10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2010

OR

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

Commission file number 001-34436

Starwood Property Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland (State or Other Jurisdiction of Incorporation or Organization)	27-0247747 (I.R.S. Employer Identification No.)
591 West Putnam Avenue Greenwich, Connecticut (Address of principal executive offices)	06830 (Zip Code)

Registrant’s telephone number, including area code:
(203) 422-8100

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 þ No o

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) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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

Large accelerated filer o Accelerated filer o Non-accelerated filer þ (Do not check if smaller reporting company) Smaller reporting company o

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

The number of shares of the issuer’s common stock, $0.01 par value, outstanding as of May 6, 2010, was 47,583,800.

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements, including without limitation, statements concerning our operations, economic performance and financial condition. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are developed by combining currently available information with our beliefs and assumptions and are generally identified by the words “believe,” “expect,” “anticipate” and other similar expressions. Forward-looking statements do not guarantee future performance, which may be materially different from that expressed in, or implied by, any such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

These forward-looking statements are based largely on our current beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control, and which could materially affect actual results, performance or achievements. Factors that may cause actual results to vary from our forward-looking statements include, but are not limited to:

• factors described in our Annual Report on Form 10-K for the year ended December 31, 2009, including those set forth under the caption “Risk Factors”;

• defaults by borrowers in paying debt service on outstanding items;

• impairment in the value of real estate property securing our loans;

• availability of mortgage origination opportunities acceptable to us;

• national and local economic and business conditions;

• general and local commercial real estate property conditions;

• changes in federal government policies;

• changes in federal, state and local governmental laws and regulations;

• increased competition from entities engaged in mortgage lending;

• changes in interest rates; and

• the availability of and costs associated with sources of liquidity and financing.

In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.

1

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited, amounts in thousands, except share and per share data)

	March 31, 2010			December 31, 2009
Assets:
Cash and cash equivalents	$	107,994		$	645,129
Loans held for investment, net		734,160			214,521
Mortgage backed securities, held-to-maturity		248,599			245,896
Mortgage backed securities, available-for-sale		34,030			—
Other investments		7,673			—
Accrued interest receivable		6,026			2,180
Other assets		1,401			1,060
Total Assets	$	1,139,883		$	1,108,786
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable and accrued expenses	$	5,861		$	1,034
Related-party payable		3,584			3,546
Dividends payable		10,698			5,349
Secured financing agreements		196,350			171,394
Deferred offering costs		27,195			27,195
Other liabilities		1,206			4,233
Total Liabilities		244,894			212,751
Commitments and contingencies (Note 12)		—			—
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Preferred stock, $0.01 per share 100,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.01 per share, 500,000,000 shares authorized, 47,583,800 issued and outstanding		476			476
Additional paid-in capital		897,417			895,857
Accumulated other comprehensive loss		(447	)		—
Accumulated deficit		(13,123	)		(8,366	)
Total Starwood Property Trust, Inc. Stockholders’ Equity		884,323			887,967
Noncontrolling interests in consolidated subsidiaries		10,666			8,068
Total Equity		894,989			896,035
Total Liabilities and Stockholders’ Equity	$	1,139,883		$	1,108,786

See notes to condensed consolidated financial statements

2

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations

(Unaudited, amounts in thousands, except share and per share data)

	Three Months Ended
	March 31, 2010
Net interest margin:
Interest income from mortgage backed securities	$	4,331
Interest income from loans		9,699
Interest expense		(1,632	)
Net interest margin		12,398
Expenses:
Management fees (including $1,542 of non-cash stock-based compensation)		4,970
General and administrative (including $18 of non-cash stock-based compensation)		1,779
Total operating expenses		6,749
Interest income from cash balances		611
Net income	$	6,260
Net income attributable to noncontrolling interests		319
Net income attributable to Starwood Property Trust, Inc.	$	5,941
Net income per share of common stock:
Basic	$	0.12
Diluted	$	0.12
Weighted average number of shares of common stock outstanding:
Basic		47,662,840
Diluted		48,626,300

See notes to condensed consolidated financial statements

3

Starwood Property Trust, Inc. and Subsidiaries

Consolidated Statement of Equity

(Unaudited, amounts in thousands, except share and per share data)

															Total
															Starwood
												Accumulated			Property
						Additional						Other			Trust, Inc.			Non-
	Common Stock					Paid -			Accumulated			Comprehensive			Stockholders’			controlling			Total
	Shares			Par Value		In Capital			Deficit			Income(Loss)			Equity			interests			Equity
Balance at August 17, 2009
(Commencement of Operations)		100		$	—	$	1		$	—		$	—		$	1		$	—		$	1
Proceeds from public offering of common stock		46,575,000			466		931,034									931,500						931,500
Underwriting and offering costs							(57,588	)								(57,588	)					(57,588	)
Proceeds from private placement		1,000,000			10		19,990									20,000						20,000
Cancellation of shares		(100	)				(1	)								(1	)					(1	)
Stock-based compensation		8,800					2,421									2,421						2,421
Net loss										(3,017	)					(3,017	)		437			(2,580	)
Dividends declared, $0.11 per share										(5,349	)					(5,349	)					(5,349	)
Contribution from noncontrolling interests																			50,855			50,855
Distribution to noncontrolling interests																			(43,224	)		(43,224	)
Balance at December 31, 2009		47,583,800		$	476	$	895,857		$	(8,366	)	$	—		$	887,967		$	8,068		$	896,035
Stock-based compensation							1,560									1,560						1,560
Net income										5,941						5,941			319			6,260
Dividends declared, $0.22 per share										(10,698	)					(10,698	)					(10,698	)
Other comprehensive loss, net													(447	)		(447	)					(447	)
Contribution from noncontrolling interests																—			2,578			2,578
Distribution to noncontrolling interests																—			(299	)		(299	)
Balance at March 31, 2010		47,583,800		$	476	$	897,417		$	(13,123	)	$	(447	)	$	884,323		$	10,666		$	894,989

See notes to condensed consolidated financial statements

4

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Comprehensive Income

(Unaudited, amounts in thousands)

	Three Months Ended
	March 31, 2010
Net Income	$	6,260
Other comprehensive loss:
Change in fair value of interest rate hedges		(120	)
Change in fair value of available-for-sale securities		(327	)
Total other comprehensive loss		(447	)
Comprehensive income	$	5,813

See notes to condensed consolidated financial statements

5

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(Unaudited, amounts in thousands)

	Three Months Ended
	March 31, 2010
Cash Flows from Operating Activities:
Net Income	$	6,260
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs		30
Amortization of net discount on mortgage backed securities (MBS)		(749	)
Amortization of net deferred loan fees and discounts		(481	)
Stock-based compensation		1,560
Changes in operating assets and liabilities:
Related-party payable		38
Accrued interest receivable, less purchased interest		(1,275	)
Other assets		292
Accounts payable and accrued expenses		1,063
Other liabilities		(3,147	)
Net cash provided by operating activities		3,591
Cash Flows from Investing Activities:
Investment in mortgage-backed securities		(35,918	)
Mortgage-backed securities investment repayments		1,699
Investment in loans		(521,359	)
Loan investment repayments		2,201
Purchased interest on investments, net		(2,572	)
Investments in other investments		(6,000	)
Net cash used in investing activities		(561,949	)
Cash Flows from Financing Activities:
Borrowings of secured financing arrangements		25,000
Principal repayments on borrowings		(44	)
Payment of deferred financing costs		(663	)
Payment of dividends		(5,349	)
Contribution from noncontrolling interests		2,578
Distribution to noncontrolling interests		(299	)
Net cash provided by financing activities		21,223
Net decrease in cash and cash equivalents		(537,135	)
Cash and cash equivalents, beginning of period		645,129
Cash and cash equivalents, end of period	$	107,994
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,609
Supplemental disclosure of non-cash investing and financing activities:
Dividends declared	$	10,698
Unsettled acquisition trades	$	3,764

See notes to condensed consolidated financial statements

6

Starwood Property Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2010 (unaudited)

1. Business and Organization

Starwood Property Trust, Inc. (together with its subsidiaries, the “Company”) is a Maryland corporation that commenced operations on August 17, 2009 upon the completion of its initial public offering. The Company is focused primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate debt investments. The Company also invests in residential mortgage-backed securities and residential mortgage loans. The Company is externally managed and advised by SPT Management, LLC (the “Manager”).

The Company is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). As such, the Company will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its taxable income to its stockholders by prescribed dates and complies with various other requirements.

The Company is organized as a holding company that conducts its business primarily through three wholly-owned subsidiaries, SPT Real Estate Sub I, LLC and SPT TALF Sub I, LLC, and SPT Operations, LLC. The Company has formed joint ventures (the “Joint Ventures”) with Starwood Hospitality Fund II (“Hotel II”) and Starwood Opportunity Fund VIII (“SOF VIII”) in accordance with the co-investment and allocation agreement with our Manager. These Joint Ventures are owned 75% by the Company and are consolidated into the Company’s consolidated financial statements.

2. Summary of Significant Accounting Policies

Basis of Accounting and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) and include our accounts and those of our consolidated subsidiaries. All significant intercompany amounts have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared under GAAP have been condensed or omitted pursuant to the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations, comprehensive income, and cash flows have been made. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the operating results for the full year.

A non-controlling interest in a consolidated subsidiary is defined as “the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent”. Non-controlling interests are required to be presented as a separate component of equity in the consolidated balance sheet. In addition, the presentation of net income must attribute earnings to controlling and non-controlling interests.

The Company uses plain English when describing or referencing accounting standards in the notes to the financial statements. As a result, there may be no reference to particular accounting standards by name, standard number, or ASC reference number.

7

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

Recent Accounting Pronouncements

Amendments to Variable Interest Entity Accounting. In June 2009, the FASB issued a statement which amends the consolidation guidance applicable to variable interest entities (“VIEs”). The amendments will significantly effect the overall consolidation analysis. It changes the way a primary beneficiary is determined in a VIE and how entities account for securitizations and special purpose entities as a result of the elimination of the qualified special purpose entity concept. This statement was effective on January 1, 2010 and the adoption of this statement did not have a material effect on our consolidated financial statements.

Segment Reporting

The Company is a REIT focused on originating and acquiring real estate related debt investments and currently operates in one reportable segment.

Debt Securities

GAAP requires that at the time of purchase, the Company designate debt securities as held-to-maturity, available-for-sale, or trading depending on intent and ability to hold such security to maturity. Held-to-maturity investments are stated at cost plus any premiums or discounts, which are amortized through the consolidated statements of income using the effective interest method. Securities that the Company does not hold for the purpose of selling in the near-term, but may dispose of prior to maturity, are designated as available-for-sale and are carried at estimated fair value with the net unrealized gains or losses recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. As of March 31, 2010, the Company’s commercial mortgage backed securities (“CMBS”) were designated as held-to-maturity and all residential mortgage backed securities (“RMBS”) were designated as available for sale.

The Company evaluates securities for other-than-temporary impairment (“OTTI”) at least quarterly. Securities are considered to be other-than-temporarily impaired when the estimated fair value of a security is less than amortized cost and (i) we intend to sell the security, (ii) it is more likely than not that we will be required to sell the security before recovery, or (iii) we do not expect to recover the entire amortized cost basis of the security. The evaluation of a security’s estimated cash flows includes the following, as applicable: (1) review of the credit of the issuer or the borrower, (2) review of the credit rating of the security, (3) review of the key terms of the security, (4) review of the performance of the loan or underlying loans, including debt service coverage and loan-to-value ratios, (5) analysis of the value of the collateral for the loan or underlying loans, (6) analysis of the effect of local, industry, and broader economic factors, and (7) analysis of historical and anticipated trends in defaults and loss severities for similar securities. If an OTTI has occurred, the carrying value of the security will be reduced to fair value, with the unrealized losses being charged against earnings as a loss on the consolidated statements of operations. For securities held to maturity, only the credit component of the unrealized loss will be charged against earnings and the component of the loss related to factors other than credit will be recognized in other comprehensive income (“OCI”).

Loans Held for Investment

The Company purchases and originates commercial real estate debt and related instruments (collectively, “Loans”) generally to be held to maturity. Held for investment loans are carried at cost, net of unamortized loan fees, acquisition premiums or discounts, and other related costs, unless the loans were deemed impaired. Interest income will be recognized using the effective interest method. Net deferred loan fees and origination and acquisition costs will be recognized in interest income over the loan term as yield adjustment. Loans that the Company plans to sell or liquidate in the near term will be held at the lower of cost or fair value. As of March 31, 2010, all of the Company’s Loans were designated as held for investment.

The Company must periodically evaluate each of its Loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the Loan. If a Loan were determined to be impaired, we would write down the Loan through a charge to the provision for loan losses. Impairment on these Loans is measured by comparing a valuation based on discounted cash-flows to the carrying 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 plans, loan sponsorship, actions of other lenders and other factors deemed necessary by management. Actual losses, if any, could ultimately differ from these estimates.

8

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

Revenue Recognition

Interest income is accrued based on the outstanding principal amount of the investment security or loan and the contractual terms. Discounts or premiums associated with the purchase of an investment security are amortized into interest income on an effective yield or “interest” method, based on expected cash flows through the expected maturity date of the security. Depending on the nature of the investment, changes to expected cash flows may result in a prospective change to yield or a retrospective change, which would include a catch up adjustment. Upon settlement of securities, the excess (or deficiency) of net proceeds over the net carrying value of such security or loan is recognized as a gain (or loss) in the period of settlement. Investment security transactions are recorded on the trade date.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash investments, single asset CMBS, loan investments and interest receivable. The Company may place cash investments in excess of insured amounts with high quality financial institutions. The Company performs ongoing analysis of credit risk concentrations in its investment portfolio by evaluating exposure to various markets, underlying property types, contract terms, tenant mix and other credit metrics. As of, and for the period ended, March 31, 2010, approximately 11% of the Company’s investment portfolio and income was related to loans on properties leased to the same tenant.

Derivative Instruments and Hedging Activities

GAAP provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, the Company must provide qualitative disclosures that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by GAAP, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

Deferred Financing Costs

Costs incurred in connection with secured financing are capitalized and amortized over the respective loan terms as a component of interest expense. As of March 31, 2010, the Company had approximately $1.0 million of capitalized financing costs, net of amortization. For the three months ended March 31, 2010, approximately $30,000 of amortization was included in interest expense on the statement of operations.

9

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

Income Taxes

The Company will elect to be taxed as a REIT and intends to comply with the Code with respect thereto. Accordingly, the Company will not be subject to federal income tax to the extent of its dividends to stockholders as long as certain asset, income and stock ownership tests are met. Many of these requirements are technical and complex and if we fail to meet these requirements we may be subject to federal, state, and local income tax and penalties.

The Company formed a taxable REIT subsidiary (“TRS”) in 2010 that will be subject to federal and state income taxes. As of March 31, 2010, the Company did not incur any income tax expense related to the TRS and therefore no provision was recorded.

3. Debt Securities

Mortgage-Backed Securities Held to Maturity

Our investments in CMBS are accounted for at amortized cost. The following table summarizes the weighted average coupon, rating and life of our investments in CMBS based on the book values as of March 31, 2010 and December 31, 2009:

	Carry								Life
March 31, 2010	Value		Par Value		Coupon(1)			Rating	(years)
Multi-Asset CMBS	$	202,676	$	202,699		5.63	%	AAA		1.9
Single Borrower CMBS		45,923		56,081		5.23	%	B-		6.1
	$	248,599	$	258,780

	Carry								Life
December 31, 2009	Value		Par Value		Coupon(1)			Rating	(years)
Multi-Asset CMBS	$	202,646	$	202,699		5.70	%	AAA		2.1
Single Borrower CMBS		43,250		53,712		5.40	%	BB+		6.3
	$	245,896	$	256,411

⁽¹⁾ Calculated using the March 31, 2010 and December 31, 2009 one month LIBOR rates of 0.2486% and 0.2309%, respectively, as applicable.

The Company’s investments in multi-asset CMBS were acquired through a joint venture in which the Company owns a 75% controlling interest and which the Company is required to consolidate under GAAP. The majority of loans backing the CMBS investments are fixed rate instruments. Approximately $13.5 million or 5% of the CMBS are variable rate and pay interest at LIBOR plus a weighted average spread of 1.30%.

Mortgage-Backed Securities Available-for-Sale

Our investments in RMBS are accounted for at fair value. The Company has allocated $50 million to be invested in RMBS with expected durations of 18 months or less and has engaged a third party manager who specializes in RMBS to execute the purchase of RMBS. The table below summarizes the weighted average coupon, rating and life of the Company’s investments in RMBS as of March 31, 2010:

March 31, 2010	Cost		FV Adj			Fair Value		Coupon			Rating	Life
RMBS	$	34,357	$	(327	)	$	34,030		0.38	%	BBB-		0.57

Approximately $33.7 million or 99% of the RMBS are variable rate and pay interest at LIBOR plus a weighted average spread of 0.09%. The Company purchased all of the RMBS securities at a discount which will be accreted into income over the expected remaining life of the security, which in all cases is less than 18 months. The majority of the income from this strategy is earned from these discounts.

10

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

4. Loans Held for Investment

The Company’s investments in mortgages and loans are accounted for at amortized cost. The following table summarizes the Company’s investments as of March 31, 2010 and December 31, 2009.

As of March 31, 2010

								Weighted
					Weighted			Average
					Average			Life
Investment	Carry Value		Face Amount		Coupon			(years)
First Mortgages	$	588,797	$	614,068		8.0	%		2.7
Subordinated Debt		145,363		154,543		7.6	%		4.1
Total Loans	$	734,160	$	768,611

As of December 31, 2009

								Weighted
					Weighted			Average
					Average			Life
Investment	Carry Value		Face Amount		Coupon			(years)
First Mortgages	$	182,829	$	212,424		8.7	%		7.2
Subordinated Debt		31,692		42,560		8.1	%		12.6
Total Loans	$	214,521	$	254,984

For the three months ended March 31, 2010, the Company acquired loans held for investment as follows:

Beginning Balance	$	214,521
Acquisitions		520,895
Additional fundings (1)		464
Principal repayments		(2,201	)
Discount/premium amortization		481
Provision for credit losses		—
Balance March 31, 2010	$	734,160

⁽¹⁾ Represents accrued interest income on loans whose terms do not require current payment of interest.

In February 2010, the Company acquired a portfolio of performing commercial mortgages with a $502.9 million par value from Teachers Insurance and Annuity Association of America for $509.9 million plus acquisition costs. The fixed- rate portfolio included 18 senior first mortgages and 2 junior first mortgage B-Notes on retail and office properties across 10 states and with a weighted average coupon of 7.75%. In addition, the Company acquired a performing first mortgage on a shopping center in Avon Colorado with a par value of $12.5 million for $10.2 through a consolidated joint venture in which the Company owns a 75% controlling interest. All loans were paying in accordance with their terms as of March 31, 2010 and no allowance for loan losses was deemed necessary.

11

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

5. Other Investments

In January 2010, the Company committed $6.3 million to acquire a 5.6% interest in a venture formed to acquire assets of a commercial real estate debt management and servicing business primarily for an opportunity to participate in debt opportunities arising from the venture’s special servicing business. Because the Company does not have control or significant influence over the venture, the investment will be accounted for under the cost method. As of March 31, 2010, the Company had funded $6.0 million of its commitment. A member of the Company’s board of directors has a $50,000 investment in the same venture.

On March 31, 2010, the Company purchased $1.7 million of marketable securities that are classified as available for sale and will be carried at fair value with changes in fair value recorded to other comprehensive income.

6. Secured Financing Facilities

On August 28, 2009 and September 25, 2009, the Company entered into multiple Federal Reserve Bank of New York Term Asset-backed securities Loan Facilities (“TALF”) through a joint venture with SOF VIII. The TALF loans are non-recourse, bear a fixed interest rate and mature five years from the loan closing dates. The loans are collateralized by the Company’s CMBS investments, which are held in a Master TALF Collateral Account and are under the control of the lender until the loan is satisfied.

	Debt Carry		Collateral Carry
March 31, 2010	Value		Value
August 28, 2009, TALF loans, fixed rate 3.872%, mature August 2014	$	54,986	$	64,896
September 25, 2009, TALF loans, fixed rate 3.796%, mature September 2014		116,364		137,780
Total	$	171,350	$	202,676

	Debt Carry		Collateral Carry
December 31, 2009	Value		Value
August 28, 2009, TALF loans, fixed rate 3.872%, mature August 2014	$	55,030	$	64,898
September 25, 2009, TALF loans, fixed rate 3.796%, mature September 2014		116,364		137,748
Total	$	171,394	$	202,646

Principal repayments are due on the TALF financing when principal is collected on the underlying CMBS securities, which principal can be paid off earlier or later than expected based on certain market factors including asset sales or loan defaults. As of March 31, 2010, the Manager had no anticipation of early principal repayments or loan defaults of the underlying CMBS.

On March 31, 2010, the Company entered into a Master Repurchase and Securities Contract (the “Repurchase Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”). The Repurchase Agreement is secured by approximately $400 million of the diversified loan portfolio (the “TIAA Assets”) purchased from Teachers Insurance and Annuity Association of America on February 26, 2010. The Repurchase Agreement provides for asset purchases of up to $280 million (the “Facility”).

Advances under the Repurchase Agreement accrue interest at a per annum Pricing Rate equal to the sum of (i) 30 day LIBOR plus (ii) the Pricing Margin of 3.0%. During the existence of an Event of Default (as defined in the Repurchase Agreement), interest accrues at the Default Rate, which is equal to the Pricing Rate plus 4.0%. The maturity date of the repurchase (the “Facility”) is May 31, 2013. The Facility is required to be fully drawn by May 31, 2010, otherwise the Company is required to pay a non-utilization fee equal to 3.0% per annum on any portion of the maximum Facility amount that has not been drawn by such date. The TIAA Assets have been approved as eligible assets under the Repurchase Agreement and the Company shall be entitled to receive advances under the Facility within one business day after request from Wells Fargo, provided that no Event of Default exists, no material adverse change has occurred with respect to the Company or the TIAA Assets and certain other contractual conditions are satisfied. As of March 31, 2010, the Company had drawn $25.0 million of the Facility.

12

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

The following table represents our five-year principal repayments schedule for the TALF secured financing assuming no early prepayments or defaults and including expected extensions of the underlying CMBS assets and the Wells Fargo Facility.

2010	$	—
2011		85,853
2012		85,497
2013		25,000
2014 and thereafter		—
Total	$	196,350

7. Derivatives and Hedging Activity

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

In connection with the Repurchase Agreement, the Company entered into an interest rate swap with Deustche Bank in March 2010 which corresponds to the maturities of the loans financed by the Facility to effectively fix borrowing costs at 4.155% for the term of the Facility. The interest rate swap has a notional amount of $278.7 million and terminates on February 5, 2013. Under the agreement, the Company will pay a monthly coupon at a fixed rate of 1.155% of the notional amount to the counterparty and receive floating rate LIBOR commencing on May 5, 2010.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2010, such derivatives were used to hedge the variable cash flows associated with forecasted borrowings expected to be made under the Repurchase Agreement. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three months ended March 31, 2010 the Company recorded no hedge ineffectiveness in earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Over the next twelve months, the Company estimates that an additional $1.8 million will be reclassified as an increase to interest expense. The Company is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of 34 months.

As of March 31, 2010, the fair value of the swap was a liability of approximately $120,000 and was included in other liabilities on the Company’s balance sheet, with an offsetting loss recognized in AOCI.

13

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

8. Related-Party Transactions

The Company entered into a management agreement (the “Management Agreement”) with our Manager upon closing of our initial public offering, which provides for an initial term of three years with automatic one-year extensions thereafter unless terminated as described below. Under the Management Agreement, our Manager, subject to the oversight of our Board of Directors, is required to manage the day-to-day activities of the Company, for which the Manager receives a base management fee and is eligible for an incentive fee and stock awards. The Manager is also entitled to charge the Company for certain expenses incurred on behalf of the Company.

In accordance with the Management Agreement, the Company pays the Manager an annual base management fee calculated as 1.5% per annum of stockholders’ equity less adjustments for unrealized gains (losses) and other non-cash items affecting stockholders’ equity and less any common stock repurchased since inception. These fees are payable quarterly in arrears and adjustments shall be made at the end of each calendar year to reflect the actual management fees payable for the year. For the period ended March 31, 2010, approximately $3.4 million was incurred and payable to the Manager for base management fees.

The Manager is entitled to an incentive fee with respect to each calendar quarter based on annualized Core Earnings as defined below. The incentive fee is calculated as 20% of the excess of Core Earnings over 8% of the weighted average shares outstanding times the weighted average public offering issue price. Core Earnings is a non-GAAP measure defined as GAAP net income (loss) excluding non-cash equity compensation expense, the incentive fee, unrealized gains, losses, or other non-cash items. The incentive fee shall be payable one-half in common stock so long as the ownership of shares by the Manager does not exceed the 9.8% stock ownership limit set forth in the Company’s articles of incorporation. As of March 31, 2010, no incentive fee was earned by the Manager.

The Company is required to reimburse the Manager for operating expenses incurred by the Manager on behalf of the Company, including legal, accounting, due diligence, executive compensation and other services. The expense reimbursement is not subject to any dollar limitations but will be subject to review by the Company’s Board of Directors. For the period ended March 31, 2010, approximately $302,000 was incurred for executive compensation and other reimbursable expenses, of which approximately $141,000 was payable as of March 31, 2010. For the period ended December 31, 2009, approximately $163,000 was incurred for executive compensation and other reimbursable expenses, of which approximately $84,000 was payable as of December 31, 2009.

In connection with the initial public offering, the Company incurred an estimated $592,000 for services provided by parties related to affiliates of our Manager that were recorded as a reduction in additional paid-in capital. After the initial three-year term, the Company can terminate the Management Agreement without cause with an affirmative two-thirds vote by the Company’s independent directors and 180 days written notice to the Manager. Upon termination without cause, the Manager is due a termination fee equal to three times the sum of the average annual base management fee and incentive fee earned by the Manager over the preceding eight calendar quarters. No termination fee is payable if the Manager is terminated for cause, as defined in the Management Agreement, which can be done at anytime with 30 days written notice from the Company’s Board of Directors.

9. Stockholders’ Equity

Our authorized capital stock consists of 100,000,000 shares of preferred stock, $0.01 par value, and 500,000,000 shares of common stock, $0.01 par value.

The Company declared a dividend of $0.22 per share of common stock for the first quarter of 2010 on March 4, 2010. The dividend was paid on April 15, 2010, to common stockholders of record on March 31, 2010. The Company also declared a dividend of $0.10 per share of common stock for the quarter ending December 31, 2009, which dividend was paid on January 29, 2010 to common stockholders of record as of December 30, 2009.

14

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

Equity Incentive Plans

The Company has reserved 3,112,500 shares of common stock for issuance under the Equity Plan and Manager Equity Plan and an additional 100,000 shares of common stock for issuance under the Director Stock Plan. These plans provide for the issuance of restricted stock or restricted stock units. The holders of awards of restricted stock or restricted stock units will be entitled to receive dividends or “distribution equivalents,” which will be payable at such time dividends are paid on outstanding shares.

The Company granted each of its four independent directors 2,200 restricted shares, with a total fair value of approximately $175,000. The awards will vest ratably in three annual installments on each of the first, second, and third anniversaries of the grant, subject to the director’s continued service. As of March 31, 2010 and December 31, 2009, approximately $11,000 and $16,000 was included in general and administrative expense related to the grants, respectively.

In August 2009, the Company granted 1,037,500 restricted stock units with a fair value of approximately $20.8 million at the grant date to the Manager under the Manager Equity Plan. The award will vest ratably in quarterly installments over three years beginning on October 1, 2009. As of March 31, 2010 and December 31, 2009, 86,458 shares had vested as of each period and approximately $1.5 million and $2.4 million was included in management fees related to this grant, respectively.

The Company granted 5,000 restricted stock units with a fair value of $100,000 under the Equity Plan in August 2009. The award will vest ratably in quarterly installments over three years beginning on October 1, 2009. As of March 31, 2010 and December 31, 2009, 417 shares had vested as of each period and approximately $8,000 and $11,000 was included in general and administrative expense related to this grant, respectively.

Schedule of Non-Vested Share and Share Equivalents

	Restricted			Restricted			Restricted
	Stock Grants to			Stock Units			Stock Units
	Independent			Grants to			Grants to
	Directors			Employees			Manager			Total
January 1, 2010		8,800			4,583			951,042			964,425
Granted		2,200			—			—			2,200
Vested		—			(417	)		(86,458	)		(86,875	)
Forfeited		(2,200	)		—			—			(2,200	)
March 31, 2010		8,800			4,166			864,584			877,550

Vesting Schedule

	Restricted		Restricted		Restricted
	Stock Grants to		Stock Units		Stock Units
	Independent		Grants to		Grants to
	Directors		Employees		Manager		Total
2010		2,933		1,251		259,374		263,558
2011		2,933		1,668		345,832		350,433
2012		2,115		1,247		259,378		262,740
2013		819		—		—		819
Total		8,800		4,166		864,584		877,550

15

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

10. Net Income per Share

Net income per share for the three months ended March 31, 2010, is computed as follows (amounts in thousands except share and per share):

Basic and Diluted:
Net income attributable to Starwood Property Trust, Inc.	$	5,941
Weighted average number of shares of common stock outstanding		47,662,840
Basic net income per share of basic stock	$	0.12
Weighted average number of shares of diluted stock outstanding		48,626,300
Diluted net income per share of diluted stock	$	0.12

11. Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring financial instruments at fair values. GAAP establishes market based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy under GAAP are described below:

Level I—Quoted prices in active markets for identical assets or liabilities.

Level II—Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III—Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period) unobservable inputs may be used.

Unobservable inputs reflect our own assumptions about the factors that market participants would use in pricing an asset or liability, and would be based on the best information available. We anticipate that a significant portion of our assets subject to these disclosure requirements will fall in Level II in the valuation hierarchy.

Any changes to the valuation methodology will be reviewed by management to ensure the changes are appropriate. The methods used by us may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we anticipate that our valuation methods will be appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

The following table presents the Company’s financial instruments carried at fair value on a recurring basis in the consolidated balance sheet as of March 31, 2010.

	As of March 31, 2010
	Total			Level I		Level II			Level III
Residential mortgage-backed securities	$	34,030		$	—	$	34,030		$	—
Marketable securities		1,673			1,673		—			—
Derivatives(1)		(120	)		—		(120	)		—
Total	$	35,583		$	1,673	$	33,910		$	—

⁽¹⁾ Included in Other Liabilities

16

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

Cash and cash equivalents, accrued interest and accounts payables are valued at their cost or carrying value due to the short term nature and are deemed low risk of material change. CMBS and RMBS securities are valued by reviewing broker quotes from dealers in those securities as well as other available market data sources. Original cost, discounted cash flows, credit and tenant review as well as other quantitative and qualitative factors are evaluated to determine the fair value of our loan portfolio.

The value of secured financing facilities are determined based on projected future discounted cash flows, current market values of interest rates, assessment of the yield curve environment and credit analysis of our counterparty.

The following table presents the fair value of all of the Company’s financial instruments not carried at fair value on the consolidated balance sheet as of March 31, 2010.

	Carry		Fair
	Value as of		Value as of
	March 31, 2010		March 31, 2010
Financial Assets:
CMBS	$	248,599	$	251,053
Loans	$	734,160	$	773,470
Financial Liabilities:
Secured financing	$	196,350	$	196,677

	Carry		Fair
	Value as of		Value as of
	December 31, 2009		December 31, 2009
Financial Assets:
CMBS	$	245,896	$	249,457
Loans	$	214,521	$	215,575
Financial Liabilities:
Secured financing	$	171,394	$	170,868

12. Commitments and Contingencies

In connection with the Company’s initial public offering, the Company is required to pay $27.2 million of underwriters’ fees if Core Earnings exceed an 8% performance hurdle rate over four consecutive quarters as defined in the purchase agreement. Based on the Company’s original and current business plan, it expects to achieve this level of earnings. Therefore, the Company recorded a deferred liability and an offsetting reduction in additional paid-in capital for the full $27.2 million.

Management is not aware of any other contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on the Company’s financial statements.

17

Starwood Property Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2010 (unaudited)

13. Quarterly Financial Data

Summarized unaudited consolidated quarterly information for the period from December 31, 2009 through March 31, 2010 is provided below (amounts in thousands except share and per share):

	Quarter Ended
	March 31,		December 31,
	2010		2009
Revenues	$	14,641	$	7,162
Income (Loss) attributable to Starwood Property Trust, Inc.	$	5,941	$	(1,098	)
Income (Loss) per share of common stock — basic	$	0.12	$	(0.02	)
Income (Loss) per share of common stock — diluted	$	0.12	$	(0.02	)

14. Subsequent Events

On May 6, 2010, the Company’s board of directors declared a dividend of $0.25 per common share for the second quarter of 2010, which is payable July 15, 2010 to common stockholders of record on June 30, 2010.

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

The following Management’s Description and Analysis of Financial Condition and Results of Operations should be read in conjunction with the information included elsewhere in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. This description contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from the results discussed in the forward-looking statements due to the factors set forth in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Overview

Starwood Property Trust, Inc. (together with its subsidiaries, the “Company”) is a Maryland corporation that commenced operations on August 17, 2009 upon completion of our initial public offering. We are focused on originating, investing in, and financing and managing commercial mortgage loans and other commercial real estate debt investments, CMBS, and other commercial real estate-related debt investments. We also invest in residential mortgage loans and RMBS. We collectively refer to commercial mortgage loans, other commercial real estate debt investments, CMBS, other commercial real estate-related debt investments, residential mortgage loans, and RMBS as our target assets.

The Company is organized as a holding company that conducts its business primarily through three wholly-owned subsidiaries, SPT Real Estate Sub I, LLC, SPT TALF Sub I, LLC, and SPT Operations, LLC. The Company has formed joint ventures (the “Joint Ventures”) with Starwood Hospitality Fund II and Starwood Opportunity Fund VIII in accordance with the co-investment and allocation agreement with SPT Management, LLC (our “Manager”). Each Joint Venture is owned 75% by the Company and is consolidated into the Company’s consolidated financial statements. As of March 31, 2010, the only assets held by the Joint Ventures were a net $31.3 million investment in AAA rated A2 CMBS financed through the Term Asset-Backed Securities Loan Facility (“TALF”) and a net $10.5 million investment in a loan acquisition for a first mortgage in Avon, Colorado.

Since the closing of our initial public offering in August 2009, we have focused on opportunities that exist in the U.S. commercial mortgage loan, commercial real estate debt, and CMBS and RMBS markets. As market conditions change over time, we may adjust our strategy to take advantage of changes in interest rates and credit spreads as well as economic and credit conditions. We believe that the diversification of our portfolio of assets, our expertise among the target asset classes, and the flexibility of our strategy will position us to generate attractive risk-adjusted returns for our stockholders in a variety of assets and market conditions.

Recent Developments for the Three Months Ended March 31, 2010

As of March 31, 2010, we had entered into agreements or consummated transactions representing net investments or commitments to invest approximately $1,026.2 million.

• In January 2010, we formed SPT Operations, LLC, a taxable REIT subsidiary, which invested $6.0 million in February 2010 in a non-controlling interest in a venture formed to acquire assets of a commercial real estate and CMBS servicing business. We also invested $2.1 million in single-borrower CMBS secured by hotel assets.

• In February 2010, we acquired a $502.9 million portfolio of performing commercial mortgages from TIAA-CREF for approximately $509.9 million, plus accrued interest. The fixed-rate portfolio consists of 18 senior first mortgage A-notes and 2 junior first mortgage B-Notes with a weighted average coupon of 7.75% and secured by retail and office assets totaling 4.5 million square feet across 10 states.

• In February 2010, we engaged an investment advisory firm with RMBS expertise to invest up to $25 million in short-term RMBS securities on a discretionary basis. In March 2010, the Company engaged the investment advisory firm to invest another $25 million in short-term RMBS securities, for a total of $50 million, on a discretionary basis. The trades are settled directly into a segregated brokerage account in the Company’s name. As of March 31, 2010, approximately $35.9 million in RMBS securities had been acquired.

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• In March 2010, we acquired a $12.5 million performing commercial mortgage on a shopping center in Avon, Colorado for $10.2 million. The shopping center consists of four buildings containing 53,818 square feet of big box anchor space, 62,577 square feet of retail and restaurant space, and 22,042 square feet of office space. The loan pays a coupon of 1 month LIBOR plus a spread of 1.75%. Additionally, we acquired $1.7 million of marketable securities.

Recent Developments for the Three Months Ended December 31, 2009

As of December 31, 2009, we had entered into agreements or consummated transactions representing net investments or commitments to invest approximately $460.4 million.

• We invested $214.5 million in fixed rate commercial mortgage loans, including a $109 million portfolio of loans on seven industrial properties in the Southeast region of the United States, a $16 million loan on a retail center in Orland Park, IL, an $18 million loan on a hotel in Laguna Beach, CA, and a $74 million loan on a portfolio of 17 extended stay hotels located in the Southeast and Mid-Atlantic regions of the United States.

• We invested $202.6 million in AAA-rated CMBS securities and obtained approximately $171.6 million of five-year term financing from the TALF in connection with the investment. Our pro rata share of the $31.1 million equity investment was approximately $23.3 million, which represents a 75% ownership interest.

• We invested $43.3 million in single-borrower CMBS secured by hotel assets.

The following table sets forth certain information regarding the investments described above as of March 31, 2010:

	Property	Carry		Face		%					Net
Investment	Type	Value		Amount		Owned			Financing		Investment		Rating	Vintage
Loans, first mortgages	Assorted	$	588,797	$	614,068		99	%*	$	22,368	$	566,429	N/A		2005-2009
Loans, subordinated debt	Assorted		145,363		154,543		100	%		2,632		142,731	N/A		1999-2005
Multi-Asset CMBS	Assorted		202,676		202,699		75	%		171,350		31,326	AAA		2006-2007
Single Borrower CMBS	Hospitality		45,923		56,081		100	%		—		45,923	B-		2001-2006
RMBS	Residential		34,030		36,245		100	%		—		34,030	BBB-		2004-2007
Other Investments	Assorted		7,673		7,673		100	%		—		7,673	N/A		N/A
		$	1,024,462	$	1,071,309				$	196,350	$	828,112

* One loan with a $10.5 million book value is owned through a consolidated 75% owned joint venture.

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Our loan and mortgage backed securities portfolio at March 31, 2010 is diversified by property type and US geographic region as follows:

Collateral	As of March 31,			As of December 31,			Geographic	As of March 31,			As of December 31,
Property Type	2010			2009			Location	2010			2009
Hospitality		15.1	%		32.7	%	Northeast		6.9	%		14.1	%
Industrial		12.0	%		26.5	%	Mid-Atlantic		15.7	%		14.8	%
Office		31.5	%		18.0	%	Southeast		20.5	%		35.9	%
Retail		35.2	%		16.2	%	Southwest		8.7	%		5.3	%
Multifamily		5.6	%		5.1	%	Midwest		25.4	%		8.7	%
Other		0.5	%		1.2	%	West		20.9	%		17.2	%
Mixed Use		0.1	%		0.3	%	Other		1.9	%		4.0	%
		100.0	%		100.0	%			100.0	%		100.0	%

Distributions to Stockholders

On March 4, 2010, we declared a dividend of $0.22 per common share for the period ending March 31, 2010, which was paid on April 15, 2010 to common stockholders of record as of March 31, 2010. We also declared a dividend of $0.10 per common share for the quarter ending December 31, 2009, which dividend was paid on January 29, 2010 to common stockholders of record as of December 30, 2009.

Critical Accounting Policies and Use of Estimates

Refer to the section of our Annual Report on Form 10-K for the year ended December 31, 2009 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting policies” for full discussion of our critical accounting policies.

Recent Accounting Pronouncements

Amendments to Variable Interest Entity Accounting. In June 2009, the FASB issued a statement which amends the consolidation guidance applicable to variable interest entities (“VIEs”). The amendments will significantly effect the overall consolidation analysis. It changes the way a primary beneficiary is determined in a VIE and how entities account for securitizations and special purpose entities as a result of the elimination of the qualified special purpose entity concept. This statement was effective on January 1, 2010 and the adoption of this statement did not have a material effect on our consolidated financial statements.

Results of Operations

We began our principal operations on August 17, 2009. We are currently in the process of investing the proceeds of our initial public offering and private placement transactions, as well as credit available under the our Master Repurchase and Securities Contract with Wells Fargo Bank, National Association (the “Repurchase Agreement”), and as of March 31, 2010 had invested approximately $1,026.2 million of such proceeds. Results for the initial period of our operations are not indicative of the results we expect when our investment strategy has been fully implemented.

Net income attributable to Starwood Property Trust for the period January 1, 2010 through March 31, 2010 was approximately $5.9 million or $0.12 per weighted average share of common stock (basic and diluted). We earned investment income of approximately $14.0 million and incurred approximately $1.6 million in interest expense, for net investment income of approximately $12.4 million, of which approximately $0.3 million was not attributable to common stockholders. In addition, we earned approximately $0.6 million in interest income on cash balances.

For the period January 1, 2010 through March 31, 2010, our non-investment expenses totaled $6.7 million and consisted of $3.4 million of base management fees payable to our Manager, $1.5 million of non-cash stock-based expense related to the amortization of grants issued to our Manager upon completion of our initial public offering, and $1.8 million of other general and administrative expenses. The other general and administrative expense includes insurance, professional fees, officer compensation costs, and general overhead costs for the Company. There was no incentive management fee incurred for the period.

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Cash Flows

Cash and cash equivalents were $108.0 million as of March 31, 2010, down from $645.1 million as of December 31, 2009. The $537.1 million decrease was primarily attributable to investment activity during the three months ended March 31, 2010 of $561.9 million. Financing activities provided cash of $21.2 million and operating activities provided cash of $3.6 million during the period from January 1, 2010 through March 31, 2010.

Net cash provided by operating activities for the period from January 1, 2010 through March 31, 2010 were approximately $3.6 million, including approximately $0.3 million of operating income attributable to noncontrolling interests. The net income for the same period was $6.3 million. Non-cash charges for stock-based compensation, amortization of deferred loan fees and discounts, amortization of deferred financing costs and amortization of net discount on MBS contributed $0.4 million. The net change in operating assets and liabilities decreased cash flows by $3.0 million and consisted of a $2.0 million decrease in accounts payable, accrued expenses and other liabilities and a decrease in interest receivables and other assets of $1.0 million.

Net cash used in investing activities for the three months ended March 31, 2010 totaled $561.9 million and related primarily to the acquisition of new loans of $521.3 million, new MBS of $35.9 million, other investments of $6.0 million and purchased interest of $2.6 million offset by principal repayments on loans and MBS of $2.2 million and $1.7 million, respectively.

Net cash provided by financing activities related primarily to the approximately $25.0 million of net proceeds from the initial drawdown of the Repurchase Agreement. In addition, net contributions from joint venture partners were approximately $2.3 million offset by the payment of dividends of $5.4 million and deferred financing costs of $0.7 million.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders, and other general business needs. We will use significant cash to purchase our target assets, repay principal and interest on our borrowings, make distributions to our stockholders and fund our operations. Our primary sources of cash currently consist of payments of principal and interest we receive on our portfolio of assets, cash generated from our operations and financing arrangements such as the Wells Fargo Repurchase Agreement.

We may, subject to maintaining our qualification as a REIT and our exemption under the Investment Company Act of 1940, as amended, also attempt to secure additional bank credit facilities (including term loans and revolving facilities), if available, to finance our assets and provide a funding source for future investments. We also expect to continue to invest in a number of our assets through co-investments with other investment vehicles managed by affiliates of our Manager and/or other third parties, which may allow us to pool capital to access larger transactions and diversify investment exposure.

As of March 31, 2010, we had cash and cash equivalents of $108.0 million, including $0.8 million related to borrower reserve funds maintained in an unrestricted account, as compared to $645.1 million of cash and cash equivalents as of December 31, 2009. In January 2010, we invested another $2.1 million in single-borrower CMBS secured by hotel assets. In February 2010, we acquired $7.8 million of RMBS, a portfolio of 20 loans for $509.9 million, and invested $6.0 million in an unconsolidated venture to acquire minority interest in a real estate service company. In March 2010 we acquired an additional $26.0 million of RMBS and $10.2 million first mortgage on a shopping center. In addition, we have drawn $25.0 million under the Repurchase Agreement and have an undrawn balance of approximately $255.0 million as of March 31, 2010.

We expect the cash flows from our current investments to be sufficient to satisfy our liquidity needs for the next twelve months with respect to our current investment portfolio, operating expenses, and REIT distribution requirements. However, we anticipate needing additional sources of liquidity, in addition to cash on hand, to repay amounts due under our financing arrangements and acquire additional target assets over the next twelve months. Additional sources of liquidity we may use in the future include (i) repurchase agreements (ii) private financing such as warehouse and bank credit facilities, (iii) securitizations, and (iv) public offerings of our equity or debt securities.

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Repurchase Agreements

Repurchase agreements effectively allow us to borrow against loans and securities that we own. Under these agreements, we will sell our loans and securities to a counterparty and agree to repurchase the same loans and securities from the counterparty at a price equal to the original sales price plus an interest factor. During the term of the repurchase agreement, we receive the principal and interest on the related loans and securities and pay interest to the counterparty.

On March 31, 2010, the Company entered into the Repurchase Agreement with Wells Fargo. The Repurchase Agreement provides for advances of up to $280 million based on an average advance rate of 70% of the approximately $400 million loan pool securing the Facility. Advances under the Repurchase Agreement accrue interest at LIBOR plus 3.0% and mature on May 13, 2013.

Leverage Policies

We intend to employ leverage, to the extent available, to fund the acquisition of our target assets and to increase potential returns to our stockholders. Although we are not required to maintain any particular leverage ratio, the amount of leverage we will deploy for particular investments in our target assets will depend upon our Manager’s assessment of a variety of factors, which may include the anticipated liquidity and price volatility of the assets in our investment portfolio, the potential for losses and extension risk in our portfolio, the gap between the duration of our assets and liabilities, including hedges, the availability and cost of financing the assets, our opinion of the creditworthiness of our financing counterparties, the health of the U.S. economy and commercial and residential mortgage markets, our outlook for the level, slope, and volatility of interest rates, the credit quality of our assets, the collateral underlying our assets, and our outlook for asset spreads relative to the LIBOR curve.

Contractual Obligations and Commitments

Contractual obligations as of March 31, 2010 are as follows (amounts in thousands):

			Less than						More than
	Total		1 year		1 to 3 years		3 to 5 years		5 years
Secured financings, including interest payable	$	209,432	$	7,583	$	201,849	$	—	$	—
Deferred underwriting fees		27,195		—		27,195		—		—
Total	$	236,627	$	7,583	$	229,044	$	—	$	—

The table above does not include amounts due under our Management Agreement as those obligations, discussed below, do not have fixed and determinable payments.

Pursuant to the Management Agreement between our Manager and us, our Manager provides for the day-to-day management of our operations in exchange for the fees and other payments described below.

Base Management Fee. The base management fee is 1.5% of our stockholders’ equity per annum and calculated and payable quarterly in arrears in cash. For purposes of calculating the management fee, our stockholders’ equity means: (a) the sum of (1) the net proceeds from all issuances of our equity securities since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (2) our retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less (b) any amount that we pay to repurchase our common stock since inception. It also excludes (1) any unrealized gains and losses and other non-cash items that have impacted stockholders’ equity as reported in our financial statements prepared in accordance with GAAP, and (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between our Manager and our independent directors and approval by a majority of our independent directors. As a result, our stockholders’ equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown on our financial statements.

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Incentive Fee. From August 17, 2009 (the effective date of the Management Agreement), our Manager is entitled to be paid the incentive fee described below with respect to each calendar quarter (or part thereof that the management agreement is in effect) if (1) our Core Earnings (as defined below) for the previous 12-month period (or part thereof that the management agreement is in effect) exceeds an 8% hurdle, and (2) our Core Earnings for the 12 most recently completed calendar quarters (or part thereof that the management agreement is in effect) is greater than zero.

The incentive fee will be an amount, not less than zero, equal to the difference between (1) the product of (x) 20% and (y) the difference between (i) our Core Earnings (as defined below) for the previous 12-month period (or part thereof that the management agreement is in effect), and (ii) the product of (A) the weighted average of the issue price per share of our common stock of all of our public offerings multiplied by the weighted average number of all shares of common stock outstanding (including any restricted stock units, any restricted shares of common stock and other shares of common stock underlying awards granted under our equity incentive plans) in such previous 12-month period (or part thereof that the Management Agreement is in effect), and (B) 8%, and (2) the sum of any incentive fee paid to our Manager with respect to the first three calendar quarters of such previous 12-month period (or part thereof that the management agreement is in effect). For purposes of calculating the incentive fee prior to the completion of a 12-month period following the effective date of the Management Agreement, Core Earnings will be calculated on an annualized basis.

One half of each quarterly installment of the incentive fee will be payable in shares of our common stock so long as the ownership of such additional number of shares by our Manager would not violate the 9.8% stock ownership limit set forth in our articles of incorporation, after giving effect to any waiver from such limit that our Board of Directors may grant to our Manager in the future. The remainder of the incentive fee will be payable in cash. The number of shares to be issued to our Manager will be equal to the dollar amount of the portion of the quarterly installment of the incentive fee payable in shares divided by the average of the closing prices of our common stock on the NYSE for the five trading days prior to the date on which such quarterly installment is paid.

Expense Reimbursement. We are required to reimburse our Manager for operating expenses related to us that are incurred by our Manager, including expenses relating to legal, accounting, due diligence and other services. Our reimbursement obligation is not subject to any dollar limitation. Expenses are reimbursed in cash on a monthly basis.

We do not reimburse our Manager for the salaries and other compensation of its personnel except that, pursuant to a secondment agreement between Starwood Capital Group and us, we are responsible for Starwood Capital Group’s expenses incurred in employing our Chief Financial Officer and Treasurer and our Executive Vice President, General Counsel and Chief Compliance Officer.

Termination Fee. The termination fee is equal to three times the sum of the average annual base management fee and incentive fee earned by our Manager during the 24-month period prior to such termination, calculated as of the end of the most recently completed fiscal quarter. The termination fee will be payable upon termination of the Management Agreement (i) by us without cause or (ii) by our Manager if we materially breach the Management Agreement.

Off-Balance Sheet Arrangements

As of March 31, 2010, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Further, as of March 31, 2010, we had not guaranteed any obligations of unconsolidated entities or entered into any commitment or intent to provide additional funding to any such entities.

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Dividends

On March 4, 2010, we declared a dividend of $0.22 per common share for the period ending March 31, 2010, which was paid on April 15, 2010 to common stockholders of record as of March 31, 2010.

Non-GAAP Financial Measures

Core Earnings is a non-GAAP financial measure. We calculate Core Earnings as our GAAP net income (loss) less non-cash equity compensation expense, the incentive fee, depreciation and amortization (to the extent that we foreclose on any properties underlying our target assets), any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income. The amount will be adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as determined by our Manager and approved by a majority of our independent directors.

We believe that Core Earnings provide an additional measure of our core operating performance by eliminating the impact of certain non-cash expenses and facilitating a comparison of our financial results to those of other comparable REITs with fewer or no non-cash charges and comparison of our own operating results from period to period. The Company uses Core Earnings in this way, and also uses Core Earnings to compute the incentive fee due under the management agreement. The Company believes that its investors also use Core Earnings to evaluate and compare the performance of the Company and its peers, and as such, the Company believes that the disclosure of Core Earnings is useful to (and expected by) its investors.

However, we caution that Core Earnings do not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of our cash flow from operating activities (determined in accordance with GAAP), a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions. In addition, our methodology for calculating Core Earnings may differ from the methodologies employed by other REITs 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 REITs.

Our Core Earnings for the period January 1, 2010 through March 31, 2010 were approximately $7.5 million or $0.15 per weighted average share. The table below provides a reconciliation of our net income to Core Earnings for this period:

March 31, 2010 Reconciliation of Net Income to Core Earnings

	Amounts		Per Share
Net income attributable to Starwood Property Trust, Inc.	$	5,941	$	0.12
Add back for non-cash stock-based compensation		1,560		0.03
Core Earnings	$	7,501	$	0.15

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We seek to manage our risks related to the credit quality of our assets, interest rates, liquidity, prepayment speeds and market value while, at the same time, seeking to provide an opportunity to stockholders to realize attractive risk-adjusted returns through ownership of our capital stock. While we do not seek to avoid risk completely, we believe the risk can be quantified from historical experience and seek to actively manage that risk, to earn sufficient compensation to justify taking those risks and to maintain capital levels consistent with the risks we undertake.

Credit Risk

We are subject to varying degrees of credit risk in connection with our assets. We have exposure to credit risk on the mortgage assets and underlying mortgage loans in our non-Agency RMBS and CMBS portfolios as well as other assets. Our Manager seeks to manage credit risk by performing deep credit fundamental analysis of potential assets. Credit risk will also be addressed through our Manager’s on-going surveillance, and investments will be monitored for variance from expected prepayments, defaults, severities, losses and cash flow on a monthly basis.

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Our investment guidelines do not limit the amount of our equity that may be invested in any type of our target assets; however, not more than 25% of our equity may be invested in any individual asset without the consent of a majority of our independent directors. Our investment decisions will depend on prevailing market conditions and may change over time in response to opportunities available in different interest rate, economic and credit environments. As a result, we cannot predict the percentage of our equity that will be invested in any of our target assets at any given time.

At March 31, 2010, the S&P ratings of our CMBS portfolio were as follows:

S&P Rating	Carry Value		Percentage
AAA	$	202,676		81.5	%
BB		10,852		4.4	%
B+		9,045		3.6	%
B-		11,625		4.7	%
CCC+		3,747		1.5	%
CCC-		10,654		4.3	%
	$	248,599		100.0	%

At December 31, 2009, the S&P ratings of our CMBS portfolio were as follows:

S&P Rating	Carry Value		Percentage
AAA	$	202,646		82.4	%
A		1,384		0.6	%
BBB		8,917		3.6	%
BBB-		9,355		3.8	%
BB+		12,680		5.2	%
BB		10,914		4.4	%
	$	245,896		100.0	%

At March 31, 2010, the S&P ratings of our RMBS portfolio were as follows:

S&P Rating	Carry Value		Percentage
AAA	$	5,455		16.0	%
AA+		1,218		3.6	%
AA-		2,895		8.5	%
A		3,833		11.3	%
A-		1,610		4.7	%
BBB		6,017		17.7	%
BBB-		158		0.5	%
BB+		317		0.9	%
BB-		1,784		5.2	%
B+		5,159		15.2	%
B-		921		2.7	%
CCC		2,100		6.2	%
D		2,563		7.5	%
	$	34,030		100.0	%

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Interest Rate Risk

Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. We will be subject to interest rate risk in connection with our assets and our related financing obligations. In general, we expect to finance the acquisition of our target assets through financings in the form of borrowings under programs established by the U.S. government, warehouse facilities, bank credit facilities (including term loans and revolving facilities), resecuritizations, securitizations and repurchase agreements. We may mitigate interest rate risk through utilization of hedging instruments, primarily interest rate swap agreements. Interest rate swap agreements are intended to serve as a hedge against future interest rate increases on our borrowings.

At March 31, 2010, approximately $57.7 million, or 5.7%, of our investments were LIBOR based variable rate loans. The majority of our investments were secured by pools of fixed-rate loans and all were classified as held-to-maturity investments. In addition, our TALF financing was non-recourse fixed-rate debt. As of March 31, 2010, a hypothetical 100 basis point increase in interest rates applied to our variable rate assets would increase our annual interest income by approximately $0.6 million. Similarly, a hypothetical 100 bps decrease in interest rates would decrease our annual interest income by the same amount.

Item 4T. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosures. Notwithstanding the foregoing, no matter how well a control system is designed and operated, it can provide only reasonable, not absolute, assurance that it will detect or uncover failures within our company to disclose material information otherwise required to be set forth in our periodic reports.

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

No change in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II— OTHER INFORMATION

Item 1. Legal Proceedings.

Currently, no legal proceedings are pending, threatened, or to our knowledge, contemplated against us.

Item 1A. Risk Factors.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K filed on March 8, 2010 with the Securities and Exchange Commission.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

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Item 4. Reserved

Item 5. Other Information.

None.

Item 6. Exhibits.

(a)		Exhibits:
	10.1	Loan Purchase and Sale Agreement, dated February 16, 2010, among Starwood Property Mortgage Sub-1, L.L.C., Teachers Insurance and Annuity Association of America and Chicago Title Insurance Company, as escrow agent
	10.2	Master Repurchase and Securities Contract, dated March 31, 2010, between Starwood Property Mortgage Sub-1, L.L.C. and Wells Fargo Bank, National Association
	31.1	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
	31.2	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
	32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Starwood Property Trust, Inc.
Date: May 10, 2010	By:	/s/ Barry S. Sternlicht
		Barry S. Sternlicht
		Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Barbara J. Anderson
		Barbara J. Anderson
		Chief Financial Officer (Principal Financial and Accounting Officer)

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INDEX TO EXHIBITS

Exhibit No.		Description
	10.1	Loan Purchase and Sale Agreement, dated February 16, 2010, among Starwood Property Mortgage Sub-1, L.L.C., Teachers Insurance and Annuity Association of America and Chicago Title Insurance Company, as escrow agent
	10.2	Master Repurchase and Securities Contract, dated March 31, 2010, between Starwood Property Mortgage Sub-1, L.L.C. and Wells Fargo Bank, National Association
	31.1	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
	31.2	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
	32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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EX-10.1

Exhibit 10.1

LOAN PURCHASE AND SALE AGREEMENT

THIS LOAN PURCHASE AND SALE AGREEMENT made as of this 16th day of February, 2010, by and among TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA (“Seller”), a New York corporation, having an address at 730 Third Avenue, New York, New York 10017, STARWOOD PROPERTY MORTGAGE SUB-1, L.L.C. (“Purchaser”), a Delaware limited liability company, having an address at c/o Starwood Capital Group, 591 West Putnam Avenue, Greenwich, Connecticut 06830, and CHICAGO TITLE INSURANCE COMPANY (“Escrow Agent”), having an address at 711 Third Avenue, New York, New York 10017.

RECITALS:

A. Seller is the owner of the loans described in the Mortgage Loan Schedule (as defined in Exhibit B) and attached as Exhibit A (each, individually, a “Loan,” and collectively, the “Loans”).

B. Seller wishes to sell the Loans and Purchaser, having conducted its own due diligence review of the Loans and the Properties (as defined in Exhibit B), wishes to purchase the Loans.

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, Seller and Purchaser agree as follows:

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.1. Definitions. Capitalized terms used in this Agreement are defined in Exhibit B or in the text with a cross-reference in Exhibit B.

Section 1.2. Rules of Construction. This Agreement will be interpreted in accordance with the rules of construction set forth in Exhibit C.

ARTICLE II

SALE AND PURCHASE OF THE LOANS

Section 2.1. Agreement to Sell and Purchase the Loans. Seller agrees to sell and Purchaser agrees to purchase the Loans in accordance with this Agreement.

Section 2.2. The Deposit. On the date hereof, Purchaser shall deliver the Deposit to Escrow Agent in accordance with the wiring instructions attached to this Agreement as Exhibit L. Escrow Agent will hold the Deposit in accordance with this Agreement in a non-interest bearing account. At the Closing, Escrow Agent will disburse the Deposit to Seller, Seller will apply the Deposit as a credit against the Purchase Price and Purchaser will pay the balance of the Purchase Price to Seller in accordance with Section 3.2(a). If Purchaser fails to deliver the Deposit to Escrow Agent on the date of this Agreement, Seller shall have the right to cancel this Agreement, in which event neither Seller nor Purchaser will have any further rights or obligations under this Agreement other than those rights and obligations which expressly survive the termination of this Agreement.

Section 2.3. Access to the Loan Files. Purchaser has delivered or is delivering to Seller contemporaneously with Purchaser’s execution and delivery of this Agreement an executed Confidentiality Agreement. During the period beginning on the date of this Agreement and ending on the Closing Date and subject to Purchaser’s delivery to Seller of such executed Confidentiality Agreement, Seller will permit Purchaser and its Representatives (as defined in the Confidentiality Agreement) access to the Loan Files during Seller’s normal business hours and upon reasonable Notice and will continue to permit Purchaser and its Representatives access to copies of the Loan Files currently available through an on-line database.

Section 2.4. Assignment and Assumption of Agreement among Noteholders. Within five (5) Business Days of the date of this Agreement, Purchaser shall deliver to Seller an executed assumption of Seller’s rights and obligations under the Agreement among Noteholders with respect to the Willowbrook Mall Loan, in the form of Exhibit K. In the event that Class A Noteholder (as defined in the Agreement among Noteholders) requests that the assumption of Seller’s rights and obligations under the Agreement among Noteholders be in a form other than the form set forth on Exhibit K, Purchaser shall reasonably cooperate with such request and within two (2) Business Days of the date of receiving a written copy of such request from Seller, deliver to Seller an executed assumption of Seller’s rights and obligations under the Agreement among Noteholders in form and substance satisfactory to Class A Noteholder. If Purchaser fails to satisfy the requirements set forth in this Section 2.4 in whole or in part, Seller may elect to cancel this Agreement, in which event this Agreement will terminate, Seller will be entitled to the Deposit and neither Seller nor Purchaser will have any further rights or obligations under this Agreement other than those rights and obligations which expressly survive the termination of this Agreement. Seller acknowledges that if it delivers the executed assumption of Seller’s rights and obligations under the Agreement among Noteholders to Class A Noteholder prior to the Closing, Seller shall notify Class A Noteholder at the time of such delivery that Seller has not yet transferred its interest in the Agreement among Noteholders to Purchaser.

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ARTICLE III

THE CLOSING

Section 3.1. Time and Location of the Closing. The Closing will occur on the Closing Date at the time specified in Exhibit B. The Closing will take place at Seller’s offices or at such other location as Seller and Purchaser may agree. Subject to the terms of this Agreement, on the Closing Date, Seller will sell all of the Loans to Purchaser and Purchaser will purchase all of the Loans from Seller.

Section 3.2. Payment of and Adjustment to Purchase Price.

(a) At the Closing, Purchaser will pay the Purchase Price (either directly or through an escrow to be established by Escrow Agent) to Seller or to Seller’s designee, by wire transfer of immediately available funds in accordance with the wiring instructions attached to this Agreement as Exhibit D. The Purchase Price will be the consideration for the full and complete principal value of the Loans without regard to the actual outstanding aggregate amount due under the Notes, the Mortgages, the Assignments and any other documents in the Loan Files.

(b) Any and all adjustments to the Purchase Price (including the calculation of the Closing Date Principal Balances) will be computed effective as of 12:01 a.m. Eastern Standard/Daylight Time on the Closing Date.

(c) The Purchase Price shall be adjusted to include accrued and unpaid interest under the Notes to and including the date immediately preceding the Closing Date.

(d) All regularly scheduled payments of principal and all prepayments of principal received on or before the Closing Date will be the property of Seller. Purchaser will not receive a credit against the Purchase Price for any payment in the nature of a prepayment premium, yield maintenance payment, additional or contingent interest or internal rate of return or residual lookback payment received by Seller and Purchaser will have no right to or interest in such payments.

(e) As of the Closing Date, Purchaser will assume all of Seller’s obligations under the Loan Documents for all Escrow Amounts and accounts and Seller will transfer to Purchaser Seller’s interest in such Escrow Amounts and accounts (and the corresponding escrow and pledge agreements) at Closing in accordance with the terms hereof.

(f) Notwithstanding anything in this Agreement to the contrary and only to the extent that the Closing is consummated, Seller shall promptly remit (or cause to be remitted) to Purchaser any payments of interest or principal under the Notes and all other sums received by Seller (or on behalf of Seller) pursuant to the Loan Documents (other than under any of the Loans repurchased by Seller pursuant to this Agreement) on and after the Closing Date (other than payments of principal received by Seller which were previously deducted from the Closing Date Principal Balances used to determine the Purchase Price).

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Section 3.3. Purchaser’s Closing Documents. Purchaser will deliver the following Closing Documents to Seller at the Closing:

(a) an executed receipt for the Notes and the Letters of Credit, in the form of Exhibit E;

(b) for each Loan, an executed assumption of Seller’s rights and obligations under agreements and with accounts with respect to the Loan, other than the Excluded Agreement and the Excluded Letter of Credit, in the form of Exhibit F;

(c) for each Loan, an executed letter in the form of Exhibit I, addressed to Borrower notifying Borrower of the transfer of the Loan to Purchaser and directing Borrower to make all debt service and any other payments required to be paid directly to Seller under the Loan from and after the Closing Date to Purchaser or Purchaser’s designee;

(d) a certificate of Purchaser’s Secretary or Assistant Secretary, certifying as to the incumbency of the signatories authorized to execute this Agreement and the Closing Documents required to be executed and delivered by Purchaser on behalf of Purchaser;

(e) certified copies of Purchaser’s corporate resolutions authorizing the execution of this Agreement and the Closing Documents required to be executed and delivered by Purchaser and the consummation of the transaction contemplated by this Agreement;

(f) a certificate of Purchaser certifying that all representations and warranties made by Purchaser in this Agreement remain true, correct and complete in all material respects on the Closing Date as though the representations and warranties were made on and as of the Closing Date;

(g) for the MGM Tower Loan, an executed letter addressed to Note A Holder (as defined in the Co-Lender Agreement) notifying Note A Holder of the transfer of the MGM Tower Loan to Purchaser and enclosing an original executed assumption of Seller’s rights and obligations under the Co-Lender Agreement with respect to the MGM Tower Loan in the form of Exhibit F; and

(h) for the Willowbrook Mall Loan, an executed letter addressed to Senior Lender (as defined in the Loan Agreement) notifying Senior Lender of the transfer of the Willowbrook Mall Loan to Purchaser.

Section 3.4. Seller’s Closing Documents. Seller’s delivery of the Loan Files and any other Closing Documents that Seller is required to deliver in accordance with this Agreement will be conditioned on Seller’s receipt of the Purchase Price and the Closing Documents that Purchaser is required to deliver in accordance with this Agreement. At the Closing, when Seller has received the Purchase Price and the Closing Documents that Purchaser is required to deliver to Seller in accordance with this Agreement, Seller will

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transfer, assign, set-over and convey to Purchaser, without recourse (except as otherwise expressly set forth in this Agreement), all of Seller’s right, title and interest in and to the Loans and the Loan Files. Seller will deliver the following Closing Documents to Purchaser at the Closing:

(a) for each Loan, an original of the Note, endorsed pursuant to an endorsement in the form of Exhibit G;

(b) for each Loan except the MGM Tower Loan, an executed assignment of the Mortgage (other than the UCC Financing Statements) and the Assignment in favor of Purchaser, in the form of Exhibit H (in recordable form for the applicable jurisdictions where the Properties are located);

(c) for each Loan, an executed assignment of Seller’s rights and obligations under agreements and accounts with respect to the Loan, other than the Excluded Agreement and the Excluded Letter of Credit, in the form of Exhibit F;

(d) for each Loan except the MGM Tower Loan, UCC-2 or UCC-3 Financing Statements (or the equivalent) reflecting the transfer of the Loan to Purchaser, provided, however, that Purchaser acknowledges that some of the UCC-1 Financing Statements in the Loan Files may have lapsed or expired;

(e) each Loan File;

(f) for each Loan, an executed letter in the form of Exhibit I, addressed to Borrower notifying Borrower of the transfer of the Loan to Purchaser, directing Borrower to make all debt service and any other payments required to be paid directly to Seller under the Loan from and after the Closing Date to Purchaser or Purchaser’s designee and notifying Borrower that any Escrow Amounts (and related escrow and pledge agreements) for such Loan (except in the case of the MGM Tower Loan and the Willowbrook Mall Loan) have been transferred to Purchaser;

(g) a certificate of Seller’s secretary or assistant secretary certifying (i) as to the incumbency of the signatories authorized to execute this Agreement and the Closing Documents required to be executed and delivered by Seller on behalf of Seller and (ii) that the execution of this Agreement and the Closing Documents and the consummation of the transaction contemplated by this Agreement have been duly authorized;

(h) a certificate of Seller certifying that all representations and warranties made by Seller in this Agreement remain true, correct and complete in all material respects on the Closing Date as though the representations and warranties were made on and as of the Closing Date, except that Seller may update the Mortgage Loan Schedule as necessary;

(i) for the MGM Tower Loan, an executed letter addressed to Note A Holder (as defined in the Co-Lender Agreement) notifying Note A Holder of the transfer of the MGM Tower Loan to Purchaser and enclosing an original executed assumption of Seller’s

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rights and obligations under the Co-Lender Agreement with respect to the MGM Tower Loan;

(j) for the Willowbrook Mall Loan, an executed letter addressed to Senior Lender (as defined in the Loan Agreement) notifying Senior Lender of the transfer of the Willowbrook Mall Loan to Purchaser;

(k) for each escrow or pledge agreement to which Seller is a party relating to the Loans, an executed letter in the form of Exhibit N, addressed to the escrow agent thereunder notifying such escrow agent of the transfer of the Loan to Purchaser and the assignment of the related Escrow Amount(s) and escrow or pledge agreements to Purchaser, and directing the escrow agent to change the name of the account in which the Escrow Amount(s) is maintained by replacing the name of Seller with the name of Purchaser;

(l) with respect to the Research Office Center Loan (as described in the Mortgage Loan Schedule), the original Letter of Credit issued by JPMorgan Chase Bank, N.A. in the amount of Two Million Five Hundred Thousand and no/100ths dollars ($2,500,000.00), together with the form transferring the Letter of Credit from Seller to Purchaser, executed and fully completed by Seller (the “Research Office Center Letter of Credit”);

(m) with respect to the Life Time Fitness Centers Loans (as described in the Mortgage Loan Schedule), the original Letter of Credit issued by U.S. Bank National Association in the amount of Five Million and no/100ths dollars ($5,000,000.00) (the “Life Time Fitness Letter of Credit”);

(n) for the MGM Tower Loan, an executed letter addressed to the Master Servicer (as defined in the MGM Tower Sub-Servicing Agreement) notifying the Master Servicer of the transfer of the MGM Tower Loan to Purchaser and the termination of the MGM Tower Sub-Servicing Agreement; and

(o) for the Willowbrook Mall Loan, an executed letter addressed to the Master Servicer (as defined in the Willowbrook Mall Sub-Servicing Agreement) notifying the Master Servicer of the transfer of the Willowbrook Mall Loan to Purchaser and the termination of the Willowbrook Mall Sub-Servicing Agreement.

Section 3.5. Delivery of the Loan Files.

(a) The Loan Files will be delivered to Purchaser at Closing when Seller has received the Purchase Price and all Closing Documents required to be delivered by Purchaser and Seller has delivered all Closing Documents required to be delivered by Seller, all in accordance with this Article (provided that Seller shall permit Purchaser or its Representatives the opportunity to review the Loan Files at the offices of Debevoise & Plimpton LLP, New York, New York prior to the Closing in order to verify the contents of the Loan Files). From and after delivery of the Loan Files to Purchaser, Seller and Seller’s Affiliates, agents, employees, representatives and trustees will have no responsibility for

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the Loan Files and Purchaser will bear all risk of loss or damage with respect to the Loan Files. Upon delivery of the Loan Files to Purchaser, Purchaser will arrange to move the Loan Files, at Purchaser’s expense, to a location designated by Purchaser.

(b) After delivery of the Loan Files to Purchaser in accordance with this Agreement, Seller will have the continuing right during the period commencing on the Closing Date and continuing until the fifth (5th) anniversary of the Closing Date to use, inspect and make extracts from or copies of documents in the Loan Files, on reasonable Notice to Purchaser and at Seller’s expense. Purchaser further agrees to allow Seller temporary possession, custody and use of original documents from the Loan Files at any time during the period commencing on the Closing Date and continuing until the fifth (5th) anniversary of the Closing Date for any lawful purpose and upon reasonable terms and conditions, on reasonable Notice to Purchaser. Before destruction of any document in the Loan Files at any time during the period commencing on the Closing Date and continuing until the fifth (5th) anniversary of the Closing Date, Purchaser agrees to give reasonable Notice to Seller and to allow Seller, at Seller’s expense, to recover the document from Purchaser.

Section 3.6. Recording and Filing Closing Documents. Purchaser will be solely responsible for recording or filing, as the case may be, at Purchaser’s own expense, the assignment of the Mortgages and the Assignments and the UCC Financing Statements to Purchaser from Seller required to be delivered hereunder.

Section 3.7. Servicing the Loans. Seller will sell the Loans and Purchaser will purchase the Loans on a servicing-released basis except in the case of the MGM Tower Loan and the Willowbrook Mall Loan. All of Seller’s rights and obligations with respect to the servicing of the Loans will be transferred to Purchaser as of the Closing Date to the extent transferable (other than Seller’s rights and obligations under the Excluded Agreement, which will not be transferred), and Seller will be discharged from all obligations for servicing the Loans as of the Closing Date and will cause the Loans (other than the MGM Tower Loan and the Willowbrook Mall Loan) to be released or discharged from any servicing agreements as of the Closing Date (other than Seller’s obligations under the Excluded Agreement, which will not be assumed by Purchaser). Seller will cooperate with Purchaser on transferring the servicing and Escrow Amounts (except in the case of the MGM Tower Loan and the Willowbrook Mall Loan) to Purchaser.

Section 3.8. Closing Date Extension.

(a) In the event that prior to the Closing Date, Seller has not consummated the Life Time Fitness Centers Loans Separation Transaction pursuant to Section 8.20(a) of this Agreement (and Seller shall provide Notice to Purchaser at least two (2) Business Days prior to the Closing Date in the event the Life Time Fitness Centers Loans Separation Transaction will not be consummated by the Closing Date), the Closing Date for the Life Time Fitness Centers Loans shall be automatically extended until the earlier of (i) two (2) Business Days after the date on which Seller consummates the Life Time Fitness Centers Loans Separation Transaction and (ii) two (2) weeks after the Closing Date (the “Life

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Time Loans Closing Date”), in order that Seller may consummate the Life Time Fitness Centers Loans Separation Transaction, provided, that:

(i) On the Closing Date, Seller shall sell to Purchaser and Purchaser shall purchase from Seller all of the Loans (and related Loan Files) other than the Life Time Fitness Centers Loans (and related Loan Files) (the “Other Loans”) pursuant to the terms of this Agreement. At the Closing, Seller shall deliver to Purchaser and Purchaser shall deliver to Seller, each party’s respective Closing Documents relating to the Other Loans pursuant to the terms of this Agreement. The Purchase Price payable by Purchaser to Seller on the Closing Date for the Other Loans shall be reduced to exclude the Life Time Fitness Centers Loans and shall be calculated pursuant to Section 3.2 hereof using the Closing Date Principal Balances of the Other Loans. Only the pro rata portion of the Deposit (based on the Closing Date Principal Balances of all Loans on the Closing Date) for the Other Loans will be applied to the Purchase Price paid to Seller on the Closing Date, and the remainder of the Deposit will continue to be held by Escrow Agent in accordance with the terms of this Agreement.

(ii) Following the Closing Date, this Agreement will remain in full force and effect with respect to the Life Time Fitness Centers Loans and references to the term “Closing Date” in this Agreement shall be deemed to mean and refer to the Life Time Loans Closing Date (or the Extended Life Time Loans Closing Date, if applicable), solely with respect to the Life Time Fitness Centers Loans.

(iii) On the Life Time Loans Closing Date, provided that Seller has consummated the Life Time Fitness Centers Loans Separation Transaction pursuant to Section 8.20(a) of this Agreement, Seller shall deliver to Purchaser an updated Mortgage Loan Schedule only with respect to the Life Time Fitness Centers Loans, and reaffirm its representations and warranties in Section 5.4(c) and Section 5.4(g) with respect to the Life Time Fitness Centers Loans as of the Life Time Loans Closing Date.

(iv) On the Life Time Loans Closing Date, provided that Seller has consummated the Life Time Fitness Centers Loans Separation Transaction pursuant to Section 8.20(a) of this Agreement, Seller shall sell to Purchaser and Purchaser shall purchase from Seller, all of the Life Time Fitness Centers Loans (and related Loan Files) pursuant to the terms of this Agreement. At the Closing, Seller shall deliver to Purchaser and Purchaser shall deliver to Seller, each party’s respective Closing Documents relating to the Life Time Fitness Centers Loans pursuant to the terms of this Agreement. The Purchaser Price payable by Purchaser to Seller on the Life Time Loans Closing Date for the Life Time Fitness Centers Loans shall be calculated pursuant to Section 3.2 hereof using the Closing Date Principal Balances (as of 12:01 a.m. Eastern Standard/Daylight Time on the Life Time Loans Closing Date) of the Life Time Fitness Centers Loans. On the Closing Date, the remaining portion of the Deposit shall be applied to the Purchase Price of the Life Time Fitness Centers Loans.

(b) Notwithstanding anything to the contrary contained in this Agreement, in the event that Seller does not effectuate the Life Time Fitness Centers Loans Separation

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Transaction pursuant to Section 8.20(a) of this Agreement prior to the Life Time Loans Closing Date, Purchaser may elect either (i) to extend the Life Time Loans Closing Date until the earlier of (A) two (2) Business Days after the date on which Seller consummates the Life Time Fitness Centers Loans Separation Transaction and (B) sixty (60) days after the original Life Time Loans Closing Date (the “Extended Life Time Loans Closing Date”), in order to provide Seller with additional time to consummate such amendments, in which case the Life Time Loans Closing Date shall be deemed to be extended, or (ii) to terminate this Agreement with respect to the Life Time Fitness Centers Loans, in which event Purchaser shall receive the remaining portion of the Deposit from Escrow Agent, and neither Seller nor Purchaser will have any further rights or obligations under this Agreement with respect to the Life Time Fitness Centers Loans other than those rights and obligations which expressly survive the termination of this Agreement. In the event that Purchaser elects to extend the Life Time Loans Closing Date until the Extended Life Time Loans Closing Date, Purchaser shall provide Notice to Seller on or prior to the Life Time Loans Closing Date (provided that Seller has provided Notice to Purchaser at least two (2) Business Days prior to the Life Time Loans Closing Date that the Life Time Fitness Centers Loans Separation Transaction will not be consummated by the Life Time Loans Closing Date). If the Life Time Loans Closing Date has been extended until the Extended Life Time Loans Closing Date and the Life Time Fitness Centers Loans Separation Transaction is not consummated by the Extended Life Time Loans Closing Date, this Agreement shall terminate with respect to the Life Time Fitness Centers Loans, Purchaser shall receive the remaining portion of the Deposit from Escrow Agent, and neither Seller nor Purchaser will have any further rights or obligations under this Agreement with respect to the Life Time Fitness Centers Loans other than those rights and obligations which expressly survive the termination of this Agreement.

(c) Notwithstanding anything to the contrary contained herein, Purchaser shall have no obligation to purchase (and shall not be in breach of this Agreement for failing to purchase) and Seller shall have no obligation to sell (and shall not be in breach of this Agreement for failing to sell) the Life Time Fitness Centers Loans if Seller fails to effectuate the Life Time Fitness Centers Loans Separation Transaction on or prior to the Closing Date (or the Life Time Loans Closing Date or the Extended Life Time Loans Closing Date, if the closing date for the sale of the Life Time Fitness Centers Loans is extended pursuant to the terms of Section 3.8 above).

ARTICLE IV

PURCHASER’S REPRESENTATIONS AND WARRANTIES

Section 4.1. Purchaser’s Authority.

(a) Purchaser is and through the Closing Date will continue to be duly organized, validly existing and in good standing under the laws of the state or commonwealth in which it was organized or incorporated.

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(b) Purchaser has and through the Closing Date will continue to have all necessary approvals, whether governmental or otherwise, and full right, power and authority, to (i) execute and deliver this Agreement and (ii) perform its obligations under this Agreement and consummate the transaction contemplated by this Agreement.

(c) Purchaser’s execution and delivery of this Agreement, Purchaser’s performance of its obligations under this Agreement and consummation of the transaction contemplated by this Agreement do not and through the Closing Date will continue not to (i) conflict with any laws or agreements binding on Purchaser or (ii) result in a default under any agreements binding on Purchaser.

(d) Assuming Seller’s due execution and delivery of this Agreement, this Agreement constitutes and through the Closing Date will continue to constitute a legal, valid and binding obligation of Purchaser, enforceable in accordance with this Agreement, except to the extent that enforceability of the obligations may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(e) Purchaser (which for this purpose includes its partners, members, principal stockholders and any other constituent entities) (i) has not been designated as a “specifically designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, <http://www.treas.gov/ofac/t11 sdn.pdf> or at any replacement website or other replacement official publication of such list; (ii) is currently in compliance with and will at times during the term of this Agreement remain in compliance with the regulations of the Office of Foreign Asset Control of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto; and (iii) has not used and will not use funds from illegal activities for any portion of the Purchase Price, including the Deposit.

(f) (i) Purchaser is not an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”), which is subject to Title I of ERISA, or a “plan” as defined in Section 4975(e)(1) of the Code, which is subject to Section 4975 of the Code; and (ii) the assets of Purchaser do not constitute “plan assets” of one or more such plans for purposes of Title I of ERISA or Section 4975 of the Code; and (iii) Purchaser is not a “governmental plan” within the meaning of Section 3(32) of ERISA, and assets of Purchaser do not constitute plan assets of one or more such plans; or (iv) transactions by or with Purchaser are not in violation of state statutes applicable to Purchaser regulating investments of and fiduciary obligations with respect to governmental plans.

(g) Purchaser is (i) an Institutional Lender/Owner (as defined in the Co-Lender Agreement) and (ii) a Qualified Institutional Lender (as defined in the Agreement among

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Noteholders).

Section 4.2. No Reliance.

(a) Purchaser is and through the Closing Date will continue to be familiar with all aspects of the Loans and the Properties. In particular, Purchaser has not relied on any oral or, except as otherwise expressly set forth in this Agreement, written information provided by Seller or by Seller’s Affiliates, agents, employees, representatives or trustees or by any broker or agent pertaining to the Properties, including any leases, cash flow statements or other financial information. Purchaser’s decision to purchase the Loans is based on Purchaser’s due diligence review and independent evaluation of the Loans and the Properties. Purchaser is a sophisticated purchaser, with experience in owning and holding commercial mortgage loans in the nature of the Loans, including commercial mortgage loans that may have been modified or restructured. Purchaser is familiar with the risks associated with commercial mortgage loan sale transactions, which ordinarily include commercial mortgage loans of varying quality and which involve purchases based on limited information, disclosures and representations and warranties. Purchaser recognizes the special nature of the transaction that is the subject of this Agreement (including that the Loans may have been modified and restructured), understands and is freely taking all risks involved in connection with the transaction and acknowledges that the nature and risks are reflected in the Purchase Price and in the terms and conditions pursuant to which Purchaser is willing to purchase and Seller is willing to sell the Loans.

(b) In entering into this Agreement, Purchaser has not relied on any oral or, except as otherwise expressly set forth in this Agreement, written information provided by Seller or by Seller’s Affiliates, agents, employees, representatives or trustees or by any other agent or broker. No agent, employee or representative of Seller or other agent or broker has been authorized to make, and Purchaser has not relied on, any statements other than those expressly set forth in this Agreement. Purchaser is not relying on any continued actions or efforts on the part of Seller or Seller’s Affiliates, agents, employees, representatives or trustees with respect to the Loans. After the Closing Date, Seller will retain no further direct interest in the Loans (except as otherwise expressly set forth in this Agreement) and Seller and its Affiliates, agents, employees, representatives and trustees will not provide any further servicing of the Loans or any foreclosure or other management services. Seller has not advanced and will not advance funds to Purchaser to protect the Properties or to maintain the yield of the Loans. Seller has not guaranteed and does not guarantee payment of the Loans or performance of Borrowers’ obligations under the documents in the Loan Files and Seller has not guaranteed and does not guarantee the condition, performance, rate of return, value or yield of the Loans or the Properties. The Loans are being sold as-is, with no enhancement or value added (except for Seller’s representations and warranties set forth in Section 5.4 and Seller’s obligations set forth in Section 8.20 of this Agreement) by Seller and no modifications to the material terms of the Loan Files.

Section 4.3. No Securities. Purchaser’s acquisition of the Loans does not constitute a purchase of securities within the meaning of federal or state securities laws,

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and in light of the representations, warranties, covenants and acknowledgments contained in this Agreement, Purchaser waives all rights, if any, to make any Claim in connection with any federal or state securities law.

Section 4.4. Environmental, Seismic, Engineering and Structural Risks. Certain environmental, seismic, engineering and structural risks may exist with respect to the Properties. Purchaser has analyzed or has had an opportunity to analyze the environmental, seismic, engineering, and structural issues pertaining to each Property and is acquiring the Loans subject to the risks mentioned above. Purchaser agrees that it will not rely in any way on any environmental, seismic, engineering and structural reports delivered to Purchaser by Seller or by Seller’s Affiliates, agents, employees, representatives or trustees in connection with Purchaser’s due diligence or review of the Loan Files.

Section 4.5. Title Insurance. Purchaser will be solely responsible for the cost of any endorsement to Seller’s existing title insurance policies for the Loans and the cost of any other title insurance desired by Purchaser, and the procurement of any endorsement or other insurance for any Loan will not be a condition to the Closing. Seller and Seller’s Affiliates, agents, employees, representatives and trustees will have no obligation under this Agreement to discharge or satisfy, or to expend any amount or incur any liability in order to discharge or satisfy, any lien, encumbrance, agreement or other matter affecting the Properties or to purchase any title endorsement that Purchaser wishes to secure in connection with the transaction.

Section 4.6. Collection Practices. Purchaser will not violate any law relating to unfair collection practices in connection with the Loans.

Section 4.7. Litigation. Purchaser will not (a) institute any legal action in the name of Seller, (b) intentionally or unintentionally, through misrepresentation or nondisclosure, conceal or mislead any person as to Purchaser’s identity or (c) use or refer to Seller’s name or any name derived from Seller’s name to promote the sale or transfer of the Loans or the collection or management of the Loans.

Section 4.8. No Brokers. Purchaser has not dealt with any broker or finder other than Seller’s Broker in connection with the purchase and sale of the Loans, provided that Purchaser shall not be responsible or liable for any fees or other amounts owed or payable to Seller’s Broker relating to the transactions contemplated hereunder, which amounts are the sole responsibility of Seller.

ARTICLE V

SELLER’S REPRESENTATIONS AND WARRANTIES

Section 5.1. No Implied Representations or Warranties. Seller has not and will not be deemed to have made and specifically disclaims any implied warranties or representations under this Agreement. Except as expressly provided in this Article V,

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Seller makes no representations or warranties with respect to (a) the Loans or the Loan Files; (b) the priority, perfection or enforceability of the Notes, the Mortgages, the Assignments or any other document in the Loan Files; (c) the presence or absence of defaults under, defenses to or offsets against the Notes, the Mortgages, the Assignments or any other document in the Loan Files; (d) the status or financial condition of any Borrower; or (e) any fact or condition respecting the Properties.

Section 5.2. Seller’s Authority.

(a) Seller is and through the Closing Date will continue to be (i) duly organized, validly existing and in good standing under the laws of the State of New York and (ii) duly qualified to conduct business, in good standing, in the State of New York.

(b) Subject to Section 8.16, Seller has and through the Closing Date will continue to have all necessary approvals, whether governmental or otherwise, and full right, power and authority, to (i) execute and deliver this Agreement and (ii) perform its obligations under this Agreement and consummate the transaction contemplated by this Agreement.

(c) Subject to Section 8.16, Seller’s execution and delivery of this Agreement, Seller’s performance of its obligations under this Agreement and consummation of the transaction contemplated by this Agreement do not and through the Closing Date will continue not to (i) conflict with any laws or agreements binding on Seller or (ii) result in a default under any agreements binding on Seller.

(d) Subject to Section 8.16, assuming Purchaser’s due execution and delivery of this Agreement, this Agreement constitutes and through the Closing Date will continue to constitute a legal, valid and binding obligation of Seller, enforceable in accordance with this Agreement, except to the extent that enforceability of the obligations may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(e) Seller (i) has not been designated as a “specifically designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, <http://www.treas.gov/ofac/t11 sdn.pdf> or at any replacement website or other replacement official publication of such list; and (ii) is currently in compliance with and will at times during the term of this Agreement remain in compliance with the regulations of the Office of Foreign Asset Control of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto.

(f) (i) Seller is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “plan” as defined in Section 4975(e)(1) of the Code, which is subject to Section 4975 of the Code; and (ii) the assets of Seller do

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not constitute “plan assets” of one or more such plans for purposes of Title I of ERISA or Section 4975 of the Code; and (iii) Seller is not a “governmental plan” within the meaning of Section 3(32) of ERISA, and assets of Seller do not constitute plan assets of one or more such plans; or (iv) transactions by or with Seller are not in violation of state statutes applicable to Seller regulating investments of and fiduciary obligations with respect to governmental plans.

Section 5.3. No Brokers. Seller has not dealt with any broker or finder other than Seller’s Broker in connection with the purchase and sale of the Loans. Seller will be responsible for the payment of any brokerage commission or finders fee payable to Seller’s Broker in connection with the purchase and sale of the Loans in accordance with a separate agreement between Seller and Seller’s Broker.

Section 5.4. Seller’s Representations as to the Loans. With respect to each Loan, Seller represents and warrants that as of the Closing Date (except for (c) and (g) below, which are made as of the date of this Agreement):

(a) Seller is the sole legal and beneficial owner and holder of the Loan and the physical contents of the Loan File with respect to such Loan, free and clear of any and all liens, pledges, charges, or security interests of any nature on its interest in the Loan, but subject to the terms, conditions and limitations contained in the Loan File.

(b) Seller has not previously assigned, sold or otherwise transferred any of its interest in and to the Loan or the physical contents of the Loan File; there are no participation agreements affecting the Loan.

(c) The information set forth on the Mortgage Loan Schedule is true and correct.

(d) The Loan is not cross-defaulted or cross-collateralized with any other loan owned by Seller which is not one of the Loans.

(e) Seller has not sent Borrower a default notice with respect to the Loan during the twelve (12) month period immediately preceding the Closing Date.

(f) No foreclosure actions by Seller are pending against the Property.

(g) The Loan has not been thirty (30) or more days delinquent in the twelve (12) month period immediately preceding the Closing Date, and, other than as indicated on the Mortgage Loan Schedule, all payments due on or before the Closing Date have been paid.

(h) The documents in the Loan Files (including any amendments to the documents) do not require the disbursement of any additional Loan proceeds by Seller and the amount of each Note has been fully disbursed. To Seller’s Actual Knowledge, any disbursements from the Escrow Amounts required to be disbursed prior to the Closing Date have been disbursed.

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(i) To Seller’s Actual Knowledge, Seller has made available to Purchaser for inspection, with respect to the Loan, true, correct and complete Loan Files.

(j) To Seller’s Actual Knowledge, the Loan File for the Loan contains true and complete copies of the Loan Documents now in effect for the Loan, and except as set forth in the Loan File, Seller has not (i) materially waived, altered or modified the Loan Documents in writing or (ii) satisfied, cancelled, rescinded, extended or subordinated the Loan Documents in whole or in part in writing.

(k) To Seller’s Actual Knowledge, Seller has not sent or received a written notice of default pursuant to the Agreement Among Noteholders or the Co-Lender Agreement.

(l) To Seller’s Actual Knowledge, Seller has not terminated or cancelled Seller’s title insurance policy, if any, relating to the Loan and Seller has not made any material claims in writing or been paid for any claims under any such title insurance policy.

Section 5.5. Survival. The representations and warranties contained in this Article V shall survive the Closing Date only until the Material Breach Termination Date.

ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.1. Seller’s Remedies.

(a) If Purchaser fails or refuses to consummate the transaction contemplated by this Agreement in accordance with this Agreement or Purchaser otherwise is in default under this Agreement, Seller and Purchaser agree that the damages Seller would sustain as a result of the failure, refusal or default by Purchaser would be substantial but would be difficult to ascertain. Accordingly, Seller and Purchaser agree that in the event of such a failure, refusal or default by Purchaser, Seller will be entitled to receive the Deposit from Escrow Agent as liquidated damages as Seller’s sole and exclusive remedy, whereupon this Agreement will terminate and neither Seller nor Purchaser will have any further rights or obligations under this Agreement.

(b) If following the Closing, Purchaser materially defaults under its obligations set forth in Section 8.23 hereof, Seller shall have the right to make a Claim against Purchaser for any loss, cost, expense and damages resulting from such default, provided that any Claim by Seller against Purchaser arising out of such default shall be limited to the actual amount of the loss, cost, expense and damages suffered or incurred by Purchaser as a result of such default (excluding consequential, punitive and similar damages).

Section 6.2. Purchaser’s Remedies.

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(a) If Seller fails to secure the appropriate corporate authorization to consummate the transaction contemplated by this Agreement in accordance with Section 8.16 or materially fails to perform or materially breaches any obligations or covenants in Section 8.20(b) or Section 8.20(c) hereof, Purchaser will be entitled to receive the Deposit from Escrow Agent, this Agreement will terminate and neither Seller nor Purchaser will have any further rights or obligations under this Agreement other than those rights and obligations that expressly survive the termination of this Agreement.

(b) If Seller fails or refuses to consummate the transaction contemplated by this Agreement (other than as a result of (i) Seller’s failure to secure the appropriate authorization to consummate the transaction or (ii) Seller’s failure to effectuate the Life Time Fitness Centers Loans Separation Transaction pursuant to Section 8.20(a), for which Purchaser shall have the rights and remedies set forth in Section 3.8 hereof), including any failure by Seller to deliver to Purchaser the Closing Documents required to be delivered by Seller, Purchaser will have the right, at Purchaser’s sole option, to (i) terminate this Agreement and receive the Deposit from Escrow Agent or (ii) institute a proceeding for specific performance.

(c) If following the Closing, Seller materially defaults under its obligations set forth in Section 8.20(d), Section 8.20(e) or Section 8.22 hereof, Purchaser shall have the right to make a Claim against Seller for any loss, cost, expense and damages resulting from such default, provided that any Claim by Purchaser against Seller arising out of such default shall be limited to the actual amount of the loss, cost, expense and damages suffered or incurred by Purchaser as a result of such default (excluding consequential, punitive and similar damages).

(d) Purchaser will have no rights or remedies against Seller or Seller’s Affiliates, agents, employees, representatives or trustees in connection with the transaction contemplated by this Agreement other than the rights and remedies expressly set forth in this Section 6.2 and the rights and remedies provided in Section 6.3 below with respect to a Material Breach of a Seller’s Representation. Notwithstanding anything to the contrary contained in this Agreement, Purchaser’s rights under this Article will inure to the benefit of Purchaser only and will terminate with respect to each Loan, upon the transfer of all or any portion of Purchaser’s interest in such Loan or upon the acquisition by any successor to Purchaser of Purchaser’s interest in such Loan.

Section 6.3. Material Breach of a Seller’s Representation.

(a) If Purchaser discovers a Material Breach of a Seller’s Representation, Purchaser will deliver Notice of the Material Breach to Seller within three (3) Business Days of Purchaser’s discovery of the Material Breach, but in no event after the Material Breach Termination Date. If Purchaser fails to deliver Notice of the Material Breach to Seller within the three (3) Business Day period described above or if Purchaser delivers the Notice to Seller after the Material Breach Termination Date, Purchaser will be deemed to have waived the Material Breach and Purchaser will have no right to assert a Claim for the Material Breach.

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(b) If, prior to or at the Closing, Purchaser delivers to Seller Notice of a Material Breach of a Seller’s Representation as provided in Section 6.3(a), then Seller may elect, within thirty (30) days of its receipt of the Notice, in its sole and absolute discretion, to cure the Material Breach in all material respects. If Purchaser delivers the Notice to Seller less than thirty (30) days before the Closing, the Closing will be adjourned to the extent necessary to allow Seller thirty (30) days in which to make an election as described above. If Seller elects to cure the Material Breach, then the Closing will be adjourned for a reasonable period of time to allow Seller to effectuate a cure. If Seller does not make an election or, having elected to cure the Material Breach, Seller fails to do so within a reasonable period of time after Seller’s election, Purchaser will have the option either to (i) waive the Material Breach and consummate the transaction or (ii) rescind and cancel this Agreement, in which event Purchaser will be entitled to receive the Deposit from Escrow Agent and neither Seller nor Purchaser will have any further rights or obligations under this Agreement.

(c) If, after the Closing but prior to or on the Material Breach Termination Date, Purchaser delivers to Seller Notice of a Material Breach of a Seller’s Representation as to a Loan, as provided in Section 6.3(a), then Seller may elect, in its sole and absolute discretion, within thirty (30) days of Purchaser’s delivery of the Notice, either to cure the Material Breach in all material respects or to repurchase such Loan. If Seller does not make an election or, having elected to cure the Material Breach, fails to do so, any Claim arising out of the Material Breach will be limited to the lesser of (i) the actual amount of the loss suffered by Purchaser as a result of the Material Breach (excluding consequential, punitive and similar damages) as evidenced by documentation satisfactory to Seller and (ii) the amount of the Repurchase Price for such Loan.

(d) If Seller elects to repurchase a Loan, Seller will repurchase the Loan on a whole loan, servicing-released basis (except for the MGM Tower Loan and the Willowbrook Mall Loan) at the Repurchase Price. On the date of repurchase, Seller will pay the Repurchase Price to Purchaser by wire transfer of immediately available funds to the account designated by Purchaser.

(e) In connection with any repurchase of a Loan in accordance with this Agreement, and as a condition to Seller’s payment of the Repurchase Price, Purchaser will tender to Seller the Loan Files for such Loan previously delivered to Purchaser, and Purchaser will endorse and assign to Seller each document that constitutes a part of the Loan Files that was endorsed or assigned to Purchaser, in the same manner as provided in Article III. In addition, Purchaser will make the same representations and warranties to Seller as of the date of the repurchase as Seller has made to Purchaser under Section 5.2 with respect to the sale and purchase of such Loan on the Closing Date. Furthermore, Purchaser will represent and warrant to Seller that (i) the provisions of the Note, the Mortgage, the Assignment and the other documents in such Loan Files have not been waived, modified, altered, satisfied, cancelled or subordinated in any respect or rescinded, (ii) Purchaser has not instituted any foreclosure action or other suit or proceeding in connection with such Loan, (iii) the Property has not been released from the lien of the

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Mortgage, in whole or in part and (iv) Purchaser has not interfered in any way with the security for the Loan while the Loan was in Purchaser’s possession.

ARTICLE VII

INDEMNIFICATION

Section 7.1. General Indemnification. Purchaser indemnifies, holds harmless and defends Seller, Seller’s Affiliates, agents, employees, representatives and trustees, the existing trustees under any deed of trust securing the Loans and any predecessor or successor of Seller (collectively, the “Indemnified Persons”) for, from and against any and all Claims to which any of the Indemnified Persons may become subject on account of, arising out of or related to any act, omission, conduct or activity of Purchaser or any of Purchaser’s Affiliates, agents, employees, members, partners, principals, representatives or trustees at any time both before or after the Closing Date (but excluding any liabilities or obligations retained by Seller under the Loans or the Loan Documents which accrue or arise prior to the Closing Date and are not caused by Purchaser) on account of, arising out of or related to (a) this Agreement; (b) any of the Loans; (c) the condition, control, operation or ownership of any of the Properties, including the presence or release of any hazardous or toxic fluids, substances or materials on, under or from any Property; (d) Purchaser’s due diligence review of the Loans or the Properties; (e) the servicing of the Loans or any other breach by Purchaser of the covenant set forth in Section 4.6 relating to unfair collection practices or any acts and/or omissions by Purchaser resulting in any Claim that Seller, subsequent to the date of this Agreement, was in any way involved in or had in any way authorized any unlawful collection practices in connection with the Loans; (f) any inaccuracy in or breach of Purchaser’s representations, warranties, covenants or acknowledgments made pursuant to this Agreement; and (g) any Claim for a finder’s fee or broker’s commission asserted against Seller and arising from the transaction contemplated by this Agreement.

Section 7.2. Notice of Claims. Purchaser promptly will deliver Notice to Seller of any Claim by any person or entity against an Indemnified Person that arises from or is related to any of the Loans. Promptly after an Indemnified Person receives notice of a Claim (whether received from Purchaser or otherwise) to which this Article applies in the Indemnified Person’s opinion, the Indemnified Person will deliver Notice to Purchaser of the Claim, provided, however, that any failure by the Indemnified Person to deliver the Notice to Purchaser will not relieve Purchaser of liability under this Agreement. Purchaser will be entitled to participate in the defense of the Claim and may (with the consent of the Indemnified Person) or will (if required by the Indemnified Person) assume the defense of the Claim, using counsel selected by Purchaser and approved by the Indemnified Person. In either event, Purchaser will be responsible for and will pay on demand all legal fees and expenses incurred by the Indemnified Person in connection with the Claim.

Section 7.3. Settlement. If any Claim is settled or if there is a final judgment against the Indemnified Person in any Claim, Purchaser will indemnify, hold harmless and

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defend the Indemnified Person for, from and against any and all loss or liability incurred by the Indemnified Person by reason of such settlement or judgment and will pay on demand all costs and expenses incurred by the Indemnified Person in connection with the settlement or judgment.

Section 7.4. Environmental Indemnity. Nothing in this Agreement or any documents delivered pursuant to this Agreement will prejudice Seller from seeking the benefit of any environmental indemnity delivered by any indemnitor to Seller in connection with any of the Loans.

ARTICLE VIII

MISCELLANEOUS

Section 8.1. Notices. All Notices must be in writing and (a) delivered personally by a process server providing a sworn declaration evidencing the date of service, the individual served, and the address where the service was made; (b) sent by certified mail, return receipt requested; or (c) delivered by nationally recognized overnight delivery service providing evidence of the date of delivery, with all charges prepaid, addressed to the appropriate party at its address listed in Exhibit B. Seller and Purchaser each may change from time to time the address to which Notices must be sent, by Notice given in accordance with this Section. All Notices given in accordance with this Section will be deemed to have been given three (3) Business Days after having been deposited in any mail depository regularly maintained by the United States postal service, if sent by certified mail, or one (1) Business Day after having been deposited with a nationally recognized overnight delivery service, if sent by overnight delivery or on the date of personal service, if served by a process server.

Section 8.2. Applicable Law. This Agreement is governed by and will be construed in accordance with the laws of the State of New York.

Section 8.3. Seller’s Discretion. Wherever under this Agreement Seller has the right to approve or determine any matter, Seller’s approval or determination will be in Seller’s reasonable discretion unless expressly provided to the contrary in this Agreement. Wherever under this Agreement any matter is required to be satisfactory to Seller, Seller’s determination that the matter is satisfactory will be in Seller’s reasonable discretion unless expressly provided to the contrary in this Agreement.

Section 8.4. Unenforceable Provisions. If any provision of this Agreement is found to be illegal or unenforceable or would operate to invalidate this Agreement, then the provision will be deemed to be expunged and this Agreement will be construed as though the provision was not contained in this Agreement and the remainder of this Agreement will remain in full force and effect.

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Section 8.5. Survival. Unless expressly provided to the contrary in this Agreement, Seller’s and Purchaser’s representations, warranties and covenants contained in this Agreement will continue in full force and effect and survive the Closing and any other act or omission that might otherwise be construed as a release or discharge and will not merge into the Closing Documents, but instead will be independently enforceable.

Section 8.6. Entire Agreement. Any agreements between Seller and Purchaser relating to the matters described in this Agreement, other than those expressly set forth in any Confidentiality Agreement executed by Purchaser, are contained in this Agreement, which contains the complete and exclusive statement of the agreements between Seller and Purchaser, except as Seller and Purchaser may later agree in writing to amend this Agreement.

Section 8.7. No Oral Amendment. This Agreement may not be amended, waived or terminated orally or by any act or omission made individually by Seller or Purchaser but may be amended, waived or terminated only by a written document signed by the party against which enforcement of the amendment, waiver or termination is sought.

Section 8.8. Joint and Several Liability. If Purchaser consists of more than one person or entity, the obligations and liabilities of each such person or entity under this Agreement are joint and several.

Section 8.9. Successors and Assigns. This Agreement binds Seller and Purchaser and their respective successors and assigns and, subject to the provisions of Section 6.2, inures to the benefit of Seller and Purchaser and their respective successors and permitted assigns. This Agreement also inures to the benefit of all Indemnified Parties pursuant to Article VII.

Section 8.10. Duplicates and Counterparts. Duplicate counterparts of this Agreement may be executed and together will constitute a single original document.

Section 8.11. Rights Cumulative; Waivers. The rights of each of Seller and Purchaser under this Agreement are cumulative and may be exercised as often as such party considers appropriate. The rights of each of Seller and Purchaser under this Agreement will not be capable of being waived or varied otherwise than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or variation of that or any other such right. Any defective or partial exercise of any of such rights will not preclude any other or further exercise of that or any other such right. No act or course of conduct or negotiation on the part of any party will in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.

Section 8.12. Assignment. This Agreement is not assignable by Purchaser, provided, however, that Purchaser will have the right to name an Affiliate as the endorsee of the Notes and the assignee of the Mortgages, the Assignments and the Loan Files

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required to be delivered pursuant to this Agreement. Notwithstanding the foregoing, in order to exercise the right to name an Affiliate as the endorsee of the Notes and the assignee of the Mortgages, the Assignments and the Loan Files required to be delivered pursuant to this Agreement, Purchaser must (i) provide Notice of such exercise to Seller at least seven (7) Business Days prior to the Closing Date and (ii) fully disclose to Seller the composition of the Affiliate and any additional information requested by Seller in Seller’s sole and absolute discretion in connection therewith, including but not limited to structure charts, organizational documents and evidence of the formation and good standing of any entities named therein.

Section 8.13. Fees and Expenses. Seller and Purchaser each will bear the fees and expenses of its respective accountants, appraisers, attorneys and other consultants and other costs and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated by this Agreement. Purchaser shall pay for cost of the title updates (whether ordered by Purchaser or Seller) to the loan policies of title insurance for the Loans. Purchaser will pay any transfer fees or taxes imposed in connection with the transaction contemplated by this Agreement other than additional income taxes, if any, imposed on Seller in connection with the transaction. If either Seller or Purchaser commences an action against the other to enforce any of the provisions of this Agreement or because of the breach by either party of any of the provisions of this Agreement, the losing party will pay to the prevailing party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of the action.

Section 8.14. Agreement Not Binding. Nothing contained in this Agreement will create any obligation on the part of Seller under this Agreement unless and until the Deposit has been deposited with Escrow Agent and Seller has executed and delivered to Purchaser a counterpart copy of this Agreement.

Section 8.15. Waiver of Jury Trial. Seller and Purchaser waive trial by jury in any proceeding brought or counterclaim asserted in connection with the transaction contemplated by this Agreement.

Section 8.16. Seller’s Authority. Seller has not received appropriate internal corporate authority for the consummation of the transaction contemplated by this Agreement and Seller does not give Purchaser any assurances or make any representations with respect to whether or not such approval will be obtained. Seller’s obligation to proceed with the transaction contemplated by this Agreement is subject to appropriate internal corporate authority.

Section 8.17. Time of the Essence. Time is of the essence with respect to Purchaser’s payment of the Purchase Price and performance of its other obligations under this Agreement.

Section 8.18. Further Assurances. Seller and Purchaser shall, upon the request of the other, execute and deliver such documents or notices, or perform such other acts, as may be reasonably requested by Seller or Purchaser to effect, perfect or confirm the

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assignment by Seller, and the assumption by Purchaser, of all right, title, interest and obligations of Seller under the Loans and to complete the transactions, deliveries and assignments contemplated by this Agreement, including correcting any errors or omissions in the Closing Documents delivered under Sections 3.3 and 3.4 hereof. In addition, Seller hereby irrevocably authorizes Purchaser from time to time following the Closing to file in the name of Seller any amendments, terminations, or assignments of any UCC Financing Statements securing any assets which are solely collateral for any of the Loans in order to perfect or continue the perfection of, or terminate the security interests in such assets, which authorization is limited solely to naming Seller in such amendments, terminations or assignments. Purchaser shall promptly provide Seller with a copy of any UCC Financing Statement amendments, terminations or assignments in which Seller is named following the filing or recording of such UCC Financing Statement.

Section 8.19. Post-Closing Sales or Securitizations. If at any time on or prior to the ninetieth (90^th) day following the Closing (x) Purchaser sells or otherwise transfers all or any portion of Purchaser’s interest in any Loan to a third party or (y) Purchaser or its Affiliate securitizes any Loan, Purchaser shall promptly notify Seller in writing in accordance with Section 8.1 (but addressed to the attention of Gabriel Steffens and John Gay). This Section 8.19 shall survive the Closing.

Section 8.20. Covenants.

(a) Purchaser acknowledges that on the date hereof, the Life Time Fitness Centers Loans (as described in the Mortgage Loan Schedule) are cross-defaulted and cross-collateralized with three (3) other loans (the “Excess Loans”) secured by properties located in Skokie, Illinois, Burr Ridge, Illinois and Orland Park, Illinois (collectively, the “Excess Property”). Prior to the Closing Date, Seller shall use reasonable efforts to cause the Excess Loans and the Excess Property to be separated from the Life Time Fitness Centers Loans, such that (i) none of the Life Time Fitness Centers Loans are cross-defaulted with the Excess Loans and none of the Excess Loans are cross-defaulted with any of the Life Time Fitness Centers Loans, (ii) none of the Properties from the Life Time Fitness Centers Loans secure the Excess Loans and none of the Excess Property secures the Life Time Fitness Centers Loans, and (iii) no guaranty, collateral or other security for the Life Time Fitness Centers Loans constitutes a guaranty, collateral or security for the Excess Loans (collectively, the “Life Time Fitness Centers Loans Separation Transaction”). Any proposed amendments or modifications to the Life Time Fitness Centers Loans to effectuate the Life Time Fitness Centers Loans Separation Transaction shall be either (i) subject to the prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed or (ii) in form and substance substantially similar to (A) those certain Omnibus Amendments to Loan Documents and (B) that certain Confirmation of Indemnities and Guaranties, each set forth on Exhibit M (collectively, the “Pre-Approved Forms”), which Purchaser has previously approved, provided that any material deviations, modifications or changes to the Pre-Approved Forms shall be subject to the prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed. Seller shall promptly deliver to Purchaser copies of any such amendments and modifications entered into by Seller.

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(b) Between the date hereof and the earlier of (i) the Closing and (ii) the date on which this Agreement is terminated pursuant to the terms hereof, Seller shall use reasonable efforts to obtain originals or copies, if originals are unavailable, of those documents set forth on Exhibit O, provided that in no event shall Seller be required to contact any Borrower to obtain such documents. Notwithstanding the foregoing, Seller is under no obligation to deliver such documents on or prior to Closing and the delivery of such documents shall not be a condition to Closing. Any failure to obtain such documents shall not constitute a breach of the representation and warranty set forth in Section 5.4(j) hereof.

(c) Between the date hereof and the earlier of (i) the Closing and (ii) the date on which this Agreement is terminated pursuant to the terms hereof, with regard to each escrow or pledge agreement to which Seller is a party relating to the Loans, Seller shall use reasonable efforts to contact the escrow agent thereunder to request that after Closing, such escrow agent change all references in the name of the account from Seller to Purchaser.

(d) With regard to the Life Time Fitness Letter of Credit, promptly upon Closing, (i) Purchaser shall use commercially reasonable efforts to pursue a replacement Letter of Credit from the Borrower, (ii) upon Purchaser’s request, Seller shall reasonably cooperate with Purchaser to assist Purchaser in obtaining a replacement Letter of Credit from the Borrower, provided that Seller shall not be required to incur any cost or expense in connection therewith (unless Purchaser agrees to reimburse Seller for such cost or expense), and (iii) if Purchaser or, in the event an Affiliate of Purchaser (a “Purchaser Affiliate Successor”) has succeeded to Purchaser’s interest in the Life Time Fitness Centers Loans, a Purchaser Affiliate Successor, holds the Life Time Fitness Centers Loans (and only to the extent that Purchaser or a Purchaser Affiliate Successor holds the Life Time Fitness Centers Loans, Purchaser hereby acknowledging that in the event that neither Purchaser nor a Purchaser Affiliate Successor hold the Life Time Fitness Centers Loans, Seller shall have no obligations under this Section 8.20(d)(iii)), Seller shall take all reasonable action, as directed by Purchaser (or as directed by a Purchaser Affiliate Successor, as applicable) and at Purchaser’s (or such Purchaser Affiliate Successor’s, as applicable) expense, to effectuate draw downs of the Life Time Fitness Letter of Credit (provided that Seller is only taking such actions in response to Purchaser’s (or a Purchaser Affiliate Successor’s, as applicable) request, and Seller is in no way independently analyzing or verifying the validity or correctness of such actions, until such time that the Borrower delivers to Purchaser (or such Purchaser Affiliate Successor) a replacement Letter of Credit. In the event of any draw on the Life Time Fitness Letter of Credit by Seller, Seller shall promptly remit to Purchaser (or such Purchaser Affiliate Successor, as applicable) (or as otherwise directed by Purchaser (or such Purchaser Affiliate Successor, as applicable)) the proceeds of such draw. In consideration of Seller’s agreement as aforesaid, Purchaser (or such Purchaser Affiliate Successor, as applicable) shall indemnify, defend and hold Seller harmless from any liability, damage, loss, cost or expense arising as a result of Seller taking such actions after Closing. This Section 8.20(d) shall survive the Closing.

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(e) With regard to the Excluded Letter of Credit, while such Excluded Letter of Credit is in Seller’s possession (and only to the extent that such Excluded Letter of Credit is in Seller’s possession, Purchaser hereby acknowledging that Seller has no obligation to Purchaser to keep the Excluded Letter of Credit in its possession for any length of time, and Seller hereby acknowledging that it will retain possession of the Excluded Letter of Credit if the Borrower under the 301 Carlson Loan and the 401 Carlson Loan tenders the Excluded Letter of Credit back to Seller after Seller has delivered it (or attempted to deliver it) to such Borrower), (i) upon Purchaser’s request, Seller shall reasonably cooperate with Purchaser to assist Purchaser in obtaining a replacement Letter of Credit from the Borrower for the portion of the Excluded Letter of Credit allocable to the 301 Carlson Loan and the 401 Carlson Loan (each, as described in the Mortgage Loan Schedule), provided that Seller shall not be required to incur any cost or expense in connection therewith (unless Purchaser agrees to reimburse Seller for such cost or expense), and (ii) if Purchaser or, in the event a Purchaser Affiliate Successor has succeeded to Purchaser’s interest in the 301 Carlson Loan or the 401 Carlson Loan, a Purchaser Affiliate Successor, holds the 301 Carlson Loan or the 401 Carlson Loan (and only to the extent that Purchaser or a Purchaser Affiliate Successor holds the 301 Carlson Loan and the 401 Carlson Loan, Purchaser hereby acknowledging that in the event that neither Purchaser nor a Purchaser Affiliate Successor hold the 301 Carlson Loan or the 401 Carlson Loan, Seller shall have no obligations under this Section 8.20(e)(ii) with regard to such Loan), Seller shall take all reasonable action, as directed by Purchaser (or, if a Purchaser Affiliate Successor has succeeded to the interests of Purchaser in either or both the 301 Carlson Loan and the 401 Carlson Loan, as directed by such Purchaser Affiliate Successor) and at Purchaser’s (or such Purchaser Affiliate Successor’s, as applicable) expense, to effectuate draw downs of the portion of the Excluded Letter of Credit allocable to the 301 Carlson Loan and the 401 Carlson Loan (provided that Seller is only taking such actions in response to Purchaser’s (or such Purchaser Affiliate Successor’s, as applicable) request, and Seller is in no way independently analyzing or verifying the validity or correctness of such actions), until such time that the Borrower delivers to Purchaser (or such Purchaser Affiliate Successor, as applicable) a replacement Letter of Credit or the Excluded Letter of Credit is no longer in Seller’s possession. In the event of any draw on the Excluded Letter of Credit by Seller with respect to the portion of the Excluded Letter of Credit allocable to the 301 Carlson Loan and/or the 401 Carlson Loan, Seller shall promptly remit to Purchaser (or such Purchaser Affiliate Successor, as applicable) (or as otherwise directed by Purchaser (or such Purchaser Affiliate Successor, as applicable)) the proceeds of such draw. In consideration of Seller’s agreement as aforesaid, Purchaser (or such Purchaser Affiliate Successor, as applicable) shall indemnify, defend and hold Seller harmless from any liability, damage, loss, cost or expense arising as a result of Seller taking such actions after Closing. Notwithstanding anything to the contrary contained in this Section 8.20(e), Seller shall have the right to draw on the Excluded Letter of Credit with respect to the portion of the Excluded Letter of Credit not allocable to the 301 Carlson Loan and the 401 Carlson Loan in Seller’s sole and absolute discretion, Purchaser hereby acknowledging that Purchaser may be required to forego possession of the Excluded Letter of Credit in connection therewith; provided, however, that in the event the Excluded Letter of Credit is amended or a new letter of credit issued

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following a draw on the Excluded Letter of Credit by Seller (the amended Excluded Letter of Credit or new letter credit, each, a “New Excluded Letter of Credit”), such New Excluded Letter of Credit shall be subject to the terms of this Section 8.20(e) and constitute the Excluded Letter of Credit under this Section 8.20(e) so long as such New Excluded Letter of Credit is in Seller’s possession and any portion of such New Excluded Letter of Credit is allocable to the 301 Carlson Loan or the 401 Carlson Loan. This Section 8.20(e) shall survive the Closing.

Section 8.21. Escrow Agent.

(a) All fees charged by Escrow Agent shall be the responsibility of Purchaser. Escrow Agent may resign from its duties hereunder at any time by giving written notice of such resignation to the parties hereto; provided, however, that Escrow Agent shall continue to serve until its successor is appointed jointly by Seller and Purchaser, and such successor accepts and agrees to perform the obligations of Escrow Agent hereunder and receives the Deposit.

(b) Under this Agreement, Escrow Agent is a depositary only and shall have no liability for the holding, disbursement, application or other disposition of any monies received by Escrow Agent other than to comply with the specific instructions, terms and provisions expressly set forth and/or provided for in this Agreement. In accepting any monies delivered to Escrow Agent hereunder, it is agreed and understood that Escrow Agent will not be called upon to construe any contract, instrument or document deposited herewith or submitted hereunder, but only to follow the specific instructions expressly set forth and/or provided for in this Agreement. Seller and Purchaser hereby agree to indemnify, defend and hold Escrow Agent harmless from and against any cost, loss or expense (including reasonable attorneys’ fees and disbursements) suffered or incurred by Escrow Agent as a result of it being named in or as a result of it commencing and prosecuting any litigation or proceeding required or permitted under this Agreement or otherwise in connection with Escrow Agent’s performance under this Agreement; provided, however, the foregoing indemnity will not apply to the extent arising as a result of the gross negligence or willful misconduct of Escrow Agent.

(c) Escrow Agent, as a part of the consideration for its acceptance of this escrow, shall not, in the performance of its duties under this Agreement, be liable for any error of judgment, or for any acts or omissions done by it in good faith, or for any mistake of fact or law, or for any claims, demands, causes of action, losses, liabilities, damages, costs or expenses claimed or suffered by any party to this Agreement, except such as may arise as a result of Escrow Agent’s own gross negligence or willful misconduct. Escrow Agent is hereby authorized to rely upon, and shall be protected in acting upon, any notice, request, waiver, consent, receipt, certificate, affidavit, authorization, power of attorney, trust agreement or other paper or document believed by Escrow Agent in good faith to be genuine and what it purports to be.

(d) If there is any dispute as to whether Escrow Agent is obligated to deliver the Deposit or as to whom the Deposit is to be delivered, Escrow Agent shall not make any

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delivery, but shall hold the Deposit until receipt by Escrow Agent of an authorization in writing, signed by all the parties having an interest in the dispute, directing the disposition of the Deposit, or, in the absence of authorization, Escrow Agent shall hold the Deposit until the final determination of the rights of the parties in an appropriate proceeding. Escrow Agent shall have no responsibility to determine the authenticity or validity of any notice, instruction, instrument, document or other item delivered to it, and it shall be fully protected in acting in accordance with any written notice, direction or instruction given to it under this Agreement and believed by it to be authentic. Upon making delivery of the Deposit in the manner provided in this Agreement, Escrow Agent shall have no further liability hereunder. In no event shall Escrow Agent be under any duty to institute, defend or participate in any proceeding that may arise between Seller and Purchaser in connection with the Deposit.

Section 8.22. Limited Exclusivity. From the period commencing on the execution of this Agreement by Seller and Purchaser and ending on the earlier of (i) the date of termination of this Agreement or (ii) the Closing, Seller shall not solicit, negotiate or engage in active discussions regarding any other offer to purchase all or any portion of the Loans.

Section 8.23. Sharing Agreements.

(a) From and after the Closing Date, Purchaser agrees to pay Seller twenty-five percent (25%) of any Net Extension Fees (as defined below) actually received by Purchaser (or its Affiliates) after the Closing Date. “Net Extension Fees” shall mean, with respect to any Loan, the amount of (i) any fees actually received by Purchaser (or its Affiliates) in connection with the extension of the maturity date of the Loan for less than eighteen (18) months (an “Extension”), less (ii) all out-of-pocket costs and expenses incurred by Purchaser in connection with or relating to the Extension of such Loan, to the extent not separately paid for by Borrower (or its Affiliates). In the event that the maturity date of a Loan is extended multiple times, such that the aggregate length of all Extensions is eighteen (18) months or more after the original maturity date of the Loan, then following the first Extension which, together with all previous Extensions, extends the original maturity date for eighteen (18) months or more, Purchaser shall pay to Seller fifty percent (50%) of the total Net Extension Fees received by Purchaser (or its Affiliates) in connection with such Extension and all previous Extensions, less all Net Extension Fees relating to such Loan previously paid to Seller; provided, however, that Seller shall not be entitled to any further Net Extension Fees (or Net Origination Fees) in connection with any further Extensions (or Refinancings) of such Loan. Nothing contained in this Section 8.23(a) shall require Purchaser to extend the maturity of all or any of the Loans (or to make any offer or proposal to extend the maturity date of all or any of the Loans), and any decision by Purchaser to extend the maturity date of any of the Loans (or to make any offer or proposal to extend the maturity date for any of the Loans) shall be made in the sole and absolute discretion of Purchaser. This Section 8.23(a) shall survive the Closing.

(b) From and after the Closing Date, Purchaser agrees to pay Seller fifty percent (50%) of any Net Origination Fees (as defined below) actually received by

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Purchaser (or its Affiliates) after the Closing Date. “Net Origination Fees” shall mean, with respect to any Loan, the amount of (i) any fees actually received by Purchaser (or its Affiliates) in connection with the first extension of the maturity date of the Loan for eighteen (18) months or more (a “Refinancing”), less (ii) all out-of-pocket costs and expenses incurred by Purchaser (or its Affiliates) in connection with or relating to the Refinancing of the Loan, to the extent not separately paid for by Borrower (or its Affiliates). The portion of the Net Origination Fees payable to Seller pursuant to this Section 8.23(b) with respect to the Refinancing shall only be payable in connection with the first Refinancing of such Loan by Purchaser (or its Affiliates) after the Closing Date, and this Section 8.23(b) shall not be applicable to any subsequent Refinancing of such Loan by Purchaser (or any of its Affiliates) following the first Refinancing of such Loan. Nothing contained in this Section 8.23 shall require Purchaser (or any of its Affiliates) to Refinance all or any of the Loans (or to make any offer or proposal to Refinance any of the Loans), and any decision by Purchaser (or its Affiliates) to Refinance any of the Loans (or to make any offer or proposal to Refinance any of the Loans) shall be made in the sole and absolute discretion of Purchaser (and its Affiliates). This Section 8.23(b) shall survive the Closing.

(c) The portion of any Net Extension Fees or any Net Origination Fees payable to Seller in accordance with the terms of this Section 8.23 shall be paid by Purchaser to Seller within seven (7) Business Days following receipt by Purchaser of the Net Extension Fees or Net Origination Fees, as applicable, in accordance with written payment instructions provided by Seller to Purchaser. This Section 8.23(c) shall survive the Closing.

(d) No later than two (2) Business Days prior to the occurrence of any extension of the term of any Loan (whether such extension is an Extension or a Refinancing as defined pursuant to this Section 8.23), a statement certified by an officer of Purchaser (or its Affiliate) shall be delivered to Seller setting forth reasonably detailed information regarding the extension (i.e., the length of the proposed extension, an estimate of any fees anticipated to be received by Purchaser (or its Affiliates) in connection with such extension, and an estimate of Purchaser’s (or its Affiliates’) out-of-pocket costs and expenses not reimbursed by Borrower (or its Affiliates)), and the amount anticipated to be paid to Seller as a result of such extension. Upon the request of Seller, Purchaser (or its Affiliates) shall promptly provide all reasonable back-up materials requested by Seller relating to such extension. This Section 8.23(d) shall survive the Closing.

[Signatures on Following Pages]

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IN WITNESS WHEREOF, Seller, Purchaser and Escrow Agent have executed and delivered this Agreement as of the date first set forth above.

PURCHASER: STARWOOD PROPERTY MORTGAGE SUB-1, L.L.C.
	By:
		Name:
		Title:
SELLER: TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
	By:
		Name:
		Title:
ESCROW AGENT: CHICAGO TITLE INSURANCE COMPANY
	By:
		Name:
		Title:

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EXHIBIT A

THE LOANS

Mortgage Loan Schedule (Including Escrow Accounts):

[Exhibit Begins on Next Page]

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EXHIBIT B

DEFINITIONS

“Affiliate” is defined, in the case of any entity, as any of the entity’s direct or indirect parents or any wholly- or partially-owned subsidiary of the entity or any of the entity’s direct or indirect parents.

“Agreement” is defined as this Loan Purchase and Sale Agreement.

“Agreement among Noteholders” is defined as that certain Agreement among Noteholders by and between Goldman Sachs Mortgage Company, a New York limited partnership, and Seller, dated as of March 22, 2001, as assigned, amended, modified, renewed or extended through the date of this Agreement and from time to time after the date of this Agreement.

“Assignment” is defined as, with respect to each Property, assignment of leases, rents and profits or similar agreement executed by the applicable Borrower, assigning all of the income, rents and profits derived from the ownership, operation, leasing or disposition of each Property, in the form which was duly executed, acknowledged and delivered, as amended, modified, renewed or extended through the date of this Agreement and from time to time after the date of this Agreement (collectively, with respect to all of the Loans, the “Assignments”).

“Borrower” is defined as the current and unreleased obligor or obligors on each Note and/or a successor or successors of such obligor(s) that takes title to the applicable Property subject to the applicable Mortgage and Assignment (collectively, with respect to all of the Notes, the “Borrowers”).

“Business Day” is defined as any day, other than a Saturday, a Sunday, a federal holiday or any day on which banking institutions in New York City are not generally open for business.

“Claim” is defined as any assertion, cause of action, claim, demand or legal proceeding.

“Closing” is defined as delivery of the Closing Documents, payment of the Purchase Price and sale and purchase of the Loans in accordance with this Agreement, which will occur at 10:00 a.m. Eastern Standard/Daylight Time on the Closing Date.

“Closing Date” is defined as February 26, 2010, as may be extended with respect to the Life Time Fitness Centers Loans to the Life Time Loans Closing Date and the Extended Life Time Loans Closing Date, each pursuant to Section 3.8 hereof; or such other date as Purchaser and Seller may mutually agree.

“Closing Date Principal Balances” is defined as the aggregate Principal Balance of the Loans as of 12:01 a.m. Eastern Standard/Daylight Time on the Closing Date.

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“Closing Documents” is defined as all documents that are required to be delivered by Seller or Purchaser at the Closing in accordance with this Agreement.

“Co-Lender Agreement” is defined as that certain Co-Lender Agreement by and between Lehman and Seller, dated as of May 6, 2003, as assigned, amended, modified, renewed or extended through the date of this Agreement and from time to time after the date of this Agreement.

“Deposit” is defined as Five million and no/100ths dollars ($5,000,000.00), constituting the amount of money to be deposited with Escrow Agent by Purchaser and applied in accordance with this Agreement.

“Escrow Agent” is defined in the introductory paragraph. Escrow Agent’s address for Notices is as follows:

Chicago Title Insurance Company

711 Third Avenue

New York, NY 10017

Attention: Matthew S. Bliwise

“Escrow Amounts” is defined as, with respect to each Loan, the positive balance of funds held by or on behalf of Seller with respect to such Loan, for taxes, insurance premiums, capital improvements, tenant improvements, leasing commissions or other matters.

“Excess Loans” is defined in Section 8.20(a).

“Excess Property” is defined in Section 8.20(a).

“Excluded Agreement” is defined as (i) the Willowbrook Mall Sub-Servicing Agreement, (ii) that certain Interim Sub-Servicing Agreement by and between Archon Group, L.P., a Delaware limited partnership, and Seller, dated as of March 22, 2001, and (iii) the MGM Tower Sub-Servicing Agreement, each as may have been assigned, amended, modified, renewed or extended through the date of this Agreement.

“Excluded Letter of Credit” is defined as that certain Letter of Credit issued by Citibank, N.A. in the amount of Two Million Nine Hundred Sixty Thousand Three Hundred Thirteen and 66/100ths dollars ($2,960,313.66), relating to the 301 Carlson Parkway Loan and the 401 Carlson Parkway Loan (each as described in the Mortgage Loan Schedule) and certain other loans that are not any of the Loans.

“Extended Life Time Loans Closing Date” is defined in Section 3.8(b).

“Extension” is defined in Section 8.23(a).

“Ground Lease” is defined in the definition of Loan Files below.

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“Indemnified Persons” is defined in Section 7.1.

“Lehman” is defined as Lehman Brothers Bank FSB, a federal stock savings bank.

“Life Time Fitness Centers Loans Separation Transaction” is defined in Section 8.20(a).

“Life Time Fitness Letter of Credit” is defined in Section 3.4(m).

“Life Time Loans Closing Date” is defined in Section 3.8(a).

“Loan” and “Loans” are defined in the Recitals to this Agreement.

“Loan Agreement” is defined as that certain Loan Agreement by and among GGP-Willowbrook, L.P., a Delaware limited partnership, Goldman Sachs Mortgage Company, a New York limited partnership, and Seller, dated as of March 22, 2001, as assigned, amended, modified, renewed or extended through the date of this Agreement and from time to time after the date of this Agreement.

“Loan Documents” is defined as the Notes, the Mortgages, the Assignments and all other material documents evidencing or securing the Loans, except those documents set forth on Exhibit O, which are excluded from the definition of Loan Documents in all respects.

“Loan Files” is defined as, with respect to each Loan, the following documents, except for those documents set forth on Exhibit O, which are excluded from the definition of Loan File in all respects:

(a) an original of the Note;

(b) the original (to the extent in Seller’s possession) or a copy of the Mortgage, and any intervening assignments (or copies of such assignments) of the Mortgage, in each case with evidence of recording indicated thereon;

(c) the original (to the extent in Seller’s possession) or a copy of the Assignment, and any intervening assignments (or copies of such assignments) of the Assignment, in each case with evidence of recording indicated thereon;

(d) the other Loan Documents;

(e) the original or a copy of the ground lease (a “Ground Lease”), if any, pertaining to the Property, any amendment to the Ground Lease and any intervening assignments of the Ground Lease, together with evidence of the recording of the Ground Lease and each such assignment or a memorandum or memoranda of the Ground Lease;

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(f) the original or a copy of all assumption, modification and substitution agreements in those instances where the Note, the Mortgage, the Assignment or any other documents in the Loan Files have been assumed or modified;

(g) the original or a copy of lender’s title insurance policy for the Loan or, with respect to a Loan not covered by a lender’s title insurance policy, an attorney’s opinion of title given by an attorney licensed to practice law in the jurisdiction where the Property is located;

(h) the Research Office Center Letter of Credit;

(i) the Life Time Fitness Letter of Credit; and

(j) all other material documents, files, correspondence, third party studies, and surveys relating to the Loan or the Property in the possession of Seller, other than electronic files and those items that are deemed by Seller in its sole discretion to be confidential, privileged or proprietary in nature.

“Material Breach” is defined as a material breach of a Seller’s Representation that causes a loss in the value of any Loan in an amount exceeding ten percent (10%) of the Principal Balance of said Loan on the Closing Date.

“Material Breach Termination Date” is defined as the date thirty (30) days after the Closing Date, provided that if such date is not a Business Day, then the Material Breach Termination Date will be the last Business Day immediately preceding the date thirty (30) days after the Closing Date.

“MGM Tower Loan” is defined as the Loan evidenced by that certain Promissory Note B by Constellation Place, LLC, a Delaware limited liability company, in favor of Lehman, dated as of May 6, 2003, in the original principal amount of $90,000,000, as assigned by Lehman to Seller pursuant to that certain Allonge by Lehman in favor of Seller, dated as of May 6, 2003.

“MGM Tower Sub-Servicing Agreement” is defined as that certain Sub-Servicing Agreement by and between Wachovia Bank, National Association, a national banking association, and Seller, dated as of January 12, 2004, as assigned, amended, modified, renewed or extended through the date of this Agreement.

“Mortgage” is defined as, with respect to each Loan, the mortgages, deeds of trust, deeds to secure debt, assignments of leases and rents, security agreements and financing statements or other instruments (including the security agreements and UCC Financing Statements included in the Loan Files) purporting to create a continuing lien against and a security interest in the applicable Property, as from time to time amended, modified, renewed or extended (collectively, with respect to all of the Loans, the “Mortgages”).

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“Mortgage Loan Schedule” is defined as the schedule of information attached as Exhibit A hereto, which schedule sets forth, among other matters, the following information with respect to each Loan as of the Closing Date:

(i)	the name of the Borrower and address of the Property;
(ii)	the Closing Date Principal Balance;
(iii)	the current interest rate on the Loan as of the Closing Date in the absence of default;
(iv)	the amount of the currently scheduled monthly debt service payment;
(v)	the amount of any Escrow Amounts;
(vi)	the date through which interest has been paid;
(vii)	the per diem rate of interest; and
(viii)	the payment amortization schedule.

“Net Extension Fees” is defined in Section 8.23(a).

“Net Origination Fees” is defined in Section 8.23(b).

“New Excluded Letter of Credit” is defined in Section 8.20(e).

“Note” is defined as the executed note or notes, together with any rider, addendum, assignment or amendment to the note or notes, evidencing the indebtedness of Borrower to Seller under each Loan (collectively, with respect to all of the Loans, the “Notes”).

“Notice” is defined as any and all acceptances, approvals, consents, demands, notices, requests and other communications required or permitted to be given under this Agreement.

“Other Loans” is defined in Section 3.8(a)(i).

“Pre-Approved Forms” is defined in Section 8.20(a).

“Principal Balance” is defined as, as of any date of determination, the then unpaid principal balance of each Loan.

“Property” is defined as the property, including any interest under a Ground Lease, securing each Note (collectively, with respect to all of the Notes, the “Properties”).

“Purchaser Affiliate Successor” is defined in Section 8.20(d).

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“Purchase Price” is defined as the amount payable by Purchaser in consideration of the transfer of the Loans to Purchaser in accordance with this Agreement, such amount being equal to 101.4% of the Closing Date Principal Balances, with such adjustments to the Purchase Price as are described in Section 3.2 of the Agreement.

“Purchaser” is defined in the introductory paragraph. Purchaser’s address for Notices is as follows:

Starwood Property Mortgage Sub-1, L.L.C.

c/o Starwood Capital Group

591 West Putnam Avenue

Greenwich, Connecticut 06830 Attention: Andrew Sossen

with a courtesy
copy to:

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention: Lee Smolen

“Refinancing” is defined in Section 8.23(b).

“Repurchase Price” means, as to any Loan, a price equal to 101.4% of the Principal Balance of such Loan on the date of repurchase, plus accrued and unpaid interest, as of the date of repurchase.

“Research Office Center Letter of Credit” is defined in Section 3.4(l).

“Seller” is defined in the introductory paragraph. Seller’s address for Notices is as follows:

Teachers Insurance and Annuity Association of America

730 Third Avenue

New York, New York 10017

Attention: Director Portfolio Management

                   Mortgage and Real Estate Sales

AAA # (As indicated in Exhibit A.)

Investment ID # (As indicated in Exhibit A.)

with a courtesy
copy to:

Teachers Insurance and Annuity Association of America

730 Third Avenue

New York, New York 10017

Attention: Managing Counsel

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                             Commercial Mortgage Team

AAA # (As indicated in Exhibit A.)

Investment ID # (As indicated in Exhibit A.)

“Seller’s Actual Knowledge” is defined as the actual, as opposed to imputed or constructive, knowledge of Faye Friedman and Frederick White without duty of investigation or inquiry.

“Seller’s Broker” is defined as Eastdil Secured.

“Seller’s Representation” is defined as the representations and warranties expressly made by Seller to Purchaser in Article V of this Agreement.

“UCC Financing Statement” is defined as a financing statement executed and filed pursuant to the Uniform Commercial Code, as in effect in the relevant jurisdiction.

“Willowbrook Mall Loan” is defined as the Loan evidenced by that certain Promissory Note by GGP-Willowbrook, L.P., a Delaware limited partnership, in favor of Seller, dated as of March 22, 2001, in the original principal amount of $35,000,000.

“Willowbrook Mall Sub-Servicing Agreement” is defined as that certain Sub-Servicing Agreement by and between GMAC Commercial Mortgage Corporation, a California corporation, and Seller, dated as of August 20, 2001, as assigned, amended, modified, renewed or extended through the date of this Agreement.

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EXHIBIT C

RULES OF CONSTRUCTION

1. References in this Agreement to numbered Articles or Sections are references to the Articles and Sections of this Agreement. References in this Agreement to lettered Exhibits and numbered Attachments are references to the Exhibits and Attachments attached to this Agreement, all of which are incorporated in and constitute a part of this Agreement. Article, Section, Exhibit and Attachment captions used in this Agreement are for reference only and do not describe or limit the substance, scope or intent of this Agreement or the individual Articles, Sections, Exhibits or Attachments of this Agreement.

2. The terms “include”, “including” and similar terms are construed as if followed by the phase “without limitation.”

3. The term “Property” is construed as if followed by the phrase “or any part thereof.”

4. Any agreement by or duty imposed on Purchaser in this Agreement to perform any obligation or to refrain from any act or omission constitutes a covenant on Purchaser’s part and includes a covenant by Purchaser to cause its Affiliates, agents, employees, members, partners, principals, representatives and trustees to perform the obligation or to refrain from the act or omission in accordance with this Agreement. Any statement or disclosure contained in this Agreement about facts or circumstances relating to Purchaser constitutes a representation and warranty by Purchaser made as of the date of this Agreement.

5. The singular of any word includes the plural and the plural includes the singular. The use of any gender includes all genders.

6. The terms “person”, “party” and “entity” include natural persons, firms, partnerships, limited liability companies and partnerships, corporations and any other public or private legal entity.

7. The term “provisions” includes terms, covenants, conditions, agreements and requirements.

8. The term “amend” includes modify, supplement, renew, extend, replace, restate and substitute and the term “amendment” includes modification, supplement, renewal, extension, replacement, restatement and substitution.

9. Reference to any specific law or to any document or agreement includes any future amendments to or replacements of the law, document or agreement, as the case may be.

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EX-10.2

Exhibit 10.2

Execution Version

THIS MASTER REPURCHASE AND SECURITIES CONTRACT, dated as of March 31, 2010 (this “Agreement”), is made by and between STARWOOD PROPERTY MORTGAGE SUB-1, L.L.C., a Delaware limited liability company (as more specifically defined below, “Seller”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (as more specifically defined below, “Buyer”). Seller and Buyer (each a “Party”) hereby agree as follows:

ARTICLE 1

APPLICABILITY

Section 1.01 Applicability. Subject to the terms and conditions of the Repurchase Documents, on the Closing Date and at the request of Seller, the Parties may enter into transactions in which Seller agrees to sell, transfer and assign to Buyer certain Assets and all related rights in and interests related to such Assets on a servicing released basis, against the transfer of funds by Buyer representing the Purchase Price for such Assets, with a simultaneous agreement by Buyer to transfer to Seller and Seller to repurchase such Assets in a repurchase transaction at a date not later than the Maturity Date, against the transfer of funds by Seller representing the Repurchase Price for such Assets.

ARTICLE 2

DEFINITIONS AND INTERPRETATION

“40 Act”: The Investment Company Act of 1940, as amended, restated or modified from time to time

“Accelerated Repurchase Date”: Defined in Section 10.02.

“Account Control Agreement”: A bank account control agreement in favor of Buyer with respect to any bank account related to a Purchased Asset, substantially in the form attached as Exhibit G hereto.

“Actual Knowledge”: With respect to any Person, the actual knowledge of such Person without further inquiry or investigation; provided, that for the avoidance of doubt, with respect to Seller, Guarantor, Manager, the Intermediate Starwood Entities and Sub-Servicer, such actual knowledge shall include the knowledge of all such Persons collectively and each of their respective employees, officers, directors and agents (and with respect to agents, solely to those agents who worked on the acquisition of the Assets or this Transaction) of any of them.

“Additional Advance”: Defined in Section 3.03.

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

“Alternative Rate”: A per annum rate based on an index approximating the behavior of LIBOR, as determined by Buyer in its discretion.

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

“Applicable Percentage”: For each Purchased Asset as of any date, the applicable percentage determined by Buyer for such Purchased Asset on the Closing Date and set forth in the Confirmation for such Purchased Asset, up to the Maximum Applicable Percentage.

“Asset”: Any Whole Loan or, in the case of the B Note Assets, a Junior Interest, the Underlying Mortgaged Property for which is included in the categories for Types of Mortgaged Property.

“B Note Assets”: Shall mean the Purchased Assets set forth on Exhibit H attached hereto.

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

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

“Book Value”: For any Purchased Asset as of any date, an amount, as certified by Seller in the related Transaction Request and Confirmation, equal to the lesser of (a) the outstanding principal amount or par value thereof as of such date, and (b) the price that Seller initially paid or advanced in respect thereof, minus principal payments received by Seller, and as further reduced by losses realized and writedowns taken by Seller.

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

“Buyer”: Wells Fargo Bank, National Association, in its capacity as Buyer under this Agreement and the other Repurchase Documents.

“Buyer’s Margin Percentage”: For any Purchased Asset as of any date, the percentage equivalent of the quotient obtained by dividing one (1) by the Applicable Percentage for such Purchased Asset as of such date.

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

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

“Carlson, Bank One and Constellation Purchased Assets”: Each of the Purchased Assets described on Exhibit I attached hereto.

“Change of Control”: The occurrence of any of the following events: (a) prior to an internalization of management by Guarantor, if Manager is no longer the manager of Guarantor; (b) after such time as Guarantor is internally managed, any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall 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 Guarantor entitled to vote generally in the election of directors, of 20% or more; (c) change in Control of Manager and/or Starwood Capital Group Global, L.P. from the Person or Persons who are directly or indirectly Controlling such entities on the date hereof; or (d) each of either Guarantor or the Intermediate Starwood Entities shall cease to own and control, of record and beneficially, directly or indirectly 100% of the outstanding Capital Stock of Seller. Notwithstanding the foregoing, Buyer shall not be deemed to approve or to have approved any internalization of management by Guarantor as a result of this definition or any other provision herein, other than to the extent actually approved pursuant to Section 8.14 or Section 10.01(g).

“Class”: With respect to an Asset, such Asset’s classification as one of the following: Whole Loan or Junior Interest.

“Closing Certificate”: A true and correct certificate in the form of Exhibit D, executed by a Responsible Officer of Seller.

“Closing Date”: March 31, 2010.

“Code”: The Internal Revenue Code of 1986, as amended.

“Collection Account”: A segregated interest-bearing account established at Collection Account Bank, in the name of Seller, pledged to Buyer and subject to a Controlled Account Agreement.

“Collection Account Bank”: Wells Fargo Bank, National Association, or any other bank requested by Seller and approved by Buyer in its discretion.

“Commitment Fee”: An amount equal to twenty-five basis points (0.25%) multiplied by the Maximum Amount.

“Compliance Certificate”: A true and correct certificate in the form of Exhibit E, executed by a Responsible Officer of Seller.

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

“Contingent Liabilities”: With respect to any Person as of any date, all of the following as of such date: (a) liabilities and obligations (including any Guarantee Obligations) of such Person in respect of “off–balance sheet arrangements” (as defined in the Off–Balance Sheet Rules defined below), (b) obligations, including Guarantee Obligations, whether or not required to be disclosed in the footnotes to such Person’s financial statements, guaranteeing in whole or in part any Non–Recourse Indebtedness, lease, dividend or other obligation, excluding, however, (i) contractual indemnities (including any indemnity or price–adjustment provision relating to the purchase or sale of securities or other assets), and (ii) guarantees of non–monetary obligations which have not yet been called on or quantified, of such Person or any other Person, and (c) forward commitments or obligations to fund or provide proceeds with respect to any loan or other financing which is obligatory and non–discretionary on the part of the lender. The amount of any Contingent Liabilities described in the preceding clause (b) shall be deemed to be (i) with respect to a guarantee of interest or interest and principal, or operating income guarantee, the sum of all payments required to be made thereunder (which, in the case of an operating income guarantee, shall be deemed to be equal to the debt service for the note secured thereby), through (x) in the case of an interest or interest and principal guarantee, the stated date of maturity of the obligation (and commencing on the date interest could first be payable thereunder), or (y) in the case of an operating income guarantee, the date through which such guarantee will remain in effect, and (ii) with respect to all guarantees not covered by the preceding clause (i), an amount equal to the stated or determinable amount of the primary obligation in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet and in the footnotes to the most recent financial statements of such Person. “Off–Balance Sheet Rules” means the Disclosure in Management’s Discussion and Analysis About Off–Balance Sheet Arrangements and Aggregate Contractual Obligations, Securities Act Release Nos. 33–8182; 34–47264; FR–67 International Series Release No. 1266 File No. S7–42–02, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR Parts 228, 229 and 249).

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

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

“Controlled Account Agreement”: A control agreement with respect to the Collection Account and the Servicing Agreement Account, each, dated as of the date of this Agreement, each among Seller, Buyer and Collection Account Bank, each of which agreements shall be substantially in the form of Exhibit J attached hereto.

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“Credit Event”: Defined in the Fee and Pricing Letter, which definition is incorporated herein by reference.

“Current Mark-to-Market Value”: For any Purchased Asset as of any date, the market value for such Purchased Asset as of such date as determined by Buyer in its discretion (a) with reference to the market value of the Underlying Mortgaged Property, and (b) taking into account such other criteria (other than current interest rates and spreads) as and to the extent that Buyer deems appropriate in its discretion, including, as appropriate, market conditions, credit quality, liquidity of position, subordination and delinquency status and aging, which market value, in each case, may be determined to be zero. The Current Mark-to-Market Value of each Purchased Asset as of the Closing Date will be set forth in on the Confirmation executed in connection with the related Transaction, and such Current Mark-to-Market Value will not be adjusted by Buyer for any Purchased Asset after the Closing Date unless a Credit Event shall occur with respect to the related Purchased Asset, provided that there shall be no restrictions on Buyer’s ability to recalculate, solely for internal purposes, the Market Value of any Purchased Asset at any time.

“Custodial Agreement”: The Custodial Agreement, dated as of the date hereof, among Buyer, Seller and Custodian, substantially in the form of Exhibit K.

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

“Debt Yield”: With respect to any Purchased Asset(s) and for any relevant calendar quarter, the percentage equivalent of the quotient obtained by dividing (i) the product of (A) the underwritten net cash flow for such period from the related Mortgaged Property or Mortgaged Properties securing the Purchased Asset(s), as determined by Buyer in its sole and absolute discretion, multiplied by (B) a fraction, (1) the numerator of which shall be 360, and (2) the denominator of which shall be the number of days in the relevant Test Period, by (ii) the then-current Purchase Price of such Purchased Asset(s) on the last day of such calendar quarter.

“Debt Yield Test”: (i) The Underlying Mortgaged Property pledged to secure all Purchased Assets other than the Life Time Purchased Assets must at all times and during all relevant time periods generate a Debt Yield of at least fifteen percent (15.0%), except that, at all times when the only Purchased Assets on the Facility are the Carlson, Bank One and Constellation Purchased Assets, the Purchased Assets must at all times and during all relevant time periods generate a Debt Yield of at least twelve percent (12%), and (ii) the Debt Yield for the Underlying Mortgaged Property pledged to secure the Life Time Purchased Assets, must at all times and during all relevant time periods generate a Debt Yield of at least thirty percent (30%).

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

“Default Rate”: As of any date, the Pricing Rate in effect on such date plus 400 basis points (4.00%), determined after any Repurchase Date on the basis of periods corresponding to Pricing Periods.

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“Defaulted Asset”: Any Asset or Purchased Asset, as applicable, (a) that is thirty (30) or more days (or, in the case of payments due at maturity, one (1) day) delinquent in the payment of principal, interest, fees, distributions or any other amounts payable under the related Mortgage Loan Documents, (b) for which there is a non–monetary default under the related Mortgage Loan Documents beyond any applicable notice or cure period, (c) as to whose Underlying Obligor an Insolvency Event has occurred, or (d) for which Seller, Servicer or Sub-Servicer has received notice of the foreclosure or proposed foreclosure of any Lien on the related Underlying Mortgaged Property; provided that with respect to any Junior Interest, in addition to the foregoing such Junior Interest will also be considered a Defaulted Asset to the extent that the Underlying Mortgage Loan would be considered a Defaulted Asset as described in this definition.

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

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

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

“Early Repurchase Date”: Defined in Section 3.05.

“EBITDA”: With respect to any Person and any Test Period, an amount equal to the sum of (a) Net Income (or loss) of such Person (prior to any impact from minority interests or joint venture net income and before deduction of any dividends on preferred stock of such Person), plus the following (but only to the extent actually included in determination of such Net Income (or loss)): (i) depreciation and amortization expense, (ii) Interest Expense, (iii) income tax expense, and (iv) extraordinary or non-recurring gains and losses, plus (b) such Person’s proportionate share of Net Income of the joint venture investments and unconsolidated Affiliates of such Person, all with respect to such Test Period, plus (c) amounts deducted in accordance with GAAP in respect of other non-cash expenses in determining such Net Income for such Person.

“Eligible Asset”: An Asset:

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(a) that is listed on the attached Exhibit L;

(b) with respect to which no Representation Breach exists;

(c) that is not a Defaulted Asset;

(d) with respect to which there are no future funding obligations on the part of Seller, Buyer or any other Person;

(e) whose Underlying Mortgaged Property is located in the United States, whose Underlying Obligors are domiciled in the United States, and all obligations thereunder and under the Underlying Mortgage Documents are denominated and payable in Dollars;

(f) whose Underlying Obligors are not Sanctioned Entities; and

(g) that is secured by a perfected, first priority security interest on a “stabilized” commercial or multi-family property; provided, that notwithstanding the failure of an Asset or Purchased Asset to conform to the requirements of this definition, Buyer may, in its discretion and subject to such terms, conditions and requirements and Applicable Percentage adjustments as Buyer may require in its discretion, designate in writing any such non–conforming Asset or Purchased Asset as an Eligible Asset, which designation (1) may include a temporary or permanent waiver of one or more Eligible Asset requirements, and (2) shall not be deemed a waiver of the requirement that all other Assets and Purchased Assets must be Eligible Assets (including any Assets that are similar or identical to the Asset or Purchased Asset subject to the waiver).

“Eligible Assignee”: Any of the following Persons designated by Buyer for purposes of Section 18.08(c): (a) a bank, financial institution, pension fund, insurance company or similar Person, an Affiliate of any of the foregoing, and an Affiliate of Buyer, and (b) any other Person to which Seller has consented; provided, that such consent of Seller shall not be unreasonably withheld, delayed or conditioned, and shall not be required at any time when a Event of Default exists. Such Person shall provide to Seller such duly executed IRS forms as Seller reasonably requests.

“Environmental Laws”: Any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety or hazardous materials, including CERCLA, RCRA, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the Oil Pollution Act of 1990, the Emergency Planning and the Community Right-to-Know Act of 1986, the Hazardous Material Transportation Act, the Occupational Safety and Health Act, and any state and local or foreign counterparts or equivalents.

“Equity Interests”: With respect to any Person, (a) any share, interest, participation and other equivalent (however denominated) of capital stock of (or other ownership, equity or profit interests in) such Person, (b) any warrant, option or other right for the

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purchase or other acquisition from such Person of any of the foregoing, (c) any security convertible into or exchangeable for any of the foregoing, and (d) any other ownership or profit interest in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date.

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

“Event of Default”: Defined in Section 10.01.

“Excess Financing Capacity”: For each Purchased Asset, initially the dollar amount, if any, specified on the related Confirmation, as such dollar amount reduces on a dollar for dollar basis with each related Additional Advance under Section 3.03.

“Excluded Assets”: Each of the assets previously owned by Seller, and commonly known as UTC Executive Plaza, Avenue East Cobb and Valley View Mall.

“Fee and Pricing Letter”: The letter agreement, dated as of the date of this Agreement, by and between Buyer and Seller.

“Fixed Charge Coverage Ratio”: With respect to any Person and for any Test Period at any time, the EBITDA for such period, divided by the Fixed Charges for the same period.

“Fixed Charges”: With respect to any Person and for any Test Period at any time, the sum of (a) debt service, (b) all preferred dividends, (c) Capital Lease Obligations paid or accrued during such period, (d) capital expenditures (if any), and (e) any amounts payable under any Ground Lease.

“Funding Expiration Date”: The earliest of (a) May 31, 2010, (b) any Accelerated Repurchase Date, and (c) any date on which the Funding Expiration Date shall otherwise occur in accordance with the provisions hereof or Requirements of Law.

“Funding Period”: The period from the Closing Date to and including the Funding Expiration Date.

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

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

“Governmental Authority”: Any (a) nation or government, (b) state or local or other political subdivision thereof, (c) central bank or similar monetary or regulatory authority, (d) Person, agency, authority, instrumentality, court, regulatory body, central bank or other body or entity exercising executive, legislative, judicial, taxing, quasi–judicial, quasi–legislative, regulatory or administrative functions or powers of or pertaining to government, (e) court or

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arbitrator having jurisdiction over such Person, its Affiliates or its assets or properties, (f) stock exchange on which shares of stock of such Person are listed or admitted for trading, (g) accounting board or authority that is responsible for the establishment or interpretation of national or international accounting principles, and (h) supra-national body such as the European Union or the European Central Bank.

“Ground Lease”: A ground lease containing the following terms and conditions: (a) a remaining term (exclusive of any unexercised extension options) of thirty (30) years or more from the Purchase Date of the related Asset, (b) the right of the lessee to mortgage and encumber its interest in the leased property without the consent of the lessor or with such consent given, (c) the obligation of the lessor to give the holder of any mortgage lien on such leased property written notice of any defaults on the part of the lessee and agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so, (d) reasonable transferability of the lessee’s interest under such lease, including ability to sublease, and (e) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease.

“Guarantee Agreement”: A Guarantee Agreement, substantially in the form of Exhibit M, made by Guarantor in favor of Buyer.

“Guarantee Default”: Defined in Section 8.13.

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

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“Guarantor”: Starwood Property Trust, Inc., a Maryland corporation, together with its successors and permitted assigns.

“Income”: With respect to any Purchased Asset, all of the following (in each case with respect to the entire par amount of the Asset represented by such Purchased Asset and not just with respect to the portion of the par amount represented by the Purchase Price advanced against such Asset): (a) all Principal Payments, (b) all Interest Payments, and (c) all other income, distributions, receipts, payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed on, in connection with or in respect of such Purchased Asset, including principal payments, interest payments, principal and interest payments, prepayment fees, extension fees, exit fees, defeasance fees, transfer fees, make whole fees, late charges, late fees and all other fees or charges of any kind or nature, premiums, yield maintenance charges, penalties, default interest, dividends, gains, receipts, allocations, rents, interests, profits, payments in kind, returns or repayment of contributions, net sale, foreclosure, liquidation, securitization or other disposition proceeds, insurance payments, settlements and proceeds; provided, that any amounts which under the applicable Mortgage Loan Documents are required to be deposited into and held in escrow or reserve to be used for a specific purpose, such as taxes and insurance, shall not be included in the term “Income” unless and until (i) an event of default exists under such Mortgage Loan Documents, (ii) the holder of the related Purchased Asset has exercised or is entitled to exercise rights and remedies with respect to such amounts, (iii) such amounts are no longer required to be held for such purpose under such Mortgage Loan Documents, or (iv) such amounts may be applied to all or a portion of the outstanding indebtedness under such Mortgage Loan Documents, and provided, further, that “Income” from Junior Interests shall include, without limitation, Seller’s share of all amounts payable in respect of the Junior Interest and the Underlying Mortgage Loan pursuant to the Junior Interest Documents.

“Indebtedness”: With respect to any Person and any date, all of the following with respect to such Person as of such date: (a) obligations in respect of money borrowed (including principal, interest, assumption fees, prepayment fees, yield maintenance charges, penalties, exit fees, contingent interest and other monetary obligations whether choate or inchoate and whether by loan, the issuance and sale of debt securities or the sale of property or assets to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets, or otherwise), (b) obligations, whether or not for money borrowed (i) represented by notes payable, letters of credit or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or services rendered, or (iv) in connection with the issuance of Preferred Equity or trust preferred securities, (c) Capital Lease Obligations, (d) reimbursement obligations under any letters of credit or acceptances (whether or not the same have been presented for payment), (e) Off–Balance Sheet Obligations, (f) obligations to purchase, redeem, retire, defease or otherwise make any payment in respect of any mandatory redeemable stock issued by such Person or any other Person (inclusive of forward equity contracts), valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (g) as applicable, all obligations of

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such Person (but not the obligation of others) in respect of any keep well arrangements, credit enhancements, contingent or future funding obligations under any Purchased Asset or any obligation senior to any Purchased Asset, unfunded interest reserve amount under any Purchased Asset or any obligation that is senior to any Purchased Asset, purchase obligation, repurchase obligation, sale/buy–back agreement, takeout commitment or forward equity commitment, in each case evidenced by a binding agreement (excluding any such obligation to the extent the obligation can be satisfied by the issuance of Equity Interests (other than mandatory redeemable stock)), (h) net obligations under any Derivatives Contract not entered into as a hedge against existing indebtedness, in an amount equal to the Derivatives Termination Value thereof, (i) all Non–Recourse Indebtedness, recourse indebtedness and all indebtedness of other Persons which such Person has guaranteed or is otherwise recourse to such Person, (j) all indebtedness of another Person secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (other than certain Permitted Liens) on property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment obligation; provided, that if such Person has not assumed or become liable for the payment of such indebtedness, then for the purposes of this definition the amount of such indebtedness shall not exceed the market value of the property subject to such Lien, (k) all Contingent Liabilities, (l) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person or obligations of such Person to pay the deferred purchase or acquisition price of property or assets, including contracts for the deferred purchase price of property or assets that include the procurement of services, (m) indebtedness of general partnerships of which such Person is liable as a general partner (whether secondarily or contingently liable or otherwise), and (n) obligations to fund capital commitments under any Governing Document, subscription agreement or otherwise.

“Indemnified Amount”: Defined in Section 13.01.

“Indemnified Person”: Defined in Section 13.01.

“Independent Director” or “Independent Manager”: An individual who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors or 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 Directors and Independent 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 such corporation or limited liability company and is not, has never been, and will not while serving as Independent Director or Independent Manager be, any of the following:

(a) a member, partner, equityholder, manager, director, officer or employee of Seller, any Principal, any of their respective equityholders or Affiliates (other than (a) as an Independent Director or Independent Manager of Seller or Principal and (b) as an Independent Director or Independent Manager of an Affiliate of Seller or Principal or any

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of their respective single-purpose entity equityholder that is not in the direct chain of ownership of Seller or Principal and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such Independent Director or Independent Manager is employed by a company that routinely provides professional Independent Directors or Independent Managers);

(b) a creditor, supplier or service provider (including provider of professional services) to Seller, any single-purpose entity equityholder, or any of their respective equityholders or Affiliates (other than a nationally-recognized company that routinely provides professional Independent Directors or Independent Managers and other corporate services to Seller, any single-purpose entity equityholder, or any of their respective equityholders or Affiliates in the ordinary course of business);

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

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

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

“Ineligible Asset”: Defined in Section 3.03.

“Initial Interest Rate Protection Agreement”: The ISDA Master Agreement, including the Schedule and Credit Support Annex thereto, and the Confirmation entered into thereunder, each dated as of March 1, 2010, between Deutsche Bank AG and Guarantor, without giving effect to any amendment, supplement or modification thereto after the date thereof.

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

“Insolvency Event”: With respect to any Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises with respect to such Person or any substantial part of its assets or property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, or ordering the winding–up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of thirty (30) days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, (c) the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law, (d) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person

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or for any substantial part of its assets or property, (e) the making by such Person of any general assignment for the benefit of creditors, (f) the admission in a legal proceeding of the inability of such Person to pay its debts generally as they become due, (g) the failure by such Person generally to pay its debts as they become due, or (h) the taking of action by such Person in furtherance of any of the foregoing.

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

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

“Interest Expense”: With respect to any Person and any period, the amount of total interest expense incurred by such Person, including capitalized or accruing interest (but excluding interest funded under a construction loan), all with respect to such period.

“Interest Payments”: With respect to any Purchased Asset and any period, all payments of interest, income, receipts, dividends, and any other collections and distributions received from time to time in connection with such Purchased Asset.

“Intermediate Starwood Entities”: Individually or collectively, Principal and SPT Real Estate Sub I, LLC, a Delaware limited liability company.

“Internal Control Event”: Material weakness in, or fraud that involves management or other employees who have a significant role in, the internal controls of Seller, Manager, any Intermediate Starwood Entity or Guarantor over financial reporting, in each case as described in the Securities Laws.

“Investment”: With respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty or credit enhancement of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any binding commitment or option to make an Investment in any other Person shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in this Agreement, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Irrevocable Redirection Notice”: A notice in form of acceptable to Buyer in its discretion, sent by Seller or by Servicer or Sub-Servicer on Seller’s behalf directing the remittance of Income with respect to a Purchased Asset to the Servicing Agreement Account or Collection Account, as applicable, and executed by the applicable Underlying Obligor, Servicer, Sub-Servicer or other Person with respect to such Purchased Asset.

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“Junior Interest”: (a) A junior participation interest in a performing commercial real estate loan, or (b) a “B-note” in an “A/B structure” in a performing commercial real estate loan.

“Junior Interest Documents”: Shall mean, for any Junior Interest, the Junior Interest Note together with any co-lender agreements, participation agreements and/or other intercreditor agreements or other documents governing or otherwise relating to such Junior Interest.

“Junior Interest Note”: The original executed promissory note, participation or other certificate or other tangible evidence of a Junior Interest.

“Knowledge”: With respect to any Person, means collectively (i) the actual knowledge of such Person, (ii) notice of any fact, event, condition or circumstance that would cause a reasonably prudent Person to conduct an inquiry that would give such Person actual knowledge, whether or not such Person actually undertook such an inquiry, and (iii) all knowledge that is imputed to a Person under any statute, rule, regulation, ordinance, or official decree or order.

“LIBOR”: For any Pricing Period, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest 1/100 of 1%) for deposits in Dollars, for a one-month period, that appears on Reuters Screen LIBOR01 (or the successor thereto) as the London interbank offered rate for deposits in Dollars as of 11:00 a.m., London time, on the Pricing Rate Reset Date for such Pricing Period. If such rate does not appear on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such Pricing Rate Reset Date, Buyer shall request the principal London office of any of the Reference Banks in the London interbank market selected by Buyer to provide such banks’ offered quotation (expressed as a percentage per annum) to leading banks in the international Eurocurrency market for deposits in Dollars for a one-month period as of 11:00 a.m., London time, on such Pricing Rate Reset Date for amounts of not less than the aggregate Repurchase Price of all Purchased Assets. If at least two such offered quotations are so provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, Buyer shall request any three major banks in New York City selected by Buyer to provide such banks’ rate (expressed as a percentage per annum) for loans in Dollars to leading banks in the international Eurocurrency market for a one-month period as of approximately 11:00 a.m., New York City time on the applicable Pricing Rate Reset Date for amounts of not less than the aggregate Repurchase Price of all Purchased Assets. If at least two such rates are so provided, LIBOR shall be the arithmetic mean of such rates.

“LIBO Rate”: For any Pricing Period, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest 1/100 of 1%) determined for such Pricing Period in accordance with the following formula:

LIBOR for such Pricing
Period

     1 – Reserve Requirement     

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

“Life Time Purchased Assets”: Each of the Purchased Assets described on Exhibit N attached hereto.

“Liquidity”: With respect to Guarantor and on any relevant date, the amount of cash or cash equivalents held by Guarantor.

“Manager”: SPT Management, LLC, a Delaware limited liability company.

“Margin Call”: Defined in Section 4.01.

“Margin Deficit”: Defined in Section 4.01.

“Market Value”: Defined in the Fee and Pricing Letter, which definition is incorporated herein by reference.

“Material Adverse Effect”: A material adverse effect on or material adverse change in or to (a) the property, assets, business, operations, financial condition, credit quality or prospects of Seller, any Intermediate Starwood Entity or Guarantor, (b) the ability of Seller to pay and perform the Repurchase Obligations, (c) the validity, legality, binding effect or enforceability of any Repurchase Document, Mortgage Loan Document, Purchased Asset or security interest granted hereunder or thereunder, (d) the rights and remedies of Buyer or any Indemnified Person under any Repurchase Document, Mortgage Loan Document or Purchased Asset, or (e) the perfection or priority of any Lien granted under any Repurchase Document or Mortgage Loan Document.

“Material Modification”: Any material 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 Purchased Asset or Mortgage Loan Document.

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

“Maturity Date”: The earliest of (a)  May 31, 2013, (b) any Accelerated Repurchase Date, and (c) any date on which the Maturity Date shall otherwise occur in accordance with the Repurchase Documents or Requirements of Law.

“Maximum Amount”: $280,000,000; provided, that on and after the earlier of the Funding Expiration Date and the Maturity Date, the Maximum Amount on any date shall be the aggregate Repurchase Price outstanding for all Transactions as of such earlier date, as such

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amount declines over time as Purchased Assets are subsequently repurchased and Margin Deficits are subsequently satisfied.

“Maximum Applicable Percentage”: For each Purchased Asset as of any date, the maximum applicable percentage determined by Buyer for such Purchased Asset on the Closing Date and set forth in the Confirmation for such Purchased Asset.

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

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

“Mortgage Loan Documents”: With respect to any Purchased Asset, those documents executed in connection with, evidencing or governing such Purchased Asset and the related Underlying Mortgaged Property.

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

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

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

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

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

“Net Cash Flow”: With respect to any Purchased Asset and for any period, the net cash flow of such Purchased Asset for such period as underwritten by Buyer in its discretion.

“Net Income”: With respect to any Person for any period, the net income of such Person for such period as determined in accordance with GAAP.

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

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“Non-Utilization Fee”: Defined in the Fee and Pricing Letter, which definition is incorporated herein by reference.

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

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

“Patriot Act”: The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

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

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

“Plan”: An “employee benefit plan” as defined in Section 3(3) of ERISA, subject to Title I of ERISA in respect of which, Seller, Guarantor or any Intermediate Starwood Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA, be deemed to be an “employer” as defined in Section 3(5) of ERISA.

“Pledge Agreement”: A Pledge Agreement from Starwood Property Mortgage, L.L.C. in favor of Buyer, covering one-hundred percent (100%) of the equity ownership interest of pledgor in Seller.

“Price Differential”: (a) For any Pricing Period or portion thereof and any Transaction outstanding, the sum of the products, for each day during such Pricing Period or portion thereof, of (i) 1/360th of the Pricing Rate in effect for such Pricing Period during which such day occurs, times (ii) the Purchase Price for such Purchased Asset as of such day, and (b) for any Pricing Period or portion thereof and all Transactions outstanding, the sum of the amounts calculated in accordance with the preceding clause (a) for all Transactions.

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“Pricing Margin”: Defined in the Fee and Pricing Letter, which definition is incorporated herein by reference.

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

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

“Pricing Rate Reset Date”: (a) In the case of the first Pricing Period for any Purchased Asset, the Purchase Date for such Purchased Asset, and (b) in the case of any subsequent Pricing Period, two (2) Business Days prior to the Remittance Date on which such Pricing Period begins.

“Principal”: Starwood Property Mortgage, L.L.C., a Delaware limited liability company, the entity that is the sole member of Seller.

“Principal Payments”: For any Purchased Asset, all payments and prepayments of principal received and applied (or which was required to be applied in accordance with the related Mortgage Loan Documents) as principal toward the Purchase Price for such Purchased Asset, including insurance and condemnation proceeds and recoveries from liquidation or foreclosure.

“Purchase Agreement”: Any purchase agreement between Seller and any Transferor pursuant to which Seller purchased or acquired an Asset which is subsequently sold to Buyer hereunder.

“Purchase Date”: For any Purchased Asset, the date on which such Purchased Asset is transferred by Seller to Buyer.

“Purchase Price”: For any Purchased Asset, (a) as of the Purchase Date for such Purchased Asset, an amount equal to the product of the Market Value of such Purchased Asset, times the Applicable Percentage for such Purchased Asset, and (b) as of any other date, the amount described in the preceding clause (a), (i) reduced by any amount of Margin Deficit transferred by Seller to Buyer pursuant to Section 4.01 and applied to the Purchase Price of such Purchased Asset, (ii) reduced by any Principal Payments remitted to the Collection Account and which were applied to the Purchase Price of such Purchased Asset by Buyer, (iii) reduced by any payments made by Seller in reduction of the outstanding Purchase Price, and (iv) increased by any amount of Excess Financing Capacity transferred to Seller by Buyer pursuant to Section 3.03, in each case before or as of such determination date with respect to such Purchased Asset.

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“Purchased Assets”: (a) For any Transaction, each Asset sold by Seller to Buyer in such Transaction, and (b) for the Transactions in general, all Assets sold by Seller to Buyer, in each case including, to the extent relating to such Asset or Assets, all of Seller’s right, title and interest in and to (i) Mortgage Loan Documents, (ii) Servicing Rights, (iii) Servicing Files, (iv) mortgage guaranties and insurance (issued by Governmental Authorities or otherwise) and claims, payments and proceeds thereunder, (v) insurance policies, certificates of insurance and claims, payments and proceeds thereunder, (vi) the principal balance of such Assets, not just the amount advanced, (vii) amounts and property from time to time on deposit in the Collection Account and the Collection Account itself, (viii) collection, escrow, reserve, collateral or lock–box accounts and all amounts and property from time to time on deposit therein, to the extent of Seller’s or the holder’s interest therein, (ix) Income, (x) amounts and property from time to time on deposit in the Servicer Accounts, together with the Servicer Accounts themselves, (xi) security interests of Seller in Derivatives Contracts entered into by Underlying Obligors, (xii) rights of Seller under any letter of credit, guarantee, warranty, indemnity or other credit support or enhancement, (xviii) all of the “Pledged Collateral”, as such term is defined in the Pledge Agreement, and (ixx) supporting obligations of any kind; provided, that (A) Purchased Assets shall not include any obligations of Seller, and (B) for purposes of the grant of security interest by Seller to Buyer and the other provisions of Article 11, Purchased Assets shall include all of the following: general intangibles, accounts, chattel paper, deposit accounts, securities accounts, instruments, securities, financial assets, uncertificated securities, security entitlements and investment property (as such terms are defined in the UCC) and replacements, substitutions, conversions, distributions or proceeds relating to or constituting any of the items described in the preceding clauses (i) through (ixx).

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

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

“Refinanced Loan”: Defined in Section 3.05(d).

“REIT”: A Person satisfying the conditions and limitations set forth in Section 756(b) and 856(c) of the Code which are necessary to qualify such Person as a “real estate investment trust,” as defined in Section 756(a) of the Code.

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

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

“Remittance Date”: The fifth (5^th) day of each month (or if such day is not a Business Day, the next following Business Day), or such other day as is mutually agreed to by Seller and Buyer.

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

“Representation Breach”: Any representation, warranty, certification, statement or affirmation made by Seller or Guarantor in any Repurchase Document (including in Schedule 1(a) or 1(b)) or in any certificate, notice, report or other document prepared and delivered by or on behalf of Seller, Manager, any Intermediate Starwood Entity or Guarantor pursuant to any Repurchase Document proves to be incorrect, false or misleading in any material respect when made, and in the case of the representations and warranties contained in Schedule 1(a) or 1(b) only, without regard to any Knowledge or lack of Knowledge thereof by Seller or (unless otherwise waived in writing), by Buyer, and without regard to any qualification, representation or warranty relating to such Knowledge or lack of Knowledge.

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

“Repurchase Documents”: Collectively, this Agreement, the Custodial Agreement, the Controlled Account Agreements, the Pledge Agreement, the Guarantee Agreement, all Confirmations, all UCC financing statements, amendments and continuation statements filed pursuant to any other Repurchase Document, and all additional documents, certificates, agreements or instruments, the execution of which is required, necessary or incidental to or desirable for performing or carrying out any other Repurchase Document.

“Repurchase Obligations”: 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 Repurchase Documents, whether now existing or hereafter arising, and all interest and fees that accrue after the commencement by or against Seller, any Intermediate Starwood Entity or Guarantor of any Insolvency Proceeding naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding (in each case, whether due or accrued).

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“Repurchase Price”: For any Purchased Asset as of any date, an amount equal to the sum of (a) the outstanding Purchase Price as of such date, (increased as set forth in the definition of Purchase Price by the amount of all related Additional Advances previously made under Section 3.03), (b) the accrued and unpaid Price Differential for such Purchased Asset as of such date, and (c) all other amounts due and payable as of such date by Seller to Buyer under this Agreement or any Repurchase Document.

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

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

“Responsible Officer”: With respect to any Person, the chief executive officer, the chief financial officer, the chief accounting officer, the treasurer or the chief operating officer of such Person.

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

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

“Sanctioned Entity”: (a) A country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, that in each case is subject to a country sanctions program administered and enforced by the Office of

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Foreign Assets Control, or (e) a Person named on the list of Specially Designated Nationals maintained by the Office of Foreign Assets Control.

“Securities Laws”: The Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the Securities and Exchange Commission or the Public Company Accounting Oversight Board.

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

“Servicer”: Wells Fargo Bank, National Association, as servicer of all of the Purchased Assets.

“Servicing Agreement Account”: The “Servicing Account” under the Sub-Servicing Agreement, which shall be a segregated interest bearing account established at the Collection Account Bank, in the name of Seller, pledged to Buyer and subject to a Controlled Account Agreement.

“Servicer Account”: Any account established by Servicer in connection with the servicing of any Asset or Purchased Asset including, without limitation, the Servicing Agreement Account.

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

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

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

“Solvent”: With respect to any Person at any time, having a state of affairs such that all of the following conditions are met at such time: (a) the fair value of the assets and property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities

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evaluated for purposes of Section 91(32) of the Bankruptcy Code, (b) the present fair salable value of the assets and property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) 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 (e) 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”: A corporation, limited partnership or limited liability company that, since the date of its formation (unless otherwise indicated in this Agreement) and at all times on and after the date hereof, has complied with and shall at all times comply with the provisions of Article 9.

“Sub-Servicer”: Defined in Section 17.01.

“Sub-Servicing Agreement”: Defined in Section 17.01.

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

“Tangible Net Worth”: With respect to any Person and any date, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person, minus (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets (other than the Initial Interest Rate Protection Agreement), and (c) prepaid taxes and/or expenses, all on or as of such date.

“Term Sheet”: The letter and/or summary of terms and conditions dated February 26, 2010 between and among Buyer, Seller and Guarantor.

“Test Period”: The time period from the first day of each calendar quarter, through and including the last day of such calendar quarter.

“Total Assets”: With respect to any Person and any date, an amount equal to the aggregate book value of all assets owned by such Person on a consolidated basis and the proportionate share of assets owned by non-consolidated Subsidiaries of such Person, less (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees,

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partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets (other than the Initial Interest Rate Protection Agreement), and (c) prepaid taxes and expenses, all on or as of such date.

“Total Indebtedness”: With respect to any Person and any date, all amounts of Indebtedness (other than Contingent Liabilities not reflected on such Person’s consolidated balance sheet), plus the proportionate share of all Indebtedness (other than Contingent Liabilities not reflected on such Person’s consolidated balance sheet) of all non-consolidated Affiliates of such Person, on or as of such date.

“Transaction”: With respect to any Asset, the sale and transfer of such Asset from Seller to Buyer pursuant to the Repurchase Documents against the transfer of funds from Buyer to Seller representing the Purchase Price or any additional Purchase Price for such Asset.

“Transaction Request”: Defined in Section 3.01(a).

“Transferor”: The seller of an Asset under a Purchase Agreement.

“Type”: With respect to a Mortgaged Property, such Mortgaged Property’s classification as one of the following: retail, office or health club.

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

“Underlying Mortgage Loan”: With respect to any Junior Interest, a mortgage loan made in respect of the related Underlying Mortgaged Property.

“Underlying Mortgaged Property”: In the case of any:

(a) Whole Loan, the Mortgaged Property securing such Whole Loan; and

(b) Junior Interest, the Mortgaged Property securing such Junior Interest (if the Junior Interest is of the type described in clause (a) of the definition thereof), or the Mortgaged Property securing the Mortgage Loan in which such Junior Interest represents a junior participation (if the Junior Interest is of the type described in clause (b) of the definition thereof).

“Underlying Obligor”: Individually and collectively, as the context may require, the Mortgagor and other obligor or obligors under an Asset, including (i) any Person that has not signed the related Mortgage Note but owns an interest in the related Underlying Mortgaged Property, which interest has been encumbered to secure such Asset, and (ii) any other Person who has assumed or guaranteed the obligations of such Mortgagor under the Mortgage Loan Documents relating to an Asset.

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“Underwriting Package”: Defined in the Fee and Pricing Letter, which definition is incorporated herein by reference.

“Whole Loan”: A performing first priority commercial real estate whole loan for which the Underlying Mortgage Property has stabilized, as determined by Buyer in its discretion.

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

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Documents, the relevant document shall be provided in writing or printed form unless Buyer requests otherwise. At the request of Buyer, the document shall be provided in computer disk form or both printed and computer disk form. The Repurchase Documents are the result of negotiations between the Parties, have been reviewed by counsel to Buyer and counsel to Seller, and are the product of both Parties. No rule of construction shall apply to disadvantage one Party on the ground that such Party proposed or was involved in the preparation of any particular provision of the Repurchase Documents or the Repurchase Documents themselves. Except where otherwise expressly stated, Buyer may give or withhold, or give conditionally, approvals and consents, and may form opinions and make determinations, in its sole and absolute discretion. Reference in any Repurchase Document to Buyer’s discretion shall mean, unless otherwise expressly stated herein or therein, Buyer’s sole and absolute discretion, and the exercise of such discretion shall be final and conclusive. In addition, unless otherwise expressly provided in the applicable Repurchase Document, whenever Buyer has a decision or right of determination, opinion or request, exercises any right given to it to agree, disagree, accept, consent, grant waivers, take action or no action or to approve or disapprove, or any arrangement or term is to be satisfactory or acceptable to or approved by (or any similar language or terms) Buyer, the decision of Buyer with respect thereto shall be in the sole and absolute discretion of Buyer, and such decision shall be final and conclusive. Any requirement of good faith, discretion or judgment by Buyer shall not be construed to require Buyer to request or await receipt of information or documentation not immediately available from or with respect to Seller or the Purchased Assets.

ARTICLE 3

THE TRANSACTIONS

Section 3.01 Procedures.

(a) Prior to the Closing Date, Seller shall have delivered to Buyer a complete Underwriting Package for each of the Assets described on Exhibit L. Seller and Buyer hereby enter into Transactions, as evidenced by Seller sending Buyer a notice substantially in the form of Exhibit A (“Transaction Request”) describing each Transaction and each proposed Asset and any related Underlying Mortgaged Property and other security therefor in reasonable detail. Included therewith is a schedule specifying what (if any) specific exceptions to the representations and warranties of Seller set forth in this Agreement (including in Schedules 1(a) and 1(b) applicable to the Class of such Asset) Seller will take with respect to any Asset. Seller shall promptly deliver to Buyer any supplemental materials requested at any time by Buyer in its discretion, provided the same are either in Seller’s possession or are reasonably obtainable by Seller. On the Closing Date, Buyer shall determine in its discretion whether or not it is willing to purchase any or all of the proposed Assets, and if so, on what terms and conditions. It is expressly agreed and acknowledged that Buyer is entering into the Transactions on the basis of all such representations and warranties and on the completeness and accuracy of the information contained in the applicable Underwriting Package, and any incompleteness or inaccuracies in the related Underwriting Package will only be acceptable to Buyer if disclosed in writing to Buyer by Seller in advance of the Closing Date, and then only if Buyer opts to purchase the related Purchased Asset from Seller notwithstanding such incompleteness and inaccuracies. In the event

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of a Representation Breach, Seller shall immediately repurchase the related Asset or Assets in accordance with Section 3.05.

(b) The Confirmation for each Transaction shall describe the related Asset, its Purchase Date, Market Value, Applicable Percentage, Purchase Price and such other terms and conditions as Buyer may require in its discretion. Upon the execution of a Confirmation by Buyer and Seller, the related Transaction shall become effective and shall be subject to all of the terms and conditions of the Repurchase Documents. Buyer’s approval of the purchase of an Asset on such terms and conditions as Buyer may require in its discretion shall be evidenced only by its execution and delivery of the related Confirmation. For the avoidance of doubt, Buyer shall not (i) be deemed to have approved the purchase of an Asset by virtue of the approval or entering into by Buyer of a rate lock agreement, the Initial Interest Rate Protection Agreement, total return swap or any other agreement with respect to such Asset, or (ii) be obligated to purchase an Asset notwithstanding a Confirmation executed by the Parties unless and until all applicable conditions precedent in Article 6 have been satisfied or waived by Buyer in its discretion.

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

(d) The fact that Buyer has conducted or has failed to conduct any partial or complete examination or any other due diligence review of any Asset or Purchased Asset shall in no way affect any rights Buyer may have under the Repurchase Documents or otherwise with respect to any representations or warranties or other rights or remedies thereunder or otherwise, including the right to determine at any time that such Asset or Purchased Asset is not an Eligible Asset, if such Asset or Purchased Asset does not meet the requirements therefor, as set forth in the definition of “Eligible Asset”.

(e) No Transaction shall be entered into if (i) any Margin Deficit, Default or Event of Default exists or would exist as a result of such Transaction, (ii) the Repurchase Date for the Purchased Assets subject to such Transaction would be later than the Maturity Date, or (iii) after giving effect to such Transaction, the aggregate Repurchase Price of all Purchased Assets subject to Transactions then outstanding would exceed the Maximum Amount.

Section 3.02 Transfer of Purchased Assets; Servicing Rights. Seller hereby sells, transfers, conveys and assigns to Buyer on a servicing-released basis all of Seller’s right, title and interest (but no Retained Interest) in and to such Purchased Asset, together with all related Servicing Rights. On the Closing Date ownership of and title to all Purchased Assets shall be transferred to and vest in Buyer or its designee against the simultaneous transfer of the Purchase Price to the account of Seller specified in Annex 1 (or if not specified therein, in the

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related Confirmation or as directed by Seller). After the Closing Date, Seller shall have no right to sell to Buyer, repurchase from Buyer and/or re-sell Eligible Assets to Buyer, and may not substitute other Eligible Assets for Purchased Assets. Buyer has the right to designate the servicer and sub-servicer of the Purchased Assets, and the Servicing Rights and other servicing provisions under this Agreement are not severable from or to be separated from the Purchased Assets under this Agreement, and such Servicing Rights and other servicing provisions of this Agreement constitute (a) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or other arrangement or other credit enhancement related to the Repurchase Documents.

Section 3.03 Excess Financing Capacity. If at any time prior to the expiration of the Funding Period, Excess Financing Capacity exists for any Purchased Asset, Seller may request, but not more frequently than twice per calendar week, and only upon the delivery of not less than three (3) business days’ prior written notice to Buyer, that Buyer make additional advances in respect of the Purchase Price thereof (each, an “Additional Advance”) in an amount up to the then-current Excess Financing Capacity for such Purchased Asset. With each such request, Seller shall also deliver to Buyer a description of any material change with respect to the related Purchased Asset or the related Mortgaged Property, together with copies of any material documents or information received by Seller to be added to the Underwriting Package in connection therewith as Buyer requests. Provided that (a) Seller delivers to Buyer a certificate stating that each of the Purchased Assets continues to be an Eligible Asset as of the date of any request for each Additional Advance, (b) no uncured Default under Sections 10.01(a) or 10.01(f), or any uncured Event of Default or Margin Deficit exist, and (c) no material adverse change exists with respect to Seller, Guarantor, the Purchased Asset or the Mortgaged Property securing the Purchased Asset, then the proceeds of each Additional Advance shall be paid to Seller by Buyer within one (1) Business Day of the related request; provided, however, that if any Purchased Asset shall not be an Eligible Asset (an “Ineligible Asset”), as of the date of request for an Additional Advance Buyer shall have no further obligation under this Section 3.03 with respect to such Ineligible Asset; provided, however, that subject to the limitations and condition set forth below, Buyer shall still be required to fund such request and all subsequent and otherwise contractually compliant requests for Additional Advances under this Section 3.03 with respect to the other Purchased Assets. Notwithstanding the foregoing, it is acknowledged and agreed that any Additional Advance shall be funded to Seller net of all amounts necessary to (a) repurchase any Ineligible Asset for which Buyer has sent a repurchase notice under Section 3.05(b) and (b) satisfy any then-currently unsatisfied Margin Calls. For purposes of this Agreement, all Additional Advances will be treated as delayed disbursements of the Purchase Price of the related Purchased Asset.

Section 3.04 Maximum Amount. The aggregate outstanding Purchase Price for all Purchased Assets as of any date shall not exceed the Maximum Amount. If such aggregate outstanding Purchase Price exceeds the Maximum Amount, Seller shall within three (3) Business Days after notice from Buyer, pay to Buyer an amount necessary to reduce such aggregate outstanding Purchase Price to an amount equal to or less than the Maximum Amount.

Section 3.05 Early Repurchases; Mandatory Repurchases. (a) The terms and provisions governing early repurchases and mandatory repurchases under Section 3.05(a) are set forth in the Fee and Pricing Letter, and are hereby incorporated by reference.

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(b) In addition to other rights and remedies of Buyer under any Repurchase Document, Seller shall repurchase any Purchased Asset that no longer qualifies as an Eligible Asset, as determined by Buyer in its discretion, within three (3) Business Days of the receipt by Seller of a related repurchase notice from Buyer.

(c) Notwithstanding the foregoing, at any time during the existence of an uncured Default or Event of Default, Seller cannot repurchase a Purchased Asset in connection with a full payoff of the underlying Whole Loan by the Underlying Obligor, unless one-hundred percent (100%) of the net proceeds due in connection with the payoff in question shall be paid directly to Buyer. The portion of all such net proceeds in excess of the then-current Repurchase Price of the related Purchased Asset will be applied in Buyer’s sole and absolute discretion to reduce any other amounts due and payable to Buyer under the Agreement, and then to reduce the Repurchase Prices of the other Purchased Assets in such order and in such amounts as Buyer shall determine in its discretion.

(d) Additional terms and provisions governing early repurchases and mandatory repurchases under Section 3.05(d) are set forth in the Fee and Pricing Letter, and are hereby incorporated by reference.

Section 3.06 Repurchase. On the Repurchase Date for each Purchased Asset, Seller shall transfer to Buyer the Repurchase Price for such Purchased Asset as of the Repurchase Date, and Buyer shall transfer to Seller such Purchased Asset, whereupon the Transaction with respect to such Purchased Asset shall terminate. Buyer shall be deemed to have simultaneously released its security interest in such Purchased Asset, shall authorize Custodian to release to Seller the Mortgage Loan Documents for such Purchased Asset and, to the extent any UCC financing statement filed against Seller specifically identifies such Purchase Asset, Buyer shall deliver an amendment thereto or termination thereof evidencing the release of such Purchased Asset from Buyer’s security interest therein. Any such transfer or release shall be without recourse to Buyer and without representation or warranty by Buyer, except that Buyer shall represent to Seller, to the extent that good title was transferred and assigned by Seller to Buyer hereunder on the Closing Date, that Buyer is the sole owner of the related Purchased Asset, free and clear of any other interests or Liens created by Buyer. Any Income with respect to such Purchased Asset received by Buyer or Collection Account Bank after payment of the Repurchase Price therefor shall be remitted to Seller. Notwithstanding the foregoing, on or before the Maturity Date, Seller shall repurchase all Purchased Assets by paying to Buyer the outstanding Repurchase Price therefor and all other outstanding Repurchase Obligations.

Section 3.07 Payment of Price Differential and Fees.

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

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recalculate such Price Differential after the Remittance Date and, if necessary, make adjustments to the Price Differential amount due on the following Remittance Date.

(b) Seller shall pay to Buyer all fees and other amounts as and when due as set forth in this Agreement including, without limitation:

(i) the Non-Utilization Fee, which shall be due and payable on a monthly basis on each Remittance Date beginning on the first Remittance Date following the end of the Funding Period, for the time period from the last day of the Funding Period until such First Remittance Date; and

(ii) a ratable portion of the Commitment Fee shall be due and payable on the Purchase Date (and on the date of each Additional Advance under Section 3.03) based on either the Purchase Price of each Purchased Asset or the amount of each related Additional Advance, with the first payment due no earlier than the Closing Date and the final payment due on the last day of the Funding Period, whether or not the aggregate Purchase Price for all Purchased Assets is equal to the Maximum Amount; provided that Buyer shall provide Seller and Guarantor with a one-time dollar for dollar credit in an amount not to exceed the Commitment Fee, to be used solely as a credit against the commitment fee and/or any other up-front fees that would otherwise be due and payable by Seller, Guarantor or any of their Affiliates in connection with either a subsequent increase in the Maximum Amount or a new credit facility to Seller, Guarantor or any of their Affiliates, but only if such an increase or new facility is (a) requested by Seller, (b) approved by Buyer in its sole and absolute discretion and (c) accepted by Seller.

Section 3.08 Payment, Transfer and Custody.

(a) Unless otherwise expressly provided herein, all amounts required to be paid or deposited by Seller hereunder shall be paid or deposited in accordance with the terms hereof no later than 3:00 p.m. on the day when due, in immediately available Dollars and without deduction, setoff or counterclaim, and if not received before such time shall be deemed to be received on the next Business Day. Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next following Business Day, and such extension of time shall in such case be included in the computation of such payment. If Seller fails to pay all or part of any Repurchase Price amount by 5:00 p.m., New York City time on any date when due, Buyer may require Seller to pay (in addition to, and together with, such past-due Repurchase Price) a late fee equal to one percent (1%) of the total amount of the late payment, plus interest on such past-due Repurchase Price as provided in Section 18.16, until all such past-due Repurchase Price is received in full by Buyer. Amounts payable to Buyer and not otherwise required to be deposited into the Collection Account shall be deposited into an account of Buyer. Seller shall have no rights in, rights of withdrawal from, or rights to give notices or instructions regarding Buyer’s account, the Collection Account or the Servicing Agreement Account. Amounts in the Collection Account and/or the Servicing Agreement Account may be invested at the direction and in the discretion of Buyer in cash equivalents before they are distributed in accordance with Article 5.

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(b) Any Mortgage Loan Documents not delivered to Buyer or Custodian are and shall be held in trust by Seller or its agent for the benefit of Buyer as the owner thereof. Seller or its agent shall maintain a copy of the Mortgage Loan Documents and the originals of the Mortgage Loan Documents not delivered to Buyer or Custodian. The possession of Mortgage Loan Documents by Seller or its agent is in a custodial capacity only at the will of Buyer for the sole purpose of assisting Sub-Servicer with its duties under the Sub-Servicing Agreement. Each Mortgage Loan Document retained or held by Seller or its agent shall be segregated on Seller’s books and records from the other assets of Seller or its agent, and the books and records of Seller or its agent shall be marked to reflect clearly the sale of the related Purchased Asset to Buyer on a servicing-released basis. Seller or its agent shall release its custody of the Mortgage Loan Document only in accordance with written instructions from Buyer, unless such release is required as incidental to the sub-servicing of the Purchased Assets by Sub-Servicer or is in connection with a repurchase of any Purchased Asset by Seller, in each case in accordance with the Custodial Agreement.

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

ARTICLE 4

MARGIN MAINTENANCE

Section 4.01 Margin Deficit.

(a) If on any date (i) the Market Value of a Purchased Asset is less than (ii) the product of (A) Buyer’s Margin Percentage multiplied by (B) the outstanding Repurchase Price for such Purchased Asset as of such date (the excess, if any, of (ii) over (i), a “Margin Deficit”), then Seller shall, within three (3) Business Days after notice from Buyer (a “Margin Call”), transfer cash to Buyer in an amount at least equal to such Margin Deficit. Buyer shall

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apply the funds received in satisfaction of a Margin Deficit to the Repurchase Obligations in such manner as Buyer determines in its discretion, to amounts due and owing under the Repurchase Documents on such date. Additional terms and provisions governing Margin Deficits and Margin Calls under this Section 4.01(a) are set forth in the Fee and Pricing Letter, and are hereby incorporated by reference.

(b) Buyer’s election in its discretion not to deliver a Margin Call notice at any time there is a Margin Deficit shall not waive the Margin Deficit or in any way limit or impair Buyer’s right to deliver a Margin Call notice at any time when the same or any other Margin Deficit exists (and the conditions to the delivery of such Margin Call notice under Section 4.01(a) above are satisfied). Buyer’s rights under this Section 4.01 are in addition to and not in lieu of any other rights of Buyer under the Repurchase Documents or Requirements of Law.

(c) All cash transferred to Buyer pursuant to this Section 4.01 with respect to a Purchased Asset shall be deposited into the Collection Account, except as directed by Buyer in its discretion, and notwithstanding any provision in Section 5.02 to the contrary, shall be applied to reduce the Purchase Price of such Purchased Asset.

(d) Additional terms and provisions concerning the Debt Yield Test are set forth in the Fee and Pricing Letter, and are hereby incorporated by reference.

ARTICLE 5

APPLICATION OF INCOME

Section 5.01 Collection Account; Servicing Agreement Account. The Collection Account shall be established at Collection Account Bank and the Servicing Agreement Account shall be established at the Collection Account Bank. Buyer shall have sole dominion and control (including, without limitation, “control” within the meaning of Section 9-104(a) of the UCC) over the Collection Account and the Servicing Agreement Account. Neither Seller nor any Person claiming through or under Seller shall have any claim to or interest in the Collection Account or the Servicing Agreement Account. All Income received by Seller, Buyer or Collection Account Bank in respect of the Purchased Assets, as well as any interest received from the reinvestment of such Income, (other than amounts of reinvestment income permitted to be retained by Servicer as additional servicing compensation in accordance with Section 3.03(e) of the Sub-Servicing Agreement) shall be deposited directly into the Collection Account (in the case of amounts deposited by Servicer, such deposits to the Collection Account shall occur from the Servicing Agreement Account in accordance with Sections 3.04 and 3.12 of the Sub-Servicing Agreement) and shall be applied to and remitted by Collection Account Bank in accordance with this Article 5. Notwithstanding the foregoing, so long as the Sub-Servicing Agreement is in full force and effect and the Manager is acting as Sub-Servicer thereunder, all amounts to be paid or are otherwise received from, or on behalf of, a related Underlying Obligor shall be paid directly to the Servicing Agreement Account and, thereafter, remitted to the Collection Account in accordance with the terms of the Sub-Servicing Agreement.

Section 5.02 Before an Event of Default. If no Event of Default exists, all Income described in Section 5.01 and deposited into the Collection Account during each Pricing

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Period shall be applied by Collection Account Bank by no later than the next following Remittance Date in the following order of priority:

first, to pay all then-currently due and payable servicing fees to Buyer (or its designated Servicer), and to reimburse Buyer (or its designated Servicer) for any and all costs, expenses, advances and similar amounts incurred by Buyer (or its designated Servicer) in connection with the servicing of the Purchased Assets;

second, to the extent such payments are actually remitted by the Underlying Obligor to the Collection Account, to remit the tax (and insurance, if applicable) escrow portion and any tenant improvement, capital expenditure or other reserve portion of any payments received from each Underlying Obligor to the respective escrow agents pursuant to the escrow agreements for the related Mortgage Loan or Underlying Mortgage Loans, and whether or not any event of default exists with respect to the related Mortgage Loan or Underlying Mortgage Loan;

third, to pay to Buyer an amount equal to the Price Differential accrued with respect to all Purchased Assets as of such Remittance Date;

fourth, to pay to Buyer an amount equal to all default interest, late fees, fees, expenses and Indemnified Amounts then due and payable from Seller and other applicable Persons to Buyer under the Repurchase Documents;

fifth, to pay to Buyer an amount sufficient to eliminate any outstanding Margin Deficit (without limiting Seller’s obligation to satisfy a Margin Deficit in a timely manner as required by Section 4.01);

sixth, to pay any custodial fees and expenses due and payable under the Custodial Agreement;

seventh, to pay the Applicable Percentage of any Principal Payments to Buyer, but only to the extent that such remittance would not result in the creation of a Margin Deficit, to be applied to reduce the outstanding Purchase Price of Purchased Assets in such order as Buyer shall determine in its discretion;

eighth, to pay to Buyer any other amounts due and payable from Seller and other applicable Persons to Buyer under the Repurchase Documents;

ninth, to pay to Seller any remainder for its own account, subject, however, to the covenants and other requirements of the Repurchase Documents.

Section 5.03 After an Event of Default. If an Event of Default exists, all Income deposited into the Collection Account in respect of the Purchased Assets shall be applied by Collection Account Bank, on the Business Day next following the Business Day on which each amount of Income is so deposited, in the following order of priority:

first, to pay all then-currently due and payable servicing fees to Buyer (or its designated Servicer), and to reimburse Buyer (or its designated Servicer) for any and all costs,

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expenses, advances and similar amounts incurred by Buyer (or its designated Servicer) in connection with the servicing of the Purchased Assets;

second, to the extent such payments are actually remitted by the Underlying Obligor to the Collection Account, to remit the tax (and insurance, if applicable) escrow portion of any payments received from each Underlying Obligor to the respective escrow agents pursuant to the escrow agreements for the related Mortgage Loan or Underlying Mortgage Loans, and whether or not any event of default exists with respect to the related Mortgage Loan or Underlying Mortgage Loan;

third, to pay to Buyer an amount equal to the Price Differential accrued with respect to all Purchased Assets as of such Remittance Date;

fourth, to pay to Buyer an amount equal to all default interest, late fees, fees, expenses and Indemnified Amounts then due and payable from Seller and other applicable Persons to Buyer under the Repurchase Documents;

fifth, to pay any custodial fees and expenses due and payable under the Custodial Agreement;

sixth, to pay to Buyer an amount equal to the aggregate Repurchase Price of all Purchased Assets (to be applied in such order and in such amounts as determined by Buyer in its discretion, until such Purchase Price has been reduced to zero) plus all other amounts due to Buyer under the Repurchase Documents;

seventh, to pay to Buyer all other Repurchase Obligations due to Buyer; and

eighth, to pay to Seller any remainder for its own account.

Section 5.04 Seller to Remain Liable. If the amounts remitted to Buyer as provided in Sections 5.02 and 5.03 are insufficient to pay all amounts due and payable from Seller to Buyer under this Agreement or any Repurchase Document on a Remittance Date, a Repurchase Date, upon the occurrence of an Event of Default or otherwise, Seller shall nevertheless remain liable for and shall pay to Buyer when due all such amounts.

ARTICLE 6

CONDITIONS PRECEDENT

Section 6.01 Conditions Precedent to Initial Transaction. Buyer shall not be obligated to enter into any Transaction or purchase any Asset until the following conditions have been satisfied in the discretion of Buyer, or waived by Buyer in its discretion, on and as of the Closing Date and the initial Purchase Date:

(a) Buyer has received the following documents, each dated the Closing Date or as of the Closing Date unless otherwise specified: (i) each Repurchase Document duly executed and delivered by the parties thereto, (ii) an official good standing certificate dated a

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recent date with respect to Seller (including in each jurisdiction where any Underlying Mortgaged Property is located to the extent necessary for Buyer to enforce its rights and remedies thereunder), (iii) certificates of the secretary or an assistant secretary of Seller with respect to attached copies of the Governing Documents and applicable resolutions of Seller, and the incumbencies and signatures of officers of Seller executing the Repurchase Documents to which it is a party, evidencing the authority of Seller with respect to the execution, delivery and performance thereof, (iv) a Closing Certificate, (v) an executed power of attorney of Seller in the form of Exhibit O, (vi) such opinions from counsel to Seller as Buyer may require in its discretion, including with respect to corporate matters, perfection of security interests, Investment Company Act of 1940 matters, and the applicability of Bankruptcy Code safe harbors, and (vii) all other documents, certificates, information, financial statements, reports, approvals and opinions of counsel as it may require in its discretion;

(b) (i) UCC financing statements have been filed against Seller in all filing offices required by Buyer, (ii) Buyer has received such searches of UCC filings, tax liens, judgments, pending litigation and other matters relating to Seller and the Purchased Assets as Buyer may require in its discretion, and (iii) the results of such searches are satisfactory to Buyer in its discretion;

(c) Buyer has received payment from Seller of all fees and expenses then payable under this Agreement and the other Repurchase Documents, as contemplated by Section 13.02; and

(d) Buyer has completed to its satisfaction such due diligence and modeling as it may require in its discretion.

Section 6.02 Conditions Precedent to All Transactions. Buyer shall not be obligated to enter into any Transaction, purchase any Asset, or be obligated to take, fulfill or perform any other action hereunder, until the following additional conditions have been satisfied in the discretion of Buyer, or waived by Buyer in its discretion, with respect to each Asset on and as of the Purchase Date therefor:

(a) Buyer has received the following documents: (i) a Transaction Request, (ii) an Underwriting Package, (iii) a Confirmation, (iv) Irrevocable Redirection Notices, (v) a trust receipt and other items required to be delivered under the Custodial Agreement, and (vi) all other documents, certificates, information, financial statements, reports, approvals and opinions of counsel as Buyer may require in its discretion;

(b) immediately before such Transaction and after giving effect thereto and to the intended use thereof, no Representation Breach (including with respect to any Purchased Asset), Default, Event of Default, Margin Deficit or Material Adverse Effect exists;

(c) Buyer has completed its due diligence review of the Underwriting Package, Mortgage Loan Documents and such other documents, records and information as Buyer in its discretion deems appropriate, and the results of such reviews are satisfactory to Buyer in its discretion;

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(d) Buyer has in its discretion (i) determined that such Asset is an Eligible Asset, (ii) approved the purchase of such Asset, (iii) obtained all necessary internal credit and other approvals for such Transaction, and (iv) executed the Confirmation;

(e) the aggregate outstanding Purchase Price of all Transactions does not exceed the Maximum Amount after giving effect to such Transaction;

(f) the Purchase Date is not later than the Closing Date and the Repurchase Date is not later than the Maturity Date;

(g) Seller has satisfied all requirements and conditions and have performed all covenants, duties, obligations and agreements contained in the Repurchase Documents to be performed by Seller on or before the Purchase Date;

(h) to the extent the related Mortgage Loan Documents or Junior Interest Documents contain notice, cure and other provisions in favor of a pledgee under a repurchase or warehouse facility, and without prejudice to the sale treatment of such Asset to Buyer, Buyer has received evidence that Seller has given notice to the applicable Persons of Buyer’s interest in such Asset and otherwise satisfied any other applicable requirements under such pledgee provisions so that Buyer is entitled to the rights and benefits of a pledgee under such pledgee provisions;

(i) (i) Buyer has received a copy of the Initial Interest Rate Protection Agreement and related documents, and (ii) no termination event, default or event of default (however defined) exists thereunder; and

(j) Buyer shall have received blank assignments of all Mortgage Loan Documents in appropriate form for recording in the jurisdiction in which the underlying real estate is located (the “Blank Assignment Documents”).

Each Confirmation delivered by Seller shall constitute a certification by Seller that all of the conditions precedent in this Article 6 have been satisfied, unless any such condition precedent was expressly waived in the related Confirmation.

The failure of Seller to satisfy any of the conditions precedent in this Article 6 with respect to any Transaction or Purchased Asset shall, unless such failure was waived in writing by Buyer in its discretion on or before the related Purchase Date, give rise to the right of Buyer at any time to rescind the related Transaction, whereupon Seller shall immediately pay to Buyer the Repurchase Price of such Purchased Asset.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants, on and as of the date of this Agreement, each Purchase Date, and at all times when any Repurchase Document or Transaction is in full force and effect, except as set forth in Schedule 2, as follows:

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Section 7.01 Seller. Seller has been duly organized and validly exists in good standing as a limited liability company under the laws of the State of Delaware. Seller (a) has all requisite power, authority, legal right, licenses and franchises, (b) is duly qualified to do business in all jurisdictions necessary, and (c) has been duly authorized by all necessary action, to (w) own, lease and operate its properties and assets, (x) conduct its business as presently conducted, (y) execute, deliver and perform its obligations under the Repurchase Documents to which it is a party, and (z) acquire, own, sell, assign, pledge and repurchase the Purchased Assets. Seller’s exact legal name is set forth in the preamble and signature pages of this Agreement. Seller’s location (within the meaning of Article 9 of the UCC), and the office where Seller keeps all records (within the meaning of Article 9 of the UCC) relating to the Purchased Assets is at the address of Seller referred to in Annex 1. Seller has not changed its name or location within the past twelve (12) months. Seller’s organizational identification number is 4786854 and its tax identification number is 27-1869666. Seller is a wholly-owned Subsidiary of Guarantor. The fiscal year of Seller is the calendar year. Seller has no Indebtedness, Contractual Obligations or investments other than (a) ordinary trade payables, (b) in connection with Assets acquired or originated for the Transactions, and (c) the Repurchase Documents. Seller has no Guarantee Obligations.

Section 7.02 Repurchase Documents. Each Repurchase Document to which Seller is a party has been duly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as such enforceability may be limited by Insolvency Laws and general principles of equity. The execution, delivery and performance by Seller of each Repurchase Document to which it is a party do not and will not (a) conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under, any (i) Governing Document, Indebtedness, Guarantee Obligation or Contractual Obligation applicable to Seller or any of its properties or assets, (ii) Requirements of Law, or (iii) approval, consent, judgment, decree, order or demand of any Governmental Authority, or (b) result in the creation of any Lien (other than Permitted Liens) on any of the properties or assets of Seller. All approvals, authorizations, consents, orders, filings, notices or other actions of any Person or Governmental Authority required for the execution, delivery and performance by Seller of the Repurchase Documents to which it is a party and the sale of and grant of a security interest in each Purchased Asset to Buyer, have been obtained, effected, waived or given and are in full force and effect. The execution, delivery and performance of the Repurchase Documents do not require compliance by Seller with any “bulk sales” or similar law. There is no material litigation, proceeding or investigation pending or, to Seller’s Knowledge, threatened, against Seller, Manager, any Intermediate Starwood Entity or Guarantor before any Governmental Authority (a) asserting the invalidity of any Repurchase Document, (b) seeking to prevent the consummation of any Transaction, or (c) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.

Section 7.03 Solvency. None of Seller, Manager, any Intermediate Starwood Entity or Guarantor is or has ever been the subject of an Insolvency Proceeding. Seller, Manager, each Intermediate Starwood Entity and Guarantor are Solvent and the Transactions do not and will not render Seller, Manager, any Intermediate Starwood Entity or Guarantor not Solvent. Seller is not entering into the Repurchase Documents or any Transaction with the intent to hinder, delay or defraud any creditor of Seller, Manager, any Intermediate Starwood Entity or Guarantor. Seller has received or will receive reasonably equivalent value for the Repurchase

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Documents and each Transaction. Seller has adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Seller is generally able to pay, and as of the date hereof is paying, its debts as they come due.

Section 7.04 Taxes. Seller, Manager, each Intermediate Starwood Entity and Guarantor have 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 material taxes (including mortgage recording taxes), assessments, fees, and other governmental charges payable by them, or with respect to any of their properties or assets, which have become due, and income or franchise taxes have been paid or are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. Seller, Manager, each Intermediate Starwood Entity and Guarantor have paid, or have provided adequate reserves for the payment of, all such taxes for all prior fiscal years and for the current fiscal year to date. There is no material action, suit, proceeding, investigation, audit or claim relating to any such taxes now pending or, to Seller’s Knowledge, threatened by any Governmental Authority which is not being contested in good faith as provided above. None of Seller, Manager, any Intermediate Starwood Entity or Guarantor has entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes, or is aware of any circumstances that would cause the taxable years or other taxable periods of Seller, Manager, any Intermediate Starwood Entity or Guarantor not to be subject to the normally applicable statute of limitations. No tax liens have been filed against any assets of Seller, Manager, any Intermediate Starwood Entity or Guarantor. Seller does not intend to treat any Transaction as being a “reportable transaction” as defined in Treasury Regulation Section 1.6011–4. If Seller determines to take any action inconsistent with such intention, it will promptly notify Buyer, in which case Buyer may treat each Transaction as subject to Treasury Regulation Section 301.6112–1 and will maintain the lists and other records required thereunder.

Section 7.05 Financial Condition. The audited balance sheet of Guarantor as at the fiscal year most recently ended for which such audited balance sheet is available, and the related audited statements of income and retained earnings and of cash flows for the fiscal year then ended, setting forth in each case, except for the 2009 calendar year, in comparative form the figures for the previous year, reported on without a “going concern” or like qualification arising out of the audit conducted by Guarantor’s independent certified public accountants, copies of which have been delivered to Buyer, are complete and correct and present fairly the financial condition of Guarantor as of such date and the results of its operations and cash flows for the fiscal year then ended. All such financial statements, including related schedules and notes, were prepared in accordance with GAAP except as disclosed therein. Guarantor does not have any material contingent liability or liability for taxes or any long term lease or unusual forward or long term commitment, including any Derivative Contract, which is not reflected in the foregoing statements or notes. Since the date of the financial statements and other information delivered to Buyer prior to the Closing Date, neither Seller nor Guarantor has sold, transferred or otherwise disposed of any material part of its property or assets (except pursuant to the Repurchase Documents) or, except pursuant to the Purchase Agreement, acquired any property or assets (including Equity Interests of any other Person) that are material in relation to the financial condition of Seller.

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Section 7.06 True and Complete Disclosure. The information, reports, certificates, documents, financial statements, operating statements, forecasts, books, records, files, exhibits and schedules furnished by or on behalf of Seller to Buyer in connection with the Repurchase Documents and the Transactions, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of Seller to Buyer in connection with the Repurchase Documents and the Transactions will be true, correct and complete in all material respects, or in the case of projections will be based on reasonable estimates prepared and presented in good faith, on the date as of which such information is stated or certified.

Section 7.07 Compliance with Laws. Seller has complied in all material respects with all Requirements of Laws, and, to Seller’s Actual Knowledge, no Purchased Asset contravenes any Requirements of Laws. Neither Seller nor any Affiliate of Seller (a) is an “enemy” or an “ally of the enemy” as defined in the Trading with the Enemy Act of 1917, (b) is in violation of any Anti-Terrorism Laws, (c) is a blocked person described in Section 1 of Executive Order 13224 or to its Knowledge engages in any dealings or transactions or is otherwise associated with any such blocked person, (d) is in violation of any country or list based economic and trade sanction administered and enforced by the Office of Foreign Assets Control, (e) is a Sanctioned Entity, (f) has more than 10% of its assets located in Sanctioned Entities, or (g) derives more than 10% of its operating income from investments in or transactions with Sanctioned Entities. The proceeds of any Transaction have not been and will not be used to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Entity. Seller is a “qualified purchaser” as defined in the Investment Company Act of 1940. None of Seller, Manager, any Intermediate Starwood Entity or Guarantor (a) is or is controlled by an “investment company” as defined in such Act or is exempt from the provisions of such Act, (b) is a “broker” or “dealer” as defined in, or could be subject to a liquidation proceeding under, the Securities Investor Protection Act of 1970, or (c) is subject to regulation by any Governmental Authority limiting its ability to incur the Repurchase Obligations. No properties presently or previously owned or leased by Seller, Manager, any Intermediate Starwood Entity or Guarantor, or any of their respective predecessors contain or previously contained any Materials of Environmental Concern which constitute or constituted a violation of Environmental Laws or reasonably could be expected to give rise to liability of Seller, Manager, any Intermediate Starwood Entity or Guarantor thereunder. Seller has no Actual Knowledge of any violation, alleged violation, non-compliance, liability or potential liability of Seller, Manager, any Intermediate Starwood Entity or Guarantor under any Environmental Law. Materials of Environmental Concern have not been released, transported, generated, treated, stored or disposed of in violation of Environmental Laws or in a manner which reasonably could be expected to give rise to liability of Seller, Manager, any Intermediate Starwood Entity or Guarantor thereunder. Seller and all Affiliates of Seller are in compliance with the Foreign Corrupt Practices Act of 1977 and any foreign counterpart thereto. Neither Seller nor any Affiliate of Seller has made, offered, promised or authorized a payment of money or anything else of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to any foreign official, foreign political party, party official or candidate for foreign political office, or (c) with the intent to induce the recipient to misuse his or her official

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position to direct business wrongfully to Seller, any Affiliate of Seller or any other Person, in violation of the Foreign Corrupt Practices Act.

Section 7.08 Compliance with ERISA. With respect to Guarantor, any Intervening Starwood Entity or Seller, during the immediately preceding five (5) year period, (a) neither a Reportable Event nor an “accumulated funding deficiency” as defined in the Code or ERISA has occurred, (b) each Plan has complied in all material respects with the applicable provisions of the Code and ERISA, (c) no termination of a Single Employer Plan has occurred resulting in any liability that has remained underfunded, and (d) no Lien in favor of the Pension Benefit Guaranty Commission or a Plan has arisen. The present value of all accrued benefits under each Single Employer Plan (based on the assumptions used to fund such Plan) relating to Guarantor, any Intervening Starwood Entity or Seller did not, as of the last annual valuation date prior to the date hereof, exceed the value of the assets of such Plan allocable to such accrued benefits. None of Guarantor, any Intervening Starwood Entity or Seller is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan.

Section 7.09 No Default or Material Adverse Effect. No Event of Default and, to Seller’s Knowledge, no Default exists. Seller believes that it is and will be able to pay and perform each agreement, duty, obligation and covenant contained in the Repurchase Documents and Mortgage Loan Documents to which it is a party, and that it is not subject to any agreement, obligation, restriction or Requirements of Law which would unduly burden its ability to do so or could reasonably be expected to have a Material Adverse Effect. Seller has no Knowledge of any actual or prospective development, event or other fact that could reasonably be expected to have a Material Adverse Effect. No Internal Control Event has occurred.

Section 7.10 Purchased Assets. Each Purchased Asset is an Eligible Asset. Each representation and warranty set forth in the Repurchase Documents (including those set forth in Schedules 1(a) and 1(b) applicable to the Class of such Purchased Asset) with respect to each Purchased Asset is true and correct. Seller has delivered to Custodian true, correct and complete copies of the Mortgage Loan Documents and Junior Interest Documents, as applicable, relating to each Purchased Asset. Seller has no Actual Knowledge of any fact which could reasonably lead it to expect that any Purchased Asset will not be paid in full. None of the Mortgage Loan Documents has any marks or notations indicating that it has been sold, assigned, pledged, encumbered or otherwise conveyed to any Person other than Buyer. If any Mortgage Loan Document requires the holder or transferee of the related Purchased Asset to be a qualified transferee, qualified institutional lender or qualified lender (however defined), Seller meets such requirement. Assuming that Buyer also meets such requirement, the assignment and pledge of such Purchased Asset to Buyer pursuant to the Repurchase Documents do not violate such Mortgage Loan Document. Seller and all Affiliates of Seller (a) have sold and transferred all Servicing Rights with respect to the Purchased Assets to Buyer, and (b) have no retained interests.

Section 7.11 Purchased Assets Acquired from Transferors. With respect to each Purchased Asset purchased by Seller from a Transferor, (a) such Purchased Asset was acquired and transferred pursuant to a Purchase Agreement, (b) such Transferor received reasonably equivalent value in consideration for the transfer of such Purchased Asset, (c) no such transfer was made for or on account of an antecedent debt owed by such Transferor to Seller or an

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Affiliate of Seller, (d) no such transfer is or may be voidable or subject to avoidance under the Bankruptcy Code, and (e) the representations and warranties made by such Transferor to Seller or such Affiliate in such Purchase Agreement and set forth on the attached Exhibit Q hereto are hereby incorporated herein by reference and are hereby remade by Seller to Buyer on each date as of which they speak in such Purchase Agreement.

Section 7.12 Transfer and Security Interest. The Repurchase Documents constitute a valid and effective transfer to Buyer of all right, title and interest of Seller in, to and under all Purchased Assets (together with all related Servicing Rights), free and clear of any Liens (other than Permitted Liens). With respect to the protective security interest granted by Seller in Section 11.01, upon the delivery of the Confirmations and the Mortgage Loan Documents to Custodian, the execution and delivery of the Controlled Account Agreements and the filing of the UCC financing statements as provided herein, such security interest shall be a valid first priority perfected security interest to the extent such security interest can be perfected by possession, filing or control under the UCC, subject only to Permitted Liens. Upon receipt by Custodian of each Mortgage Loan Document required to be endorsed in blank by Seller and payment by Buyer of the Purchase Price for the related Purchased Asset, Buyer shall either (a) own such Purchased Asset and the related Mortgage Loan Documents or (b) have a valid first priority perfected security interest in such Purchased Asset and the related Mortgage Loan Documents. At Buyer’s election (and at Buyer’s sole cost and expense, only if completed and recorded by Buyer prior to a Default or Event of Default), Buyer may complete and record any or all of the Blank Assignment Documents as further evidence of Buyer’s ownership interest in the related Purchased Assets. Seller has not authorized the filing of and is not aware of any UCC financing statements filed against Seller as debtor that include the Purchased Assets, other than any financing statement that has been terminated or filed pursuant to this Agreement.

Section 7.13 No Broker. Neither Seller nor any Affiliate of Seller has dealt with any broker, investment banker, agent or other Person, except for Buyer or an Affiliate of Buyer, who may be entitled to any commission or compensation in connection with any Transaction.

Section 7.14 Initial Interest Rate Protection Agreement. (a) Guarantor has entered into the Initial Interest Rate Protection Agreement, (b) such Initial Interest Rate Protection Agreement is in full force and effect, and (c) no termination event, default or event of default (however defined) exists thereunder.

Section 7.15 Separateness. Seller is in compliance with the requirements of Article 9.

Section 7.16 REIT Status. Guarantor has not engaged in any material “prohibited transactions” as defined in Section 857(b)(6)(B)(iii) and (C) of the Code. Guarantor for its current “tax year” (as defined in the Code) is entitled to a dividends paid deduction under the requirements of Section 857 of the Code with respect to any dividends paid by it with respect to each such year for which it claims a deduction in its Form 1120-REIT filed with the United States Internal Revenue Service for such year.

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Section 7.17 Investment Company Act. Neither Seller, any Intermediate Starwood Entity or Guarantor is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the 40 Act.

Section 7.18 Conveyance of Excluded Assets. At the time Seller transferred ownership of the Excluded Assets, such transfer was accomplished through a dividend of such Excluded Assets to Principal in accordance with the organizational documents and requirements of Seller and Principal, and without recourse and without any representation or warranty or continuing obligation or liability to Seller, Manager, any Intermediate Starwood Entity or Guarantor.

ARTICLE 8

COVENANTS OF SELLER

From the date hereof until the Repurchase Obligations are paid in full and the Repurchase Documents are terminated, Seller shall perform and observe the following covenants, which shall be given independent effect.

Section 8.01 Existence; Governing Documents; Conduct of Business. Seller shall (a) preserve and maintain its legal existence, (b) qualify and remain qualified in good standing in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect, (c) comply with its Governing Documents, including all special purpose entity provisions, and (d) not modify, amend or terminate its Governing Documents in any material respect, without Buyer’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. Seller shall (a) continue to engage in the same (and no other) general lines of business as presently conducted by it, (b) maintain and preserve all of its material rights, privileges, licenses and franchises necessary for the operation of its business, and (c) maintain Seller’s status as a qualified transferee, qualified institutional lender or qualified lender (however defined) if and to the extent required under the Mortgage Loan Documents. Seller shall not (a) change its name, organizational number, tax identification number, fiscal year, method of accounting, identity, structure or jurisdiction of organization (or have more than one such jurisdiction), move the location of its principal place of business and chief executive office, as defined in the UCC) from the location referred to in Section 7.01, or (b) move, or consent to Custodian moving, the Mortgage Loan Documents from the location thereof on the Closing Date, unless in each case Seller has given at least thirty (30) days prior notice to Buyer and has taken all actions required under the UCC to continue the first priority perfected security interest of Buyer in the Purchased Assets. Seller shall enter into each Transaction as principal, unless Buyer in its discretion agrees before a Transaction that Seller may enter into such Transaction as agent for a principal and under terms and conditions disclosed to Buyer.

Section 8.02 Compliance with Laws, Contractual Obligations and Repurchase Documents. Seller shall comply in all material respects with all Requirements of Laws, including those relating to any Purchased Asset and to the reporting and payment of taxes. No part of the proceeds of any Transaction shall be used for any purpose that violates Regulation T, U or X of the Board of Governors of the Federal Reserve System. Seller shall conduct the requisite due diligence in connection with the origination or acquisition of each Asset for

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purposes of complying with the Anti–Terrorism Laws, including with respect to the legitimacy of the applicable Underlying Obligor and the origin of the assets used by such Person to purchase the Underlying Mortgaged Property, and will maintain sufficient information to identify such Person for purposes of the Anti–Terrorism Laws. Seller shall maintain the Custodial Agreement and Controlled Account Agreement in full force and effect. Seller shall not directly or indirectly enter into any agreement that would be violated or breached by any Transaction or the performance by Seller of any Repurchase Document.

Section 8.03 Structural Changes. Seller shall not enter into merger or consolidation, or liquidate, wind up or dissolve, or sell all or substantially all of its assets or properties, or permit any changes in the ownership of its Equity Interests which results in a Change of Control of Seller, without the consent of Buyer in its discretion (unless, in any of the foregoing cases, the Repurchase Obligations are paid in full in connection with any such transaction). Seller shall ensure that all direct Equity Interests of Seller shall continue to be owned by the owner or owners thereof as of the date hereof. Seller shall ensure that neither the Equity Interests of Seller nor any property or assets of Seller shall be pledged to any Person other than Buyer. Seller shall not enter into any transaction with an Affiliate of Seller unless such transaction is on market and arm’s-length terms and conditions.

Section 8.04 Protection of Buyer’s Interest in Purchased Assets. With respect to each Purchased Asset, Seller shall take all action necessary or required by the Repurchase Documents, Mortgage Loan Documents or Requirements of Law, or reasonably requested by Buyer, to perfect, protect and more fully evidence Buyer’s ownership of and first priority perfected security interest in such Purchased Asset and related Mortgage Loan Documents, including executing or causing to be executed such other instruments or notices as may be necessary or appropriate and filing and maintaining effective UCC financing statements, continuation statements and assignments and amendments thereto. Seller shall comply with all requirements of the Custodial Agreement with respect to each Purchased Asset, including the delivery to Custodian of all required Mortgage Loan Documents. Seller shall (a) not assign, sell, transfer, pledge, hypothecate, grant, create, incur, assume or suffer or permit to exist any security interest in or Lien (other than Permitted Liens) on any Purchased Asset to or in favor of any Person other than Buyer, (b) defend such Purchased Asset against, and take such action as is necessary to remove, any such Lien, and (c) defend the right, title and interest of Buyer in and to all Purchased Assets against the claims and demands of all Persons whomsoever. Notwithstanding the foregoing, if Seller grants a Lien on any Purchased Asset in violation of this Section 8.04 or any other Repurchase Document, Seller shall be deemed to have simultaneously granted an equal and ratable Lien on such Purchased Asset in favor of Buyer to the extent such Lien has not already been granted to Buyer; provided, that such equal and ratable Lien shall not cure any resulting Default or Event of Default. Seller shall not materially amend, modify, waive or terminate any provision of the Purchase Agreement or the Sub-Servicing Agreement. Seller shall mark its computer records and tapes to evidence the interests granted to Buyer hereunder. Seller shall not take any action to cause any Purchased Asset that is not evidenced by an instrument or chattel paper (as defined in the UCC) to be so evidenced. If a Purchased Asset becomes evidenced by an instrument or chattel paper, the same shall be immediately delivered to Custodian on behalf of Buyer, together with endorsements required by Buyer in its discretion.

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Section 8.05 Actions of Seller Relating to Distributions, Indebtedness, Guarantee Obligations, Contractual Obligations, Investments and Liens. At any time after the occurrence and during the continuance of any Default under Sections 10.01(a) or 10.01(f), any Event of Default or any breach of the Debt Yield Test, Seller shall not declare or make any payment on account of, or set apart assets for, a sinking or similar fund for the purchase, redemption, defeasance, retirement or other acquisition of any Equity Interest of Seller, Manager, any Intermediate Starwood Entity or Guarantor, 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, Manager, any Intermediate Starwood Entity or Guarantor. Seller shall not contract, create, incur, assume or permit to exist any Indebtedness, Guarantee Obligations, Contractual Obligations or Investments, except to the extent (a) arising or existing under the Repurchase Documents, (b) existing as of the Closing Date, as referenced in the financial statements delivered to Buyer prior to the Closing Date, and any renewals, refinancings or extensions thereof in a principal amount not exceeding that outstanding as of the date of such renewal, refinancing or extension, (c) incurred after the Closing Date to originate or acquire Assets or to provide funding with respect to Assets, (d) pursuant to the Initial Interest Rate Protection Agreement entered into in order to manage risks related to Assets, and (e) unsecured trade payables and personal property leases and financings incurred in the ordinary course of business, so long as the maximum outstanding amount of all liabilities described in this clause (e) shall at no time exceed an amount equal to three hundred thousand dollars ($300,000). Seller shall not (a) contract, create, incur, assume or permit to exist any Lien on or with respect to any of its property or assets (including the Purchased Assets) of any kind (whether real or personal, tangible or intangible), whether now owned or hereafter acquired, except for Permitted Liens, or (b) except as provided in the preceding clause (a), grant, allow or enter into any agreement or arrangement with any Person that prohibits or restricts or purports to prohibit or restrict the granting of any Lien on any of the foregoing.

Section 8.06 Maintenance Records. Seller shall keep and maintain all documents, books, records and other information (including with respect to the Purchased Assets) that are reasonably necessary or advisable in the conduct of its business.

Section 8.07 Financial Covenants.

(a) Seller shall comply with the Debt Yield Test at all times. Buyer shall have the right, in its discretion, to test for compliance with the Debt Yield Test for any calendar quarter, which may be tested at such times as Buyer determines, and any failure of Buyer to do so as of any particular date shall not constitute a waiver of Buyer’s right to do so at any time thereafter. Buyer agrees that in the event that it declares a Debt Yield Test compliance breach and Seller pays any and all amounts payable in full with respect to such compliance breach in accordance with Section 4.01(d), the Buyer shall not declare an additional Debt Yield Test compliance breach with respect to the calendar quarter that was the subject of the cured compliance breach; provided that this sentence shall not prevent Buyer from making any declaration of any other Event of Default hereunder and shall not act to prevent Buyer from declaring a breach of the Debt Yield Test at any other time.

(b) Seller shall not permit its Net Income during any fiscal year to be less than zero.

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Section 8.08 Delivery of Income. Seller shall, and pursuant to Irrevocable Redirection Notices shall cause the Underlying Obligors under the Purchased Assets and all other applicable Persons to, deposit all Income in respect of the Purchased Assets into the Servicing Agreement Account or the Collection Account in accordance with Section 5.01 hereof on the day the related payments are due. Seller, Servicer and Sub-Servicer (a) shall comply with and enforce each Irrevocable Redirection Notice, (b) shall not amend, modify, waive, terminate or revoke any Irrevocable Redirection Notice without Buyer’s consent in its discretion, and (c) shall take all reasonable steps to enforce each Irrevocable Redirection Notice. In connection with each principal payment or prepayment under a Purchased Asset, Seller shall provide or cause to be provided to Buyer and Custodian sufficient detail to enable Buyer and Custodian to identify the Purchased Asset to which such payment applies. If Seller receives any rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any Purchased Assets, or otherwise in respect thereof, Seller shall accept the same as Buyer’s agent, hold the same in trust for Buyer and immediately deliver the same to Buyer or its designee in the exact form received, together with duly executed instruments of transfer, stock powers or assignment in blank and such other documentation as Buyer shall reasonably request. If any Income is received by Seller or any Affiliate of Seller, Seller shall pay or deliver such Income to Buyer on behalf of Buyer within two (2) Business Days after receipt, and, until so paid or delivered, hold such Income in trust for Buyer, segregated from other funds of Seller.

Section 8.09 Delivery of Financial Statements and Other Information. Seller shall deliver the following to Buyer, as soon as available and in any event within the time periods specified:

(a) within forty-five (45) days after the end of each fiscal quarter and each fiscal year of Guarantor, (i) the unaudited balance sheets of Guarantor as at the end of such period, (ii) the related unaudited statements of income, retained earnings and cash flows for such period and the portion of the fiscal year through the end of such period, setting forth in each case in comparative form the figures for the previous year, and (iii) a Compliance Certificate;

(b) within ninety (90) days after the end of each fiscal year of Guarantor, (i) the audited balance sheets of Guarantor as at the end of such fiscal year, (ii) the related statements of income, retained earnings and cash flows for such year, setting forth in each case in comparative form the figures for the previous year, (iii) an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall not be qualified as to scope of audit or going concern and shall state that said financial statements fairly present the financial condition and results of operations of Guarantor as at the end of and for such fiscal year in accordance with GAAP, (iv) a projections of Guarantor of the operating budget and cash flow budget of Guarantor for the following fiscal year, to the extent such is prepared and (v) a Compliance Certificate;

(c) all reports submitted to Guarantor by independent certified public accountants in connection with each annual, interim or special audit of the books and records of Guarantor made by such accountants, including any management letter commenting on Guarantor’s internal controls;

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(d) with respect to each Purchased Asset and related Underlying Mortgaged Property, on or before each Remittance Date, all remittance, servicing, securitization, exception and other reports, if any, and all operating and financial statements and rent rolls of all Underlying Obligors for all Mortgaged Properties during the prior month, when and as received from Sub-Servicer, an Underlying Obligor, a third-party servicer or from any other source;

(e) all financial statements, reports, notices and other documents that Guarantor sends to holders of its Equity Interests or makes to or files with any Governmental Authority, promptly after the delivery or filing thereof;

(f) any other material agreements, correspondence, documents or other information not included in the Underwriting Package on the Closing Date, which is related to Seller or the Purchased Assets, as soon as possible after the discovery thereof by Seller, any Intermediate Starwood Entity or Guarantor; and

(g) such other information regarding the financial condition, operations or business of Seller, Guarantor or any Underlying Obligor as Buyer may reasonably request including, without limitation, any such information which is otherwise necessary to allow Buyer to monitor compliance with the terms of the Repurchase Documents.

Section 8.10 Delivery of Notices. Seller shall promptly (and in no event later than one (1) Business Day from the date of each such occurrence) notify Buyer of the occurrence of any of the following of which Seller has Knowledge, together with a certificate of a Responsible Officer of Seller setting forth details of such occurrence and any action Seller has taken or proposes to take with respect thereto:

(a) a Representation Breach;

(b) any of the following: (i) with respect to any Purchased Asset or related Underlying Mortgaged Property: material change in Market Value, material loss or damage, material licensing or permit issues, violation of Requirements of Law, discharge of or damage from Material of Environmental Concern or any other actual or expected event or change in circumstances that could reasonably be expected to result in a default or material decline in value or cash flow, and (ii) with respect to Seller: violation of Requirements of Law, material decline in the value of Seller’s assets or properties, an Internal Control Event or other event or circumstance that could reasonably be expected to have a Material Adverse Effect;

(c) the existence of any Default, Event of Default or material default under or related to a Purchased Asset, Mortgage Loan Document, Indebtedness, Guarantee Obligation or Contractual Obligation of Seller;

(d) the resignation or termination of Sub-Servicer under the Sub-Servicing Agreement;

(e) the establishment of a rating by any Rating Agency applicable to Seller, Guarantor, Manager or any Intermediate Starwood Entity, and any downgrade in or withdrawal of such rating once established;

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(f) the commencement of, settlement of or material judgment in any litigation, action, suit, arbitration, investigation or other legal or arbitrable proceedings before any Governmental Authority that (i) affects Seller, Guarantor, any Purchased Asset or any Underlying Mortgaged Property, (ii) questions or challenges the validity or enforceability of any Repurchase Document, Transaction, Purchased Asset or Mortgage Loan Document, or (iii) individually or in the aggregate, if adversely determined, could reasonably be likely to have a Material Adverse Effect; and

(g) promptly upon Knowledge thereof, notice of any change in Guarantor’s status as a REIT.

Section 8.11 Hedging. The terms and provisions governing Hedging under this Section 8.11 are set forth in the Fee and Pricing Letter, and are hereby incorporated by reference.

Section 8.12 Escrow Imbalance. Seller shall, no later than ten (10) Business Days after learning of any material overdraw, deficit or imbalance in any escrow or reserve account relating to a Purchased Asset, use reasonable efforts to cause the applicable Underlying Obligor to correct and eliminate the same, including by depositing funds into such account.

Section 8.13 Guarantee Agreement. If at any time (a) the obligations of any Guarantor under the Guarantee Agreement shall cease to be in effect, (b) any Insolvency Event has occurred with respect to Guarantor, or (c) any violation of any provision set forth in Section 9 of the Guarantee Agreement should occur and be continuing (any of the foregoing events, a “Guarantee Default”), then, within sixty (60) days after the occurrence of any such Guarantee Default, Seller shall cause a replacement guarantor acceptable to Buyer in its discretion to assume in writing all obligations of Guarantor under the Guarantee Agreement or become a Guarantor, as Buyer deems necessary in its discretion to correct such Guarantee Default.

Section 8.14 Management Internalization. Seller shall not permit Guarantor to internalize its management without Buyer’s prior written approval, which shall not be unreasonably withheld.

Section 8.15 REIT Status. Guarantor shall at all times continue to be (i) qualified as a REIT as defined in Section 856 of the Code without giving any effect to any cure or corrective periods or allowances, (ii) entitled to a dividends paid deduction under Section 857 of the Code with respect to dividends paid by it with respect to each taxable year for which it claims a deduction on its Form 1120 REIT filed with the United States Internal Revenue Service for such year, or the entering into by it of any material “prohibited transactions” as defined in Sections 857(b) and 856(c) of the Code, and (iii) a publicly traded company listed, quoted or traded on and in good standing in respect of any Stock Exchange.

Section 8.16 Certain Post-Closing Obligations.Section 8.17 Each of the following post-closing conditions must be satisfied on or before the dates specified therein, as determined by Buyer in its sole discretion:

(a) On or before May 31, 2010, for all of the accounts described in Section 17.02 which are maintained in connection with the Purchased Assets described on Exhibit R hereto, Seller shall use all reasonable, good faith best efforts to cause the Underlying

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Obligors to enter into the contractual arrangements with Buyer and Seller that are necessary in order to create a perfected security interest in favor of Seller (for the joint benefit of both Seller and Buyer) in all such accounts, including, without limitation, an Account Control Agreement in form and substance reasonably acceptable to Buyer in its sole discretion.

(b) On or before April 2, 2010, Seller shall provide Buyer with evidence of the delivery of executed copies of irrevocable direction notices, each in form and substance acceptable to Buyer in its discretion, to all depository institutions that maintain escrow accounts in connection with any Purchased Assets. On or before April 30, 2010, Seller shall provide Buyer with copies of all such irrevocable direction notices, countersigned by the related Mortgagors and the related depository institutions.

(c) On or before May 2, 2010, Seller shall resolve, to Buyer’s satisfaction determined in its discretion, all of the open items listed on the Custodian’s exception report, a copy of which is attached hereto as Exhibit 8.16(c), which evidence shall include, without limitation, (a) for all unrecorded documents, the delivery to Buyer of either recorded copies or evidence that they have been delivered for recording, and (b) for all newly filed UCC-1 financing statements, the delivery to Buyer of recorded copies of the same, together with currently dated and clean copies of new UCC searches at all related filing locations.

(d) On or before April 30, 2010, Seller shall provide Buyer with evidence reasonably acceptable to Buyer that insurance coverage reasonably acceptable to Buyer is currently in full force and effect in connection with the Underlying Mortgage Loan commonly known as Constellation Place.

(e) On or before April 30, 2010, Seller shall provide Buyer with (i) a re-issued original copy of the existing $5,000,000 Letter of Credit, originally issued by U.S. Bank, National Association in connection with the Whole Loans commonly known as the Lifetime Fitness loans, naming Seller as sole beneficiary and containing a written acknowledgement from the issuing bank of Buyer’s security interest therein, and (ii) issued original copies of the two (2) existing Letters of Credit in the aggregate face amount of $2,960,313.66, originally issued by Citibank, N.A., as re-issued by Wells Fargo Bank, National Association in connection with the Whole Loans commonly known as the 301 Carlson Parkway Loan and the 401 Carlson Parkway Loan, respectively in the face amounts of $550,198.57 and $531,384.75, naming Seller as sole beneficiary and containing written acknowledgements from the issuing bank of Buyer’s security interests therein.

(f) On or before 5:00 PM on April 2, 2010, Seller shall deliver a fully executed, currently dated and properly completed Compliance Certificate to Buyer.

ARTICLE 9

SINGLE-PURPOSE ENTITY

Section 9.01 Covenants Applicable to Seller. Seller shall (a) own, and, other than the Excluded Assets, has owned no assets, and shall not engage in any business, other than the assets and transactions specifically contemplated by this Agreement and any other

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Repurchase Document, (b) not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) with respect to the Mortgage Loan Documents and the Retained Interests, (ii) commitments to make loans which may become Eligible Assets, and (iii) as otherwise permitted under this Agreement, (c) not make any loans or advances to any Affiliate or third party and shall not acquire obligations or securities of its Affiliates, in each case other than in connection with the origination or acquisition of Assets for purchase under the Repurchase Documents, (d) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets, (e) comply with the provisions of its Governing Documents, (f) do all things necessary to observe organizational formalities and to preserve its existence, and shall not amend, modify, waive provisions of or otherwise change its Governing Documents in any material respect without the prior written approval of Buyer, (g) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates (except that such financial statements may be consolidated to the extent consolidation is required under GAAP or as a matter of Requirements of Law; provided, that (i) appropriate notation shall be made on such financial statements to indicate the separateness of Seller from such Affiliate and to indicate that Seller’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (ii) such assets shall also be listed on Seller’s own separate balance sheet) and file its own tax returns (except to the extent consolidation is required or permitted under Requirements of Law), (h) be, and at all times shall hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other, (i) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall remain Solvent, (j) not engage in or suffer any change of Control, dissolution, winding up, liquidation, consolidation or merger in whole or in part or convey or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein), (k) not commingle its funds or other assets with those of any Affiliate or any other Person and shall maintain its properties and assets in such a manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others, (l) maintain its properties, assets and accounts separate from those of any Affiliate or any other Person, (m) not hold itself out to be responsible for the debts or obligations of any other Person, (n) not, without the prior unanimous written consent of all of its Independent Directors, take any Insolvency Action, (o) (i) have at all times at least one Independent Director, or such greater number if necessary to comply with customary industry standards then-currently applicable to bankruptcy remote entities, and (ii) provide Buyer with up-to-date contact information for all Independent Director(s) and a copy of the agreement pursuant to which each Independent Director consents to and serves as an “Independent Director” for Seller, (p) the Governing Documents for Seller shall provide (i) that Buyer be given at least two (2) Business Days prior notice of the removal and/or replacement of the Independent Director, together with the name and contact information of the replacement Independent Director and evidence of the replacement’s satisfaction of the definition of Independent Director and (ii) that the Independent Director of Seller shall not have any fiduciary duty to anyone including the holders of the Equity Interest in Seller and any Affiliates of Seller except Seller and the creditors of Seller with respect to taking of, or otherwise voting on, the Insolvency Action; provided, that the foregoing shall not

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eliminate the implied contractual covenant of good faith and fair dealing, (q) not enter into any transaction with an Affiliate of Seller except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction, (r) maintain a sufficient number of employees in light of contemplated business operations, (s) use separate stationary, invoices and checks bearing its own name, and (t) allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an affiliate, and (u) not pledge its assets to secure the obligations of any other Person, and (v) not form, acquire or hold any Subsidiary or own any Equity Interest in any other entity.

Section 9.02 Additional Covenants Applicable to Seller. (a) Seller (i) shall be a Delaware limited liability company, (ii) shall have at least one Independent Director or Independent Manager serving as manager of such company, (iii) shall not take any Insolvency Action and shall not cause or permit the members or managers of such entity to take any Insolvency Action, either with respect to itself or, if the company is a Principal, with respect to Seller, in each case unless all of its Independent Directors or Independent Managers then serving as managers of the company shall have consented in writing to such action, and (iv) shall have either (A) a member which owns no economic interest in the company, has signed the company’s limited liability company agreement and has no obligation to make capital contributions to the company, or (B) two natural persons or one entity that is not a member of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company agreement becomes a member of the company immediately prior to the resignation or dissolution of the last remaining member of the company.

ARTICLE 10

EVENTS OF DEFAULT AND REMEDIES

Section 10.01 Events of Default. Each of the following events shall be an “Event of Default”:

(a) Seller fails to make a payment of (i) Repurchase Price (other than Price Differential) when due, whether by acceleration or otherwise, (ii) Price Differential when due, or (iii) any other amount (including all unpaid Margin Deficits) when due, in each case under the Repurchase Documents;

(b) Seller fails to observe or perform in any material respect any other Repurchase Obligation of Seller under the Repurchase Documents or the Mortgage Loan Documents to which Seller is a party, and (except in the case of a failure to perform or observe the Repurchase Obligations of Seller under Section 8.04 and 18.08(a)) such failure continues unremedied for five (5) Business Days after the earlier of receipt of notice thereof from Buyer or the discovery of such failure by Seller (or such longer period as agreed to by Buyer in its discretion, not to exceed fifteen (15) days from the date of the underlying breach, but only if such underlying breach is capable of being cured and so long as Seller diligently and continuously takes all actions necessary to cure such underlying breach);

(c) any Representation Breach (other than a breach of any of the representations and warranties set forth on Schedules 1(a) and 1(b) hereto, which will not, in and

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of themselves, be Events of Default) exists and continues unremedied for ten (10) Business Days after the earlier of receipt of notice thereof from Buyer or the discovery of such Representation Breach by Seller;

(d) Seller or Guarantor defaults beyond any applicable grace period in paying any amount or performing any obligation under any Indebtedness, Guarantee Obligation or Contractual Obligation with an outstanding amount of at least $100,000 with respect to Seller, or $25,000,000 with respect to Guarantor, and the effect of such default is to permit the acceleration thereof (regardless of whether such default is waived or such acceleration occurs);

(e) Seller or Guarantor defaults beyond any applicable grace period in paying any amount or performing any obligation due to Buyer or any Affiliate of Buyer under any other financing, hedging, security or other agreement between Seller or Guarantor and Buyer or any Affiliate of Buyer;

(f) an Insolvency Event occurs with respect to Seller, any Intermediate Starwood Entity or Guarantor;

(g) a Change of Control occurs with respect to Seller, Manager, any Intermediate Starwood Entity or Guarantor, without the prior written consent of Buyer, not to be unreasonably withheld;

(h) a final judgment or judgments for the payment of money in excess of $100,000 with respect to Seller, or $25,000,000 with respect to Guarantor, in each case in the aggregate and in each case that is not insured against is entered against Seller or Guarantor by one or more Governmental Authorities and the same is not satisfied, discharged (or provision has not been made for such discharge) or bonded, or a stay of execution thereof has not been procured, within thirty (30) days from the date of entry thereof;

(i) a 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 Repurchase Documents;

(j) Seller, any Intermediate Starwood Entity or Guarantor admits in writing that it is not Solvent or is not able to perform any of its Repurchase Obligations, Contractual Obligations, Guarantee Obligations, Capital Lease Obligations or Off-Balance Sheet Obligations;

(k) any provision of the Repurchase 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 Repurchase Documents or Purchased Assets 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 other Person, in each case directly, indirectly, in whole or in part, except that, Seller have a period of three (3) Business Days from the date of each such violation

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to either repurchase the related Purchased Asset from Buyer pursuant to Section 3.05 or cure the related breach, as such cure is determined by Buyer in its discretion;

(l) Buyer ceases for any reason to have a valid and perfected first priority security interest in any Purchased Asset except that, Seller have a period of three (3) Business Days from the date of each such violation to cure the related breach, as such cure is determined by Buyer in its discretion;

(m) Seller, any Intermediate Starwood Entity or Guarantor is required to register as an “investment company” (as defined in the 40 Act) or the arrangements contemplated by the Repurchase Documents shall require registration of Seller, Manager, any Intermediate Starwood Entity or Guarantor as an “investment company”;

(n) Seller engages in any conduct or action where Buyer’s prior consent is required by any Repurchase Document and Seller fails to obtain such consent;

(o) Seller, Sub-Servicer, Guarantor, Manager, any Intermediate Starwood Entity or any other Person or, due to the action or inaction of any of the foregoing, (but not merely as a result of the unprompted failure by any Underlying Obligor to make a payment under a Purchased Asset) any Underlying Obligor or any other Person fails to deposit to the Servicing Agreement Account or the Collection Account all Income and other amounts as required by Section 5.01 and other provisions of this Agreement within two (2) Business Days of when due;

(p) Guarantor’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein are qualified or limited by reference to the status of Guarantor as a “going concern” or a reference of similar import, other than a qualification or limitation expressly related to Buyer’s rights in the Purchased Assets;

(q) Guarantor fails (i) to qualify as a REIT (without giving any effect to any cure or corrective periods or allowances), or (ii) to continue to be entitled to a dividend paid deduction under Section 857 of the Code with respect to dividends paid by it with respect to each taxable year for which it claims a deduction on its Form 1120- REIT filed with the United States Internal Revenue Service for such year, or the entering into by Guarantor of “prohibited transactions” as defined in Sections 857(b)(6)(B)(iii) of the Code (taking into account Sections 857(b)(6)(C), 857(b)(6)(D) and 857(b)(6)(E) of the Code) or (iii) to satisfy any of the income or asset tests required to be satisfied by a REIT;

(r) Guarantor breaches any of the obligations, terms or conditions set forth in the Guarantee Agreement and such breach remains uncured for at least three (3) Business Days; or

(s) Any Material Modification is made to any Purchased Asset or any Mortgage Loan Document without the prior written consent of Buyer.

Section 10.02 Remedies of Buyer as Owner of the Purchased Assets. If an Event of Default exists, at the option of Buyer, exercised by notice to Seller (which option shall be deemed to be exercised, even if no notice is given, automatically and immediately upon the occurrence of an Event of Default under Section 10.01(f)), the Repurchase Date for all Purchased

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Assets shall be deemed automatically and immediately to occur (the date on which such option is exercised or deemed to be exercised, the “Accelerated Repurchase Date”). If Buyer exercises or is deemed to have exercised the foregoing option:

(a) All Repurchase Obligations shall become immediately due and payable on and as of the Accelerated Repurchase Date.

(b) All amounts in the Collection Account and/or the Servicing Agreement Account and all Income paid after the Accelerated Repurchase Date shall be retained by Buyer and applied in accordance with Article 5.

(c) Buyer may complete any assignments, allonges, endorsements, powers or other documents or instruments executed in blank and otherwise obtain physical possession of all Mortgage Loan Documents and other instruments, certificates and documents then held by Custodian under the Custodial Agreement. Buyer may obtain physical possession of all Servicing Files, Servicing Agreements and other files and records of Seller, Servicer or Sub-Servicer. Seller shall deliver to Buyer such assignments and other documents with respect thereto as Buyer shall request.

(d) Buyer may in its discretion immediately, at any time and from time to time, exercise either of the following remedies with respect to any or all of the Purchased Assets: (i)  sell such Purchased Assets on a servicing-released basis in a recognized market and by means of a public or private sale at such price or prices as Buyer accepts in its discretion, and apply the net proceeds thereof in accordance with Article 5, or (ii) retain such Purchased Assets and give Seller credit against the Repurchase Price for such Purchased Assets (or if the amount of such credit exceeds the Repurchase Price for such Purchased Assets, to other Repurchase Obligations due and any other amounts then owing to Buyer by any other Person pursuant to any Repurchase Document, in such order and in such amounts as determined by Buyer in its discretion), in an amount equal to the market value of such Purchased Assets. Until such time as Buyer exercises either such remedy with respect to a Purchased Asset, Buyer may hold such Purchased Asset for its own account and retain all Income with respect thereto.

(e) The Parties agree that the Purchased Assets are of such a nature that they may decline rapidly in value, and may not have a ready or liquid market. Accordingly, Buyer shall not be required to sell more than one Purchased Asset on a particular Business Day, to the same purchaser or in the same manner. Buyer may determine in its discretion whether, when and in what manner a Purchased Asset shall be sold, it being agreed that both a good faith public and a good faith private sale shall be deemed to be commercially reasonable. Except as expressly required herein or in the other Repurchase 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. If no prior notice is given, Buyer shall give notice to Seller of the remedies exercised by Buyer promptly thereafter. Buyer shall act in good faith in exercising its rights and remedies under this Article 10.

(f) Seller shall be liable to Buyer for (i) any amount by which the Repurchase Obligations due to Buyer exceed the aggregate of the net proceeds and credits referred to in the preceding clause (d), (ii) the amount of all actual out-of-pocket expenses, including reasonable

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legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (iii) any costs and losses payable under Section 12.03, and (iv) any other actual loss, damage, cost or expense resulting from the occurrence of an Event of Default.

(g) Buyer shall be entitled to an injunction, an order of specific performance or other equitable relief to compel Seller to fulfill any of its obligations as set forth in the Repurchase Documents, including this Article 10, if Seller fails or refuses to perform its obligations as set forth herein or therein.

(h) Seller hereby appoints Buyer as attorney-in-fact of Seller for purposes of carrying out the Repurchase Documents, including executing, endorsing and recording any instruments or documents and taking any other actions that Buyer deems necessary or advisable to accomplish such purposes, which appointment is coupled with an interest and is irrevocable.

(i) Buyer may, without prior notice to Seller, exercise any or all of its set-off rights including those set forth in Section 18.17. This Section 10.02(i) shall be without prejudice and in addition to any right of set-off, combination of accounts, Lien or other rights to which any Party is at any time otherwise entitled.

(j) All rights and remedies of Buyer under the Repurchase Documents, including those set forth in Section 18.17, are cumulative and not exclusive of any other rights or remedies which Buyer may have and may be exercised at any time when an Event of Default exists. Such rights and remedies may be enforced without prior judicial process or hearing. Seller agrees that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s-length. Seller hereby expressly waives any defenses Seller might have to require Buyer to enforce its rights by judicial process or otherwise arising from the use of nonjudicial process, disposition of any or all of the Purchased Assets, or any other election of remedies.

ARTICLE 11

SECURITY INTEREST

Section 11.01 Grant. Buyer and Seller intend that all Transactions shall be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, to preserve and protect Buyer’s rights with respect to the Purchased Assets and under the Repurchase Documents in the event that any Governmental Authority recharacterizes the Transactions as other than sales, and as security for Seller’s performance of the Repurchase Obligations, Seller hereby grants to Buyer a Lien on and security interest in all of the right, title and interest of Seller in, to and under the Purchased Assets (which for this purpose shall be deemed to include the items described in the proviso in the definition thereof), and the transfers of the Purchased Assets to Buyer shall be deemed to constitute and confirm such grant, to secure the payment and performance of the Repurchase Obligations (including the obligation of Seller to pay the Repurchase Price, or if the Transactions are recharacterized as loans, to repay such loans for the Repurchase Price).

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Section 11.02 Effect of Grant. If any circumstance described in Section 11.01 occurs, (a) this Agreement shall also be deemed to be a security agreement as defined in the UCC, (b) Buyer shall have all of the rights and remedies provided to a secured party by Requirements of Law (including the rights and remedies of a secured party under the UCC and the right to set off any mutual debt and claim) and under any other agreement between Buyer and Seller, (c) 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 the Repurchase Obligations, without prejudice to Buyer’s right to recover any deficiency, (d) the possession by Buyer or any of its agents, including Custodian, of the Mortgage Loan Documents, the Purchased Assets and such other items of property as constitute instruments, money, negotiable documents, securities or chattel paper shall be deemed to be possession by the secured party for purposes of perfecting such security interest under the UCC and Requirements of Law, and (e) notifications to Persons (other than Buyer) holding such property, and acknowledgments, receipts or confirmations from Persons (other than Buyer) holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, securities intermediaries, bailees or agents (as applicable) of the secured party for the purpose of perfecting such security interest under the UCC and Requirements of Law. The security interest of Buyer granted herein shall be, and Seller hereby represents and warrants to Buyer that it is, a first priority perfected security interest. For the avoidance of doubt, (i) each Purchased Asset secures the Repurchase Obligations of Seller with respect to all other Transactions and all other Purchased Assets, including any Purchased Assets that are junior in priority to the Purchased Asset in question, and (B) if an Event of Default exists, no Purchased Asset will be released from Buyer’s Lien or transferred to Seller until the Repurchase Obligations are indefeasibly paid in full provided, however, notwithstanding the foregoing, Buyer shall be required to release its Lien on any Purchased Asset in the event of a repayment in full by the underlying borrower of any Mortgage Loan or Junior Interest and Seller’s payment of the Repurchase Price with respect to such Purchased Asset in accordance with Section 3.05. Notwithstanding the foregoing, the Repurchase Obligations shall be full recourse to Seller.

Section 11.03 Seller to Remain Liable. The parties agree that the grant of a security interest under this Article 11 shall not constitute or result in the creation or assumption by Buyer of any Retained Interest or other obligation of Seller or any other Person in connection with any Purchased Asset, whether or not Buyer exercises any right with respect thereto. Seller shall remain liable under the Purchased Assets and Mortgage Loan Documents to perform all of Seller’s duties and obligations thereunder to the same extent as if the Repurchase Documents had not been executed.

Section 11.04 Waiver of Certain Laws. Seller agrees, to the extent permitted by Requirements of Law, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where any Purchased Assets may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the Purchased Assets, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and Seller, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws and any and all right to have any of the properties or assets constituting the Purchased Assets marshaled upon any such sale, and agrees that Buyer or any court having

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jurisdiction to foreclose the security interests granted in this Agreement may sell the Purchased Assets as an entirety or in such parcels as Buyer or such court may determine.

ARTICLE 12

INCREASED COSTS; CAPITAL ADEQUACY

Section 12.01 Market Disruption. If prior to any Pricing Period, Buyer determines that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Pricing Period, Buyer shall give prompt notice thereof to Seller, whereupon the Pricing Rate for such Pricing Period, and for all subsequent Pricing Periods until such notice has been withdrawn by Buyer, shall be the Alternative Rate.

Section 12.02 Illegality. If the adoption of or any change in any Requirements of Law or in the interpretation or application thereof after the date hereof shall make it unlawful for Buyer to effect or continue Transactions as contemplated by the Repurchase Documents, (a) any commitment of Buyer hereunder to enter into new Transactions shall be terminated and the Funding Expiration Date shall be deemed to have occurred, (b) the Pricing Rate shall be converted automatically to the Alternative Rate on the last day of the then current Pricing Period or within such earlier period as may be required by Requirements of Law, and (c) if required by such adoption or change, the Maturity Date shall be deemed to have occurred.

Section 12.03 Breakfunding. Seller shall indemnify Buyer and hold Buyer harmless from any loss, cost or expense (including legal fees and expenses) which Buyer may sustain or incur arising from (a) the failure by Seller to terminate any Transaction after Seller has given a notice of termination pursuant to Section 3.05, (b) any payment to Buyer on account of the outstanding Repurchase Price, including a payment made pursuant to Section 3.05 but excluding a payment made pursuant to Section 5.02, on any day other than a Remittance Date (based on the assumption that Buyer funded its commitment with respect to the Transaction in the London Interbank Eurodollar market and using any reasonable attribution or averaging methods which Buyer deems appropriate and practical) (upon request, Buyer shall provide Seller with notice of the underlying calculation methodology), (c) any failure by Seller to sell Eligible Assets to Buyer after Seller has notified Buyer of a proposed Transaction and Buyer has agreed to purchase such Eligible Assets in accordance with this Agreement, or (d) any conversion of the Pricing Rate to the Alternative Rate because the LIBO Rate is not available for any reason on a day which is not the last day of the then current Pricing Period. Notwithstanding the foregoing, in no event shall any amounts be payable under this Section 12.03 in connection with any voluntary and contractually permissible repurchase by Seller of a Purchased Asset from Buyer.

Section 12.04 Increased Costs. If the adoption of or any change in any Requirements of Law or in the interpretation or application thereof by any Governmental Authority or compliance by 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 after the date of this Agreement (a) shall subject Buyer to any tax of any kind whatsoever with respect to the Repurchase Documents, any Purchased Asset or any Transaction, or change the basis of taxation of payments to Buyer in respect thereof (except for income taxes and any

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changes in the rate of tax on Buyer’s overall net income), (b) 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, or (c) shall impose on Buyer any other condition; and the result of any of the preceding clauses (a), (b) and (c) is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering into, continuing or maintaining Transactions, or to reduce any amount receivable under the Repurchase Documents in respect thereof, then, in any such case, Seller shall pay to Buyer such additional amount or amounts as reasonably necessary to fully compensate Buyer for such increased cost or reduced amount receivable.

Section 12.05 Capital Adequacy. If Buyer determines that the adoption of or any change in any Requirements of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation Controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made after the date of this Agreement has or shall have the effect of reducing the rate of return on 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 its discretion to be material, then, in any such case, Seller shall pay to Buyer such additional amount or amounts as reasonably necessary to fully compensate Buyer for such reduction.

Section 12.06 Withholding Taxes. (a) All payments made by Seller to Buyer or any other Indemnified Person under the Repurchase Documents and by Underlying Obligors with respect to the Purchased Assets shall be made free and clear of and without deduction or withholding for or on account of any taxes. If any taxes are required to be withheld from any amounts payable to Buyer and/or any other Indemnified Person, then the amount payable to such Person will be increased (such increase, the “Additional Amount”) such that every net payment made under this Agreement after withholding for or on account of any taxes (including any taxes on such increase) is not less than the amount that would have been paid absent such deduction or withholding provided, however, that Seller shall not be required to pay any Additional Amount to Buyer, any Eligible Assignee or any other Person that is not organized under the laws of the United States or any state thereof if Buyer or such Person fails to comply with Section 12.06(b). The foregoing obligation to pay Additional Amounts, however, will not apply with respect to net income or franchise taxes imposed on Buyer and/or any other Indemnified Person, with respect to payments required to be made by Seller under the Repurchase Documents, by a taxing jurisdiction in which Buyer and/or any other Indemnified Person is organized, conducts business or is paying taxes (as the case may be). Promptly after Seller pays any taxes referred to in this Section 12.06, Seller will send Buyer appropriate evidence of such payment.

(b) If a Person acquires any of the rights and obligations of Buyer as an Eligible Assignee under this Agreement, and such Person is not organized under the laws of the United States, any state thereof or the District of Columbia (a “Non-U.S. Person”), such Non-U.S. Person shall deliver to Seller on or before the date on which such Person becomes a party to this Agreement, two duly completed and executed copies of, as applicable, IRS Form W-8BEN or IRS Form W-8ECI or any successor forms thereto designated as such by the IRS. If the Non-

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U.S. Person is eligible for and wishes to claim exemption from or reduction in U.S. federal withholding tax through benefit of a treaty, such Person shall deliver a Form W-8ECI. If the Non-U.S. Person is eligible for and wishes to claim exemption from U.S. federal withholding tax under Section 871(h) or Section 881(c) of the Code with respect to payments of “portfolio interest,” such Person shall deliver both the Form W-8BEN and a statement certifying that such Person is not a bank, a “10 percent shareholder” or a “controlled foreign corporation” within the meaning of Section 881(c)(3) of the Code. If any previously delivered form or statement becomes inaccurate with respect to the Non-U.S. Person that delivered it, the Non-U.S. Person shall promptly notify Seller of this fact.

Section 12.07 Payment and Survival of Obligations. Buyer may at any time send Seller a notice showing the calculation of any amounts payable pursuant to this Article 12, and Seller shall pay such amounts to Buyer within ten (10) Business Days after Seller receives such notice. The obligations of Seller under this Article 12 shall apply to Eligible Assignees and Participants and survive the termination of the Repurchase Documents.

ARTICLE 13

INDEMNITY AND EXPENSES

Section 13.01 Indemnity.

(a) Seller shall release, defend, indemnify and hold harmless Buyer, Affiliates of Buyer and its and their respective officers, directors, shareholders, partners, members, owners, employees, agents, attorneys, Affiliates and advisors (each an “Indemnified Person” and collectively the “Indemnified Persons”), on a net after-tax basis, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, taxes (other than income taxes of Buyer), fees, costs, expenses (including legal fees and expenses), penalties or fines of any kind that may be imposed on, incurred by or asserted against such Indemnified Person (collectively, the “Indemnified Amounts”) in any way relating to, arising out of or resulting from or in connection with (i) the Repurchase Documents, the Mortgage Loan Documents, the Purchased Assets, the Transactions, any Underlying Mortgaged Property or related property, or any action taken or omitted to be taken by any Indemnified Person in connection with or under any of the foregoing, or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of any Repurchase Document or Transaction, (ii) any claims, actions or damages by an Underlying Obligor or lessee with respect to a Purchased Asset, (iii) any violation or alleged violation of, non–compliance with or liability under any Requirements of Law, (iv) ownership of, Liens on, security interests in or the exercise of rights or remedies under any of the items referred to in the preceding clause (i), (v) any accident, injury to or death of any person or loss of or damage to property occurring in, on or about any Underlying Mortgaged Property or on the adjoining sidewalks, curbs, parking areas, streets or ways, (vi) any use, nonuse or condition in, on or about, or possession, alteration, repair, operation, maintenance or management of, any Underlying Mortgaged Property or on the adjoining sidewalks, curbs, parking areas, streets or ways, (vii) any failure by Seller to perform or comply with any Repurchase Document, Mortgage Loan Document or Purchased Asset, (viii) performance of any labor or services or the furnishing of any materials or other property in respect of any Underlying Mortgaged Property or Purchased

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Asset, (ix) any claim by brokers, finders or similar Persons claiming to be entitled to a commission in connection with any lease or other transaction involving any Repurchase Document, Purchased Asset or Underlying Mortgaged Property, (x) any taxes attributable to the execution, delivery, filing or recording of any Repurchase Document, Mortgage Loan Document or any memorandum of any of the foregoing, (xi) any Lien or claim arising on or against any Purchased Asset or related Underlying Mortgaged Property under any Requirements of Law or any liability asserted against Buyer or any Indemnified Person with respect thereto, (xii) (1) a past, present or future violation or alleged violation of any Environmental Laws in connection with any property or Mortgaged Property by any Person or other source, whether related or unrelated to Seller or any Underlying Obligor, (2) any presence of any Materials of Environmental Concern in, on, within, above, under, near, affecting or emanating from any Underlying Mortgaged Property, (3) the failure to timely perform any Remedial Work, (4) any past, present or future activity by any Person or other source, whether related or unrelated to Seller or any Underlying Obligor in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from any Underlying Mortgaged Property of any Materials of Environmental Concern at any time located in, under, on, above or affecting any Underlying Mortgaged Property, (5) any past, present or future actual Release (whether intentional or unintentional, direct or indirect, foreseeable or unforeseeable) to, from, on, within, in, under, near or affecting any Underlying Mortgaged Property by any Person or other source, whether related or unrelated to Seller or any Underlying Obligor, (6) the imposition, recording or filing or the threatened imposition, recording or filing of any Lien on any Underlying Mortgaged Property with regard to, or as a result of, any Materials of Environmental Concern or pursuant to any Environmental Law, or (7) any misrepresentation or failure to perform any obligations pursuant to any Repurchase Document or Mortgage Loan Document relating to environmental matters in any way, (xiii) the Term Sheet or any business communications or dealings between the Parties relating thereto, or (xiv) Seller’s conduct, activities, actions and/or inactions in connection with, relating to or arising out of any of the foregoing clauses of this Section 13.01, that, in each case, results from anything whatsoever other than any Indemnified Person’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction pursuant to a final, non–appealable judgment. In any suit, proceeding or action brought by an Indemnified Person in connection with any Purchased Asset for any sum owing thereunder, or to enforce any provisions of any Purchased Asset, Seller shall defend, indemnify and hold such Indemnified Person harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the account debtor or Underlying Obligor arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or Underlying Obligor from Seller. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 13.01 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by Seller, an Indemnified Person or any other Person or any Indemnified Person is otherwise a party thereto and whether or not any Transaction is entered into.

(b) If for any reason the indemnification provided in this Section 13.01 is unavailable to the Indemnified Person or is insufficient to hold an Indemnified Person harmless, even though such Indemnified Person is entitled to indemnification under the express terms

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thereof, then Seller shall contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative benefits received by such Indemnified Person on the one hand and Seller on the other hand, the relative fault of such Indemnified Person, and any other relevant equitable considerations.

(c) An Indemnified Person may at any time send Seller a notice showing the calculation of Indemnified Amounts, and Seller shall pay such Indemnified Amounts to such Indemnified Person within ten (10) Business Days after Seller receives such notice. The obligations of Seller under this Section 13.01 shall apply to Eligible Assignees and Participants and survive the termination of this Agreement.

Section 13.02 Expenses. Seller shall promptly on demand pay to or as directed by Buyer all third-party out-of-pocket costs and expenses (including legal, accounting and advisory fees and expenses) incurred by Buyer in connection with (a) the development, evaluation, preparation, negotiation, execution, consummation, delivery and administration of, and any amendment, supplement or modification to, or extension, renewal or waiver of, the Repurchase Documents and the Transactions, (b) any Asset or Purchased Asset, including due diligence, inspection, testing, review, recording, registration, travel custody, care, insurance or preservation, with the total amount of all such reimbursable costs and expenses otherwise due under this clause (b) not to exceed $50,000 per calendar year, (c) the enforcement of the Repurchase Documents or the payment or performance by Seller of any Repurchase Obligations, and (d) any actual or attempted sale, exchange, enforcement, collection, compromise or settlement relating to the Purchased Assets.

ARTICLE 14

INTENT

Section 14.01 The Parties intend (a) for each Transaction to qualify for the safe harbor treatment provided by the Bankruptcy Code and for Buyer to be entitled to all of the rights, benefits and protections afforded to Persons under the Bankruptcy Code with respect to a “repurchase agreement” as defined in Section 91(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 91 of the Bankruptcy Code, (b) for the grant of a security interest set forth in Article 11 to also be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code and a “repurchase agreement” as that term is defined in Section 91(47)(A)(v) of the Bankruptcy Code, and (c) that Buyer (for so long as Buyer is a “financial institution,” “financial participant” or other entity listed in Section 555, 559 or 362(b)(6) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract,” including (x) the rights, set forth in Article 10 and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Assets and terminate this Agreement, and (y) the right to offset or net out as set forth in Article 10 and Section 18.17 and in Section 362(b)(6) of the Bankruptcy Code.

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Section 14.02 The Parties acknowledge and agree that (a) Buyer’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Articles 10 and 11 and as otherwise provided in the Repurchase Documents is a contractual right to liquidate such Transactions as described in Section 555, 559 and 561 of the Bankruptcy Code.

Section 14.03 The Parties acknowledge and agree that if a Party is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then 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).

Section 14.04 The Parties acknowledge and agree that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation,” respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

Section 14.05 The Parties expressly represent, warrant, acknowledge and agree that this Agreement constitutes a “master netting agreement” as defined in Section 91(38A) of the Bankruptcy Code.

ARTICLE 15

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The Parties acknowledge that they have been advised and understand that:

(a) in the case of Transactions in which one of the Parties is a broker or dealer registered with the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934, the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 do not protect the other Party with respect to any Transaction;

(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 Securities and Exchange Commission under Section 14C of the Securities Exchange Act of 1934, the Securities Investor Protection Act of 1970 will not provide protection to the other Party with respect to any Transaction;

(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 are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable; and

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(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 16

NO RELIANCE

Each Party acknowledges, represents and warrants to the other Party that, in connection with the negotiation of, entering into, and performance under, the Repurchase Documents and each Transaction:

(a) It is not relying (for purposes of making any investment decision or otherwise) on any advice, counsel or representations (whether written or oral) of the other Party, other than the representations expressly set forth in the Repurchase Documents;

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

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

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

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

(f) No partnership or joint venture exists or will exist as a result of the Transactions or entering into and performing the Repurchase Documents.

ARTICLE 17

SERVICING

This Article 17 shall apply to all Purchased Assets.

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Section 17.01 Servicing Rights. The terms and provisions governing Servicing Rights under Section 17.01 are set forth in the Fee and Pricing Letter, and are hereby incorporated by reference.

Section 17.02 Accounts Related to Purchased Assets. All accounts directly related to the Purchased Assets shall be maintained at institutions in accordance with and pursuant to the terms and conditions of the existing agreements including, without limitation, this Agreement; provided, however, that if any institution in which such accounts are currently held is not reasonably acceptable to Buyer, then at Buyer’s request, Seller shall cause the Underlying Obligor to enter into the contractual arrangements with Buyer and Seller that are necessary in order to create a perfected security interest in favor of Buyer in all such accounts, including, without limitation, an Account Control Agreement in form and substance reasonably acceptable to Buyer in its sole discretion. Section 17.03 Servicing Reports. Seller shall deliver and cause Sub-Servicer to deliver to Buyer and Custodian a monthly remittance report on or before the 15th day of each month containing servicing information, including those fields reasonably requested by Buyer from time to time, on an asset-by-asset and in the aggregate, with respect to the Purchased Assets for the month (or any portion thereof) before the date of such report.

ARTICLE 18

MISCELLANEOUS

Section 18.01 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

Section 18.02 Submission to Jurisdiction; Service of Process. Each Party irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Repurchase Documents, or for recognition or enforcement of any judgment, and each Party irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such State court or, to the fullest extent permitted by applicable law, in such Federal court. Each Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or the other Repurchase Documents shall affect any right that Buyer may otherwise have to bring any action or proceeding arising out of or relating to the Repurchase Documents against Seller or its properties in the courts of any jurisdiction. Each Party irrevocably and unconditionally waives, to the fullest extent permitted by Requirements of Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to the Repurchase Documents in any court referred to above, and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each Party irrevocably consents to service of process in the manner provided for notices in Section 18.12. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

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Section 18.03 IMPORTANT WAIVERS.

(a) SELLER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST IT BY BUYER OR ANY INDEMNIFIED PERSON.

(b) TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE BETWEEN THEM, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH OR RELATED TO THE REPURCHASE DOCUMENTS, THE PURCHASED ASSETS, THE TRANSACTIONS, ANY DEALINGS OR COURSE OF CONDUCT BETWEEN THEM, OR ANY STATEMENTS (WRITTEN OR ORAL) OR OTHER ACTIONS OF EITHER PARTY. NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

(c) TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, SELLER HEREBY WAIVES ANY RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER INVOLVING ANY INDEMNIFIED PERSON, ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER SUCH WAIVED DAMAGES ARE BASED ON STATUTE, CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION, INCLUDING ANY CLAIM OR ACTION ALLEGING GROSS NEGLIGENCE, RECKLESS DISREGARD, WILLFUL OR WONTON MISCONDUCT, FAILURE TO EXERCISE REASONABLE CARE OR FAILURE TO ACT IN GOOD FAITH. NO INDEMNIFIED PERSON SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH ANY REPURCHASE DOCUMENT OR THE TRANSACTIONS.

(d) SELLER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF BUYER OR AN INDEMNIFIED PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BUYER OR AN INDEMNIFIED PERSON WOULD NOT SEEK TO ENFORCE ANY OF THE WAIVERS IN THIS SECTION 18.03 IN THE EVENT OF LITIGATION OR OTHER CIRCUMSTANCES. THE SCOPE OF SUCH WAIVERS IS INTENDED TO BE ALL–ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THE REPURCHASE DOCUMENTS, REGARDLESS OF THEIR LEGAL THEORY.

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(e) EACH PARTY ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 18.03 ARE A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT SUCH PARTY HAS ALREADY RELIED ON SUCH WAIVERS IN ENTERING INTO THE REPURCHASE DOCUMENTS, AND THAT SUCH PARTY WILL CONTINUE TO RELY ON SUCH WAIVERS IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED SUCH WAIVERS WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL AND OTHER RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

(f) THE WAIVERS IN THIS SECTION 18.03 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO ANY OF THE REPURCHASE DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(g) THE PROVISIONS OF THIS SECTION 18.03 SHALL SURVIVE TERMINATION OF THE REPURCHASE DOCUMENTS AND THE PAYMENT IN FULL OF THE OBLIGATIONS.

Section 18.04 Integration. The Repurchase Documents supersede and integrate all previous negotiations, contracts, agreements and understandings (whether written or oral) between the Parties relating to a sale and repurchase of Purchased Assets and the other matters addressed by the Repurchase Documents, and contain the entire final agreement of the Parties relating to the subject matter thereof.

Section 18.05 Single Agreement. Seller agrees that (a) each Transaction is in consideration of and in reliance on the fact that all Transactions constitute a single business and contractual relationship, and that each Transaction has been entered into in consideration of the other Transactions, (b) a default by it in the payment or performance of any its obligations under a Transaction shall constitute a default by it with respect to all Transactions, (c) Buyer may set off claims and apply properties and assets held by or on behalf of Buyer with respect to any Transaction against the Repurchase Obligations owing to Buyer with respect to other Transactions, and (d) payments, deliveries and other transfers made by or on behalf of Seller with respect to any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers with respect to all Transactions, and the obligations of Seller to make any such payments, deliveries and other transfers may be applied against each other and netted.

Section 18.06 Use of Employee Plan Assets. No assets of an employee benefit plan subject to any provision of ERISA shall be used by either Party in a Transaction.

Section 18.07 Survival and Benefit of Seller’s Agreements. The Repurchase Documents and all Transactions shall be binding on and shall inure to the benefit of the Parties and their successors and permitted assigns. All of Seller’s representations, warranties, agreements and indemnities in the Repurchase Documents shall survive the termination of the

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Repurchase Documents and the payment in full of the Repurchase Obligations, and shall apply to and benefit Eligible Assignees and Participants. No other Person shall be entitled to any benefit, right, power, remedy or claim under the Repurchase Documents.

Section 18.08 Assignments and Participations.

(a) Seller shall not sell, assign or transfer any of its rights or the Repurchase Obligations under this Agreement without the prior written consent of Buyer in its discretion, and any attempt by Seller to do so without such consent shall be null and void.

(b) Buyer may at any time, without the consent of or notice to Seller, sell participations to any Person (other than a natural person or Seller or any Affiliate of Seller) (a “Participant”) in up to forty-nine percent (49%) (in the aggregate, in one or more transactions, including any assignments under Section 18.08(c)) of Buyer’s rights and/or obligations under the Repurchase Documents; provided, that (i) Buyer’s obligations and Seller’s rights and obligations under the Repurchase Documents shall remain unchanged, (ii) Buyer shall remain solely responsible to Seller for the performance of such obligations, and (iii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under the Repurchase Documents. No Participant shall have any right to approve any amendment, waiver or consent with respect to any Repurchase Document, except to the extent that the Repurchase Price or Price Differential of any Purchased Asset would be reduced or the Repurchase Date of any Purchased Asset would be postponed. Each Participant shall be entitled to the benefits of Article 12 to the same extent as if it had acquired its interest by assignment pursuant to Section 18.08(c), but shall not be entitled to receive any greater payment thereunder than Buyer would have been entitled to receive with respect to the participation sold to such Participant. To the extent permitted by Requirements of Law, each Participant shall be entitled to the benefits of Sections 10.02(j) and 18.17 to the same extent as if it had acquired its interest by assignment pursuant to Section 18.08(c).

(c) Buyer may at any time, upon notice to Seller, sell and assign to any Eligible Assignee up to forty-nine percent (49%) (in the aggregate, in one or more transactions, and including any participations under Section 18.08(b)) of the rights and obligations of Buyer under the Repurchase Documents. Each such assignment shall be made pursuant to an Assignment and Acceptance substantially in the form of Exhibit F (an “Assignment and Acceptance”). From and after the effective date of such Assignment and Acceptance, (i) such Eligible Assignee shall be a Party and, to the extent provided therein, have the rights and obligations of Buyer under the Repurchase Documents with respect to the percentage and amount of the Repurchase Price allocated to it; provided that Buyer shall remain solely responsible to Seller for the performance of Buyer’s obligations under the Repurchase Documents, (ii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under the Repurchase Documents, and (iii) Buyer will give prompt written notice thereof (including identification of the Eligible Assignee and the amount of Repurchase Price allocated to it) to each Party (but Buyer shall not have any liability for any failure to timely provide such notice). Any sale or assignment by Buyer of rights or obligations under the Repurchase Documents that does not comply with this Section 18.08(c) shall be treated for purposes of the Repurchase Documents as a sale by such Buyer of a participation in such rights and obligations in accordance with Section 18.08(b).

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(d) Seller shall cooperate with Buyer in connection with any such sale and assignment of participations or assignments and shall enter into such restatements of, and amendments, supplements and other modifications to, the Repurchase Documents to give effect to any such sale or assignment; provided, that none of the foregoing shall change any economic or other material term of the Repurchase Documents in a manner adverse to Seller without the consent of Seller in its discretion.

Section 18.09 Ownership and Hypothecation of Purchased Assets. Title to all Purchased Assets shall pass to and vest in Buyer on the applicable Purchase Dates and, subject to the terms of the Repurchase Documents, Buyer or its designee shall have free and unrestricted use of all Purchased Assets and be entitled to exercise all rights, privileges and options relating to the Purchased Assets as the owner thereof, including rights of subscription, conversion, exchange, substitution, voting, consent and approval, and to direct any servicer or trustee. Buyer or its designee may engage in repurchase transactions with the Purchased Assets or otherwise sell, pledge, repledge, transfer, hypothecate, or rehypothecate the Purchased Assets, all on terms that Buyer may determine in its discretion; provided, that no such transaction shall affect the obligations of Buyer to transfer the Purchased Assets to Seller on the applicable Repurchase Dates free and clear of any pledge, Lien, security interest, encumbrance, charge or other adverse claim.

Section 18.10 Confidentiality. All information regarding the terms set forth in any of the Repurchase Documents or the Transactions shall be kept confidential and shall not be disclosed by either Party to any Person except (a) to the Affiliates of such Party or its or their respective directors, officers, employees, agents, advisors and other representatives who are informed of the confidential nature of such information and instructed to keep it confidential, (b) to the extent requested by any regulatory authority or required by Requirements of Law, (c) to the extent required to be included in the financial statements of either Party or an Affiliate thereof, (d) to the extent required to exercise any rights or remedies under the Repurchase Documents, Purchased Assets or Underlying Mortgaged Properties, (e) to the extent required to consummate and administer a Transaction, (f) to any actual or prospective Participant or Eligible Assignee which agrees to comply with this Section 18.10; provided, that no such disclosure made with respect to any Repurchase Document shall include a copy of such Repurchase Document to the extent that a summary would suffice, but if it is necessary for a copy of any Repurchase Document to be disclosed, all pricing and other economic terms set forth therein shall be redacted before disclosure.

Section 18.11 No Implied Waivers. No failure on the part of Buyer to exercise, or delay in exercising, any right or remedy under the Repurchase Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy thereunder preclude any further exercise thereof or the exercise of any other right. The rights and remedies in the Repurchase Documents are cumulative and not exclusive of any rights and remedies provided by law. Application of the Default Rate after an Event of Default shall not be deemed to constitute a waiver of any Event of Default or Buyer’s rights and remedies with respect thereto, or a consent to any extension of time for the payment or performance of any obligation with respect to which the Default Rate is applied. Except as otherwise expressly provided in the Repurchase Documents, no amendment, waiver or other modification of any provision of the Repurchase Documents shall be effective without the signed agreement of Seller and Buyer.

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Any waiver or consent under the Repurchase Documents shall be effective only if it is in writing and only in the specific instance and for the specific purpose for which given.

Section 18.12 Notices and Other Communications. Unless otherwise provided in this Agreement, all notices, consents, approvals, requests and other communications required or permitted to be given to a Party hereunder shall be in writing and sent prepaid by hand delivery, by certified or registered mail, by expedited commercial or postal delivery service, or by facsimile or email if also sent by one of the foregoing, to the address for such Party specified in Annex I or such other address as such Party shall specify from time to time in a notice to the other Party. Any of the foregoing communications shall be effective when delivered or upon the first attempted delivery on a Business Day. A Party receiving a notice that does not comply with the technical requirements of this Section 18.12 may elect to waive any deficiencies and treat the notice as having been properly given.

Section 18.13 Counterparts; Electronic Transmission. Any Repurchase Document may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall together constitute but one and the same instrument.

Section 18.14 No Personal Liability. No administrator, incorporator, Affiliate, owner, member, partner, stockholder, officer, director, employee, agent or attorney of Buyer, any Indemnified Person, Seller, any Intermediate Starwood Entity or Guarantor, as such, shall be subject to any recourse or personal liability under or with respect to any obligation of Buyer, Seller, any Intermediate Starwood Entity or Guarantor under the Repurchase Documents, whether by the enforcement of any assessment, by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed that the obligations of Buyer, Seller and Guarantor under the Repurchase Documents are solely their respective corporate, limited liability company or partnership obligations, as applicable, and that any such recourse or personal liability is hereby expressly waived. This Section 18.14 shall survive the termination of the Repurchase Documents.

Section 18.15 Protection of Buyer’s Interests in the Purchased Assets; Further Assurances.

(a) Seller shall cause the Repurchase Documents and/or all financing statements and continuation statements and any other necessary documents covering the right, title and interest of Buyer to the Purchased Assets to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect such right, title and interest. Seller shall deliver to Buyer file–stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. Seller shall execute any and all documents reasonably required to fulfill the intent of this Section 18.15.

(b) Seller will promptly at its expense execute and deliver such instruments and documents and take such other actions as Buyer may reasonably request from time to time in order to perfect, protect, evidence, exercise and enforce Buyer’s rights and remedies under and with respect to the Repurchase Documents, the Transactions and the Purchased Assets.

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(c) If Seller fails to perform any of its Repurchase Obligations promptly after written request from Buyer, Buyer may (but shall not be required to) perform or cause to be performed such Repurchase Obligation, and the costs and expenses incurred by Buyer in connection therewith shall be payable by Seller. Without limiting the generality of the foregoing, if Seller shall fail to do so promptly after written request from Buyer, Seller authorizes Buyer, at the option of Buyer and the expense of Seller, at any time and from time to time, to take all actions and pay all amounts that Buyer deems necessary or appropriate to protect, enforce, preserve, insure, service, administer, manage, perform, maintain, safeguard, collect or realize on the Purchased Assets and Buyer’s Liens and interests therein or thereon and to give effect to the intent of the Repurchase Documents. No Default or Event of Default shall be cured by the payment or performance of any Repurchase Obligation by Buyer on behalf of Seller. Buyer may make any such payment in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax Lien, title or claim except to the extent such payment is being contested in good faith by Seller in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.

(d) Without limiting the generality of the foregoing, Seller will no earlier than six (6) or later than three (3) months before the fifth (5th) anniversary of the date of filing of each UCC financing statement filed in connection with any Repurchase Document or any Transaction, (i) deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statement, and (ii) deliver or cause to be delivered to Buyer an opinion of counsel, in form and substance reasonably satisfactory to Buyer, confirming and updating the opinion delivered pursuant to Section 6.01(a) with respect to perfection and otherwise to the effect that the security interests hereunder continue to be enforceable and perfected security interests, subject to no other Liens of record except as provided herein or otherwise permitted hereunder, which opinion may contain usual and customary assumptions, limitations and exceptions.

(e) Except as provided in the Repurchase Documents, the sole duty of Buyer, Custodian or any other designee or agent of Buyer with respect to the Purchased Assets shall be to use reasonable care in the custody, use, operation and preservation of the Purchased Assets in its possession or control. Buyer shall incur no liability to Seller or any other Person for any act of Governmental Authority, act of God or other destruction in whole or in part or negligence or wrongful act of custodians or agents selected by and supervised by Buyer with reasonable care, or Buyer’s failure to provide adequate protection or insurance for the Purchased Assets. Buyer shall have no obligation to take any action to preserve any rights of Seller in any Purchased Asset against prior parties, and Seller hereby agrees to take such action. Buyer shall have no obligation to realize upon any Purchased Asset except through proper application of any distributions with respect to the Purchased Assets made directly to Buyer or its agent(s). So long as Buyer and Custodian shall act in good faith in their handling of the Purchased Assets, Seller waives or is deemed to have waived the defense of impairment of the Purchased Assets by Buyer and Custodian.

Section 18.16 Default Rate. To the extent permitted by Requirements of Law, Seller shall pay interest at the Default Rate on the amount of all Repurchase Obligations not paid

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when due under the Repurchase Documents until such Repurchase Obligations are paid or satisfied in full.

Section 18.17 Set-off. In addition to any rights now or hereafter granted under the Repurchase Documents, Requirements of Law or otherwise, Seller, on behalf of itself and Guarantor, hereby grants to Buyer and each Indemnified Person, to secure repayment of the Repurchase Obligations, a right of set-off upon any and all of the following: monies, securities, collateral or other property of Seller and Guarantor and any proceeds from the foregoing, now or hereafter held or received by Buyer, any Affiliate of Buyer or any Indemnified Person, for the account of Seller or Guarantor, whether for safekeeping, custody, pledge, transmission, collection or otherwise, and also upon any and all deposits (general, specified, special, time, demand, provisional or final) and credits, claims or Indebtedness of Seller or Guarantor at any time existing, and any obligation owed by Buyer or any Affiliate of Buyer to Seller or Guarantor and to set–off against any Repurchase Obligations or Indebtedness owed by Seller or Guarantor and any Indebtedness owed by Buyer or any Affiliate of Buyer to Seller or Guarantor, in each case whether direct or indirect, absolute or contingent, matured or unmatured, whether or not arising under the Repurchase Documents and irrespective of the currency, place of payment or booking office of the amount or obligation and in each case at any time held or owing by Buyer, any Affiliate of Buyer or any Indemnified Person to or for the credit of any Seller or Guarantor, without prejudice to Buyer’s right to recover any deficiency. Each of Buyer, each Affiliate of Buyer and each Indemnified Person is hereby authorized upon any amount becoming due and payable by Seller or Guarantor to Buyer or any Indemnified Person under the Repurchase Documents, the Repurchase Obligations or otherwise or upon the occurrence of an Event of Default, without notice to Seller or Guarantor, any such notice being expressly waived by Seller and Guarantor to the extent permitted by any Requirements of Law, to set–off, appropriate, apply and enforce such right of set–off against any and all items hereinabove referred to against any amounts owing to Buyer or any Indemnified Person by Seller or Guarantor under the Repurchase Documents and the Repurchase Obligations, irrespective of whether Buyer, any Affiliate of Buyer or any Indemnified Person shall have made any demand under the Repurchase Documents and regardless of any other collateral securing such amounts, and in all cases without waiver or prejudice of Buyer’s rights to recover a deficiency. Seller and Guarantor shall be deemed directly indebted to Buyer and the other Indemnified Persons in the full amount of all amounts owing to Buyer and the other Indemnified Parties by Seller and Guarantor under the Repurchase Documents and the Repurchase Obligations, and Buyer and the other Indemnified Persons shall be entitled to exercise the rights of set–off provided for above. ANY AND ALL RIGHTS TO REQUIRE BUYER OR OTHER INDEMNIFIED PERSONS TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO THE PURCHASED ASSETS OR OTHER INDEMNIFIED PERSONS UNDER THE REPURCHASE DOCUMENTS, PRIOR TO EXERCISING THE FOREGOING RIGHT OF SET–OFF, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER AND GUARANTOR.

Buyer or any Indemnified Person shall promptly notify the affected Seller or Guarantor after any such set–off and application made by Buyer or such Indemnified Person, provided that the failure to give such notice shall not affect the validity of such set–off and application. If an amount or obligation is unascertained, Buyer may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant Party accounting to the other Party when the amount or obligation is ascertained. Nothing in this Section 18.17 shall be

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effective to create a charge or other security interest. This Section 18.17 shall be without prejudice and in addition to any right of set-off, combination of accounts, Lien or other rights to which any Party is at any time otherwise entitled.

Section 18.18 Seller’s Waiver of Setoff. Seller hereby waives any right of setoff it may have or to which it may be or become entitled under the Repurchase Documents or otherwise against Buyer, any Affiliate of Buyer, any Indemnified Person or their respective assets or properties.

Section 18.19 Periodic Due Diligence Review. Buyer may perform continuing due diligence reviews with respect to the Purchased Assets, Seller and Affiliates of Seller, including ordering new third party reports, for purposes of, among other things, verifying compliance with the representations, warranties, covenants, agreements, duties, obligations and specifications made under the Repurchase Documents or otherwise. Upon reasonable prior notice to Seller, unless a Default or Event of Default exists, in which case no notice is required, Buyer or its representatives may during normal business hours inspect any properties and examine, inspect and make copies of the books and records of Seller and Affiliates of Seller, the Mortgage Loan Documents and the Servicing Files. Seller shall make available to Buyer one or more knowledgeable financial or accounting officers and representatives of the independent certified public accountants of Seller for the purpose of answering questions of Buyer concerning any of the foregoing. Seller shall cause Servicer and Sub-Servicer to cooperate with Buyer by permitting Buyer to conduct due diligence reviews of the Servicing Files. Buyer may purchase Purchased Assets from Seller based solely on the information provided by Seller to Buyer in the Underwriting Materials and the representations, warranties, duties, obligations and covenants contained herein, and Buyer may at any time conduct a partial or complete due diligence review on some or all of the Purchased Assets, including ordering new credit reports and new appraisals on the Underlying Mortgaged Properties and otherwise re-generating the information used to originate and underwrite such Purchased Assets. Buyer may underwrite such Purchased Assets itself or engage a mutually acceptable third-party underwriter to do so.

Section 18.20 Time of the Essence. Time is of the essence with respect to all obligations, duties, covenants, agreements, notices or actions or inactions of Seller under the Repurchase Documents.

Section 18.21 Patriot Act Notice. Buyer hereby notifies Seller that Buyer is required by the Patriot Act to obtain, verify and record information that identifies Seller.

Section 18.22 Successors and Assigns; No Third Party Beneficiaries. Subject to the foregoing, the Repurchase Documents and any Transactions shall be binding upon and shall inure to the benefit of the Parties and their successors and permitted assigns. Nothing in the Repurchase Documents, express or implied, shall give to any Person other than the Parties any benefit or any legal or equitable right, power, remedy or claim under the Repurchase Documents.

Section 18.23 Right of First Offer: Guarantor shall provide Buyer with a right of first offer, which will expire by its terms on the first anniversary of the Closing Date, with respect to any refinancing of the Facility or the initial secured credit or master repurchase facility of Guarantor (a “Qualified Financing”). If Seller or Guarantor wishes to obtain a Qualified

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Financing, Guarantor shall send written notice thereof to Buyer describing the general parameters of the Qualified Financing that it is seeking. If Buyer wishes to offer to provide such Qualified Financing, Buyer shall deliver a term sheet setting forth all of the material terms for such Qualified Financing it would be willing to provide within ten (10) Business Days after receipt of Guarantor’s notice. If Buyer does not deliver a term sheet within such ten (10) Business Day period or, if Buyer delivers such term sheet, but Buyer and Guarantor are unable to agree on such terms, each in its sole discretion, within ten (10) Business Days after delivery of such term sheet by Buyer, then Seller, Guarantor and/or its Affiliates may obtain such Qualified Financing from another lender at any time thereafter and neither Buyer nor its Affiliates shall have any right to provide such Qualified Financing, so long as the terms for such Qualified Financing provided by the third party lender are not materially less favorable to Seller, Guarantor and/or its Affiliates than those offered by Buyer in its term sheet.

[ONE OR MORE UNNUMBERED SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first above written.

SELLER:
STARWOOD PROPERTY MORTGAGE
	SUB-1, L.L.C., a Delaware limited liability company
By:
	Its:
	Title:
BUYER:
WELLS FARGO BANK, NATIONAL
	ASSOCIATION, a national banking association
By:
	Its:
	Title:

EX-31.1

Exhibit 31.1

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Barry S. Sternlicht, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Starwood Property Trust, Inc. for the period ended March 31, 2010;

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)) 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. 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

c. 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: May 10, 2010	/s/ Barry S. Sternlicht Barry S. Sternlicht
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Barbara J. Anderson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Starwood Property Trust, Inc. for the period ended March 31, 2010;

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)) 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. 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

c. 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: May 10, 2010	/s/ Barbara J. Anderson Barbara J. Anderson
	Chief Financial Officer and Treasurer

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 Starwood Property Trust, Inc.’s (the “Company”) Quarterly Report on Form 10-Q for the period ended March 31, 2010 (the “Report”), I, Barry S. Sternlicht, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, 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.

Date: May 10, 2010	/s/ Barry S. Sternlicht Barry S. Sternlicht
	Chief Executive Officer

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 Starwood Property Trust, Inc.’s (the “Company”) Quarterly Report on Form 10-Q for the period ended March 31, 2010 (the “Report”), I, Barbara J. Anderson, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, 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.

Date: May 10, 2010	/s/ Barbara J. Anderson Barbara J. Anderson
	Chief Financial Officer and Treasurer