Seller certifying that any copies of documents delivered represent true and correct copies of the originals of such documents:

(i)    The original Mortgage Note (or A-Note with respect to any Senior Interest) (and if applicable, one or more allonges) bearing all intervening endorsements, endorsed “Pay to the order of                      without recourse” and signed in the name of the last endorsee (the “Last Endorsee”) by an authorized Person (in the event that the Purchased Loan was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Purchased Loan was acquired or originated by the Last Endorsee while doing business under another name, the signature must be in the following form: “[Last Endorsee], formerly known as [previous name]”).

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(ii)    An original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of each guarantee executed in connection with the Mortgage Note (if any).

(iii)    The original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of the loan agreement.

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

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

(vi)    The original Assignment of Mortgage in blank for each Purchased Loan, in form and substance acceptable for recording in the relevant jurisdiction, and in form and substance otherwise acceptable to Buyer and signed in the name of the Last Endorsee (in the event that the Purchased Loan was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Purchased Loan was acquired or originated while doing business under another name, the signature must be in the following form: “[Last Endorsee], formerly known as [previous name]”).

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

(viii)    The original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of the attorney’s opinion of title and abstract of title or the original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of the mortgagee title insurance policy, or if the mortgagee title insurance policy has not been issued, the binding pro forma policy or commitment marked effective attached to the Purchased Loan closing escrow letter.

(ix)    The original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of any security agreement, chattel mortgage or equivalent document executed in connection with the Purchased Loan (if any).

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

(xi)    The originals 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 (or, in the case of the Watchtower A-Note Eligible Loan, if applicable, copies thereof together with an officer’s certificate of Seller, certifying that such copies represent true and correct copies of the originals and that such originals have been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located).

(xii)    A copy of the UCC financing statements and all necessary UCC continuation statements with evidence of filing thereon, and UCC assignments, which UCC assignments shall be in form and substance acceptable for filing.

(xiii)    An original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of the environmental indemnity agreement (if any).

(xiv)    The originals (or, in the case of the Watchtower A-Note Eligible Loan, copies) of all lockbox agreements, cash management agreements, other Loan Documents and other material documents (including, without limitation, legal opinions) and agreements relating to such Purchased Loan.

(xv)    An omnibus assignment in blank (if any).

(xvi)    For any Senior Interest which is a Participation Interest, the original participation certificate evidencing such Senior Interest endorsed “Pay to the order of                      without recourse” and signed in the name of the Last Endorsee by an authorized Person (in the event that the Purchased Loan was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Senior Interest was acquired or originated by the Last Endorsee while doing business under another name, the signature must be in the following form: “[Last Endorsee], formerly known as [previous name]”).

(xvii)    For any Senior Interest, the original or a copy of the participation agreement or co-lender agreement, as applicable, and all other Senior Interest Documents executed in connection with the Senior Interest.

(xviii)    For any Senior Interest, the original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of the Senior Interest Side Letter (if applicable).

(xix)    The original or a copy of the intercreditor or co-lender agreement (if any) executed in connection with the Purchased Loan to the extent the subject borrower, or an affiliate thereof, has encumbered its assets with mezzanine or other subordinate financing in addition to the Purchased Loan.

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(xx)    Other than in the case of the Watchtower A-Note Eligible Loan, a Mortgagor’s certificate or title affidavit (if any).

(xxi)    A survey of the Mortgaged Property (if any) as accepted by the title company for issuance of the mortgagee title policy.

(xxii)    A copy of the Mortgagor’s, and (if applicable) any guarantor’s, opinion of counsel.

(xxiii)    An original (or, in the case of the Watchtower A-Note Eligible Loan, a copy) of an assignment of permits, contracts and agreements (if any).

(xxiv)    The original of all letters of credit issued and outstanding in connection with such Purchased Loan, with any modifications, amendments or endorsements necessary to permit Buyer to draw upon them when and if it is contractually permitted to do so pursuant to this Agreement (if any).

(c)    In addition, with respect to each Purchased Loan, Seller shall deliver an instruction letter from Seller to the Mortgagor under each Purchased Loan, instructing the Mortgagor to remit all sums required to be remitted to the holder of the Purchased Loan under the related Purchased Loan Documents to the Servicer for deposit in the Applicable Servicer Account or as otherwise directed in a written notice signed by Seller and Buyer; provided, however, that to the extent that all sums required to be remitted to Seller under a Purchased Loan are to be remitted to Seller by a primary Servicer pursuant to the related Purchased Loan Documents, Seller shall deliver an instruction letter from Seller to such primary Servicer, instructing such primary Servicer to remit all sums required to be remitted to the Seller under the related Purchased Loan Documents, to the Cash Management Account or as otherwise directed in a written notice signed by Seller and Buyer. If the Mortgagor or the primary Servicer, as applicable, under any Purchased Loan remits any sums required to be remitted to the holder of such Purchased Loan under the related Purchased Loan Documents to Seller or its Affiliate, Seller shall, within two (2) Business Days after receipt thereof, (i) remit such sums (other than Underlying Purchased Loan Reserves) to the Depository for deposit in the Cash Management Account as set forth in Section 5 hereof or as otherwise directed in the written notice signed by Seller and Buyer, and (ii) deliver (or cause Servicer to deliver) an additional instruction letter from Seller or Servicer, as applicable, to the Mortgagor or the primary Servicer, as applicable, under the applicable Purchased Loan, instructing the Mortgagor or the primary Servicer, as applicable to remit all sums required to be remitted to the holder of the Purchased Loan under the related Purchased Loan Documents to the Servicer for deposit in the Applicable Servicer Account or as otherwise directed in a written notice signed by Seller and Buyer.

(d)    From time to time, Seller shall forward to the Custodian additional original documents or additional copies of 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

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documents as Custodian 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 or its designee (including the Custodian) 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 Buyer or its designee (including the Custodian) within five (5) Business Days after 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 to, during the continuance of an Event of Default, (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. 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 Files not delivered to Buyer or its designee. The possession of the Purchased Loan Files 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 Files only in accordance with written instructions from Buyer and in accordance with the provisions of the Custodial Agreement, 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.

(e)    Unless an Event of Default shall have occurred and be continuing, Buyer hereby appoints and authorizes Seller to act as Buyer’s agent for purposes relating to the holder of the Purchased Loan and to take such actions on Buyer’s behalf under the Purchased Loan Documents and to exercise such powers and perform such duties as are necessary under the Purchased Loan Documents to administer the Purchased Loans, including, without limitation, (i) entering into amendments, modifications and waivers to, under or in connection with the Purchased Loan Documents, (ii) releasing and otherwise dealing with any collateral for such Purchased Loan, (iii) receiving all notices and deliveries delivered by the obligor(s) under the Purchased Loan Documents, (iv) consenting to or approving any matter which requires “lender’s” or, in the case of any Senior Interest, “participant’s” or “noteholder’s”, consent or approval under the Purchased Loan Documents, (v) administering all matters related to additional advances to be provided under any Purchased Loan Document, including, if applicable, making out of its own funds, any additional advances pursuant to the terms of the related Purchased Loan Documents, (vi) enforcement and related remedies under the Purchased Loan Documents and (vii) exercising all voting, consent, corporate and decision-making rights with respect to the Purchased Loans, provided that Seller shall not take, and shall not permit any

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other Person to take, any Material Action with respect to any Purchased Loan or Purchased Loan Document without the prior written consent of Buyer; provided, further, that with respect to any amendment, modification, waiver or consent in respect of any Purchased Loan or Purchased Loan Documents, regardless of whether constituting a Material Action, Seller shall send notice and copies thereof to Buyer promptly after entering into such amendment, modification, waiver or consent. Upon the occurrence and during the continuation of an Event of Default, Buyer shall be entitled to exercise all voting, consent, corporate, and decision-making rights with respect to the Purchased Loans without regard to Seller’s instructions. Buyer agrees to exercise the same standard of discretion required of Seller under the Purchased Loan Documents in determining whether to consent to any Material Action.

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. Subject to Section 18(b), 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 Loans to Seller pursuant to Section 3 of this Agreement or of Buyer’s obligation to credit or pay Available Income to, or apply Available Income to the obligations of, Seller pursuant to Section 5 hereof.

(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.    REPRESENTATIONS

(a)    Buyer represents and warrants to Seller as follows:

(i)    Organization. Buyer has the power and authority to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents, and the Transactions contemplated hereunder and thereunder.

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

(iii)    Non-Contravention. None of the execution and delivery of the Transaction Documents, the consummation by Buyer of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by Buyer with the terms,

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conditions and provisions of the Transaction Documents (or any of them) will conflict with or result in a breach of any of the terms, conditions or provisions of (i) the organizational documents of Buyer, (ii) any contractual obligation to which Buyer is now a party or by which it is otherwise bound or to which the assets of Buyer are subject or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of the assets of Buyer, (iii) any judgment or order, writ, injunction, decree or demand of any court applicable to Buyer, 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 upon Buyer’s ability to perform its obligations hereunder.

(b)    Seller represents and warrants to Buyer that as of the Closing Date, the Amendment and Restatement Date and as of each Purchase Date (and, in the case of the representations and warranties made in Section 9(b)(viii), at all times while this Agreement and any Transaction is in effect); provided that, for purposes hereof, all references to the term “Seller” in this Section 9(b) shall be deemed to mean and refer to Master Seller together with each Series Seller which is a party to this Agreement as of the date the applicable representation and warranty is made or deemed made:

(i)    Organization. Master 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, except to the extent such failure would not reasonably be expected to result in a Material Adverse Effect. Seller has the power to own and hold the assets it purports to own and hold, to carry on its business as now being conducted and proposed to be conducted, and to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents.

(ii)    Due Execution; Enforceability. The Transaction Documents have been duly executed and delivered by 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. None of the execution and delivery of the Transaction Documents, the 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 (i) the organizational documents of Seller, (ii) any contractual obligation to which Seller is now a party or by which it is otherwise bound 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

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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 the failure to have any such licensees, permits or consents would not result in a Material Adverse Effect.

(iv)    Litigation; Requirements of Law. Except as otherwise disclosed in writing to Buyer on or prior to the Closing Date and the Amendment and Restatement Date, there is no material action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of Seller, threatened against Seller, the Sponsor or any of their respective assets, which is reasonably likely to result in a Material Adverse Effect. Seller is in compliance in all material respects with all Requirements of Law applicable to Seller. Neither Seller nor the Sponsor 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.

(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 Loan by Buyer from Seller, Seller owned such Purchased Loan 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 Loan to Buyer and, upon transfer of such Purchased Loan to Buyer, Buyer shall be the owner of such Purchased Loan free of any adverse claim, subject to the rights of Seller and obligations of Buyer pursuant to the terms of this Agreement and the Transaction Documents, in each case except for liens to be released simultaneously with the sale of a Purchased Loan to Buyer hereunder, and subject to the terms and conditions of any participation agreement, co-lender agreement, intercreditor agreement or similar agreement with respect to any Purchased Loan. In the event that any Transaction is characterized as a secured financing of the related Purchased Loans, the provisions of this Agreement are effective to create in favor of Buyer a valid “security interest” (as defined in Section 1-201(b)(37) of the UCC) 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 such Purchased Loans.

(vii)    No Default. No Event of Default or, to Seller’s Knowledge, Default exists under or with respect to the Transaction Documents unless disclosed to Buyer in writing on or prior to the Closing Date.

(viii)    Representations and Warranties Regarding the Purchased Loans; Delivery of Preliminary Due Diligence Package and Purchased Loan File. With respect to each Purchased Loan sold in a Transaction hereunder, each of the Purchased Loan Representations applicable to such Purchased Loan are true and correct, except as disclosed to Buyer in writing prior to the Purchase Date for the applicable Purchased

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Loan in an Exceptions Report. It is understood and agreed that the Purchased Loan Representations shall survive delivery of the respective Purchased Loan File to Buyer or its designee (including the Custodian) and shall remain true and correct at all times while this Agreement is in effect. With respect to each Purchased Loan, the Preliminary Due Diligence Package delivered to Buyer in connection with such Purchased Loan is complete, true and accurate in all material respects to the best of Seller’s Knowledge (including, but not limited to, complete, true and accurate in all material respects with respect to the disclosure of any direct or indirect ownership interests of Seller or its Affiliates in the Mortgagor). 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 its designee (including the Custodian or a Bailee, as applicable) on its behalf. Seller or its designee is in possession of a complete, true and accurate Purchased Loan File with respect to each Purchased Loan, except for such documents the originals of which have been delivered to the Custodian or a Bailee and except as may otherwise be approved by Buyer in accordance with this Agreement and the Custodial Agreement.

(ix)    Adequate Capitalization; No Fraudulent Transfer. Seller has, as of the Purchase Date, adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Seller is generally able to pay, as of the Closing Date and as of the Amendment and Restatement Date is paying, its debts as they come due. Seller is not 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 the United States, the State of New York or any other jurisdiction under which Seller is organized or qualified to do business. 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)    Consents. No consent, approval or other action of, or filing by Seller with, any Governmental Authority or any other Person is required to authorize, or is otherwise required in connection with, the execution, delivery and performance by Seller of any of the Transaction Documents (other than consents, approvals and filings that have been obtained or made, as applicable).

(xi)    Ownership. The direct, and to the extent depicted, the indirect, ownership interests in Seller are as set forth on the organizational chart attached hereto as Exhibit VII hereto.

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

(xiii)    No Encumbrances. Subject to the terms of this Agreement, and subject to the terms and conditions of any participation agreement, co-lender agreement, intercreditor agreement with respect to any Purchased Loan, there are (i) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Loans, and (ii) no agreements on the part of Seller to issue, sell or distribute the Purchased Loans.

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(xiv)    Federal Regulations. Seller is not required to register as an “investment company” under the Investment Company Act of 1940, as amended.

(xv)    Taxes. Seller has filed or caused to be filed all federal and other material Tax returns which would be delinquent if they had not been filed on or before the date hereof and has paid all Taxes shown to be due and payable on or before the date hereof on such returns or on any assessments made against it or any of its property and all other Taxes, fees or other charges imposed on it and any of its assets by any Governmental Authority 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 any of Seller’s assets and, to the Knowledge of Seller, no claims are being asserted with respect to any such Taxes, fees or other charges.

(xvi)    ERISA. Neither Seller nor any of its ERISA Affiliates sponsors, maintains, contributes to, or has within the immediately preceding five calendar years sponsored, maintained or contributed to, any Plans or Multiemployer Plans, the liability for which could reasonably be expected in the aggregate to result in a Material Adverse Effect.

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

(xviii)    Full and Accurate Disclosure. No information contained in the Transaction Documents, or any written statement furnished to Buyer by or on behalf of Seller pursuant to the terms of the Transaction Documents, contains any untrue statement of a material fact or, to the Knowledge of Seller, omits to state a material fact necessary to make the statements contained herein or therein not misleading when taken as a whole and in light of the circumstances under which they were made.

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

(xx)    Reserved.

(xxi)    Notice Address; Jurisdiction of Organization. On the date of this Agreement, Seller’s address for notices is as set forth on Annex I attached hereto. Seller’s jurisdiction of formation 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.

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(xxii)    Prohibited Person. (a) None of the funds or other assets of Seller or Sponsor constitute property of, or are beneficially owned, directly or indirectly, by a Prohibited Person with the result that the investment in Seller or Sponsor, as applicable (whether directly or indirectly), is prohibited by law or the entering into this Agreement by Buyer is in violation of law; (b) no Prohibited Person has any interest of any nature whatsoever in Seller or Sponsor, as applicable, with the result that the investment in Seller or Sponsor, as applicable (whether directly or indirectly), is prohibited by law or the entering into this Agreement is in violation of law; (c) none of the funds of Seller or Sponsor, as applicable, have been derived from any unlawful activity with the result that the investment in Seller or Sponsor, as applicable (whether directly or indirectly), is prohibited by law or the entering into this Agreement is in violation of law; (d) neither Seller nor Sponsor has conducted or will conduct any business or has engaged or will engage in any transaction dealing with any Prohibited Person; and (e) neither Seller nor Sponsor is a Prohibited Person or has been convicted of a felony or a crime which if prosecuted under the laws of the United States of America would be a felony.

(c)    On the Purchase Date for any Transaction, Master Seller and each Series Seller party to any Transaction hereunder (including the Transaction closing on such Purchase Date) shall be deemed to have made all of the representations set forth in this Section 9 as of such Purchase Date (except to the extent such representations and warranties are made solely as of a particular date, in which case such representations and warranties shall be true and correct in all material respects as of such particular date).

10.    NEGATIVE COVENANTS OF SELLER

During the term of this Agreement and so long as any Transaction is in effect hereunder, Seller shall not without the prior written consent of Buyer (for purposes hereof, all references to the term “Seller” in this Section 10 shall be deemed to mean and refer to Master Seller together with each Series Seller which is a party to this Agreement as of the applicable date):

(a)    take any action which would directly or indirectly impair or adversely affect Buyer’s title to any of the Purchased Loans;

(b)    transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge, encumber or hypothecate, directly or indirectly (any of the foregoing, a “Transfer”), 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;

(c)    change its name or its jurisdiction of organization from the jurisdiction referred to in Section 9(b)(xxi) unless it shall have provided Buyer at least thirty (30) days’ prior written notice of such change;

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(d)    create, incur or permit to exist any lien, encumbrance or security interest in or on any of the Purchased Loans or the other Collateral, except for any liens created in favor of Buyer under this Agreement or the other Transaction Documents;

(e)    modify or terminate the Master Seller LLC Agreement or any of the organizational documents of Seller (provided, however, notwithstanding anything to the contrary in this Agreement, Buyer hereby consents to Member’s execution of that certain Second Amended and Restated Limited Liability Company Agreement of Master Seller dated as of February 9, 2017);

(f)    enter into, consent or assent to any amendment or supplement to, or termination of, or waiver of any provision of, any of the Purchased Loan Documents relating to any Purchased Loan, other than in accordance with Section 7(e) hereof;

(g)    transfer or permit to be transferred any direct or indirect ownership interests in Seller, or take any action or permit any action to be taken, if any such transfers and/or actions, individually or in the aggregate, would result in a Change of Control.

(h)    take any action, file any Tax return, or make any election inconsistent with the treatment of Seller, for purposes of U.S. federal, state and local income taxes, as a disregarded entity, including making an election under Section 301.7701-3(a) of the Treasury Regulations to be treated as an association taxable as a corporation for U.S. federal income tax purposes;

(i)    after the occurrence and during the continuation of any 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 equity or ownership interest of Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller;

(j)    send a payment redirection letter to the Mortgagor of any Purchased Loan, or otherwise instruct any Mortgagor, to make any payment due on a Purchased Loan to any account, other than the Applicable Servicer Account or Cash Management Account;

(k)    sponsor or maintain any Plans or make any contributions to, or have any liability or obligation (direct or contingent) with respect to, any Plan or permit any ERISA Affiliate to sponsor or maintain any Plans or make any contributions to, or have any liability or obligation (direct or contingent) with respect to, any Plan

(l)    engage in any transaction that would cause any obligation or action taken or to be taken hereunder (or the exercise by Buyer of any of its rights under this Agreement, the Purchased Loans or any Transaction Document) to be a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code;

(m)    make any future advances under any Purchased Loan to any underlying obligor that are not (i) protective advances or (ii) future advances which are (x) permitted or contemplated by the related Purchased Loan Documents and (y) in accordance with the budgets and capital expenditure plans approved under the Purchased Loan Documents (and, if applicable, approved by Buyer under Section 3(o) hereof);

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(n)    seek its dissolution, liquidation or winding up, in whole or in part;

(o)    incur any Indebtedness except as provided in Section 12(i) or otherwise cease to be a Single-Purpose Entity.

(p)    (x) other than as expressly permitted under the terms of the related Confirmation, exercise any remedies under the Purchased Loan Documents for any Purchased Loan as to which a Purchased Loan Event of Default has occurred including, without limitation, the commencement or prosecution of any foreclosure proceeding, the exercise of any power of sale, the taking of a deed-in-lieu of foreclosure or other realization upon the security for any Purchased Loan or (y) in connection with any foreclosure or exercise of remedies relating to any Purchased Loan, take title to or otherwise obtain an ownership interest in any underlying Mortgaged Property, in each case, without Buyer’s prior written consent;

(q)    except as otherwise expressly permitted without the Seller’s consent under the terms of the applicable intercreditor agreement, co-lender agreement or participation agreement for the applicable Purchased Loan as in effect on the Purchase Date, or any such similar agreement or amendment thereto entered into subsequent to the applicable Purchase Date that has been approved by Buyer, or as otherwise expressly agreed by Buyer pursuant to the terms of the Confirmation and/or the Senior Interest Side Letter for the applicable Purchased Loan, Transfer or permit to be Transferred, in whole or in part, any Related Interest, Mezzanine Loan or Preferred Equity Interest held by Seller or any Affiliate of Seller or consent to the Transfer, in whole or in part, of any Related Interest, Mezzanine Loan or Preferred Equity Interest held by any other Person, except to a Qualified Institutional Lender;

(r)    other than as specified in the related Confirmation, consent to, or grant any waiver with respect to, any incurrence of additional debt by the Mortgagor or any mezzanine loan by any direct or indirect beneficial owner of the Mortgagor which is not expressly permitted under the related Purchased Loan Documents;

(s)    following the Purchase Date with respect to the Watchtower A-Note Eligible Loan, transfer, sell or permit to be transferred or sold any interest in the Watchtower A-Note Eligible Loan, without Buyer’s prior written consent;

(t)    without Buyer’s consent, cause any Purchased Loan to be serviced by any servicer other than the Initial Servicer or other servicer expressly approved in writing by Buyer on the related Purchase Date; or

(u)    permit Manager to be terminated as Sponsor’s external manager pursuant to the Second Amended and Restated Management Agreement, dated as of October 23, 2014 (as the same may be further amended, restated, supplemented or otherwise modified, provided that such amendment, restatement, supplement or other modification does not terminate or replace Manager as Sponsor’s external manager), between Sponsor and Manager, unless any replacement external manager or switch to internal management shall have been approved by Buyer in writing, such approval not to be unreasonably withheld, conditioned or delayed.

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Also during the term of this Agreement and so long as any Transaction is in effect hereunder, Seller shall not (i) conduct any business, nor engage in any transaction or dealing, with any 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; or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order 13224 issued on September 24, 2001. Seller further covenants and agrees to deliver (from time to time) to Buyer any such certification or other evidence as may be requested by Buyer in its sole and absolute discretion, confirming that neither Seller nor Sponsor 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.

11.    AFFIRMATIVE COVENANTS OF SELLER

During the term of this Agreement and so long as any Transaction is in effect hereunder (for purposes hereof, all references to the term “Seller” in this Section 11 shall be deemed to mean and refer to Master Seller together with each Series Seller which is a party to this Agreement as of the applicable date):

(a)    Seller shall notify Buyer of any Material Adverse Effect promptly following Seller’s Knowledge thereof; provided, however, that nothing in this Section 11 shall relieve Seller of its obligations under this Agreement.

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

(c)    Seller (i) 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, security interests, claims and demands of all Persons (other than security interests by or through Buyer or liens otherwise permitted under the Purchased Loan Documents) and (ii) 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 of the occurrence of any Default or Event of Default of which Seller has Knowledge as soon as possible but in no event later than the second (2nd) Business Day after obtaining Knowledge of such event.

(e)    Seller shall give notice to Buyer of the following (except in the case of clause (i) below, accompanied by an officer’s certificate setting forth details of the occurrence referred to therein and stating what actions Seller has taken or proposes to take with respect thereto, as applicable):

(i)    with respect to any Purchased Loan subject to a Transaction hereunder, promptly (and in any event within two (2) Business Days) following receipt of any unscheduled Principal Payment (in full or in part);

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(ii)    with respect to any Purchased Loan sold to Buyer hereunder, promptly (and in any event within two (2) Business Days) following receipt by Seller of notice or Knowledge that the related Mortgaged Property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as, in each case, to materially adversely affect the value of such Mortgaged Property;

(iii)    promptly (and in any event within two (2) Business Days) following receipt of written notice by Seller or Knowledge of (i) the occurrence of any payment default or other material default under the Purchased Loan Documents for any Purchased Loan, (ii) any material lien or security interest (other than security interests created hereby) on, or claim asserted against, any Purchased Loan or, to the Knowledge of Seller, the underlying collateral therefor (other than liens expressly permitted under the Purchased Loan Documents) or (iii) any event or change in circumstances that has or could reasonably be expected to have a material adverse effect on the Market Value of a Purchased Loan; and

(iv)    promptly, and in any event within three (3) Business Days after service of process on any of the following, give to Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened in writing or of which Seller or Sponsor otherwise has Knowledge) or other legal or arbitrable proceedings naming Seller or any of the assets of Seller before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Transaction Documents or any action to be taken in connection with the transactions contemplated hereby, or (ii) which, individually or in the aggregate, if adversely determined could reasonably be likely to have a Material Adverse Effect.

(f)    Seller shall deliver to Buyer (i) notice of the occurrence of any Purchased Loan Event of Default promptly (and in any event not later than two (2) Business Days) after the earlier of the date that Seller receives notice or has Knowledge thereof and (ii) any other information Known to Seller with respect to any Purchased Loan as may be reasonably requested by Buyer from time to time.

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

(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 to Buyer 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 security interests 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

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immediately delivered to Buyer or its designee (including the Custodian or a Bailee), 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 (or Servicer on its behalf) 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 and within 60 days after the last day of the fourth quarter in any fiscal year, Sponsor’s consolidated and unaudited and Master Seller’s unaudited statements of income and statements of changes in cash flow for such quarter and balance sheets as of the end of such quarter, in each case presented fairly in accordance with GAAP and certified as being true and correct by an officer’s certificate;

(ii)    Within 90 days after the last day of its fiscal year, Sponsor’s consolidated and audited, and Master Seller’s unaudited, 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 all cases, by an unqualified report of a nationally recognized independent certified public accounting firm reasonably acceptable to Buyer;

(iii)    Within 45 days after the last day of each calendar month, any and all property level financial information (including without limitation rent rolls and operating statements) received with respect to the Purchased Loan by Seller or an Affiliate during such calendar month; and

(iv)    Within 45 days after the last day of each of the first, second and third quarters and within 60 days after the last day of the fourth quarter in any fiscal year, an officer’s certificate from Seller addressed to Buyer certifying that, as of the end of such quarter, (x) Seller is in compliance with all of the terms, conditions and requirements of this Agreement, (y) no Default or Event of Default exists and (z) Sponsor is in compliance with the financial covenants set forth in Section 5 of the Guaranty (including a calculation of each such financial covenant), and shall set forth the details of any exceptions to the foregoing stating what actions Seller has taken or proposes to take with respect thereto, as applicable.

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

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

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(l)    Seller shall observe, perform and satisfy all the terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents, including, without limitation, fees payable to Buyer by Seller pursuant to any Confirmation. 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 or charge upon the Collateral, 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 in all material respects. Seller shall timely file all Tax returns required to be filed by it.

(m)    Seller shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office and of any change in Seller’s name or organizational structure or the places where the books and records pertaining to the Purchased Loan are held not less than thirty (30) days prior to taking any such action.

(n)    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 and will furnish Buyer, upon reasonable request by Buyer or its designated representative, with reasonable information reasonably obtainable by Seller with respect to the Collateral and the conduct and operation of its business.

(o)    Seller shall provide Buyer with reasonable access to any operating statements, any occupancy status and any other property level information, with respect to the Mortgaged Properties, plus any such additional reports as Buyer may reasonably request, in each case, to the extent the same is in Seller’s possession or reasonably obtainable by Seller.

(p)    Master Seller, and to the extent applicable, each Series Seller, shall maintain its existence as a limited liability company, organized solely and in good standing under the law of the State of Delaware (unless Seller shall have given Buyer at least thirty (30) days’ prior written notice that Seller intends to change the jurisdiction of its organization) and shall not dissolve, liquidate, merge with or into any other Person or otherwise change its organizational structure or documents or incorporate or organize in any other jurisdiction, without the prior written approval of Buyer, which approval shall not be unreasonably withheld, conditioned or delayed.

(q)    Seller may propose, and Buyer will consider, but shall be under no obligation to approve, strategies for the foreclosure or other realization upon the security for any Purchased Loan with respect to which a Purchased Loan Event of Default has occurred.

12.    SINGLE-PURPOSE ENTITY

Seller hereby represents and warrants to Buyer, and covenants with Buyer, that as of the Closing Date, the Amendment and Restatement Date and so long as this Agreement or any of the Transaction Documents shall remain in effect (for purposes hereof, all references to the term “Seller” in this Section 12 shall be deemed to mean and refer to Master Seller together with each Series Seller which is a party to this Agreement as of the applicable date):

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

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(b)    It has complied and will comply with the provisions of its organizational documents.

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

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

(e)    It will, and will at all times hold itself out to the public as, in the case of Master Seller, a legal entity separate and distinct from any other entity (including any Affiliate), and, in the case of any Series Seller, distinct from any other entity (including any Affiliate, Master Seller or any other Series), it will correct any known misunderstanding regarding such status, it will conduct business in its own name, it will not identify itself or any of its Affiliates as a division or part of the other (except any Series Seller may refer to itself as a “series” of Master Seller), it will maintain and utilize separate stationery, invoices and checks, and Master Seller or any Series Seller will pay to any Affiliate that incurs costs for office space and administrative services that it uses, the amount of such costs allocable to its use of such office space and administrative services.

(f)    It has not owned and will not own any property or any other assets other than the Purchased Loans, cash and other assets including New Collateral incidental to the origination, acquisition, ownership, hedging, administering, financing and disposition of Purchased Loans.

(g)    It has not engaged and will not engage in any business other than the origination, acquisition, ownership, hedging, administering, financing and disposition of the Purchased Loans or New Collateral in accordance with the applicable provisions of the Transaction 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 obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) obligations under the Transaction Documents, (B) unsecured trade payables, in an aggregate amount not to exceed $250,000 at any one time outstanding, incurred in the ordinary course of originating, acquiring, owning, financing and disposing of Eligible Loans or New Collateral, and (C) contingent or future funding obligations under any Purchased Loan; provided, however, that any such trade payables incurred by Seller shall be paid within sixty (60) days of the date invoiced.

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(j)    It has not made and will not make any loans or advances (other than Eligible Loans) to any other Person, and shall not acquire obligations or securities of any member or any Affiliate of any member (other than in connection with the acquisition of the Eligible Loans or New Collateral) or any other Person.

(k)    It has maintained and intends 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.

(l)    It has not commingled and will not commingle its funds and other assets with those of any of its Affiliates or any other Person (except with Master Seller and other Series Sellers as contemplated under Section 5 hereof).

(m)    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.

(n)    Except as contemplated under the Transaction Documents, it has not held and will not hold itself out to be responsible for the debts or obligations of any other Person.

(o)    It shall not take any of the following actions without the affirmative vote of the Independent Manager: (i) permit its members to dissolve or liquidate Seller, in whole or in part; (ii) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity; or (iii) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Laws, or effect any similar procedure under any similar law, or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee or sequestrator (or other similar official) of Seller or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, or make an assignment for the benefit of creditors, or admit in an external written communication to third parties its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing.

(p)    It has no liabilities, contingent or otherwise, other than those normal and incidental to the origination, acquisition, ownership, hedging, financing and disposition of the Purchased Loans or New Collateral.

(q)    It is an entity disregarded as a separate entity or treated as a partnership for U.S. federal income tax purposes and has not made any election under Section 301.7701-3(a) of the Treasury Regulations to be treated as an association taxable as a corporation for U.S. federal income tax purposes.

(r)    It has not and shall not maintain any employees.

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(s)    Master Seller will have at all times at least one (1) Independent Manager and will provide Buyer with up-to-date contact information for all Independent Manager(s) and a copy of the agreement pursuant to which each Independent Manager consents to and serves as an “Independent Manager” for Master Seller and each Series Seller.

(t)    It has not pledged and will not pledge its assets to secure the obligations of any other Person (other than as contemplated by this Agreement with respect to any Master Seller or Series Seller).

(u)    It has not and will not guarantee any obligation of any Person, including any Affiliate or become obligated for the debts of any other Person or hold out its credit as being available to pay the obligations of any other Person (other than as contemplated by this Agreement with respect to any Master Seller or Series Seller).

(v)    It will not, to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or transfer of all or substantially all of its assets.

(w)    It will not form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity (other than the Master Seller with respect to any Series Seller).

(x)    The Master Seller LLC Agreement shall provide that (i) no Independent Manager of Seller may be removed or replaced without Cause, (ii) Buyer be given at least two (2) Business Days prior notice of the removal and/or replacement of the 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 (iii) any Independent Manager of Seller shall not have any fiduciary duty to anyone including the holders of the equity interests in Seller and any Affiliates of Seller except Seller and the creditors of Seller with respect to taking of, or otherwise voting on, any of the actions contemplated by Section 12(o) above; provided, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.

13.    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 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.

(I)    Each of the following shall constitute a “Facility Event of Default”:

(i)    an Act of Insolvency occurs with respect to Seller, Sponsor or Member;

(ii)    any employee with a title equivalent or more senior to that of “Senior Vice President” of either Seller, Sponsor or Member 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 or under any of the Transaction Documents,

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(iii)    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 (other than the rights of Seller pursuant to this Agreement) of any of the Purchased Loans, and such condition is not cured by Seller within three (3) Business Days after notice thereof from Buyer to Seller, (B) if a Transaction is recharacterized as a secured financing, the Transaction Documents with respect to any Transaction shall for any reason cease to create a valid first priority security interest in favor of Buyer in any of the Purchased Loans or (C) any provision of the Transaction Documents, any right or remedy of Buyer or obligation, covenant, agreement or duty of Seller thereunder, or any lien, security interest or control granted under or in connection with the Transaction Documents or Purchased Loans terminates, 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 Affiliate thereof, in each case directly, indirectly, in whole or in part;

(iv)    failure of Master Seller to make any payment owing to Buyer which has become due under this Agreement or any other Transaction Document (other than any monetary Transaction Event of Default by any Series Seller under Sections 13(a)(II)(i)-(iv) of this Agreement), whether by acceleration or otherwise under the terms of this Agreement or the other Transaction Documents, which failure is not remedied within five (5) Business Days;

(v)    any governmental, regulatory, or self-regulatory authority shall have taken any action to remove, limit, restrict, suspend or terminate the rights, privileges, or operations of Seller, which removal, limitation, restriction, suspension or termination results in a Material Adverse Effect in the determination of Buyer;

(vi)    a Change of Control shall have occurred that has not been consented to by Buyer in writing;

(vii)    any representation made by Seller or Sponsor in this Agreement or the other Transaction Documents shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, which incorrect or untrue representation, to the extent such breach is reasonably susceptible to cure, is not cured within five (5) Business Days after the earlier of notice thereof from Buyer or Seller obtaining Knowledge of such breach; provided, however, that the breach of Section 9(b)(viii) or any Purchased Loan Representation made by Seller with respect to any Purchased Loan in any Transaction Document shall not be considered a Facility Event of Default if incorrect or untrue unless Seller shall have made any such representation with Knowledge that it was materially incorrect or untrue at the time made, in which case such breach shall constitute an immediate Facility Event of Default;

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(viii)    either (A) Sponsor shall fail to observe any of the financial covenants set forth in the Guaranty or shall have defaulted or failed to perform any other material covenant under the Guaranty; provided, that any such default or failure to perform shall not constitute an Event of Default if Sponsor cures such default or failure to perform, as the case may be, within the grace, notice or cure period, if any, provided under the applicable agreement, or (B) the Guaranty shall have been revoked, rescinded or otherwise cease to be in full force and effect;

(ix)    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 $250,000 (in the case of Seller) or $25,000,000 (in the case of Sponsor) shall have been rendered against Seller or Sponsor, 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 acceptable to Buyer;

(x)    Sponsor shall have defaulted or failed to perform under any note, indenture, loan agreement, guaranty, repurchase agreement, short sale, futures contract (including Eurodollar futures) or options contract or any interest rate swap, cap or collar agreement or derivatives transaction to which it is a party (other than a Transaction Document), which default (A) involves the failure to pay a monetary obligation in an amount greater than or equal to $25,000,000, or (B) permits the acceleration of the maturity of obligations, or the declaration of a mandatory early repurchase date or termination date with respect to indebtedness or obligations in an amount greater than or equal to $25,000,000, by any other party to or beneficiary of such note, indenture, loan agreement, guaranty, repurchase agreement, swap agreement or other contract agreement or transaction due to the failure to observe the financial covenants, if any, set forth therein; provided, however, that any such default, failure to perform or breach shall not constitute a Facility Event of Default if Sponsor cures such default, failure to perform or breach, as the case may be, within the grace period, if any, provided under the applicable agreement;

(xi)    Seller shall have defaulted or failed to perform under any note, indenture, loan agreement, guaranty, repurchase agreement, short sale, futures contract (including Eurodollar futures) or options contract or any interest rate swap, cap or collar agreement or derivatives transaction to which it is a party (other than a Transaction Document), which default (A) involves the failure to pay a monetary obligation of $250,000 or more, or (B) permits the acceleration of the maturity of obligations, or the declaration of a mandatory early repurchase date or termination date with respect to indebtedness or obligations of $250,000 or more, by any other party to or beneficiary of such note, indenture, loan agreement, guaranty, repurchase agreement, swap agreement or other contract agreement or transaction; provided, however, that any such default, failure to perform or breach shall not constitute a Facility Event of Default if Sponsor cures such default, failure to perform or breach, as the case may be, within the grace period, if any, provided under the applicable agreement;

(xii)    any breach under Sections 10(b), (d), (e), (g), (i), (n) through (p), (r) or (u);

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(xiii)    any breach under Section 10(f); provided, however, that any such breach by Seller under Section 10(f) shall not be considered an Event of Default hereunder provided Seller terminates the related Transaction and repurchases the related Purchased Loan(s) pursuant to Section 3(e) no later than two (2) Business Days after notice from Buyer to Seller of such breach;

(xiv)    if Seller or Sponsor or shall breach or fail to perform any of the terms, covenants, obligations or conditions of this Agreement or any other Transaction Document, other than as specifically otherwise referred to in this definition of “Facility Event of Default”, and such breach or failure to perform is not remedied within ten (10) Business Days after written notice thereof to Seller by Buyer, or its successors or assigns, or such other (shorter or longer) cure period (if any) as may be expressly provided herein or in such Transaction Document (unless this Agreement or such other Transaction Document expressly provides that such breach or failure constitutes an immediate Facility Event of Default, in which case no notice or cure period shall apply;

(xv)    Seller, Member or Sponsor is required to register as an “investment company” under the Investment Company Act of 1940, as amended;

(xvi)    Seller engages in any conduct or action where Buyer’s prior consent is required by any Transaction Document and Seller fails to obtain such consent;

(xvii)    Seller, any Servicer, any Mortgagor under a Purchased Loan or any other Person fails to deposit to the Cash Management Account all Available Income and other amounts as required by Section 5 and other provisions of this Agreement when due and such failure to deposit to the Cash Management Account, as applicable, is not cured within five (5) Business Days; or

(xviii)    Sponsor fails to qualify as a REIT (after giving effect to any cure or corrective periods or allowances pursuant to the Code), or Seller becomes subject to U.S. federal income tax on a net income basis.

(II)    Each of the following, as to a Purchased Loan, shall constitute a “Transaction Event of Default” for such Purchased Loan:

(i)    the applicable Series Seller fails to repurchase such Purchased Loan upon the applicable Repurchase Date therefor;

(ii)    the applicable Series Seller fails to pay any Margin Deficit with respect to such Purchased Loan when required pursuant to Section 4 hereof;

(iii)    the applicable Series Seller fails to repurchase such Purchased Loan which is the subject of a Mandatory Early Repurchase, as and when required pursuant to Section 3(l); or

(iv)    Seller, any Servicer, or any Mortgagor under such Purchased Loan, as applicable, fails to deposit to the Cash Management Account all Available Income from such Purchased Loan as required by Section 5 and other provisions of this Agreement when due and such failure to deposit to the Cash Management Account, is not cured within five (5) Business Days.

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(b)    If a Facility 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 written notice is given, immediately upon the occurrence of an Act of Insolvency with respect to Seller or Sponsor), 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 13(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)    the Repurchase Price with respect to each Transaction (determined as of the Accelerated Repurchase Date) shall include the accrued and unpaid Price Differential with respect to each Purchased Loan accrued at the Pricing Rate applicable upon the occurrence of an Event of Default; and

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

(iii)    Upon the occurrence of a Facility Event of Default, Buyer may (A) immediately sell, at a public or private sale in a commercially reasonable manner and at such price or prices as Buyer may deem satisfactory in its sole and absolute discretion, in accordance applicable laws, any or all of the Purchased Loans or (B) in its sole and absolute discretion, in accordance applicable laws, 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 against the aggregate unpaid Repurchase Price for such Purchased Loans and any other amounts owing by Seller under this Agreement or the Transaction Documents. The proceeds of any disposition of Purchased Loans effected pursuant to this Section 13(b)(iii) shall be applied, (v) first, to the costs and expenses incurred by Buyer in connection with Seller’s default; (w) second, to any and all amounts due under Section 3(h), including, without limitation, costs of cover, if any; (x) third, to the aggregate Repurchase Price of the Purchased Loans; and (y) fourth, to return any excess to Seller.

(iv)    The parties acknowledge and agree that (1) the Purchased Loans subject to Transactions hereunder are not instruments traded in a recognized market, and, in the absence of a generally recognized source for prices or bid or offer quotations for any Purchased Loans, Buyer may establish the source therefor in its sole and absolute

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discretion and (2) all prices, bids and offers shall be determined together with accrued Available Income (except to the extent contrary to market practice with respect to the relevant Purchased Loans). 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 at such time. In view of the nature of the Purchased Loans, the parties agree that liquidation of a Transaction or the Purchased Loans pursuant to this Section 13(b) or Section 13(c) 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 and absolute discretion, in accordance applicable laws, the time and manner of liquidating any Purchased Loans pursuant to this Section 13(b) or Section 13(c), 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 expenses, including reasonable legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (B) all costs incurred in connection with covering transactions, and (C) any other actual out-of-pocket loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default.

(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 and local laws (including, without limitation, if the Transactions are characterized 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 under this Agreement, whether or not such obligations are then due, without prejudice to Buyer’s right to recover any deficiency.

(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 of an Event of Default and at any time during the continuance thereof. Except as expressly required herein or in the other Transaction Documents, Buyer 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. 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

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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 notice to the other party of any set off effected under this Section 13(b)(ix). If a sum or obligation is unascertained, Buyer may 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 13(b)(ix) shall be effective to create a charge or other security interest. This Section 13(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).

(x)    Seller shall within two (2) Business Days following Buyer’s written request, to execute and deliver to Buyer such documents, instruments, certificates, assignments and other writings, and do such other acts as Buyer may reasonably request for the purposes of assuring, perfecting and evidencing Buyer’s ownership of the Purchased Loans, including without limitation: (i) forwarding, to Buyer or Buyer’s designee (including, if applicable, the Custodian), any payments Seller may hereafter receive on account of the Purchased Loans, in each case promptly upon receipt thereof; (ii) delivering to Buyer or such designee any originals of certificates, instruments, documents, notices or files evidencing or relating to the Purchased Loans which are in Seller’s possession or under its control; (iii) delivering to Buyer underwriting summaries, credit memos, assets summaries, status reports or similar documents relating to the Purchased Loans and in Sellers possession or under its control.

(c)    Without limiting Buyer’s rights and remedies under Section 13(b) of this Agreement or otherwise available under the Transaction Documents, at law or in equity, if a Transaction 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, the Repurchase Date for the applicable Transaction shall, if it has not already occurred, be deemed immediately to occur (the “Accelerated Transaction Repurchase Date”).

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(ii)    If Buyer exercises or is deemed to have exercised the option referred to in Section 13(c)(i) of this Agreement:

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

(B)    the Repurchase Price with respect to such Transaction (determined as of the Accelerated Transaction Repurchase Date) shall include the accrued and unpaid Price Differential with respect to such Purchased Loan accrued at the Pricing Rate applicable upon the occurrence of a Transaction Event of Default; and

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

(iii)    Upon the occurrence of a Transaction Event of Default, Buyer may (A) immediately sell, at a public or private sale in a commercially reasonable manner and at such price or prices as Buyer may deem satisfactory in its sole and absolute discretion, in accordance applicable laws, the applicable Purchased Loan or (B) in its sole and absolute discretion elect, in lieu of selling all or a portion of such Purchased Loan, to give Seller credit for such Purchased Loan in an amount equal to the Market Value of such Purchased Loan against the aggregate unpaid Repurchase Price for such Purchased Loan and any other amounts owing by Seller under this Agreement or the Transaction Documents. The proceeds of any disposition of Purchased Loan effected pursuant to this Section 13(c)(iii) shall be applied, (v) first, to the costs and expenses incurred by Buyer in connection with Seller’s default; (w) second, to any and all amounts due under Section 3(h), including, without limitation, costs of cover, if any; (x) third, to the Repurchase Price; and (y) fourth, to return any excess to Seller.

14.    LIMITATIONS ON RECOURSE AGAINST SERIES SELLERS

Buyer acknowledges that Master Seller is organized as a series limited liability company under Section 18-215 of the Delaware Limited Liability Company Act. Notwithstanding that this Agreement and the other Transaction Documents have been executed on behalf of Seller without reference to any particular Series Seller, Buyer agrees to treat each Transaction under this Agreement as the obligation of the particular Series Seller of Master Seller that enters into the Transaction for the related Purchased Loan(s). Provided that no Facility Event of Default shall have occurred and be continuing hereunder, the Repurchase Obligations of any Series Seller relating to or arising from the Transaction(s) to which such Series Seller is a party shall be enforceable only against such Series Seller and with respect to the Purchased Loan(s) relating to such Transaction(s) and not against any other Series Seller or any other Purchased Loan. Notwithstanding the foregoing or anything to the contrary contained in this Agreement or any other Transaction Document, Buyer shall be entitled to exercise any and all remedies available to Buyer under Section 13(b) against Seller and any and all Purchased Loans subject to Transactions hereunder upon the occurrence and continuance of a Facility Event of Default.

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15.    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. EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREE THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.

16.    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 delivered or sent by (a) hand delivery, with proof of attempted delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (d) by telecopy or email provided that such telecopy or email notice must also be delivered by one of the means set forth in (a), (b) or (c) 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 Section 16. A notice shall be deemed to have been given: (a) in the case of hand delivery, at the time of delivery, (b) in the case of registered or certified mail, when delivered on a Business Day, (c) in the case of expedited prepaid delivery upon delivery on a Business Day, or (d) in the case of telecopy or email, upon delivery; provided that (i) such telecopy or email notice was also delivered by one of the means set forth in (a), (b) or (c) above (which may arrive after such telecopy or email), and (ii) the transmitting party did not receive an electronic notice of a transmission failure. A party receiving a notice which does not comply with the technical requirements for notice under this Section 16 may elect to waive any deficiencies and treat the notice as having been properly given.

17.    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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18.    ASSIGNABILITY

(a)    The rights and obligations of Seller under this Agreement and the other Transaction Documents and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer, which consent may be granted or withheld in Buyer’s sole discretion.

(b)    Buyer may assign its rights and obligations under this Agreement and the other Transaction Documents and/or under any Transaction or may issue one or more participation interests with respect to any or all of the Transactions, without the consent of, and without prior notice to, Seller, to any other Person, and, in connection therewith, may bifurcate or allocate (i.e. senior/subordinate) amounts owed to Buyer; provided, however, that, with respect to any such participation or assignment, so long as no monetary Default, material non-monetary Default or Event of Default has occurred and is continuing (i) Seller shall not be obligated to deal directly with any party other than Buyer or its Affiliate in connection with such Transactions and (ii) Buyer shall not assign or grant participations in its rights and obligations hereunder to any of the parties listed on Exhibit X attached hereto or their respective Affiliates (collectively, “Prohibited Transferees”) without Seller’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, if a monetary Default, material non-monetary Default or Event of Default has occurred and is continuing, Buyer may assign and/or grant participations in any and all of its rights and obligations to any Prohibited Transferee, without notice to or consent of the Seller. Seller shall reasonably cooperate at Buyer’s sole cost and expense with Buyer in connection with any assignment or participation, provided Seller’s obligations under the Transaction Documents are not increased and its rights under the Transaction Documents are not impaired. Seller agrees that any assignee or participant shall be entitled to the benefits of Section 3(i) and Section 29 (subject to the limitations and requirements under Section 29 (it being understood that the applicable documentation required under Section 29(c) shall be delivered to the participating Buyer)); provided that, no assignee or participant will be entitled to any greater payment of Additional Amounts under Section 3(i) or Section 29, than its assignor or participating Buyer would have been entitled to receive with respect to the applicable assigned or participated rights and obligations, except to the extent such entitlement to receive a greater payment or Additional Amounts results from a change in law that occurs after the date such assignee or participant acquired its interest in the Transaction Documents.

(c)    Buyer shall, acting for this purpose as a non-fiduciary agent of Seller (the “Registrar”), maintain a record of ownership (the “Register”) on which is entered the name and address of all assignees of Buyer and each such assignee’s interest in the rights and obligations under this Agreement and the other Transaction Documents. All assignments pursuant to Section 18 hereof shall be recorded on the Register. This provision is intended to be interpreted so that the indebtedness (for federal income tax purposes, as set forth in Section 22(e)) evidenced by the Transaction Documents is treated as being in registered form in accordance with Section 5f.103-1(c) of the Treasury Regulations. The Register shall be available for inspection by Seller at any reasonable time and from time to time upon reasonable prior notice. The entries in the Register shall be conclusive absent manifest error, and Buyer and Seller shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Buyer hereunder for all purposes of this Agreement. Buyer may, at any time, designate any other Person, including Seller, to be the successor Registrar.

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(d)    Each Buyer that sells a participation shall, acting for this purpose as a non-fiduciary agent of Seller, maintain a register on which is entered the name and address of each participant and such participant’s interest in the rights and obligations under this Agreement and the other Transaction Documents (the “Participant Register”); provided that, no Buyer shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any rights or obligations under this Agreement and the other Transaction Documents) to any Person except to the extent that such disclosure is necessary to establish that such rights or obligations are in registered form in accordance with Section 5f.103-1(c) of the Treasury Regulations. The entries in each Participant Register shall be conclusive absent manifest error, and the applicable Buyer shall treat each Person whose name is recorded in such Participant Register as the owner of the related rights and obligations for all purposes of this Agreement notwithstanding notice to the contrary.

(e)    Subject to the foregoing, this Agreement and the other 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 this Agreement or the other Transaction Documents, express or implied, shall give to any Person, other than the parties to the Transaction Documents and their respective successors and permitted assigns, any benefit or any legal or equitable right, power, remedy or claim under the Transaction Documents.

19.    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.

20.    NO WAIVERS, ETC.

No express or implied waiver of any Default or Event of Default by Buyer shall constitute a waiver of any other Default or Event of Default and no exercise of any right or remedy hereunder by Buyer shall constitute a waiver of its right to exercise any other right or 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 of the foregoing, the failure to give a notice pursuant to Section 4(b) or 4(c) hereof will not constitute a waiver of any right to do so at a later date.

21.    USE OF EMPLOYEE PLAN ASSETS

(a)    No plan assets within the meaning of 29 C.F.R. § 2510.3-101 as modified in operation by Section 3(42) of ERISA (“Plan Assets”) of any Plan subject to any provision of ERISA or Section 4975 of the Code shall be used in connection with any Transaction. If any such assets are intended to be used by either party hereto (the “Plan Party”) in the Transaction,

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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 Section 21, if assets of Seller are deemed to be Plan Assets, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.

(c)    By entering into a Transaction pursuant to this Section 21, if assets of Seller are deemed to be Plan Assets, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.

22.    INTENT

(a)    The parties intend, agree and acknowledge that: (i) each Transaction involving a Purchased Loan qualifies 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, (ii) each Transaction involving a Purchased Loan qualifies 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 “securities contract” as that term is defined in Section 741(7) of the Bankruptcy Code, (iii) certain payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 101 of the Bankruptcy Code, (iv) each Transaction involving a Purchased Loan with a Repurchase Date not later than one year after the Purchase Date or that provides for repurchase on demand qualifies as a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code, (v) each payment to Buyer under this Agreement has been made by, to or for the benefit of a financial institution as defined in section 101(22) of the Bankruptcy Code, a financial participant as defined in section 101(22A) of the Bankruptcy Code or repo participant as defined in section 101(46) of the Bankruptcy Code, and thus 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” a “securities contract,” and a “master netting agreement” including (x) the rights, set forth in Section 13 and in Sections 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Loans and terminate this Agreement, and (y) the right to offset or net out as set forth in Section 13 and in Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o) and 546 of the Bankruptcy Code, (vi) the grant of a security interest set forth in Sections 6 and 28(b) hereof to secure the rights of Buyer hereunder also constitutes a “repurchase agreement” (where applicable) 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 and are a part of this Agreement and (vii) each of the Purchased Loans shall constitute a “security” as defined in Section 101(49)

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of the Bankruptcy Code, a mortgage loan or an interest in a mortgage loan. It is further understood that this Agreement is intended to constitute a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, as amended, with respect to each Transaction so constituting a “repurchase agreement” (where applicable), or “securities contract”. Each party hereto hereby further agrees that it shall not challenge the characterization of this Agreement as a “repurchase agreement,” “securities contract” and/or “master netting agreement” within the meaning of the Bankruptcy Code.

(b)    The parties intend, agree and acknowledge that either party’s right to accelerate or terminate this Agreement or to liquidate Purchased Loans delivered to it in connection with the Transaction hereunder or to exercise any other remedies pursuant to Section 13 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. 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 any Transaction 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 intend, agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

(d)    It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “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).

(e)    Each party intends, agrees and acknowledges that it is its intent for U.S. federal, state and local income and franchise tax purposes to treat the Transactions as indebtedness of Seller that is secured by the Purchased Loans, and the Purchased Loans as owned by Seller for such purposes, that each Series Seller shall be disregarded as a separate entity from the Master Seller and each other Series Seller for such purposes, and each party agrees to take no action inconsistent with such treatment, unless required by applicable law, in which case such party shall promptly notify the other party of such requirement.

(f)    In light of the intent set forth above in this Section 22, Seller agrees that, from time to time upon the written request of Buyer, Seller will execute and deliver any supplements, modifications, addendums or other documents as may be necessary, in Buyer’s sole and absolute 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

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the criteria for safe harbor treatment under the Bankruptcy Code for “repurchase agreements” (where applicable), “securities contracts” and “master netting agreements”; provided, however, that Buyer’s failure to request, or Buyer’s or Seller’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” (where applicable), “securities contracts” and/or a “master netting agreement” as such terms are defined in the Bankruptcy Code.

23.    DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

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

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

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

24.    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 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 24 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.

25.    NO RELIANCE

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

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

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

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

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

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

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(b)    Each determination by Buyer of the Market Value with respect to each Purchased Loan or the communication to Seller of any information pertaining to Market Value under this Agreement shall be subject to the following disclaimers; provided, however, that Buyer hereby agrees that none of the disclaimers contained in this Section 25(b) shall be construed as expanding or modifying the method by which Buyer must determine Market Value as set forth in the definition of Market Value herein:

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

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

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

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

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

(vi)    Market Value determinations and other information provided to Seller in connection therewith are only indicative of the initial Market Value of the Purchased Loan submitted to Buyer for consideration hereunder, and may change without notice to Seller prior to, or subsequent to, the Purchase Date for the applicable Transaction. No indication is provided as to Buyer’s expectation of the future value of such Purchased Loan or the underlying collateral.

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

26.    INDEMNITY

Seller hereby agrees to indemnify, defend and hold harmless Buyer, Buyer’s Affiliates and each of its officers, directors, employees and agents (“Indemnified Parties”) from and against any and all liabilities, obligations, actual out-of-pocket losses, actual out-of-pocket damages, actual out-of-pocket penalties, actions, judgments, suits, actual out-of-pocket Taxes (including stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement and the Transaction Documents and the documents delivered in connection herewith and therewith, other than Excluded Taxes), actual out-of-pocket fees, actual out-of-pocket costs, actual out-of-pocket expenses (including reasonable attorneys fees and disbursements) or disbursements (all of the foregoing, collectively “Indemnified Amounts”) which may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transactions shall have been repaid in full) be imposed on or asserted against any Indemnified Party in any way whatsoever arising out of or in connection with, or relating to, this Agreement, the Transaction Documents or any Transactions hereunder or 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 indemnify, defend and hold Buyer and the other Indemnified Parties harmless from and indemnify Buyer against all Indemnified Amounts with respect to all Purchased Loans relating to or arising out of any (A) breach of any representation or warranty relating to Environmental Law or Hazardous Materials made by Seller hereunder or under any Transaction Document or any violation or alleged violation of any Environmental Law or (B) any violation or alleged violation of any consumer credit laws, including without limitation ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act, except to the extent such violation or alleged violation results from Buyer’s bad faith, 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 costs and expenses (including reasonable attorneys’ fees), losses or damages 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 (i) all Buyer’s actual out-of-pocket costs and expenses incurred in connection with the initial preparation and negotiation of this Agreement and the Transaction Documents and the closing of the transactions contemplated hereby and thereby and (ii) all Buyer’s actual

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out-of-pocket costs and expenses incurred in connection with Buyer’s due diligence reviews with respect to the Purchased Loans or any loan which is proposed by Seller as a Purchased Loan, including without limitation, those incurred under Section 27 and the reasonable fees and disbursements of its counsel, subject in all cases under this clause (ii), to the terms and conditions of Section 27. Additionally, Seller also agrees to reimburse Buyer as and when billed by Buyer for all of Buyer’s actual out-of-pocket costs and expenses incurred in connection with the enforcement or the preservation of Buyer’s rights under this Agreement and the Transaction Documents or any Transaction contemplated hereby or thereby, including, without limitation, the reasonable fees and disbursements of its counsel. Seller hereby acknowledges that, the obligation of Seller hereunder is a recourse obligation of Seller. Except as otherwise provided, this Section 26 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim, which shall be as set forth in Section 29.

27.    DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or 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 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 and/or the Custodian. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Purchased Loan Files and the Purchased Loans. Seller acknowledges that, upon any determination by Buyer that a decrease in the Market Value of the Purchased Loan has occurred, Buyer has the right to request, at Seller’s expense, an Appraisal for any Mortgaged Property securing the Purchased Loan, not more frequently than once in any calendar year; provided, however, that Buyer shall have the right to request an additional Appraisal in the same calendar year, and, if such Appraisal results in a determination by Buyer that a decrease in the Market Value of the Purchased Loan has occurred, Seller shall reimburse Buyer for the costs and expenses related to such additional Appraisal. 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, financial models, 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 reasonable out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 27 on or before the Purchase Date for any Purchased Loan or within ten (10) days after Buyer shall reject any prospective New Collateral.

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28.    SERVICING

(a)    Master Seller, on behalf of itself and each Series Seller, and Buyer agree that all Servicing Rights with respect to the Purchased Loans will be transferred hereunder to Buyer on the applicable Purchase Date and such Servicing Rights shall be transferred by Buyer to Master Seller or the applicable Series Seller upon the applicable Series Seller’s payment of the Repurchase Price for such Purchased Loans, in each case subject to the terms of the applicable Servicing Agreement. Notwithstanding the transfer of Servicing Rights to Buyer, Master Seller, on behalf of itself and each Series Seller, shall be entitled to exercise all discretion with respect to any directions or consents to be given to the Servicer of the Purchased Loans (other than modifications of the Purchased Loans) and to appoint a servicer for each Purchased Loan subject to the prior written consent of Buyer, which consent may be given by Buyer in its sole and absolute discretion; provided, however, that upon the occurrence and during the continuance of an Event of Default, Master Seller’s and each Series Seller’s rights to exercise such discretion with respect to all of the Purchased Loans shall automatically terminate and be of no further force and effect. Any amendment, modification or termination, or waiver of any term or provision, of any Purchased Loan or Purchased Loan Documents shall require Buyer’s prior written consent to the extent required and in accordance with Section 7(e) of this Agreement. Buyer hereby agrees that Midland Loan Services, a division of PNC Bank, National Association, a national banking association, or any other third party servicer otherwise approved by Buyer in writing (a “Servicer”) may service the Purchased Loans for the benefit of Buyer in accordance with the terms and conditions of the servicing agreement in effect for each such Servicer, provided that each such servicing agreement shall have been approved in writing by Buyer in its commercially reasonable discretion, exercised in good faith (each such servicing agreement or subservicing agreement that has been approved by Buyer (or, if applicable, Buyer’s assigns), a “Servicing Agreement” and, collectively, the “Servicing Agreements”); and provided, further, that any such Servicer shall have entered into a Servicer Notice and Agreement substantially in the form of Exhibit IX attached hereto (a “Servicer Notice and Agreement”) acknowledging Buyer’s interests in the related Purchased Loans and its rights to sell such Purchased Loans on a servicing-released basis and to terminate the term of such Servicing Rights with respect to any Purchased Loans from and after an Event of Default; provided, however, that Midland Loan Services, as the initial Servicer, and as a party to the Initial Servicing Agreement, shall not be required to enter into a Servicer Notice and Agreement. Master Seller shall cause the Purchased Loans to be serviced in accordance with Accepted Servicing Practices approved by Buyer in its reasonable discretion and practiced by other prudent mortgage lenders with respect to mortgage loans similar to the Purchased Loans.

(b)    Master Seller, on behalf of itself and each Series Seller, agrees that Buyer is the owner of all servicing records, including but not limited to Seller’s rights in and to any and all Servicing Agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of Purchased Loans (collectively, the “Servicing Records”) so long as the Purchased Loans are subject to this Agreement. Master Seller, on behalf of itself and each Series Seller, grants Buyer a security interest in all of Seller’s interest (if any) in servicing fees and rights relating to the Purchased Loans and all Servicing Records to secure the obligation of Seller or its designee to service in conformity with this Section 28 and any other obligation of Seller to

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Buyer. Seller covenants to safeguard such Servicing Records (if any are in Seller’s possession) and to deliver them promptly to Buyer or its designee (including the Custodian) upon the occurrence and during the continuance of an Event of Default.

(c)    Upon the occurrence and during the continuance of an Event of Default, Buyer may, in its sole and absolute discretion, subject to Section 13 and any terms in the applicable Servicing Agreements approved by Buyer (i) in the case of a Facility Event of Default, sell its rights to any or all of the Purchased Loans (or in the case of a Transaction Event of Default, sell its rights to the affected Purchased Loan(s)) on a servicing released basis or (ii) in the case of a Facility Event of Default, terminate any Servicer or sub-servicer of any or all of the Purchased Loans (or in the case of a Transaction Event of Default, terminate the Servicer and sub-servicer, if any, for the affected Purchased Loan(s)), with or without cause, in each case without payment of any termination fee. Seller shall cause each Servicer to cooperate with Buyer in effecting such termination and transferring all authority to service such Purchased Loans to the successor servicer, including requiring such Servicer to (i) promptly transfer all data in its possession relating to the applicable Purchased Loans to the successor servicer in such electronic format as the successor servicer may reasonably request, (ii) promptly transfer to the successor servicer, Buyer or Buyer’s designee, the Purchased Loan File and all other files, records, correspondence and documents in its possession relating to the applicable Purchased Loans and (iii) use commercially reasonable efforts to cooperate and coordinate with the successor servicer and/or Buyer to comply with any applicable so-called “goodbye” letter requirements or other applicable requirements of the Real Estate Settlement Procedures Act or other applicable legal or regulatory requirement associated with the transfer of the servicing of the applicable Purchased Loans. Seller agrees that if either Seller or any such Servicer fails to cooperate with Buyer or any successor servicer in effecting the termination of such Servicer as servicer of any Purchased Loan or the transfer of all authority to service such Purchased Loan to such successor servicer in accordance with the terms hereof and the applicable Servicing Agreement, Buyer shall be entitled to injunctive relief.

(d)    If Servicer is an Affiliate of Seller or Sponsor, the payment of servicing fees shall be subordinate to payment of amounts outstanding under any Transaction and this Agreement.

29.    TAXES

(a)    For the avoidance of doubt, for purposes of this Section 29, the term “applicable law” includes FATCA.

(b)    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 (as determined in the good faith discretion of the applicable withholding agent) 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 by Seller 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 Section 29) Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made.

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(c)    Seller shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(d)    Seller shall indemnify Buyer, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under Section 29) 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 as to the amount of such payment or liability delivered to Seller by Buyer shall be conclusive absent manifest error.

(e)    As soon as practicable after any payment of Taxes by Seller to a Governmental Authority pursuant to this Section 29, Seller shall deliver to Buyer 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.

(f)    (i) If Buyer 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 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, 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 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 Section 29(f)(ii)(A), Section 29(f)(ii)(B) and Section 29(f)(ii)(D) below) shall not be required if in Buyer’s reasonable judgment such completion, execution or submission would subject Buyer to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Buyer.

(ii)    Without limiting the generality of the foregoing:

(A)    if Buyer is a U.S. Person, it shall deliver to Seller on or prior to the date on which Buyer becomes a party under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed copies of IRS Form W-9 certifying that Buyer is exempt from U.S. federal backup withholding tax;

(B)    if Buyer is a Foreign Buyer, it shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by Seller) on or prior to the date on which Buyer becomes a party under this

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Agreement (and from time to time thereafter upon the reasonable request of Seller), whichever of the following is applicable:

(I)    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 any Transaction Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) 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 or IRS Form W-8BEN-E (as applicable) 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;

(II)    executed copies of IRS Form W-8ECI;

(III)    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 to the effect that such 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 copies of IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable); or

(IV)    to the extent a Foreign Buyer is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, 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 on behalf of each such direct and indirect partner;

(C)    if Buyer is a Foreign Buyer, it shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by Seller) on or prior to the date on which Buyer becomes a under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed copies 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

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(D)    if a payment made to Buyer under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if Buyer 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 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 has complied with Buyer’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.

Buyer agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification, provide such successor form, or promptly notify the Seller in writing of its legal inability to do so.

(g)    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 29 (including by the payment of additional amounts pursuant to this Section 29), 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 29 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 29(g) (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 29(g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 29(g) 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 Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 29(g) 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.

(h)    Each party’s obligations under this Section 29 shall survive any assignment of rights by, or the replacement of the Buyer, the termination of this Agreement and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

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

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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)    This Agreement 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 electronic transmission (including a pdf e-mail transmission) of an executed counterpart of a signature page to this Agreement or any other Transaction Document shall be effective as delivery of an original executed counterpart of such Transaction Document.

(c)    The headings in this Agreement are for convenience of reference only and shall not affect the interpretation or construction of this Agreement.

(d)    Without limiting the rights and remedies of Buyer under this Agreement or the other Transaction Documents, Seller shall pay Buyer’s actual out-of-pocket costs and expenses, including reasonable fees and expenses of accountants, attorneys, underwriters, consultants and advisors, incurred in connection with the preparation, negotiation, execution and consummation of and any amendment, supplement or modification to, this Agreement and/or the other Transaction Documents and the Transactions thereunder. Seller agrees to pay Buyer on demand all actual out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) (i) reasonably incurred in connection with the consummation and administration of the transactions contemplated hereby and (ii) of any subsequent enforcement of any of the provisions of this Agreement and/or the other Transaction Documents, 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 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 on demand all actual out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred in connection with the maintenance of the Cash Management Account. 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 together with the Transaction Documents contain a final and complete integration of all prior expressions by the parties with respect to the subject matter hereof and thereof and shall constitute the entire agreement among the parties with respect to such subject matter, superseding all prior oral or written understandings.

(g)    The parties understand that 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.

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(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)    Buyer and Seller hereby agree that neither party shall assert any claims against the other or against any Affiliate of the other for special, indirect, consequential or punitive damages under this Agreement, any Transaction Document or any Transaction, all such damages and claims being hereby waived.

(j)    From and after the date hereof, the Existing Repurchase Agreement is hereby amended, restated and superseded in its entirety by this Agreement. The parties hereto acknowledge and agree that the liens and security interests granted under the Existing Repurchase Agreement are, in each case, continuing in full force and effect and, upon the amendment and restatement of the Existing Repurchase Agreement, such liens and security interests secure and continue to secure the payment of the Repurchase Obligations.

[NO FURTHER TEXT ON THIS PAGE]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first written above.

MASTER SELLER:
PARLEX 15 FINCO, LLC,       a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

[Signatures Continue on Following Page]

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Buyer:
DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH
By:	/s/ Dean Aotani
Name:	Dean Aotani
Title:	Managing Director
By:	/s/ R. Christoper Jones
Name:	R. Christoper Jones
Title:	Director

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EX-10.8

Exhibit 10.8

AMENDMENT NO. 1 TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND GUARANTY

AMENDMENT NO. 1 TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND GUARANTY, dated as of March 24, 2017 (this “Amendment”), by and among PARLEX 15 FINCO, LLC, a Delaware limited liability company, (“Master Seller”), on behalf of itself and each Series Seller, BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation (“Guarantor”) and DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, a branch of a foreign banking institution (“Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).

RECITALS

WHEREAS, Master Seller and Buyer are parties to that certain Amended and Restated Master Repurchase Agreement, dated as of February 9, 2017 which amended and restated that certain Master Repurchase Agreement, dated as of August 2, 2016, by and between Master Seller and Buyer (as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”);

WHEREAS, in connection with the Repurchase Agreement, Guarantor executed and delivered to Buyer that certain Guaranty, dated as of August 2, 2016 (as amended, the “Guaranty”);

WHEREAS, Master Seller and Buyer have agreed to further amend certain provisions of the Repurchase Agreement and the Guaranty in the manner set forth herein, and Guarantor hereby agrees to make the acknowledgements set forth herein.

Therefore, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Master Seller, Buyer and Guarantor hereby agree as follows:

SECTION 1.    Repurchase Agreement Amendments. Master Seller and Buyer agree as follows with respect to the Repurchase Agreement:

(a)    Article 2(a) of the Repurchase Agreement is hereby amended by inserting the following new definition in correct alphabetical order:

“Extended Purchased Loan Maturity Date” shall mean, for any Purchased Loan, the date(s) set forth in the Confirmation for the related Transaction to which the maturity date of such Purchased Loan may be extended pursuant to the Purchased Loan Documents.

(b)    The definition of “Maximum Amount,” as set forth in Article 2(a) of the Repurchase Agreement is hereby amended by replacing the dollar figure “$252,714,876.29” set forth therein with the dollar figure “$500,000,000.00.”; and

(c)    The proviso at the end of the first sentence of Section 3(p) of the Repurchase Agreement is hereby amended and restated in its entirety to read as follows:

“; provided, that (i) with respect to the 640 Broadway Eligible Loan, if the maturity date of the 640 Broadway Eligible Loan has been extended to January 9, 2022 pursuant to the terms of the related Purchased Loan Documents and subject to the terms of this Agreement, then the Second Extended Repurchase Date shall be, solely with respect to the 640 Broadway Eligible Loan, January 9, 2022 and (ii) with respect to any other Purchased Loan (other than the Watchtower A-Note Eligible Loan and 640 Broadway Eligible Loan) if the maturity date of such Purchased Loan has been extended to the Extended Purchased Loan Maturity Date for such Purchased Loan as set forth on the related Confirmation therefor pursuant to the terms of the related Purchased Loan Documents and subject to the terms of this Agreement, then the Second Extended Repurchase Date shall be, solely with respect to such Purchased Loan, such Extended Purchased Loan Maturity Date.”

SECTION 2.    Guaranty Amendments. Guarantor and Buyer agree as follows with respect to the Guaranty:

(a)    The first sentence of Section 20 of the Guaranty is hereby amended and restated in its entirety to read as follows: “This Guaranty, as amended from time to time by agreement between Guarantor and Buyer, contains the entire agreement among the parties with respect to the matters set forth in this Guaranty”; and

(b)    Annex II of the Guaranty is hereby deleted in its entirety.

SECTION 3.    Conditions Precedent. This Amendment and its provisions shall become effective on the date hereof (the “Amendment Effective Date”) provided that this Amendment is duly executed and delivered by a duly authorized officer of each of Master Seller, Buyer and Guarantor.

SECTION 4.    Representations, Warranties and Covenants. Each of Seller and Guarantor hereby represents and warrants to Buyer, as of the date hereof, that (i) it is in full compliance with all of the terms and provisions set forth in each Transaction Document to which it is a party on its part to be observed or performed, and (ii) no Default or Event of Default has occurred or is continuing. Each of Seller and Guarantor hereby confirms and reaffirms its representations, warranties and covenants contained in each Transaction Document to which it is a party.

SECTION 5.    Acknowledgments of Master Seller. Master Seller on behalf of itself and each Series Seller hereby acknowledges that Buyer is in compliance with its undertakings and obligations under the Repurchase Agreement and the other Transaction Documents.

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SECTION 6.    Acknowledgments of Guarantor. Guarantor hereby acknowledges the execution and delivery of this Amendment by Master Seller and Buyer and agrees that it continues to be bound by the Guaranty notwithstanding the execution and delivery of this Amendment and the impact of the changes set forth herein.

SECTION 7.    Limited Effect. Except as expressly amended and modified by this Amendment, the Repurchase Agreement, the Guaranty and each of the other Transaction Documents shall continue to be, and shall remain, in full force and effect in accordance with their respective terms; provided, however, that upon the execution of this Amendment, each (x) reference therein and herein to the “Transaction Documents” shall be deemed to include, in any event, this Amendment, (y) each reference to the “Repurchase Agreement” or the “Guaranty” in any of the Transaction Documents shall be deemed to be a reference to the Repurchase Agreement or the Guaranty, as applicable, as amended hereby, and (z) each reference in the Repurchase Agreement or the Guaranty, as applicable, to “this Agreement”, this “Repurchase Agreement”, this “Guaranty”, “hereof”, “herein” or words of similar effect in referring to the Repurchase Agreement shall be deemed to be references to the Repurchase Agreement or the Guaranty, as applicable, as amended by this Amendment.

SECTION 8.    No Novation, Effect of Agreement. The parties hereto have entered into this Amendment solely to amend the terms of the Repurchase Agreement and the Guaranty and do not intend this Amendment or the transactions contemplated hereby to be, and this Amendment and the transactions contemplated hereby shall not be construed to be, a novation of any of the obligations owning by Seller, Guarantor or any of their respective Affiliates (the “Repurchase Parties”) under or in connection with the Repurchase Agreement, the Guaranty or any of the other Transaction Documents. It is the intention of each of the parties hereto that (i) the perfection and priority of all security interests securing the payment of the Repurchase Obligations of the Repurchase Parties under the Repurchase Agreement are preserved, (ii) the liens and security interests granted under the Repurchase Agreement continue in full force and effect, and (iii) any reference to the Repurchase Agreement or the Guaranty, as applicable, in any such Transaction Document shall be deemed to also reference the Repurchase Agreement or the Guaranty, as applicable, as amended by this Amendment.

SECTION 9.    Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of a manually executed original counterpart thereof.

SECTION 10.    Expenses. Seller agrees to pay and reimburse Buyer for all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with the preparation, execution and delivery of this Amendment in accordance with the Repurchase Agreement.

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SECTION 11.    GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AMENDMENT, 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.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

MASTER SELLER:
PARLEX 15 FINCO, LLC,       a Delaware limited liability company
By:	/s/ Douglas Armer
Name:	Douglas Armer
Title:	Managing Director, Head of Capital Markets and Treasurer
GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC.,       a Maryland corporation
By:		/s/ Douglas Armer
Name:		Douglas Armer
Title:		Managing Director, Head of Capital Markets and Treasurer

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BUYER:
DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH
By:	/s/ Dean Astoni
Name:	Dean Astoni
Title:	Managing Director

By:	/s/ JT Coe
Name:	JT Coe
Title:	Managing Director

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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 the 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: April 25, 2017

/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, Anthony F. Marone, Jr., 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 the 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: April 25, 2017

/s/ Anthony F. Marone, Jr.

Anthony F. Marone, Jr.

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 March 31, 2017 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

April 25, 2017

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 March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony F. Marone, Jr., 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/ Anthony F. Marone, Jr.

Anthony F. Marone, Jr.

Chief Financial Officer

April 25, 2017

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-K for the fiscal year ended December 31, 2016 with the Securities and Exchange Commission (the “SEC”), NCR Corporation (“NCR”) which may be considered an affiliate of The Blackstone Group L.P. (“Blackstone”), and, therefore, an affiliate of BXMT, filed the disclosure reproduced below with respect to such period, in accordance with Section 13(r) of the Securities Exchange Act of 1934, as amended. As of the date BXMT filed its Form 10-Q for the quarter ended March 31, 2017 with the SEC, neither Blackstone nor NCR had filed their respective Form 10-Qs for such period. Therefore, the disclosures reproduced below do not include information for the quarter ended March 31, 2017. BXMT did not independently verify or participate in the preparation of the disclosure reproduced below.

NCR included the following disclosure in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016:

“Disclosure Pursuant to Section 13(r)(1)(D)(ii) of the Securities Exchange Act. Pursuant to Section 13(r)(1)(D)(ii) of the Securities Exchange Act of 1934, as amended, we note that, during the period from January 1, 2016 through April 30, 2016, we continued to maintain a bank account and guarantees at the Commercial Bank of Syria (“CBS”), which was designated as a Specially Designated National pursuant to Executive Order 13382 (“EO 13382”) on August 10, 2011. This bank account and the guarantees at CBS were maintained in the normal course of business prior to the listing of CBS pursuant to EO 13382. We note that the last known account balance was approximately $3,468 at April 30, 2016. The bank account did not generate interest from January 1, 2016 through April 30, 2016, and the guarantees did not generate any revenue or profits for the Company. Pursuant to a license granted to the Company by OFAC on January 3, 2013, and subsequent licenses granted on April 29, 2013, July 12, 2013, February 28, 2014, November 12, 2014, and October 24, 2015, the Company had been engaged in winding down its past operations in Syria. The Company’s last such license expired on April 30, 2016. In addition, the Company’s application to renew its license to transact business with CBS, which was submitted to OFAC on May 18, 2015, was not acted upon prior to the expiration of the Company’s last such license. As a result, and in connection with the license expiration, the Company abandoned its remaining property in Syria, which, including the CBS account, was commercially insignificant, and ended the employment of its final two employees in Syria, who had remained employed by the Company to assist with the execution of the Company’s wind-down activities pursuant to authority granted by the OFAC licenses. The Company does not intend to engage in any further business activities with CBS.”

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 18, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
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	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		94,827,579

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 64,275	$ 75,567
Loans receivable, net	8,721,768	8,692,978
Other assets	168,616	44,070
Total Assets	8,954,659	8,812,615
Liabilities and Equity
Secured debt agreements, net	5,760,191	5,716,354
Loan participations sold, net	354,131	348,077
Convertible notes, net	167,475	166,762
Other liabilities	176,880	87,819
Total Liabilities	6,458,677	6,319,012
Commitments and contingencies
Equity
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 94,818,348 and 94,540,263 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	948	945
Additional paid-in capital	3,096,006	3,089,997
Accumulated other comprehensive loss	(52,357)	(56,202)
Accumulated deficit	(548,615)	(541,137)
Total Equity	2,495,982	2,493,603
Total Liabilities and Equity	$ 8,954,659	$ 8,812,615

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value in dollars per share	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	94,818,348	94,540,263
Common stock, shares outstanding	94,818,348	94,540,263

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income from loans and other investments
Interest and related income	$ 118,517	$ 123,025
Less: Interest and related expenses	46,674	45,381
Income from loans and other investments, net	71,843	77,644
Other expenses
Management and incentive fees	12,921	13,613
General and administrative expenses	7,428	6,795
Total other expenses	20,349	20,408
Gain on investments at fair value		66
Income from equity investment in unconsolidated subsidiary		138
Income before income taxes	51,494	57,440
Income tax provision	89	241
Net income	51,405	57,199
Net income attributable to non-controlling interests		(152)
Net income attributable to Blackstone Mortgage Trust, Inc.	$ 51,405	$ 57,047
Net income per share of common stock basic and diluted	$ 0.54	$ 0.61
Weighted-average shares of common stock outstanding, basic and diluted	94,993,386	94,067,769
Dividends declared per share of common stock	$ 0.62	$ 0.62

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Net income	$ 51,405	$ 57,199
Other comprehensive income
Unrealized gain on foreign currency remeasurement	7,770	5,979
Realized and unrealized loss on derivative financial instruments	(3,925)	(6,666)
Other comprehensive income (loss)	3,845	(687)
Comprehensive income	55,250	56,512
Comprehensive income attributable to non-controlling interests		(152)
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$ 55,250	$ 56,360

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Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands	Total	Class A Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Stockholders' Equity [Member]	Non-controlling Interests [Member]
Balance at Dec. 31, 2015	$ 2,505,731	$ 937	$ 3,070,200	$ (32,758)	$ (545,791)	$ 2,492,588	$ 13,143
Shares of class A common stock issued, net	2	2				2
Restricted class A common stock earned	4,593		4,593			4,593
Dividends reinvested	6		88		(82)	6
Deferred directors' compensation	94		94			94
Other comprehensive income (loss)	(687)			(687)		(687)
Net income	57,199				57,047	57,047	152
Dividends declared on common stock	(58,226)				(58,226)	(58,226)
Distributions to non-controlling interests	(6,879)						(6,879)
Balance at Mar. 31, 2016	2,501,833	939	3,074,975	(33,445)	(547,052)	2,495,417	$ 6,416
Balance at Dec. 31, 2016	2,493,603	945	3,089,997	(56,202)	(541,137)	2,493,603
Shares of class A common stock issued, net	3	3				3
Restricted class A common stock earned	5,810		5,810			5,810
Dividends reinvested	9		105		(96)	9
Deferred directors' compensation	94		94			94
Other comprehensive income (loss)	3,845			3,845		3,845
Net income	51,405				51,405	51,405
Dividends declared on common stock	(58,787)				(58,787)	(58,787)
Balance at Mar. 31, 2017	$ 2,495,982	$ 948	$ 3,096,006	$ (52,357)	$ (548,615)	$ 2,495,982

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net income	$ 51,405	$ 57,199
Adjustments to reconcile net income to net cash provided by operating activities
Non-cash compensation expense	5,907	4,852
Amortization of deferred fees on loans	(8,808)	(8,954)
Amortization of deferred financing costs and premiums/ discount on debt obligations	4,535	4,053
Income from equity investment in unconsolidated subsidiary		(138)
Distributions of income from unconsolidated subsidiary		6,837
Gain on investments at fair value		(66)
Changes in assets and liabilities, net
Other assets	1,699	4,254
Other liabilities	2,636	(2,256)
Net cash provided by operating activities	57,374	65,781
Cash flows from investing activities
Origination and fundings of loans receivable	(702,353)	(586,066)
Principal collections and sales proceeds from loans receivable and other assets	567,321	420,513
Origination and exit fees received on loans receivable	12,429	10,424
Receipts under derivative financial instruments	1,903
Payments under derivative financial instruments	(3,752)
Change in restricted cash		9,122
Net cash used in investing activities	(124,452)	(146,007)
Cash flows from financing activities
Borrowings under secured debt agreements	789,865	629,897
Repayments under secured debt agreements	(672,161)	(466,536)
Repayment of loan participations		(9,600)
Payment of deferred financing costs	(3,895)	(5,260)
Receipts under derivative financial instruments		11,478
Payments under derivative financial instruments		(3,260)
Distributions to non-controlling interests		(6,879)
Net proceeds from issuance of class A common stock	8	6
Dividends paid on class A common stock	(58,615)	(58,097)
Net cash provided by financing activities	55,202	91,749
Net (decrease) increase in cash and cash equivalents	(11,876)	11,523
Cash and cash equivalents at beginning of period	75,567	96,450
Effects of currency translation on cash and cash equivalents	584	2,649
Cash and cash equivalents at end of period	64,275	110,622
Supplemental disclosure of cash flows information
Payments of interest	(39,287)	(38,121)
Payments of income taxes	(50)	(151)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	(58,787)	(58,226)
Participations sold, net		(9,600)
Loan principal payments held by servicer, net	$ 42,715	$ 75,378

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Organization

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

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.

Blackstone Mortgage Trust is a real estate finance company that originates and purchases senior loans collateralized by properties in North America and Europe. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust, or REIT, 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 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 an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, 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 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the Securities and Exchange Commission, or the SEC.

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. 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 affect 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.

As of both March 31, 2017 and December 31, 2016, we did not consolidate any VIEs.

Use of Estimates

The preparation of consolidated 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 as of 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 portfolio is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred until the loan is advanced and is then recorded 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. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents.

Loans Receivable and Provision for Loan Losses

We originate and purchase 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 to us pursuant 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 of these loans, which are collateral dependent, is measured by comparing the estimated 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. 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 risk factors of each loan, and assigns a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 -	Very Low Risk
2 -	Low Risk
3 -	Medium Risk
4 -	High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.
5 -	Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

During the second quarter of 2015, we acquired a portfolio of loans from General Electric Capital Corporation and certain of its affiliates, or the GE portfolio, for a total purchase price of $4.7 billion. We allocated the aggregate purchase price between each loan based on its fair value relative to the overall portfolio, which allocation resulted in purchase discounts or premiums determined on an asset-by-asset basis. Each loan accretes from its allocated purchase price to its expected collection value over the life of the loan, consistent with the other loans in our portfolio.

Equity Investment in Unconsolidated Subsidiary

Our carried interest in CT Opportunity Partners I, LP, or CTOPI, was accounted for using the equity method. CTOPI’s assets and liabilities were not consolidated into our financial statements due to our determination that (i) it was not a VIE and (ii) the other investors in CTOPI had sufficient rights to preclude consolidation by us. As such, we reported our allocable percentage of the net assets of CTOPI on our consolidated balance sheets. The investment was fully realized as of December 31, 2016 and we no longer have any equity investments in unconsolidated subsidiaries in our consolidated financial statements.

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. Changes in the fair value of the effective portion of our hedges are reflected in accumulated other comprehensive income (loss) on our consolidated financial statements. Changes in the fair value of the ineffective portion of our hedges are included in net income. Amounts are reclassified out of accumulated other comprehensive income (loss) and into net income when the hedged item is sold, substantially liquidated, or de-designated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its value are included in net income.

Secured Debt Agreements

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

Senior Loan Participations

In certain instances, we finance our loans through the non-recourse syndication of a senior loan interest to a third-party. Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining subordinate loan and not the non-consolidated senior interest we sold.

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic, or ASC 820, 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.

ASC 820 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 that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee composed of members of senior management of our Manager, including our Chief Executive Officer, Chief Financial Officer, and other senior officers.

Certain of our other assets are reported 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 that are recorded at fair value are discussed further in Note 14. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may 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.

We are also required by GAAP to disclose fair value information about financial instruments, that are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

• Loans receivable, net: The fair values of these loans were estimated by our Manager based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount 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.

• Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

• Secured debt agreements, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

• Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

• Convertible notes, net: The convertible notes are actively traded and their fair values were obtained using quoted market prices.

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. 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. Refer to Note 12 for additional information.

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain individuals employed by an affiliate of our Manager that vest over the life of the awards, as well as deferred stock units issued to certain members of our Board of Directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 13 for additional information.

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units. Refer to Note 10 for additional discussion of earnings per share.

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income.

Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” or ASU 2016-18. ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and is to be applied retrospectively. Upon the adoption of the new guidance, we will change the presentation of restricted cash in our statement of cash flows to conform to the new requirements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 broadly amends the accounting guidance for revenue recognition. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2017, and is to be applied retrospectively. We do not anticipate that the adoption of ASU 2014-09 will have a material impact on our consolidated financial statements.

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Loans Receivable, Net

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Loans Receivable, Net

3. LOANS RECEIVABLE, NET

The following table details overall statistics for our loans receivable portfolio ($ in thousands):

	March 31, 2017			December 31, 2016
Number of loans		103			107
Principal balance	$	8,759,696		$	8,727,218
Net book value	$	8,721,768		$	8,692,978
Unfunded loan commitments(1)	$	1,149,842		$	882,472
Weighted-average cash coupon(2)		5.15	%		5.01	%
Weighted-average all-in yield(2)		5.57	%		5.36	%
Weighted-average maximum maturity (years)(3)		3.3			3.2

(1)	Unfunded commitments will primarily be funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments will be funded over the term of each loan, subject in certain cases to an expiration date.
(2)	As of March 31, 2017, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans by principal balance indexed to USD LIBOR. In addition, $217.8 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.22%, as of March 31, 2017. As of December 31, 2016, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans indexed to USD LIBOR. In addition, $216.3 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.27%, as of December 31, 2016. In addition to cash coupon, all-in yield includes the amortization of deferred origination fees, loan origination costs, purchase discounts, and accrual of both extension and exit fees. Cash coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.
(3)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of March 31, 2017, 59% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 41% were open to repayment by the borrower without penalty. As of December 31, 2016, 64% of our loans were subject to yield maintenance or other prepayment restrictions and 36% were open to repayment by the borrower without penalty.

Activity relating to our loans receivable portfolio was as follows ($ in thousands):

	Principal Balance			Deferred Fees / Other Items(1)			Net Book Value
December 31, 2016	$	8,727,218		$	(34,240)		$	8,692,978
Loan fundings		702,353			—			702,353
Loan repayments		(695,758	)		—			(695,758	)
Unrealized gain (loss) on foreign currency translation		25,883			(67	)		25,816
Deferred fees and other items(1)		—			(12,429	)		(12,429	)
Amortization of fees and other items(1)		—			8,808			8,808
March 31, 2017	$	8,759,696		$	(37,928	)	$	8,721,768

(1)   Other items primarily consist of purchase discounts or premiums, exit fees, and deferred origination expenses.

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

March 31, 2017
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
Office	54	$	4,808,211	$	4,833,513	50%
Hotel	16		2,104,014		2,175,505	22
Retail	7		524,318		944,818	10
Multifamily	8		515,170		517,376	5
Manufactured housing	9		295,559		295,359	3
Condominium	1		49,276		226,478	2
Other	8		425,220		740,328	8
	103	$	8,721,768	$	9,733,377	100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
United States
Northeast	24	$	2,493,379	$	2,510,088	26%
West	23		1,998,995		2,185,476	22
Southeast	20		1,453,309		1,877,334	19
Midwest	7		702,238		704,199	7
Southwest	7		318,348		317,136	3
Northwest	2		215,617		218,088	2
Subtotal	83		7,181,886		7,812,321	79
International
United Kingdom	9		983,679		1,317,265	14
Canada	8		494,223		490,326	5
Germany	1		11,271		62,510	1
Netherlands	2		50,709		50,955	1
Subtotal	20		1,539,882		1,921,056	21
Total	103	$	8,721,768	$	9,733,377	100%

(1)   In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of March 31, 2017.

December 31, 2016
Property Type	Number of Loans		Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
Office		55	$	4,800,609	$	4,889,456		50%
Hotel		18		1,889,732		1,957,334		20
Retail		9		769,813		1,173,592		12
Multifamily		8		521,097		523,529		5
Manufactured housing		9		296,290		296,252		3
Condominium		2		66,070		258,360		3
Other		6		349,367		658,211		7
		107	$	8,692,978	$	9,756,734		100%
Geographic Location	Number of Loans		Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
United States
Northeast		26	$	2,548,257	$	2,562,149		26%
Southeast		21		1,492,530		1,899,748		19
West		22		1,628,811		1,828,667		19
Midwest		7		695,713		698,093		7
Southwest		8		380,639		379,766		4
Northwest		3		227,747		293,564		3
Subtotal		87		6,973,697		7,661,987		78
International
United Kingdom		9		977,136		1,305,816		13
Canada		8		487,835		483,923		5
Germany		1		204,241		254,644		3
Netherlands		2		50,069		50,364		1
Subtotal		20		1,719,281		2,094,747		22
Total		107	$	8,692,978	$	9,756,734		100%

(1)   In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of December 31, 2016.

Loan Risk Ratings

As further described in Note 2, our Manager evaluates our loan portfolio on a quarterly basis. In conjunction with our quarterly loan portfolio review, our Manager assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2.

The following table allocates the principal balance and net book value of our loans receivable based on our internal risk ratings ($ in thousands):

March 31, 2017							December 31, 2016
Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)		Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)
	1	6	$	303,849	$	304,170		1	8	$	361,100	$	361,574
	2	47		3,670,002		3,679,119		2	52		4,011,992		4,083,678
	3	49		4,727,107		5,729,339		3	46		4,299,026		5,290,668
	4	1		20,810		20,749		4	1		20,860		20,814
	5	—		—		—		5	—		—		—
		103	$	8,721,768	$	9,733,377			107	$	8,692,978	$	9,756,734

(1) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of both March 31, 2017 and December 31, 2016.

The weighted-average risk rating of our total loan exposure was 2.6 and 2.5 as of March 31, 2017 and December 31, 2016, respectively. The increase in weighted-average risk rating was primarily driven by repayments of loans with lower risk ratings, and not rating downgrades in the existing portfolio.

We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of March 31, 2017 or December 31, 2016.

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Equity Investment in Unconsolidated Subsidiary

3 Months Ended

Mar. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Equity Investment in Unconsolidated Subsidiary

4. EQUITY INVESTMENT IN UNCONSOLIDATED SUBSIDIARY

Our equity investment in unconsolidated subsidiary consisted solely of our carried interest in CTOPI, a fund sponsored and managed by an affiliate of our Manager. The investment was fully realized as of December 31, 2016 and we no longer have any investments in unconsolidated subsidiaries on our consolidated financial statements.

Our carried interest in CTOPI entitled us to earn promote revenue 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 recognized $138,000 of promote income from CTOPI in respect of our carried interest and recorded such amounts as income in our consolidated statements of operations during the three months ended March 31, 2016.

CTOPI Incentive Management Fee Grants

In January 2011, we created a management compensation pool for employees equal to 45% of the CTOPI promote distributions received by us. During the three months ended March 31, 2016, we recognized $170,000 of expenses under the CTOPI incentive plan. Such amounts were recognized as a component of general and administrative expenses in our consolidated statements of operations.

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Other Assets and Liabilities

3 Months Ended

Mar. 31, 2017

Text Block [Abstract]

Other Assets and Liabilities

5. OTHER ASSETS AND LIABILITIES

The following table details the components of our other assets ($ in thousands):

	March 31,		December 31,
	2017		2016
Loan portfolio payments held by servicer(1)	$	135,516	$	6,294
Accrued interest receivable		30,962		32,871
Derivative assets		1,424		4,086
Prepaid expenses		700		803
Prepaid taxes		14		16
Total	$	168,616	$	44,070

(1)   Represents loan principal and interest payments held by our third-party loan servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle.

The following table details the components of our other liabilities ($ in thousands):

	March 31,		December 31,
	2017		2016
Secured debt repayments pending servicer remittance(1)	$	91,763	$	5,372
Accrued dividends payable		58,787		58,615
Accrued management and incentive fees payable		12,921		12,798
Accrued interest payable		11,673		9,049
Accounts payable and other liabilities		1,736		1,985
Total	$	176,880	$	87,819

(1)   Represents pending transfers from our third-party loan servicer that were remitted to our banking counterparties during the subsequent remittance cycle.

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Secured Debt Agreements, Net

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Secured Debt Agreements, Net

6. SECURED DEBT AGREEMENTS, NET

Our secured debt agreements include credit facilities, the GE portfolio acquisition facility, asset-specific financings, and a revolving credit agreement. The following table details our secured debt agreements ($ in thousands):

	Secured Debt Agreements
	Borrowings Outstanding
	March 31, 2017			December 31, 2016
Credit facilities	$	3,958,064		$	3,572,837
GE portfolio acquisition facility		1,250,524			1,479,582
Asset-specific financings		567,577			679,207
Revolving credit agreement		—			—
Total secured debt agreements	$	5,776,165		$	5,731,626
Deferred financing costs(1)		(15,974	)		(15,272	)
Net book value of secured debt	$	5,760,191		$	5,716,354

(1)   Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

Credit Facilities

During the three months ended March 31, 2017, we increased the maximum facility size of two of our credit facilities, providing an additional £250.0 million and €250.0 million of credit capacity, respectively, and we converted one of our asset-specific financings to a $500.0 million credit facility. The following tables detail our credit facilities ($ in thousands):

	March 31, 2017
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,895,248	$	1,468,184	$	1,238,872	$	229,312
MetLife		1,000,000		1,104,478		866,114		866,114		—
Bank of America		750,000		813,305		641,066		641,066		—
Citibank(4)		766,300		509,582		393,933		295,777		98,156
Deutsche Bank		500,000		374,119		278,851		278,851		—
Morgan Stanley(5)		627,500		329,767		260,623		220,969		39,654
Société Générale(6)		426,080		281,623		220,915		214,678		6,237
JP Morgan(7)		500,000		359,098		277,914		201,737		76,177
	$	6,569,880	$	5,667,220	$	4,407,600	$	3,958,064	$	449,536

	December 31, 2016
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,718,874	$	1,339,942	$	1,107,733	$	232,209
MetLife		1,000,000		1,106,017		862,454		862,454		—
Bank of America		750,000		794,881		617,694		617,694		—
JP Morgan(7)		500,000		550,560		420,414		316,219		104,195
Morgan Stanley(5)		308,500		344,056		272,221		231,930		40,291
Citibank(4)		500,000		508,989		394,677		229,629		165,048
Société Générale(6)		420,680		274,351		207,178		207,178		—
	$	5,479,180	$	5,297,728	$	4,114,580	$	3,572,837	$	541,743

(1)	Maximum facility size represents the largest amount of borrowings available under a given facility once sufficient collateral assets have been approved by the lender and pledged by us.
(2)	Represents the principal balance of the collateral assets.
(3)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(4)	As of March 31, 2017, the Citibank maximum facility size was composed of a general $500.0 million facility size denominated in U.S. Dollars plus a general €250.0 million ($266.3 million) facility size that contemplated British Pound Sterling and Euro borrowings. As of December 31, 2016, the maximum facility size was composed of a general $500.0 million facility.
(5)	As of March 31, 2017, the Morgan Stanley maximum facility size was composed of a £500.0 million facility size that was translated to $627.5 million. As of December 31, 2016, the maximum facility size was composed of a £250.0 million facility size that was translated to $308.5 million. Borrowings denominated in British Pound Sterling and Euro are contemplated under this facility.
(6)	As of March 31, 2017 and December 31, 2016, the Société Générale maximum facility size was composed of a €400.0 million facility size that was translated to $426.1 million and $420.7 million, respectively. Borrowings denominated in U.S. Dollars, British Pound Sterling, and Euro are contemplated under this facility.
(7)	As of March 31, 2017 and December 31, 2016, the JP Morgan maximum facility size was composed of a general $500.0 million facility size, under which U.S. Dollars and British Pound Sterling borrowings are contemplated.

The weighted-average outstanding balance of our credit facilities was $3.5 billion for the three months ended March 31, 2017. As of March 31, 2017, we had aggregate borrowings of $4.0 billion outstanding under our credit facilities, with a weighted-average cash coupon of LIBOR plus 1.90% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.11% per annum, and a weighted-average advance rate of 78.9%. As of March 31, 2017, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

The weighted-average outstanding balance of our credit facilities was $2.9 billion for the three months ended December 31, 2016. As of December 31, 2016, we had aggregated borrowings of $3.6 billion outstanding under our credit facilities, with a weighted-average cash coupon of LIBOR plus 1.82% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.02% per annum, and a weighted-average advance rate of 79.1%. As of December 31, 2016, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

The following tables outline the key terms of our credit facilities as of March 31, 2017:

Lender	Currency	Guarantee(1)	Margin Call(2)	Term/Maturity
Wells Fargo	$	25%	Collateral marks only	Term matched(3)
MetLife	$	50%	Collateral marks only	April 22, 2022(4)
Bank of America	$	50%	Collateral marks only	May 21, 2021(5)
Citibank	$ / £/ €	25%	Collateral marks only	Term matched(3)
Deutsche Bank	$	25%	Collateral marks only	Term matched(3)
Morgan Stanley	£  / €	25%	Collateral marks only	March 1, 2020
Société Générale	$  /£/ €	25%	Collateral marks only	Term matched(3)
JP Morgan	$  / £	50%	Collateral marks only	January 7, 2019

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.
(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.
(3)	These credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.
(4)	Includes five one-year extension options which may be exercised at our sole discretion.
(5)	Includes two one-year extension options which may be exercised at our sole discretion.

Currency	Outstanding Borrowings		Potential Borrowings(1)		Index	Rate(2)	Advance Rate(3)
$		$3,639,921		$4,030,008	1-month USD LIBOR	L+1.88%	78.9%
€		€          —		€     38,269	3-month EURIBOR	n/a	77.8%
£		£   253,500		£   269,273	3-month GBP LIBOR	L+2.15%	79.0%
		$3,958,064		$4,407,600		L+1.90%	78.9%

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents weighted-average cash coupon based on borrowings outstanding.
(3)	Represents weighted-average advance rate based on the outstanding principal balance of the collateral assets pledged.

GE Portfolio Acquisition Facility

During the second quarter of 2015, concurrently with our acquisition of the GE portfolio, we entered into an agreement with Wells Fargo to provide us with secured financing for the acquired portfolio. As of March 31, 2017, this facility provided for $1.4 billion of financing, of which $1.3 billion was outstanding and an additional $171.7 million was available to finance future loan fundings in the GE portfolio. The GE portfolio acquisition facility is non-revolving and consists of a single master repurchase agreement providing for asset-specific borrowings for each collateral asset.

The asset-specific borrowings under the GE portfolio acquisition facility were advanced at a weighted-average rate of 80% of our purchase price of the collateral assets and are repaid pro rata from collateral asset repayment proceeds. The asset-specific borrowings are currency matched to the collateral assets and accrue interest at a rate equal to the sum of (i) the applicable base rate plus (ii) a margin of 1.75%, which will increase to 1.80% and 1.85% in year four and year five, respectively. As of March 31, 2017, those borrowings were denominated in U.S. Dollars, Canadian Dollars, and British Pounds Sterling. The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options. We guarantee obligations under the GE portfolio acquisition facility in an amount equal to the greater of (i) 25% of outstanding asset-specific borrowings, and (ii) $250.0 million. We had outstanding asset-specific borrowings of $1.3 billion and $1.5 billion under the GE portfolio acquisition facility as of March 31, 2017 and December 31, 2016, respectively.

Asset-Specific Financings

The following tables detail statistics for our asset-specific financings ($ in thousands):

	March 31, 2017
Lender	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term(3)
JP Morgan(4)
Collateral assets		1	$	286,887	$	285,955		L+3.88	%		n/a		Jan. 2020
Financing provided		1		233,679		233,413		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets		2		204,617		204,548		L+4.40	%		n/a		Nov. 2020
Financing provided		2		161,163		161,123		L+2.42	%		40,291		Nov. 2020
Bank of the Ozarks
Collateral assets		2		169,986		167,510		L+6.51	%		n/a		June 2020
Financing provided		2		128,969		128,045		L+3.83	%		—		June 2020
Wells Fargo
Collateral assets		1		62,523		62,302		L+6.05	%		n/a		Dec. 2019
Financing provided		1		43,766		43,609		L+3.14	%		8,753		Dec. 2019
Total
Collateral assets		6	$	724,013	$	720,315		L+4.83	%		n/a
Financing provided		6	$	567,577	$	566,190		L+2.58	%	$	165,883

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

	December 31, 2016
Lender	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term(3)
JP Morgan(4)
Collateral assets		1	$	284,012	$	282,818		L+3.88	%		n/a		Jan. 2020
Financing provided		1		233,679		233,626		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets		2		203,656		203,555		L+4.40	%		n/a		Nov. 2020
Financing provided		2		158,652		158,609		L+2.42	%		39,663		Nov. 2020
Deutsche Bank
Collateral assets		1		183,300		180,866		L+5.18	%		n/a		Aug. 2021
Financing provided		1		135,075		133,621		L+3.03	%		66,410		Aug. 2021
Bank of the Ozarks
Collateral assets		2		143,164		140,524		L+6.42	%		n/a		Apr. 2020
Financing provided		2		108,435		107,323		L+3.68	%		—		Apr. 2020
Wells Fargo
Collateral assets		1		61,951		61,654		L+6.05	%		n/a		Dec. 2019
Financing provided		1		43,366		43,154		L+2.97	%		8,673		Dec. 2019
Total
Collateral assets		7	$	876,083	$	869,417		L+4.84	%		n/a
Financing provided		7	$	679,207	$	676,333		L+2.60	%	$	231,585

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

The weighted-average outstanding balance of our asset-specific financings was $696.4 million for the three months ended March 31, 2017 and $606.9 million for the three months ended December 31, 2016.

Revolving Credit Agreement

During the second quarter of 2016, we entered into a $125.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to six months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The initial maturity date of the facility is April 4, 2018 and is subject to two one-year extension options, exercisable at our option.

During the three months ended March 31, 2017, we had no borrowings under the revolving credit agreement and we recorded interest expense of $240,000, including $126,000 of amortization of deferred fees and expenses.

During the three months ended December 31, 2016, the weighted-average outstanding borrowings under the revolving credit agreement were $35.3 million and we recorded interest expense of $506,000, including $128,000 of amortization of deferred fees and expenses. As of December 31, 2016 we had no outstanding borrowings under the agreement.

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $1.9 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to March 31, 2017; (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 83.33% of our total assets. As of March 31, 2017 and December 31, 2016, we were in compliance with these covenants.

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Loan Participations Sold, Net

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Loan Participations Sold, Net

7. LOAN PARTICIPATIONS SOLD, NET

The financing of a loan by the non-recourse sale of a senior interest in the loan through a participation agreement generally does not qualify as a sale under GAAP. Therefore, in the instance of such sales, we present the whole loan as an asset and the loan participation sold as a liability on our consolidated balance sheet until the loan is repaid. The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation. The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

The following tables detail statistics for our loan participations sold ($ in thousands):

	March 31, 2017
Loan Participations Sold	Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term
Total loan	1	$	426,700	$	423,575		L+4.48	%		n/a	Dec. 2019
Senior participation(3)(4)	1		355,583		354,131		L+2.72	%	$	30,120	Dec. 2019
	December 31, 2016
Loan Participations Sold	Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term
Total loan	1	$	419,560	$	416,233		L+4.48	%		n/a	Dec. 2019
Senior participation(3)(4)	1		349,633		348,077		L+2.72	%	$	29,616	Dec. 2019

(1)	Our floating rate loans and related liabilities were indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	Other than one instance where we entered into a related guarantee agreement for £24.0 million ($30.1 million and $29.6 million as of March 31, 2017 and December 31, 2016, respectively), our loan participations sold are non-recourse to us.
(3)	During the three months ended March 31, 2017 and December 31, 2016, we recorded $2.6 million and $2.9 million, respectively, of interest expense related to our loan participations sold, of which $2.5 million and $2.8 million was paid in cash.
(4)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $1.5 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively.

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Convertible Notes, Net

3 Months Ended

Mar. 31, 2017

Text Block [Abstract]

Convertible Notes, Net

8. CONVERTIBLE NOTES, NET

In November 2013, we issued $172.5 million of 5.25% convertible senior notes due on December 1, 2018, or Convertible Notes. The Convertible Notes’ issuance costs are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cost of the Convertible Notes is 5.87% per annum.

The Convertible Notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on August 31, 2018, at the applicable conversion rate in effect on the conversion date. Thereafter, the Convertible Notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. The Convertible Notes were not convertible as of March 31, 2017. The conversion rate was initially set to equal 34.8943 shares of class A common stock per $1,000 principal amount of Convertible Notes, which was equivalent to an initial conversion price of $28.66 per share of class A common stock, subject to adjustment upon the occurrence of certain events. As a result of exceeding the cumulative dividend threshold as defined in the Convertible Notes Supplemental Indenture, the conversion rate was adjusted on September 28, 2016 to 35.7236 shares of Class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $27.99 per share of class A common stock. We may not redeem the Convertible Notes prior to maturity. The last reported sale price of our Class A common stock of $30.96 on March 31, 2017 was greater than the per share conversion price of the Convertible Notes. We have the intent and ability to settle the Convertible Notes in cash and, as a result, the Convertible Notes did not have any impact on our diluted earnings per share.

Upon issuance of the Convertible Notes, we recorded a $9.1 million discount based on the implied value of the conversion option and an assumed effective interest rate of 6.50%, as well as $4.1 million of initial issuance costs. Including the amortization of this discount and the issuance costs, our total cost of the Convertible Notes is 7.16% per annum. During the three months ended March 31, 2017, we incurred total interest on our Convertible Notes of $3.0 million, of which $2.3 million related to cash coupon and $713,000 related to the amortization of discount and certain issuance costs. During the three months ended March 31, 2016, we incurred total interest on our Convertible Notes of $3.0 million, of which $2.3 million related to cash coupon and $670,000 related to the amortization of discount and certain issuance costs.

As of March 31, 2017, the Convertible Notes were carried on our consolidated balance sheet at $167.5 million, net of an unamortized discount of $4.8 million and deferred financing costs of $180,000. As of December 31, 2016, the Convertible Notes were carried on our consolidated balance sheet at $166.8 million, net of an unamortized discount of $5.5 million and deferred financing costs of $206,000. Accrued interest payable for the Convertible Notes was $3.0 million and $755,000 as of March 31, 2017 and December 31, 2016, respectively. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

9. DERIVATIVE FINANCIAL INSTRUMENTS

The sole objective of our use of derivative financial instruments is to minimize the risks and/or costs associated with our investments and/or financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815 – “Derivatives and Hedging.” Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks. For more information on the accounting for designated and non-designated hedges, refer to Note 2.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations.

Net Investment Hedges of Foreign Currency Risk

Certain of our international investments expose us to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional currency, the U.S. Dollar. We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. Dollar.

The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amount in thousands):

March 31, 2017				December 31, 2016
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Sell GBP Forward	1	£	141,900	Sell GBP Forward	2	£	141,900
Sell CAD Forward	1	C$	122,900	Sell CAD Forward	2	C$	122,900
				Sell EUR Forward	1	€	44,900

Cash Flow Hedges of Interest Rate Risk

Certain of our financing transactions expose us to a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate caps and swaps, and may also include interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk associated with our borrowings where there is potential for an index mismatch.

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

March 31, 2017
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps(1)	4	C$	108,271	1.0%	CDOR	2.2
Interest Rate Caps	19	$	633,903	2.0%	USD LIBOR	0.2
Interest Rate Caps	6	C$	304,931	2.0%	CDOR	0.2
Interest Rate Caps	1	£	15,142	2.0%	GBP LIBOR	0.1
December 31, 2016
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps(1)	4	C$	108,271	1.0%	CDOR	2.4
Interest Rate Caps	21	$	802,256	2.0%	USD LIBOR	0.4
Interest Rate Caps	5	C$	400,035	2.0%	CDOR	0.4
Interest Rate Caps	1	£	15,142	2.0%	GBP LIBOR	0.3

(1) Two of our interest rate swaps totaling C$91.0 million ($68.3 million and $67.7 million as of March 31, 2017 and December 31, 2016, respectively) do not become effective until June 1, 2017.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt. During the twelve months following March 31, 2017, we estimate that an additional $470,000 will be reclassified from accumulated other comprehensive income as an increase to interest expense. Additionally, during the three months ended March 31, 2017 and 2016, we did not record any hedge ineffectiveness in our consolidated statements of operations.

Non-designated Hedges

During the three months ended March 31, 2017 and 2016, we recorded gains of $90,000 and losses of $976,000, respectively, related to non-designated hedges that were reported as a component of interest expense in our consolidated financial statements.

The following tables summarize our non-designated hedges (notional amount in thousands):

March 31, 2017
Non-designated Hedges	Number of Instruments	Notional Amount
Interest Rate Caps	2	$	72,960
Interest Rate Caps	1	C$	18,327
Buy GBP / Sell EUR Forward	1	€	12,857
December 31, 2016
Non-designated Hedges	Number of Instruments	Notional Amount
Interest Rate Caps	3	$	256,875
Interest Rate Caps	2	C$	37,221
Buy GBP / Sell EUR Forward	1	€	12,857

Valuation of Derivative Instruments

The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

	Fair Value of Derivatives in an Asset Position(1) as of				Fair Value of Derivatives in a Liability Position(2) as of
	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	1,174	$	3,268	$	—	$	210
Interest rate derivatives		236		331		—		—
Total derivatives designated as hedging instruments	$	1,410	$	3,599	$	—	$	210
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	14	$	487	$	—	$	—
Interest rate derivatives		—		—		—		—
Total derivatives not designated as hedging instruments	$	14	$	487	$	—	$	—
Total Derivatives	$	1,424	$	4,086	$	—	$	210

(1) Included in other assets in our consolidated balance sheets.

(2) Included in other liabilities in our consolidated balance sheets.

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)						Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Hedging Relationships	Three Months Ended March 31,								Three Months Ended March 31,
	2017			2016					2017			2016
Net Investment
Foreign exchange contracts(1)	$	(4,294	)	$	(6,470	)		Interest Expense	$	—		$	—
Cash Flow Hedges
Interest rate derivatives		(105	)		(196	)		Interest Expense		(474	)		(27	)
Total	$	(4,399	)	$	(6,666	)			$	(474	)	$	(27	)

(1)   During the three months ended March 31, 2017 and 2016, we paid net cash settlements of $1.8 million and received $8.2 million on our foreign currency forward contracts, respectively. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.

Credit-Risk Related Contingent Features

We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of March 31, 2017, we were in a net asset position with each such derivative counterparty.

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Equity

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Equity

10. EQUITY

Stock and Stock Equivalents

Authorized Capital

As of March 31, 2017, we had the authority to issue up to 300,000,000 shares of stock, consisting of 200,000,000 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. We did not have any shares of preferred stock issued and outstanding as of March 31, 2017.

Class A Common Stock and Deferred Stock Units

Holders of shares of our class A common stock are entitled to vote on all matters submitted to a vote of stockholders and are entitled to receive such dividends as may be authorized by our board of directors and declared by us, in all cases subject to the rights of the holders of shares of outstanding preferred stock, if any.

We also issue restricted class A common stock under our stock-based incentive plans. Refer to Note 13 for additional discussion of these long-term incentive plans. 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, including restricted class A common stock and deferred stock units:

	Three Months Ended March 31,
Common Stock Outstanding(1)	2017		2016
Beginning balance		94,709,290		93,843,847
Issuance of class A common stock(2)		270		285
Issuance of restricted class A common stock, net		277,815		209,798
Issuance of deferred stock units		6,415		7,322
Ending balance		94,993,790		94,061,252

(1) Includes deferred stock units held by members of our board of directors of 175,442 and 148,843 as of March 31, 2017 and 2016, respectively.

(2) Consists of 270 and 285 shares under our dividend reinvestment program during the three months ended March 31, 2017 and 2016, respectively.

Dividend Reinvestment and Direct Stock Purchase Plan

On March 25, 2014, we adopted a dividend reinvestment and direct stock purchase plan, under which we registered and reserved for issuance, in the aggregate, 10,000,000 shares of class A common stock. Under the dividend reinvestment component of this plan, our class A common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of class A common stock. The direct stock purchase component allows stockholders and new investors, subject to our approval, to purchase shares of class A common stock directly from us. During the three months ended March 31, 2017 and 2016, we issued 270 shares and 285 shares, respectively, of class A common stock under the dividend reinvestment component of the plan. As of March 31, 2017, a total of 9,998,057 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

At the Market Stock Offering Program

On May 9, 2014, we entered into equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $200.0 million of our class A common stock. On July 29, 2016, in connection with filing a new universal shelf registration statement on Form S-3, we entered into amendments to each of the ATM Agreements. Sales of class A common stock made pursuant to the ATM Agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended. Actual sales will depend on a variety of factors including market conditions, the trading price of our class A common stock, our capital needs, and our determination of the appropriate sources of funding to meet such needs. We did not sell any shares of our class A common stock under the ATM Agreements during the three months ended March 31, 2017 and 2016. As of March 31, 2017, sales of our class A common stock with an aggregate sales price of $188.6 million remained available for issuance under the ATM Agreements.

Dividends

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year 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.

On March 15, 2017, we declared a dividend of $0.62 per share, or $58.8 million, that was paid on April 17, 2017, to stockholders of record as of March 31, 2017. The following table details our dividend activity ($ in thousands, except per share data):

	Three Months Ended March 31,
	2017		2016
Dividends declared per share of common stock	$	0.62	$	0.62
Total dividends declared	$	58,787	$	58,226

Earnings Per Share

We calculate our basic and diluted earnings per share using the two-class method for all periods presented as the unvested shares of our restricted class A common stock qualify as participating securities, as defined by GAAP. These restricted shares have the same rights as our other shares of class A common stock, including participating in any dividends, and therefore have been included in our basic and diluted net income per share calculation. Our Convertible Notes are excluded from dilutive earnings per share as we have the intent and ability to settle these instruments in cash.

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 ($ in thousands, except per share data):

	Three Months Ended March 31,
	2017		2016
Net income(1)	$	51,405	$	57,047
Weighted-average shares outstanding, basic and diluted		94,993,386		94,067,769
Per share amount, basic and diluted	$	0.54	$	0.61

(1)   Represents net income attributable to Blackstone Mortgage Trust, Inc.

Other Balance Sheet Items

Accumulated Other Comprehensive Loss

As of March 31, 2017, total accumulated other comprehensive loss was $52.4 million, primarily representing (i) $99.7 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $47.3 million of net realized and unrealized gains related to changes in the fair value of derivative instruments. As of December 31, 2016, total accumulated other comprehensive loss was $56.2 million, primarily representing (i) $107.5 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $51.3 million of net realized and unrealized gains related to changes in the fair value of derivative instruments.

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Other Expenses

3 Months Ended

Mar. 31, 2017

Other Income and Expenses [Abstract]

Other Expenses

11. OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our outstanding equity balance, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.

During the three months ended March 31, 2017 and 2016, we incurred $9.6 million and $9.5 million, respectively, of management fees payable to our Manager. In addition, during the three months ended March 31, 2017 and 2016, we incurred $3.3 million and $4.2 million, respectively, of incentive fees payable to our Manager.

As of March 31, 2017 and December 31, 2016 we had accrued management and incentive fees payable to our Manager of $12.9 million and $12.8 million, respectively.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended March 31,
	2017		2016
Professional services	$	1,017	$	890
Operating and other costs		445		869
Subtotal		1,462		1,759
Non-cash and CT Legacy Portfolio compensation expenses
Management incentive awards plan - CTOPI(1)		—		170
Management incentive awards plan - CT Legacy Partners(2)		—		129
Restricted class A common stock earned		5,813		4,593
Director stock-based compensation		94		94
Subtotal		5,907		4,986
Total BXMT expenses		7,369		6,745
Other expenses		59		50
Total general and administrative expenses	$	7,428	$	6,795

(1) Represents the portion of CTOPI promote revenue recorded under compensation awards. See Note 4 for further discussion.

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

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 our subsidiary, CT Legacy Partners (subject to certain caps and priority distributions). During the three months ended March 31, 2016 we recognized $129,000 of expenses under the CT Legacy Partners incentive plan. Our investment in CT Legacy Partners was substantially realized as of December 31, 2016.

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Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

12. INCOME TAXES

We elected 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 March 31, 2017 and December 31, 2016, we were in compliance with all REIT requirements.

During the three months ended March 31, 2017 and 2016, we recorded a current income tax provision of $89,000 and $241,000, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes. We did not have any deferred tax assets or liabilities as of March 31, 2017 or December 31, 2016.

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, is generally limited to $2.0 million per annum by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust. As of December 31, 2016, we had estimated NOLs of $159.0 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.

As of March 31, 2017, tax years 2013 through 2016 remain subject to examination by taxing authorities.

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Stock-Based Incentive Plans

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Incentive Plans

13. STOCK-BASED INCENTIVE PLANS

We do not have any employees as we are externally managed by our Manager. However, as of March 31, 2017, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through the issuance of stock-based instruments.

We had stock-based incentive awards outstanding under seven benefit plans as of March 31, 2017: (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; (iv) our 2013 stock incentive plan, or 2013 Plan; (v) our 2013 manager incentive plan, or 2013 Manager Plan; (vi) our 2016 stock incentive plan, or 2016 Plan; and (vii) our 2016 manager incentive plan, or 2016 Manager Plan. We refer to our 1997 Plan, our 2007 Plan, our 2011 Plan, our 2013 Plan, and our 2013 Manager Plan, collectively, as our Expired Plans and we refer to our 2016 Plan and 2016 Manager Plan, collectively, 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 2,400,000 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 March 31, 2017, there were 1,471,955 shares available under the Current Plans.

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2016		1,309,995		$	28.68
Granted		280,938			30.54
Vested		(111,699	)		27.77
Forfeited		(3,123	)		27.37
Balance as of March 31, 2017		1,476,111		$	29.11

These shares generally vest in installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of the Current Plans. The 1,476,111 shares of restricted class A common stock outstanding as of March 31, 2017 will vest as follows: 636,317 shares will vest in 2017; 537,562 shares will vest in 2018; and 302,232 shares will vest in 2019. As of March 31, 2017, total unrecognized compensation cost relating to nonvested share-based compensation arrangements was $45.7 million based on the March 31, 2017 closing price of our class A common stock of $30.96. This cost is expected to be recognized over a weighted average period of 1.2 years from March 31, 2017.

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Fair Values

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Values

14. FAIR VALUES

Assets and Liabilities Measured at Fair Value

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	March 31, 2017								December 31, 2016
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets
Derivatives	$	—	$	1,424	$	—	$	1,424	$	—	$	4,086	$	—	$	4,086
Liabilities
Derivatives	$	—	$	—	$	—	$	—	$	—	$	210	$	—	$	210

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):

	Three Months Ended March 31,
	2017		2016(1)
January 1,	$	—	$	12,561
Proceeds from investment realizations		—		(2,406	)
Adjustments to fair value included in earnings
Gain on investments at fair value		—		66
March 31,	$	—	$	10,221

(1) All assets measured at fair value on a recurring basis using Level 3 inputs were included as a component of other assets in the consolidated Balance Sheets.

Refer to Note 2 for further discussion regarding fair value measurement.

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 fair value of the financial instruments described in Note 2 ($ in thousands):

	March 31, 2017						December 31, 2016
	Carrying		Face		Fair		Carrying		Face		Fair
	Amount		Amount		Value		Amount		Amount		Value
Financial assets
Cash and cash equivalents	$	64,275	$	64,275	$	64,275	$	75,567	$	75,567	$	75,567
Loans receivable, net		8,721,768		8,759,696		8,765,688		8,692,978		8,727,218		8,733,784
Financial liabilities
Secured debt agreements, net		5,760,191		5,776,165		5,776,165		5,716,354		5,731,626		5,731,626
Loan participations sold, net		354,131		355,583		355,583		348,077		349,633		349,633
Convertible notes, net		167,475		172,500		194,870		166,762		172,500		191,763

Estimates of fair value for cash and cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.

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Transactions with Related Parties

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Transactions with Related Parties

15. TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2017, and will be automatically renewed for a one-year term each anniversary thereafter unless earlier terminated.

As of March 31, 2017 and December 31, 2016, our consolidated balance sheet included $12.9 million and $12.8 million of accrued management and incentive fees payable to our Manager, respectively. During the three months ended March 31, 2017, we paid $12.8 million, of management and incentive fees to our Manager, compared to $14.4 million during the same period of 2016. In addition, during the three months ended March 31, 2017, we reimbursed our Manager for $93,000 of expenses incurred on our behalf compared to $320,000 during the same period of 2016. During the three months ended March 31, 2016, CT Legacy Partners made aggregate preferred distributions of $224,000 to an affiliate of our Manager.

As of March 31, 2017, our Manager held 719,903 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $20.9 million. The shares vest in installments over three years from the date of issuance. During the three months ended March 31, 2017 and 2016, we recorded non-cash expense related to shares held by our Manager of $2.9 million and $2.1 million, respectively. We did not issue any shares of restricted class A common stock to our Manager during the three months ended March 31, 2017 or 2016, respectively. Refer to Note 13 for further details.

During the three months ended March 31, 2017, we originated two loans whereby each respective borrower engaged an affiliate of our Manager to act as title insurance agent in connection with each transaction. We did not incur any expenses or receive any revenues as a result of this transaction. We did not have any similar transactions during the three months ended March 31, 2016.

During the three months ended March 31, 2017 and 2016, we incurred $88,000 and $90,000, respectively, of expenses for various administrative and capital market data services to third-party service providers that are affiliates of our Manager.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

16. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of March 31, 2017, we had unfunded commitments of $1.1 billion related to 58 loans receivable, which amounts will generally be funded to finance lease-related or capital expenditures by our borrowers. These future commitments will expire variously over the next four years.

Litigation

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2017, we were not involved in any material legal proceedings.

Board of Directors’ Compensation

As of March 31, 2017, of the eight members of our board of directors, our five independent directors are entitled to annual compensation of $125,000 each. The other three board members, including our chairman and our chief executive officer, serve as directors without compensation for such service. As of March 31, 2017, the annual compensation for our directors was paid 40% in cash and 60% in the form of deferred stock units. In addition, the member of our board of directors that serves as the chairperson of the audit committee of our board of directors receives additional annual cash compensation of $12,000. Compensation to the board of directors is payable in four equal quarterly installments.

In April 2017, our board of directors approved changes to the compensation of our five independent directors which will be effective as of the beginning of the third quarter of 2017. The other three board members, including our chairman and our chief executive officer, will continue to serve as directors without compensation for such service. These changes will increase the annual compensation of our directors from $125,000 to $175,000 and will be paid $75,000 in cash and $100,000 in the form of deferred stock units. In addition, the chair of our audit committee will receive an increase in the additional annual cash compensation from $12,000 to $20,000, the other members of our audit committee will receive additional annual cash compensation of $10,000, and the chairs of each of our compensation and corporate governance committees will receive additional annual cash compensation of $10,000.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Principles of Consolidation

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. 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 affect 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.

As of both March 31, 2017 and December 31, 2016, we did not consolidate any VIEs.

Use of Estimates

Use of Estimates

The preparation of consolidated 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 as of 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 portfolio is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred until the loan is advanced and is then recorded 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. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents.

Loans Receivable and Provision for Loan Losses

Loans Receivable and Provision for Loan Losses

We originate and purchase 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 to us pursuant 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 of these loans, which are collateral dependent, is measured by comparing the estimated 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. 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 risk factors of each loan, and assigns a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 -	Very Low Risk
2 -	Low Risk
3 -	Medium Risk
4 -	High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.
5 -	Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

During the second quarter of 2015, we acquired a portfolio of loans from General Electric Capital Corporation and certain of its affiliates, or the GE portfolio, for a total purchase price of $4.7 billion. We allocated the aggregate purchase price between each loan based on its fair value relative to the overall portfolio, which allocation resulted in purchase discounts or premiums determined on an asset-by-asset basis. Each loan accretes from its allocated purchase price to its expected collection value over the life of the loan, consistent with the other loans in our portfolio.

Equity Investment in Unconsolidated Subsidiary

Equity Investment in Unconsolidated Subsidiary

Our carried interest in CT Opportunity Partners I, LP, or CTOPI, was accounted for using the equity method. CTOPI’s assets and liabilities were not consolidated into our financial statements due to our determination that (i) it was not a VIE and (ii) the other investors in CTOPI had sufficient rights to preclude consolidation by us. As such, we reported our allocable percentage of the net assets of CTOPI on our consolidated balance sheets. The investment was fully realized as of December 31, 2016 and we no longer have any equity investments in unconsolidated subsidiaries in our consolidated financial statements.

Derivative Financial Instruments

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. Changes in the fair value of the effective portion of our hedges are reflected in accumulated other comprehensive income (loss) on our consolidated financial statements. Changes in the fair value of the ineffective portion of our hedges are included in net income. Amounts are reclassified out of accumulated other comprehensive income (loss) and into net income when the hedged item is sold, substantially liquidated, or de-designated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its value are included in net income.

Secured Debt Agreements

Secured Debt Agreements

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

Senior Loan Participations

Senior Loan Participations

In certain instances, we finance our loans through the non-recourse syndication of a senior loan interest to a third-party. Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining subordinate loan and not the non-consolidated senior interest we sold.

Convertible Notes

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Deferred Financing Costs

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic, or ASC 820, 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.

ASC 820 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 that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee composed of members of senior management of our Manager, including our Chief Executive Officer, Chief Financial Officer, and other senior officers.

Certain of our other assets are reported 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 that are recorded at fair value are discussed further in Note 14. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may 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.

We are also required by GAAP to disclose fair value information about financial instruments, that are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

• Loans receivable, net: The fair values of these loans were estimated by our Manager based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount 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.

• Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

• Secured debt agreements, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

• Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

• Convertible notes, net: The convertible notes are actively traded and their fair values were obtained using quoted market prices.

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. 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. Refer to Note 12 for additional information.

Stock-Based Compensation

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain individuals employed by an affiliate of our Manager that vest over the life of the awards, as well as deferred stock units issued to certain members of our Board of Directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 13 for additional information.

Earnings per Share

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units. Refer to Note 10 for additional discussion of earnings per share.

Foreign Currency

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income.

Underwriting Commissions and Offering Costs

Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” or ASU 2016-18. ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and is to be applied retrospectively. Upon the adoption of the new guidance, we will change the presentation of restricted cash in our statement of cash flows to conform to the new requirements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 broadly amends the accounting guidance for revenue recognition. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2017, and is to be applied retrospectively. We do not anticipate that the adoption of ASU 2014-09 will have a material impact on our consolidated financial statements.

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Loans Receivable, Net (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Overall Statistics for Loans Receivable Portfolio

The following table details overall statistics for our loans receivable portfolio ($ in thousands):

	March 31, 2017			December 31, 2016
Number of loans		103			107
Principal balance	$	8,759,696		$	8,727,218
Net book value	$	8,721,768		$	8,692,978
Unfunded loan commitments(1)	$	1,149,842		$	882,472
Weighted-average cash coupon(2)		5.15	%		5.01	%
Weighted-average all-in yield(2)		5.57	%		5.36	%
Weighted-average maximum maturity (years)(3)		3.3			3.2

(1)	Unfunded commitments will primarily be funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments will be funded over the term of each loan, subject in certain cases to an expiration date.
(2)	As of March 31, 2017, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans by principal balance indexed to USD LIBOR. In addition, $217.8 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.22%, as of March 31, 2017. As of December 31, 2016, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans indexed to USD LIBOR. In addition, $216.3 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.27%, as of December 31, 2016. In addition to cash coupon, all-in yield includes the amortization of deferred origination fees, loan origination costs, purchase discounts, and accrual of both extension and exit fees. Cash coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.
(3)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of March 31, 2017, 59% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 41% were open to repayment by the borrower without penalty. As of December 31, 2016, 64% of our loans were subject to yield maintenance or other prepayment restrictions and 36% were open to repayment by the borrower without penalty.

Activity Relating to Loans Receivable Portfolio

Activity relating to our loans receivable portfolio was as follows ($ in thousands):

	Principal Balance			Deferred Fees / Other Items(1)			Net Book Value
December 31, 2016	$	8,727,218		$	(34,240)		$	8,692,978
Loan fundings		702,353			—			702,353
Loan repayments		(695,758	)		—			(695,758	)
Unrealized gain (loss) on foreign currency translation		25,883			(67	)		25,816
Deferred fees and other items(1)		—			(12,429	)		(12,429	)
Amortization of fees and other items(1)		—			8,808			8,808
March 31, 2017	$	8,759,696		$	(37,928	)	$	8,721,768

(1)   Other items primarily consist of purchase discounts or premiums, exit fees, and deferred origination expenses.

Property Type and Geographic Distribution of Properties Securing Loans in Portfolio

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

March 31, 2017
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
Office	54	$	4,808,211	$	4,833,513	50%
Hotel	16		2,104,014		2,175,505	22
Retail	7		524,318		944,818	10
Multifamily	8		515,170		517,376	5
Manufactured housing	9		295,559		295,359	3
Condominium	1		49,276		226,478	2
Other	8		425,220		740,328	8
	103	$	8,721,768	$	9,733,377	100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
United States
Northeast	24	$	2,493,379	$	2,510,088	26%
West	23		1,998,995		2,185,476	22
Southeast	20		1,453,309		1,877,334	19
Midwest	7		702,238		704,199	7
Southwest	7		318,348		317,136	3
Northwest	2		215,617		218,088	2
Subtotal	83		7,181,886		7,812,321	79
International
United Kingdom	9		983,679		1,317,265	14
Canada	8		494,223		490,326	5
Germany	1		11,271		62,510	1
Netherlands	2		50,709		50,955	1
Subtotal	20		1,539,882		1,921,056	21
Total	103	$	8,721,768	$	9,733,377	100%

(1)   In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of March 31, 2017.

December 31, 2016
Property Type	Number of Loans		Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
Office		55	$	4,800,609	$	4,889,456		50%
Hotel		18		1,889,732		1,957,334		20
Retail		9		769,813		1,173,592		12
Multifamily		8		521,097		523,529		5
Manufactured housing		9		296,290		296,252		3
Condominium		2		66,070		258,360		3
Other		6		349,367		658,211		7
		107	$	8,692,978	$	9,756,734		100%
Geographic Location	Number of Loans		Net Book Value		Total Loan Exposure(1)		Percentage of Portfolio
United States
Northeast		26	$	2,548,257	$	2,562,149		26%
Southeast		21		1,492,530		1,899,748		19
West		22		1,628,811		1,828,667		19
Midwest		7		695,713		698,093		7
Southwest		8		380,639		379,766		4
Northwest		3		227,747		293,564		3
Subtotal		87		6,973,697		7,661,987		78
International
United Kingdom		9		977,136		1,305,816		13
Canada		8		487,835		483,923		5
Germany		1		204,241		254,644		3
Netherlands		2		50,069		50,364		1
Subtotal		20		1,719,281		2,094,747		22
Total		107	$	8,692,978	$	9,756,734		100%

(1)   In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of December 31, 2016.

Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings

The following table allocates the principal balance and net book value of our loans receivable based on our internal risk ratings ($ in thousands):

March 31, 2017							December 31, 2016
Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)		Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)
	1	6	$	303,849	$	304,170		1	8	$	361,100	$	361,574
	2	47		3,670,002		3,679,119		2	52		4,011,992		4,083,678
	3	49		4,727,107		5,729,339		3	46		4,299,026		5,290,668
	4	1		20,810		20,749		4	1		20,860		20,814
	5	—		—		—		5	—		—		—
		103	$	8,721,768	$	9,733,377			107	$	8,692,978	$	9,756,734

(1) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of both March 31, 2017 and December 31, 2016.

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Other Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2017

Text Block [Abstract]

Summary of Components of Other Assets

The following table details the components of our other assets ($ in thousands):

	March 31,		December 31,
	2017		2016
Loan portfolio payments held by servicer(1)	$	135,516	$	6,294
Accrued interest receivable		30,962		32,871
Derivative assets		1,424		4,086
Prepaid expenses		700		803
Prepaid taxes		14		16
Total	$	168,616	$	44,070

(1)   Represents loan principal and interest payments held by our third-party loan servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle.

Summary of Components of Other Liabilities

The following table details the components of our other liabilities ($ in thousands):

	March 31,		December 31,
	2017		2016
Secured debt repayments pending servicer remittance(1)	$	91,763	$	5,372
Accrued dividends payable		58,787		58,615
Accrued management and incentive fees payable		12,921		12,798
Accrued interest payable		11,673		9,049
Accounts payable and other liabilities		1,736		1,985
Total	$	176,880	$	87,819

(1)   Represents pending transfers from our third-party loan servicer that were remitted to our banking counterparties during the subsequent remittance cycle.

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Secured Debt Agreements, Net (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Secured Debt Agreements

The following table details our secured debt agreements ($ in thousands):

	Secured Debt Agreements
	Borrowings Outstanding
	March 31, 2017			December 31, 2016
Credit facilities	$	3,958,064		$	3,572,837
GE portfolio acquisition facility		1,250,524			1,479,582
Asset-specific financings		567,577			679,207
Revolving credit agreement		—			—
Total secured debt agreements	$	5,776,165		$	5,731,626
Deferred financing costs(1)		(15,974	)		(15,272	)
Net book value of secured debt	$	5,760,191		$	5,716,354

(1)   Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

Credit Facilities

The following tables detail our credit facilities ($ in thousands):

	March 31, 2017
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,895,248	$	1,468,184	$	1,238,872	$	229,312
MetLife		1,000,000		1,104,478		866,114		866,114		—
Bank of America		750,000		813,305		641,066		641,066		—
Citibank(4)		766,300		509,582		393,933		295,777		98,156
Deutsche Bank		500,000		374,119		278,851		278,851		—
Morgan Stanley(5)		627,500		329,767		260,623		220,969		39,654
Société Générale(6)		426,080		281,623		220,915		214,678		6,237
JP Morgan(7)		500,000		359,098		277,914		201,737		76,177
	$	6,569,880	$	5,667,220	$	4,407,600	$	3,958,064	$	449,536

	December 31, 2016
	Maximum		Collateral		Credit Borrowings
Lender	Facility Size(1)		Assets(2)		Potential(3)		Outstanding		Available(3)
Wells Fargo	$	2,000,000	$	1,718,874	$	1,339,942	$	1,107,733	$	232,209
MetLife		1,000,000		1,106,017		862,454		862,454		—
Bank of America		750,000		794,881		617,694		617,694		—
JP Morgan(7)		500,000		550,560		420,414		316,219		104,195
Morgan Stanley(5)		308,500		344,056		272,221		231,930		40,291
Citibank(4)		500,000		508,989		394,677		229,629		165,048
Société Générale(6)		420,680		274,351		207,178		207,178		—
	$	5,479,180	$	5,297,728	$	4,114,580	$	3,572,837	$	541,743

(1)	Maximum facility size represents the largest amount of borrowings available under a given facility once sufficient collateral assets have been approved by the lender and pledged by us.
(2)	Represents the principal balance of the collateral assets.
(3)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(4)	As of March 31, 2017, the Citibank maximum facility size was composed of a general $500.0 million facility size denominated in U.S. Dollars plus a general €250.0 million ($266.3 million) facility size that contemplated British Pound Sterling and Euro borrowings. As of December 31, 2016, the maximum facility size was composed of a general $500.0 million facility.
(5)	As of March 31, 2017, the Morgan Stanley maximum facility size was composed of a £500.0 million facility size that was translated to $627.5 million. As of December 31, 2016, the maximum facility size was composed of a £250.0 million facility size that was translated to $308.5 million. Borrowings denominated in British Pound Sterling and Euro are contemplated under this facility.
(6)	As of March 31, 2017 and December 31, 2016, the Société Générale maximum facility size was composed of a €400.0 million facility size that was translated to $426.1 million and $420.7 million, respectively. Borrowings denominated in U.S. Dollars, British Pound Sterling, and Euro are contemplated under this facility.
(7)	As of March 31, 2017 and December 31, 2016, the JP Morgan maximum facility size was composed of a general $500.0 million facility size, under which U.S. Dollars and British Pound Sterling borrowings are contemplated.

Summary of Key Terms of Credit Facilities

The following tables outline the key terms of our credit facilities as of March 31, 2017:

Lender	Currency	Guarantee(1)	Margin Call(2)	Term/Maturity
Wells Fargo	$	25%	Collateral marks only	Term matched(3)
MetLife	$	50%	Collateral marks only	April 22, 2022(4)
Bank of America	$	50%	Collateral marks only	May 21, 2021(5)
Citibank	$ / £/ €	25%	Collateral marks only	Term matched(3)
Deutsche Bank	$	25%	Collateral marks only	Term matched(3)
Morgan Stanley	£  / €	25%	Collateral marks only	March 1, 2020
Société Générale	$  /£/ €	25%	Collateral marks only	Term matched(3)
JP Morgan	$  / £	50%	Collateral marks only	January 7, 2019

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.
(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.
(3)	These credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.
(4)	Includes five one-year extension options which may be exercised at our sole discretion.
(5)	Includes two one-year extension options which may be exercised at our sole discretion.

Currency	Outstanding Borrowings		Potential Borrowings(1)		Index	Rate(2)	Advance Rate(3)
$		$3,639,921		$4,030,008	1-month USD LIBOR	L+1.88%	78.9%
€		€          —		€     38,269	3-month EURIBOR	n/a	77.8%
£		£   253,500		£   269,273	3-month GBP LIBOR	L+2.15%	79.0%
		$3,958,064		$4,407,600		L+1.90%	78.9%

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents weighted-average cash coupon based on borrowings outstanding.
(3)	Represents weighted-average advance rate based on the outstanding principal balance of the collateral assets pledged.

Summary of Statistics for Asset-Specific Financings

The following tables detail statistics for our asset-specific financings ($ in thousands):

	March 31, 2017
Lender	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term(3)
JP Morgan(4)
Collateral assets		1	$	286,887	$	285,955		L+3.88	%		n/a		Jan. 2020
Financing provided		1		233,679		233,413		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets		2		204,617		204,548		L+4.40	%		n/a		Nov. 2020
Financing provided		2		161,163		161,123		L+2.42	%		40,291		Nov. 2020
Bank of the Ozarks
Collateral assets		2		169,986		167,510		L+6.51	%		n/a		June 2020
Financing provided		2		128,969		128,045		L+3.83	%		—		June 2020
Wells Fargo
Collateral assets		1		62,523		62,302		L+6.05	%		n/a		Dec. 2019
Financing provided		1		43,766		43,609		L+3.14	%		8,753		Dec. 2019
Total
Collateral assets		6	$	724,013	$	720,315		L+4.83	%		n/a
Financing provided		6	$	567,577	$	566,190		L+2.58	%	$	165,883

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

	December 31, 2016
Lender	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term(3)
JP Morgan(4)
Collateral assets		1	$	284,012	$	282,818		L+3.88	%		n/a		Jan. 2020
Financing provided		1		233,679		233,626		L+1.89	%	$	116,839		Jan. 2020
Citibank(4)
Collateral assets		2		203,656		203,555		L+4.40	%		n/a		Nov. 2020
Financing provided		2		158,652		158,609		L+2.42	%		39,663		Nov. 2020
Deutsche Bank
Collateral assets		1		183,300		180,866		L+5.18	%		n/a		Aug. 2021
Financing provided		1		135,075		133,621		L+3.03	%		66,410		Aug. 2021
Bank of the Ozarks
Collateral assets		2		143,164		140,524		L+6.42	%		n/a		Apr. 2020
Financing provided		2		108,435		107,323		L+3.68	%		—		Apr. 2020
Wells Fargo
Collateral assets		1		61,951		61,654		L+6.05	%		n/a		Dec. 2019
Financing provided		1		43,366		43,154		L+2.97	%		8,673		Dec. 2019
Total
Collateral assets		7	$	876,083	$	869,417		L+4.84	%		n/a
Financing provided		7	$	679,207	$	676,333		L+2.60	%	$	231,585

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.
(4)	Borrowings under these asset specific financings are cross collateralized with the related credit facility with the same lender.

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Loan Participations Sold, Net (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Summary of Statistics for Loan Participations Sold

The following tables detail statistics for our loan participations sold ($ in thousands):

	March 31, 2017
Loan Participations Sold	Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term
Total loan	1	$	426,700	$	423,575		L+4.48	%		n/a	Dec. 2019
Senior participation(3)(4)	1		355,583		354,131		L+2.72	%	$	30,120	Dec. 2019
	December 31, 2016
Loan Participations Sold	Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Guarantee(2)		Wtd. Avg. Term
Total loan	1	$	419,560	$	416,233		L+4.48	%		n/a	Dec. 2019
Senior participation(3)(4)	1		349,633		348,077		L+2.72	%	$	29,616	Dec. 2019

(1)	Our floating rate loans and related liabilities were indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	Other than one instance where we entered into a related guarantee agreement for £24.0 million ($30.1 million and $29.6 million as of March 31, 2017 and December 31, 2016, respectively), our loan participations sold are non-recourse to us.
(3)	During the three months ended March 31, 2017 and December 31, 2016, we recorded $2.6 million and $2.9 million, respectively, of interest expense related to our loan participations sold, of which $2.5 million and $2.8 million was paid in cash.
(4)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $1.5 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively.

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Outstanding Foreign Exchange Derivatives Designated as Net Investment Hedges of Foreign Currency Risk

The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amount in thousands):

March 31, 2017				December 31, 2016
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Sell GBP Forward	1	£	141,900	Sell GBP Forward	2	£	141,900
Sell CAD Forward	1	C$	122,900	Sell CAD Forward	2	C$	122,900
				Sell EUR Forward	1	€	44,900

Summary of Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

March 31, 2017
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps(1)	4	C$	108,271	1.0%	CDOR	2.2
Interest Rate Caps	19	$	633,903	2.0%	USD LIBOR	0.2
Interest Rate Caps	6	C$	304,931	2.0%	CDOR	0.2
Interest Rate Caps	1	£	15,142	2.0%	GBP LIBOR	0.1
December 31, 2016
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps(1)	4	C$	108,271	1.0%	CDOR	2.4
Interest Rate Caps	21	$	802,256	2.0%	USD LIBOR	0.4
Interest Rate Caps	5	C$	400,035	2.0%	CDOR	0.4
Interest Rate Caps	1	£	15,142	2.0%	GBP LIBOR	0.3

(1) Two of our interest rate swaps totaling C$91.0 million ($68.3 million and $67.7 million as of March 31, 2017 and December 31, 2016, respectively) do not become effective until June 1, 2017.

Summary of Non-designated Hedges

The following tables summarize our non-designated hedges (notional amount in thousands):

March 31, 2017
Non-designated Hedges	Number of Instruments	Notional Amount
Interest Rate Caps	2	$	72,960
Interest Rate Caps	1	C$	18,327
Buy GBP / Sell EUR Forward	1	€	12,857
December 31, 2016
Non-designated Hedges	Number of Instruments	Notional Amount
Interest Rate Caps	3	$	256,875
Interest Rate Caps	2	C$	37,221
Buy GBP / Sell EUR Forward	1	€	12,857

Summary of Fair Value of Derivative Financial Instruments

The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

	Fair Value of Derivatives in an Asset Position(1) as of				Fair Value of Derivatives in a Liability Position(2) as of
	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	1,174	$	3,268	$	—	$	210
Interest rate derivatives		236		331		—		—
Total derivatives designated as hedging instruments	$	1,410	$	3,599	$	—	$	210
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	14	$	487	$	—	$	—
Interest rate derivatives		—		—		—		—
Total derivatives not designated as hedging instruments	$	14	$	487	$	—	$	—
Total Derivatives	$	1,424	$	4,086	$	—	$	210

(1) Included in other assets in our consolidated balance sheets.

(2) Included in other liabilities in our consolidated balance sheets.

Summary of Effect of Derivative Financial Instruments on Consolidated Statements of Operations

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)						Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Hedging Relationships	Three Months Ended March 31,								Three Months Ended March 31,
	2017			2016					2017			2016
Net Investment
Foreign exchange contracts(1)	$	(4,294	)	$	(6,470	)		Interest Expense	$	—		$	—
Cash Flow Hedges
Interest rate derivatives		(105	)		(196	)		Interest Expense		(474	)		(27	)
Total	$	(4,399	)	$	(6,666	)			$	(474	)	$	(27	)

(1)   During the three months ended March 31, 2017 and 2016, we paid net cash settlements of $1.8 million and received $8.2 million on our foreign currency forward contracts, respectively. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.

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Equity (Tables)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Schedule of Movement in Outstanding Shares of Class A Common Stock, Restricted Class A Common Stock and Deferred Stock Units

The following table details the movement in our outstanding shares of class A common stock, including restricted class A common stock and deferred stock units:

	Three Months Ended March 31,
Common Stock Outstanding(1)	2017		2016
Beginning balance		94,709,290		93,843,847
Issuance of class A common stock(2)		270		285
Issuance of restricted class A common stock, net		277,815		209,798
Issuance of deferred stock units		6,415		7,322
Ending balance		94,993,790		94,061,252

(1) Includes deferred stock units held by members of our board of directors of 175,442 and 148,843 as of March 31, 2017 and 2016, respectively.

(2) Consists of 270 and 285 shares under our dividend reinvestment program during the three months ended March 31, 2017 and 2016, respectively.

Schedule of Dividend Activity

The following table details our dividend activity ($ in thousands, except per share data):

	Three Months Ended March 31,
	2017		2016
Dividends declared per share of common stock	$	0.62	$	0.62
Total dividends declared	$	58,787	$	58,226

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 ($ in thousands, except per share data):

	Three Months Ended March 31,
	2017		2016
Net income(1)	$	51,405	$	57,047
Weighted-average shares outstanding, basic and diluted		94,993,386		94,067,769
Per share amount, basic and diluted	$	0.54	$	0.61

(1)   Represents net income attributable to Blackstone Mortgage Trust, Inc.

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Other Expenses (Tables)

3 Months Ended

Mar. 31, 2017

Other Income and Expenses [Abstract]

Schedule of General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended March 31,
	2017		2016
Professional services	$	1,017	$	890
Operating and other costs		445		869
Subtotal		1,462		1,759
Non-cash and CT Legacy Portfolio compensation expenses
Management incentive awards plan - CTOPI(1)		—		170
Management incentive awards plan - CT Legacy Partners(2)		—		129
Restricted class A common stock earned		5,813		4,593
Director stock-based compensation		94		94
Subtotal		5,907		4,986
Total BXMT expenses		7,369		6,745
Other expenses		59		50
Total general and administrative expenses	$	7,428	$	6,795

(1) Represents the portion of CTOPI promote revenue recorded under compensation awards. See Note 4 for further discussion.

(2) Represents the amounts recorded 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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Stock-Based Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Movement in Outstanding Shares of Restricted Class A Common Stock and Weighted-Average Grant Date Fair Value Per Share

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2016		1,309,995		$	28.68
Granted		280,938			30.54
Vested		(111,699	)		27.77
Forfeited		(3,123	)		27.37
Balance as of March 31, 2017		1,476,111		$	29.11

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Fair Values (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	March 31, 2017								December 31, 2016
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets
Derivatives	$	—	$	1,424	$	—	$	1,424	$	—	$	4,086	$	—	$	4,086
Liabilities
Derivatives	$	—	$	—	$	—	$	—	$	—	$	210	$	—	$	210

Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on 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):

	Three Months Ended March 31,
	2017		2016(1)
January 1,	$	—	$	12,561
Proceeds from investment realizations		—		(2,406	)
Adjustments to fair value included in earnings
Gain on investments at fair value		—		66
March 31,	$	—	$	10,221

(1) All assets measured at fair value on a recurring basis using Level 3 inputs were included as a component of other assets in the consolidated Balance Sheets.

Schedule of Details of Carrying Amount, Face Amount, and Fair Value of Financial Instruments

The following table details the carrying amount, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):

	March 31, 2017						December 31, 2016
	Carrying		Face		Fair		Carrying		Face		Fair
	Amount		Amount		Value		Amount		Amount		Value
Financial assets
Cash and cash equivalents	$	64,275	$	64,275	$	64,275	$	75,567	$	75,567	$	75,567
Loans receivable, net		8,721,768		8,759,696		8,765,688		8,692,978		8,727,218		8,733,784
Financial liabilities
Secured debt agreements, net		5,760,191		5,776,165		5,776,165		5,716,354		5,731,626		5,731,626
Loan participations sold, net		354,131		355,583		355,583		348,077		349,633		349,633
Convertible notes, net		167,475		172,500		194,870		166,762		172,500		191,763

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Jun. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount attributable to consolidated VIEs	$ 0	$ 0
Income accrual, description	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.
Cash and cash equivalents, description	Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less.
Expected loss	$ 0
Provision for loan losses	$ 0
General Electrical Capital Corporation [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchase price of Loan Portfolio			$ 4,700,000,000

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Loans Receivable, Net - Overall Statistics for Loans Receivable Portfolio (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) SecurityLoan	Dec. 31, 2016 USD ($) SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	103	107
Net book value	$ 8,721,768	$ 8,692,978
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	103	107
Principal balance	$ 8,759,696	$ 8,727,218
Unfunded loan commitments	$ 1,149,842	$ 882,472
Weighted-average maximum maturity (years)	3 years 3 months 18 days	3 years 2 months 12 days
Loans Receivable [Member] | LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Weighted-average cash coupon, rate	5.15%	5.01%
Weighted-average all-in yield, rate	5.57%	5.36%
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 8,721,768	$ 8,692,978

XML

Loans Receivable, Net - Overall Statistics for Loans Receivable Portfolio (Parenthetical) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Floating rate loans	$ 217.8	$ 216.3
Average floor rate	1.22%	1.27%
Percentage of loans subject to yield maintenance, or other prepayment restrictions	59.00%	64.00%
Percentage of loans open to repayment by borrower without penalty	41.00%	36.00%
USD LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans receivable by type	84.00%	84.00%

XML

Loans Receivable, Net - Activity Relating to Loans Receivable Portfolio (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	$ 8,692,978
Unrealized gain (loss) on foreign currency translation	7,770	$ 5,979
Amortization of fees and other items	8,808	$ 8,954
Ending Balance	8,721,768
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	8,692,978
Loan fundings	702,353
Loan repayments	(695,758)
Unrealized gain (loss) on foreign currency translation	25,816
Deferred fees and other items	(12,429)
Amortization of fees and other items	8,808
Ending Balance	8,721,768
Deferred Fees/Other Items [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	(34,240)
Unrealized gain (loss) on foreign currency translation	(67)
Deferred fees and other items	(12,429)
Amortization of fees and other items	8,808
Ending Balance	(37,928)
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	8,727,218
Loan fundings	702,353
Loan repayments	(695,758)
Unrealized gain (loss) on foreign currency translation	25,883
Ending Balance	$ 8,759,696

XML

Loans Receivable, Net - Property Type and Geographic Distribution of Properties Securing Loans in Portfolio (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) SecurityLoan	Dec. 31, 2016 USD ($) SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	103	107
Net book value	$ 8,721,768	$ 8,692,978
Total Loan Exposure	$ 9,733,377	$ 9,756,734
Percentage of Portfolio	100.00%	100.00%
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	54	55
Net book value	$ 4,808,211	$ 4,800,609
Total Loan Exposure	$ 4,833,513	$ 4,889,456
Percentage of Portfolio	50.00%	50.00%
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	16	18
Net book value	$ 2,104,014	$ 1,889,732
Total Loan Exposure	$ 2,175,505	$ 1,957,334
Percentage of Portfolio	22.00%	20.00%
Manufactured Housing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	9	9
Net book value	$ 295,559	$ 296,290
Total Loan Exposure	$ 295,359	$ 296,252
Percentage of Portfolio	3.00%	3.00%
Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	7	9
Net book value	$ 524,318	$ 769,813
Total Loan Exposure	$ 944,818	$ 1,173,592
Percentage of Portfolio	10.00%	12.00%
Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	8	8
Net book value	$ 515,170	$ 521,097
Total Loan Exposure	$ 517,376	$ 523,529
Percentage of Portfolio	5.00%	5.00%
Condominium [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	2
Net book value	$ 49,276	$ 66,070
Total Loan Exposure	$ 226,478	$ 258,360
Percentage of Portfolio	2.00%	3.00%
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	8	6
Net book value	$ 425,220	$ 349,367
Total Loan Exposure	$ 740,328	$ 658,211
Percentage of Portfolio	8.00%	7.00%
United States Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	24	26
Net book value	$ 2,493,379	$ 2,548,257
Total Loan Exposure	$ 2,510,088	$ 2,562,149
Percentage of Portfolio	26.00%	26.00%
United States West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	23	22
Net book value	$ 1,998,995	$ 1,628,811
Total Loan Exposure	$ 2,185,476	$ 1,828,667
Percentage of Portfolio	22.00%	19.00%
United States Southeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	20	21
Net book value	$ 1,453,309	$ 1,492,530
Total Loan Exposure	$ 1,877,334	$ 1,899,748
Percentage of Portfolio	19.00%	19.00%
United States Midwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	7	7
Net book value	$ 702,238	$ 695,713
Total Loan Exposure	$ 704,199	$ 698,093
Percentage of Portfolio	7.00%	7.00%
United States Southwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	7	8
Net book value	$ 318,348	$ 380,639
Total Loan Exposure	$ 317,136	$ 379,766
Percentage of Portfolio	3.00%	4.00%
United States Northwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	2	3
Net book value	$ 215,617	$ 227,747
Total Loan Exposure	$ 218,088	$ 293,564
Percentage of Portfolio	2.00%	3.00%
United States [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	83	87
Net book value	$ 7,181,886	$ 6,973,697
Total Loan Exposure	$ 7,812,321	$ 7,661,987
Percentage of Portfolio	79.00%	78.00%
United Kingdom [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	9	9
Net book value	$ 983,679	$ 977,136
Total Loan Exposure	$ 1,317,265	$ 1,305,816
Percentage of Portfolio	14.00%	13.00%
Canada [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	8	8
Net book value	$ 494,223	$ 487,835
Total Loan Exposure	$ 490,326	$ 483,923
Percentage of Portfolio	5.00%	5.00%
Germany [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	1
Net book value	$ 11,271	$ 204,241
Total Loan Exposure	$ 62,510	$ 254,644
Percentage of Portfolio	1.00%	3.00%
Netherlands [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	2	2
Net book value	$ 50,709	$ 50,069
Total Loan Exposure	$ 50,955	$ 50,364
Percentage of Portfolio	1.00%	1.00%
International [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	20	20
Net book value	$ 1,539,882	$ 1,719,281
Total Loan Exposure	$ 1,921,056	$ 2,094,747
Percentage of Portfolio	21.00%	22.00%

XML

Loans Receivable, Net - Property Type and Geographic Distribution of Properties Securing Loans in Portfolio (Parenthetical) (Detail) - USD ($) $ in Billions	Mar. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Total loan exposure including senior interests	$ 1.0	$ 1.0

XML

Loans Receivable, Net - Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) SecurityLoan	Dec. 31, 2016 USD ($) SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	103	107
Net book value	$ 8,721,768	$ 8,692,978
Total Loan Exposure	$ 9,733,377	$ 9,756,734
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	103	107
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 8,721,768	$ 8,692,978
Risk Rating 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 304,170	$ 361,574
Risk Rating 1 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	6	8
Risk Rating 1 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 303,849	$ 361,100
Risk Rating 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 3,679,119	$ 4,083,678
Risk Rating 2 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	47	52
Risk Rating 2 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 3,670,002	$ 4,011,992
Risk Rating 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 5,729,339	$ 5,290,668
Risk Rating 3 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	49	46
Risk Rating 3 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 4,727,107	$ 4,299,026
Risk Rating 4 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 20,749	$ 20,814
Risk Rating 4 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	1
Risk Rating 4 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 20,810	$ 20,860

XML

Loans Receivable, Net - Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings (Parenthetical) (Detail) - USD ($) $ in Billions	Mar. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Total loan exposure including senior interests	$ 1.0	$ 1.0

XML

Loans Receivable, Net - Additional Information (Detail)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Receivables [Abstract]
Weighted-average risk rating on loan exposure	2.6	2.5
Impaired loans	$ 0	$ 0

XML

Equity Investment in Unconsolidated Subsidiary - Additional Information (Detail) - CT Opportunity Partners I, LP [Member] - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Jan. 31, 2011
Schedule of Equity Method Investments [Line Items]
Carried interest revenue, percentage of fund's profit	17.70%
Preferred return	9.00%
Return of capital to partners	100.00%
Promote income recognized		$ 138,000
Percentage of carried interest distributions pool for employees			45.00%
Description of incentive management fee grants to employees vesting schedule	During the three months ended March 31, 2016, we recognized $170,000 of expenses under the CTOPI incentive plan. Such amounts were recognized as a component of general and administrative expenses in our consolidated statements of operations.
CTOPI Incentive Plan [Member]
Schedule of Equity Method Investments [Line Items]
Recognized expenses for incentive plan		$ 170,000

XML

Other Assets and Liabilities - Summary of Components of Other Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Loan portfolio payments held by servicer	$ 135,516	$ 6,294
Accrued interest receivable	30,962	32,871
Derivative assets	1,424	4,086
Prepaid expenses	700	803
Prepaid taxes	14	16
Total	$ 168,616	$ 44,070

XML

Other Assets and Liabilities - Summary of Components of Other Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Other Liabilities [Abstract]
Secured debt repayments pending servicer remittance	$ 91,763	$ 5,372
Accrued dividends payable	58,787	58,615
Accrued management and incentive fees payable	12,921	12,798
Accrued interest payable	11,673	9,049
Accounts payable and other liabilities	1,736	1,985
Total	$ 176,880	$ 87,819

XML

Secured Debt Agreements, Net - Schedule of Secured Debt Agreements (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	$ 567,577	$ 679,207
Secured debt agreements borrowings outstanding	5,776,165	5,731,626
Deferred financing costs	(15,974)	(15,272)
Net book value of secured debt	5,760,191	5,716,354
Credit Facilities [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	3,958,064	3,572,837
GE Portfolio Acquisition Facility [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	1,250,524	1,479,582
Asset-Specific Financings [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	$ 567,577	$ 679,207

XML

Secured Debt Agreements, Net - Additional Information (Detail) € in Millions, £ in Millions		3 Months Ended						6 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) ExtensionOptions	Mar. 31, 2017 USD ($) ExtensionOptions Facility	Mar. 31, 2017 GBP (£) Facility	Mar. 31, 2017 EUR (€) Facility	Dec. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)	Jun. 30, 2015 USD ($) ExtensionOptions	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent		1.90%	1.90%	1.90%
Weighted-average advance rate		78.90%	78.90%	78.90%
Secured debt agreements borrowings outstanding	$ 5,760,191,000	$ 5,760,191,000			$ 5,716,354,000				$ 5,716,354,000
Interest expense		46,674,000				$ 45,381,000
Secured debt agreements borrowings outstanding	5,776,165,000	5,776,165,000			5,731,626,000				5,731,626,000
Covenants, minimum tangible net worth	$ 1,900,000,000	$ 1,900,000,000
Covenants, percentage of tangible assets on cash proceeds from equity issuances		75.00%	75.00%	75.00%
Covenants, percentage of recourse indebtedness	5.00%	5.00%
Maximum [Member]
Debt Instrument [Line Items]
Covenants, indebtedness to total assets, in percent	83.33%	83.33%
Minimum [Member]
Debt Instrument [Line Items]
Covenants, EBITDA to fixed charges, in percent		140.00%	140.00%	140.00%
Covenants, minimum cash liquidity amount	$ 10,000,000	$ 10,000,000
Asset-Specific Financings [Member]
Debt Instrument [Line Items]
Weighted-average outstanding balance		696,400,000			606,900,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Weighted-average outstanding balance					35,300,000
Interest expense		240,000			506,000
Amortization of deferred fees and expenses		126,000			128,000
Secured debt agreements borrowings outstanding	$ 0	$ 0			0				0
Revolving Credit Facility [Member] | Barclays [Member]
Debt Instrument [Line Items]
Maximum Facility Size								$ 125,000,000
Number of extension options | ExtensionOptions	2	2
Term of maturity date		1 year	1 year	1 year
First mortgage bridge to term financing maximum period								6 months
GE Portfolio Acquisition Facility [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	$ 1,250,524,000	$ 1,250,524,000			1,479,582,000				1,479,582,000
GE Portfolio Acquisition Facility [Member] | Wells Fargo [Member]
Debt Instrument [Line Items]
Maximum Facility Size	1,400,000,000	1,400,000,000
Approximate credit line, outstanding amount	1,300,000,000
Amount available for potential future fundings of loan	171,700,000	$ 171,700,000
GE Portfolio Acquisition Facility [Member] | Asset Specific Borrowings [Member]
Debt Instrument [Line Items]
Weighted average rate							80.00%
Maturity date		May 20, 2020	May 20, 2020	May 20, 2020
Borrowings maturity term		The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options.	The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options.	The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options.
Number of extension options | ExtensionOptions							2
Term of maturity date							1 year
Secured debt agreements borrowings outstanding	1,300,000,000	$ 1,300,000,000			1,500,000,000				1,500,000,000
GE Portfolio Acquisition Facility [Member] | Asset Specific Borrowings [Member] | Maximum [Member]
Debt Instrument [Line Items]
Percentage of guarantee rate							25.00%
Guarantee of outstanding borrowings							$ 250,000,000
Credit Facilities [Member]
Debt Instrument [Line Items]
Number of revolving repurchase facilities closed | Facility		2	2	2
Additional credit capacity			£ 250.0	€ 250.0
Weighted-average outstanding balance		$ 3,500,000,000			3,600,000,000
Aggregate borrowings	4,000,000,000	$ 4,000,000,000			2,900,000,000				$ 2,900,000,000
Weighted-average advance rate		78.90%	78.90%	78.90%					79.10%
Weighted-average initial maturity		1 year 6 months	1 year 6 months	1 year 6 months					1 year 6 months
Maximum Facility Size	6,569,880,000	$ 6,569,880,000			5,479,180,000				$ 5,479,180,000
Amount available for potential future fundings of loan	449,536,000	449,536,000			541,743,000				541,743,000
Secured debt agreements borrowings outstanding	3,958,064,000	3,958,064,000			3,572,837,000				3,572,837,000
Credit Facilities [Member] | Wells Fargo [Member]
Debt Instrument [Line Items]
Maximum Facility Size	2,000,000,000	2,000,000,000			2,000,000,000				2,000,000,000
Amount available for potential future fundings of loan	$ 229,312,000	$ 229,312,000			$ 232,209,000				$ 232,209,000
Borrowings maturity term		Term matched	Term matched	Term matched
Credit Facilities [Member] | Asset-Specific Financings [Member]
Debt Instrument [Line Items]
Additional credit capacity		$ 500,000,000
Base Rate [Member] | GE Portfolio Acquisition Facility [Member] | Asset Specific Borrowings [Member] | Primary [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent							1.75%
Base Rate [Member] | GE Portfolio Acquisition Facility [Member] | Asset Specific Borrowings [Member] | Primary [Member] | Year Four [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent							1.80%
Base Rate [Member] | GE Portfolio Acquisition Facility [Member] | Asset Specific Borrowings [Member] | Primary [Member] | Year Five [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent							1.85%
LIBOR [Member] | Credit Facilities [Member] | Weighted-Average Cash Coupon [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent		1.90%	1.90%	1.90%					1.82%
LIBOR [Member] | Credit Facilities [Member] | Weighted-Average All-in Cost of Credit [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent		2.11%	2.11%	2.11%					2.02%

XML

Secured Debt Agreements, Net - Credit Facilities (Detail)	Mar. 31, 2017 USD ($)	Mar. 31, 2017 GBP (£)	Mar. 31, 2017 EUR (€)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 GBP (£)	Dec. 31, 2016 EUR (€)
Line of Credit Facility [Line Items]
Potential	$ 4,407,600,000
Repurchase Borrowings Outstanding	3,958,064,000
Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	6,569,880,000			$ 5,479,180,000
Collateral Assets	5,667,220,000			5,297,728,000
Potential	4,407,600,000			4,114,580,000
Repurchase Borrowings Outstanding	3,958,064,000			3,572,837,000
Available	449,536,000			541,743,000
Wells Fargo [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	2,000,000,000			2,000,000,000
Collateral Assets	1,895,248,000			1,718,874,000
Potential	1,468,184,000			1,339,942,000
Repurchase Borrowings Outstanding	1,238,872,000			1,107,733,000
Available	229,312,000			232,209,000
MetLife [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	1,000,000,000			1,000,000,000
Collateral Assets	1,104,478,000			1,106,017,000
Potential	866,114,000			862,454,000
Repurchase Borrowings Outstanding	866,114,000			862,454,000
Bank of America [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	750,000,000			750,000,000
Collateral Assets	813,305,000			794,881,000
Potential	641,066,000			617,694,000
Repurchase Borrowings Outstanding	641,066,000			617,694,000
JP Morgan [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000,000			500,000,000
Collateral Assets	359,098,000			550,560,000
Potential	277,914,000			420,414,000
Repurchase Borrowings Outstanding	201,737,000			316,219,000
Available	76,177,000			104,195,000
Morgan Stanley [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	627,500,000	£ 500,000,000		308,500,000	£ 250,000,000
Collateral Assets	329,767,000			344,056,000
Potential	260,623,000			272,221,000
Repurchase Borrowings Outstanding	220,969,000			231,930,000
Available	39,654,000			40,291,000
Citibank [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	766,300,000			500,000,000
Collateral Assets	509,582,000			508,989,000
Potential	393,933,000			394,677,000
Repurchase Borrowings Outstanding	295,777,000			229,629,000
Available	98,156,000			165,048,000
Deutsche Bank [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000,000
Collateral Assets	374,119,000
Potential	278,851,000
Repurchase Borrowings Outstanding	278,851,000
Societe Generale [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	426,080,000		€ 400,000,000	420,680,000		€ 400,000,000
Collateral Assets	281,623,000			274,351,000
Potential	220,915,000			207,178,000
Repurchase Borrowings Outstanding	214,678,000			$ 207,178,000
Available	$ 6,237,000

XML

Secured Debt Agreements, Net - Credit Facilities (Parenthetical) (Detail) - Credit Facilities [Member]	Mar. 31, 2017 USD ($)	Mar. 31, 2017 GBP (£)	Mar. 31, 2017 EUR (€)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 GBP (£)	Dec. 31, 2016 EUR (€)
Line of Credit Facility [Line Items]
Maximum Facility Size	$ 6,569,880,000			$ 5,479,180,000
JP Morgan [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000,000			500,000,000
JP Morgan [Member] | $250.0 Million Facility [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000,000			500,000,000
Morgan Stanley [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	627,500,000	£ 500,000,000		308,500,000	£ 250,000,000
Citibank [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	766,300,000			500,000,000
Citibank [Member] | $250.0 Million Facility [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000,000
Citibank [Member] | $500.0 Million Facility [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	266,300,000		€ 250,000,000
Citibank [Member] | UK Pound Sterling 153.0 Million ($226.7 Million) Facility [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size				500,000,000
Societe Generale [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	$ 426,080,000		€ 400,000,000	$ 420,680,000		€ 400,000,000

XML

Secured Debt Agreements, Net - Summary of Key Terms of Credit Facilities (Detail) € in Thousands, £ in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Mar. 31, 2017 GBP (£)	Mar. 31, 2017 EUR (€)
Line of Credit Facility [Line Items]
Outstanding Borrowings	$ 3,958,064
Potential Borrowings	$ 4,407,600
Rate	1.90%
Advance Rate	78.90%
Credit Facilities [Member]
Line of Credit Facility [Line Items]
Outstanding Borrowings	$ 3,958,064	$ 3,572,837
Potential Borrowings	$ 4,407,600	$ 4,114,580
Advance Rate	78.90%	79.10%
Credit Facilities [Member] | 1-Month USD LIBOR [Member]
Line of Credit Facility [Line Items]
Outstanding Borrowings	$ 3,639,921
Potential Borrowings	$ 4,030,008
Rate	1.88%
Advance Rate	78.90%
Credit Facilities [Member] | 3-Month EURIBOR [Member]
Line of Credit Facility [Line Items]
Potential Borrowings | €				€ 38,269
Advance Rate	77.80%
Credit Facilities [Member] | 3-Month GBP LIBOR [Member]
Line of Credit Facility [Line Items]
Outstanding Borrowings | £			£ 253,500
Potential Borrowings | £			£ 269,273
Rate	2.15%
Advance Rate	79.00%
Credit Facilities [Member] | Wells Fargo [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Outstanding Borrowings	$ 1,238,872	$ 1,107,733
Potential Borrowings	$ 1,468,184	1,339,942
Credit Facilities [Member] | MetLife [Member]
Line of Credit Facility [Line Items]
Guarantee	50.00%
Margin Call	Collateral marks only
Term/Maturity	April 22, 2022
Outstanding Borrowings	$ 866,114	862,454
Potential Borrowings	$ 866,114	862,454
Credit Facilities [Member] | Bank of America [Member]
Line of Credit Facility [Line Items]
Guarantee	50.00%
Margin Call	Collateral marks only
Term/Maturity	May 21, 2021
Outstanding Borrowings	$ 641,066	617,694
Potential Borrowings	$ 641,066	617,694
Credit Facilities [Member] | Citibank [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Outstanding Borrowings	$ 295,777	229,629
Potential Borrowings	$ 393,933	394,677
Credit Facilities [Member] | Deutsche Bank [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Outstanding Borrowings	$ 278,851
Potential Borrowings	$ 278,851
Credit Facilities [Member] | Morgan Stanley [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	March 1, 2020
Outstanding Borrowings	$ 220,969	231,930
Potential Borrowings	$ 260,623	272,221
Credit Facilities [Member] | Societe Generale [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Outstanding Borrowings	$ 214,678	207,178
Potential Borrowings	$ 220,915	207,178
Credit Facilities [Member] | JP Morgan [Member]
Line of Credit Facility [Line Items]
Guarantee	50.00%
Margin Call	Collateral marks only
Term/Maturity	January 7, 2019
Outstanding Borrowings	$ 201,737	316,219
Potential Borrowings	$ 277,914	$ 420,414

XML

Secured Debt Agreements, Net - Summary of Key Terms of Credit Facilities (Parenthetical) (Detail) - Credit Facilities [Member] - ExtensionOptions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
MetLife [Member]
Line of Credit Facility [Line Items]
Maturity period		Includes five one-year extension options which may be exercised at our sole discretion.
Number of extension options		5
Term of maturity date		1 year
Bank of America [Member]
Line of Credit Facility [Line Items]
Maturity period	Includes two one-year extension options which may be exercised at our sole discretion.
Number of extension options	2
Term of maturity date	1 year

XML

Secured Debt Agreements, Net - Summary of Statistics for Asset-Specific Financings (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) SecurityLoan	Dec. 31, 2016 USD ($) SecurityLoan
Participating Mortgage Loans [Line Items]
Collateral assets, Book Value	$ 720,315	$ 869,417
Financing provided, Book Value	566,190	676,333
Collateral assets, Principal Balance	724,013	876,083
Financing provided, Principal Balance	$ 567,577	$ 679,207
Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Count | SecurityLoan	6	7
LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	4.83%	4.84%
JP Morgan [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2020-01	2020-01
Collateral assets, Book Value	$ 285,955	$ 282,818
Collateral assets, Principal Balance	$ 286,887	$ 284,012
Count | SecurityLoan	1	1
JP Morgan [Member] | LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	3.88%	3.88%
Citibank [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2020-11	2020-11
Collateral assets, Book Value	$ 204,548	$ 203,555
Collateral assets, Principal Balance	$ 204,617	$ 203,656
Count | SecurityLoan	2	2
Citibank [Member] | LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	4.40%	4.40%
Deutsche Bank [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term		2021-08
Collateral assets, Book Value		$ 180,866
Collateral assets, Principal Balance		$ 183,300
Count | SecurityLoan		1
Deutsche Bank [Member] | LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate		5.18%
Bank of the Ozarks [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2020-06	2020-04
Collateral assets, Book Value	$ 167,510	$ 140,524
Collateral assets, Principal Balance	$ 169,986	$ 143,164
Count | SecurityLoan	2	2
Bank of the Ozarks [Member] | LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	6.51%	6.42%
Wells Fargo [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2019-12	2019-12
Collateral assets, Book Value	$ 62,302	$ 61,654
Collateral assets, Principal Balance	$ 62,523	$ 61,951
Count | SecurityLoan	1	1
Wells Fargo [Member] | LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	6.05%	6.05%
Asset-Specific Financings [Member]
Participating Mortgage Loans [Line Items]
Guarantee	$ 165,883	$ 231,585
Financing provided, Principal Balance	$ 567,577	$ 679,207
Count | SecurityLoan	6	7
Asset-Specific Financings [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	2.58%	2.60%
Asset-Specific Financings [Member] | JP Morgan [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2020-01	2020-01
Guarantee	$ 116,839	$ 116,839
Financing provided, Book Value	233,413	233,626
Financing provided, Principal Balance	$ 233,679	$ 233,679
Count | SecurityLoan	1	1
Asset-Specific Financings [Member] | JP Morgan [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	1.89%	1.89%
Asset-Specific Financings [Member] | Citibank [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2020-11	2020-11
Guarantee	$ 40,291	$ 39,663
Financing provided, Book Value	161,123	158,609
Financing provided, Principal Balance	$ 161,163	$ 158,652
Count | SecurityLoan	2	2
Asset-Specific Financings [Member] | Citibank [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	2.42%	2.42%
Asset-Specific Financings [Member] | Deutsche Bank [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term		2021-08
Guarantee		$ 66,410
Financing provided, Book Value		133,621
Financing provided, Principal Balance		$ 135,075
Count | SecurityLoan		1
Asset-Specific Financings [Member] | Deutsche Bank [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate		3.03%
Asset-Specific Financings [Member] | Bank of the Ozarks [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2020-06	2020-04
Financing provided, Book Value	$ 128,045	$ 107,323
Financing provided, Principal Balance	$ 128,969	$ 108,435
Count | SecurityLoan	2	2
Asset-Specific Financings [Member] | Bank of the Ozarks [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	3.83%	3.68%
Asset-Specific Financings [Member] | Wells Fargo [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Term	2019-12	2019-12
Guarantee	$ 8,753	$ 8,673
Financing provided, Book Value	43,609	43,154
Financing provided, Principal Balance	$ 43,766	$ 43,366
Count | SecurityLoan	1	1
Asset-Specific Financings [Member] | Wells Fargo [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	3.14%	2.97%

XML

Loan Participations Sold, Net - Summary of Statistics for Loan Participations Sold (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) Loans	Dec. 31, 2016 USD ($) Loans
Participating Mortgage Loans [Line Items]
Count | Loans	1	1
Principal Balance	$ 426,700	$ 419,560
Book Value, Total Loan	$ 8,721,768	$ 8,692,978
Weighted Average Term	2019-12	2019-12
Book Value	$ 354,131	$ 348,077
Senior Participation [Member]
Participating Mortgage Loans [Line Items]
Count | Loans	1	1
Principal Balance	$ 355,583	$ 349,633
Guarantee	$ 30,120	$ 29,616
Weighted Average Term	2019-12	2019-12
Book Value	$ 354,131	$ 348,077
Loan Participations Sold [Member]
Participating Mortgage Loans [Line Items]
Book Value, Total Loan	$ 423,575	$ 416,233
LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost	4.48%	4.48%
LIBOR [Member] | Senior Participation [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost	2.72%	2.72%

XML

Loan Participations Sold, Net - Summary of Statistics for Loan Participations Sold (Parenthetical) (Detail) $ in Thousands, £ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)	Mar. 31, 2017 GBP (£)
Participating Mortgage Loans [Line Items]
Guarantor obligations	$ 30,100	$ 29,600		£ 24.0
Interest paid	39,287		$ 38,121
Deferred financing costs	15,974	15,272
Loan Participations Sold [Member]
Participating Mortgage Loans [Line Items]
Interest expense	2,600	2,900
Interest paid	2,500	2,800
Deferred financing costs	$ 1,500	$ 1,600

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Convertible Notes, Net - Additional Information (Detail)		1 Months Ended	3 Months Ended		12 Months Ended
	Sep. 28, 2016 USD ($) $ / shares	Nov. 30, 2013 USD ($) $ / shares	Mar. 31, 2017 USD ($) $ / shares	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Interest on convertible notes related to amortization of discount and certain issuance costs			$ 4,535,000	$ 4,053,000
Convertible notes, net			167,475,000		$ 166,762,000
Accrued interest payable			11,673,000		9,049,000
Deferred financing costs			15,974,000		15,272,000
5.25% Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Convertible Senior Notes, Principal amount		$ 172,500,000	$ 172,500,000		$ 172,500,000
Convertible Senior Notes, Interest rate		5.25%
Maturity date					Dec. 01, 2018
Convertible Senior Notes, Interest rate including underwriter discounts		5.87%
Description of Convertible Notes conversion			The Convertible Notes are convertible at the holders' option into shares of our class A common stock, only under specific circumstances, prior to the close of business on August 31, 2018, at the applicable conversion rate in effect on the conversion date.
Discount upon issuance of Convertible Notes		$ 9,100,000	$ 4,800,000		$ 5,500,000
Debt issuance costs		$ 4,100,000
Convertible Notes, assumed effective interest rate		6.50%
Convertible Senior Notes, Interest rate including amortization of discount upon issuance		7.16%
Total interest on convertible notes			3,000,000	3,000,000
Interest on convertible notes related to cash coupon			2,300,000	2,300,000
Interest on convertible notes related to amortization of discount and certain issuance costs			713,000	$ 670,000
Accrued interest payable			3,000,000		755,000
Deferred financing costs			$ 180,000		$ 206,000
5.25% Convertible Senior Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt instrument, conversion price | $ / shares			$ 30.96
5.25% Convertible Senior Notes [Member] | Class A Common Stock [Member]
Debt Instrument [Line Items]
Convertible Notes, debt conversion, common stock issued, in percent	35.7236	34.8943
Convertible Notes, debt conversion, principal amount	$ 1,000	$ 1,000
Debt instrument, conversion price | $ / shares	$ 27.99	$ 28.66

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Derivative Financial Instruments - Summary of Outstanding Foreign Exchange Derivatives Designated as Net Investment Hedges of Foreign Currency Risk (Detail) - Sell [Member] - Designated as Hedging Instrument [Member] - Foreign Exchange Forward [Member] - Net Investment Hedges [Member] € in Thousands, £ in Thousands, CAD in Thousands	Mar. 31, 2017 GBP (£) DerivativeInstrument	Mar. 31, 2017 CAD DerivativeInstrument	Dec. 31, 2016 GBP (£) DerivativeInstrument	Dec. 31, 2016 EUR (€) DerivativeInstrument	Dec. 31, 2016 CAD DerivativeInstrument
EUR [Member]
Derivative [Line Items]
Number of Instruments			1	1	1
Notional Amount | €				€ 44,900
GBP [Member]
Derivative [Line Items]
Number of Instruments	1	1	2	2	2
Notional Amount | £	£ 141,900		£ 141,900
CAD [Member]
Derivative [Line Items]
Number of Instruments	1	1	2	2	2
Notional Amount | CAD		CAD 122,900			CAD 122,900

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Derivative Financial Instruments - Summary of Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk (Detail) - Cash Flow Hedges [Member] - Designated as Hedging Instrument [Member] £ in Thousands, CAD in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) DerivativeInstrument	Dec. 31, 2016 USD ($) DerivativeInstrument	Mar. 31, 2017 GBP (£) DerivativeInstrument	Mar. 31, 2017 CAD DerivativeInstrument	Dec. 31, 2016 GBP (£) DerivativeInstrument	Dec. 31, 2016 CAD DerivativeInstrument
Interest Rate Caps [Member] | GBP [Member] | GBP LIBOR [Member]
Derivative [Line Items]
Number of Instruments	1	1	1	1	1	1
Notional Amount | £			£ 15,142		£ 15,142
Strike	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%
Wtd. Avg. Maturity (Years)	1 month 6 days	3 months 18 days
Interest Rate Caps [Member] | USD [Member] | USD LIBOR [Member]
Derivative [Line Items]
Number of Instruments	19	21	19	19	21	21
Notional Amount | $	$ 633,903	$ 802,256
Strike	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%
Wtd. Avg. Maturity (Years)	2 months 12 days	4 months 24 days
Interest Rate Caps [Member] | CAD [Member] | CDOR [Member]
Derivative [Line Items]
Number of Instruments	6	5	6	6	5	5
Notional Amount | CAD				CAD 304,931		CAD 400,035
Strike	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%
Wtd. Avg. Maturity (Years)	2 months 12 days	4 months 24 days
Interest Rate Swaps [Member] | CAD [Member] | CDOR [Member]
Derivative [Line Items]
Number of Instruments	4	4	4	4	4	4
Notional Amount | CAD				CAD 108,271		CAD 108,271
Strike	1.00%	1.00%	1.00%	1.00%	1.00%	1.00%
Wtd. Avg. Maturity (Years)	2 years 2 months 12 days	2 years 4 months 24 days

XML

Derivative Financial Instruments - Summary of Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk (Parenthetical) (Detail) - Cash Flow Hedges [Member] - Interest Rate Swaps Effective June 1, 2017 [Member] - Designated as Hedging Instrument [Member] CAD in Millions, $ in Millions	Mar. 31, 2017 USD ($) DerivativeInstrument	Mar. 31, 2017 CAD DerivativeInstrument	Dec. 31, 2016 USD ($)
Derivative [Line Items]
Number of Instruments	2	2
Notional Amount	$ 68.3	CAD 91.0	$ 67.7

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Derivative Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Not Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivatives recorded gains (losses) during the period	$ 90,000	$ (976,000)
Interest Rate Swaps/Derivatives [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Reclassification from accumulated other comprehensive income as increase to interest expense	$ 470,000
Reclassification from accumulated other comprehensive income, time period	12 months
Cash flow hedge ineffectiveness	$ 0	$ 0

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Derivative Financial Instruments - Summary of Non-designated Hedges (Detail) - Not Designated as Hedging Instrument [Member] € in Thousands, CAD in Thousands, $ in Thousands	Mar. 31, 2017 USD ($) DerivativeInstrument	Mar. 31, 2017 EUR (€) DerivativeInstrument	Mar. 31, 2017 CAD DerivativeInstrument	Dec. 31, 2016 USD ($) DerivativeInstrument	Dec. 31, 2016 EUR (€) DerivativeInstrument	Dec. 31, 2016 CAD DerivativeInstrument
CAD [Member] | Interest Rate Swaps/Derivatives [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	1	1	1	2	2	2
Notional Amount | CAD			CAD 18,327			CAD 37,221
EUR [Member] | Buy GBP / Sell EUR Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	1	1	1	1	1	1
Notional Amount | €		€ 12,857			€ 12,857
USD [Member] | Interest Rate Swaps/Derivatives [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	2	2	2	3	3	3
Notional Amount | $	$ 72,960			$ 256,875

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Derivative Financial Instruments - Summary of Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	$ 1,424	$ 4,086
Fair Value of Derivatives in a Liability Position		210
Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	1,410	3,599
Fair Value of Derivatives in a Liability Position		210
Designated as Hedging Instrument [Member] | Foreign Currency Contracts [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	1,174	3,268
Fair Value of Derivatives in a Liability Position		210
Designated as Hedging Instrument [Member] | Interest Rate Swaps/Derivatives [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	236	331
Not Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	14	487
Not Designated as Hedging Instrument [Member] | Foreign Currency Contracts [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	$ 14	$ 487

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Derivative Financial Instruments - Summary of Effect of Derivative Financial Instruments on Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Loss Recognized in OCI on Derivatives (Effective Portion)	$ (4,399)	$ (6,666)
Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)	(474)	(27)
Net Investment [Member] | Foreign Currency Contracts [Member] | Interest Expense [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Loss Recognized in OCI on Derivatives (Effective Portion)	(4,294)	(6,470)
Cash Flow Hedges [Member] | Interest Rate Swaps/Derivatives [Member] | Interest Expense [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Loss Recognized in OCI on Derivatives (Effective Portion)	(105)	(196)
Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)	$ (474)	$ (27)

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Derivative Financial Instruments - Summary of Effect of Derivative Financial Instruments on Consolidated Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net Investment Hedges [Member] | Foreign Currency Contracts [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net cash settlements on our foreign currency forward contracts	$ 1.8	$ 8.2

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Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	3 Months Ended
	Apr. 17, 2017	Mar. 15, 2017	May 09, 2014	May 31, 2013	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Mar. 25, 2014
Class of Stock [Line Items]
Total stock, shares authorized					300,000,000
Common stock, shares authorized					200,000,000		200,000,000
Preferred stock, shares authorized					100,000,000
Preferred stock issued					0
Preferred stock outstanding					0
Plan adoption date					Mar. 25, 2014
Common stock, shares issued under dividend reinvestment program					270	285
Number of shares sold during period				25,875,000	270	285
Dividends declared per share of common stock		$ 0.62			$ 0.62	$ 0.62
Date of dividend paid					Apr. 17, 2017
Date of dividend declared					Mar. 15, 2017
Record date of dividend paid					Mar. 31, 2017
Accumulated other comprehensive loss					$ 52,357		$ 56,202
Net realized and unrealized gains related to changes in fair value of derivative instruments					47,300		51,300
Cumulative unrealized currency translation adjustment on assets and liabilities denominated in foreign currencies					$ 99,700		$ 107,500
Subsequent Events [Member]
Class of Stock [Line Items]
Dividends paid	$ 58,800
Dividends paid per common stock	$ 0.62
ATM Agreements [Member]
Class of Stock [Line Items]
Aggregate sales price			$ 200,000
Number of shares sold during period					0	0
Aggregate sales price remaining available					$ 188,600
Dividend Reinvestment and Direct Stock Purchase Plan [Member]
Class of Stock [Line Items]
Reserved for issuance of class A common stock					9,998,057			10,000,000

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Equity - Schedule of Movement in Outstanding Shares of Class A Common Stock, Restricted Class A Common Stock and Deferred Stock Units (Detail) - shares	1 Months Ended	3 Months Ended
	May 31, 2013	Mar. 31, 2017	Mar. 31, 2016
Equity [Abstract]
Beginning balance		94,709,290	93,843,847
Issuance of class A common stock	25,875,000	270	285
Issuance of restricted class A common stock, net		277,815	209,798
Issuance of deferred stock units		6,415	7,322
Ending balance		94,993,790	94,061,252

XML

Equity - Schedule of Movement in Outstanding Shares of Class A Common Stock, Restricted Class A Common Stock and Deferred Stock Units (Parenthetical) (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Class of Stock [Line Items]
Common stock, shares issued under dividend reinvestment program	270	285
Class A Common Stock [Member]
Class of Stock [Line Items]
Deferred stock units held by directors	175,442	148,843
Common stock, shares issued under dividend reinvestment program	270	285

XML

Equity - Schedule of Dividend Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 15, 2017	Mar. 31, 2017	Mar. 31, 2016
Equity [Abstract]
Dividends declared per share of common stock	$ 0.62	$ 0.62	$ 0.62
Total dividends declared		$ 58,787	$ 58,226

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Equity - Schedule of Basic and Diluted Earnings Per Share, or EPS, Based on Weighted-Average of Both Restricted and Unrestricted Class A Common Stock Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income	$ 51,405	$ 57,047
Weighted-average shares outstanding, basic and diluted	94,993,386	94,067,769
Per share amount, basic and diluted	$ 0.54	$ 0.61

XML

Other Expenses - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
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 description	Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12 month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.
Management fees	$ 12,921,000	$ 13,613,000
Accrued management and incentive fees payable	12,921,000		$ 12,798,000
CT Legacy Partners [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total incentive compensation payments		129,000
Manager [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Management fees	9,600,000	9,500,000
Total incentive compensation payments	3,300,000	4,200,000
Accrued management and incentive fees payable	$ 12,900,000		$ 12,800,000
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%
Incentive Awards Plan [Member] | CT Legacy Partners [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Recognized expenses for incentive plan		$ 129,000

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Other Expenses - Schedule of General and Administrative Expenses (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Professional services	$ 1,017	$ 890
Operating and other costs	445	869
Subtotal	1,462	1,759
Non-cash and CT Legacy Portfolio compensation expenses
Restricted class A common stock earned	5,813	4,593
Subtotal	5,907	4,986
General and administrative expenses	59	50
General and administrative expenses	7,428	6,795
General and Administrative Expense [Member]
Non-cash and CT Legacy Portfolio compensation expenses
Director stock-based compensation	94	94
CT Legacy Partners [Member]
Non-cash and CT Legacy Portfolio compensation expenses
Management incentive awards plan		129
Blackstone [Member]
Non-cash and CT Legacy Portfolio compensation expenses
General and administrative expenses	$ 7,369	6,745
CT Opportunity Partners I, LP [Member]
Non-cash and CT Legacy Portfolio compensation expenses
Management incentive awards plan		$ 170

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Income Taxes - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	May 31, 2013	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Tax Credit Carryforward [Line Items]
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		$ 89,000	$ 241,000
Deferred tax assets		0		$ 0
Deferred tax liabilities		$ 0		0
Common stock, shares issued	25,875,000	270	285
Net operating losses carried forward				$ 159,000,000
NOLs expiration date		Dec. 31, 2029
Internal Revenue Service [Member]
Tax Credit Carryforward [Line Items]
Net operating losses limitations		The availability of our net operating losses, or NOLs, is generally limited to $2.0 million per annum
Earliest Tax Year [Member]
Tax Credit Carryforward [Line Items]
Open tax year		2013
Latest Tax Year [Member]
Tax Credit Carryforward [Line Items]
Open tax year		2016

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Stock-Based Incentive Plans - Additional Information (Detail) $ / shares in Units, $ in Millions		3 Months Ended
	Mar. 31, 2017 USD ($) Plans $ / shares shares	Mar. 31, 2017 USD ($) Plans $ / shares shares	Dec. 31, 2016 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of benefit plans | Plans	7	7
Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares, vesting period		3 years
Number of shares of restricted class A common stock outstanding	1,476,111	1,476,111	1,309,995
Unrecognized compensation cost relating to nonvested share-based compensation | $	$ 45.7	$ 45.7
Unrecognized compensation cost expected to be recognized over weighted average period	1 year 2 months 12 days
Nonvested share-based compensation, closing price | $ / shares	$ 30.96	$ 30.96
Expired Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available under plan	0	0
Vest in 2017 [Member] | Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of restricted class A common stock outstanding	636,317	636,317
Vest in 2018 [Member] | Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of restricted class A common stock outstanding	537,562	537,562
Vest in 2019 [Member] | Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of restricted class A common stock outstanding	302,232	302,232
Class A Common Stock [Member] | Stock Incentive Current Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available under plan	1,471,955	1,471,955
Maximum number of shares available under plan	2,400,000	2,400,000

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Stock-Based Incentive Plans - Movement in Outstanding Shares of Restricted Class A Common Stock and Weighted-Average Grant Date Fair Value Per Share (Detail) - Restricted Class A Common Stock [Member]	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Class A Common Stock, Beginning Balance | shares	1,309,995
Restricted Class A Common Stock, Granted | shares	280,938
Restricted Class A Common Stock, Vested | shares	(111,699)
Restricted Class A Common Stock, Forfeited | shares	(3,123)
Restricted Class A Common Stock, Ending Balance | shares	1,476,111
Weighted-Average Grant Date Fair Value Per Share, Beginning Balance | $ / shares	$ 28.68
Weighted-Average Grant Date Fair Value Per Share, Granted | $ / shares	30.54
Weighted-Average Grant Date Fair Value Per Share, Vested | $ / shares	27.77
Weighted-Average Grant Date Fair Value Per Share, Forfeited | $ / shares	27.37
Weighted-Average Grant Date Fair Value Per Share, Ending Balance | $ / shares	$ 29.11

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Fair Values - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Derivatives	$ 1,424	$ 4,086
Liabilities
Derivatives		210
Recurring [Member]
Assets
Derivatives	1,424	4,086
Liabilities
Derivatives		210
Level 2 [Member] | Recurring [Member]
Assets
Derivatives	$ 1,424	4,086
Liabilities
Derivatives		$ 210

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Fair Values - Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on Recurring Basis Using Level 3 Inputs (Detail) - Level 3 [Member] - Recurring [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning	$ 12,561
Proceeds from investment realizations	(2,406)
Adjustments to fair value included in earnings
Gain on investments at fair value	66
Balance, ending	$ 10,221

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Fair Values - Schedule of Details of Carrying Amount, Face Amount, and Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015	Nov. 30, 2013
Financial assets
Cash and cash equivalents, face amount	$ 64,275	$ 75,567	$ 110,622	$ 96,450
Loans receivable, net, face amount	8,759,696	8,727,218
Financial liabilities
Secured debt agreements, net, face amount	5,776,165	5,731,626
Loan participations sold, net	354,131	348,077
Loan participations sold, net, face amount	426,700	419,560
Carrying Amount [Member]
Financial assets
Cash and cash equivalents	64,275	75,567
Loans receivable, net	8,721,768	8,692,978
Financial liabilities
Secured debt agreements, net	5,760,191	5,716,354
Loan participations sold, net	354,131	348,077
Convertible notes, net	167,475	166,762
Fair Value [Member]
Financial assets
Cash and cash equivalents	64,275	75,567
Loans receivable, net	8,765,688	8,733,784
Financial liabilities
Secured debt agreements, net	5,776,165	5,731,626
Loan participations sold, net	355,583	349,633
Convertible notes, net	194,870	191,763
Senior Participation [Member]
Financial liabilities
Loan participations sold, net	354,131	348,077
Loan participations sold, net, face amount	355,583	349,633
5.25% Convertible Senior Notes [Member]
Financial liabilities
Convertible notes, net, face amount	$ 172,500	$ 172,500			$ 172,500

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Transactions with Related Parties - Additional Information (Detail)	3 Months Ended		12 Months Ended
	Mar. 31, 2017 USD ($) SecurityLoan shares	Mar. 31, 2016 USD ($) shares	Dec. 31, 2016 USD ($) SecurityLoan shares
Related Party Transaction [Line Items]
Accrued management and incentive fees payable	$ 12,921,000		$ 12,798,000
Common stock value	948,000		$ 945,000
Non-cash expenses	$ 5,907,000	$ 4,852,000
Number of Loans | SecurityLoan	103		107
Restricted Class A Common Stock [Member]
Related Party Transaction [Line Items]
Shares held | shares	1,476,111		1,309,995
Restricted shares, vesting period	3 years
Restricted Class A Common Stock [Member] | Class A Common Stock [Member]
Related Party Transaction [Line Items]
Common stock, shares issued | shares	0	0
Manager [Member]
Related Party Transaction [Line Items]
Management Agreement expiration date	Dec. 19, 2017
Management Agreement renewal term, description	The current term of which expires on December 19, 2017, and will be automatically renewed for a one-year term each anniversary thereafter unless earlier terminated.
Management Agreement renewal term, period	1 year
Accrued management and incentive fees payable	$ 12,900,000		$ 12,800,000
Management fees paid to Manager	12,800,000	$ 14,400,000
Expenses reimbursed to Manager	$ 93,000	320,000
Number of Loans | SecurityLoan	2
Expenses incurred on insurance agency transaction of affiliate with loan borrower	$ 0	0
Income received on insurance agency transaction of affiliate with loan borrower	$ 0	0
Manager [Member] | Class A Common Stock [Member] | Restricted Class A Common Stock [Member]
Related Party Transaction [Line Items]
Shares held | shares	719,903
Common stock value	$ 20,900,000
Non-cash expenses	$ 2,900,000	2,100,000
Manager [Member] | Class A Common Stock [Member] | Restricted Class A Common Stock [Member] | Stock Incentive Current Plan [Member]
Related Party Transaction [Line Items]
Restricted shares, vesting period	3 years
BXMT Advisors Limited Liability Company and Affiliates [Member]
Related Party Transaction [Line Items]
Payments of preferred distributions to affiliate of our Manager	$ 224,000
Affiliates of Manager [Member] | Third-Party Service Provider [Member]
Related Party Transaction [Line Items]
Administrative services expenses incurred	$ 88,000	$ 90,000

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Commitments and Contingencies - Additional Information (Detail)		3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) Loans Directors	Mar. 31, 2017 USD ($) Loans Installments	Dec. 31, 2017 USD ($) Directors	Dec. 31, 2016 USD ($)
Commitments And Contingencies [Line Items]
Commitments expiration period		4 years
Number of loans receivable | Loans	58	58
Percentage of compensation paid in cash	40.00%
Percentage of compensation in the form of deferred stock units	60.00%
Number of board of directors | Directors	8
Number of independent directors entitled to annual compensation | Directors	5
Number of equal quarterly installments | Installments		4
Scenario, Forecast [Member]
Commitments And Contingencies [Line Items]
Number of independent directors entitled to annual compensation | Directors			5
Loans Receivable [Member]
Commitments And Contingencies [Line Items]
Unfunded loan commitments	$ 1,149,842,000	$ 1,149,842,000		$ 882,472,000
Five Independent Board of Directors [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	125,000
Five Independent Board of Directors [Member] | Scenario, Forecast [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation			$ 175,000
Annual cash compensation paid in cash			75,000
Annual cash compensation paid in the form of deferred stock units			100,000
Chairperson of Audit Committee [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	$ 12,000
Chairperson of Audit Committee [Member] | Scenario, Forecast [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation			20,000
Audit Committee Members [Member] | Scenario, Forecast [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation			10,000
Compensation and Corporate Governance Committees [Member] | Scenario, Forecast [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation			$ 10,000