BLACKSTONE MORTGAGE TRUST, INC. (Form: 10-Q, Received: 04/23/2019 16:20:46)

JOINT AND SEVERAL OBLIGATIONS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-14788

LOGO

Blackstone Mortgage Trust, Inc.

(Exact name of Registrant as specified in its charter)

Maryland

94-6181186

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

345 Park Avenue, 42nd Floor

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 655-0220

(Registrant’s telephone number, including area code)

N/A

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
		Emerging growth company ☐

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

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

The number of the registrant’s outstanding shares of class A common stock, par value $0.01 per share, outstanding as of April 16, 2019 was 125,666,822.

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	2

	Consolidated Financial Statements (Unaudited):

	Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018	2

	Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018	3

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018	4

	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2019 and 2018	5

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018	6

	Notes to Consolidated Financial Statements	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	63

ITEM 4.	CONTROLS AND PROCEDURES	65

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	66

ITEM 1A.	RISK FACTORS	66

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	66

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	66

ITEM 4.	MINE SAFETY DISCLOSURES	66

ITEM 5.	OTHER INFORMATION	66

ITEM 6.	EXHIBITS	67

SIGNATURES		68

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)


	March 31, 2019			December 31, 2018
Assets
Cash and cash equivalents	$	79,437		$	105,662
Loans receivable, net		14,508,735			14,191,200
Other assets		208,048			170,513

Total Assets	$	14,796,220		$	14,467,375

Liabilities and Equity
Secured debt agreements, net	$	9,208,010		$	8,974,756
Loan participations sold, net		107,237			94,418
Securitized debt obligations, net		1,286,417			1,285,471
Convertible notes, net		610,684			609,911
Other liabilities		132,283			128,212

Total Liabilities		11,344,631			11,092,768

Commitments and contingencies		—			—

Equity
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 125,666,550 and 123,435,738 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		1,257			1,234
Additional paid-in capital		4,039,805			3,966,540
Accumulated other comprehensive loss		(30,756	)		(34,222	)
Accumulated deficit		(570,908	)		(569,428	)

Total Blackstone Mortgage Trust, Inc. stockholders’ equity		3,439,398			3,364,124
Non-controlling interests		12,191			10,483

Total Equity		3,451,589			3,374,607

Total Liabilities and Equity	$	14,796,220		$	14,467,375

Note:

The consolidated balance sheets as of March 31, 2019 and December 31, 2018 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc. As of both March 31, 2019 and December 31, 2018, assets of the consolidated VIEs totaled $1.5 billion and liabilities of the consolidated VIEs totaled $1.3 billion. Refer to Note 15 for additional discussion of the VIEs.

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)


	Three Months Ended March 31,
	2019			2018
Income from loans and other investments
Interest and related income	$	224,759		$	155,425
Less: Interest and related expenses		118,688			69,989

Income from loans and other investments, net		106,071			85,436
Other expenses
Management and incentive fees		19,790			15,492
General and administrative expenses		9,313			8,708

Total other expenses		29,103			24,200

Income before income taxes		76,968			61,236
Income tax provision		101			120

Net income		76,867			61,116

Net income attributable to non-controlling interests		(302	)		(158	)

Net income attributable to Blackstone Mortgage Trust, Inc.	$	76,565		$	60,958

Net income per share of common stock basic and diluted	$	0.62		$	0.56

Weighted-average shares of common stock outstanding, basic and diluted		124,333,048			108,397,598

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)


	Three Months Ended March 31,
	2019			2018
Net income	$	76,867		$	61,116
Other comprehensive income
Unrealized gain on foreign currency translation		5,414			10,738
Realized and unrealized loss on derivative financial instruments		(1,948	)		(2,935	)

Other comprehensive income		3,466			7,803

Comprehensive income		80,333			68,919
Comprehensive income attributable to non-controlling interests		(302	)		(158	)

Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$	80,031		$	68,761

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)


	Blackstone Mortgage Trust, Inc.
	Class A Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income				Accumulated Deficit				Stockholders’ Equity				Non- controlling Interests				Total Equity
Balance at December 31, 2017		$	1,079		$	3,506,861		$	(29,706	)		$	(567,168	)		$	2,911,066			$	6,340			$	2,917,406
Shares of class A common stock issued, net			3			—			—				—				3				—				3
Restricted class A common stock earned			—			6,848			—				—				6,848				—				6,848
Issuance of convertible notes			—			1,462			—				—				1,462				—				1,462
Dividends reinvested			—			122			—				(108	)			14				—				14
Deferred directors’ compensation			—			125			—				—				125				—				125
Other comprehensive income			—			—			7,803				—				7,803				—				7,803
Net income			—			—			—				60,958				60,958				158				61,116
Dividends declared on common stock, $0.62 per share			—			—			—				(67,066	)			(67,066	)			—				(67,066	)
Contributions from non-controlling interests			—			—			—				—				—				375				375
Distributions to non-controlling interests			—			—			—				—				—				(1,575	)			(1,575	)

Balance at March 31, 2018		$	1,082		$	3,515,418		$	(21,903	)		$	(573,384	)		$	2,921,213			$	5,298			$	2,926,511

Balance at December 31, 2018		$	1,234		$	3,966,540		$	(34,222	)		$	(569,428	)		$	3,364,124			$	10,483			$	3,374,607
Shares of class A common stock issued, net			23			65,358			—				—				65,381				—				65,381
Restricted class A common stock earned			—			7,639			—				—				7,639				—				7,639
Dividends reinvested			—			143			—				(132	)			11				—				11
Deferred directors’ compensation			—			125			—				—				125				—				125
Other comprehensive income			—			—			3,466				—				3,466				—				3,466
Net income			—			—			—				76,565				76,565				302				76,867
Dividends declared on common stock, $0.62 per share			—			—			—				(77,913	)			(77,913	)			—				(77,913	)
Contributions from non-controlling interests			—			—			—				—				—				1,470				1,470
Distributions to non-controlling interests			—			—			—				—				—				(64	)			(64	)

Balance at March 31, 2019		$	1,257		$	4,039,805		$	(30,756	)		$	(570,908	)		$	3,439,398			$	12,191			$	3,451,589

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Three Months Ended March 31,
	2019			2018
Cash flows from operating activities
Net income	$	76,867		$	61,116
Adjustments to reconcile net income to net cash provided by operating activities
Non-cash compensation expense		7,768			6,976
Amortization of deferred fees on loans and debt securities		(13,356	)		(11,229	)
Amortization of deferred financing costs and premiums/discount on debt obligations		7,265			6,331
Changes in assets and liabilities, net
Other assets		(4,780	)		(354	)
Other liabilities		3,808			9,739

Net cash provided by operating activities		77,572			72,579


Cash flows from investing activities
Origination and fundings of loans receivable		(799,326	)		(1,978,213	)
Principal collections and sales proceeds from loans receivable and debt securities		463,483			1,001,682
Origination and exit fees received on loans receivable		5,501			18,881
Receipts under derivative financial instruments		2,956			22
Payments under derivative financial instruments		(970	)		(7,397	)
Return of collateral deposited under derivative agreements		4,000			10,740
Collateral deposited under derivative agreements		(9,090	)		(13,210	)

Net cash used in investing activities		(333,446	)		(967,495	)

continued…

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Three Months Ended March 31,
	2019			2018
Cash flows from financing activities
Borrowings under secured debt agreements	$	721,571		$	1,949,135
Repayments under secured debt agreements		(483,748	)		(1,265,100	)
Proceeds from sale of loan participations		12,802			37,483
Payment of deferred financing costs		(11,200	)		(10,217	)
Contributions from non-controlling interests		1,470			375
Distributions to non-controlling interests		(64	)		(1,575	)
Net proceeds from issuance of convertible notes		—			214,463
Net proceeds from issuance of class A common stock		65,377			—
Dividends paid on class A common stock		(76,530	)		(66,888	)

Net cash provided by financing activities		229,678			857,676

Net decrease in cash, cash equivalents, and restricted cash		(26,196	)		(37,240	)
Cash, cash equivalents, and restricted cash at beginning of year		105,662			102,518
Effects of currency translation on cash, cash equivalents, and restricted cash		(29	)		9,200

Cash, cash equivalents, and restricted cash at end of year	$	79,437		$	74,478

Supplemental disclosure of cash flows information
Payments of interest	$	(107,971	)	$	(55,582	)

Payments of income taxes	$	(74	)	$	(135	)

Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	$	(77,913	)	$	(67,080	)

Loan principal payments held by servicer, net	$	37,285		$	4,684

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1.	ORGANIZATION

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

Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from our loan portfolio. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 42 ^nd Floor, New York, New York 10154. We were incorporated in Maryland in 1998, when we reorganized from a California common law business trust into a Maryland corporation.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. We believe we have made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing our consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission, or the SEC.

Basis of Presentation

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

Certain reclassifications have been made in the presentation of the prior period secured debt agreements in Note 5 to conform to the current period presentation.

Principles of Consolidation

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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

In the third quarter of 2018, we contributed a loan to a single asset securitization vehicle, or the 2018 Single Asset Securitization, which is a VIE, and invested in the related subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. Refer to Note 15 for additional discussion of our VIEs.

In April 2017, we entered into a joint venture, or our Multifamily Joint Venture, with Walker & Dunlop Inc. to originate, hold, and finance multifamily bridge loans. Pursuant to the terms of the agreements governing the joint venture, Walker & Dunlop contributed 15% of the venture’s equity capital and we contributed 85%. We consolidate the Multifamily Joint Venture as we have a controlling financial interest. The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are owned by Walker & Dunlop. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on Walker & Dunlop’s pro rata ownership of our Multifamily Joint Venture.

Use of Estimates

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

Revenue Recognition

Interest income from our loans receivable portfolio and debt securities is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan or debt security as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash, Cash Equivalents, and Restricted Cash

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Restricted cash represents cash held in a segregated bank account related to a letter of credit.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash in our consolidated balance sheets to the total amount shown in our consolidated statements of cash flows ($ in thousands):


	March 31, 2019		March 31, 2018
Cash and cash equivalents	$	79,437	$	57,396
Restricted cash		—		17,082

Total cash, cash equivalents, and restricted cash shown in our consolidated statements of cash flows	$	79,437	$	74,478

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $291.3 million as of March 31, 2019. This cash is maintained in segregated bank accounts, and these amounts are not included in the assets and liabilities presented in our consolidated balance sheets. Cash in these Servicing Accounts will be transferred by the respective third-party servicer to the borrower or us under the terms of the applicable loan agreement upon occurrence of certain future events. We do not generate any revenue or incur any expenses as a result of these Servicing Accounts.

Loans Receivable and Provision for Loan Losses

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

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the risk factors of each loan, and assigns it a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 —

Very Low Risk

2 —

Low Risk

3 —

Medium Risk

4 —

High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.

5 —

Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Debt Securities Held-to-Maturity

We classify our debt securities as held-to-maturity, as we have the intent and ability to hold these securities until maturity. We include our debt securities in other assets on our consolidated balance sheets at amortized cost.

If, based on current information and events, there is an adverse change in cash flows expected to be collected from the cash flows previously projected for one of our debt securities, an other-than-temporary impairment is deemed to have occurred. A change in expected cash flows is considered adverse if the present value of the revised cash flows (taking into consideration both the timing and amount of cash flows expected to be collected), discounted using the debt security’s current yield, is less than the present value of the previously estimated remaining cash flows. If an other-than-temporary impairment is considered to have occurred, the debt security is written down to fair value. The total other-than-temporary impairment is bifurcated into (i) the amount related to expected credit losses, and (ii) the amount related to fair value adjustments in excess of expected credit losses. The other-than-temporary impairment related to expected credit losses is calculated by comparing the amortized cost basis of the security to the present value of cash flows expected to be collected, discounted at the security’s current yield, and is recognized in earnings in the consolidated statement of operations. The remaining other-than-temporary impairment that is not related to expected credit losses is recognized in other comprehensive income (loss). A portion of other-than-temporary impairments recognized through earnings is accreted back to the amortized cost basis of the security through interest income, while amounts recognized through other comprehensive income (loss) are amortized over the life of the security with no impact on earnings.

Derivative Financial Instruments

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

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

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in net income prospectively. Changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of accumulated other comprehensive income (loss) on our consolidated financial statements. Deferred gains and losses are reclassified out of accumulated other comprehensive income (loss) and into net income in the same period or periods during which the hedged transaction affects earnings, and are presented in the same line item as the earnings effect of the hedged item. For cash flow hedges, this is typically when the periodic swap settlements are made, while for net investment hedges, this occurs when the hedged item is sold or substantially liquidated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its fair value are included in net income concurrently.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Secured Debt Agreements

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

Senior Loan Participations

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

Convertible Notes

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

Deferred Financing Costs

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

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

ASC 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

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

•

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

•

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

•

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

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

Certain of our other assets are reported at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets that are recorded at fair value are discussed further in Note 14. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager.

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

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

•

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

•

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

•

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and indications of market value from other market participants.

•

Debt securities held-to-maturity: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

•

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

•

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

•

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

•

Securitized debt obligations, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

•

Convertible notes, net: Each series of the convertible notes is actively traded and their fair values were obtained using quoted market prices.

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. If we were to fail to meet these requirements, we may be subject to federal, state, and local income tax on current and past income, and penalties. Refer to Note 12 for additional information.

Stock-Based Compensation

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

Earnings per Share

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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

Foreign Currency

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

Underwriting Commissions and Offering Costs

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

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments — Credit Losses — Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses in our consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

3.	LOANS RECEIVABLE, NET

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


	March 31, 2019			December 31, 2018
Number of loans		122			125
Principal balance	$	14,603,831		$	14,293,970
Net book value	$	14,508,735		$	14,191,200
Unfunded loan commitments (1)	$	3,123,059		$	3,405,945
Weighted-average cash coupon (2)		5.63	%		5.67	%
Weighted-average all-in yield (2)		5.99	%		6.00	%
Weighted-average maximum maturity (years) (3)		3.8			3.9

(1)

Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.

(2)

As of March 31, 2019, 99% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 1% earned a fixed rate of interest. As of December 31, 2018, 98% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 2% earned a fixed rate of interest. Cash coupon and all-in yield assume applicable floating benchmark rates as of March 31, 2019 and December 31, 2018, respectively, for weighted-average calculation. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.

(3)

Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of March 31, 2019, 65% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 35% were open to repayment by the borrower without penalty. As of December 31, 2018, 75% of our loans were subject to yield maintenance or other prepayment restrictions and 25% were open to repayment by the borrower without penalty.

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


	Principal Balance				Deferred Fees / Other Items (1)				Net Book Value
December 31, 2018		$	14,293,970			$	(102,770	)		$	14,191,200
Loan fundings			799,326				—				799,326
Loan repayments			(495,492	)			—				(495,492	)
Unrealized gain (loss) on foreign currency translation			6,027				(49	)			5,978
Deferred fees and other items			—				(5,501	)			(5,501	)
Amortization of fees and other items.			—				13,224				13,224

March 31, 2019		$	14,603,831			$	(95,096	)		$	14,508,735

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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


March 31, 2019
Property Type	Number of Loans		Net Book Value			Total Loan Exposure (1)(2)			Percentage of Portfolio
Office		52		$	7,080,970		$	7,133,812		47	%
Hotel		18			2,612,768			2,694,028		18
Multifamily		35			2,238,435			2,256,289		15
Industrial		5			681,091			685,513		5
Retail		4			457,968			460,423		3
Condominium		3			278,110			328,500		2
Self-Storage		2			282,684			283,956		2
Other		3			876,709			1,210,851		8

		122		$	14,508,735		$	15,053,372		100	%


Geographic Location	Number of Loans		Net Book Value			Total Loan Exposure (1)(2)			Percentage of Portfolio
United States
Northeast		33		$	4,481,059		$	4,512,296		32	%
West		26			2,996,086			3,072,901		20
Southeast		18			2,249,064			2,261,069		15
Midwest		9			1,170,535			1,178,563		8
Southwest		13			479,835			482,734		3
Northwest		3			156,639			157,462		1

Subtotal		102			11,533,218			11,665,025		79
International
United Kingdom		9			1,154,538			1,507,808		10
Spain		1			1,069,279			1,075,640		7
Canada		5			341,106			338,462		2
Australia		3			329,780			332,107		2
Belgium		1			69,057			69,378		—
Germany		1			11,757			64,952		—

Subtotal		20			2,975,517			3,388,347		21

Total		122		$	14,508,735		$	15,053,372		100	%

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $449.5 million of such non-consolidated senior interests as of March 31, 2019.

(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)


December 31, 2018
Property Type	Number of Loans		Net Book Value			Total Loan Exposure (1)(2)			Percentage of Portfolio
Office		55		$	7,104,842		$	7,164,466		49	%
Hotel		18			2,591,565			2,673,763		18
Multifamily		34			2,193,699			2,206,740		15
Industrial		5			680,808			685,776		5
Retail		4			451,099			452,900		3
Condominium		4			304,545			368,104		2
Self-Storage		2			278,473			280,043		2
Other		3			586,169			909,052		6

		125		$	14,191,200		$	14,740,844		100	%


Geographic Location	Number of Loans		Net Book Value			Total Loan Exposure (1)(2)			Percentage of Portfolio
United States
Northeast		32		$	4,322,114		$	4,359,938		31	%
West		29			3,137,072			3,222,706		22
Southeast		19			2,258,033			2,271,664		15
Midwest		9			1,161,637			1,170,619		8
Southwest		13			478,665			481,745		3
Northwest		4			238,844			239,872		2

Subtotal		106			11,596,365			11,746,544		81
International
Spain		1			1,124,174			1,131,334		8
United Kingdom		7			754,299			1,094,663		7
Canada		5			316,268			313,229		2
Australia		3			310,372			312,893		2
Belgium		1			70,621			71,007		—
Germany		1			11,585			63,637		—
Netherlands		1			7,516			7,537		—

Subtotal		19			2,594,835			2,994,300		19

Total		125		$	14,191,200		$	14,740,844		100	%

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $446.9 million of such non-consolidated senior interests as of December 31, 2018.

(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Loan Risk Ratings

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

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


March 31, 2019						December 31, 2018
Risk Rating	Number of Loans	Net Book Value		Total Loan Exposure (1)(2)		Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure (1)(2)
1	3		$ 255,229		$ 255,899		1	2		$ 181,366		$ 182,740
2	37		4,275,769		4,350,775		2	38		3,860,432		3,950,025
3	82		9,977,737		10,446,698		3	85		10,149,402		10,608,079
4	—		—		—		4	—		—		—
5	—		—		—		5	—		—		—

	122		$14,508,735		$15,053,372			125		$14,191,200		$14,740,844

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $449.5 million and $446.9 million of such non-consolidated senior interests as of March 31, 2019 and December 31, 2018, respectively.

(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

The weighted-average risk rating of our total loan exposure was 2.7 as of both March 31, 2019 and December 31, 2018.

We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of March 31, 2019 or December 31, 2018.

Multifamily Joint Venture

As discussed in Note 2, we entered into a Multifamily Joint Venture in April 2017. As of March 31, 2019 and December 31, 2018, our Multifamily Joint Venture held $343.4 million and $334.6 million of loans, respectively, which are included in the loan disclosures above. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

4.	OTHER ASSETS AND LIABILITIES

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


	March 31, 2019			December 31, 2018
Debt securities held-to-maturity (1)		$	95,877		$	96,167
Accrued interest receivable			61,148			56,679
Loan portfolio payments held by servicer (2)			39,784			6,133
Derivative assets			5,384			9,916
Collateral deposited under derivative agreements			5,090			—
Prepaid expenses			512			647
Prepaid taxes			3			6
Other			250			965

Total		$	208,048		$	170,513

(1)	Represents the subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization, with a yield to full maturity of L+10.0% and a maximum maturity date of June 9, 2025, assuming all extension options are exercised by the borrower. Refer to Note 15 for additional discussion.

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

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


	March 31, 2019			December 31, 2018
Accrued dividends payable		$	77,913		$	76,530
Accrued interest payable			28,904			25,588
Accrued management and incentive fees payable			19,790			18,586
Accounts payable and other liabilities			3,950			4,583
Derivative liabilities			1,726			2,925

Total		$	132,283		$	128,212

5.	SECURED DEBT AGREEMENTS, NET

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


	Secured Debt Agreements Borrowings Outstanding
	March 31, 2019				December 31, 2018
Secured credit facilities		$	9,093,821			$	8,870,897
Asset-specific financings			97,699				81,739
Revolving credit agreement			43,845				43,845

Total secured debt agreements		$	9,235,365			$	8,996,481

Deferred financing costs (1)			(27,355	)			(21,725	)

Net book value of secured debt		$	9,208,010			$	8,974,756

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Secured Credit Facilities

The following tables detail our secured credit facilities ($ in thousands):


	March 31, 2019
	Credit Facility Borrowings						Collateral Assets (2)
Lender	Potential (1)		Outstanding		Available (1)		Collateral Assets (2)
Deutsche Bank	$	1,865,813	$	1,865,813	$	—	$	2,357,198
Wells Fargo		1,992,903		1,748,737		244,166		2,556,230
JP Morgan		1,078,749		1,078,749		—		1,357,997
Barclays		890,620		890,620		—		1,113,275
Citibank		878,104		801,474		76,630		1,114,229
Bank of America		793,804		793,804		—		992,805
MetLife		675,329		675,329		—		857,689
Morgan Stanley		444,653		414,456		30,197		589,931
Société Générale		321,182		321,182		—		410,165
Goldman Sachs		237,149		237,149		—		314,526
Goldman Sachs — Multi. JV (3)		169,506		169,506		—		221,202
Bank of America — Multi. JV (3)		97,002		97,002		—		122,167

	$	9,444,814	$	9,093,821	$	350,993	$	12,007,414

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.

(2)	Represents the principal balance of the collateral assets.

(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our secured credit facilities was $9.1 billion for the three months ended March 31, 2019. As of March 31, 2019, we had aggregate borrowings of $9.1 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.72% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.90% per annum, and a weighted-average advance rate of 79.5%. As of March 31, 2019, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.2 years.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)


	December 31, 2018
	Credit Facility Borrowings						Collateral Assets (2)
Lender	Potential (1)		Outstanding		Available (1)		Collateral Assets (2)
Deutsche Bank	$	1,839,698	$	1,839,698	$	—	$	2,325,047
Wells Fargo		1,908,509		1,822,154		86,355		2,514,513
JP Morgan		1,010,628		1,010,628		—		1,266,259
Barclays		890,620		890,620		—		1,113,275
Citibank		852,470		663,917		188,553		1,076,085
Bank of America		873,446		873,446		—		1,090,117
MetLife		675,329		675,329		—		852,733
Morgan Stanley		341,241		276,721		64,520		457,496
Société Générale		321,182		321,182		—		404,048
Goldman Sachs		230,140		230,140		—		295,368
Goldman Sachs — Multi. JV (3)		170,060		170,060		—		212,983
Bank of America — Multi. JV (3)		97,002		97,002		—		121,636

	$	9,210,325	$	8,870,897	$	339,428	$	11,729,560

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.

(2)	Represents the principal balance of the collateral assets.

(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our secured credit facilities was $7.7 billion for the three months ended December 31, 2018. As of December 31, 2018, we had aggregated borrowings of $8.9 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.72% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.90% per annum, and a weighted-average advance rate of 79.5%. As of December 31, 2018, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.5 years.

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following tables outline the key terms of our credit facilities as of March 31, 2019:

Lender

Currency

Guarantee (1)

Margin Call (2)

Term/Maturity

Goldman Sachs — Multi. JV (3)

Collateral marks only

July 12, 2020 (5)

JP Morgan

$ / £

Collateral marks only

January 7, 2021 (6)

Bank of America — Multi. JV (3)

Collateral marks only

July 19, 2021 (7)

Deutsche Bank

$ / €

% (8)

Collateral marks only

August 9, 2021 (8)

Morgan Stanley

$ / £ / €

Collateral marks only

March 1, 2022

Barclays

Collateral marks only

March 29, 2023 (9)

MetLife

Collateral marks only

April 22, 2023 (10)

Bank of America

Collateral marks only

May 21, 2023 (11)

Goldman Sachs

Collateral marks only

October 22, 2023 (12)

Citibank

$ / £ / € / A$ / C$

Collateral marks only

Term matched(13)

Société Générale

$ / £ / €

Collateral marks only

Term matched (13)

Wells Fargo

$ / C$

% (4)

Collateral marks only

Term matched (13)(14)

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.

(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.

(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

(4)	In addition to the 25% guarantee across all borrowings, there is an incremental guarantee of $131.4 million related to $474.4 million of specific borrowings outstanding.

(5)	Includes a one-year extension option which may be exercised at our sole discretion.

(6)	Maturity dates for $520.6 million of specific borrowings outstanding are term-matched to the respective collateral assets.

(7)	Includes two one-year extension options which may be exercised at our sole discretion.

(8)

Includes two one-year extension options which may be exercised at our sole discretion. Specific borrowings outstanding of $860.5 million are 100% guaranteed and the related maturity dates are term-matched to the respective collateral assets. The remainder of the credit facility borrowings are 25% guaranteed.

(9)	Includes three one-year extension options which may be exercised at our sole discretion.

(10)	Includes four one-year extension options which may be exercised at our sole discretion.

(11)	Includes two one-year extension options which may be exercised at our sole discretion.

(12)	Includes three one-year extension options which may be exercised at our sole discretion.

(13)	These secured credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.

(14)	This secured credit facility is term-matched other than $128.2 million of specific borrowings that have a maturity date of May 8, 2019.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)


Currency	Potential Borrowings			Outstanding Borrowings (1)			Floating Rate Index (2)		Spread (3)			Advance Rate (4)
$		$	7,356,109		$	7,047,922		USD LIBOR		1.70	%		79.6	%
€		€	816,557		€	779,119		EURIBOR		1.51	%		80.0	%
£		£	546,781		£	546,781		GBP LIBOR		2.06	%		77.8	%
C$		C$	371,131		C$	371,122		CDOR		1.80	%		82.1	%
A$		A$	255,270		A$	255,270		BBSY		1.90	%		78.0	%

		$	9,444,814		$	9,093,821				1.72	%		79.5	%

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.

(2)	Floating rate indices are generally matched to the payment timing under the terms of each secured credit facility and its respective collateral assets.

(3)	Represents weighted-average spread over the applicable floating rate index, based on borrowings outstanding.

(4)	Represents weighted-average advance rate based on the approved outstanding principal balance of the collateral assets pledged.

Asset-Specific Financings

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


	March 31, 2019
Asset-Specific Financings	Count		Principal Balance			Book Value			Wtd. Avg. Yield/Cost (1)			Guarantee (2)		Wtd. Avg. Term (3)
Collateral assets		2		$	122,699		$	112,093		L+6.05	%		n/a		Aug. 2022
Financing provided		2		$	97,699		$	91,624		L+4.06	%		n/a		Aug. 2022

	December 31, 2018
Asset-Specific Financings	Count		Principal Balance			Book Value			Wtd. Avg. Yield/Cost (1)			Guarantee (2)		Wtd. Avg. Term (3)
Collateral assets		1		$	106,739		$	104,807		L+6.08	%		n/a		Aug. 2022
Financing provided		1		$	81,739		$	80,938		L+4.07	%		n/a		Aug. 2022

(1)

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

(2)	Borrowings under our asset-specific financings are non-recourse to us.

(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.

The weighted-average outstanding balance of our asset-specific financings was $88.9 million for the three months ended March 31, 2019 and $68.0 million for the three months ended December 31, 2018.

Revolving Credit Agreement

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The maturity date of the facility is April 4, 2020.

During the three months ended March 31, 2019, the weighted-average outstanding borrowings under the revolving credit agreement was $43.8 million and we recorded interest expense of $969,000, including $268,000 of amortization of deferred fees and expenses. As of March 31, 2019, we had $43.8 million of borrowings outstanding under the agreement.

During the three months ended December 31, 2018, the weighted-average outstanding borrowings under the revolving credit agreement was $63.5 million and we recorded interest expense of $1.2 million, including $297,000 of amortization of deferred fees and expenses. As of December 31, 2018, we had $43.8 million of borrowings outstanding under the agreement.

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $2.6 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to March 31, 2019; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 83.33% of our total assets. As of March 31, 2019 and December 31, 2018, we were in compliance with these covenants.

6.	LOAN PARTICIPATIONS SOLD, NET

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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

March 31, 2019

Loan Participations Sold

Count

Principal
Balance

Book
Value

Yield/
Cost (1)

Guarantee (2)

Term

Total loan

140,504

139,504

L+5.96

n/a

Feb. 2022

Senior participation (3)(4)

107,330

107,237

L+4.06

n/a

Feb. 2022

December 31, 2018

Loan Participations Sold

Count

Principal
Balance

Book
Value

Yield/
Cost (1)

Guarantee (2)

Term

Total loan

123,745

122,669

L+5.92

n/a

Feb. 2022

Senior participation (3)(4)

94,528

94,418

L+4.07

n/a

Feb. 2022

(1)

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

(2)	As of March 31, 2019 and December 31, 2018, our loan participations sold were non-recourse to us.

(3)	During the three months ended March 31, 2019 and 2018, we recorded $1.7 million and $1.5 million, respectively, of interest expense related to our loan participations sold.

(4)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $93,000 and $110,000 as of March 31, 2019 and December 31, 2018, respectively.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

7.	SECURITIZED DEBT OBLIGATIONS, NET

We have financed a pool of our loans through a collateralized loan obligation, or the CLO, and have also financed one of our loans through a single asset securitization vehicle, or the 2017 Single Asset Securitization. The CLO and the 2017 Single Asset Securitization have issued securitized debt obligations that are non-recourse to us. Both the CLO and the 2017 Single Asset Securitization are consolidated in our financial statements. Refer to Note 15 for further discussion of our CLO and 2017 Single Asset Securitization.

The following tables detail our securitized debt obligations ($ in thousands):


	March 31, 2019
Securitized Debt Obligations	Count		Principal Balance			Book Value			Wtd. Avg. Yield/Cost (1)			Term (2)
Collateralized Loan Obligation
Collateral assets		24		$	1,000,000		$	1,000,000		L+3.74	%		June 2022
Financing provided		1			817,500			811,940		L+1.64	%		June 2035
2017 Single Asset Securitization
Collateral assets (3)		1			691,178			688,117		L+3.60	%		June 2023
Financing provided		1			474,620			474,477		L+1.65	%		June 2033
Total
Collateral assets		25		$	1,691,178		$	1,688,117		L+3.68	%

Financing provided (4)		2		$	1,292,120		$	1,286,417		L+1.65	%


	December 31, 2018
Securitized Debt Obligations	Count		Principal Balance			Book Value			Wtd. Avg. Yield/Cost (1)			Term (2)
Collateralized Loan Obligation
Collateral assets		26		$	1,000,000		$	1,000,000		6.25	%		Apr. 2022
Financing provided		1			817,500			811,023		L+1.74	%		June 2035
2017 Single Asset Securitization
Collateral assets (3)		1			682,297			678,770		L+3.60	%		June 2023
Financing provided		1			474,620			474,448		L+1.65	%		June 2033
Total
Collateral assets		27		$	1,682,297		$	1,678,770		6.19	%

Financing provided (4)		2		$	1,292,120		$	1,285,471		L+1.71	%

(1)

As of March 31, 2019, all of our loans financed by securitized debt obligations earned a floating rate of interest. As of December 31, 2018, 98% of our loans financed by securitized debt obligations earned a floating rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.

(2)

Loan term represents weighted-average final maturity, assuming all extension options are exercised by the borrower. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.

(3)	The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.

(4)	During the three months ended March 31, 2019 and 2018, we recorded $13.5 million and $11.0 million, respectively, of interest expense related to our securitized debt obligations.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

8.	CONVERTIBLE NOTES, NET

As of March 31, 2019, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):


Convertible Notes Issuance	Face Value		Coupon Rate			All-in Cost (1)			Conversion Rate (2)		Maturity
May 2017	$	402,500		4.38	%		4.85	%		28.0324		May 5, 2022
March 2018	$	220,000		4.75	%		5.33	%		27.6052		March 15, 2023

(1)	Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

(2)

Represents the shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $35.67 and $36.23 per share of class A common stock, respectively, for the May 2017 and March 2018 convertible notes. The cumulative dividend threshold as defined in the respective May 2017 and March 2018 convertible notes supplemental indentures have not been exceeded as of March 31, 2019.

The Convertible Notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on January 31, 2022 and December 14, 2022 for the May 2017 and March 2018 convertible notes, respectively, at the applicable conversion rate in effect on the conversion date. Thereafter, the Convertible Notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. We may not redeem the Convertible Notes prior to maturity. The last reported sale price of our class A common stock of $34.56 on March 29, 2019, the last trading day in the quarter ended March 31, 2019, was less than the per share conversion price of the May 2017 and March 2018 convertible notes. We have the intent and ability to settle each series of the Convertible Notes in cash and, as a result, the Convertible Notes did not have any impact on our diluted earnings per share.

Upon our issuance of the May 2017 convertible notes, we recorded a $979,000 discount based on the implied value of the conversion option and an assumed effective interest rate of 4.57%, as well as $8.4 million of initial debt discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the May 2017 convertible notes issuance is 4.91% per annum.

Upon our issuance of the March 2018 convertible notes, we recorded a $1.5 million discount based on the implied value of the conversion option and an assumed effective interest rate of 5.25%, as well as $5.2 million of initial debt discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the March 2018 convertible notes issuance is 5.49% per annum.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the net book value of our Convertible Notes on our consolidated balance sheets ($ in thousands):


	March 31, 2019			December 31, 2018
Face value	$	622,500		$	622,500
Unamortized discount		(11,021	)		(11,740	)
Deferred financing costs		(795	)		(849	)

Net book value	$	610,684		$	609,911

The following table details our interest expense related to the Convertible Notes ($ in thousands):


	Three Months Ended
	March 31,
	2019			2018
Cash coupon		$	7,015		$	6,783
Discount and issuance cost amortization			772			1,189

Total interest expense		$	7,787		$	7,972

Accrued interest payable for the Convertible Notes was $7.8 million and $6.0 million as of March 31, 2019 and December 31, 2018, respectively. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

9.	DERIVATIVE FINANCIAL INSTRUMENTS

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

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

Net Investment Hedges of Foreign Currency Risk

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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


March 31, 2019						December 31, 2018
Foreign Currency Derivatives	Number of Instruments		Notional Amount			Foreign Currency Derivatives	Number of Instruments		Notional Amount
Sell GBP Forward		3		£	262,000	Sell GBP Forward		3		£	192,300
Sell AUD Forward		4		A$	210,700	Sell AUD Forward		2		A$	187,600
Sell EUR Forward		1		€	179,600	Sell EUR Forward		1		€	185,000
Sell CAD Forward		2		C$	78,700	Sell CAD Forward		1		C$	70,600

Cash Flow Hedges of Interest Rate Risk

Certain of our transactions expose us to interest rate risks, which include a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate caps and swaps, and may also include interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk.

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


March 31, 2019
Interest Rate Derivatives	Number of Instruments	Notional Amount			Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	2		C$	17,273	1.0%	CDOR	1.4
Interest Rate Caps	8		$	178,430	2.5%	USD LIBOR	0.3
Interest Rate Caps	1		C$	21,709	3.0%	CDOR	0.7

December 31, 2018
Interest Rate Derivatives	Number of Instruments	Notional Amount			Strike	Index	Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	3		C$	90,472	1.0%	CDOR	0.5
Interest Rate Caps	9		$	204,248	2.4%	USD LIBOR	0.5
Interest Rate Caps	2		C$	39,998	2.5%	CDOR	0.6

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt. During the twelve months following March 31, 2019, we estimate that an additional $63,000 will be reclassified from accumulated other comprehensive income (loss) as an increase to interest income.

Non-designated Hedges

During the three months ended March 31, 2019 and 2018, we recorded gains of $660,000 and $215,000, respectively, related to non-designated hedges that were reported as a component of interest expense in our consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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


March 31, 2019
Non-designated Hedges	Number of Instruments		Notional Amount
Buy GBP / Sell EUR Forward		1		€	12,857
Buy CAD / Sell USD Forward		1		C$	4,200
Buy USD / Sell CAD Forward		1		C$	4,200

December 31, 2018
Non-designated Hedges	Number of Instruments		Notional Amount
Buy AUD / Sell USD Forward		1		A$	55,000
Buy USD / Sell AUD Forward		1		A$	55,000
Buy GBP / Sell USD Forward		1		£	23,200
Buy USD / Sell GBP Forward		1		£	23,200
Buy GBP / Sell EUR Forward		1		€	12,857

Valuation of Derivative Instruments

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


	Fair Value of Derivatives in an Asset Position (1) as of						Fair Value of Derivatives in a Liability Position (2) as of
	March 31, 2019			December 31, 2018			March 31, 2019			December 31, 2018
Derivatives designated as hedging instruments:
Foreign exchange contracts		$	4,862		$	8,210		$	1,720		$	1,307
Interest rate derivatives			228			590			—			—

Total		$	5,090		$	8,800		$	1,720		$	1,307

Derivatives not designated as hedging instruments:
Foreign exchange contracts		$	294		$	1,116		$	6		$	1,618
Interest rate derivatives			—			—			—			—

Total		$	294		$	1,116		$	6		$	1,618

Total Derivatives		$	5,384		$	9,916		$	1,726		$	2,925

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

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

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


	Amount of (Loss) Gain Recognized in OCI on Derivatives								Location of Gain Reclassified from Accumulated OCI into Income		Amount of Gain Reclassified from Accumulated OCI into Income
Derivatives in Hedging Relationships	Three Months Ended March 31,										Three Months Ended March 31,
Derivatives in Hedging Relationships	2019				2018						2019			2018
Net Investment Hedges
Foreign exchange contracts (1)		$	(1,646	)		$	(2,953	)		Interest Expense		$	—		$	—
Cash Flow Hedges
Interest rate derivatives			(134	)			127			Interest Expense (2)			168			109

Total		$	(1,780	)		$	(2,826	)				$	168		$	109

(1)	During the three months ended March 31, 2019 and 2018, we paid net cash settlements of $2.0 million and $7.4 million, respectively, on our foreign currency forward contracts. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.

(2)

During the three months ended March 31, 2019, we recorded total interest and related expenses of $118.7 million, which included a $168,000 expense reduction related to income generated by our cash flow hedges. During the three months ended March 31, 2018, we recorded total interest and related expenses of $70.0 million which included a $109,000 expense reduction related to our cash flow hedges.

Credit-Risk Related Contingent Features

We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of March 31, 2019, we were in a net asset position with each such derivative counterparty, and posted collateral of $5.1 million under these derivative contracts. As of December 31, 2018, we were in a net asset position with each such derivative counterparty and did not have any collateral posted under these derivative contracts.

10.

EQUITY

Stock and Stock Equivalents

Authorized Capital

As of March 31, 2019, we had the authority to issue up to 300,000,000 shares of stock, consisting of 200,000,000 shares of class A common stock and 100,000,000 shares of preferred stock. Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval. In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock. We did not have any shares of preferred stock issued and outstanding as of March 31, 2019.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Class A Common Stock and Deferred Stock Units

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

The following table details our issuance of class A common stock during the three months ended March 31, 2019:


	Three Months Ended March 31, 2019
Shares issued (1)			1,909,628
Gross share issue price (2)		$	34.63
Net share issue price (3)		$	34.28
Net proceeds (4)		$	65,389

(1)	Issuance represents shares issued under our at-the-market program.

(2)	Represents the weighted-average gross price per share paid by the underwriters or sales agents, as applicable.

(3)	Represents the weighted-average net proceeds per share after underwriting or sales discounts and commissions.

(4)	Net proceeds represents proceeds received from the underwriters less applicable transaction costs.

We also issue restricted class A common stock under our stock-based incentive plans. Refer to Note 13 for additional discussion of these long-term incentive plans. In addition to our class A common stock, we also issue deferred stock units to certain members of our board of directors in lieu of cash compensation for services rendered. These deferred stock units are non-voting, but carry the right to receive dividends in the form of additional deferred stock units in an amount equivalent to the cash dividends paid to holders of shares of class A common stock.

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


	Three Months Ended March 31,
Common Stock Outstanding (1)	2019		2018
Beginning balance		123,664,577		108,081,077
Issuance of class A common stock (2)		1,909,909		455
Issuance of restricted class A common stock, net		320,903		309,775
Issuance of deferred stock units		7,964		7,871

Ending balance		125,903,353		108,399,178

(1)	Includes deferred stock units held by members of our board of directors of 236,803 and 205,088 as of March 31, 2019 and 2018, respectively.

(2)	Includes 281 and 455 shares issued under our dividend reinvestment program during the three months ended March 31, 2019 and 2018, respectively.

Dividend Reinvestment and Direct Stock Purchase Plan

On March 25, 2014, we adopted a dividend reinvestment and direct stock purchase plan, under which we registered and reserved for issuance, in the aggregate, 10,000,000 shares of class A common stock. Under the dividend reinvestment component of this plan, our class A common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of class A common stock. The direct stock purchase

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

component allows stockholders and new investors, subject to our approval, to purchase shares of class A common stock directly from us. During the three months ended March 31, 2019 and 2018, we issued 281 shares and 455 shares, respectively, of class A common stock under the dividend reinvestment component of the plan. As of March 31, 2019, a total of 9,994,957 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

At the Market Stock Offering Program

On November 14, 2018, we entered into equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our class A common stock. Sales of class A common stock made pursuant to our ATM Agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended. Actual sales will depend on a variety of factors including market conditions, the trading price of our class A common stock, our capital needs, and our determination of the appropriate sources of funding to meet such needs. During the three months ended March 31, 2019, we issued and sold 1,909,628 shares of class A common stock under ATM Agreements, generating net proceeds totaling $65.4 million. We did not sell any shares of our class A common stock under ATM Agreements during the three months ended March 31, 2018. As of March 31, 2019, shares of our class A common stock with an aggregate sales price of $363.8 million remained available for issuance under our ATM Agreements.

Dividends

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Our dividend policy remains subject to revision at the discretion of our board of directors. All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

On March 15, 2019, we declared a dividend of $0.62 per share, or $77.9 million, that was paid on April 15, 2019, to stockholders of record as of March 29, 2019. The following table details our dividend activity ($ in thousands, except per share data):


	Three Months Ended March 31,
	2019		2018
Dividends declared per share of common stock	$	0.62	$	0.62
Total dividends declared	$	77,913	$	67,066

Earnings Per Share

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding ($ in thousands, except per share data):


	Three Months Ended March 31,
	2019		2018
Net income (1)	$	76,565	$	60,958
Weighted-average shares outstanding, basic and diluted		124,333,048		108,397,598

Per share amount, basic and diluted	$	0.62	$	0.56

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

Other Balance Sheet Items

Accumulated Other Comprehensive Loss

As of March 31, 2019, total accumulated other comprehensive loss was $30.8 million, primarily representing (i) $99.3 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $68.5 million of net realized and unrealized gains related to changes in the fair value of derivative instruments. As of December 31, 2018, total accumulated other comprehensive loss was $34.2 million, primarily representing (i) $104.6 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $70.4 million of net realized and unrealized gains related to changes in the fair value of derivative instruments.

Non-Controlling Interests

The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are not owned by us. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of our Multifamily Joint Venture. As of March 31, 2019, our Multifamily Joint Venture’s total equity was $81.3 million, of which $69.1 million was owned by us, and $12.2 million was allocated to non-controlling interests. As of December 31, 2018, our Multifamily Joint Venture’s total equity was $69.9 million, of which $59.4 million was owned by us, and $10.5 million was allocated to non-controlling interests.

11.

OTHER EXPENSES

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

Management and Incentive Fees

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

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

During the three months ended March 31, 2019 and 2018, we incurred management fees payable to our Manager of $13.1 million and $11.1 million, respectively. In addition, during the three months ended March 31, 2019 and 2018, we incurred incentive fees payable to our Manager of $6.7 million and $4.4 million, respectively.

As of March 31, 2019 and December 31, 2018 we had accrued management and incentive fees payable to our Manager of $19.8 million and $18.6 million, respectively.

General and Administrative Expenses

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


	Three Months Ended March 31,
	2019		2018
Professional services (1)	$	1,096	$	1,223
Operating and other costs (1)		449		509

Subtotal		1,545		1,732
Non-cash compensation expenses
Restricted class A common stock earned		7,643		6,851
Director stock-based compensation		125		125

Subtotal		7,768		6,976

Total general and administrative expenses	$	9,313	$	8,708

(1)	During the three months ended March 31, 2019 and 2018, we recognized an aggregate $169,000 and $101,000, respectively, of expenses related to our Multifamily Joint Venture.

12.

INCOME TAXES

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

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of March 31, 2019 and December 31, 2018, we were in compliance with all REIT requirements.

Securitization transactions could result in the creation of taxable mortgage pools for federal income tax purposes. As a REIT, so long as we own 100% of the equity interests in a taxable mortgage pool, we generally

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

would not be adversely affected by the characterization of the securitization as a taxable mortgage pool. Certain categories of stockholders, however, such as foreign stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, or UBTI, could be subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage pool. We currently own no UBTI producing assets and we do not intend to purchase or generate assets that produce UBTI distributions in the future.

During the three months ended March 31, 2019 and 2018, we recorded a current income tax provision of $101,000 and $120,000, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes. We did not have any deferred tax assets or liabilities as of March 31, 2019 or December 31, 2018.

Effective January 1, 2018, under legislation from the Tax Cuts and Jobs Act of 2017, the maximum U.S. federal corporate income tax rate was reduced from 35% to 21%. Accordingly, to the extent that the activities of our taxable REIT subsidiaries generate taxable income in future periods, they may be subject to lower U.S. federal income tax rates.

We have net operating losses, or NOLs, generated by our predecessor business that may be carried forward and utilized in current or future periods. As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our NOLs is generally limited to $2.0 million per annum by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust. As of December 31, 2018, we had estimated NOLs of $159.0 million that will expire in 2029, unless they are utilized by us prior to expiration.

As of March 31, 2019, tax years 2015 through 2018 remain subject to examination by taxing authorities.

13.

STOCK-BASED INCENTIVE PLANS

We are externally managed by our Manager and do not currently have any employees. However, as of March 31, 2019, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through the issuance of stock-based instruments.

We had stock-based incentive awards outstanding under nine benefit plans as of March 31, 2019. Seven of such benefit plans have expired and no new awards may be issued under them. Under our two current benefit plans, a maximum of 5,000,000 shares of our class A common stock may be issued to our Manager, our directors and officers, and certain employees of affiliates of our Manager. As of March 31, 2019, there were 3,977,788 shares available under the Current Plans.

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


	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2018		1,614,907			$	32.94
Granted		334,904				31.54
Vested		(153,653	)			31.13
Forfeited		(14,001	)			31.52

Balance as of March 31, 2019		1,782,157			$	32.84

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

These shares generally vest in installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of the Current Plans. The 1,782,157 shares of restricted class A common stock outstanding as of March 31, 2019 will vest as follows: 796,115 shares will vest in 2019; 650,663 shares will vest in 2020; and 335,379 shares will vest in 2021. As of March 31, 2019, total unrecognized compensation cost relating to unvested share-based compensation arrangements was $52.6 million based on the grant date fair value of shares granted, subsequent to July 1, 2018. The compensation cost of our share based compensation arrangements for awards granted before July 1, 2018 is based on $31.43, the closing price of our class A common stock on the last trading day prior to July 1, 2018. This cost is expected to be recognized over a weighted-average period of 1.2 years from March 31, 2019.

14.

FAIR VALUES

Assets and Liabilities Measured at Fair Value

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


	March 31, 2019												December 31, 2018
	Level 1			Level 2			Level 3			Total			Level 1			Level 2			Level 3			Total
Assets
Derivatives		$	—		$	5,384		$	—		$	5,384		$	—		$	9,916		$	—		$	9,916
Liabilities
Derivatives		$	—		$	1,726		$	—		$	1,726		$	—		$	2,925		$	—		$	2,925

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

Fair Value of Financial Instruments

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the book value, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):


	March 31, 2019						December 31, 2018
	Book Value		Face Amount		Fair Value		Book Value		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	79,437	$	79,437	$	79,437	$	105,662	$	105,662	$	105,662
Loans receivable, net		14,508,735		14,603,831		14,605,743		14,191,200		14,293,970		14,294,836
Debt securities held-to-maturity (1)		95,877		98,579		97,200		96,167		99,000		96,600

Financial liabilities
Secured debt agreements, net		9,208,010		9,235,365		9,235,365		8,974,756		8,996,481		8,996,481
Loan participations sold, net		107,237		107,330		107,330		94,418		94,528		94,528
Securitized debt obligations, net		1,286,417		1,292,120		1,290,833		1,285,471		1,292,120		1,283,086
Convertible notes, net		610,684		622,500		627,050		609,911		622,500		605,348

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

Estimates of fair value for cash and cash equivalents, restricted cash, and convertible notes are measured using observable, quoted market prices, or Level 1 inputs. Estimates of fair value for debt securities held to maturity and securitized debt obligations are measured using observable, quoted market prices, in inactive markets, or Level 2 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.

15.

VARIABLE INTEREST ENTITIES

Consolidated Variable Interest Entities

We have financed a portion of our loans through the CLO and the 2017 Single Asset Securitization, both of which are VIEs. We are the primary beneficiary and consolidate the CLO and the 2017 Single Asset Securitization on our balance sheet as we (i) control the relevant interests of the CLO and the 2017 Single Asset Securitization that give us power to direct the activities that most significantly affect the CLO and the 2017 Single Asset Securitization, and (ii) have the right to receive benefits and obligation to absorb losses of the CLO and the 2017 Single Asset Securitization through the subordinate interests we own.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the assets and liabilities of our consolidated CLO and 2017 Single Asset Securitization VIEs ($ in thousands):


	March 31, 2019			December 31, 2018
Assets:
Loans receivable, net		$	1,463,702		$	1,500,000
Other assets			41,565			5,440

Total assets		$	1,505,267		$	1,505,440


Liabilities:
Securitized debt obligations, net		$	1,286,417		$	1,285,471
Other liabilities			2,342			2,155

Total liabilities		$	1,288,759		$	1,287,626

Assets held by these VIEs are restricted and can be used only to settle obligations of the VIEs, including the subordinate interests owned by us. The liabilities of these VIEs are non-recourse to us and can only be satisfied from the assets of the VIEs. The consolidation of these VIEs results in an increase in our gross assets, liabilities, interest income and interest expense, however it does not affect our stockholders’ equity or net income.

Non-Consolidated Variable Interest Entities

In the third quarter of 2018, we contributed a $517.5 million loan to the $1.0 billion 2018 Single Asset Securitization, which is a VIE, and invested in the related $99.0 million subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. We are not obligated to provide, have not provided, and do not intend to provide, financial support to the 2018 Single Asset Securitization, and therefore, our maximum exposure to loss is limited to our book value of $95.9 million as of March 31, 2019. Refer to Note 16 for further details of this transaction.

We are not obligated to provide, have not provided, and do not intend to provide financial support to these consolidated and non-consolidated VIEs.

16.

TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2019, and will be automatically renewed for a one-year term upon such date and each anniversary thereafter unless earlier terminated.

As of March 31, 2019 and December 31, 2018, our consolidated balance sheet included $19.8 million and $18.6 million of accrued management and incentive fees payable to our Manager, respectively. During the three months ended March 31, 2019, we paid management and incentive fees to our Manager of $18.6 million, compared to $14.3 million during the same period of 2018. In addition, during the three months ended March 31, 2019, we reimbursed our Manager for expenses incurred on our behalf of $188,000 compared to $190,000 during the same period of 2018.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

As of March 31, 2019, our Manager held 882,524 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $27.9 million, and vest in installments over three years from the date of issuance. During the three months ended March 31, 2019 and 2018, we recorded non-cash expenses related to shares held by our Manager of $3.8 million and $3.2 million, respectively. Refer to Note 13 for further details on our restricted class A common stock.

An affiliate of our Manager is the special servicer of the CLO. This affiliate did not earn any special servicing fees related to the CLO during the three months ended March 31, 2019 or 2018.

During the three months ended March 31, 2019 and 2018, we incurred $86,000 and $141,000, respectively, of expenses for various administrative, compliance, and capital market data services to third-party service providers that are affiliates of our Manager.

In the first quarter of 2019, we originated £240.1 million of a total £490.0 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third-party without our involvement and our 49% interest in the senior loan was made on such market terms.

In the first quarter of 2018, we originated €1.0 billion of a total €7.3 billion senior term facility, or the Senior Term Facility, for the acquisition of a portfolio of Spanish real estate assets and a Spanish real estate management and loan servicing company by a joint venture between Banco Santander S.A. and certain Blackstone-advised investment vehicles. These investment vehicles own 51% of the joint venture, and we will forgo all non-economic rights under the Senior Term Facility, including voting rights, so long as Blackstone-advised investment vehicles control the joint venture. The Senior Term Facility was negotiated by the joint venture with third-party investment banks without our involvement, and our 14% interest in the Senior Term Facility was made on such market terms.

In the first quarter of 2018, we originated a $330.0 million senior loan, the proceeds of which were used by the borrower to repay an existing loan owned by a Blackstone-advised investment vehicle.

17.

COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of March 31, 2019, we had unfunded commitments of $3.1 billion related to 89 loans receivable, which amounts will generally be funded to finance our borrowers’ construction or development of real estate related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Principal Debt Repayments

Our contractual principal debt repayments as of March 31, 2019 were as follows ($ in thousands):


	Total Obligation		Payment Timing
	Total Obligation		Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
Principal repayments under secured debt agreements (1)	$	9,235,365	$	392,854	$	3,484,304	$	5,172,469	$	185,738
Principal repayments of convertible notes (2)		622,500		—		—		622,500		—

Total (3)	$	9,857,865	$	392,854	$	3,484,304	$	5,794,969	$	185,738

(1)	The allocation of repayments under our secured debt agreements is based on the earlier of (i) the maturity date of each facility, or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

(2)	Reflects the outstanding principal balance of convertible notes, excluding any potential conversion premium. Refer to Note 8 for further details on our convertible notes.

(3)	As of March 31, 2019, the total does not include $107.3 million of loan participations sold, $449.5 million of non-consolidated senior interests, and $1.3 billion of securitized debt obligations, as the satisfaction of these liabilities will not require cash outlays from us.

Litigation

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2019, we were not involved in any material legal proceedings.

Board of Directors’ Compensation

As of March 31, 2019, of the eight members of our board of directors, our five independent directors are entitled to annual compensation of $175,000 each, $75,000 of which will be paid in the form of cash and $100,000 in the form of deferred stock units. The other three board members, including our chairman and our chief executive officer, are not compensated by us for their service as directors. In addition, (i) the chair of our audit committee receives additional annual cash compensation of $20,000, (ii) the other members of our audit committee receive additional annual cash compensation of $10,000, and (iii) the chairs of each of our compensation and corporate governance committees receive additional annual cash compensation of $10,000.

18.

SUBSEQUENT EVENTS

On April 23, 2019, we closed on a $500.0 million senior secured term loan facility, or the Secured Term Loan. The Secured Term Loan accrues interest at a floating rate equal to LIBOR plus 2.50% and was issued at a 99.75% price. It has a maturity date of April 23, 2026 and is open to prepayment after October 23, 2019. The covenant package includes an 83.33% maximum debt-to-total assets covenant consistent with those in our secured debt agreements and does not include any borrowing base covenant.

Certain investment funds advised by affiliates of our Manager were allocated an aggregate $55.0 million participation in the Secured Term Loan as a part of a broad syndication lead-arranged by JP Morgan. Blackstone Advisory Partners L.P., an affiliate of our Manager, was engaged as a book-runner for the transaction and received a fee of $500,000 in such capacity.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In addition to historical data, this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to, among other things, our business, operations and financial performance. You can identify these forward-looking statements by the use of words such as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “seeks,” “anticipates,” “should,” “could,” “may,” “designed to,” “foreseeable future,” “believe,” “scheduled,” and similar expressions. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Our actual results or outcomes may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December 31, 2018 and elsewhere in this quarterly report on Form 10-Q.

Introduction

I. Key Financial Measures and Indicators

As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Core Earnings, and book value per share. For the three months ended March 31, 2019 we recorded earnings per share of $0.62, declared a dividend of $0.62 per share, and reported $0.71 per share of Core Earnings. In addition, our book value per share as of March 31, 2019 was $27.32. As further described below, Core Earnings is a measure that is not prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. We use Core Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan activity and operations.

Earnings Per Share and Dividends Declared

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


	Three Months Ended
	March 31, 2019			December 31, 2018
Net income (1)		$	76,565		$	73,643
Weighted-average shares outstanding, basic and diluted			124,333,048			121,588,404

Net income per share, basic and diluted		$	0.62		$	0.61

Dividends declared per share		$	0.62		$	0.62

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

Core Earnings

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

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

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

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


	Three Months Ended
	March 31, 2019			December 31, 2018
Net income (1)		$	76,565		$	73,643
Non-cash compensation expense			7,768			7,666
Hedging and foreign currency income, net (2)			3,271			1,942
Other items			95			394

Core Earnings		$	87,699		$	83,645

Weighted-average shares outstanding, basic and diluted			124,333,048			121,588,404

Core Earnings per share, basic and diluted		$	0.71		$	0.69

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

(2)

Primarily represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and USD LIBOR. These forward contracts effectively convert the rate exposure to USD LIBOR, resulting in additional interest income earned in U.S. dollar terms. These amounts are not included in GAAP net income, but rather as a component of Other Comprehensive Income in our consolidated financial statements.

Book Value Per Share

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


	March 31, 2019			December 31, 2018
Stockholders’ equity		$	3,439,398		$	3,364,124
Shares
Class A common stock			125,666,550			123,435,738
Deferred stock units			236,803			228,839

Total outstanding			125,903,353			123,664,577

Book value per share		$	27.32		$	27.20

II. Loan Portfolio

During the quarter ended March 31, 2019, we originated or acquired $698.7 million of loans. Loan fundings during the quarter totaled $806.2 million, including $6.9 million of non-consolidated senior interests. Loan repayments during the quarter totaled $508.2 million, including $12.7 million of non-consolidated senior interests. We generated interest income of $224.8 million and incurred interest expense of $118.7 million during the quarter, which resulted in $106.1 million of net interest income during the three months ended March 31, 2019.

Portfolio Overview

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


	Three Months Ended March 31, 2019				Three Months Ended December 31, 2018
Loan originations (1)		$	698,732			$	3,500,066
Loan fundings (2)		$	806,241			$	2,667,915
Loan repayments (3)			(508,224	)			(594,728	)

Total net fundings		$	298,017			$	2,073,187

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

(2)	Loan fundings during the three months ended March 31, 2019 and December 31, 2018 included $6.9 million and $667,000, respectively, of additional fundings under related non-consolidated senior interests.

(3)	Loan repayments during the three months ended March 31, 2019 and December 31, 2018 included $12.7 million and $12.2 million, respectively, of additional repayments of loan exposure under related non-consolidated senior interests.

The following table details overall statistics for our investment portfolio as of March 31, 2019 ($ in thousands):


				Total Investment Exposure
	Balance Sheet Portfolio (1)			Loan Exposure (1)(2)			Other Investments (3)			Total Investment Portfolio
Number of investments		122			122			1			123
Principal balance	$	14,603,831		$	15,053,372		$	1,030,595		$	16,083,967
Net book value	$	14,508,735		$	14,508,735		$	95,877		$	14,604,612
Unfunded loan commitments (4)	$	3,123,059		$	3,186,128		$	—		$	3,186,128
Weighted-average cash coupon (5)		5.63	%		5.59	%		L + 2.75	%		5.57	%
Weighted-average all-in yield (5)		5.99	%		5.95	%		L + 2.99	%		5.92	%
Weighted-average maximum maturity (years) (6)		3.8			3.8			6.2			3.9
Loan to value (LTV) (7)		63.4	%		63.5	%		42.6	%		62.2	%

(1)	Excludes investment exposure to the $98.6 million subordinate risk retention interest we own in the $1.0 billion 2018 Single Asset Securitization. Refer to Notes 4 and 15 to our consolidated financial statements for further discussion of the 2018 Single Asset Securitization.

(2)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. Total loan exposure encompasses the entire loan we originated and financed, including $449.5 million of such non-consolidated senior interests that are not included in our balance sheet portfolio.

(3)

Includes investment exposure to the $1.0 billion 2018 Single Asset Securitization. We do not consolidate the 2018 Single Asset Securitization on our consolidated financial statements, and instead reflect our $98.6 million subordinate risk retention investment as a component of other assets on our consolidated balance sheet. Refer to Notes 4 and 15 to our consolidated financial statements for further discussion of the 2018 Single Asset Securitization.

(4)

(5)

As of March 31, 2019, 96% of our loans by total loan exposure earned a floating rate of interest, primarily indexed to USD LIBOR, and 4% earned a fixed rate of interest. Cash coupon and all-in yield assume applicable floating benchmark rates as of March 31, 2019 for weighted-average calculation. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.

(6)

Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date. As of March 31, 2019, 67% of our loans and other investments were subject to yield maintenance or other prepayment restrictions and 33% were open to repayment by the borrower without penalty.

(7)	Based on LTV as of the dates loans and other investments were originated or acquired by us.

The charts below detail the geographic distribution and types of properties securing our investment portfolio, as of March 31, 2019:

LOGO

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

Asset Management

We actively manage the investments in our loan portfolio and exercise the rights afforded to us as a lender, including collateral level budget approvals, lease approvals, loan covenant enforcement, escrow/reserve management, collateral release approvals, and other rights that we may negotiate.

As discussed in Note 2 to our consolidated financial statements, our Manager performs a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5,” from less risk to greater risk.

The following table allocates the principal balance and total loan exposure balances based on our internal risk ratings ($ in thousands):


		March 31, 2019
Risk Rating		Number of Loans		Net Book Value			Total Loan Exposure (1)(2)
	1		3		$	255,229		$	255,899
	2		37			4,275,769			4,350,775
	3		82			9,977,737			10,446,698
	4		—			—			—
	5		—			—			—

			122		$	14,508,735		$	15,053,372

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $449.5 million of such non-consolidated senior interests as of March 31, 2019.

(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. Refer to Notes 4 and 15 to our consolidated financial statements for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

The weighted-average risk rating of our total loan exposure was 2.7 as of both March 31, 2019 and December 31, 2018.

Multifamily Joint Venture

As of March 31, 2019, our Walker & Dunlop Multifamily Joint Venture held $343.4 million of loans, which are included in the loan disclosures above. Refer to Note 2 to our consolidated financial statements for additional discussion of our Multifamily Joint Venture.

Portfolio Financing

Our portfolio financing arrangements include secured credit facilities, asset-specific financings, a revolving credit agreement, loan participations sold, non-consolidated senior interests, and securitized debt obligations.

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


	Portfolio Financing Outstanding Principal Balance
	March 31, 2019			December 31, 2018
Secured credit facilities		$	9,093,821		$	8,870,897
Asset-specific financings			97,699			81,739
Revolving credit agreement			43,845			43,845
Loan participations sold			107,330			94,528
Non-consolidated senior interests (1)			449,542			446,874
Securitized debt obligations			1,292,120			1,292,120

Total portfolio financing		$	11,084,357		$	10,830,003

(1)	These non-consolidated senior interests provide structural leverage for our net investments which are reflected in the form of mezzanine loans or other subordinate interests on our balance sheet and in our results of operations.

Secured Credit Facilities

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


	March 31, 2019
	Credit Facility Borrowings									Collateral Assets (2)
Lender	Potential (1)			Outstanding			Available (1)			Collateral Assets (2)
Deutsche Bank		$	1,865,813		$	1,865,813		$	—		$	2,357,198
Wells Fargo			1,992,903			1,748,737			244,166			2,556,230
JP Morgan			1,078,749			1,078,749			—			1,357,997
Barclays			890,620			890,620			—			1,113,275
Citibank			878,104			801,474			76,630			1,114,229
Bank of America			793,804			793,804			—			992,805
MetLife			675,329			675,329			—			857,689
Morgan Stanley			444,653			414,456			30,197			589,931
Société Générale			321,182			321,182			—			410,165
Goldman Sachs			237,149			237,149			—			314,526
Goldman Sachs — Multi. JV (3)			169,506			169,506			—			221,202
Bank of America — Multi. JV (3)			97,002			97,002			—			122,167

		$	9,444,814		$	9,093,821		$	350,993		$	12,007,414

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.

(2)	Represents the principal balance of the collateral assets.

(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 to our consolidated financial statements for additional discussion of our Multifamily Joint Venture.

Asset-Specific Financings

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


	March 31, 2019
Asset-Specific Financings	Count		Principal Balance			Book Value			Wtd. Avg. Yield/Cost (1)			Guarantee (2)		Wtd. Avg. Term (3)
Collateral assets		2		$	122,699		$	112,093		L+6.05	%		n/a		Aug. 2022
Financing provided		2		$	97,699		$	91,624		L+4.06	%		n/a		Aug. 2022

(1)

(2)	Borrowings under our asset-specific financings are non-recourse to us.

(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.

Revolving Credit Agreement

We have a $250.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to nine months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The maturity date of the facility is April 4, 2020.

Loan Participations Sold

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

March 31, 2019

Loan Participations Sold

Count

Principal
Balance

Book
Value

Yield/
Cost (1)

Guarantee (2)

Term

Total loan

140,504

139,504

L+5.96

n/a

Feb. 2022

Senior participation (3)(4)

107,330

107,237

L+4.06

n/a

Feb. 2022

(1)

(2)	As of March 31, 2019, our loan participations sold was non-recourse to us.

(3)	During the three months ended March 31, 2019, we recorded $1.7 million of interest expense related to our loan participations sold.

(4)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $93,000 as of March 31, 2019.

Refer to Note 6 to our consolidated financial statements for additional details of our loan participations sold.

Non-Consolidated Senior Interests

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. These non-consolidated senior interests provide structural leverage for our net investments which are reflected in the form of mezzanine loans or other subordinate interests on our balance sheet and in our results of operations. The following table details the subordinate interests retained on our balance sheet and the related non-consolidated senior interests as of March 31, 2019 ($ in thousands):

March 31, 2019

Non-Consolidated Senior Interests

Count

Principal
Balance

Book
Value

Wtd. Avg.
Yield/Cost (1)

Guarantee

Wtd. Avg.
Term

Total loan

552,310

n/a

6.10%

n/a

Oct. 2022

Senior participation

449,542

n/a

4.60%

n/a

Oct. 2022

(1)

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

Securitized Debt Obligations

The following table details our securitized debt obligations ($ in thousands):


	March 31, 2019
Securitized Debt Obligations	Count		Principal Balance			Book Value			Wtd. Avg. Yield/Cost (1)			Term (2)
Collateralized Loan Obligation
Collateral assets		24		$	1,000,000		$	1,000,000		L+3.74	%		June 2022
Financing provided		1			817,500			811,940		L+1.64	%		June 2035
2017 Single Asset Securitization
Collateral assets (3)		1			691,178			688,117		L+3.60	%		June 2023
Financing provided		1			474,620			474,477		L+1.65	%		June 2033
Total
Collateral assets		25		$	1,691,178		$	1,688,117		L+3.68	%

Financing provided (4)		2		$	1,292,120		$	1,286,417		L+1.65	%

(1)	In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.

(2)

(3)	The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.

(4)	During the three months ended March 31, 2019, we recorded $13.5 million of interest expense related to our securitized debt obligations.

Refer to Notes 7 and 15 to our consolidated financial statements for additional details of our securitized debt obligations.

Floating Rate Portfolio

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of March 31, 2019, 96% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. As of March 31, 2019, the remaining 4% of our loans by total loan exposure earned a fixed rate of interest, but are financed with liabilities that pay interest at floating rates, which resulted in a negative correlation to rising interest rates to the extent of our financing. In certain instances where we have financed fixed rate assets with floating rate liabilities, we have purchased interest rate swaps or caps to limit our exposure to increases in interest rates on such liabilities.

Our liabilities are generally currency and index-matched to each collateral asset, resulting in a net exposure to movements in benchmark rates that varies by currency silo based on the relative proportion of floating rate assets and liabilities. The following table details our loan portfolio’s net exposure to interest rates by currency as of March 31, 2019 ($/£/€/A$/C$ in thousands):


	USD			GBP			EUR			AUD			CAD
Floating rate loans (1)	$	11,665,025		£	837,541		€	1,020,697		A$	468,020		C$	315,393
Floating rate debt (1)(2)(3)		(8,644,829	)		(546,781	)		(779,119	)		(255,270	)		(353,849	)

Net floating rate exposure (4)	$	3,020,196		£	290,760		€	241,578		A$	212,750		C$	(38,456	)

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

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

(3)	Balance includes two interest rate swaps totaling C$17.3 million ($13.0 million as of March 31, 2019) that are used to hedge a portion of our fixed rate debt.

(4)	In addition, we have interest rate caps of $178.4 million and C$21.7 million ($16.3 million as of March 31, 2019) to limit our exposure to increases in interest rates.

Convertible Notes

As of March 31, 2019, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):


Convertible Notes Issuance	Face Value			Coupon Rate			All-in Cost (1)			Maturity
May 2017		$	402,500		4.38	%		4.85	%		May 5, 2022
March 2018		$	220,000		4.75	%		5.33	%		March 15, 2023

(1)	Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

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

III. Our Results of Operations

Operating Results

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


	Three Months Ended March 31,						2019 vs. 2018
	2019			2018			$
Income from loans and other investments
Interest and related income	$	224,759		$	155,425		$	69,334
Less: Interest and related expenses		118,688			69,989			48,699

Income from loans and other investments, net		106,071			85,436			20,635
Other expenses
Management and incentive fees		19,790			15,492			4,298
General and administrative expenses		9,313			8,708			605

Total other expenses		29,103			24,200			4,903

Income before income taxes		76,968			61,236			15,732
Income tax provision		101			120			(19	)

Net income		76,867			61,116			15,751

Net income attributable to non-controlling interests		(302	)		(158	)		(144	)

Net income attributable to Blackstone Mortgage Trust, Inc.	$	76,565		$	60,958		$	15,607

Net income per share — basic and diluted	$	0.62		$	0.56		$	0.06
Dividends declared per share	$	0.62		$	0.62		$	—

Income from loans and other investments, net

Income from loans and other investments, net increased $20.6 million during the three months ended March 31, 2019 compared to the corresponding period in 2018. The increase was primarily due to (i) an increase in LIBOR and (ii) an increase in the weighted-average principal balance of our loan portfolio, which increased by $4.4 billion during the three months ended March 31, 2019, as compared to the corresponding period in 2018. This was offset by the increase in the weighted-average principal balance of our outstanding financing arrangements, which increased by $4.0 billion during the three months ended March 31, 2019, as compared to the corresponding period in 2018.

Other expenses

Other expenses are composed of management and incentive fees payable to our Manager and general and administrative expenses. Other expenses increased by $4.9 million during the three months ended March 31, 2019 compared to the corresponding period in 2018 due to (i) an increase of $2.3 million of incentive fees payable to our Manager as a result of an increase in Core Earnings, (ii) an increase of $2.0 million of management fees payable to our Manager, primarily as a result of net proceeds received from the sale of our class A common stock during 2018, and (iii) $792,000 of additional non-cash restricted stock amortization related to shares awarded under our long-term incentive plans. These were partially offset by a decrease of $186,000 of general operating expenses.

Net income attributable to non-controlling interests

During the three months ended March 31, 2019 and 2018, we recorded $302,000 and $158,000, respectively, of net income attributable to non-controlling interests related to our Multifamily Joint Venture.

Dividends per share

During the three months ended March 31, 2019, we declared a dividend of $0.62 per share, or $77.9 million, which was paid on April 15, 2019 to common stockholders of record as of March 29, 2019. During the three months ended March 31, 2018, we declared a dividend of $0.62 per share, or $67.1 million.

IV. Liquidity and Capital Resources

Capitalization

We have capitalized our business to date through, among other things, the issuance and sale of shares of our class A common stock, borrowings under secured debt agreements, and the issuance and sale of Convertible Notes. As of March 31, 2019, we had 125,666,550 shares of our class A common stock outstanding representing $3.5 billion of stockholders’ equity, $9.2 billion of outstanding borrowings under secured debt agreements, and $622.5 million of Convertible Notes outstanding.

As of March 31, 2019, our secured debt agreements consisted of secured credit facilities with an outstanding balance of $9.1 billion and $97.7 million of asset-specific financings. We also finance our business through the sale of loan participations and non-consolidated senior interests. As of March 31, 2019 we had $107.3 million of loan participations sold and $449.5 million of non-consolidated senior interests outstanding. In addition, as of March 31, 2019, our consolidated balance sheet included $1.3 billion of securitized debt obligations related to our CLO and our 2017 Single Asset Securitization.

See Notes 5, 6, 7, and 8 to our consolidated financial statements for additional details regarding our secured debt agreements, loan participations sold, securitized debt obligations, and Convertible Notes, respectively.

Debt-to-Equity Ratio and Total Leverage Ratio

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


	March 31, 2019		December 31, 2018
Debt-to-equity ratio (1)		2.8x		2.8x
Total leverage ratio (2)		3.7x		3.7x

(1)	Represents (i) total outstanding secured debt agreements and convertible notes, less cash, to (ii) total equity, in each case at period end.

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

Sources of Liquidity

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


	March 31, 2019			December 31, 2018
Cash and cash equivalents		$	79,437		$	105,662
Available borrowings under secured debt agreements			370,514			359,618
Loan principal payments held by servicer, net (1)			37,285			4,855

		$	487,236		$	470,135

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

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

We may also access liquidity through a dividend reinvestment plan and direct stock purchase plan, under which 9,994,957 shares of class A common stock were available for issuance as of March 31, 2019, and our at-the-market stock offering program, pursuant to which we may sell, from time to time, up to $363.8 million of additional shares of our class A common stock as of March 31, 2019. Refer to Note 10 to our consolidated financial statements for additional details.

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

Liquidity Needs

In addition to our ongoing loan origination activity, our primary liquidity needs include interest and principal payments under our $9.2 billion of outstanding borrowings under secured debt agreements, our Convertible Notes, our unfunded loan commitments, dividend distributions to our stockholders, and operating expenses.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of March 31, 2019 were as follows ($ in thousands):


			Payment Timing
	Total Obligation		Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
Unfunded loan commitments (1)	$	3,123,059	$	194,868	$	1,253,409	$	1,674,782	$	—
Principal repayments under secured debt agreements (2)		9,235,365		392,854		3,484,304		5,172,469		185,738
Principal repayments of convertible notes (3)		622,500		—		—		622,500		—
Interest payments (2)(4)		1,242,888		402,734		622,760		209,286		8,108

Total (5)	$	14,223,812	$	990,456	$	5,360,473	$	7,679,037	$	193,846

(1)	The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.

(2)	The allocation of repayments under our secured debt agreements for both principal and interest payments is based on the earlier of (i) the maturity date of each facility, or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

(3)	Reflects the outstanding principal balance of convertible notes, excluding any potential conversion premium. Refer to Note 8 to our consolidated financial statements for further details on our convertible notes.

(4)

Represents interest payments on our secured debt agreements and convertible notes. Future interest payment obligations are estimated assuming the amounts outstanding and the interest rates in effect as of March 31, 2019 will remain constant into the future. This is only an estimate as actual amounts borrowed and interest rates will vary over time.

(5)	Total does not include $107.3 million of loan participations sold, $449.5 million of non-consolidated senior interests, and $1.3 billion of securitized debt obligations, as the satisfaction of these liabilities will not require cash outlays from us.

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

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

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

Cash Flows

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


	Three Months Ended March 31,
	2019			2018
Cash flows provided by operating activities	$	77,572		$	72,579
Cash flows used in investing activities		(333,446	)		(967,495	)
Cash flows provided by financing activities		229,678			857,676

Net decrease in cash, cash equivalents, and restricted cash	$	(26,196	)	$	(37,240	)

We experienced a net decrease in cash, cash equivalents, and restricted cash of $26.2 million for the three months ended March 31, 2019, compared to a net decrease of $37.2 million for the three months ended March 31, 2018. During the three months ended March 31, 2019, we (i) received $463.5 million of proceeds from loan principal repayments, (ii) borrowed a net $237.8 million under our secured debt agreements, and (iii) received $65.4 million of net proceeds from the issuance of class A common stock. We used the proceeds from our loan repayments and debt and equity financing activities to fund $799.3 million of new loans during the three months ended March 31, 2019.

Refer to Note 3 to our consolidated financial statements for further discussion of our loan activity. Refer to Notes 5 and 10 to our consolidated financial statements for additional discussion of our secured debt agreements and equity.

V. Other Items

Income Taxes

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of March 31, 2019 and December 31, 2018, we were in compliance with all REIT requirements.

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

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our Manager to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. There have been no material changes to our Critical Accounting Policies described in our annual report on Form 10-K filed with the SEC on February 12, 2019.

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

VI. Loan Portfolio Details

The following table provides details of our loan portfolio, on a loan-by-loan basis, as of March 31, 2019 ($ in millions):


	Loan Type (1)	Origination Date (2)		Total Loan (3)(4)		Principal Balance (3)(4)		Net Book Value		Cash Coupon (5)	All-in Yield (5)	Maximum Maturity (6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV (2)			Risk Rating
1	Senior loan		3/22/2018	$	1,075.6	$	1,075.6	$	1,069.3	L + 3.15%	L + 3.40%	3/15/2023	Diversified - Spain	Mixed-Use	n/a		71	%	3
2	Senior loan		5/11/2017		752.6		691.2		688.1	L + 3.40%	L + 3.60%	6/10/2023	Washington DC	Office	$338 / sqft		62	%	3
3	Senior loan (3)		8/6/2015		481.0		481.0		87.1	5.75%	5.77%	10/29/2022	Diversified - EUR	Other	n/a		71	%	3
4	Senior loan		5/1/2015		355.0		342.4		341.7	L + 2.85%	L + 3.02%	5/1/2023	New York	Office	$434 / sqft		68	%	2
5	Senior loan		2/13/2018		330.0		325.0		324.7	L + 3.42%	L + 3.52%	3/9/2023	New York	Multi	$786,898 / unit		62	%	3
6	Senior loan		1/7/2015		350.0		324.9		324.3	L + 2.50%	L + 2.76%	1/9/2021	New York	Office	$278 / sqft		53	%	2
7	Senior loan		10/23/2018		352.4		316.3		314.0	L + 3.40%	L + 3.72%	10/23/2021	New York	Mixed-Use	$287 / sqft		65	%	3
8	Senior loan		1/11/2019		313.0		313.0		308.5	L + 4.35%	L + 4.70%	1/11/2026	Diversified - UK	Other	$151 / sqft		59	%	3
9	Senior loan		3/31/2017		339.3		302.7		300.1	L + 3.50%	L + 3.87%	8/9/2023	Maui	Hotel	$398,832 / key		61	%	3
10	Senior loan		11/30/2018		291.3		274.8		272.2	L + 2.83%	L + 3.20%	12/9/2023	New York	Hotel	$224,913 / key		73	%	3
11	Senior loan		11/30/2018		253.9		247.4		245.1	L + 2.80%	L + 3.17%	12/9/2023	San Francisco	Hotel	$363,291 / key		73	%	3
12	Senior loan		12/11/2018		310.0		241.2		238.3	L + 2.55%	L + 2.96%	12/9/2023	Chicago	Office	$203 / sqft		78	%	3
13	Senior loan		8/3/2016		275.9		236.4		236.5	L + 4.66%	L + 5.32%	8/9/2021	New York	Office	$325 / sqft		57	%	3
14	Senior loan		12/22/2017		225.0		225.0		223.7	L + 2.80%	L + 3.16%	1/9/2023	Chicago	Multi	$326,087 / unit		65	%	3
15	Senior loan		5/9/2018		219.0		219.0		217.7	L + 3.00%	L + 3.24%	5/9/2023	New York	Industrial	$62 / sqft		70	%	2
16	Senior loan		6/23/2015		212.6		212.6		212.6	L + 3.65%	L + 3.78%	5/8/2022	Washington DC	Office	$238 / sqft		72	%	2
17	Senior loan		7/31/2018		284.5		211.8		209.3	L + 3.10%	L + 3.55%	8/9/2022	San Francisco	Office	$538 / sqft		50	%	2
18	Senior loan		4/15/2016		225.0		207.5		206.3	L + 3.25%	L + 3.84%	5/9/2023	New York	Office	$193 / sqft		40	%	3
19	Senior loan		6/4/2015		198.3		198.3		200.5	L + 4.19%	L + 4.14%	5/21/2021	Diversified - CAN	Hotel	$41,866 / key		54	%	2
20	Senior loan		6/4/2018		189.4		190.1		188.8	L + 3.50%	L + 3.86%	6/9/2024	New York	Hotel	$313,015 / key		52	%	3
21	Senior loan		4/12/2018		259.3		187.7		186.9	L + 2.93%	L + 3.32%	11/20/2022	New York	Office	$35 / sqft		58	%	1
22	Senior loan		12/22/2016		204.5		185.5		185.2	L + 3.50%	L + 4.07%	1/9/2022	New York	Office	$261 / sqft		64	%	3
23	Senior loan		4/9/2018		1,486.5		185.0		172.7	L + 8.50%	L + 10.64%	6/9/2025	New York	Office	$525 / sqft		48	%	2
24	Senior loan		3/8/2016		181.2		181.2		180.3	L + 2.90%	L + 3.23%	9/9/2023	Orange County	Office	$228 / sqft		52	%	2
25	Senior loan		5/16/2017		189.2		177.7		176.9	L + 3.90%	L + 4.29%	5/16/2021	Chicago	Office	$133 / sqft		59	%	3
26	Senior loan		4/3/2018		178.6		176.6		175.5	L + 2.75%	L + 3.08%	4/9/2024	Dallas	Mixed-Use	$500 / sqft		64	%	3
27	Senior loan		10/26/2016		176.0		176.0		175.6	L + 3.10%	L + 3.46%	12/9/2022	San Francisco	Office	$189 / sqft		72	%	2
28	Senior loan		11/23/2018		193.9		174.6		172.7	L + 2.62%	L + 2.87%	2/15/2024	Diversified - UK	Office	$519 / sqft		50	%	3
29	Senior loan		8/31/2017		183.0		172.3		171.4	L + 3.00%	L + 3.40%	9/9/2022	Orange County	Office	$204 / sqft		64	%	3
30	Senior loan		10/23/2018		278.4		171.5		169.8	L + 2.65%	L + 2.88%	11/9/2024	Atlanta	Office	$163 / sqft		64	%	3
31	Senior loan		9/14/2018		178.9		171.1		169.7	L + 3.50%	L + 3.85%	9/14/2023	Canberra - AU	Mixed-Use	$444 / sqft		68	%	3
32	Senior loan		9/27/2018		165.0		162.8		161.4	L + 2.25%	L + 2.61%	10/9/2025	Honolulu	Multi	$313,068 / unit		72	%	3
33	Senior loan		9/4/2018		172.7		151.1		149.7	L + 3.00%	L + 3.39%	9/9/2023	Las Vegas	Hotel	$182,930 / key		70	%	3
34	Senior loan		8/23/2017		165.0		142.1		141.2	L + 3.25%	L + 3.64%	10/9/2022	Los Angeles	Office	$288 / sqft		74	%	2
35	Senior loan		1/26/2017		168.8		140.5		139.5	L + 5.50%	L + 5.96%	2/9/2022	Boston	Office	$453 / sqft		42	%	2

continued...


	Loan Type (1)	Origination Date (2)		Total Loan (3)(4)		Principal Balance (3)(4)		Net Book Value		Cash Coupon (5)	All-in Yield (5)	Maximum Maturity (6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV (2)			Risk Rating
36	Senior loan		12/21/2017		182.5		135.9		134.7	L + 3.25%	L + 3.68%	1/9/2023	Atlanta	Office	$102 / sqft		51	%	2
37	Senior loan		10/5/2016		134.8		134.8		134.8	L + 4.35%	L + 4.80%	10/9/2021	Diversified - US	Hotel	$68,301 / key		61	%	2
38	Senior loan		6/24/2015		135.0		134.3		133.9	L + 3.50%	L + 3.72%	4/9/2023	Honolulu	Hotel	$225,285 / key		67	%	2
39	Senior loan		1/30/2014		133.4		133.4		132.8	L + 4.30%	L + 5.83%	6/3/2019	New York	Hotel	$212,341 / key		38	%	2
40	Senior loan		6/29/2017		140.2		132.9		132.2	L + 2.85%	L + 3.30%	7/9/2022	Los Angeles	Multi	$314,939 / unit		68	%	2
41	Senior loan		11/14/2017		128.5		128.5		127.8	L + 3.80%	L + 4.16%	12/9/2022	Los Angeles	Hotel	$514,000 / key		56	%	2
42	Senior loan		11/2/2017		140.0		124.2		123.5	L + 3.20%	L + 3.62%	11/9/2022	Boston	Industrial	$163 / sqft		69	%	2
43	Senior loan		5/11/2017		135.9		123.3		122.7	L + 3.40%	L + 3.91%	6/10/2023	Washington DC	Office	$283 / sqft		38	%	2
44	Senior loan		7/20/2017		193.2		122.7		120.8	L + 5.10%	L + 6.05%	8/9/2022	San Francisco	Office	$321 / sqft		58	%	3
45	Senior loan		4/30/2018		167.0		118.4		116.9	L + 3.25%	L + 3.51%	4/30/2023	London - UK	Office	$532 / sqft		60	%	3
46	Senior loan		12/10/2018		141.1		116.6		115.2	L + 2.95%	L + 3.31%	12/3/2024	London - UK	Office	$557 / sqft		72	%	3
47	Senior loan		7/28/2016		119.0		116.2		116.0	L + 3.60%	L + 3.92%	8/9/2021	Atlanta	Office	$184 / sqft		70	%	3
48	Senior loan		12/14/2018		135.6		114.7		113.8	L + 2.90%	L + 3.27%	1/9/2024	Diversified - US	Industrial	$46 / sqft		57	%	3
49	Senior loan		10/17/2016		111.3		111.3		111.1	L + 3.95%	L + 3.98%	10/21/2021	Diversified - UK	Self-Storage	$153 / sqft		73	%	3
50	Senior loan		2/20/2014		110.0		110.0		109.7	L + 3.95%	L + 4.16%	3/9/2021	New York	Office	$161 / sqft		74	%	2
51	Senior loan		2/27/2015		105.7		105.7		105.4	L + 3.55%	L + 3.89%	4/28/2022	Chicago	Office	$216 / sqft		65	%	2
52	Senior loan		3/21/2018		113.2		104.5		103.8	L + 3.10%	L + 3.36%	3/21/2024	Jacksonville	Office	$104 / sqft		72	%	3
53	Senior loan		3/13/2018		123.0		103.4		102.5	L + 3.50%	L + 3.83%	4/9/2025	Honolulu	Hotel	$160,368 / key		50	%	3
54	Senior loan		3/10/2016		106.7		102.6		102.1	L + 2.60%	L + 2.94%	12/9/2022	Chicago	Multi	$554,595 / unit		63	%	3
55	Senior loan		10/16/2018		113.7		101.1		100.2	L + 3.25%	L + 3.57%	11/9/2023	San Francisco	Hotel	$220,180 / key		72	%	3
56	Senior loan		12/21/2018		123.1		100.4		99.2	L + 2.60%	L + 3.00%	1/9/2024	Chicago	Office	$196 / key		72	%	2
57	Senior loan		9/20/2018		130.9		100.0		99.6	L + 4.00%	L + 4.06%	8/16/2023	Diversified - AU	Other	$161 / sqft		53	%	3
58	Senior loan		5/16/2014		100.0		99.2		99.2	L + 3.85%	L + 4.18%	4/9/2022	Miami	Office	$214 / sqft		67	%	3
59	Senior loan		12/20/2018		105.0		98.9		98.4	L + 2.95%	L + 3.28%	1/1/2022	Seattle	Multi	$248,550 / unit		65	%	3
60	Senior loan		11/30/2018		105.1		98.3		97.6	L + 2.70%	L + 3.04%	12/9/2023	Diversified - US	Hotel	$75,153 / key		57	%	3
61	Senior loan		6/1/2018		131.7		92.7		91.5	L + 3.40%	L + 3.75%	5/28/2023	London - UK	Office	$628 / sqft		70	%	3
62	Senior loan		12/9/2014		104.5		91.8		91.7	L + 3.65%	L + 3.80%	12/9/2021	Diversified - US	Office	$79 / sqft		65	%	2
63	Senior loan		2/9/2017		88.8		88.8		88.2	L + 4.50%	L + 4.85%	5/29/2023	London - UK	Office	$866 / sqft		69	%	3
64	Senior loan		3/28/2019		98.4		88.5		88.1	L + 3.25%	L + 3.40%	1/9/2024	New York	Hotel	$114,327 / key		60	%	3
65	Senior loan		2/18/2015		87.7		87.7		87.6	L + 3.75%	L + 4.17%	3/9/2020	Diversified - CA	Office	$181 / sqft		71	%	3
66	Senior loan		2/12/2016		92.0		87.4		87.2	L + 4.15%	L + 4.46%	3/9/2021	New York	Office	$130 / sqft		65	%	3
67	Senior loan		11/30/2018		151.1		85.5		84.5	L + 2.55%	L + 2.82%	12/9/2024	Washington DC	Office	$267 / sqft		60	%	3
68	Senior loan		4/12/2018		103.1		84.5		83.8	L + 2.75%	L + 3.14%	5/9/2023	San Francisco	Office	$221 / sqft		72	%	2
69	Senior loan		5/22/2014		84.2		84.2		84.2	L + 3.75%	L + 3.95%	6/15/2021	Orange County	Office	$146 / sqft		74	%	2
70	Senior loan		5/1/2015		79.4		79.4		79.4	L + 3.95%	L + 4.21%	5/9/2020	Washington DC	Hotel	$203,634 / key		67	%	3
71	Senior loan		3/31/2017		89.1		76.9		76.7	L + 4.30%	L + 4.95%	4/9/2022	New York	Office	$377 / sqft		64	%	3
72	Senior loan		2/20/2019		132.3		76.5		75.2	L + 3.25%	L + 3.89%	2/19/2024	London - UK	Office	$375 / sqft		60	%	3
73	Senior loan		6/29/2016		83.4		76.1		76.0	L + 2.80%	L + 3.28%	7/9/2021	Miami	Office	$294 / sqft		64	%	2
74	Senior loan (3)		6/30/2015		63.4		60.4		11.9	L + 4.75%	L + 5.10%	8/15/2022	San Francisco	Condo	$614 / sqft		60	%	2
75	Senior loan		7/26/2018		84.1		70.1		69.9	L + 2.75%	L + 2.85%	7/1/2024	Columbus	Multi	$65,962 / unit		69	%	3

continued...


	Loan Type (1)	Origination Date (2)		Total Loan (3)(4)		Principal Balance (3)(4)		Net Book Value		Cash Coupon (5)	All-in Yield (5)	Maximum Maturity (6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV (2)			Risk Rating
76	Senior loan		8/18/2017		69.4		69.4		69.1	L + 4.10%	L + 4.46%	8/18/2022	Brussels	Office	$110 / sqft		59	%	3
77	Senior loan		6/4/2015		67.8		67.8		68.6	5.09%(7)	5.25%(7)	4/26/2019	Diversified - CAN	Retail	$39 / sqft		74	%	3
78	Senior loan		11/30/2016		79.0		66.6		66.4	L + 3.95%	L + 4.39%	12/9/2021	Chicago	Retail	$1,317 / sqft		54	%	3
79	Senior loan		4/5/2018		85.3		65.9		65.3	L + 3.10%	L + 3.51%	4/9/2023	Diversified - US	Industrial	$24 / sqft		54	%	3
80	Senior loan		10/17/2018		80.4		65.1		64.5	L + 2.60%	L + 3.16%	11/9/2023	San Francisco	Office	$406 / sqft		68	%	3
81	Senior loan		5/9/2017		73.7		64.7		64.5	L + 3.85%	L + 4.30%	5/9/2022	New York	Multi	$389,948 / unit		67	%	3
82	Senior loan		3/11/2014		65.0		62.8		62.8	L + 4.50%	L + 4.77%	4/9/2019	New York	Multi	$705,469 / unit		65	%	3
83	Senior loan		6/29/2017		64.2		60.8		60.5	L + 3.40%	L + 3.71%	7/9/2023	New York	Multi	$177,304 / unit		69	%	3
84	Senior loan		10/5/2018		61.0		61.0		60.4	L + 5.50%	L + 5.65%	10/5/2021	Sydney - AU	Office	$648 / sqft		78	%	3
85	Senior loan		7/13/2017		86.3		60.0		59.6	L + 3.75%	L + 4.18%	8/9/2022	Honolulu	Hotel	$192,926 / key		66	%	3
86	Senior loan		1/13/2014		60.0		60.0		60.0	L + 3.45%	L + 3.71%	6/9/2020	New York	Office	$284 / sqft		53	%	2
87	Senior loan		5/8/2017		80.0		59.1		58.4	L + 3.75%	L + 4.71%	5/8/2022	Washington DC	Office	$373 / sqft		73	%	3
88	Senior loan		10/6/2017		55.9		55.8		55.6	L + 2.95%	L + 3.21%	10/9/2022	Nashville	Multi	$99,598 / unit		74	%	3
89	Senior loan		11/23/2016		55.4		51.9		51.7	L + 3.50%	L + 3.80%	12/9/2022	New York	Multi	$216,432 / unit		65	%	3
90	Senior loan		11/1/2017		52.1		51.8		51.6	L + 2.95%	L + 3.21%	11/9/2022	Denver	Multi	$154,127 / unit		74	%	2
91	Senior loan		12/27/2016		57.2		49.5		49.3	L + 4.65%	L + 5.08%	1/9/2022	New York	Multi	$1,260,476 / unit		64	%	3
92	Senior loan		11/19/2015		48.7		46.0		46.0	L + 4.00%	L + 4.50%	10/9/2019	New York	Office	$1,180 / sqft		57	%	3
93	Senior loan		9/25/2018		49.3		44.5		44.2	L + 3.50%	L + 3.79%	9/1/2023	Chicago	Multi	$60,559 / unit		70	%	3
94	Senior loan		5/20/2015		45.0		44.0		43.9	L + 3.00%	L + 3.08%	11/1/2022	Los Angeles	Office	$205 / sqft		59	%	1
95	Senior loan		8/29/2017		51.2		43.5		43.2	L + 3.10%	L + 3.52%	10/9/2022	Southern California	Industrial	$91 / sqft		65	%	3
96	Senior loan		5/24/2018		81.3		43.2		42.5	L + 4.10%	L + 4.59%	6/9/2023	Boston	Office	$83 / sqft		55	%	3
97	Senior loan		10/6/2017		41.1		41.0		40.9	L + 2.95%	L + 3.20%	10/9/2022	Las Vegas	Multi	$138,611 / unit		77	%	2
98	Senior loan		6/26/2015		42.1		40.6		40.5	L + 3.75%	L + 4.14%	7/9/2020	San Diego	Office	$185 / sqft		73	%	3
99	Senior loan		2/20/2019		50.2		36.9		36.4	L + 3.50%	L + 3.91%	3/9/2024	Calgary - CAN	Office	$102 / sqft		51	%	3
100	Senior loan		11/30/2018		40.0		36.6		36.4	L + 2.95%	L + 3.38%	12/1/2023	Las Vegas	Multi	$76,256 / unit		70	%	3
101	Senior loan		11/16/2018		211.9		30.5		28.4	L + 4.10%	L + 4.81%	12/9/2023	Fort Lauderdale	Mixed-Use	$86 / sqft		59	%	3
102	Senior loan		1/30/2018		28.0		28.0		27.8	L + 2.90%	L + 3.26%	2/9/2023	Houston	Multi	$135,266 / unit		66	%	3
103	Senior loan		3/1/2018		28.0		28.0		27.8	L + 2.95%	L + 3.31%	3/9/2023	Houston	Multi	$102,564 / unit		72	%	3
104	Senior loan		9/1/2017		31.5		26.5		26.4	L + 4.15%	L + 4.55%	9/9/2021	New York	Condo	$284 / sqft		64	%	3
105	Senior loan		8/30/2018		28.7		25.9		25.8	L + 3.00%	L + 3.42%	9/1/2022	Boise	Multi	$102,152 / unit		73	%	3
106	Senior loan		9/1/2016		24.2		24.2		24.4	L + 4.20%	L + 4.70%	9/1/2022	Atlanta	Multi	$105,852 / unit		72	%	1
107	Senior loan		10/31/2018		63.3		22.8		22.3	L + 5.00%	L + 5.63%	11/9/2023	New York	Multi	$59,101 / unit		57	%	3
108	Senior loan		12/15/2017		22.5		22.5		22.3	L + 3.25%	L + 4.31%	12/9/2020	Diversified - US	Hotel	$8,465 / key		50	%	2
109	Senior loan		12/21/2018		22.9		20.0		19.9	L + 3.25%	L + 3.48%	1/1/2024	Daytona Beach	Multi	$74,627 / unit		77	%	3
110	Senior loan		6/4/2015		19.4		19.4		19.3	4.46%	4.90%	12/23/2021	Montreal - CAN	Office	$53 / sqft		45	%	2
111	Senior loan		10/31/2018		59.3		18.9		18.5	L + 5.00%	L + 6.00%	11/9/2023	New York	Condo	$79 / sqft		64	%	3
112	Senior loan		6/15/2018		22.0		18.9		18.9	L + 3.35%	L + 3.43%	7/1/2022	Phoenix	Multi	$65,976 / unit		78	%	3
113	Senior loan		11/2/2017		17.9		16.8		16.8	L + 3.90%	L + 4.01%	11/1/2020	Phoenix	Multi	$64,506 / unit		59	%	2
114	Senior loan		3/9/2018		17.8		16.8		16.8	L + 3.75%	L + 3.77%	4/1/2023	Los Angeles	Multi	$128,979 / unit		75	%	3
115	Senior loan		6/4/2015		16.1		16.1		16.2	5.15%	5.27%	9/4/2020	Diversified - CAN	Self-Storage	$3,510 / unit		61	%	2

continued...


	Loan Type (1)	Origination Date (2)		Total Loan (3)(4)		Principal Balance (3)(4)		Net Book Value		Cash Coupon (5)	All-in Yield (5)	Maximum Maturity (6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV (2)			Risk Rating
116	Senior loan		10/20/2017		17.2		14.0		13.9	L + 4.25%	L + 4.35%	11/1/2021	Houston	Multi	$110,714 / unit		56	%	3
117	Senior loan		2/28/2019		15.3		12.6		12.5	L + 3.00%	L + 3.33%	3/1/2024	San Antonio	Multi	$54,704 / unit		63	%	3
118	Senior loan		6/29/2018		11.6		11.6		11.6	L + 2.95%	L + 3.32%	7/1/2020	Washington DC	Multi	$61,053 / unit		60	%	2
119	Senior loan		10/31/2018		10.0		10.0		10.0	L + 3.35%	L + 3.58%	11/1/2020	Boise	Multi	$156,250 / unit		74	%	2
120	Senior loan		5/30/2018		10.1		9.5		9.5	L + 3.90%	L + 3.98%	6/1/2021	Phoenix	Multi	$106,066 / unit		74	%	3
121	Senior loan		7/21/2017		7.3		7.3		7.3	L + 5.25%	L + 6.28%	7/1/2019	Phoenix	Multi	$56,154 / unit		78	%	2
122	Senior loan (3)		9/22/2017		91.0		10.9		2.9	L + 5.64%	L + 6.17%	10/9/2022	San Francisco	Multi	$446,078 / unit		46	%	3

				$	18,239.5	$	15,053.4	$	14,508.7	5.59%	5.95%	3.8 yrs					64	%	2.7

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

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

(3)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. As of March 31, 2019, three loans in our portfolio have been financed with an aggregate $449.5 million of non-consolidated senior interest, which are included in the table above.

(4)	Portfolio excludes our $98.6 million subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization. Refer to Notes 4 and 15 to our consolidated financial statements for details of the 2018 Single Asset Securitization.

(5)

As of March 31, 2019, our floating rate loans were indexed to various benchmark rates, with 81% of floating rate loans by loan exposure indexed to USD LIBOR. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.

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

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

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Loan Portfolio Net Interest Income

The following table projects the impact on our interest income and expense, net of incentive fees, for the twelve-month period following March 31, 2019, assuming an immediate increase or decrease of both 25 and 50 basis points in the applicable interest rate benchmark by currency ($ in thousands):


Currency	Assets (Liabilities) Sensitive to Changes in Interest Rates (1)(2)					Interest Rate Sensitivity as of March 31, 2019
						Increase in Rates								Decrease in Rates
						25 Basis Points				50 Basis Points				25 Basis Points				50 Basis Points
USD		$	11,665,025		Income		$	23,218			$	46,436			$	(22,860	)		$	(44,384	)
			(8,644,829	)	Expense			(16,827	)			(33,648	)			17,081				34,010

		$	3,020,196		Net interest		$	6,391			$	12,788			$	(5,779	)		$	(10,374	)

GBP		$	1,091,735		Income		$	1,804			$	3,987			$	(1,558	)		$	(3,003	)
			(712,730	)	Expense			(1,425	)			(2,851	)			1,425				2,851

		$	379,005		Net interest		$	379			$	1,136			$	(133	)		$	(152	)

EUR		$	1,145,017		Income		$	—			$	1,249			$	—			$	—
			(874,016	)	Expense			—				(936	)			—				—

		$	271,001		Net interest		$	—			$	313			$	—			$	—

AUD		$	332,107		Income		$	664			$	1,328			$	(664	)		$	(1,241	)
			(181,140	)	Expense			(362	)			(725	)			274				548

		$	150,967		Net interest		$	302			$	603			$	(390	)		$	(693	)

CAD ⁽³⁾		$	236,267		Income		$	424			$	896			$	(399	)		$	(797	)
			(265,075	)	Expense			(530	)			(1,060	)			530				1,060

		$	(28,808	)	Net interest		$	(106	)		$	(164	)		$	131			$	263

					Total net interest		$	6,966			$	14,676			$	(6,171	)		$	(10,956	)

(1)

Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each case in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. Increases (decreases) in interest income and expense are presented net of incentive fees. Refer to Note 11 to our consolidated financial statements for additional details of our incentive fee calculation.

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

(3)	Liabilities balance includes two interest rate swaps totaling C$17.3 million ($13.0 million as of March 31, 2019) that are used to hedge a portion of our fixed rate debt.

Loan Portfolio Value

As of March 31, 2019, 4% of our loans by total loan exposure earned a fixed rate of interest and as such, the values of such loans are sensitive to changes in interest rates. We generally hold all of our loans to maturity and so do not expect to realize gains or losses on our fixed rate loan portfolio as a result of movements in market interest rates.

Risk of Non-Performance

In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the additional debt service payments due from our borrowers may strain the operating cash flows of the collateral real estate assets and, potentially, contribute to non-performance or, in severe cases, default. This risk is partially mitigated by various facts we consider during our underwriting process, which in certain cases include a requirement for our borrower to purchase an interest rate cap contract.

Credit Risks

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

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

Capital Market Risks

We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our class A common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under credit facilities or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing, and terms of capital we raise.

Counterparty Risk

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

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

Currency Risk

Our loans and investments that are denominated in a foreign currency are also subject to risks related to fluctuations in currency rates. We mitigate this exposure by matching the currency of our foreign currency assets to

the currency of the borrowings that finance those assets. As a result, we substantially reduce our exposure to changes in portfolio value related to changes in foreign currency rates. In certain circumstances, we may also enter into foreign currency derivative contracts to further mitigate this exposure.

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


	March 31, 2019
Foreign currency assets (1)	£	1,207,738		€	1,033,564		C$	459,326		A$	471,467
Foreign currency liabilities (1)		(852,037	)		(775,538	)		(371,934	)		(256,671	)
Foreign currency contracts — notional		(262,000	)		(179,600	)		(78,700	)		(210,700	)

Net exposure to exchange rate fluctuations	£	93,701		€	78,426		C$	8,692		A$	4,096

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

We estimate that a 10% appreciation of the United States dollar relative to the British Pound Sterling and the Euro would result in a decline in our net assets in U.S. dollar terms of $46.4 million and $28.9 million, respectively, as of March 31, 2019. Substantially all of our net asset exposure to the Canadian and Australian dollar has been hedged with foreign currency forward contracts.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Controls over Financial Reporting

There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2019, we were not involved in any material legal proceedings.

ITEM 1A.

RISK FACTORS

There have been no material changes to the risk factors previously disclosed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

Fifth Amended and Restated Bylaws

Effective April 19, 2019, our board of directors approved our Fifth Amended and Restated Bylaws, which amend and restate our existing bylaws to allow stockholders the power to adopt, alter or repeal any provision of the bylaws, or adopt new bylaws, by the affirmative vote of a majority of the votes entitled to be cast on the matter by stockholders entitled to vote in the election of directors. The Fifth Amended and Restated Bylaws also incorporate conforming language and stylistic and clarifying changes, including to clarify the circumstances under which a properly submitted stockholder proposal shall be considered at a meeting of stockholders.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Fifth Amended and Restated Bylaws, which is filed as Exhibit 3.1 to this quarterly report on Form 10-Q and is incorporated herein by reference. In addition, a version of the Fifth Amended and Restated Bylaws that has been marked to show changes from the bylaws that were previously in effect is included as Exhibit 3.2 and is incorporated herein by reference.

ITEM 6.

EXHIBITS


3.1		Fifth Amended and Restated Bylaws of Blackstone Mortgage Trust, Inc.

3.2		Fifth Amended and Restated Bylaws of Blackstone Mortgage Trust, Inc. (marked).

10.1		Fourth Amended and Restated Master Repurchase Agreement, dated as of February 15, 2019, among Parlex 2 Finance, LLC, Parlex 2A Finco, LLC, Parlex 2 UK Finco, LLC, Parlex 2 Eur Finco, LLC, Parlex 2 AU Finco, LLC, Parlex 2 CAD Finaco, LLC and Citibank, N.A.

10.2		Fifth Amendment to Limited Guaranty, dated as of February 15, 2019, by and between Blackstone Mortgage trust, Inc. and Citibank, N.A.

10.3		Amendment No. 5, dated as of February 22, 2019, to Amended and Restated Master Repurchase Agreement by and among Parlex 15 Finco, LLC, Blackstone Mortgage Trust, Inc. and Deutsche Bank AG, Cayman Islands Branch.

10.4		Form of Restricted Stock Award of Blackstone Mortgage Trust, Inc. 2018 Stock Incentive Plan.

10.5		Form of Restricted Stock Award of Blackstone Mortgage Trust, Inc. 2018 Manager Incentive Plan.

31.1		Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1+		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2+		Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

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

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

SIGNATURES

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


				BLACKSTONE MORTGAGE TRUST, INC.

April 23, 2019				/s/ Stephen D. Plavin
Date				Stephen D. Plavin
				Chief Executive Officer
				(Principal Executive Officer)


April 23, 2019				/s/ Anthony F. Marone, Jr.
Date				Anthony F. Marone, Jr.
				Chief Financial Officer
				(Principal Financial Officer and Principal Accounting Officer)

Exhibit 3.1

BLACKSTONE MORTGAGE TRUST, INC.

FIFTH AMENDED AND RESTATED

BYLAWS

Adopted as of April 19, 2019

TABLE OF CONTENTS



		Page

ARTICLE 1 OFFICES			1

Section 1.	PRINCIPAL OFFICE		1

Section 2.	ADDITIONAL OFFICES		1

ARTICLE II MEETINGS OF STOCKHOLDERS			1

Section 1.	PLACE		1

Section 2.	ANNUAL MEETING		1

Section 3.	SPECIAL MEETINGS		1

Section 4.	NOTICE		4

Section 5.	SCOPE OF NOTICE		4

Section 6.	ORGANIZATION AND CONDUCT		4

Section 7.	QUORUM		5

Section 8.	VOTING		6

Section 9.	PROXIES		6

Section 10.	VOTING OF STOCK BY CERTAIN HOLDERS		6

Section 11.	INSPECTORS		7

Section 12.	ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS		7

Section 13.	VOTING BY BALLOT		12

Section 14.	TELEPHONE MEETINGS		12

Section 15.	STOCKHOLDERS’ CONSENT IN LIEU OF MEETING		12

ARTICLE III DIRECTORS			12

Section 1.	GENERAL POWERS		12

Section 2.	NUMBER, TENURE AND RESIGNATION		12

Section 3.	ANNUAL AND REGULAR MEETINGS		13

Section 4.	SPECIAL MEETINGS		13

Section 5.	NOTICE		13

Section 6.	QUORUM		13

Section 7.	VOTING		14

Section 8.	ORGANIZATION		14

Section 9.	TELEPHONE MEETINGS		14

Section 10.	CONSENT BY DIRECTORS WITHOUT A MEETING		14

Section 11.	VACANCIES		14



Section 12.	COMPENSATION	14

Section 13.	LOSS OF DEPOSITS	15

Section 14.	SURETY BONDS	15

Section 15.	RELIANCE	15

Section 16.	RATIFICATION	15

Section 17.	CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS	15

Section 18.	EMERGENCY PROVISIONS	15

ARTICLE IV COMMITTEES		16

Section 1.	NUMBER, TENURE AND QUALIFICATIONS	16

Section 2.	POWERS	16

Section 3.	MEETINGS	16

Section 4.	TELEPHONE MEETINGS	16

Section 5.	CONSENT BY COMMITTEES WITHOUT A MEETING	16

Section 6.	VACANCIES	17

ARTICLE V OFFICERS		17

Section 1.	GENERAL PROVISIONS	17

Section 2.	REMOVAL AND RESIGNATION	17

Section 3.	VACANCIES	17

Section 4.	CHAIRMAN OF THE BOARD	17

Section 5.	EXECUTIVE CHAIRMAN	18

Section 6.	VICE CHAIRMAN	18

Section 6.	CHIEF EXECUTIVE OFFICER	18

Section 8.	CHIEF OPERATING OFFICER	18

Section 9.	CHIEF FINANCIAL OFFICER	18

Section 10.	HEAD OF CAPITAL MARKETS	18

Section 11.	PRESIDENT	18

Section 12.	MANAGING DIRECTORS	19

Section 13.	DIRECTORS	19

Section 14.	VICE PRESIDENTS	19

Section 15.	SECRETARY	19

Section 16.	TREASURER	19

Section 17.	ASSISTANT SECRETARIES AND ASSISTANT TREASURERS	19

Section 18.	COMPENSATION	20



ARTICLE VI CONTRACTS, CHECKS AND DEPOSITS		20

Section 1.	CONTRACTS	20

Section 2.	CHECKS AND DRAFTS	20

Section 3.	DEPOSITS	20

ARTICLE VII STOCK		20

Section 1.	CERTIFICATES	20

Section 2.	TRANSFERS	21

Section 3.	REPLACEMENT CERTIFICATE	21

Section 4.	FIXING OF RECORD DATE	21

Section 5.	STOCK LEDGER	22

Section 6.	FRACTIONAL STOCK; ISSUANCE OF UNITS	22

ARTICLE VIII ACCOUNTING YEAR		22

ARTICLE IX DISTRIBUTIONS		22

Section 1.	AUTHORIZATION	22

Section 2.	CONTINGENCIES	22

ARTICLE X INVESTMENT POLICY		23

ARTICLE XI SEAL		23

Section 1.	SEAL	23

Section 2.	AFFIXING SEAL	23

ARTICLE XII INDEMNIFICATION AND ADVANCE OF EXPENSES		23

ARTICLE XIII WAIVER OF NOTICE		24

ARTICLE XIV AMENDMENT OF BYLAWS		24

iii

BLACKSTONE MORTGAGE TRUST, INC.

BYLAWS

ARTICLE I

OFFICES

Section 1. PRINCIPAL OFFICE . The principal office of the Corporation in the State of Maryland shall be located at such place as the Board of Directors may designate.

Section 2. ADDITIONAL OFFICES . The Corporation may have additional offices, including a principal executive office, at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. PLACE . All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting. Notwithstanding the foregoing, the Board of Directors may provide that any or all meetings of the stockholders shall not be held at a place, but instead shall be held solely by means of remote communication; provided, however, that the Board of Directors shall provide a place for a meeting of the stockholders if a stockholder makes a written request for the same.

Section 2. ANNUAL MEETING . An annual meeting of stockholders for the election of directors and the transaction of any business within the powers of the Corporation shall be held on the date and at the time and place set by the Board of Directors.

Section 3. SPECIAL MEETINGS .

(a) General . Each of the chairman of the board, chief executive officer, president, secretary and Board of Directors may call a special meeting of stockholders. Subject to subsection (b) of this Section 3, a special meeting of stockholders shall also be called by the secretary of the Corporation to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting.

(b) Stockholder Requested Special Meetings . (1) Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary (the “Record Date Request Notice”) by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the “Request Record Date”). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be acted on at it, shall be signed by one or more stockholders of record as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), shall bear the date of signature of

each such stockholder (or such agent) and shall set forth all information relating to each such stockholder, each individual whom the stockholder proposes to nominate for election or reelection as a director and each matter proposed to be acted on at the meeting that would be required to be disclosed in connection with the solicitation of proxies for the election of directors or the election of each such individual, as applicable, in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such a solicitation, in each case pursuant to Regulation 14A (or any successor provision) promulgated under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”). Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than 10 days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the 10th day after the first date on which a Record Date Request Notice is received by the secretary.

(2) In order for any stockholder to request a special meeting to act on any matter that may properly be considered at a meeting of stockholders, one or more written requests for a special meeting (collectively, the “Special Meeting Request”) signed by stockholders of record (or their agents duly authorized in a writing accompanying the request) as of the Request Record Date entitled to cast not less than a majority of all of the votes entitled to be cast on such matter at such meeting (the “Special Meeting Percentage”) shall be delivered to the secretary. In addition, the Special Meeting Request shall (a) set forth the purpose of the meeting and the matters proposed to be acted on at it (which shall be limited to those lawful matters set forth in the Record Date Request Notice received by the secretary), (b) bear the date of signature of each such stockholder (or such agent) signing the Special Meeting Request, (c) set forth (i) the name and address, as they appear in the Corporation’s books, of each stockholder signing such request (or on whose behalf the Special Meeting Request is signed), (ii) the class, series and number of all shares of stock of the Corporation which are owned (beneficially or of record) by each such stockholder and (iii) the nominee holder for, and number of, shares of stock of the Corporation owned beneficially but not of record by such stockholder, (d) be sent to the secretary by registered mail, return receipt requested, and (e) be received by the secretary within 60 days after the Request Record Date. Any requesting stockholder (or agent duly authorized in a writing accompanying the revocation of the Special Meeting Request) may revoke his, her or its request for a special meeting at any time by written revocation delivered to the secretary.

(3) The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of the meeting (including the Corporation’s proxy materials). The secretary shall not be required to call a special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by paragraph (2) of this Section 3(b), the secretary receives payment of such reasonably estimated cost prior to the preparation and mailing or delivery of such notice of the meeting.

(4) Except as provided in the next sentence, any special meeting shall be held on the date and at the time and place set by the chairman of the board, chief executive officer, president or Board of Directors, as applicable, who called such meeting. In the case of any special meeting called by the secretary upon the request of stockholders (a “Stockholder Requested Meeting”), such meeting shall be held at such place, date and time as may be designated by the Board of Directors; provided , however, that the date of any Stockholder Requested Meeting shall be not more than 90 days after the record date for such meeting (the “Meeting Record Date”); and provided further that if the Board of Directors fails to designate, within 10 days after the date that a valid Special Meeting Request is actually received by the secretary (the “Delivery Date”), a date and time for a Stockholder Requested Meeting, then such meeting shall be held at 2:00 p.m., local time at the principal executive office of the Corporation, on the 90th day after the Meeting Record Date or, if such 90th day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder Requested Meeting within 10 days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for a Stockholder Requested Meeting, the Board of Directors may consider such factors as it deems relevant, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting or a special meeting. In the case of any Stockholder Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within 30 days after the Delivery Date, then the close of business on the 30th day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of paragraph (3) of this Section 3(b).

(5) If written revocations of the Special Meeting Request have been delivered to the secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting on the matter to the secretary: (i) if the notice of meeting has not already been delivered, the secretary shall refrain from delivering the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for a special meeting on the matter, or (ii) if the notice of meeting has been delivered and if the secretary first sends to all requesting stockholders who have not revoked requests for a special meeting on the matter written notice of any revocation of a request for the special meeting and written notice of the Corporation’s intention to revoke the notice of the meeting or for the chairman of the meeting to adjourn the meeting without action on the matter, (A) the secretary may revoke the notice of the meeting at any time before 10 days before the commencement of the meeting or (B) the chairman of the meeting may call the meeting to order and adjourn the meeting without acting on the matter. Any request for a special meeting received after a revocation by the secretary of a notice of a meeting shall be considered a request for a new special meeting.

(6) The chairman of the board, chief executive officer, president or Board of Directors may appoint regionally or nationally recognized independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported Special Meeting Request shall be deemed to have been received by the secretary until the earlier of (i) five Business Days after actual receipt by the secretary of such purported request and (ii) such date as

the independent inspectors certify to the Corporation that the valid requests received by the secretary represent, as of the Request Record Date, stockholders of record entitled to cast not less than the Special Meeting Percentage. Nothing contained in this paragraph (6) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(7) For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

Section 4. NOTICE . Not less than 10 nor more than 90 days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, by mail, by presenting it to such stockholder personally, by leaving it at the stockholder’s residence or usual place of business, by electronic transmission or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the Corporation, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Corporation may give a single notice to all stockholders who share an address, which single notice shall be effective as to any stockholder at such address, unless a stockholder at such address objects to receiving such single notice or revokes a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

Section 5. SCOPE OF NOTICE . Subject to Section 12(a) of this Article II, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice. The Corporation may postpone or cancel a meeting of stockholders by making a public announcement (as defined in Section 12(c)(3) of this Article II) of such postponement or cancellation prior to the meeting. Notice of the date, time and place to which the meeting is postponed shall be given not less than 10 days prior to such date and otherwise in the manner set forth in this section.

Section 6. ORGANIZATION AND CONDUCT . Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman or the executive chairman of the board or, in the case of a vacancy in the office or absence of the chairman and the executive chairman of the board, by one of the following

officers present at the meeting in the following order: the vice chairman of the board, if there is one, the chief executive officer, the president, the vice presidents in their order of rank and seniority, the secretary, or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary of the meeting shall be an individual appointed by the Board of Directors to act as secretary of the meeting or, in the absence of such appointment, a person appointed by the chairman of the meeting shall act as secretary or, in the absence of such appointment, the secretary of the Corporation or, in the secretary’s absence, an assistant secretary of the Corporation shall act as secretary of the meeting. In the event that the secretary presides at a meeting of stockholders, an assistant secretary, or, in the absence of all assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting, shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation: (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance and participation at the meeting to stockholders of record of the Corporation, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; ; (c) limiting the time allotted to questions or comments; (d) determining when and for how long the polls should be opened and when the polls should be closed; (e) maintaining order and security at the meeting; (f) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (g) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum has been established, to a later date and time and at a place announced at the meeting; and (h) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 7. QUORUM . At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the charter of the Corporation (the “Charter”) for the vote necessary for the approval of any matter. If such quorum is not established at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

The stockholders present either in person or by proxy, at a meeting which has been duly called and at which a quorum has been established, may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough stockholders to leave fewer than would be required to establish a quorum.

Section 8. VOTING . A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum has been established shall be sufficient to elect a director. Each share entitles the holder thereof to vote for as many different individuals as there are directors to be elected and for whose election the holder is entitled to vote. For the avoidance of doubt, stockholders do not have cumulative voting rights in the election of directors generally. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum has been established shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Charter or Article XIV of these Bylaws. Unless otherwise provided by statute or by the Charter, each outstanding share, regardless of class, entitles the holder thereof to cast one vote on each matter submitted to a vote at a meeting of stockholders.

Section 9. PROXIES . A stockholder may cast the votes entitled to be cast by the shares of stock owned of record by the stockholder in person or by proxy executed by the stockholder or by the stockholder’s duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Corporation before or at the meeting. No proxy shall be valid more than 11 months after its date unless otherwise provided in the proxy.

Section 10. VOTING OF STOCK BY CERTAIN HOLDERS . Stock of the Corporation registered in the name of a corporation, limited liability company, partnership, joint venture, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, managing member, manager, general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any trustee or fiduciary, in such capacity, may vote stock registered in such trustee’s or fiduciary’s name, either in person or by proxy.

Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt by the Corporation of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.

Notwithstanding any other provision of the Charter or these Bylaws, Title 3, Subtitle 7 of the Corporations and Associations Article of the Annotated Code of Maryland (or any successor statute) shall not apply to: (a) any acquisition by Veqtor Finance Company, LLC, a Delaware limited liability company (“Veqtor”), or any affiliates thereof, of shares of stock of the Corporation, (b) any acquisition of shares of class A common stock, $0.01 par value per share, of the Corporation (the “Common Stock”), by W. R. Berkley Corporation, a Delaware corporation, or any of its controlled affiliates (collectively, “Berkley”), or (c) any acquisition of shares of Common Stock by Huskies Acquisition LLC, a Delaware limited liability company, or any person or entity that is an affiliate of Huskies Acquisition LLC as of September 27, 2012 (collectively, “Huskies”) or by The Blackstone Group L.P., a Delaware limited partnership, or any of its affiliates (collectively, “Blackstone”). This section may not be repealed, in whole or in part, with respect to any prior or subsequent control share acquisition of (i) Veqtor, or any affiliates thereof, without its prior written consent, (ii) Berkley, without its prior written consent or (iii) Huskies or Blackstone, without the prior written consent of Huskies or Blackstone, as applicable, unless the Purchase and Sale Agreement by and between the Corporation and Huskies Acquisition LLC, dated September 27, 2012, is terminated pursuant to Article 11 thereof.

Section 11. INSPECTORS . The Board of Directors or the chairman of the meeting may appoint, before or at the meeting, one or more inspectors for the meeting and any successor to the inspector. Except as otherwise provided by the chairman of the meeting, the inspectors, if any, shall (i) determine the number of shares of stock represented at the meeting, in person or by proxy, and the validity and effect of proxies, (ii) receive and tabulate all votes, ballots or consents, (iii) report such tabulation to the chairman of the meeting, (iv) hear and determine all challenges and questions arising in connection with the right to vote, and (v) do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

Section 12. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS .

(a) Annual Meetings of Stockholders . (1) Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the annual meeting, at the time of giving of notice by the stockholder as provided for in this Section 12(a) and at the time of the annual meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 12(a).

(2) For any nomination or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 12, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and any such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder’s notice shall set forth all information required under this Section 12 and shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, in order for notice by the stockholder to be timely, such notice must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the 10th day following the day on which public announcement of the date of such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

(3) Such stockholder’s notice shall set forth:

(i) as to each individual whom the stockholder proposes to nominate for election or reelection as a director (each, a “Proposed Nominee”), all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) promulgated under the Exchange Act;

(ii) as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the stockholder’s reasons for proposing such business at the meeting and any material interest in such business of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom;

(iii) as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person,

(A) the class, series and number of all shares of stock or other securities of the Corporation or any affiliate thereof (collectively, the “Company Securities”), if any, which are owned (beneficially or of record) by such stockholder, Proposed Nominee or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person,

(B) the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person,

(C) whether and the extent to which such stockholder, Proposed Nominee or Stockholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (I) manage risk or benefit of changes in the price of Company Securities for such stockholder, Proposed Nominee or Stockholder Associated Person or (II) increase or decrease the voting power of such stockholder, Proposed Nominee or Stockholder Associated Person in the Corporation or any affiliate thereof disproportionately to such person’s economic interest in the Company Securities, and

(D) any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such stockholder, Proposed Nominee or Stockholder Associated Person, in the Corporation or any affiliate thereof, other than an interest arising from the ownership of Company Securities where such stockholder, Proposed Nominee or Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

(iv) as to the stockholder giving the notice, any Stockholder Associated Person with an interest or ownership referred to in clauses (ii) or (iii) of this paragraph (3) of this Section 12(a) and any Proposed Nominee,

(A) the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and the current name and business address, if different, of each such Stockholder Associated Person and any Proposed Nominee, and

(B) the investment strategy or objective, if any, of such stockholder and each such Stockholder Associated Person who is not an individual and a copy of the most recent prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such stockholder and each such Stockholder Associated Person;

(v) the name and address of any person who contacted or was contacted by the stockholder giving the notice or any Stockholder Associated Person about the Proposed Nominee or other business proposal prior to the date of such stockholder’s notice; and

(vi) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder’s notice.

(4) Such stockholder’s notice shall, with respect to any Proposed Nominee, be accompanied by a certificate executed by the Proposed Nominee (i) certifying that such Proposed Nominee (a) is not, and will not become, a party to any agreement, arrangement or understanding with any person or entity other than the Corporation in connection with service or action as a director that has not been disclosed to the Corporation and (b) will serve as a

director of the Corporation if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Corporation, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) promulgated under the Exchange Act and the rules thereunder, or would be required pursuant to the rules of any national securities exchange on which any securities of the Corporation are listed or over-the-counter market on which any securities of the Corporation are traded).

(5) Notwithstanding anything in this subsection (a) of this Section 12 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year’s annual meeting, a stockholder’s notice required by this Section 12(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive office of the Corporation not later than 5:00 p.m., Eastern Time, on the 10th day following the day on which such public announcement is first made by the Corporation.

(6) For purposes of this Section 12, “Stockholder Associated Person” of any stockholder shall mean (i) any person acting in concert with such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder (other than a stockholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such stockholder or such Stockholder Associated Person.

(b) Special Meetings of Stockholders . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors, (ii) by a stockholder that has requested that a special meeting be called for the purpose of electing directors in compliance with Section 3 of this Article II and that has supplied the information required by Section 3 of this Article II about each individual whom the stockholder proposes to nominate for election of directors or (iii) provided that the special meeting has been called in accordance with Section 3(a) of this Article II for the purpose of electing directors, by any stockholder of the Corporation who is a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the special meeting, at the time of giving of notice provided for in this Section 12 and at the time of the special meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 12. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board of Directors, any stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation’s notice of meeting, if the stockholder’s notice, containing the information required by paragraphs (a)(3)

and (4) of this Section 12, is delivered to the secretary at the principal executive office of the Corporation not earlier than the 120th day prior to such special meeting and not later than 5:00 p.m., Eastern Time, on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

(c) General . (1) If information submitted pursuant to this Section 12 by any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 12. Any such stockholder shall notify the Corporation of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information. Upon written request by the secretary or the Board of Directors, any such stockholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 12, and (B) a written update of any information (including, if requested by the Corporation, written confirmation by such stockholder that it continues to intend to bring such nomination or other business proposal before the meeting) submitted by the stockholder pursuant to this Section 12 as of an earlier date. If a stockholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 12.

(2) Only such individuals who are nominated in accordance with this Section 12 shall be eligible for election by stockholders as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section 12. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 12.

(3) For purposes of this Section 12, “the date of the proxy statement” shall have the same meaning as “the date of the company’s proxy statement released to shareholders” as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time. “Public announcement” shall mean disclosure (A) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (B) in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Exchange Act.

(4) Notwithstanding the foregoing provisions of this Section 12, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 12. Nothing in this Section 12 shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, or the right of the Corporation to omit a proposal from, any proxy

statement filed by the Corporation with the Securities and Exchange Commission pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section 12 shall require disclosure of revocable proxies received by the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such stockholder or Stockholder Associated Person under Section 14(a) of the Exchange Act.

(5) Notwithstanding anything in these Bylaws to the contrary, except as otherwise determined by the chairman of the meeting, if the stockholder giving notice as provided for in this Section 12 does not appear in person or by proxy at such annual or special meeting to present each nominee for election as a director or the proposed business, as applicable, such matter shall not be considered at the meeting.

Section 13. VOTING BY BALLOT . Voting on any question or in any election may be viva voce unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.

Section 14. TELEPHONE MEETINGS . The Board of Directors or chairman of the meeting may permit one or more stockholders or other persons to participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means constitutes presence in person at the meeting.

Section 15. STOCKHOLDERS’ CONSENT IN LIEU OF MEETING . Any action required or permitted to be taken at any meeting of stockholders may be taken without a meeting if a unanimous consent setting forth the action is given in writing or by electronic transmission by each stockholder entitled to vote on the matter and filed with the minutes of proceedings of the stockholders.

ARTICLE III

DIRECTORS

Section 1. GENERAL POWERS . The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section 2. NUMBER, TENURE AND RESIGNATION . At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Directors may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the Maryland General Corporation Law (the “MGCL”), nor more than 15, and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors. Any director of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the board or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

Section 3. ANNUAL AND REGULAR MEETINGS . An annual meeting of the Board of Directors shall be held each year and may be held on the date and at the same place as the annual meeting of stockholders, no notice other than this Bylaw being necessary. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. The Board of Directors may provide, by resolution, the time and place for the holding of regular meetings of the Board of Directors without other notice than such resolution.

Section 4. SPECIAL MEETINGS . Special meetings of the Board of Directors may be called by or at the request of the chairman or the executive chairman of the board, the chief executive officer, the president or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix the time and place of any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place of special meetings of the Board of Directors without other notice than such resolution.

Section 5. NOTICE . Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, electronic mail, facsimile transmission, United States mail or courier to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting. Notice by United States mail shall be given at least three days prior to the meeting. Notice by courier shall be given at least two days prior to the meeting. Telephone notice shall be deemed to be given when the director or his or her agent is personally given such notice in a telephone call to which the director or his or her agent is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Corporation by the director. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.

Section 6. QUORUM . A majority of the directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of such directors is present at such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other percentage of a particular group of directors is required for action, a quorum must also include a majority or such other percentage of such group.

The directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough directors to leave fewer than required to establish a quorum.

Section 7. VOTING . The action of a majority of the directors then present at a meeting at which a quorum has been established shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws. If enough directors have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws.

Section 8. ORGANIZATION . At each meeting of the Board of Directors, the chairman of the board or, in the absence of the chairman, the executive chairman or the vice chairman of the board, if any, shall act as chairman of the meeting. In the absence of the chairman and any executive chairman or vice chairman of the board, the chief executive officer or, in the absence of the chief executive officer, the president or, in the absence of the president, a director chosen by a majority of the directors present, shall act as chairman of the meeting. The secretary or, in his or her absence, an assistant secretary of the Corporation, or, in the absence of the secretary and all assistant secretaries, an individual appointed by the chairman of the meeting, shall act as secretary of the meeting.

Section 9. TELEPHONE MEETINGS . Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 10. CONSENT BY DIRECTORS WITHOUT A MEETING . Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each director and is filed with the minutes of proceedings of the Board of Directors. Any or all of the signatures on such consent may be a copy or other reproduction.

Section 11. VACANCIES . If for any reason any or all of the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder. Any vacancy on the Board of Directors for any cause other than an increase in the number of directors may be filled by a majority of the remaining directors, even if such majority is less than a quorum. Any vacancy in the number of directors created by an increase in the number of directors may be filled by a majority vote of the entire Board of Directors. Any individual so elected as director shall serve until the next annual meeting of stockholders and until his or her successor is elected and qualifies.

Section 12. COMPENSATION . Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Corporation and for any service or activity they performed or engaged in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they perform or engage in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.

Section 13. LOSS OF DEPOSITS . No director shall be liable for any loss which may occur by reason of the failure of the bank, trust company, savings and loan association, or other institution with whom moneys or stock of the Corporation have been deposited.

Section 14. SURETY BONDS . Unless required by law, no director shall be obligated to give any bond or surety or other security for the performance of any of his or her duties.

Section 15. RELIANCE . Each director and officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the director or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a director, by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.

Section 16. RATIFICATION . The Board of Directors or the stockholders may ratify any action or inaction by the Corporation or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the matter, and if so ratified, shall have the same force and effect as if originally duly authorized, and such ratification shall be binding upon the Corporation and its stockholders. Any action or inaction questioned in any stockholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a director, officer or stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the stockholders, and such ratification shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

Section 17. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS . The directors shall have no responsibility to devote their full time to the affairs of the Corporation. Subject to Article X of the Charter, any director or officer, employee or agent of the Corporation, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to or in addition to or in competition with those of or relating to the Corporation.

Section 18. EMERGENCY PROVISIONS . Notwithstanding any other provision in the Charter or these Bylaws, this Section 18 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors under Article III of these Bylaws cannot readily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Board of Directors, (i) a meeting of the Board of Directors or a committee thereof may be called by any director or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Directors during such an Emergency may be given less than 24 hours prior to the meeting to as many directors and by such means as may be feasible at the time, including publication, television or radio; and (iii) the number of directors necessary to constitute a quorum shall be one-third of the entire Board of Directors.

ARTICLE IV

COMMITTEES

Section 1. NUMBER, TENURE AND QUALIFICATIONS . The Board of Directors may appoint from among its members an Audit Committee, a Compensation Committee, a Corporate Governance Committee and an Investment Risk Management Committee and one or more other committees, composed of one or more directors, to serve at the pleasure of the Board of Directors. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member.

Section 2. POWERS . The Board of Directors may delegate to committees appointed under Section 1 of this Article any of the powers of the Board of Directors, except as prohibited by law. Except as may be otherwise provided by the Board of Directors, any committee may delegate some or all of its power and authority to one or more subcommittees, composed of one or more directors, as the committee deems appropriate in its sole and absolute discretion.

Section 3. MEETINGS . Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of the committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board shall otherwise provide. Each committee shall keep minutes of its proceedings.

Section 4. TELEPHONE MEETINGS . Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 5. CONSENT BY COMMITTEES WITHOUT A MEETING . Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each member of the committee and is filed with the minutes of proceedings of such committee.

Section 6. VACANCIES . Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

ARTICLE V

OFFICERS

Section 1. GENERAL PROVISIONS . The officers of the Corporation shall include a president, a secretary and a treasurer and may include a chairman of the board, one or more vice chairmen, a chief executive officer, a chief operating officer, a chief financial officer, a head of capital markets, one or more managing directors, one or more employee directors, one or more vice presidents, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The officers of the Corporation, including any officers elected to fill a vacancy among the officers, shall be elected by the Board of Directors, except that the chief executive officer or the president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or any other officers (other than the chief executive officer, president and chief financial officer). Each officer shall serve for the term specified by the Board of Directors or the appointing officer or, if no such term is specified, until his or her successor is elected and qualifies or until his or her death or his or her resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.

Section 2. REMOVAL AND RESIGNATION . Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the board, the chief executive officer, the president or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.

Section 3. VACANCIES . A vacancy in any office may be filled by the Board of Directors for the balance of the term.

Section 4. CHAIRMAN OF THE BOARD . The Board of Directors shall designate from among its members a chairman of the board, who shall not, solely by reason of theses Bylaws, be an officer of the Corporation. The chairman of the board shall preside over the meetings of the Board of Directors and, unless otherwise determined by the Board of Directors, of the stockholders at which he shall be present. The Board of Directors may designate the chairman of the board as an executive or non-executive chairman. The chairman of the board shall perform such other duties as may be assigned to him or her or by these Bylaws or the Board of Directors.

Section 5. EXECUTIVE CHAIRMAN . The Board of Directors may designate from among its members an executive chairman of the board in addition to or in the place of a chairman of the board, who shall not, solely by reason of theses Bylaws, be an officer of the Corporation. The executive chairman shall perform such duties as may be assigned to him or her or by these Bylaws or the Board of Directors.

Section 6. VICE CHAIRMAN . Each Vice Chairman shall have the general responsibility for the implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation.

Section 7. CHIEF EXECUTIVE OFFICER . The Board of Directors may designate a chief executive officer. In the absence of such designation, the chairman of the board shall be the chief executive officer of the Corporation. Subject to the direction of the Board of Directors, the chief executive officer shall in general supervise and control all of the business and affairs of the Corporation and shall exercise chief executive powers and such specific powers and shall perform such duties as from time to time may be conferred upon or assigned to him or her by the Board of Directors or any committee thereof designated by it to so act. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed.

Section 8. CHIEF OPERATING OFFICER . The Board of Directors may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer. In the absence of a president or in the event of a vacancy in such office, the chief operating officer shall perform the duties of president and when so acting shall have all the powers of and be subject to all the restrictions placed upon the president.

Section 9. CHIEF FINANCIAL OFFICER . The Board of Directors may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 10. HEAD OF CAPITAL MARKETS . The Board of Directors or the chief executive officer may designate a head of capital markets. The head of capital markets shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 11. PRESIDENT . The president shall have general executive powers and shall have such specific powers and shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time. In the absence of a designation of a chief operating officer by the Board of Directors, the president shall be the chief operating officer.

Section 12. MANAGING DIRECTORS . The Board of Directors or the chief executive officer may designate one or more managing directors. A managing director shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 13. DIRECTORS . The Board of Directors may designate one or more employee directors. An employee director shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.

Section 14. VICE PRESIDENTS . The Board of Directors or the chief executive officer may designate one or more vice presidents. A vice president shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer. The Board of Directors may designate one or more vice presidents as executive vice president or as vice president for particular areas of responsibility.

Section 15. SECRETARY . The secretary shall (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation; (d) keep, or direct that a transfer agent and registrar appointed pursuant to Article VII Section 5 keep, a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) have general charge of the stock transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him or her by the Board of Directors or the chief executive officer.

Section 16. TREASURER . The treasurer shall have the custody of the funds and securities of the Corporation, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors , the chief executive officer, the president, the chief financial officer, or any other officer designated by the Board of Directors may determine, and in general perform such other duties as from time to time may be assigned to him or her by the Board of Directors or the chief executive officer. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.

The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and Board of Directors, whenever the Board of Directors may require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.

Section 17. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS . The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the Board of Directors or the chief executive officer.

Section 18. COMPENSATION . The compensation of the officers shall be fixed from time to time by or under the authority of the Board of Directors and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a director.

ARTICLE VI

CONTRACTS, CHECKS AND DEPOSITS

Section 1. CONTRACTS . The Board of Directors or any manager of the Corporation approved by the Board of Directors and acting within the scope of its authority pursuant to a management agreement with the Corporation may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when duly authorized or ratified by action of the Board of Directors or a manager acting within the scope of its authority pursuant to a management agreement and executed by the chief executive officer, the president, the chief financial officer, the head of capital markets or any other person designated by the Board of Directors, such a manager or any of the foregoing officers.

Section 2. CHECKS AND DRAFTS . All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.

Section 3. DEPOSITS . All funds of the Corporation not otherwise employed shall be deposited or invested from time to time to the credit of the Corporation as the Board of Directors, the chief executive officer, the president, the chief financial officer, or any other officer designated by the Board of Directors may determine.

ARTICLE VII

STOCK

Section 1. CERTIFICATES . Except as may be otherwise provided by the Board of Directors, stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them. In the event that the Corporation issues shares of stock represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized officer, shall contain the statements and information required by the MGCL and shall be signed by the officers of the Corporation in any manner permitted by the MGCL. In the event that the Corporation issues shares of stock without certificates, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates. There shall be no differences in the rights and obligations of stockholders based on whether or not their shares are represented by certificates.

Section 2. TRANSFERS . All transfers of shares of stock shall be made on the books of the Corporation, by the holder of the shares, in person or by his or her attorney, in such manner as the Board of Directors or any officer of the Corporation may prescribe and, if such shares are certificated, upon surrender of certificates duly endorsed. The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Directors that such shares shall be represented by certificates. Upon the transfer of any uncertificated shares, the Corporation shall, to the extent then required by the MGCL, provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates.

The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland.

Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

Section 3. REPLACEMENT CERTIFICATE . Any officer of the Corporation may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such stockholder and the Board of Directors has determined that such certificates may be issued. Unless otherwise determined by an officer of the Corporation, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Corporation a bond in such sums as it may direct as indemnity against any claim that may be made against the Corporation.

Section 4. FIXING OF RECORD DATE . The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than 10 days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

When a record date for the determination of stockholders entitled to notice of and to vote at any meeting of stockholders has been set as provided in this section, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned or postponed to a date more than 120 days after the record date originally fixed for the meeting, in which case a new record date for such meeting may be determined as set forth herein.

Section 5. STOCK LEDGER . The Board of Directors shall have power and authority to make all such rules and regulations as it may deem expedient concerning the issuance and registration of shares of stock, including the appointment from time to time of transfer agents and registrars. The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate stock ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.

Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS . The Board of Directors may authorize the Corporation to issue fractional shares of stock or authorize the issuance of scrip, all on such terms and under such conditions as it may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may authorize the issuance of units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board of Directors may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.

ARTICLE VIII

ACCOUNTING YEAR

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

Section 1. AUTHORIZATION . Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors, subject to the provisions of law and the Charter. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the Charter.

Section 2. CONTINGENCIES . Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine, and the Board of Directors may modify or abolish any such reserve.

ARTICLE X

INVESTMENT POLICY

Subject to the provisions of the Charter, the Board of Directors may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Corporation as it shall deem appropriate in its sole discretion.

ARTICLE XI

SEAL

Section 1. SEAL . The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation and the words “Incorporated Maryland,” or shall be in any other form authorized by the Board of Directors. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.

Section 2. AFFIXING SEAL . Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word “(SEAL)” adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.

ARTICLE XII

INDEMNIFICATION AND ADVANCE OF EXPENSES

To the maximum extent permitted by Maryland law in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former director or officer of the Corporation and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, trustee, member, manager or partner of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity. The rights to indemnification and advance of expenses provided by the Charter and these Bylaws shall vest immediately upon election of a director or officer. The Corporation may, with the approval of its Board of Directors, provide such indemnification and advance for expenses to an individual who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The indemnification and payment or reimbursement of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, resolution, insurance, agreement or otherwise.

Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Charter or these Bylaws inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

ARTICLE XIII

WAIVER OF NOTICE

Whenever any notice of a meeting is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice of such meeting, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

ARTICLE XIV

AMENDMENT OF BYLAWS

These Bylaws may be altered, amended or repealed, in whole or in part, and new Bylaws may be adopted by the Board of Directors. In addition, these Bylaws may be altered, amended or repealed, in whole or in part, and new Bylaws may be adopted by the stockholders of the Corporation, without the approval of the Board of Directors, by the affirmative vote of a majority of the votes entitled to be cast on the matter by stockholders entitled to vote generally in the election of directors.

Exhibit 3.2

BLACKSTONE MORTGAGE TRUST, INC.

~~FOURTH~~ FIFTH AMENDED AND RESTATED

BYLAWS

Adopted as of ~~October 23~~ April 19 , ~~2014~~ 2019

TABLE OF CONTENTS


		Page

ARTICLE 1 OFFICES			1

Section 1.	PRINCIPAL OFFICE		1

Section 2.	ADDITIONAL OFFICES		1

ARTICLE II MEETINGS OF STOCKHOLDERS			1

Section 1.	PLACE		1

Section 2.	ANNUAL MEETING		1

Section 3.	SPECIAL MEETINGS		1

Section 4.	NOTICE		4

Section 5.	SCOPE OF NOTICE		4

Section 6.	ORGANIZATION AND CONDUCT		5 4

Section 7.	QUORUM		5

Section 8.	VOTING		6

Section 9.	PROXIES		6

Section 10.	VOTING OF STOCK BY CERTAIN HOLDERS		6

Section 11.	INSPECTORS		7

Section 12.	ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS		7

Section 13.	VOTING BY BALLOT		12

Section 14.	TELEPHONE MEETINGS		12

Section 15.	STOCKHOLDERS’ CONSENT IN LIEU OF MEETING		12

ARTICLE III DIRECTORS			12

Section 1.	GENERAL POWERS		13 12

Section 2.	NUMBER, TENURE AND RESIGNATION		13 12

Section 3.	ANNUAL AND REGULAR MEETINGS		13

Section 4.	SPECIAL MEETINGS		13

Section 5.	NOTICE		13

Section 6.	QUORUM		14 13

Section 7.	VOTING		14

Section 8.	ORGANIZATION		14

Section 9.	TELEPHONE MEETINGS		14

Section 10.	CONSENT BY DIRECTORS WITHOUT A MEETING		14

Section 11.	VACANCIES		15 14



Section 12.	COMPENSATION	15 14

Section 13.	LOSS OF DEPOSITS	15

Section 14.	SURETY BONDS	15

Section 15.	RELIANCE	15

Section 16.	RATIFICATION	15

Section 17.	CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS	16 15

Section 18.	EMERGENCY PROVISIONS	15

ARTICLE IV COMMITTEES		16

Section 1.	NUMBER, TENURE AND QUALIFICATIONS	16

Section 2.	POWERS	16

Section 3.	MEETINGS	17 16

Section 4.	TELEPHONE MEETINGS	17 16

Section 5.	CONSENT BY COMMITTEES WITHOUT A MEETING	16

Section 6.	VACANCIES	17

ARTICLE V OFFICERS		17

Section 1.	GENERAL PROVISIONS	17

Section 2.	REMOVAL AND RESIGNATION	18 17

Section 3.	VACANCIES	18 17

Section 4.	CHAIRMAN OF THE BOARD	17

Section 5.	EXECUTIVE CHAIRMAN	18

Section 6.	VICE CHAIRMAN	18

Section 6.	CHIEF EXECUTIVE OFFICER	18

Section 8.	CHIEF OPERATING OFFICER	19 18

Section 9.	CHIEF FINANCIAL OFFICER	19 18

Section 10.	HEAD OF CAPITAL MARKETS	19 18

Section 11.	PRESIDENT	18

Section 12.	MANAGING DIRECTORS	19

Section 13.	DIRECTORS	19

Section 14.	VICE PRESIDENTS	19

Section 15.	SECRETARY	20 19

Section 16.	TREASURER	20 19

Section 17.	ASSISTANT SECRETARIES AND ASSISTANT TREASURERS	19

Section 18.	COMPENSATION	20



ARTICLE VI CONTRACTS, CHECKS AND DEPOSITS		20

Section 1.	CONTRACTS	20

Section 2.	CHECKS AND DRAFTS	21 20

Section 3.	DEPOSITS	21 20

ARTICLE VII STOCK		21 20

Section 1.	CERTIFICATES	21 20

Section 2.	TRANSFERS	21

Section 3.	REPLACEMENT CERTIFICATE	22 21

Section 4.	FIXING OF RECORD DATE	22 21

Section 5.	STOCK LEDGER	22

Section 6.	FRACTIONAL STOCK; ISSUANCE OF UNITS	22

ARTICLE VIII ACCOUNTING YEAR		23 22

ARTICLE IX DISTRIBUTIONS		23 22

Section 1.	AUTHORIZATION	23 22

Section 2.	CONTINGENCIES	23 22

ARTICLE X INVESTMENT POLICY		22

ARTICLE XI SEAL		23

Section 1.	SEAL	24 23

Section 2.	AFFIXING SEAL	24 23

ARTICLE XII INDEMNIFICATION AND ADVANCE OF EXPENSES		24 23

ARTICLE XIII WAIVER OF NOTICE		24

ARTICLE XIV AMENDMENT OF BYLAWS		25 24

iii

BLACKSTONE MORTGAGE TRUST, INC.

BYLAWS

ARTICLE I

OFFICES

Section 1. PRINCIPAL OFFICE . The principal office of the Corporation in the State of Maryland shall be located at such place as the Board of Directors may designate.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 3. SPECIAL MEETINGS .

officers present at the meeting in the following order: the vice chairman of the board, if there is one, the chief executive officer, the president, the vice presidents in their order of rank and seniority, the secretary, or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary of the meeting shall be an individual appointed by the Board of Directors to act as secretary of the meeting or, in the absence of such appointment, a person appointed by the chairman of the meeting shall act as secretary or, in the absence of such appointment, the secretary of the Corporation or, in the secretary’s absence, an assistant secretary of the Corporation shall act as secretary of the meeting. In the event that the secretary presides at a meeting of stockholders, an assistant secretary, or, in the absence of all assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting, shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation: (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance and participation at the meeting to stockholders of record of the Corporation, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c ) limiting participation at the meeting on any matter to stockholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d ) limiting the time allotted to questions or comments; ( e d ) determining when and for how long the polls should be opened and when the polls should be closed; ( f e ) maintaining order and security at the meeting; ( g f ) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; ( h g ) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum has been established, to a later date and time and at a place announced at the meeting; and ( i h ) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 7. QUORUM . At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the charter of the Corporation (the “Charter”) for the vote necessary for the approval of any matter. If such quorum is not established at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

Section 8. VOTING . A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum has been established shall be sufficient to elect a director. Each share entitles the holder thereof to vote for as many different individuals as there are directors to be elected and for whose election the holder is entitled to vote. For the avoidance of doubt, stockholders do not have cumulative voting rights in the election of directors generally. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum has been established shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Charter or Article XIV of these Bylaws . Unless otherwise provided by statute or by the Charter, each outstanding share, regardless of class, entitles the holder thereof to cast one vote on each matter submitted to a vote at a meeting of stockholders.

Section 12. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS .

(a) Annual Meetings of Stockholders . (1) Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record ~~both~~ at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the annual meeting, at the time of giving of notice by the stockholder as provided for in this Section 12(a) and at the time of the annual meeting (and any postponement or adjournment thereof) , who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 12(a).

(3) Such stockholder’s notice shall set forth:

(iii) as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person,

(B) the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person,

(b) Special Meetings of Stockholders . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors, (ii) by a stockholder that has requested that a special meeting be called for the purpose of electing directors in compliance with Section 3 of this Article II and that has supplied the information required by Section 3 of this Article II about each individual whom the stockholder proposes to nominate for election of directors or (iii) provided that the special meeting has been called in accordance with Section 3(a) of this Article II for the purpose of electing directors, by any stockholder of the Corporation who is a stockholder of record ~~both~~ at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the special meeting, at the time of giving of notice provided for in this Section 12 and at the time of the special meeting (and any postponement or adjournment thereof) , who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 12. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board of Directors, any stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation’s notice of meeting, if the stockholder’s notice, containing the information required by paragraphs (a)(3)

Section 13. VOTING BY BALLOT . Voting on any question or in any election may be viva voce unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.

ARTICLE III

DIRECTORS

Section 1. GENERAL POWERS . The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section 14. SURETY BONDS . Unless required by law, no director shall be obligated to give any bond or surety or other security for the performance of any of his or her duties.

During any Emergency, unless otherwise provided by the Board of Directors, (i) a meeting of the Board of Directors or a committee thereof may be called by any director or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Directors during such an Emergency may be given less than 24 hours prior to the meeting to as many directors and by such means as may be feasible at the time, including publication, television or radio; and (iii) the number of directors necessary to constitute a quorum shall be one-third of the entire Board of Directors.

ARTICLE IV

COMMITTEES

ARTICLE V

OFFICERS

Section 3. VACANCIES . A vacancy in any office may be filled by the Board of Directors for the balance of the term.

ARTICLE VI

CONTRACTS, CHECKS AND DEPOSITS

ARTICLE VII

STOCK

Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

ARTICLE VIII

ACCOUNTING YEAR

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

ARTICLE X

INVESTMENT POLICY

ARTICLE XI

SEAL

ARTICLE XII

INDEMNIFICATION AND ADVANCE OF EXPENSES

ARTICLE XIII

WAIVER OF NOTICE

ARTICLE XIV

AMENDMENT OF BYLAWS

~~The Board of Directors shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.~~ These Bylaws may be altered, amended or repealed, in whole or in part, and new Bylaws may be adopted by the Board of Directors. In addition, these Bylaws may be altered, amended or repealed, in whole or in part, and new Bylaws may be adopted by the stockholders of the Corporation, without the approval of the Board of Directors, by the affirmative vote of a majority of the votes entitled to be cast on the matter by stockholders entitled to vote generally in the election of directors.

Exhibit 10.1

EXECUTION VERSION

FOURTH AMENDED AND RESTATED

MASTER REPURCHASE AGREEMENT

Dated as of February 15, 2019

among

PARLEX 2 FINANCE, LLC,

PARLEX 2A FINCO, LLC,

PARLEX 2 UK FINCO, LLC,

PARLEX 2 EUR FINCO, LLC,

PARLEX 2 AU FINCO, LLC,

PARLEX 2 CAD FINCO, LLC,

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

this Agreement from time to time

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

and

CITIBANK, N.A.,

as Buyer

TABLE OF CONTENTS


		Page

1.	APPLICABILITY		1

2.	DEFINITIONS		1

3.	INITIATION; CONFIRMATION; TERMINATION; FEES		35

4.	MARGIN MAINTENANCE		42

5.	INCOME PAYMENTS AND PRINCIPAL PAYMENTS		47

6.	SECURITY INTEREST		51

7.	PAYMENT, TRANSFER AND CUSTODY		52

8.	SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS		56

9.	INTENTIONALLY OMITTED		57

10.	REPRESENTATIONS		57

11.	NEGATIVE COVENANTS OF SELLER		62

12.	AFFIRMATIVE COVENANTS OF SELLER		63

13.	SINGLE-PURPOSE ENTITY		66

14.	EVENTS OF DEFAULT; REMEDIES		68

15.	SINGLE AGREEMENT		74

16.	RECORDING OF COMMUNICATIONS		74

17.	NOTICES AND OTHER COMMUNICATIONS		74

18.	ENTIRE AGREEMENT; SEVERABILITY		75

19.	NON-ASSIGNABILITY		75

20.	GOVERNING LAW		76

21.	NO WAIVERS, ETC.		76

22.	USE OF EMPLOYEE PLAN ASSETS		77

23.	INTENT		77

24.	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS		79

25.	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL		80

26.	NO RELIANCE		80

27.	INDEMNITY		81

28.	DUE DILIGENCE		82

29.	SERVICING		83

30.	MISCELLANEOUS		84

ANNEXES AND EXHIBITS



ANNEX I		Names and Addresses for Communications between Parties and Wire Instructions

SCHEDULE I		Prohibited Transferees

EXHIBIT I		Form of Confirmation

EXHIBIT II		Authorized Representatives of Seller

EXHIBIT III		Form of Custodial Delivery

EXHIBIT IV		Eligible Loan Due Diligence Checklist

EXHIBIT V-A		Form of Power of Attorney for U.S. Purchased Loans

EXHIBIT V-B		Form of Power of Attorney for Foreign Purchased Loans

EXHIBIT VI-I		Representations and Warranties Regarding Each Individual Purchased Loan Which Is Not (i) a Foreign Purchased Loan (AU), (ii) a Participation Interest in a Whole Loan or (iii) a Foreign Purchased Loan (CAD)

EXHIBIT VI-II		Representations and Warranties Regarding Each Individual Purchased Loan Which Is a Participation Interest in a Whole Loan

EXHIBIT VI-III		Representations and Warranties Regarding Each Individual Purchased Loan Which Is a Foreign Purchased Loan (AU)

EXHIBIT VI-IV		Representations and Warranties Regarding Each Individual Purchased Loan Which Is a Foreign Purchased Loan (CAD)

EXHIBIT VII		Collateral Tape

EXHIBIT VIII		Form of Transaction Request

EXHIBIT IX		Form of Request for Margin Excess

EXHIBIT X		Form of Irrevocable Direction Letter

EXHIBIT XI		Form of Joinder Agreement

EXHIBIT XII		Form of Facility Asset Chart

iii

FOURTH AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of February 15, 2019, by and among PARLEX 2 FINANCE, LLC, a Delaware limited liability company (“ Parlex 2 ”), PARLEX 2A FINCO, LLC, a Delaware limited liability company (“ Parlex 2A ”), PARLEX 2 UK FINCO, LLC, a Delaware limited liability company (“ Parlex 2 UK ”), PARLEX 2 EUR FINCO, LLC, a Delaware limited liability company (“ Parlex 2 EUR ”), PARLEX 2 AU FINCO, LLC, a Delaware limited liability company (“ Parlex 2 AU ”), PARLEX 2 CAD FINCO, LLC (“ Parlex 2 CAD ”, and together with Parlex 2, Parlex 2A, Parlex 2 UK, Parlex 2 EUR, Parlex 2 AU and any other Person when such Person joins as a Seller hereunder from time to time, individually and/or collectively as the context may require, “ Seller ”) and CITIBANK, N.A., a national banking association (“ Buyer ”).

1. APPLICABILITY

From time to time during the Facility Availability Period, the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Purchased Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Purchased Loans at a date certain, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any exhibits identified herein as applicable hereunder.

This Agreement amends, restates and replaces in its entirety that certain Third Amended and Restated Master Repurchase Agreement, dated as of October 12, 2018 (the “ Third Amendment and Restatement Date ”), by and among Parlex 2, Parlex 2A, Parlex 2 UK, Parlex 2 EUR, Parlex 2 AU and Buyer (the “ Original Agreement ”). Seller and Buyer acknowledge and agree that the Original Agreement shall be void and of no force or effect from and after the date hereof. All Transactions (as defined in the Original Agreement) outstanding under the Original Agreement as of the Fourth Amendment and Restatement Date shall be deemed to be Transactions (as defined in this Agreement) outstanding under this Agreement and all Confirmations (as defined in the Original Agreement) under the Original Agreement as of the Fourth Amendment and Restatement Date shall be deemed to be Confirmations under this Agreement (and, accordingly, in each case, subject to the terms and conditions hereof) and all references in any Transaction Document (including, without limitation, any and all Confirmations and assignment documentation executed pursuant to the Original Agreement) to “the Agreement” or any similar formulation intended to refer to the Original Agreement shall be deemed to be references to this Agreement.

2. DEFINITIONS

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

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

“ Accepted Servicing Practices ” shall have the meaning given to such term in the Servicing Agreement (or, if not defined therein, shall mean with respect to any Purchased Loan, those mortgage servicing practices of prudent mortgage lending institutions which service whole mortgage loans (and senior interests in whole mortgage loans) in the jurisdiction where the related Mortgaged Property is located).

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

“ Act of Insolvency ” shall mean, with respect to any Person, (a) the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its assets or property in an involuntary case under any applicable Insolvency Law now or hereafter in effect which (i) results in the entry of an order for relief or (ii) is not dismissed within 90 days, (b) the appointment by a court having jurisdiction over such Person or any substantial part of its assets or property, of a receiver, interim-receiver, receiver and manager, liquidator, assignee, custodian, trustee, sequestrator, administration or similar official for such Person or for any substantial part of its assets or property and such appointment shall remain unstayed and in effect for a period of 90 days, (c) an order by a court having jurisdiction over such Person or any substantial part of its assets or property ordering the winding up or liquidation of such Person’s affairs, and such order shall remain unstayed and in effect for a period of 90 days, (d) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, (e) the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law, (f) the consent by such Person to the appointment of or taking possession by a receiver, interim-receiver, receiver and manager, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, (g) the making by such Person of any general assignment for the benefit of creditors, or (h) the admission in writing in connection with a legal proceeding of the inability of such Person to pay its debts generally as they become due.

“ Actual Knowledge ” shall mean, as of any date of determination, the then current actual knowledge of Stephen Plavin, Thomas C. Ruffing and Douglas Armer, without duty of further inquiry or investigation; provided , that if any such individual ceases to be an officer of or in the employ of Seller and/or Guarantor after the date of this Agreement in a capacity comparable to the capacity occupied as of the date of this Agreement, then Seller shall designate promptly another individual reasonably acceptable to Buyer for purposes of satisfying this definition.

“ Affiliate ” shall mean, when used with respect to any specified Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person.

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

“ Agreement ” shall mean this Fourth Amended and Restated Master Repurchase Agreement, dated as of the date first set forth above, by and among Parlex 2, Parlex 2A, Parlex 2 UK, Parlex 2 EUR, Parlex 2 AU, Parlex 2 CAD and Citibank, N.A., as such agreement may be amended, modified, supplemented, and/or restated and in effect from time to time.

“ Alternative Rate ” shall have the meaning specified in the Fee Agreement.

“ Alternative Rate Transaction ” shall mean, with respect to any Pricing Rate Period, any Transaction with respect to which the Pricing Rate for such Pricing Rate Period is determined with reference to the Alternative Rate.

“ ANZVPS ” shall mean the Australia and New Zealand Valuation and Property Standards published by the Australian Property Institute and the Property Institute of New Zealand.

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

“ Applicable Spread ” shall mean, with respect to each Transaction:

(i) so long as no Event of Default shall have occurred and be continuing, the number of basis points (i.e., 1 basis point equals 0.01%) determined in accordance with the Pricing Matrix, and confirmed in the related Confirmation; or

(ii) after the occurrence and during the continuance of an Event of Default, the applicable incremental per annum rate described in clause (i) of this definition, as applicable, plus 400 basis points (4.00%).

It is understood and agreed that no improvement or decline in the LTV (Loan UPB) after the applicable Purchase Date for a Purchased Loan shall result in any adjustment to the Applicable Spread for such Purchased Loan.

“ Applicable Standard of Discretion ” shall mean: (a) at any time the Maximum LTV (Purchase Price) of a Purchased Loan is less than or equal to the LTV (Loan UPB) of such Purchased Loan as of the Purchase Date, Buyer’s commercially reasonable discretion, and (b) at any time the Maximum LTV (Purchase Price) of a Purchased Loan is greater than the LTV (Loan UPB) of such Purchased Loan as of the Purchase Date, Buyer’s sole discretion.

“ Appraisal ” shall mean an Appraisal Regime-compliant appraisal addressed to Buyer, Seller or Guarantor (or, in the case of a Purchased Loan (AU), the facility agent or the security trustee in respect of that Purchased Loan (AU)), and, where it is market practice in the jurisdiction where the relevant Mortgaged Property is located, the successors and assigns of the addressee (and, if not addressed to Buyer, containing reliance language acceptable to Buyer (acting reasonably and having regard to market practice for appraisals in the jurisdiction in which the relevant Mortgaged Property is located), which language shall be made available by Seller to and approved by Buyer prior to the applicable Purchase Date) and reasonably satisfactory to Buyer of the related Mortgaged Property from a third party appraiser.

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

“ ARD Loan ” shall mean any loan that provides that if the unamortized principal balance thereof is not repaid by a date certain set forth in the related loan documents, such loan will accrue additional interest at the rate specified in the related Mortgage Note and the related Mortgagor is required to apply certain excess monthly cash flow generated by the related Mortgaged Property to the repayment of the outstanding principal balance on such Mortgage Loan.

“ Assignment Documents in Blank ” shall mean, (a) for each Purchased Loan that is not a Participation Interest, the (i) allonge in blank (in the case of a U.S. Purchased Loan), (ii) Transfer Certificate duly executed by Seller or transferor (howsoever described) with the name of the transferee (howsoever described) and dated in blank (in the case of a Foreign Purchased Loan), (iii) omnibus assignment in blank, (iv) except in the case of each Purchased Loan that is a Senior Interest, Assignment of Mortgage in blank, (v) except in the case of each Purchased Loan that is a Senior Interest or a Foreign Purchased Loan (AU), assignment of Assignment of Leases in blank, and/or (vi) equivalent of each of the foregoing (except with respect to the Transfer Certificate referenced in clause (ii) herein, for which there shall be no equivalent) in the relevant non-U.S. jurisdiction and where so required by Buyer, duly executed by Seller with the name of the transferee or assignee (howsoever described) and dated in blank (in the case of a Foreign Purchased Loan) and (b) for each Purchased Loan that is a Participation Interest, (i) an endorsement in blank in respect of the related participation certificate and (ii) an assignment and assumption agreement in blank.

“ Assignment of Leases ” shall mean, with respect to any Mortgage (other than in the case of any Foreign Purchased Loan (AU)), an assignment of leases thereunder, notice of transfer or equivalent instrument in recordable or registerable form, sufficient under the laws of the jurisdiction wherein the Mortgaged Property is located to reflect the assignment of leases, subject to the terms, covenants and provisions of this Agreement.

“ Assignment of Mortgage ” shall mean, with respect to any Mortgage, an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable or registerable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment and pledge of the Mortgage, subject to the terms, covenants and provisions of this Agreement.

“ Attorney’s Bailee Letter ” shall mean a letter from an Acceptable Attorney, in form and substance reasonably acceptable to Buyer, wherein such Acceptable Attorney in possession of a Purchased Loan File (i) acknowledges receipt of such Purchased Loan File, (ii) confirms that such Acceptable Attorney is holding the same as bailee (in the case of U.S. Purchased Loans) or agent (in the case of Foreign Purchased Loans), of Buyer, or solicitor of Seller (in the case of Foreign Purchased Loans (AU)), as applicable, under such letter and (iii) agrees that such Acceptable Attorney shall deliver such Purchased Loan File to the Custodian by not later than the third (3 ^rd ) Business Day (or, in the case of a Foreign Purchased Loan (AU), the tenth (10 ^th ) Business Day) following the Purchase Date for the related Purchased Loan.

“ AU Dollar ” and “ A$ ” shall mean the lawful currency of the Commonwealth of Australia.

“ AU Reference Banks ” shall mean (i) the Commonwealth Bank of Australia, (ii) Westpac Banking Corporation, (iii) Australia and New Zealand Banking Group Limited, (iv) National Australia Bank Limited, and (v) such other Person as Buyer and Seller may agree.

“ Bankruptcy Code ” shall mean Title 11 of the United States Code (11 U.S.C. § 101, et seq. ), as amended, modified or replaced from time to time.

“ Basel II ” shall mean the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III).

“ Basel III ” shall mean:

(i) the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(ii) the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(iii) any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III.

“ BBSY Rate ” shall mean, with respect to any Pricing Rate Period related to any Foreign Purchased Loan (AU), the Australian Bank Bill Swap Reference Rate (bid) administered by ASX Benchmarks Pty Limited (or any other person which takes over administration of that rate) for a period equal in length to the relevant Pricing Rate Period displayed on the Thomson Reuters screen BBSY page (or such other page as may replace that page on that service, or the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters) as of 10.:30 a.m., Sydney time, on the related Pricing Rate Determination Date (the “ BBSY Screen Rate ”).

If no BBSY Screen Rate is available for any Pricing Rate Period, and such Pricing Rate Period is longer than the minimum period for which a BBSY Screen Rate is displayed, the BBSY Rate for such Pricing Rate Period shall be the rate which results from interpolating on a linear basis between:

(i) the BBSY Screen Rate for the longest period (for which the BBSY Screen Rate is available) which is less than such Pricing Rate Period; and

(ii) the BBSY Screen Rate for the shortest period (for which the BBSY Screen Rate is available) which exceeds such Pricing Rate Period (the “ Interpolated BBSY Screen Rate ”).

If no BBSY Screen Rate is available for any Pricing Rate Period and it is not possible to calculate an Interpolated BBSY Screen Rate for such Pricing Rate Period, Buyer shall request each of the AU Reference Banks quote the buying for bills of exchange accepted by a leading Australian bank for amounts of not less than the Repurchase Price of the applicable Transaction for a period equal to the relevant Pricing Rate Period, as of 10:30 a.m., Sydney time, on the related Pricing Rate Determination Date.

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

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

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

“ Blocked Account Agreement ” shall mean, individually or collectively, as the context may require, (i) that certain Deposit Account Control Agreement, dated as of June 12, 2013, among Buyer, Parlex 2, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2, as the same may be amended, modified and/or restated from time to time, (ii) that certain Deposit Account Control Agreement, dated as of January 31, 2014, among Buyer, Parlex 2A, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2A, as the same may be amended, modified and/or restated from time to time, (iii) that certain Deposit Account Control Agreement, dated as of the Second Amendment and Restatement Date, among Buyer, Parlex 2 UK, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2 UK, as the same may be amended, modified and/or restated from time to time, (iv) that certain Deposit Account Control Agreement, dated as of the Second Amendment and Restatement Date, among Buyer, Parlex 2 EUR, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2 EUR, as the same may be amended, modified and/or restated from time to time, (v) that certain Deposit Account Control Agreement, dated as of the Third Amendment and Restatement Date, among Buyer, Parlex 2 AU, Servicer and the Depository, relating to the Cash Management Account established by Parlex 2 AU, as the same may be amended, modified and/or restated from time to time, (vi) that certain Deposit Account Control Agreement, dated as of the Fourth Amendment and Restatement Date, among Buyer, Parlex 2 CAD, Servicer and the Depository, relating to the

Cash Management Account established by Parlex 2 CAD, as the same may be amended, modified and/or restated from time to time, and (vii) each additional Deposit Account Control Agreement entered into among a new Seller admitted to this Agreement pursuant to a Joinder Agreement, Buyer, Servicer and the Depository and relating to a Cash Management Account established pursuant to this Agreement by such new Seller, as the same may be amended, modified and/or restated from time to time.

“ Business Day ” shall mean a day other than (i) a Saturday or Sunday, (ii) a day on which the New York Stock Exchange or Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed and (iii) a day on which commercial banks in the States of New York, Pennsylvania, Kansas or Minnesota or in London, England, Sydney, Australia, Toronto, Canada, or, as it relates to a specific Foreign Purchased Loan, the relevant non-U.S. jurisdiction in which the Mortgaged Property securing the related Foreign Purchased Loan is located or the laws of which otherwise govern the Purchased Loan Documents relating to the subject Foreign Purchased Loan (or as otherwise designated in the Purchased Loan Documents relating to the subject Foreign Purchased Loan and stated in the related Confirmation) are authorized or obligated by law or executive order to be closed. When used with respect to a Pricing Rate Determination Date, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banks in London, England are closed for interbank or foreign exchange transactions.

“ Buyer ” shall mean Citibank, N.A., or any successor or assign.

“ CA Dollar ” and “ C$ ” shall mean the lawful currency of Canada.

“Canadian Anti-Money Laundering & Anti-Terrorism Legislation ” means the Criminal Code (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the United Nations Act (Canada) or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto.

“ Capital Lease Obligations ” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

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

“ Cash Management Account ” shall mean, individually or collectively, as the context may require, with respect to each Seller, a segregated interest bearing account, in the name of such Seller for the benefit of Buyer, established at the Depository and subject to a Blocked Account Agreement.

“ Change of Control ” shall mean any of the following events shall have occurred without the prior approval of Buyer:

(i) Guarantor shall no longer own, directly or indirectly, 100% of the ownership interest in Seller and Control, directly or indirectly, Seller;

(ii) any merger, reorganization or consolidation of Guarantor where Guarantor is not the surviving entity; or

(iii) any conveyance, transfer, lease or disposal of all or substantially all assets of any Seller or Guarantor to any Person or entity other than an Affiliate of such entity.

“ CLO ” shall mean the collateral loan obligation bond transaction issued pursuant to the CLO Indenture.

“ CLO Indenture ” shall mean that certain Indenture, dated as of December 21, 2017 by and among BXMT 2017-FL1, Ltd., as Issuer, BXMT 2017-FL1, LLC, as Co-Issuer, 42-16 CLO L SELL, LLC, as Advancing Agent and Wells Fargo Bank, National Association as Trustee and as Note Administrator, as the same may be amended, modified and/or restated from time to time.

“ CLO Participation A-1 ” shall have the meaning assigned to such term in each CLO Participation Agreement.

“ CLO Participation A-2 ” shall have the meaning assigned to such term in each CLO Participation Agreement.

“ CLO Participation Agreements ” shall mean, individually or collectively as the context requires, that certain (i) Participation Agreement and Future-Funding Indemnification Agreement, dated as of December 21, 2017, by and among 42-16 CLO L SELL, LLC, a Delaware corporation (the “ Mortgage Lender ” and the “ Initial CLO Participation A-1 Holder ”), 42-16 CLO L SELL, LLC, a Delaware corporation (the “ Initial CLO Participation A-2 Holder ”), Wells Fargo Bank, National Association (the “ CLO Participation Custodial Agent ”) and Blackstone Mortgage Trust, Inc., a Maryland corporation (the “ Future Funding Indemnitor ”) with respect to the Purchased Loan known as “SunTrust Center”, (ii) Participation Agreement and Future-Funding Indemnification Agreement, dated as of December 21, 2017, by and among Mortgage Lender, Initial CLO Participation A-1 Holder, Initial CLO Participation A-2 Holder, CLO Participation Custodial Agent and Future Funding Indemnitor with respect to the Purchased Loan known as “Douglass Entrance”, (iii) Participation Agreement and Future-Funding Indemnification Agreement, dated as of December 21, 2017, by and among Mortgage Lender, Initial CLO Participation A-1 Holder, Initial CLO Participation A-2 Holder, CLO Participation Custodial Agent and Future Funding Indemnitor with respect to the Purchased Loan known as “Ambassador Waikiki II” and (iv) Participation Agreement and Future-Funding Indemnification Agreement, dated as of December 21, 2017, by and among Mortgage Lender, Initial CLO Participation A-1 Holder, Initial CLO Participation A-2 Holder, CLO Participation Custodial Agent and Future Funding Indemnitor with respect to the Purchased Loan known as “Torrance Portfolio”, as each may be amended, modified and/or restated from time to time.

“ CLO Servicing Agreement ” shall have the meaning assigned to such term in the CLO Participation Agreements, as the same may be amended, modified and/or restated from time to time.

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

“ Collateral ” shall have the meaning specified in Section 6 of this Agreement.

“ Collateral Tape ” shall mean, with respect to each Eligible Loan, the tape containing the fields of information set forth in Exhibit VII attached hereto and any other similar information with respect to a Foreign Purchased Loan.

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

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

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

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

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

“ Concentration Limit ” shall mean, unless otherwise agreed to in writing by Buyer (including, without limitation, in a Confirmation), the test that shall be satisfied at any applicable date of determination, if the aggregate outstanding Purchase Price with respect to all Purchased Loans which are Participation Interests shall not exceed 33% of the Facility Amount (i) which outstanding Purchase Price for Foreign Purchased Loans shall for purposes of such calculations be converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan, and (ii) excluding for purposes of such calculation each CLO Participation A-1 issued pursuant to a CLO Participation Agreement for which no Concentration Limit shall be applicable.

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

“ Connection Income Taxes ” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“ Control ” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract and “Controlling” and “Controlled” shall have meanings correlative thereto.

“ Current Appraisal ” shall mean, as of any date of determination, an Appraisal approved by Buyer dated within six (6) months (or such greater number of months as Buyer may approve in its sole discretion) of such date of determination.

“ Custodial Agreement ” shall mean, individually or collectively, as the context may require, (i) that certain Third Amended and Restated Custodial Agreement, dated as of the Fourth Amendment and Restatement Date, among the Custodian, Sellers and Buyer, as the same may be further amended, modified and/or restated from time to time, and (ii) each additional Custodial Agreement entered into among a new Seller admitted to this Agreement pursuant to a Joinder Agreement, the Custodian and Buyer, as the same may be amended, modified and/or restated from time to time.

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

“ Custodian ” shall mean U.S. Bank, National Association, or any successor Custodian appointed by Buyer with the prior written consent of Seller (which consent shall not be unreasonably withheld or delayed).

“ Debt Yield (Loan UPB) ” shall mean, with respect to each Purchased Loan or proposed Purchased Loan, as of any date of determination, the net cash flow debt yield equal to the percentage equivalent of the quotient obtained by dividing (a) the in place underwritten net cash flow of the related Mortgaged Property, as determined by Buyer in its good faith business judgment, by (b) the unpaid principal balance of such Purchased Loan or proposed Purchased Loan, as applicable, on such date of determination.

“ Debt Yield (Purchase Price) ” shall mean, with respect to each Purchased Loan, as of any date of determination, the net cash flow debt yield equal to the percentage equivalent of the quotient obtained by dividing (a) the in place underwritten net cash flow of the related Mortgaged Property, as determined by Buyer in its good faith business judgment, by (b) the outstanding Purchase Price of such Purchased Loan on such date of determination.

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

“ Defeasance ” shall have the meaning specified in Exhibit VI-I.

“ Depository ” shall mean PNC Bank, The Toronto-Dominion Bank or any successor Depository appointed by Seller with the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed).

“ Due Date (Foreign Purchased Loan (AU)) ” shall have the meaning given to the term “Due Date” in the Servicing Agreement referenced in clause (v) of the definition of Servicing Agreement.

“ Due Diligence Package ” shall mean: (i) the Collateral Tape, (ii) the items on the Eligible Loan Due Diligence Checklist, in each case to the extent applicable and (iii) such other documents or information as Buyer or its counsel shall reasonably deem necessary.

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

“ Eligible Loan Due Diligence Checklist ” shall mean the due diligence materials set forth in Exhibit IV attached hereto and any other similar information with respect to a Foreign Purchased Loan.

“ Eligible Loans ” shall mean fixed or floating rate whole mortgage loans (“ Whole Loans ”) or senior interests (including “A” notes in an “A/B” note structure) in such Whole Loans (“ Senior Interests ”) or certificated participation interests in such Whole Loans or Senior Interests which are (1) denominated in an Applicable Currency and (2) secured by stabilized or un-stabilized multi-family or commercial properties (including, but not limited to, office, retail, industrial and hotel properties, but excluding, with respect to potential Foreign Purchased Loans, development and heavy restructuring facilities), which have been approved by Buyer in its sole discretion as a Purchased Loan and which satisfy all of the following criteria as of the applicable Purchase Date:

(a) the Debt Yield (Loan UPB) is equal to or greater than 6.00%,

(b) the LTV (Loan UPB) is 75.00% or less (or such higher percentage as Buyer may agree to in its sole discretion),

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

(e) in the event the maturity date of the subject Whole Loan or Senior Interests (or participation interests therein) shall be later than three (3) years (inclusive of all extension terms) after the expiration of the Facility Availability Period, then the conditions precedent to the exercise of any option that would extend the maturity date of such Whole Loan or Senior Interests (or participation interests therein) beyond such three (3) year period shall include extension conditions satisfactory to Buyer, including but not limited to, enhanced credit metrics relative to those in place at the time of such Purchased Loan’s origination.

Eligible Loans shall also include such other loans and debt instruments (or interests in such loans and debt instruments) as Buyer may approve from time to time in its sole discretion, subject to terms and conditions and document delivery requirements as may be established by Buyer.

“ Environmental Law ” shall mean, any federal, state, provincial, territorial, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, orders-in-council, consent decree or judgment, relating to the environment, employee health and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq .; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq .; the Clean Air Act, 42 U.S.C. § 7401 et seq .; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq .; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq .; the Emergency Planning the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq .; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq .; and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq .; and any state, provincial, territorial and local or foreign counterparts or equivalents, in each case as amended from time to time.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and, as of the relevant date, any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

“ ERISA Affiliate ” shall mean any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Section 302 of ERISA and Section 412 of the Code and the lien created under Section 303(k) of ERISA and Section 430(k) of the Code, described in Section 414(m) or (o) of the Code of which Seller is a member.

“ ESA ” shall have the meaning specified in Exhibit VI-I.

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

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

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

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

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

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

EURIBOR

1 – Reserve Requirement

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

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

“ Event of Default ” shall have the meaning specified in Section 14(a) of this Agreement.

“ Excluded Taxes ” shall mean, any of the following Taxes imposed on or with respect to payment to Buyer or required to be withheld or deducted from such payment, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, Taxes imposed on or measured by net worth (however denominated) and branch profits Taxes, in each case, (i) imposed as a result of Buyer being organized under the laws of, or having its principal office or the office from which it books the Transactions located in, the jurisdiction imposing such Taxes (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of Buyer with respect to an interest in the Transactions pursuant to a law in effect on the date on which such Party (i) acquires such interest in the Transactions or (ii) changes its principal office or the office from which it books the Transactions, except in each case to the extent that, pursuant to Section 31, amounts with respect to such Taxes were payable either to such Buyer’s assignor immediately before such Buyer became a party hereto or to such Buyer immediately before it changed the office from which it books the Transactions, (c) Taxes attributable to Buyer’s failure to comply with Section 31 of this Agreement, (d) Taxes attributable to Buyer’s failure to comply with its obligations under Sections 19(c), 19(d) or 23(i) of this Agreement, (e) any withholding Taxes imposed under FATCA, (f) any U.S. federal backup withholding Taxes imposed under Section 3406 of the Code, (g) an Australian Tax required to be withheld or deducted from any interest or other payment under Division 11A of Part III of the Income Tax Assessment Act 1936 (Cth) or the Income Tax Assessment Act 1997 (Cth) or Subdivision 12-F of Schedule 1 to the Taxation Administration Act 1953 (Cth), and (h) any interest, additions to tax or penalties in respect of the foregoing.

“ Exit Fee ” shall have the meaning specified in the Fee Agreement.

“ Extension Fee ” shall have the meaning specified in the Fee Agreement.

“ Facility Amount ” shall mean, subject to Section 30(j) of this Agreement, One Billion Dollars ($1,000,000,000); provided that whenever under this Agreement Seller and Buyer are required or otherwise need to calculate whether the Facility Amount has been or would be exceeded, then all applicable amounts for Foreign Purchased Loans necessary for such calculation shall be converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan for all purposes of such calculation.

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

“ Facility Availability Period ” shall mean the period commencing on June 12, 2013 and ending on October 12, 2021 (or if such day is not a Business Day, the next succeeding Business Day). Notwithstanding anything herein to the contrary, at any time during the Facility Availability Period, Seller may request an extension of the Facility Availability Period which extension shall be in Buyer’s sole discretion and subject to terms and conditions determined by Buyer in its sole discretion.

“ Facility Expiration Date ” shall mean the last day of the Facility Availability Period; provided , that the Facility Expiration Date shall be extendible by Seller on an annual basis thereafter (i.e. for consecutive twelve (12) month periods), subject to the following:

(a) Seller delivers to Buyer a written request of the extension of the Facility Expiration Date no earlier than ninety (90) nor later than thirty (30) days before the then current Facility Expiration Date,

(b) no Default or Event of Default has occurred and is continuing on the date the request to extend is delivered or on the then current Facility Expiration Date,

(d) the Concentration Limit is satisfied on the date the request to extend is delivered and on the then current Facility Expiration Date (except to the extent waived or otherwise approved by Buyer), and

(e) Seller shall have paid to Buyer the Extension Fee on or before the then current Facility Expiration Date.

“ FATCA ” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and, for the avoidance of doubt, any agreements entered into pursuant to any of the foregoing.

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

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

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

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

“ Filings ” shall have the meaning specified in Section 6.

“ Financing Lease ” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

“ FIRREA ” shall mean the Financial Institutions, Reform, Recovery and Enforcement Act of 1989.

“ First Amendment and Restatement Date ” shall mean July 28, 2014.

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

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

“ Foreign Purchased Loan (AU) ” shall mean a Foreign Purchased Loan denominated in AU Dollars.

“ Foreign Purchased Loan (CAD) ” shall mean a Foreign Purchased Loan denominated in CA Dollars.

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

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

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

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

“ Fourth Amendment and Restatement Date ” shall mean February 15, 2019.

“ Funding Fee ” shall have the meaning specified in the Fee Agreement.

“ Future Funding Conditions Precedent ” shall have the meaning specified in Section 4(c).

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

“ Governmental Authority ” shall mean any national or federal government, any state, regional, provincial, territorial, local or other political subdivision thereof with jurisdiction exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“ Ground Lease ” shall have the meaning specified in Exhibit VI-I.

“ Guarantor ” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation (or, following a substitution consummated in accordance with Section 9, Successor Guarantor).

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

“ Hedging Transactions ” shall mean, with respect to any Purchased Loan that is a fixed rate loan, any short sale of U.S. Treasury Securities or mortgage-related securities, futures contract (including Eurodollar futures) or options contract or any interest rate swap, cap or collar agreement or similar arrangements providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller with either (x) Buyer or an Affiliate of Buyer or (y) one or more other counterparties reasonably acceptable to Buyer and, in the case of clause (y) only, assigned by Seller to Buyer as additional collateral for the applicable Transaction.

“ Income ” shall mean, with respect to any Purchased Loan at any time, the sum of (x) any principal thereof and all interest, dividends or other distributions thereon and (y) all net sale proceeds received by Seller in connection with a sale of such Purchased Loan to a Person other than Buyer.

“ Indebtedness ” shall mean, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; contingent or future funding obligations under any Purchased Loan or any obligations senior to, or pari passu with, any Purchased Loan; (e) Capital Lease Obligations of such Person; and (f) obligations of such Person under repurchase agreements or like arrangements; (g) Indebtedness of others guaranteed by such Person to the extent of such guarantee; and (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person. Notwithstanding the foregoing, nonrecourse Indebtedness owing pursuant to a securitization transaction such as a REMIC securitization, a collateralized loan obligation transaction or other similar securitization shall not be considered Indebtedness for any person.

“ Indemnified Amounts ” and “ Indemnified Parties ” shall have the meaning specified in Section 27 of this Agreement.

“ Indemnified Taxes ” shall mean: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Seller under any Transaction Document and (b) Other Taxes.

“ Independent Director ” shall mean a duly appointed manager or member of the board of directors (or managers) of the relevant entity who shall not have been, at the time of such appointment or at any time while serving as a director or manager of the relevant entity and may not have been at any time in the preceding five (5) years, (a) a direct or indirect legal or beneficial owner in such entity or any of its Affiliates, (b) a creditor, supplier, employee, officer, director (other than in its capacity as Independent Director), family member, manager or contractor of such entity or any of its Affiliates, or (c) a Person who controls (directly, indirectly or otherwise) such entity or any of its Affiliates or any creditor, supplier, employee, officer, director, family member, manager or contractor of such Person or any of its Affiliates.

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

“ Insolvency Laws ” shall mean the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), and the Winding-Up and Restructuring Act (Canada) and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension or payments and similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

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

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

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

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

“ LIBOR ” shall mean:

(a) With respect to each Pricing Rate Period related to any U.S. Purchased Loan, the rate (expressed as a percentage per annum) for deposits in U.S. Dollars, for a one month period, that appears on “Page BBAM” of the Bloomberg Financial Markets Services Screen (or the successor thereto) as of 11:00 a.m., London time, on the related Pricing Rate Determination Date. If such rate does not appear on “Page BBAM” of the Bloomberg Financial Markets Services Screen (or the successor thereto) as of 11:00 a.m., London time, on such Pricing Rate Determination Date, Buyer shall request the Reference Banks to provide such bank’s offered quotation (expressed as a percentage per annum) to prime banks in the London interbank market for deposits in U.S. Dollars for a one month period as of 11:00 a.m., London time, on such Pricing Rate Determination Date for amounts of not less than the Repurchase Price of the applicable Transaction. If at least two such offered quotations are so provided, LIBOR with respect to the relevant Pricing Rate Period related to a U.S. Purchased Loan, shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, Buyer shall request any three major banks in New York City selected by Buyer to provide such bank’s rate (expressed as a percentage per annum) for loans in U.S. Dollars to leading European banks for a one month period as of approximately 11:00 a.m., New York City time on the applicable Pricing Rate Determination Date for amounts of not less than the Repurchase Price of such Transaction. If at least two such rates are so provided, LIBOR with respect to the relevant Pricing Rate Period related to a U.S. Purchased Loan shall be the arithmetic mean of such rates. LIBOR with respect to each Pricing Rate Period related to any U.S. Purchased Loan shall be determined by Buyer or its agent, which determination shall be conclusive absent manifest error; and

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

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

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

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

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

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

LIBOR

1 – Reserve Requirement

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

“ Lien ” shall mean any mortgage, lien, encumbrance, charge, hypothec, trust, retention of title or other security interest by way of, or having similar commercial effect to, security for the payment or performance of an obligation, whether arising under contract, by operation of law, judicial process or otherwise.

“ LTV (Aggregate Loan UPB) ” shall mean, with respect to any Purchased Loan or proposed Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the sum of (x) the unpaid principal balance of such Purchased Loan or proposed Purchased Loan plus (y) the unpaid principal balance of any subordinate or mezzanine debt secured indirectly by the Mortgaged Property and the denominator of which shall equal the “as is” value of such Mortgaged Property securing such Purchased Loan or proposed Purchased Loan as determined by Buyer as of the Purchase Date in its sole discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan. For purposes of determining the value of a Mortgaged Property in accordance with this definition, (i) the value may be determined by reference to a Current Appraisal, discounted cash flow analysis or other commercially reasonable method and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks (including risk of delay) posed by any Liens on the related Mortgaged Property.

“ LTV (Loan UPB) ” shall mean, with respect to any Purchased Loan or proposed Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the unpaid principal balance of such Purchased Loan or proposed Purchased Loan, as applicable, and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan or proposed Purchased Loan, as applicable, as determined by Buyer as of the Purchase Date in its sole discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan. For purposes of determining the value of a Mortgaged Property in accordance with this definition, (i) the value may be determined by reference to a Current Appraisal, discounted cash flow analysis or other commercially reasonable method and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks (including risk of delay) posed by any Liens on the related Mortgaged Property.

“ LTV (Purchase Price) ” shall mean, with respect to any Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the outstanding Purchase Price of such Purchased Loan and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan as determined by Buyer as of the Purchase Date in its sole discretion and at all times thereafter in Buyer’s commercially reasonable discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan. For purposes of determining the value of a Mortgaged Property in accordance with this definition, (i) the value may be determined by reference to a Current Appraisal, discounted cash flow analysis or other commercially reasonable method and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks (including risk of delay) posed by any Liens on the related Mortgaged Property.

“ MAI ” shall have the meaning specified in Exhibit VI-I.

“ Margin Amount ” shall mean, with respect to any Purchased Loan as of any date of determination, an amount equal to the product of the applicable Margin Percentage and the outstanding Purchase Price of such Purchased Loan as of such date.

“ Margin Deficit ” shall have the meaning specified in Section 4(a).

“ Margin Deficit Notice ” shall have the meaning specified in Section 4(b).

“ Margin Excess ” shall mean, as applicable, Margin Excess (Future Funding) or Margin Excess (Other).

“ Margin Excess (Future Funding) ” shall have the meaning specified in Section 4(c).

“ Margin Excess (Other) ” shall have the meaning specified in Section 4(e).

“ Margin Percentage ” shall mean, with respect to any Purchased Loan as of any date of determination, the reciprocal of the applicable Maximum Purchase Price Percentage.

“ Market Value ” shall mean, with respect to any Purchased Loan, the market value for such Purchased Loan, as determined by Buyer at the Applicable Standard of Discretion on each Business Day in accordance with this definition. For purposes of Section 4(a) and 5(e), as applicable, changes in the Market Value of a Purchased Loan shall be determined solely in relation to material positive or negative changes (relative to Buyer’s initial underwriting or the most recent determination of Market Value in terms of the performance or condition, taken in the aggregate, of (i) the Mortgaged Property securing the Purchased Loan or other collateral securing or related to the Purchased Loan, (ii) the Purchased Loan’s borrower (including obligors, guarantors, participants and sponsors) and the borrower on any underlying property or other collateral securing such Purchased Loan, (iii) the commercial real estate market relevant to the Mortgaged Property, and (iv) any actual risks posed by any liens or claims on the related Mortgaged Property or Properties. In addition, the Market Value for any Purchased Loan may be deemed by Buyer to be zero or such greater amount (in the Applicable Standard of Discretion) in the event any of the following occurs with respect to such Purchased Loan: (a) a negative change in Market Value to the extent resulting from a continuing material breach of a representation or warranty set forth on Exhibit VI-I, Exhibit VI-II, Exhibit VI-III or Exhibit VI-IV, as applicable (but without giving effect to any qualifications for Seller’s Actual Knowledge); or (b) the Repurchase Date with respect to such Purchased Loan occurs without repurchase of such Purchased Loan. For the avoidance of doubt, the Market Value of any Purchased Loan shall be denominated in the same Applicable Currency as the Purchase Price of such Purchased Loan and, if determined in a currency other than such Applicable Currency, shall be converted to such Applicable Currency for the purposes herein based on the applicable Purchase Date Spot Rate with respect to such Purchased Loan.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, condition (financial or otherwise) or results of operations of Seller and Guarantor, taken as a whole, (b) the ability of Seller or Guarantor to pay and perform its material obligations under any of the Transaction Documents, (c) the legality, validity or enforceability of any of the Transaction Documents, (d) the rights and remedies of Buyer under any of the Transaction Documents, or (e) the perfection or priority of any Lien granted under any Purchased Loan Document.

“ Maximum LTV (Purchase Price) ” shall mean, with respect to any Purchased Loan, the ratio, expressed as a percentage, the numerator of which shall equal the Maximum Purchase Price of the Purchased Loan and the denominator of which shall equal the “as is” value of the related Mortgaged Property securing such Purchased Loan as determined by Buyer in its commercially reasonable discretion and, in each case, calculated using the Applicable Currency relevant to such Purchased Loan.

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

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

“ Mortgage ” shall mean: (x) with respect to U.S. Purchased Loans, a mortgage, deed of trust, deed to secure debt or other instrument, creating a valid and enforceable first lien on or a first priority ownership interest in an estate in fee simple in real property and the improvements thereon, or a leasehold interest therein, securing a mortgage note or similar evidence of indebtedness, and (y) with respect to Foreign Purchased Loans, the related mortgage, debenture, hypothec, charge or equivalent security deed or other instrument creating a first priority lien, first priority mortgage, first priority charge, first priority hypothec or first priority security interest in an estate in fee simple in real or immovable property and the improvements thereon, or in a freehold or crown or other leasehold interest therein, securing a mortgage note or similar evidence of indebtedness and any other security deed or other instrument or securing indebtedness under a loan or facility agreement (and any related finance documentation), in each case securing indebtedness under applicable Requirements of Law in the relevant non-U.S. jurisdiction.

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

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

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

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

“ MTM Representations ” shall mean the representations and warranties set forth as items (a) 11, 12, 14, 25, 35, 36, 37, 42, 47, 50 and 55 on Exhibit VI-I of this Agreement, (b) 3, 7, 9, 16 and 20 on Exhibit VI-II of this Agreement, (c) 8, 9, 18, 19, 20, 21, 24 and 30 on Exhibit VI-III of this Agreement, and (d) 10, 11, 13, 22, 28, 29, 30, 35, 39 and 46 on Exhibit VI-IV of this Agreement.

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

“ OFAC ” shall mean the U.S. Department of Treasury, Office of Foreign Assets Control

“ OFAC List ” shall mean the Specially Designated Nationals list maintained by OFAC.

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

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

“ Other Connection Taxes ” shall mean Taxes imposed as a result of a present or former connection between Buyer and the jurisdiction imposing such Taxes (other than a connection arising solely as a result of Buyer having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under or enforced any Transaction Document, or sold or assigned an interest in any Transaction or Transaction Document).

“ Other Taxes ” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes (including, without limitation, United Kingdom stamp duty and stamp duty reserve tax) that arise from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under any Transaction Document; provided, however, that Other Taxes shall not include (i) Taxes imposed with respect to an assignment, transfer or sale of participation or other interest in or with respect to the Transaction Documents or (ii) any Excluded Taxes.

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

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

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

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

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

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

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

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

“ Participation Interests ” shall have the meaning assigned to such term in Exhibit VI-II.

“ Permitted Encumbrances ” shall have the meaning specified in Exhibit VI-I.

“ Permitted Liens ” shall mean any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding has been commenced: (a) Liens for Taxes not yet due and payable or which are being contested in good faith and for which adequate reserves have been established in accordance with GAAP, (b) Liens imposed by Requirements of Law, such as materialmen’s, mechanics’, carriers’, workmen’s, repairmen’s, construction, builder’s and similar Liens, arising in the ordinary course of business securing obligations that are not overdue for more than thirty (30) days, (c) Liens securing the unpaid balance of purchase money for property acquired in the ordinary course of business under an instalment contract on the supplier’s standard terms where such unpaid balance is not yet due, and (d) Liens granted pursuant to or by the Transaction Documents.

“ Permitted Purchased Loan Modification ” shall mean any modification or amendment of a Purchased Loan which is not a Significant Purchased Loan Modification.

“ Person ” shall mean an individual, corporation, limited liability company, business trust, partnership, joint tenant or tenant-in-common, trust, unincorporated organization, or other entity, or a federal, provincial, territorial, state or local government or any agency or political subdivision thereof.

“ PEXA ” shall mean the electronic registration platform known as Property Exchange Australia.

“ Plan ” shall mean an employee benefit or other plan established or maintained by Seller or any ERISA Affiliate during the five year period ended prior to the date of this Agreement or to which Seller or any ERISA Affiliate makes, is obligated to make or has, within the five year period ended prior to the date of this Agreement, been required to make contributions and that is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, other than a Multiemployer Plan.

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

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

“ PPSA ” shall mean, (i) with respect to any Foreign Purchased Loan (AD), the Personal Property Securities Act (2009) Cth; and (ii) with respect to any Foreign Purchased Loan (CAD), the personal property security legislation of the province or territory and/or other jurisdiction where filing and/or recording is necessary or desirable for perfection of validly created security interests in personal property related to such Foreign Purchased Loan (CAD) in accordance with the terms and requirements of such legislation as is applicable, including the regulations thereto.

“ PPS Register ” shall mean the Personal Property Securities Register established under section 147 of the PPSA.

“ Price Differential ” shall mean, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the outstanding Purchase Price for such Transaction on a 360-day-per-year basis (or, in the case of Foreign Purchased Loans (AU) only, a 365-day-per-year basis) for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction). Price Differential shall be payable in the Applicable Currency of the Purchase Price of the applicable Purchased Loan.

“ Pricing Matrix ” shall mean the matrix attached to the Fee Agreement which shall be used to determine the Purchase Price Percentage, Maximum Purchase Price Percentage and the Applicable Spread for each Purchased Loan.

“ Pricing Rate ” shall mean, for any Pricing Rate Period, an annual rate equal to the Index Rate for such Pricing Rate Period (as specified in the related Confirmation) plus the Applicable Spread for such Transaction plus the Spread Adjustment for such Transaction and shall be subject to adjustment and/or conversion as provided in Sections 3(g) and 3(h) of this Agreement.

“ Pricing Rate Determination Date ” shall mean with respect to any Pricing Rate Period with respect to any Transaction, the second (2nd) Business Day preceding the first day of such Pricing Rate Period (or, in the case of a Foreign Purchased Loan (AU) only, the first day of such Pricing Rate Period).

“ Pricing Rate Period ” shall mean, (a) in the case of the first Pricing Rate Period with respect to any Transaction, the period commencing on and including the Purchase Date for such Transaction and ending on and excluding the following Remittance Date, and (b) in the case of any subsequent Pricing Rate Period, the period commencing on and including such Remittance Date and ending on and excluding the following Remittance Date; provided , however , that in no event shall any Pricing Rate Period end subsequent to the Repurchase Date.

“ Prime Rate ” shall mean the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates).

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

“ Prohibited Person ” shall mean any (1) person or entity who is on the OFAC List or any Foreign Sanctions List; a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in the Foreign Assets Control Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, (2) person acting on behalf of, or an entity owned or controlled by, any government against whom the United States maintains economic sanctions or embargoes under the Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, including, but not limited to, the “Government of Sudan,” the “Government of Iran,” and the “Government of Cuba,” and any person or organization determined by the Director of the Office of Foreign Assets Control to be included within 31 C.F.R. Section 575.306 (definition of “Government of Iraq”), (3) person or entity who is listed in the Annex to or is otherwise within the scope of Executive Order 13224 – Blocking Property and Prohibiting Transactions with Person who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001, or (4) person or entity subject to additional restrictions imposed by the following statutes or Regulations and Executive Orders issued thereunder: the Trading with the Enemy Act, 50 U.S.C. app. §§ 1 et seq. , the Iraq Sanctions Act, Pub. L. 101-513, Title V, §§ 586 to 586J, 104 Stat. 2047, the National Emergencies Act, 50 U.S.C. §§ 1601 et seq. , the Anti-Terrorism and Effective Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214-1319, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq. , the United Nations Participation Act, 22 U.S.C. § 287c, the International Security and Development Cooperation Act, 22 U.S.C. § 2349aa-9, the Nuclear Proliferation Prevention Act of 1994, Pub. L. 103-236, 108 Stat. 507, the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. §§ 1901 et seq. , the Iran and Libya Sanctions Act of 1996, Pub. L. 104-172, 110 Stat. 1541, the Cuban Democracy Act, 22 U.S.C. §§ 6001 et seq. , the Cuban Liberty and Democratic Solidarity Act, 22 U.S.C. §§ 6201-91, the Foreign Operations, Export Financing and Related Programs Appropriations Act, 1997, Pub. L. 104-208, 110 Stat. 3009-172, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, 115 Stat. 272, or any other law of similar import as to any non-U.S. country, as each such Act or law has been or may be amended, adjusted, modified, or reviewed from time to time.

“ Prohibited Transferee ” shall mean any of the Persons listed on Schedule I attached to this Agreement.

“ Property ” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Property Report ” shall mean, with respect to a Foreign Purchased Loan, an original, duplicate or counterpart certificate, report or document of title in relation to the related Mortgaged Property (including, if applicable, a certificate of units in a unit trust or share certificate) that is delivered as a condition precedent to the making of the related Foreign Purchased Loan under the loan agreement for such Foreign Purchased Loan.

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

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

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

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

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

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

“ Purchase Date Spot Rate ” shall mean the Purchase Date Spot Rate (AU), the Purchase Date Spot Rate (CAD), the Purchase Date Spot Rate (EUR), the Purchase Date Spot Rate (GBP) or the Purchase Date Spot Rate (U.S. Dollars), as applicable.

“ Purchase Price ” shall mean, with respect to any Purchased Loan, the price at which such Purchased Loan is transferred by Seller to Buyer on the applicable Purchase Date (paid in the same Applicable Currency as the related Whole Loan or Senior Interest (or participation interest therein) and stated on the related Confirmation), as adjusted after the Purchase Date, all as set forth below and not to exceed the Maximum Purchase Price. The Purchase Price as of the Purchase Date for any Purchased Loan shall be the amount set forth on the applicable Confirmation (expressed in the same Applicable Currency as the related Whole Loan or Senior Interest (or participation interest therein)) equal to the lesser of (a) the product obtained by multiplying (i) the lesser of the Market Value of such Purchased Loan and the par amount of such Purchased Loan by (ii) the applicable Purchase Price Percentage and (b) the amount that causes the LTV (Purchase Price) to equal 60.00%. The Purchase Price of any Purchased Loan shall thereafter only be modified to be (a) increased by any Margin Excess transferred by Buyer to Seller pursuant to Section 4(c) or 4(e) of this Agreement, not to exceed the Maximum Purchase Price, and (b) reduced by any amount applied to reduce such Purchase Price pursuant to Section 3(f), 4(a) or 5 of this Agreement (or, in the case of Principal Payments made in respect of such Purchased Loan, remitted to the applicable Cash Management Account for application to reduce such Purchase Price pursuant to Section 5(e)).

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

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

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

“ Purchased Loan File ” shall mean the documents specified as the “Purchased Loan File” in Section 7(b), together with any additional documents and information required to be delivered to Buyer or its designee (including the Custodian) pursuant to this Agreement.

“ Purchased Loan Schedule ” shall mean a schedule of Purchased Loans attached to each Trust Receipt and Custodial Delivery, which may but is not required to, contain information substantially similar to the Collateral Tape.

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

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

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

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

“ Remittance Date ” shall mean: (a) with respect to U.S. Purchased Loans, the seventeenth (17th) calendar day of each month, or the next succeeding Business Day, if such calendar day shall not be a Business Day; (b) with respect to Foreign Purchased Loans (AU), either (i) solely to the extent the related Purchased Loan Documents require monthly (as opposed to quarterly) interest payments by the relevant Mortgagor, the twelfth (12th) calendar day of each month, or the next succeeding Business Day, if such calendar day shall not be a Business Day or (ii) solely to the extent the related Purchased Loan Documents require quarterly (as opposed to monthly) interest payments by the relevant Mortgagor, January 12, April 12, July 12 and October 12, or the next succeeding Business Day, if such calendar day shall not be a Business Day; provided that, notwithstanding the foregoing, in the event that the Due Date (Foreign Purchased Loan (AU)) applicable to such Foreign Purchased Loan (AU) in any month occurs less than three (3) Business Days prior to the applicable date specified in either of the foregoing clause (b)(i) or (ii), then the Remittance Date for such Foreign Purchased Loan (AU) shall be the date which is three (3) Business Days after such Due Date (Foreign Purchased Loan (AU)); (c) with respect to Foreign Purchased Loans (CAD), either (i) solely to the extent the related Purchased Loan Documents require monthly (as opposed to quarterly) interest payments by the relevant

Mortgagor, the seventeenth (17 ^th ) calendar day of each month, or the next succeeding Business Day, if such calendar day shall not be a Business Day or (ii) solely to the extent the related Purchased Loan Documents require quarterly (as opposed to monthly) interest payments by the relevant Mortgagor, January 17, April 17, July 17 and October 17, or the next succeeding Business Day, if such calendar day shall not be a Business Day; and (d) with respect to all other Foreign Purchased Loans, January 25, April 25, July 25 and October 25, or the next succeeding Business Day, if such calendar day shall not be a Business Day, or, in each case, such other day as is mutually agreed to by Seller and Buyer.

“ Repurchase Date ” shall mean, with respect to each Purchased Loan, the earliest of: (x) the Facility Expiration Date or (y) the maturity date of such Purchased Loan (subject to extension, if applicable, in accordance with its Purchased Loan Documents) or (z) the related Early Repurchase Date.

“ Repurchase Obligations ” shall mean all obligations of Seller to pay the Repurchase Price on the Repurchase Date and all other obligations and liabilities of Seller to Buyer arising under or in connection with the Transaction Documents, whether now existing or hereafter arising.

“ Repurchase Price ” shall mean, with respect to any Purchased Loan as of any date, the price at which such Purchased Loan is to be transferred from Buyer to Seller upon termination of the related Transaction (which price shall be expressed and payable in the Applicable Currency stated on the Confirmation for such Purchased Loan); such price will be determined in each case as the sum of (a) the outstanding Purchase Price of such Purchased Loan, (b) the accrued but unpaid Price Differential thereon with respect to such Purchased Loan as of such date, (c) all other amounts due and payable as of such date by Seller to Buyer under this Agreement or any Transaction Document with respect to such Purchased Loan (including, but not limited to, accrued and unpaid fees, expenses and indemnity amounts) and (d) any costs incurred in connection with terminating any related Hedging Transactions entered into with Buyer or an Affiliate of Buyer.

“ Request for Margin Excess ” shall mean a request for Margin Excess, in the form of Exhibit IX attached hereto.

“ Requirement of Law ” shall mean any law, treaty, rule, regulation, code, directive, policy, order or requirement or determination of an arbitrator or a court or other Governmental Authority whether now or hereafter enacted or in effect.

“ Required Filing ” shall mean, with respect to any Foreign Purchased Loan, to the extent applicable, (v) registration of particulars of the related Mortgage at the Companies Registration Office under the Companies Act 2006 and payment of associated fees, (w) registration of the related Mortgage at the Land Registry or Land Charges Registry in England and Wales and payment of associated fees, (x) registration of the related Mortgage at the land registry, land titles office or similar Governmental Authority (including, where applicable, through PEXA) in the relevant State or Territory of the Commonwealth of Australia in which the related Mortgaged Property is situated, (y) registration of the related Mortgage at the land registry office, land titles office or similar Governmental Authority in the relevant province or territory of Canada in which the related Mortgaged Property is situated, and (z) registration of the related Mortgage with any analogous Governmental Authority in the applicable non-U.S. jurisdiction in which the Mortgaged Property securing the related Mortgage is located.

“ Reserve Requirement ” shall mean, with respect to any Pricing Rate Period, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect during such Pricing Rate Period (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board of Governors) maintained by Buyer.

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

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

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

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

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

“ Senior Interests ” shall have the meaning given to such term in the definition of “Eligible Loans”.

“ Servicer ” shall mean: (x) Midland Loan Services, a division of PNC Bank, National Association or (y) any other third party servicer selected by Seller and approved by Buyer in its sole discretion; provided , that notwithstanding the foregoing, such other third party servicer selected by Seller shall be approved by Buyer in its reasonable discretion, so long as such Person’s primary servicer rating shall be at least “above average” by Standard & Poor’s Ratings Service.

“ Servicing Agreement ” shall mean, individually or collectively, as the context may require (a) other than with respect to each CLO Participation A-1 issued pursuant to a CLO Participation Agreement, (i) that certain Servicing Agreement, dated as of June 12, 2013, among Parlex 2, Buyer and Servicer, as the same may be amended, modified and/or restated from time to time, (ii) that certain Servicing Agreement, dated as of January 31, 2014, among Parlex 2A, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, (iii) that certain Servicing Agreement, dated as of the Second Amendment and Restatement Date,

among Parlex 2 UK, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, (iv) that certain Servicing Agreement, dated as of the Second Amendment and Restatement Date, among Parlex 2 EUR, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, (v) that certain Servicing Agreement, dated as of the Third Amendment and Restatement Date, among Parlex 2 AU, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, (vi) that certain Servicing Agreement, dated as of the Fourth Amendment and Restatement Date, among Parlex 2 CAD, Buyer, and Servicer, as the same may be amended, modified and/or restated from time to time, and (vii) any other servicing agreement entered into by a Seller, Buyer and any Servicer approved by Buyer for the servicing of Purchased Loans, as the same may be amended, modified and/or restated from time to time and (b) with respect to each CLO Participation A-1 issued pursuant to a CLO Participation Agreement, (x) for so long as the corresponding CLO Participation A-2 is an asset of the CLO, the CLO Servicing Agreement and (y) at any time such corresponding CLO Participation A-2 is not an asset of the CLO, the servicing agreement entered into in accordance with the applicable CLO Participation Agreement.

“ Servicing Records ” shall have the meaning specified in Section 29(b).

“ Servicing Rights ” shall mean Seller’s right, title and interest in and to any and all of the following: (a) any and all rights to service the related Purchased Loan; (b) any payments to or monies received by such Seller or any other Person as a fee for servicing such Purchased Loan; (c) any late fees, penalties or similar payments with respect to such Purchased Loan; (d) all agreements or documents creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights and all rights of such Seller or any other Person thereunder; (e) escrow payments or other similar payments with respect to such Purchased Loan and any amounts actually collected by such Seller or any other Person with respect thereto; (f) the right, if any, to appoint a special servicer or liquidator of such Purchased Loan; and (g) all accounts and other rights to payment related to the servicing of such Purchased Loan.

“ Similar Loan ” shall have the meaning specified in Section 3(g) of this Agreement.

“ Significant Purchased Loan Modification ” means any modification or amendment of a Purchased Loan which

(i) reduces the principal amount of the Purchased Loan in question other than (1) with respect to a dollar-for-dollar principal payment or (2) reductions of principal to the extent of deferred, accrued or capitalized interest added to principal which additional amount subsequently reduced was not taken into account by Buyer in determining the related Purchase Price,

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

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

(iv) changes the frequency of scheduled payments of principal and interest in respect of a Purchased Loan,

(v) subordinates the lien priority of the Purchased Loan in question or the payment priority of the Purchased Loan in question other than subordinations required under the then existing terms and conditions of the Purchased Loan in question (provided, however, the foregoing shall not preclude the execution and delivery of subordination, nondisturbance and attornment agreements with tenants, subordination to tenant leases, easements, servitudes, plats of subdivision and condominium declarations, conditions, covenants and restrictions and similar instruments which in the commercially reasonable judgment of Seller do not materially adversely affect the rights and interest of the holder of the Purchased Loan in question),

(vi) releases any collateral for the Purchased Loan in question other than releases required under the then existing Purchased Loan documents or releases in connection with eminent domain or under threat of eminent domain,

(vii) waives, amends or modifies any cash management or reserve account requirements of the Purchased Loan other than changes required under the then existing Purchased Loan documentation,

(viii) waives any due-on-sale or due-on-encumbrance provisions of the Purchased Loan in question other than waivers required to be given under the then existing Purchased Loan documents, or

(ix) waives, amends or modifies the underlying insurance requirements of the Purchased Loan;

provided , however , that this definition of “Significant Purchased Loan Modification” shall not include any modification or amendment to any Purchased Loan Document solely in connection with the reallocation of a portion of the principal balance of any CLO Participation A-1 to the corresponding CLO Participation A-2 pursuant to Section 29(b) of the applicable CLO Participation Agreement in order to implement a replenishment pursuant to Section 12.2 of the CLO Indenture, so long as such reallocation is implemented in connection with an early repurchase consummated in accordance with Section 3(d) of this Agreement.

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

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

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

evaluated for purposes of Section 101(32) of the Bankruptcy Code, (b) the present fair salable value of the assets and property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets and property would constitute unreasonably small capital.

“ Special Purpose Entity ” shall mean a Person, other than an individual, which is formed or organized solely for the purpose of holding, directly and subject to this Agreement, the Purchased Loans and otherwise complies with the requirements of Section 13.

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

“ Spread Adjustment ” shall have the meaning specified in the Fee Agreement.

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

“ Survey ” shall mean: (x) with respect to U.S. Purchased Loans, a certified ALTA/ACSM (or applicable state standards for the state in which the Mortgaged Property is located) survey of a Mortgaged Property prepared by a registered independent surveyor or engineer, (y) with respect to Foreign Purchased Loans (other than Foreign Purchased Loans (AU) or Foreign Purchased Loan (CAD)), a valuation of such Mortgaged Property by a valuer prepared on the basis of the market value as that term is defined in the then current Statements of Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors or its equivalent in any applicable jurisdiction, in each case, in form and content satisfactory to Buyer in its commercially reasonable discretion, and (z) with respect to a Foreign Purchased Loan (CAD), a survey certificate, certificate of location or real property report prepared by a provincial land surveyor confirming the boundaries, area and dimensions of the Mortgaged Property, the location of the improvements to the Mortgaged Property and the locations of any encroachments, easements, servitudes or rights of way affecting the Mortgaged Property, and, in the case of the foregoing clause (x) and clause (z), in form and content satisfactory to the company issuing the Title Policy for such Mortgaged Property.

“ Taxes ” shall mean all present or future Taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto and including any stamp duty, transfer taxes and any value added or goods or services tax.

“ Terrorism Cap Amount ” shall have the meaning specified in Exhibit VI-I.

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

“ Title Policy ” shall have the meaning specified in Exhibit VI-I.

“ Transaction ” shall have the meaning set forth in Section 1.

“ Transaction Conditions Precedent ” shall have the meaning specified in Section 3(b) of this Agreement.

“ Transaction Documents ” shall mean, collectively, this Agreement, any applicable Annexes to this Agreement, the Guaranty, any Custodial Agreement, any Blocked Account Agreement, any Servicing Agreement, any Joinder Agreement, the Omnibus Amendment, all Confirmations executed pursuant to this Agreement or the Original Agreement in connection with specific Transactions, any other documents or instruments relating to any such documents executed by Seller or Guarantor, and any written modifications, extensions, renewals, restatements, or replacements of any of the foregoing.

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

“ Transfer Certificate ” shall mean, with respect to a Foreign Purchased Loan, any form of transfer or substitution certificate or assignment agreement that is scheduled to the related loan agreement or other equivalent agreement for such Foreign Purchased Loan and that is used to effect the legal transfer or assignment of such Foreign Purchased Loan and (if applicable) any accession or substitution certificate, if any, required for the Buyer to become a beneficiary of the security trust in respect of such Foreign Purchased Loan.

“ Treasury Regulations ” shall have the meaning specified in Section 19(d) of this Agreement.

“ TRIA ” shall have the meaning specified in Exhibit VI-I.

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

“ UCC ” shall have the meaning specified in Section 6 of this Agreement.

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

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

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

“ Whole Loans ” shall have the meaning given to such term in the definition of “Eligible Loans”.

“ Zoning Regulations ” shall have the meaning specified in Exhibit VI-I.

3. INITIATION; CONFIRMATION; TERMINATION; FEES

(a) Subject to the terms and conditions set forth in this Agreement (including, without limitation, (x) the “Transaction Conditions Precedent” specified in Section 3(b) of this Agreement and (y) Section 4(h) of this Agreement), an agreement to enter into a Transaction shall be made, from time to time, in writing at the initiation of Seller as provided below; provided , however , that (i) the aggregate outstanding Purchase Price at any time for all Purchased Loans shall not exceed the Facility Amount, and (ii) Buyer shall not have any obligation to enter into new Transactions with Seller after the occurrence and during the continuance of a monetary or material non-monetary Default or an Event of Default or after the Facility Availability Period. Seller may, from time to time, submit to Buyer a Transaction Request, in the form of Exhibit VIII attached hereto, for Buyer’s review and approval in order to enter into a Transaction with respect to any Eligible Loan that Seller proposes to be included as Collateral under this Agreement. Upon Buyer’s receipt of a complete Due Diligence Package, Buyer shall have the right to request, in Buyer’s good faith business judgment and in a manner consistent with Buyer’s other master repurchase facilities for comparable assets, additional diligence materials and deliveries with respect to the applicable Eligible Loan, to the extent necessary for Buyer’s underwriting of such Eligible Loan. Upon Buyer’s receipt of the Transaction Request, Due Diligence Package and such additional diligence materials, Buyer shall use commercially reasonable efforts to within five (5) Business Days and following receipt of internal credit approval, either (i) notify Seller of the Purchase Price and the Market Value for the Eligible Loan or (ii) deny Seller’s request for a Transaction. Buyer’s failure to respond to Seller within five (5) Business Days shall be deemed to be a denial of Seller’s request for a Transaction, unless Buyer and Seller have agreed otherwise in writing. Buyer shall have the right to review all Eligible Loans proposed to be sold to Buyer in any Transaction and to conduct its own due diligence investigation of such Eligible Loans as Buyer reasonably determines. Buyer shall be entitled to make a determination, in its sole discretion, that it shall or shall not purchase any or all of the Eligible Loans proposed to be sold to Buyer by Seller. On the Purchase Date for the Transaction which shall be on a date mutually agreed upon by Buyer and Seller following the approval of an Eligible Loan by Buyer, the Purchased Loan shall be transferred to Buyer or its designee against the transfer of the Purchase Price (which Purchase Price shall be funded in the Applicable Currency of the related Whole Loan or Senior Interest (or participation interest therein) and stated on the applicable Confirmation) to an account of Seller or as directed by Seller in writing (and subject to the last sentence of Section 17).

(b) Upon agreeing to enter into a Transaction hereunder, provided each of the Transaction Conditions Precedent shall have been satisfied (or waived by Buyer), Buyer shall promptly deliver to Seller a written confirmation in the form of Exhibit I attached hereto of each Transaction (a “ Confirmation ”). Such Confirmation shall describe the Purchased Loan, shall identify Buyer and Seller, and shall set forth:

(i)

the Purchase Date,

(ii)

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

(iii)

the Repurchase Date,

(iv)

the Pricing Rate (including the Applicable Spread),

(v)

the Margin Percentage,

(vi)

the LTV (Purchase Price) and Maximum LTV (Purchase Price),

(vii)

the LTV (Loan UPB) and LTV (Aggregate Loan UPB) (if applicable),

(viii)

the Funding Fee, any additional conditions precedent to the availability of Margin Excess (Future Funding) and the type of funding (i.e. table funded/non-table funded),

(ix)

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

(x)

the applicable Purchase Date Spot Rates, and

(xi)

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

With respect to any Transaction, the Pricing Rate shall be determined initially on the Pricing Rate Determination Date applicable to the first Pricing Rate Period for such Transaction, and shall be reset on each subsequent Pricing Rate Determination Date for the next succeeding Pricing Rate Period for such Transaction. Buyer or its agent shall determine in accordance with the terms of this Agreement the Pricing Rate on each Pricing Rate Determination Date for the related Pricing Rate Period and notify Seller of such rate for such period on such subsequent Pricing Rate Determination Date. For purposes of this Section 3(b), the “Transaction Conditions Precedent” shall be deemed to have been satisfied with respect to any proposed Transaction if:

(A)

no monetary or material non-monetary Default or Event of Default under this Agreement shall have occurred and be continuing as of the Purchase Date for such proposed Transaction;

(B)

subject to any exceptions reasonably approved by Buyer, the representations and warranties made by Seller in any of the Transaction Documents shall be true and correct in all material respects as of the Purchase Date for such Transaction, before and after giving effect to such Transaction, as though made on such Purchase Date (except to the extent such representations and warranties are made as of a particular date);

(C)

Buyer shall have received from Seller all corporate and governmental approvals, legal opinions of counsel to Seller and Guarantor (including, without limitation, as to authority, enforceability, perfection under the UCC and, with respect to any Foreign Purchased Loan, the equivalent Requirements of Law under the relevant non-U.S. jurisdiction, bankruptcy safe harbor and the Investment Company Act of 1940) and closing documentation as Buyer may reasonably request pursuant to this Agreement (including, with respect to any Foreign Purchased Loan, a Foreign Assignment Agreement and such other closing documentation necessary to transfer such Foreign Purchased Loan to Buyer and perfect the security interest therein granted by Seller in favor of Buyer in the relevant non-U.S. jurisdiction);

(D)

Seller shall have paid to Buyer (x) the Funding Fee then due and payable with respect to such Transaction pursuant to the Fee Agreement and (y) Buyer’s out-of-pocket costs and expenses pursuant to Section 30(d) of this Agreement (which amounts referred to in the preceding sub-clauses (D)(x) and (D)(y) may be paid through a holdback to the Purchase Price);

(E)

Buyer shall have (A) determined, in accordance with the applicable provisions of Section 3(a) of this Agreement, that the Assets proposed to be sold to Buyer by Seller in such Transaction are Eligible Loans and (B) obtained internal credit approval for the inclusion of such Eligible Loan as a Purchased Loan in a Transaction;

(F)

Buyer shall have determined that no event has occurred which is reasonably likely to result in a Material Adverse Effect; and

(G)

as of the applicable Purchase Date, each of the applicable Concentration Limits is satisfied (unless waived by Buyer).

(c) Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby unless specific objection is made in writing no less than three (3) Business Days after the date thereof. In the event of any conflict between the terms of such Confirmation and the terms of this Agreement, the Confirmation shall prevail. An objection sent by Seller with respect to any Confirmation must state specifically that the writing is an objection, must specify the provision(s) of such Confirmation being objected to by Seller, must set forth such provision(s) in the manner that Seller believes such provisions should be

stated, and must be sent by Seller no more than five (5) Business Days after such Confirmation is received by Seller. It is understood and agreed that once a Confirmation has been executed by Buyer and Seller, such Confirmation shall be binding on the parties hereto (absent manifest error) and shall constitute evidence of Buyer’s approval of the applicable Purchased Loan and the terms of the applicable Transaction.

(d) No Transaction shall be terminable on demand by Buyer (other than upon the occurrence and during the continuance of an Event of Default). Seller shall be entitled to terminate a Transaction on demand, in whole or in part (but in the case of a termination in part, solely in connection with the reallocation of a portion of the principal balance of any CLO Participation A-1 to the corresponding CLO Participation A-2 pursuant to Section 29(b) of the applicable CLO Participation Agreement in order to implement a replenishment pursuant to Section 12.2 of the CLO Indenture), and repurchase the Purchased Loan subject to a Transaction on any Business Day prior to the Repurchase Date (an “ Early Repurchase Date ”); provided , however , that:

(i)

Seller notifies Buyer in writing of its intent to terminate such Transaction and repurchase such Purchased Loan no later than three (3) Business Days prior to such Early Repurchase Date,

(ii)

on such Early Repurchase Date Seller pays to Buyer an amount equal to the sum of (x) the Repurchase Price for such Transaction, (y) the Exit Fee, if any, then due and payable with respect to such Transaction pursuant to the Fee Agreement (provided, however, that no Exit Fee shall be due and payable in connection with a termination of a Transaction by Seller either (x) in part or (y) in whole in connection with a severing of any CLO Participation A-1 into multiple participations representing the funded portion of such CLO Participation A-1 following which a severed portion is reallocated to the corresponding CLO Participation A-2 and the other severed portion is the subject of a new Transaction under this Agreement) and (z) any other amounts payable under this Agreement (including, without limitation, Section 3(i) of this Agreement) with respect to such Transaction, in connection with the transfer to Seller or its agent of such Purchased Loan; provided, however, that no amounts shall be due and payable pursuant to Section 3(i)(ii) of this Agreement in connection with a termination of a Transaction by Seller in part or in whole in the circumstance described in the parenthetical to clause (ii)(y) above,

(iii)

on such Early Repurchase Date, following the payment of the amounts set forth in subclause (ii) above, no unpaid Margin Deficit exists, and

(iv)

no Default or Event of Default shall have occurred and be continuing as of such Early Repurchase Date.

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

(e) On the Repurchase Date or any Early Repurchase Date (including, without limitation, in order to cure a Margin Deficit), termination of the applicable Transaction will be effected by transfer to Seller or its agent of the applicable Purchased Loan and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Section 5 of this Agreement) against the simultaneous transfer to an account of Buyer of the Repurchase Price, the amount, if any, payable by Seller in the event any Hedging Transaction related to such Purchased Loan is being terminated as of such date and any other amounts payable under this Agreement with respect to such Transaction.

(f) On any Remittance Date before the Repurchase Date (or any Business Day before the Repurchase Date upon two (2) Business Days prior notice to Buyer, with respect to a reduction in outstanding Purchase Price of greater than $2,000,000 (or, with respect to any Foreign Purchased Loan, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Loan as of the date of determination), Seller shall have the right, from time to time, to transfer cash (in the Applicable Currency of the related Purchased Loan) to Buyer for the purpose of reducing the outstanding Purchase Price of, but not terminating, a Transaction and without the release of any Collateral or the payment of any Exit Fee or other prepayment fee or penalty; provided , that any such reduction in outstanding Purchase Price occurring on a date other than a Remittance Date shall be required to be accompanied by payment of all unpaid accrued Price Differential on the amount of such reduction. Upon any reduction in outstanding Purchase Price in accordance with this Section 3(f), either Seller or Buyer can request an amended and restated Confirmation which shall reflect the decrease in the outstanding Purchase Price (it being acknowledged that the failure by any party to request or deliver such amended and restated Confirmation shall not be a Default).

(g) If prior to any Pricing Rate Period with respect to any Transaction, Buyer shall have determined in the exercise of its reasonable business judgment (which determination shall be conclusive and binding upon Seller) that, (i) by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Index Rate for such Pricing Rate Period, or (ii) in the case of any Purchased Loan for which the LIBO Rate or the EURIBO Rate is the Index Rate, that LIBOR or EURIBOR, as applicable, has been succeeded by an Alternative Rate, Buyer shall give written notice thereof to Seller as soon as practicable thereafter, which notice shall set forth the affected Transactions and the circumstances for such determination in reasonable detail. If such notice is given, the Pricing Rate with respect to such affected Transactions for such Pricing Rate Period, and for any subsequent Pricing Rate Periods until such notice has been withdrawn by Buyer (which withdrawal shall be delivered by Buyer promptly after Buyer becomes aware that the condition for switching to the Alternative Rate no longer exists) shall be a per annum rate determined by reference to the Alternative Rate in lieu of the applicable Index Rate. In exercising its rights and remedies under this Article 3(g), Buyer shall act in a manner consistent to how Buyer is contemporaneously treating its similarly situated customers domiciled in the United States under repurchase facilities under which Buyer has a comparable contractual right, which repurchase facilities finance commercial real estate mortgage loans of similar type, size and duration to the affected Purchased Loans and which are otherwise similar to such Purchased Loans in a manner which is material to Buyer’s determination hereunder (“ Similar Loans ”).

(h) Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for Buyer to effect or continue Transactions as contemplated by the Transaction Documents, (a) the commitment of Buyer hereunder to enter into new Transactions shall forthwith be canceled, and (b) the Transactions then outstanding shall be converted automatically to Alternative Rate Transactions on the last day of the then current Pricing Rate Period or within such earlier period as may be required by law. If any such conversion of a Transaction occurs on a day which is not the last day of the then current Pricing Rate Period with respect to such Transaction, Seller shall pay to Buyer such amounts, if any, as may be required pursuant to Section 3(i) of this Agreement.

(i) Upon written demand by Buyer, Seller shall indemnify Buyer and hold Buyer harmless from any net actual, out-of-pocket loss or expense (not to include any lost profit or opportunity or other consequential costs, loss or damages) (including, without limitation, reasonable actual attorneys’ fees and disbursements of outside counsel) which Buyer sustains or incurs as a consequence of (i) default by Seller in terminating any Transaction after Seller has given a notice in accordance with Section 3(d) hereof of a termination of a Transaction, (ii) any payment of the Repurchase Price on any day other than a Remittance Date or the Repurchase Date (including, without limitation, any such actual, out-of-pocket loss or expense arising from the reemployment of funds obtained by Buyer to maintain Transactions hereunder or from customary and reasonable fees payable to terminate the deposits from which such funds were obtained) or (iii) a default by Seller in selling Eligible Loans after Seller has delivered to Buyer an executed Confirmation in connection with a proposed Transaction and Buyer has agreed to purchase such Eligible Loans in accordance with the provisions of this Agreement as evidenced by a countersigned Confirmation executed by Buyer and delivered to Seller. A certificate as to such actual costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly by Buyer to Seller.

(j) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by any Governmental Authority or compliance by Buyer with any request or directive from any central bank or other Governmental Authority having jurisdiction over Buyer made subsequent to the date hereof:

(i)

shall subject Buyer to any tax of any kind whatsoever with respect to the Transaction Documents, any Purchased Loan or any Transaction, or change the basis of taxation of payments to Buyer in respect thereof (except for (i) Indemnified Taxes (with Other Taxes applying for this purpose without the proviso in the definition thereof), (ii) Taxes described in clauses (b) through (h) of the definition of Excluded Taxes and (iii) Connection Income Taxes); or

(ii)

shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of Buyer which is not otherwise included in the determination of the Index Rate hereunder;

and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems, in the exercise of its reasonable business judgment, to be material, of entering into, continuing or maintaining Transactions or to reduce in a material manner any amount receivable under the Transaction Documents in respect thereof; then, in any such case, and provided Buyer imposes such additional costs generally on all of its similarly situated customers, Seller shall pay to Buyer within ten (10) Business Days any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable. If Buyer becomes entitled to claim any additional amounts pursuant to this Section 3(j), it shall notify Seller in writing of the event by reason of which it has become so entitled. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller. Any claim by Buyer made under this clause Section 3(j) arising in connection with any Transaction relating to a Foreign Purchased Loan (AU) shall be accompanied by reasonable details of the event giving rise to such claim and, if made more than one hundred eighty (180) days after Buyer becomes aware of and was able to quantify the applicable loss or expense, cannot be made in respect of any period occurring more than one hundred eighty (180) days before the date of the applicable demand.

(k) If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof has the effect of reducing the rate of return on Buyer’s or such corporation’s capital deployed in respect of any Transaction as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer, in the exercise of its reasonable business judgment, to be material, then from time to time, after submission by Buyer to Seller of a written request therefor, and provided Buyer imposes such additional costs generally on all of its similarly situated customers, Seller shall pay to Buyer within ten (10) Business Days such additional amount or amounts as will compensate Buyer for such reduction. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller. Any claim by Buyer made under this clause Section 3(k) arising in connection with any Transaction relating to a Foreign Purchased Loan (AU) shall be accompanied by reasonable details of the event giving rise to such claim and, if made more than one hundred eighty (180) days after Buyer becomes aware of and was able to quantify the applicable amount, cannot be made in respect of any period occurring more than one hundred eighty (180) days before the date of the applicable demand.

(l) Notwithstanding the foregoing or anything herein or in the Fee Agreement to the contrary, (x) if any Transaction is converted to an Alternative Rate Transaction, then Seller may consummate an early repurchase of the related Purchased Loan at any time while the Alternative Rate is in effect without payment of the Exit Fee, (y) if Buyer notifies Seller of its entitlement to additional amounts pursuant to Section 3(j) or 3(k), then provided Seller pays such additional amounts pursuant to Section 3(j) or 3(k), Seller may consummate an early repurchase of all of the Purchased Loans and terminate this Agreement and the other Transaction Documents without payment of the Exit Fee and (z) no Exit Fee shall be due and payable in connection with any reduction in outstanding Purchase Price or consummation of an early repurchase of a Purchased Loan in accordance with Section 4(a).

(m) Notwithstanding the foregoing or anything herein to the contrary, neither Section 3(i) nor Section 3(k) shall apply with respect to any Transaction relating to a Foreign Purchased Loan (AU) the extent such loss, expense or other amount otherwise covered by such Sections are attributable to the implementation or application of or compliance with Basel II or Basel III, to the extent full details have been officially announced and publicly released prior to the date of this Agreement and which are applicable to the Buyer.

(n) Notwithstanding the foregoing or anything herein to the contrary, Buyer, in consultation with Seller, shall take all reasonable steps consistent with prudent banking practice to mitigate any circumstances which would result in any consequence described in Section 3(h) and any amount becoming payable under any of Sections 3(i) through (k), in each case with respect to each Foreign Purchased Loan (AU) (including transferring its rights and obligations under the Transaction Documents to a related entity of Buyer or changing its lending office), provided that Buyer shall not be obligated to take any steps under this Section 3(n) if, in Buyer’s opinion (acting reasonably), to do so might be prejudicial to it. Seller shall indemnify Buyer and hold Buyer harmless from any reasonable out-of-pocket loss or expense (not to include any lost profit or opportunity or other consequential costs, loss or damages) (including, without limitation, reasonable actual attorneys’ fees and disbursements of outside counsel) which Buyer sustains or incurs as a result of steps required to be taken by it under this Section 3(n).

4. MARGIN MAINTENANCE

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

(i)

transferring to Buyer additional cash collateral in an amount at least equal to the sum of the amounts, calculated individually for each U.S. Purchased Loan, Foreign Purchased Loan (EUR), Foreign Purchased Loan (GBP) Foreign Purchased Loan (AU) or Foreign Purchased Loan (CAD), as applicable, equal to the product of (x) the difference between the Margin

Amount with respect to such Purchased Loan and the Market Value of such Purchased Loan multiplied by (y) the applicable Maximum Purchase Price Percentage, which cash collateral shall be held by Buyer as additional Collateral with respect to the applicable Purchased Loan(s);

(ii)

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

(iii)

doing an early repurchase on an Early Repurchase Date of any U.S. Purchased Loan, Foreign Purchased Loan (EUR), Foreign Purchased Loan (GBP), Foreign Purchased Loan (AU) or Foreign Purchased Loan (CAD), as applicable, pursuant to Section 3(d) of this Agreement and paying the related Repurchase Price which early repurchase results in a cure of such Margin Deficit.

With respect to this Section 4(a), such payments and/or reductions shall be made by Seller in the Applicable Currency of the related Purchased Loan(s) with respect to which such Margin Deficit exists. Any cash transferred to Buyer pursuant to clause (ii) of this Section 4(a) of this Agreement with respect to any Purchased Loan shall be applied to reduce the outstanding Purchase Price for such Purchased Loan on a “dollar-for-dollar” basis for which there was a Margin Deficit. Notwithstanding the foregoing or anything herein to the contrary, a Margin Deficit shall not exist or be deemed to exist with respect to any Purchased Loan at any time the outstanding Purchase Price with respect to such Purchased Loan is less than 60% of the related Market Value.

(b) If any notice is given by Buyer under Section 4(a) of this Agreement on any Business Day (such notice, a “ Margin Deficit Notice ”) and Seller elects to transfer cash pursuant to Section 4(a)(i) or (ii), Seller shall transfer cash in the full amount (and in the Applicable Currency) required in Section 4(a)(i) or (ii), if the Margin Deficit Notice is given before 1:00 p.m. EST, by no later than the close of business on the Business Day following the Business Day on which such Margin Deficit Notice is given, and if the Margin Deficit Notice is given on or after 1:00 p.m. EST, by no later than the close of business on the second (2 ^nd ) Business Day following the Business Day on which such Margin Deficit Notice is given. The failure of Buyer, on any one or more occasions, to exercise its rights under Section 4(a) of this Agreement shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Buyer and Seller agree that any failure or delay by Buyer to exercise its rights under Section 4(a) of this Agreement shall not limit such party’s rights under this Agreement or otherwise existing by law or in any way create additional rights for such party.

(c) At any time prior to the Facility Expiration Date, in the event a future funding is contractually required to be made available to the related Mortgagor under a Purchased Loan, Seller may submit to Buyer a Request for Margin Excess, in the form of Exhibit IX attached hereto, which requests that Buyer transfer to Seller, by wire transfer to an account of Seller or as directed by Seller in writing (and subject to the last sentence of Section 17), cash (in the Applicable Currency of such Purchased Loan) in an amount equal to the product of a percentage, not to exceed the applicable Maximum Purchase Price Percentage for such Purchased Loan, multiplied by the amount of such future funding (such product, “ Margin Excess (Future Funding) ”), which cash shall be applied to increase the outstanding Purchase Price with respect to the Transaction for such Purchased Loan and to satisfy such future funding obligation in part; provided , that, Buyer shall not have any obligation to transfer such Margin Excess (Future Funding) to Seller unless Buyer shall have determined that all of the following conditions precedent (such conditions, the “ Future Funding Conditions Precedent ”) are satisfied:

(i)

If in connection with the entry into the initial Transaction relating to the Purchased Loan that is the subject of a future funding obligation, Buyer and Seller agreed upon additional conditions precedent which are required to be satisfied ( e.g. maintenance of or improvement in Debt Yield (Purchase Price) and/or Debt Yield (Loan UPB)) with respect to such Purchased Loan and which are specified in the Confirmation, taking into account the increase in the outstanding Purchase Price attributable to such Margin Excess (Future Funding), then such additional conditions precedent are satisfied;

(ii)

taking into account the increase in the outstanding Purchase Price attributable to such Margin Excess (Future Funding), the LTV (Purchase Price) shall not exceed sixty percent (60%);

(iii)

no Default or Event of Default has occurred and is continuing;

(iv)

the increase in the outstanding Purchase Price with respect to such Purchased Loan attributable to such Margin Excess (Future Funding) shall be equal to or greater than $250,000 (or, with respect to any Foreign Purchased Loan, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Loan as of the date of determination);

(v)

Seller shall have demonstrated to Buyer’s reasonable satisfaction that all conditions precedent to the future funding obligation under the Purchased Loan documentation shall have been satisfied in all material respects; and

(vi)

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

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

(d) If any notice is given by Seller under Section 4(c) of this Agreement on any Business Day, Buyer shall transfer cash as provided in Section 4(c) (and subject to the last sentence of Section 17) by no later than the close of business on the second (2 ^nd ) Business Day following the Business Day on which Buyer reasonably determines that the Future Funding Conditions Precedent have been satisfied (or, in Buyer’s sole discretion, waived). The failure of Seller, on any one or more occasions, to exercise its rights under Section 4(c) of this Agreement shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Seller to do so at a later date. Buyer and Seller agree that any failure or delay by Seller to exercise its rights under Section 4(c) of this Agreement shall not limit such party’s rights under this Agreement or otherwise existing by law or in any way create additional rights for such party.

(e) At any time prior to the Facility Expiration Date, in the event,

(x)(a) Seller elects to transfer cash to Buyer pursuant to Section 4(a)(i) or (ii) to satisfy a Margin Deficit and (b) on any date subsequent to such transfer of cash, the Market Value of a Purchased Loan increases such that the outstanding Purchase Price (or if cash collateral was transferred in accordance with Section 4(a)(i), the outstanding Purchase Price less such cash collateral so transferred) with respect to such Purchased Loan is less than the Maximum Purchase Price with respect to such Purchased Loan, or

(y)(a) Seller elects to transfer cash to Buyer pursuant to Section 3(f) or elects as described in the definition of Pricing Matrix to receive on the applicable Purchase Date a Purchase Price lower than the Maximum Purchase Price of such Purchased Loan and (b) on any date subsequent to such transfer of cash, Seller desires to receive a re-advance of such cash so transferred or an additional advance of cash in an amount up to the Maximum Purchase Price of such Purchased Loan (the difference between the actual outstanding Purchase Price (or outstanding Purchase Price less cash collateral transferred, as the case may be), and the Maximum Purchase Price, the “ Margin Excess (Other) ”),

then Seller in either case may submit to Buyer a Request for Margin Excess, in the form of Exhibit IX attached hereto, which requests that Buyer transfer to Seller an amount up to such Margin Excess (Other) (in the Applicable Currency of the Purchased Loan for which such Margin Excess (Other) exists), by wire transfer to an account of Seller or designated by Seller in writing (and subject to the last sentence of Section 17); provided , that, Buyer shall not have any obligation to transfer such Margin Excess (Other) to Seller unless Buyer shall have determined that all of the following conditions precedent are satisfied:

(i)

no Default or Event of Default has occurred and is continuing;

(ii)

with respect to any Purchased Loan, the amount of cash transferred by Buyer pursuant to clause (x) or (y) above shall not cause the Purchase Price to exceed the Maximum Purchase Price for such Purchased Loan;

(iii)

the increase in the outstanding Purchase Price with respect to such Purchased Loan attributable to such Margin Excess (Other) shall be equal to or greater than $250,000 (or, with respect to any Foreign Purchased Loan, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Loan as of the date of determination); and

(iv)

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

(f) If any Request for Margin Excess is given by Seller on any Business Day under (x) Section 4(e)(x) of this Agreement, Buyer shall transfer cash as provided in Section 4(e) by no later than the close of business on the next succeeding Business Day following the Business Day on which Buyer has completed its calculation of Market Value, or (y) Section 4(e)(y) of this Agreement, Buyer shall transfer cash as provided in Section 4(e) by no later than the close of business on the next succeeding Business Day following the Business Day on which such Request for Margin Excess is submitted. The failure of Seller, on any one or more occasions, to exercise its rights under Section 4(e) of this Agreement shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Seller to do so at a later date. Buyer and Seller agree that any failure or delay by Seller to exercise its rights under Section 4(e) of this Agreement shall not limit such party’s rights under this Agreement or otherwise existing by law or in any way create additional rights for such party.

(g) Promptly following the transfer of Margin Excess by Buyer to Seller, or any increase to the Market Value of a Purchased Loan, in each case pursuant to Section 4(c) and 4(d) or 4(e) and 4(f), as applicable, Buyer and Seller shall revise the Confirmation to reflect the revised outstanding Purchase Price, Maximum Purchase Price, Purchase Price Percentage, and Maximum Purchase Price Percentage for such Purchased Loan, as applicable, and any other necessary modifications to the terms set forth on the existing Confirmation.

(h) In the event Seller requests to enter into a Transaction with Buyer with respect to any Eligible Loan which includes Margin Excess (Future Funding) obligations approved by Buyer, or Seller requests a Margin Excess (Future Funding) with respect to any Purchased Loan, and the result of such Transaction with respect to such Eligible Loan or the funding of such Margin Excess (Future Funding) with respect to such Purchased Loan would be that, the sum of Column A plus Column B plus Column C calculated with respect to all Purchased Loans collectively (including for this purpose, such Eligible Loan) (with such calculation with respect to Foreign Purchased Loans to be based on the applicable amounts converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan) would exceed the Facility Amount, then Seller may notify Buyer in writing that Seller elects to reallocate downward, in its sole discretion, the amount referenced in Column C with respect to any Purchased Loan by an amount necessary for the sum of Column A plus Column B plus Column C calculated with respect to all Purchased Loans collectively (including for this purpose,

such Eligible Loan) (with such calculation with respect to Foreign Purchased Loans to be based on the applicable amounts converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan) not to exceed, with respect to all Purchased Loans collectively (including for this purpose, such Eligible Loan), the Facility Amount. Notwithstanding the foregoing, Seller shall be permitted, at any time and from time to time, upon written notice to Buyer, to reallocate upward or downward the amount referenced in Column C with respect to any Purchased Loan so long as (a) the sum of Column A plus Column B plus Column C calculated with respect to all Purchased Loans collectively (with such calculation with respect to Foreign Purchased Loans to be based on the applicable amounts converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan) does not exceed the Facility Amount, and (b) any upward reallocation of the amount referenced in Column C for any Purchased Loan does not exceed the amount referenced in Column E with respect to such Purchased Loan. Upon making any such reallocations, Seller shall promptly deliver to Buyer (by e-mail) a Facility Asset Chart, which then-current Facility Asset Chart shall represent the definitive allocation of Buyer’s Margin Excess (Future Funding) obligations with respect to all Purchased Loans. Notwithstanding anything to the contrary set forth in this Agreement or any other Transaction Document, Buyer and Seller hereby acknowledge and agree that, as of any date of determination, (i) the amount referenced in Column C of the then-current version of the Facility Asset Chart with respect to any Purchased Loan shall be the maximum amount of Margin Excess (Future Funding) that Buyer would be obligated to transfer to Seller with respect to such Purchased Loan upon satisfaction of the Future Funding Conditions Precedent, in accordance with Sections 4(c) and (d) of this Agreement, and (ii) the sum of Column A plus Column B plus Column C calculated with respect to each Purchased Loan individually, as reflected in Column D, shall not exceed, with respect to all Purchased Loans collectively (with such calculation with respect to Foreign Purchased Loans to be based on the applicable amounts converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan), the Facility Amount.

5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a) Each Cash Management Account shall be established at the Depository, which (i) in the case of the Cash Management Account established by Parlex 2, shall have been established on June 12, 2013, (ii) in the case of the Cash Management Account established by Parlex 2A, shall have been established on January 31, 2014, (iii) in the case of the Cash Management Account established by Parlex 2 UK, shall have been established on the Second Amendment and Restatement Date, (iv) in the case of the Cash Management Account established by Parlex 2 EUR, shall have been established on the Second Amendment and Restatement Date, (v) in the case of the Cash Management Account established by Parlex 2 AU, shall have been established on the Third Amendment and Restatement Date, (vi) in the case of the Cash Management Account established by Parlex 2 CAD, shall have been established on the Fourth Amendment and Restatement Date, and (vii) in the case of any Cash Management Account established by any Person that joins as a Seller under this Agreement from time to time, shall be established concurrently with the execution and delivery of the Joinder Agreement by which such Person joins as a Seller under this Agreement. Buyer shall have sole dominion and control over each Cash Management Account. All Income in respect of the Purchased Loans and any payments in respect of associated Hedging Transactions, as well as any interest received from the reinvestment of such Income, shall be deposited directly into the applicable Cash Management

Account and shall be remitted by the Depository in accordance with the provisions of the applicable Blocked Account Agreement and Servicing Agreement (which remittances shall be in conformity to the applicable provisions of Sections 5(d), 5(e), 5(f) and 14(b)(iii) of this Agreement).

(b) With respect to each Purchased Loan, Seller shall deliver to each Mortgagor, issuer of a participation or borrower or similar Person (however described) under a Purchased Loan an irrevocable direction letter (the “ Irrevocable Direction Letter ”) in the form attached as Exhibit X to this Agreement (in the case of any Foreign Purchased Loan, with such reasonable changes as are mutually agreed upon by Buyer and Seller to reflect any equivalent terminology, customary market practices, Requirements of Law in the relevant non-U.S. jurisdiction, in each case applicable to such Foreign Purchased Loan) with a simultaneous copy to Servicer, instructing the Mortgagor and Servicer to pay all amounts payable under the related Purchased Loan to the applicable Cash Management Account and shall provide to Buyer proof of such delivery. If a Mortgagor or Servicer forwards any Income with respect to a Purchased Loan to Seller rather than directly to the applicable Cash Management Account, Seller shall (i) deliver an additional Irrevocable Direction Letter to the applicable Mortgagor, with a simultaneous copy to Servicer, and make other commercially reasonable efforts to cause such Mortgagor or Servicer to forward such amounts directly to the applicable Cash Management Account and (ii) deposit in the applicable Cash Management Account any such amounts within one Business Day of Seller’s receipt thereof.

(c) On each Remittance Date, Seller shall pay to Buyer an amount equal to the Price Differential which has accrued during the related Pricing Rate Period for each Transaction to the extent not previously paid to Buyer.

(d) So long as no Event of Default shall have occurred and be continuing, during the Facility Availability Period (or, with respect to Foreign Purchased Loans (AU) only, at any time), all Income received by the Depository in respect of the Purchased Loans and the associated Hedging Transactions (other than Principal Payments and net sale proceeds) may be remitted by the Depository on the next Business Day to the account of Seller specified in the applicable Blocked Account Agreement (or in accordance with such other direction and instruction of Seller which is reasonably approved by Buyer).

(e) So long as no Event of Default shall have occurred and be continuing, during the Facility Availability Period, all Principal Payments in respect of each Purchased Loan received by the Depository shall be paid, pursuant to the withdrawal instructions of Seller that have been approved by Buyer, either (x) with respect to scheduled Principal Payments (other than Principal Payments in full), on the next Remittance Date, or (y) with respect to unscheduled Principal Payments and scheduled Principal Payments in full, on the first (1 ^st ) Business Day immediately following the date such Principal Payment was deposited in the applicable Cash Management Account), and, in each instance, applied as follows: (i) first, toward the reduction of the outstanding Purchase Price of such Purchased Loan to the extent necessary to cause the outstanding Purchase Price with respect to such Purchased Loan to equal the product of the related Market Value and the applicable Purchase Price Percentage (or with respect to any Principal Payment in full, in the amount necessary to reduce the outstanding Purchase Price of such Purchased Loan to zero) and (ii) second, to the extent necessary to cause the outstanding

Purchase Price with respect to each other Purchased Loan to equal the product of the related Market Value and the applicable Purchase Price Percentage. Any Principal Payments received by the Depository and not paid to Buyer pursuant to the preceding sentence during the Facility Availability Period shall be remitted promptly to Seller.

(f) Following the end of the Facility Availability Period (so long as no Event of Default shall have occurred and be continuing), all Income received by the Depository (and, with respect to Foreign Purchased Loans (AU), Seller) in respect of any Purchased Loan and the associated Hedging Transactions shall be applied, pursuant to the withdrawal instructions of Seller that have been approved by Buyer (which withdrawal instructions shall set forth the applicable Spot Rate(s) referenced in clause (vii) below), by the Depository (and, with respect to Foreign Purchased Loans (AU), Seller) on each Remittance Date as follows (subject to the following sentence):

(i)

first , to the Depository and Custodian an amount equal to the depository and custodial fees due and payable;

(ii)

second , to Buyer an amount equal to its out-of-pocket costs and expenses and any other amounts due and payable under this Agreement;

(iii)

third , to Buyer an amount equal to the Price Differential which has accrued and is outstanding in respect of all of the Purchased Loans denominated in the same Applicable Currency as the Purchased Loan from which the Income was received as of such Business Day, such payment to be allocated amongst all such Purchased Loans on a pro rata basis based upon the outstanding Purchase Price of each such Purchased Loan;

(iv)

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

(v)

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

(vi)

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

(vii)

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

(viii)

eighth , the surplus, if any, to Seller.

Notwithstanding anything in Section 5(f) of this Agreement to the contrary, prior to the application of funds pursuant to such Section, Seller shall be entitled upon written request to Buyer to receive the amount of funds, if any, as may be required by applicable law to be distributed for Guarantor to maintain its status as a “real estate investment trust” for tax purposes and to avoid other adverse tax consequences to Guarantor and/or its shareholders related to the status of Guarantor as a “real estate investment trust” for tax purposes; provided , that such distribution shall be subject to the condition precedent (which Seller shall be required to demonstrate to the satisfaction of Buyer in its sole discretion) that Guarantor has exhausted all other sources of cash flow and income, whether in the form of equity or debt, prior to such request being made to Buyer.

(g) If an Event of Default shall have occurred and be continuing, all Income received by the Depository in respect of the Purchased Loans and the associated Hedging Transactions shall be applied, upon the direction and instruction of Buyer, by the Depository on the Business Day next following the Business Day on which such funds are deposited in the applicable Cash Management Account as follows:

(i)

first , to the Depository and Custodian an amount equal to the depository and custodial fees due and payable;

(ii)

second , to Buyer an amount equal to its out-of-pocket costs and expenses and any other amounts due and payable under this Agreement;

(iii)

third , to Buyer an amount equal to the Price Differential which has accrued and is outstanding in respect of all of the Purchased Loans as of such Business Day;

(iv)

fourth , to make a payment to Buyer in reduction of the outstanding Purchase Price of the Purchased Loans, such payment to be allocated amongst the Purchased Loans as determined by Buyer in its sole discretion, until the outstanding Purchase Price for all of the Purchased Loans has been reduced to zero;

(v)

fifth , to pay, the amount, if any, payable by Seller in the event any Hedging Transaction related to such Purchased Loan is being terminated as of such date; and

(vi)

sixth , the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

(h) Notwithstanding any other provision of this Section 5, Income derived from Foreign Purchased Loans (AU) which require quarterly (as opposed to monthly) interest payments by the relevant Mortgagor, which Income is credited to Parlex 2 AU’s Cash Management Account shall only be distributed pursuant to this Section 5 on Remittance Dates specified in clause (b)(ii) of the definition thereof, and shall remain in such Cash Management Account and shall not be applied to any payments pursuant to this Section 5 on any Remittance Date specified in clause (b)(i) of the definition thereof.

6. SECURITY INTEREST

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

(a) the Purchased Loans, the Servicing Rights, Servicing Agreements, Servicing Records, insurance relating to the Purchased Loans, and collection and escrow accounts relating to the Purchased Loans;

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

(c) each Cash Management Account and all financial assets (including, without limitation, all security entitlements with respect to all financial assets) from time to time on deposit in each Cash Management Account;

(d) the Foreign Assignment Agreement, if any;

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

(f) all replacements, substitutions or distributions on or proceeds, payments, Income and profits of, and records (but excluding any financial models or other proprietary information) and files relating to any and all of any of the foregoing.

Buyer’s security interest in the Collateral shall terminate only upon termination of Seller’s obligations under this Agreement and the documents delivered in connection herewith and therewith. Upon such termination, Buyer shall promptly deliver to Seller such UCC termination statements, the equivalent under applicable Requirements of Law in the relevant non-U.S. jurisdiction (with respect to Foreign Purchased Loans) and other release documents as may be commercially reasonable and to return the Purchased Loans to Seller and, (i) in the case of each Foreign Purchased Loan (AU), the Buyer shall promptly register a financing change statement on the PPS Register amending or removing any registration on the PPS Register relating to such Collateral and (ii) in the case of each Foreign Purchased Loan (CAD), the Buyer shall promptly register a financing change statement on the applicable personal property registry amending or removing any registration on such registry relating to such Collateral. For purposes of the grant of the security interest pursuant to this Section 6, this Agreement shall be deemed to

constitute a security agreement under the New York Uniform Commercial Code (the “ UCC ”) and, in relation to each Foreign Purchased Loan (AU) or Foreign Purchased Loan (CAD), under the applicable PPSA. Buyer shall have all of the rights and may exercise all of the remedies of a secured creditor under applicable Requirements of Law in the relevant jurisdiction (including, with respect to U.S. Purchased Loans, the UCC and the other laws of the State of New York). In furtherance of the foregoing, (a) Buyer, at Seller’s sole cost and expense, shall cause to be filed in such locations as may be reasonably necessary to perfect and maintain perfection and priority of the security interest granted hereby and by any Foreign Assignment Agreement, UCC financing statements and continuation statements or their equivalent under applicable Requirements of Law in the relevant non-U.S. jurisdiction, including any registrations on the PPS Register or any applicable personal property registry in Canada (with respect to Foreign Purchased Loans) (collectively, the “ Filings ”), and shall forward copies of such Filings to Seller upon completion thereof, and (b) Seller shall from time to time take such further actions as may be reasonably requested by Buyer to maintain and continue the perfection and priority of the security interest granted hereby and by any Foreign Assignment Agreement (including (x) in the case of any Foreign Purchased Loan (AU), upon the request of Buyer, executing a legal or statutory mortgage in favor of Buyer over any real property or any other form of security which Buyer reasonably considers appropriate for the property to be subject to that security, each in form and substance reasonably required by Buyer, and (y) marking its records and files to evidence the interests granted to Buyer hereunder).

With respect to each Foreign Purchased Loan (AU), to the extent the law permits, (a) for the purposes of section 115(1) and 115(7) of the PPSA, Buyer need not comply with sections 95, 118, 121(4), 125, 130, 132(3)(d) or 132(4); and sections 142 and 143 are excluded; (b) for the purposes of section 115(7) of the PPSA, Buyer need not comply with sections 132 and 137(3); and (c) Parlex 2 AU agrees not to exercise its rights to make any request of Buyer under section 275 of the PPSA, to authorize the disclosure of any information under that section or to waive any duty of confidence that would otherwise permit non-disclosure under that section.

7. PAYMENT, TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, ownership of the Purchased Loans shall be transferred to Buyer or its designee (including the Custodian) against the simultaneous transfer of the Purchase Price to an account of Seller specified in writing by Seller relating to such Transaction (and subject to the last sentence of Section 17).

(b) On or before each Purchase Date, Seller shall deliver or cause to be delivered to Buyer or its designee the Custodial Delivery in the form attached hereto as Exhibit III; provided, that notwithstanding the foregoing, upon request of Seller, Buyer in its sole discretion may elect to permit Seller to make such delivery by not later than the third (3 ^rd ) Business Day (or, in the case of each Foreign Purchased Loan (AU), the tenth (10 ^th ) Business Day) after the related Purchase Date, so long as Seller causes an Acceptable Attorney to deliver to Buyer and the Custodian an Attorney’s Bailee Letter on or prior to such Purchase Date. In connection with each sale, transfer, conveyance and assignment of a Purchased Loan, on or prior to the Purchase Date with respect to such Purchased Loan, Seller shall deliver or cause to be delivered and released the following documents (collectively, the “ Purchased Loan File ”) pertaining to such Purchased Loan to the Custodian on or prior to the Purchase Date (unless otherwise waived by Buyer) with respect to such Purchased Loan (or, pursuant to the proviso in the immediately preceding sentence, by not later than the third (3 ^rd ) Business Day (or, in the case of each Foreign Purchased Loan (AU), the tenth (10 ^th ) Business Day) after the related Purchase Date):

With respect to each Purchased Loan that is a Whole Loan or Senior Interest, to the extent applicable:

(i)

The original Mortgage Note (or senior Mortgage Note in an “A/B” structure), bearing all intervening endorsements and/or assignments (including, with respect to Foreign Purchased Loans, copies of all Transfer Certificates duly executed by the relevant parties).

(ii)

An original or copy of any loan agreement and any guarantee executed in connection with the Mortgage Note.

(iii)

An original or copy of the Mortgage with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or regulations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction to perfect a valid first priority security in the Mortgaged Property).

(iv)

Originals or copies of all assumption, modification, consolidation or extension agreements with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction).

(v)

An original of the Assignment Documents in Blank.

(vi)

An original of the Foreign Assignment Agreement.

(vii)

Originals or copies of all intervening assignments of mortgage with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or regulations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction to perfect a valid first priority security in the Mortgaged Property).

(viii)

Other than in the case of Foreign Purchased Loans (AU), an original or copy of the attorney’s opinion of title and abstract of title or a copy of the mortgagee title insurance policy, as applicable, or if the mortgagee title insurance policy has not been issued, a copy of the irrevocable marked commitment to issue the same (or irrevocable signed proforma policy).

(ix)

An original or copy of any security agreement, chattel mortgage or equivalent document executed in connection with the Purchased Loan and, together, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction necessary to perfect a valid first priority security interest in the relevant Mortgaged Property.

(x)

Other than in the case of Foreign Purchased Loans (AU), an original or copy of the assignment of leases and rents, if any, with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction necessary to perfect a valid first priority security interest in the relevant Mortgaged Property).

(xi)

Originals or copies of all intervening assignments of assignment of leases and rents, if any, or copies thereof, with evidence of recordation, or submission for recordation, from the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located (or, in the case of a Foreign Purchased Loan, with evidence of all filings, recordings, notifications and/or registrations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction).

(xii)

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

(xiii)

An environmental indemnity agreement (if any).

(xiv)

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

(xv)

Other than in the case of Foreign Purchased Loans (AU), a Survey of the Mortgaged Property (if any) as accepted by the title company for issuance of the Title Policy (or, with respect to Foreign Purchased Loans, by Buyer).

(xvi)

With respect to Foreign Purchased Loans, a Property Report and, an overview thereon prepared by Seller’s (or, to the extent customary in the relevant non-U.S. jurisdiction, the relevant Mortgagor’s) counsel addressed to or capable of being relied on by Buyer or its designee upon registration of Buyer or its designee, as lender of record (if available).

(xvii)

A copy of the opinion of Mortgagor’s (or, with respect to any Foreign Purchased Loan, to the extent customary in the relevant non-U.S. jurisdiction, Mortgagee’s) counsel.

(xviii)

An assignment of permits, contracts and agreements (if any).

With respect to each Purchased Loan which is a participation interest in a Whole Loan or Senior Interest:

(i)

the original or a copy of all of the documents described above with respect to a Purchased Loan which is a whole mortgage loan;

(ii)

if applicable, an original participation certificate bearing all intervening endorsements;

(iii)

an original or copy of any participation agreement and an original or copy of any intercreditor agreement, co–lender agreement and/or servicing agreement executed in connection with the Purchased Loan; and

(iv)

An original of the Assignment Documents in Blank.

From time to time, Seller shall forward to the Custodian additional original documents or additional documents evidencing any assumption, modification, consolidation or extension of a Purchased Loan approved in accordance with the terms of this Agreement, and upon receipt of any such other documents, the Custodian shall hold such other documents as Buyer shall request from time to time. With respect to any documents which have been delivered or are being delivered to recording offices for recording and have not been returned to Seller in time to permit their delivery hereunder at the time required, in lieu of delivering such original documents, Seller shall deliver to Buyer a true copy thereof with an officer’s certificate certifying that such copy is a true, correct and complete copy of the original, which has been transmitted for recordation. Seller shall deliver such original documents to the Custodian promptly when they are received. With respect to all of the Purchased Loans delivered by Seller to Buyer or its designee (including the Custodian), Seller shall execute an omnibus power of attorney substantially in the form of Exhibit V-A or Exhibit V-B attached hereto, as applicable, irrevocably appointing Buyer or its designee its attorney-in-fact with full power during the occurrence and continuance of an Event of Default and, subject to the following sentence, during the occurrence and continuance of a monetary Default or material non-monetary Default, to take the actions described therein, on the terms and conditions set forth therein. If a monetary Default or a material non-monetary Default has occurred and is continuing and Buyer has requested in writing that Seller take or cause to be taken any action that Buyer deems reasonably necessary to preserve Buyer’s or its designee’s ability to enforce upon the Purchased Loans as and when permitted pursuant to Section 14(b) hereof (which writing shall include a statement that Buyer will exercise its power of attorney if

Seller fails to take or cause to be taken such action requested by Buyer), and Seller has not complied with any such request promptly following receipt thereof, then Buyer (or its designee) may exercise its power of attorney during the existence and continuation of any such monetary Default or material non-monetary Default, as the case may be, as Buyer deems reasonably necessary to preserve Buyer’s or its designee’s ability to enforce upon the Purchased Loans as and when permitted pursuant to Section 14(b) hereof. Buyer shall deposit the Purchased Loan Files representing the Purchased Loans, or direct that the Purchased Loan Files be deposited directly, with the Custodian. The Purchased Loan Files shall be maintained in accordance with the applicable Custodial Agreement. Any Purchased Loan Files not delivered to Buyer or its designee (including the Custodian) are and shall be held in trust by Seller or its designee for the benefit of Buyer as the owner thereof. Seller or its designee shall maintain a copy of the Purchased Loan File and the originals of the Purchased Loan File not delivered to Buyer or its designee (to the extent such originals are in the possession or control of the Seller). The possession of the Purchased Loan File by Seller or its designee, is at the will of Buyer for the sole purpose of servicing the related Purchased Loan, and such retention and possession by Seller or its designee is in a custodial capacity only. The books and records (including, without limitation, any computer records or tapes) of Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Loan to Buyer. Seller or its designee (including the Custodian) shall release its custody of the Purchased Loan File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Loans, is in connection with a repurchase of any Purchased Loan by Seller or as otherwise required by law.

(c) Unless an Event of Default shall have occurred and be continuing, Buyer and/or its designee shall exercise all voting and corporate rights with respect to the Purchased Loans in accordance with Seller’s written instructions; provided , however , that Buyer and/or its designee, shall not be required to follow Seller’s instructions concerning any vote or corporate right if doing so would, in Buyer’s Applicable Standard of Discretion and in a manner consistent with Buyer’s other master repurchase facilities for comparable assets, be inconsistent with or result in any violation of any provision of the Transaction Documents or any Requirement of Law. The rights of Buyer as described in Section 3.07 of the Servicing Agreement in relation to the consideration of and provision to the Servicer of any consents, authorizations, directions and/or instructions shall constitute the exercise of voting and corporate rights with respect to the Purchased Loans for the purpose of this Section 7(c) . Upon the occurrence and during the continuation of an Event of Default, Buyer and/or its designee, shall be entitled to exercise all voting and corporate rights with respect to the Purchased Loans without regard to Seller’s instructions.

8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS

(a) Title to all Purchased Loans shall pass to Buyer (or its designee) on the applicable Purchase Date, and Buyer (or its designee) shall have free and unrestricted use of all Purchased Loans, subject however, to the terms of this Agreement. Nothing in this Agreement or any other Transaction Document shall preclude Buyer (or its designee) from engaging in repurchase transactions with the Purchased Loans or otherwise selling, transferring, pledging, repledging, hypothecating, or rehypothecating the Purchased Loans, but no such transaction shall relieve Buyer of its obligations to transfer the Purchased Loans to Seller pursuant to Section 3 of this Agreement, of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Section 5 hereof or of Buyer’s obligations pursuant to Section 19(b).

(b) Nothing contained in this Agreement or any other Transaction Document shall obligate Buyer to segregate any Purchased Loans delivered to Buyer (or its designee) by Seller. Notwithstanding anything to the contrary in this Agreement or any other Transaction Document, no Purchased Loan shall remain in the custody of Seller or an Affiliate of Seller.

9. INTENTIONALLY OMITTED

10. REPRESENTATIONS

(a) Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance or rule applicable to it or its organizational documents or any agreement by which it is bound or by which any of its assets are affected.

(b) In addition to the representations and warranties in subsection (a) above, Seller represents and warrants to Buyer that as of the date of this Agreement, as of the Purchase Date for the purchase of any Purchased Loans by Buyer from Seller and any Transaction thereunder, as of any Business Day on which Margin Excess is made available by Buyer to Seller, and at all times while this Agreement and any Transaction thereunder is in full force and effect:

(i)

Organization . Seller is duly formed, validly existing and in good standing under the laws and regulations of the state of Seller’s formation and is duly licensed, qualified, and in good standing in every jurisdiction where such licensing or qualification is necessary for the transaction of Seller’s business. Seller has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents.

(ii)

Due Execution; Enforceability . The Transaction Documents have been or will be duly executed and delivered by Seller. The Transaction Documents constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms subject to bankruptcy, insolvency, court schemes, moratoria, administration, examinership, reorganisation and other limitations on creditors’ rights generally and to equitable principles.

(iii)

Non-Contravention . Neither the execution and delivery of the Transaction Documents, nor consummation by Seller of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by Seller with the terms, conditions and provisions of the Transaction Documents (or any of them) will conflict with or result in a breach of any of the terms or provisions of (i) the organizational documents of Seller, (ii) any contractual obligation to which Seller is now a party or the rights under which have been assigned to Seller or the obligations under which have been assumed by Seller or to which the assets of Seller are subject or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of the assets of Seller, other than pursuant to the Transaction Documents, (iii) any judgment or order, writ, injunction, decree or demand of any court applicable to Seller, or (iv) any applicable Requirement of Law, in the case of clauses (ii)-(iv) above, to the extent that such conflict or breach would have a Material Adverse Effect. Seller has all necessary licenses, permits and other consents from Governmental Authorities necessary to acquire, own and sell the Purchased Loans and for the performance of its obligations under the Transaction Documents, except to the extent failure to have such licenses, permits and consents is not reasonably likely to have a Material Adverse Effect.

(iv)

Litigation; Requirements of Law . Except as disclosed in writing to Buyer, there is no action, suit, proceeding, investigation, or arbitration pending or, to Seller’s Actual Knowledge, threatened in writing against Seller or any of its assets, which is reasonably likely to have a Material Adverse Effect. Seller is in compliance in all material respects with all Requirements of Law. Seller is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

(v)

No Broker . Seller has not dealt with any broker, investment banker, agent, or other Person (other than Buyer or an Affiliate of Buyer) who may be entitled to any commission or compensation in connection with the sale of Purchased Loans pursuant to any of the Transaction Documents.

(vi)

Good Title to Purchased Loans . Immediately prior to the purchase of any Purchased Loans by Buyer from Seller, such Purchased Loans are free and clear of any lien, encumbrance or impediment to transfer (including any “adverse claim” as defined in Section 8-102(a)(1) of the UCC), and Seller is the record and beneficial owner of and has good and marketable title to and the right to sell and transfer such Purchased Loans to Buyer and, upon transfer of such Purchased Loans to Buyer, Buyer shall be the owner of such Purchased Loans free of any adverse claim, subject to the rights of

Seller and other obligations of Buyer pursuant to the terms of this Agreement. In the event the related Transaction is recharacterized as a secured financing of the Purchased Loans, the provisions of this Agreement (together, with respect to any Foreign Purchased Loan, with the relevant Foreign Assignment Agreement) are effective to create in favor of Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Collateral and Buyer shall have a valid, perfected first priority security interest in the Purchased Loans.

(vii)

No Default . As of the date of this Agreement and each Purchase Date, no Default or Event of Default has occurred and is continuing under or with respect to the Transaction Documents. At all times while this Agreement and any Transaction thereunder is in effect, no monetary Default, material non-monetary Default or Event of Default to Seller’s Actual Knowledge has occurred and is continuing under or with respect to the Transaction Documents.

(viii)

Representations and Warranties Regarding Purchased Loans; Delivery of Purchased Loan File . Seller represents and warrants to Buyer that each Purchased Loan sold in a Transaction hereunder, as of the related Purchase Date for such Transaction and as of any Business Day on which Margin Excess is made available by Buyer to Seller which increases the outstanding Purchase Price of such Purchased Loan, conforms to the applicable representations and warranties set forth in Exhibit VI-I, Exhibit VI-II, Exhibit VI-III and Exhibit VI-IV attached hereto in all material respects, except as disclosed to Buyer in writing. With respect to each Purchased Loan, the Mortgage Note, the Mortgage, the Assignment of Mortgage, the Transfer Certificate and any other documents required to be delivered under this Agreement and the applicable Custodial Agreement for such Purchased Loan have been delivered to Buyer or the Custodian on its behalf (or shall be delivered in accordance with the time periods set forth herein).

(ix)

Adequate Capitalization; No Fraudulent Transfer . Seller is generally able to pay, and as of the date hereof is paying, its debts as they come due. Seller has not become, and is not presently, financially insolvent nor will Seller be made insolvent by virtue of Seller’s execution of or performance under any of the Transaction Documents within the meaning of the bankruptcy laws or the insolvency laws of any jurisdiction. Seller has not entered into any Transaction Document or any Transaction pursuant thereto in contemplation of insolvency or with intent to hinder, delay or defraud any creditor. Seller has not received any written notice that any payment or other transfer made to or on account of Seller from or on account of any Mortgagor or any other person obligated under any Purchased Loan Documents is or may be void or voidable as an actual or constructive fraudulent transfer or as a preferential transfer.

(x)

Consents . No consent, approval or other action of, or filing by Seller with, any Governmental Authority or any other Person is required to authorize, or is otherwise required in connection with, the execution, delivery and performance of any of the Transaction Documents (other than consents, approvals and filings that have been obtained or made, as applicable, or that, if not obtained or made, are not reasonably likely to have a Material Adverse Effect).

(xi)

Members . Seller is a wholly owned subsidiary of Guarantor.

(xii)

Organizational Documents . Seller has delivered to Buyer certified copies of its organizational documents, together with all amendments thereto, if any.

(xiii)

No Encumbrances . Except to the extent expressly set forth in this Agreement, there are (i) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Loans, (ii) no agreements on the part of Seller to issue, sell or distribute the Purchased Loans, and (iii) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or any interest therein or to pay any dividend or make any distribution in respect of the Purchased Loans.

(xiv)

Federal Regulations . Seller is not (A) required to register as an “investment company,” or a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended, or (B) a “holding company,” or a “subsidiary company of a holding company,” or an “affiliate” of either a “holding company” or a “subsidiary company of a holding company,” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.

(xv)

Taxes . Seller and Guarantor have filed or caused to be filed all federal and other material tax returns which are required to be filed with respect to Seller and have paid all federal and other material taxes imposed on or with respect to Seller except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP; no tax liens have been filed against Seller or its assets (except for Permitted Liens).

(xvi)

ERISA . Neither Seller nor any ERISA Affiliate maintains any Plans and neither Seller nor any ERISA Affiliate and makes any contributions to any Plans or any Multiemployer Plans.

(xvii)

Judgments/Bankruptcy . Except as disclosed in writing to Buyer, there are no judgments against Seller unsatisfied of record or docketed in any court located in the United States of America. No Act of Insolvency has ever occurred with respect to Seller.

(xviii)

Full and Accurate Disclosure . No information contained in the Transaction Documents or in any written statement prepared and delivered by Seller or Guarantor pursuant to the terms of the Transaction Documents contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made when such statements and omissions are considered in the totality of the circumstances in question.

(xix)

Financial Information . All financial data concerning Seller and Guarantor that has been delivered by Seller to Buyer is true, complete and correct in all material respects and has been prepared in accordance with GAAP. To Seller’s Actual Knowledge, all financial data concerning the Purchased Loans that has been delivered by or on behalf of Seller to Buyer is true, complete and correct in all material respects. Since the delivery of such data, except as otherwise disclosed in writing to Buyer, there has been no change in the financial position of Seller and Guarantor or in the operations of Seller and Guarantor or, to Seller’s Actual Knowledge, the financial position of the Purchased Loans, which change is reasonably likely to have in a Material Adverse Effect.

(xx)

Notice Address; Jurisdiction of Organization . On the date of this Agreement, Seller’s address for notices is as set forth in Annex I. Seller’s jurisdiction of organization is Delaware. The location where Seller keeps its books and records, including all computer tapes and records relating to the Collateral, is its notice address.

(xxi)

Prohibited Person . None of Seller, Guarantor or any of their respective Affiliates is a Prohibited Person and each of Seller and Guarantor is in full compliance with all applicable orders, rules, regulations and recommendations of OFAC and each Foreign Sanctions Authority. None of Seller or Guarantor or any of their respective members, directors, executive officers, parents or Subsidiaries, as applicable: (A) are subject to U.S. or multilateral economic or trade sanctions currently in force; (B) are owned or controlled by, or act on behalf of, any governments, corporations, entities or individuals that are subject to U.S. or multilateral economic or trade sanctions currently in force; or (C) is a Prohibited Person or is otherwise named, identified or described on any blocked persons list, designated nationals list, denied persons list, entity list, debarred party list, unverified list, sanctions list or other list of individuals or entities with whom U.S. persons may not conduct business, including but not limited to lists published or maintained by OFAC, the U.S. Department of Commerce, the U.S. Department of State and any Foreign Sanctions Authority. Each of Seller and Guarantor has established an anti-

money laundering compliance program as required by all applicable anti-money laundering laws and regulations, including without limitation the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56).

(xxii)

Centre of Main Interests . Seller has not (A) taken any action that would cause its “centre of main interests” (as such term is used in Section 3(1) of the Regulation (EU) No. 2015/848 on Insolvency Proceedings (the “ Recast Insolvency Regulation ”)) to be located in the United Kingdom or Europe or (B) registered as a company in any jurisdiction other than Delaware.

11. NEGATIVE COVENANTS OF SELLER

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

(a) subject to Seller’s right to repurchase any Purchased Loan, take any action which would directly or indirectly impair or adversely affect Buyer’s title to the Purchased Loans;

(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Purchased Loans (or any of them) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Loans (or any of them) with any Person other than Buyer, unless and until such Purchased Loans are repurchased by Seller in accordance with this Agreement;

(c) create, incur or permit to exist any Lien in or on the Purchased Loans, except as described in Section 6 of this Agreement;

(d) create, incur or permit to exist any lien, encumbrance or security interest in or on any of the other Collateral subject to the security interest granted by Seller pursuant to Section 6 of this Agreement;

(e) modify or terminate any of the organizational documents of Seller (except Buyer shall not unreasonably withhold or delay any request for a consent to such modification to the organizational documents (excluding the special purpose entity provisions));

(f) consent to any amendment or supplement to, or termination of any note, loan agreement, mortgage or guaranty relating to the Purchased Loans or other material agreement or instrument relating to the Purchased Loans (other than Permitted Purchased Loan Modifications), unless and until such Purchased Loans are repurchased by Seller in accordance with this Agreement; provided , that notwithstanding the foregoing, to the extent Buyer’s prior approval is required for any such amendment or termination set forth in this Section 11(f) and Seller delivers a written request for approval to Buyer which is not responded to within five (5) Business Days, then Buyer shall be deemed to have granted its approval to such amendment or termination if Seller proceeds to deliver to Buyer a second written request for approval which is not responded

to within five (5) Business Days, so long as such second request is marked in bold lettering with the following language: “BUYER’S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A REPURCHASE AGREEMENT BETWEEN THE UNDERSIGNED AND BUYER” and the envelope containing the request must be marked “PRIORITY”;

(g) admit any additional members in Seller, or permit the sole member of Seller to assign or transfer all or any portion of its membership interest in Seller;

(h) enter into any Hedging Transactions other than to the extent required under Section 12(e) (it being understood and agreed Seller shall not have any obligation to enter into Hedging Transactions with respect to individual Purchased Loans or pursue hedging strategies at the level of Seller with respect to the Purchased Loans);

(i) after the occurrence and during the continuation of an Event of Default, make any distribution, payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any Capital Stock of Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller; or

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

12. AFFIRMATIVE COVENANTS OF SELLER

(a) Seller shall use commercially reasonable efforts to promptly notify Buyer of any change in its business operations and/or financial condition that would be reasonably likely to have a Material Adverse Effect; provided , however , the failure to deliver such notice in accordance with this Section 12(a) shall not give rise to an Event of Default; provided , further , that nothing in this Section 12 shall relieve Seller of its obligations under this Agreement.

(b) Seller shall provide Buyer with copies of such documents as Buyer may reasonably request and which are in Seller’s possession or control evidencing the truthfulness of the representations set forth in Section 10.

(c) Seller (1) shall defend the right, title and interest of Buyer in and to the Collateral against, and take such other action as is necessary to remove, the Liens of all Persons (other than security interests by or through Buyer and Permitted Liens) and (2) shall, at Buyer’s reasonable request, take all action necessary to ensure that Buyer will have a first priority security interest in the Purchased Loans subject to any of the Transactions in the event such Transactions are recharacterized as secured financings (including, in the case of any Foreign Purchased Loan (AU), upon the request of Buyer, executing a legal or statutory mortgage in favor of Buyer over any real property or any other form of security which Buyer reasonably considers appropriate for the property to be subject to that security, each in form and substance reasonably required by Buyer).

(d) Seller shall notify Buyer and the Depository of the occurrence of any Default or Event of Default of which Seller has written notice or Actual Knowledge and which has not otherwise been disclosed pursuant to the reports delivered in accordance with Section 12(i).

(e) With respect to each fixed rate Purchased Loan, Seller shall enter into Hedging Transactions designed to mitigate interest rate risk (i.e. not credit risk) pursuant to a hedging strategy reasonably acceptable to Buyer and pledge such Hedging Transactions to Buyer as Collateral (including, without limitation, to the extent such Hedging Transactions are entered into with a party other than Buyer, delivering a collateral assignment of such Hedging Transactions in form and substance acceptable to Buyer). Seller acknowledges Buyer will mark to market such Hedging Transactions from time to time in accordance with and subject to the terms of this Agreement.

(f) Seller shall promptly (and in any event not later than three (3) Business Days following receipt) deliver to Buyer (i) any written notice of the occurrence of an event of default received by Seller pursuant to the Purchased Loan Documents and (ii) any other information with respect to the Purchased Loans within Seller’s possession or control as may be reasonably requested by Buyer from time to time.

(g) Seller will permit Buyer or its designated representative to inspect at Buyer’s sole cost and expense (so long as an Event of Default has not occurred and is not continuing) Seller’s records which are not privileged or confidential (but excluding for this purpose all information received from Mortgagors or other obligors on the Purchased Loans) and the conduct and operation of its business related thereto upon reasonable prior written notice from Buyer or its designated representative, at such reasonable times and with reasonable frequency (not to exceed twice per calendar year, so long as an Event of Default has not occurred and is not continuing), subject to the terms of any confidentiality agreement between Buyer and Seller and applicable law, and if no such confidentiality agreement then exists between Buyer and Seller, Buyer and Seller shall act in accordance with customary market standards regarding confidentiality and applicable law. Buyer shall act in a commercially reasonable manner in requesting and conducting any inspection relating to the conduct and operation of Seller’s business.

(h) At any time from time to time upon the reasonable request of Buyer, at the sole expense of Seller, Seller will promptly and duly execute and deliver such further instruments and documents and take such further actions as Buyer may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the first priority security interest granted hereunder and of the rights and powers herein granted (including, among other things, filing such UCC financing statements or their equivalent under applicable Requirements of Law in any relevant non-U.S. jurisdiction as Buyer may reasonably request). If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such note, instrument or chattel paper shall be immediately delivered to Buyer, duly endorsed in a manner reasonably satisfactory to Buyer, to be held as Collateral pursuant to this Agreement, and the documents delivered in connection herewith. Seller hereby authorizes Buyer and its counsel to file UCC-1 financing statements in form and substance satisfactory to Buyer, describing the collateral as “all assets of the Seller, whether now owned or existing or hereafter acquired or arising and wheresoever located, and all proceeds and products thereof” or words to that effect.

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

(i)

Within 45 days after the last day of each of the first three fiscal quarters in any fiscal year, Guarantor’s and (to the extent prepared separately from Guarantor) Seller’s unaudited consolidated balance sheets as of the end of such quarter, in each case certified as being true and correct by an officer’s certificate;

(ii)

Within 90 days after the last day of its fiscal year, Guarantor’s audited and (to the extent prepared separately from Guarantor) Seller’s unaudited (or, if generated by Seller, Seller’s audited) consolidated statements of income and statements of changes in cash flow for such year and balance sheets as of the end of such year, in each case presented fairly in accordance with GAAP, and accompanied, in the case of Guarantor, by an unqualified report of a nationally recognized independent certified public accounting firm, Deloitte & Touche LLP or any other accounting firm consented to by Buyer in its reasonable discretion;

(iii)

Within 30 days after the last day of each calendar month, any and all property level financial information (including, without limitation, operating and financial statements) with respect to the Purchased Loans that was received during the preceding calendar month and is in the possession of Seller or an Affiliate, including, without limitation, rent rolls and income statements;

(iv)

Within 30 days after the last day of each calendar quarter in any fiscal year, an officer’s certificate from Seller addressed to Buyer certifying that, as of such calendar month, (x) Seller and Guarantor are in compliance in all material respects with all of the terms and requirements of this Agreement, (y) Guarantor is in compliance with the financial covenants set forth in the Guaranty (including therein detailed calculations demonstrating such compliance) and (z) no Event of Default has occurred and is continuing; and

(v)

With respect to the Purchased Loans and related Mortgaged Properties: (x) within 30 days after the last day of each calendar month, Seller’s monthly operations report covering occupancy, collections, delinquencies, losses, recoveries, cash flows and such other property level information as may reasonably be requested by Buyer and (y) within 30 days after the last day of each calendar quarter in any fiscal year, an asset management report prepared by Seller or Guarantor.

(j) Seller shall at all times comply with all laws, ordinances, rules and regulations of any federal, provincial, territorial, state, municipal or other public authority having jurisdiction over Seller or any of its assets, except to the extent any failure thereof is not reasonably likely to result in a Material Adverse Effect. Seller shall do or cause to be done all things reasonably necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business.

(k) Seller shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP and set aside on its books from its earnings for each fiscal year all such proper reserves in accordance with GAAP.

(l) Seller shall observe, perform and satisfy all the terms, provisions and covenants required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents. Seller shall pay and discharge all Taxes, levies, liens and other charges on its assets and on the Collateral that, in each case, in any manner would create any Lien upon the Collateral, except for Permitted Liens or similar charges.

(m) Seller will maintain records with respect to the Collateral and the conduct and operation of its business with no less a degree of prudence than if the Collateral were held by Seller for its own account.

(n) In the event that Guarantor terminates BXMT Advisors L.L.C. as Guarantor’s external manager pursuant to the Second Amended and Restated Management Agreement, dated as of October 23, 2014, between Guarantor and BXMT Advisors L.L.C., any replacement external manager or switch to internal management shall be subject to Buyer’s prior written approval, not to be unreasonably withheld, conditioned or delayed.

13. SINGLE-PURPOSE ENTITY

Seller hereby represents and warrants to Buyer, and covenants with Buyer, that as of the date hereof and so long as any of the Transaction Documents shall remain in effect:

(a) It is and intends to remain Solvent and it has paid and will pay its debts and liabilities (including employment and overhead expenses) from and solely to the extent of its own assets as the same shall become due.

(b) It has complied and will comply with the provisions of its organizational documents (i.e. certificate of formation and operating agreement) in all material respects.

(c) It has done or caused to be done and will, to the extent under its control, do all things necessary to observe corporate formalities and to preserve its existence.

(d) It has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates, its members and any other Person (except, in each case, to the extent consolidation is permitted under GAAP or as a matter of law), and, to the extent required by law, it will file its own tax returns, if any (except, for the avoidance of doubt, if Seller is included as part of a consolidated, unitary, combined or similar tax return, or if Seller is disregarded as a separate entity for applicable tax purposes).

(e) It has been, is and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any misunderstanding of which it has Actual Knowledge regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other, shall maintain and utilize separate stationery, invoices and checks, and allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an Affiliate.

(f) It has not owned and will not own any property or any other assets other than Purchased Loans, assets intended to be offered as Eligible Loans pursuant to this Agreement, cash and its interest under any associated Hedging Transactions; provided , however , that Seller shall not be in breach of this provision to the extent that Seller acquires or originates an Eligible Loan under its good faith belief that such Eligible Loan will become a Purchased Loan; provided, further, that in the event Buyer does not approve such Eligible Loan for inclusion in a Transaction after Buyer’s receipt of the applicable Transaction Request, Due Diligence Package and such additional diligence materials in accordance with Section 3(a), then Seller shall convey all of its right, title and interest in such Eligible Loan to a third party by not later than ten (10) Business Days after Buyer disapproves (or is deemed to have disapproved) such Eligible Loan in accordance with Section 3(a).

(g) It has not engaged and will not engage in any business other than the acquisition, origination, ownership, servicing, enforcement, financing and disposition of Purchased Loans in accordance with the applicable provisions of the Transaction Documents and its organizational documents.

(h) It has not entered into, and will not enter into, any contract or agreement with any of its Affiliates, except upon terms and conditions that are substantially similar to those that would be available on an arm’s-length basis with Persons other than such Affiliate.

(i) It has not incurred and will not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) with respect to the Purchased Loan Documents, and (B) trade payables in the ordinary course of its business which are either (x) no more than ninety (90) days past due and do not exceed $500,000.00 in the aggregate or (y) more than ninety (90) days past due and do not exceed $250,000.00 in the aggregate, and are being contested in good faith and for which adequate reserves are maintained, and (C) as otherwise expressly permitted under this Agreement.

(j) It has not made and will not make any loans or advances to any other Person, except as permitted under this Agreement and under assets intended to be offered as Eligible Loans pursuant to this Agreement (subject to the provisos to Section 12(f) herein), and shall not acquire obligations or securities of any member or any Affiliate of any member or any other Person.

(k) It will maintain adequate capital derived from income from its business operations for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

(l) It shall not seek its dissolution, liquidation or winding up, in whole or in part, or suffer any Change of Control or consolidation or merger with respect to Seller.

(m) It will not commingle its funds and other assets with those of any of its Affiliates or any other Person.

(n) It has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any of its Affiliates or any other Person.

(o) Except as expressly permitted under this Agreement, it has not held and will not hold itself out to be responsible for the debts or obligations of any other Person.

(p) Seller shall not take any Act of Insolvency without the affirmative vote of the Independent Director.

(q) It shall at all times maintain at least one Independent Director. For so long as the Repurchase Obligations remain outstanding, Seller shall not take any of the actions contemplated by Section 13(p) above (including, to the extent, applicable without the affirmative vote of such Independent Director).

(r) It shall not pledge its assets to secure the obligations of any other Person.

14. EVENTS OF DEFAULT; REMEDIES

(a) After the occurrence and during the continuance of an Event of Default, Seller hereby appoints Buyer as attorney-in-fact of Seller in accordance with Section 7(b) for the purpose of carrying out the provisions of this Agreement and taking any action and executing or endorsing any instruments that Buyer may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. With respect to each Transaction, each of the following clauses (i) through (xv) shall be an Event of Default under this Agreement:

(i)

Seller fails to repurchase the Purchased Loans upon the applicable Repurchase Date;

(ii)

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

(iii)

an Act of Insolvency occurs with respect to Seller or Guarantor;

(iv)

Guarantor fails to qualify as a REIT (after giving effect to any cure or corrective periods or allowances pursuant to the Code);

(v)

either (A) the Transaction Documents shall for any reason not cause, or shall cease to cause, Buyer (or its designee) to be the owner free of any adverse claim of any of the Purchased Loans, or (B) if a Transaction is recharacterized as a secured financing, the Transaction Documents with respect to any Transaction shall for any reason cease to create a valid first priority security interest in favor of Buyer (or its designee) in any of the Purchased Loans;

(vi)

if an event occurs which would constitute (a) an “event of default” under any Hedging Transaction or (b) a “termination event” or an “additional termination event” under any Hedging Transaction (and, in either case, Seller has failed to cure the “event of default” within the applicable cure period or to meet its obligation to pay the Early Termination Amount, if any, pursuant to the terms of such Hedging Transaction);

(vii)

failure of Buyer to receive within one (1) Business Day after any Remittance Date the accreted value of the Price Differential (less any amount of such Price Differential previously paid by Seller to Buyer);

(viii)

failure of Seller to make any other payment owing to Buyer which has become due, whether by acceleration or otherwise under the terms of this Agreement (other than due to any act or failure to act of Depository to the extent available funds are on deposit in the applicable Cash Management Account), which failure is not remedied within three (3) Business Days after written notice thereof to Seller from Buyer;

(ix)

any Governmental Authority takes any action to (i) condemn, seize or appropriate, or assume custody or control of, all or any substantial part of the property of Seller, (ii) displace the management of Seller or curtail its authority in the conduct of the business of Seller, or (iii) terminate the activities of Seller as contemplated by the Transaction Documents;

(x)

a Change of Control shall have occurred;

(xi)

any representation (other than a MTM Representation) made by Seller or Guarantor in any Transaction Document shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated and such incorrect or untrue representation exists and continues unremedied for ten (10) Business Days after the earlier of receipt of written notice thereof from Buyer or Seller’s acquiring Actual Knowledge of such incorrect or untrue representation (other than the representations and warranties set forth in Section 10(b)(viii) of this Agreement made by Seller, which shall not be considered an Event of Default if incorrect or untrue in any material respect, provided Seller repurchases the related Purchased Loan on an Early Repurchase Date no later than three (3) Business Days after receiving notice of such incorrect or untrue representation and terminates the related Transaction; provided further Seller shall not have made any such representation with actual knowledge that it was materially incorrect or untrue at the time made);

(xii)

(i) Guarantor breaches any of the payment obligations set forth in the Guaranty or (ii) Guarantor shall fail to observe any of the financial covenants set forth in the Guaranty or (iii) shall have defaulted or failed to perform any of the other obligations under the Guaranty in any material respect and such default or failure referred to in this clause (iii) remains uncured for a period of seven (7) Business Days after the earlier of receipt of notice thereof from Buyer or Seller’s acquiring Actual Knowledge of such default or failure by Guarantor;

(xiii)

a final non-appealable judgment by any competent court in the United States of America for the payment of money in an amount greater than $100,000 (in the case of Seller) or $5,000,000 (in the case of the Guarantor) shall have been rendered against Seller or Guarantor, and remains undischarged or unpaid for a period of forty-five (45) days, during which period execution of such judgment is stayed by the posting of cash or a bond or other collateral acceptable to Buyer in the amount of the judgment;

(xiv)

Seller or Guarantor shall have (x) defaulted under any note, indenture, loan agreement, guaranty or other Indebtedness to which it is a party, which default (A) involves the failure to pay a matured obligation in excess of $100,000 (in the case of Seller) or the greater of (a) $5,000,000 or (b) the lesser of (i) 5% of Tangible Net Worth (as such term is defined in the Guaranty) and (ii) $25,000,000 (in the case of Guarantor), or (B) results in the acceleration of the maturity of such Indebtedness in excess of a principal amount of $100,000 (in the case of Seller) or the greater of (a) $5,000,000 or (b) the lesser of (i) 5% of Tangible Net Worth (as such term is defined in the Guaranty) and (ii) $25,000,000 (in the case of Guarantor) by any other party to or beneficiary of such note, indenture, loan agreement, guaranty or other Indebtedness or (y) failed to perform any other material non-payment obligation under such note, indenture, loan agreement, guaranty or other Indebtedness with an asserted actual out-of-pocket damages claim in excess of the limits referenced in clause (x) with respect to Seller or Guarantor, as applicable and acceleration occurs under such Indebtedness as a result thereof; provided , however , that any such default, failure to perform or breach shall not constitute an Event of Default if Seller or Guarantor cures such default or failure to perform, as the case may be, within the grace notice and/or cure period, if any, provided under the applicable agreement; or

(xv)

if Seller or Guarantor shall breach or fail to perform any of the terms, agreements, conditions, covenants or obligations applicable to such Person under this Agreement, any other Transaction Document or any Purchased Loan Document to which such Person is a party, other than as specifically otherwise referred to in this definition of “Event of Default” (including, without limitation, the failure by Seller to deliver any report required pursuant to Section 12(i)), and such breach or failure to perform is not remedied within fifteen (15) Business Days after written notice thereof to Seller from the applicable party or its successors or assigns; (each of (i) through (xv), an “ Event of Default ”).

(b) If an Event of Default shall occur and be continuing, the following rights and remedies shall be available to Buyer:

(i)

At the option of Buyer, exercised by written notice to Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Act of Insolvency), the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (the date on which such option is exercised or deemed to have been exercised being referred to hereinafter as the “ Accelerated Repurchase Date ”).

(ii)

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

(A)

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

(B)

to the extent permitted by applicable law, the Repurchase Price with respect to each Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis (or, in the case of a Transaction relating to a Foreign Purchased Loan (AU), a 365 day per year basis) for the actual number of days during the period from and including the Accelerated Repurchase Date to but excluding the date of payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such Transaction multiplied by (y) the outstanding Purchase Price for such Transaction (decreased by (I) any amounts actually remitted to Buyer by the Depository or Seller from time to time pursuant to Sections 4 or 5 of this Agreement and applied to such Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant to Section 14(b)(iii) of this Agreement); and

(C)

the Custodian shall, upon the request of Buyer, deliver to Buyer all instruments, certificates and other documents then held by the Custodian relating to the Purchased Loans.

(iii)

Upon the occurrence and during the continuance of an Event of Default with respect to Seller, Buyer may (A) immediately sell, at a public or private sale in a commercially reasonable manner in accordance with Requirements of Law, and with prior written notice to Seller, at such price or prices as Buyer may reasonably deem satisfactory any or all of the Purchased Loans or (B) in its sole discretion elect, in lieu of selling all or a

portion of such Purchased Loans, to give Seller credit for such Purchased Loans in an amount equal to the market value of such Purchased Loans as determined by Buyer in its sole discretion against the aggregate unpaid Repurchase Price for such Purchased Loans and any other amounts owing by Seller under the Transaction Documents. The proceeds of any disposition of Purchased Loans effected pursuant to this Section 14(b)(iii) shall be applied in accordance with Section 5(g).

(iv)

The parties recognize that it may not be possible to purchase or sell all of the Purchased Loans on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Purchased Loans may not be liquid. In view of the nature of the Purchased Loans, the parties agree that liquidation of a Transaction or the Purchased Loans does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, Buyer may elect, in its sole discretion in accordance with Requirements of Law, the time and manner of liquidating any Purchased Loans, and nothing contained herein shall (A) obligate Buyer to liquidate any Purchased Loans on the occurrence and during the continuance of an Event of Default or to liquidate all of the Purchased Loans in the same manner or on the same Business Day or (B) constitute a waiver of any right or remedy of Buyer.

(v)

Seller shall be liable to Buyer for (A) the amount of all actual out-of-pocket expenses, including reasonable legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default with respect to Seller, (B) all actual costs incurred in connection with the termination of Hedging Transactions, and (C) any other actual out-of-pocket loss, damage, cost or expense directly arising or resulting from the occurrence and continuance of an Event of Default with respect to Seller.

(vi)

Buyer shall have, in addition to its rights and remedies under the Transaction Documents, all of the rights and remedies provided by applicable federal, state, provincial, territorial, foreign, and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, the rights and remedies of a secured party under the UCC of the State of New York or, with respect to any Foreign Purchased Loan, the equivalent Requirement of Law in the relevant non-U.S. jurisdiction, to the extent that the UCC or such other Requirement of Law is applicable, and the right to offset any mutual debt and claim and the right to appropriate the Purchased Loans in accordance with this Section 12(b)(vi)), in equity, and under any other agreement between Buyer and Seller. In relation to Foreign Purchased Loans (AU) or Foreign Purchased Loans (CAD), the Buyer shall also have the right to appoint any person or persons to be a receiver and manager of the Collateral and, without the need for any consent from Seller or any other Person but subject to the

same restrictions and limitations imposed on Buyer as set forth in the Transaction Documents, each receiver will have the power to do all things the law allows an owner of any interest in the Collateral to do . Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Loans against all of Seller’s obligations to Buyer pursuant to this Agreement, whether or not such obligations are then due, without prejudice to Buyer’s right to recover any deficiency. The parties hereto agree that the method of valuation of Purchased Loans provided for in this Section 12(b)(vi) shall constitute a commercially reasonable method of valuation for the purposes of the FCA Regulations.

(vii)

Subject to the notice and grace periods set forth herein, Buyer may exercise any or all of the remedies available to Buyer immediately upon the occurrence and continuance of an Event of Default (other than with respect to Buyer) and at any time during the continuance thereof. All rights and remedies arising under the Transaction Documents, as amended from time to time, are cumulative and not exclusive of any other rights or remedies which Buyer may have.

(viii)

Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives any defense Seller might otherwise have arising from the use of nonjudicial process, disposition of any or all of the Purchased Loans, or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

(ix)

Upon the designation of any Accelerated Repurchase Date, Buyer may, without prior notice to Seller, set off any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or not contingent and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by Seller to Buyer or any Affiliate of Buyer against any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or not contingent and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by Buyer or any Affiliate of Buyer to Seller. Buyer will give written notice to the other party of any set off effected under this Section 14(b)(ix). If a sum or obligation is unascertained, Buyer may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Section 14(b)(ix) shall be effective to create a charge or other security interest. This Section 14(b)(ix) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other rights to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

(x)

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

15. SINGLE AGREEMENT

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

16. RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF THE APPLICABLE PARTY.

17. NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial, United States Postal Service, Royal Mail, Australia Post or Canada Post, with proof of delivery, or (d) by email with proof of delivery to the address specified in Annex I hereto or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section . A notice shall be deemed to have been given: (a) in the case of hand delivery, at the

time of delivery, (b) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (c) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (d) in the case of email, upon receipt of confirmation of transmission and delivery, respectively, provided that such notice sent by email was also delivered as required in this Section . A party receiving a notice which does not comply with the technical requirements for notice under this Section may elect to waive any deficiencies and treat the notice as having been properly given. Notwithstanding the foregoing, in the event that Seller directs Buyer to transfer funds pursuant to a Transaction or otherwise in accordance with Section 3 or 4 to an account or recipient other than Seller’s wiring instructions specified on Annex I, such direction shall be in writing (including in a Confirmation) and signed by two (2) authorized officers of Seller.

18. ENTIRE AGREEMENT; SEVERABILITY

This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

19. NON-ASSIGNABILITY

(a) The rights and obligations of Seller under the Transaction Documents and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer.

(b) Upon prior written notice to Seller, Buyer shall be entitled to assign an interest in its rights and obligations under the Transaction Documents and/or under any Transaction to any other Person or issue one or more participation interests with respect to any or all of the Transactions and, in connection therewith, may bifurcate or allocate (i.e. senior/subordinate) amounts due to Buyer; provided, however, in all such instances, so long as no Event of Default has occurred and is continuing, (i) Buyer may not assign an interest in its rights and obligations under the Transaction Documents and/or under any Transaction or issue one or more participation interests with respect to any or all of the Transactions to any Prohibited Transferee, (ii) Buyer shall retain control and authority over its rights and obligations under the Transaction Documents and/or under any Transaction, (iii) Seller shall not be obligated to deal directly or indirectly with any party other than Buyer, and (iv) Seller shall not be charged for, incur or be required to pay or reimburse Buyer or any assignee, transferee, participant or other third party for any costs that would not have been incurred but for the assignment, participation, bifurcation or allocation by Buyer in accordance with this Section 19(b). In furtherance of and without limitation to the foregoing, in no event shall Buyer confer on or grant any rights in any Person other than Buyer any right to determine the Market Value of any Purchased Loan, to declare a Margin Deficit, to determine whether a Default or Event of Default has occurred or is continuing, to approve a Purchased Loan, to make available to Seller Margin Excess, or to enforce any provision of any Transaction Documents against Seller or Guarantor, it being understood and agreed that nothing herein shall restrict or limit Buyer’s right to consult with and consider the views and opinions of any assignee, transferee or participant under this Agreement.

(c) Buyer, acting solely for this purpose as a non-fiduciary agent of Seller, shall maintain a register for the recordation of each assignment pursuant to Section 19(b) above and the name and address of any assignee, and the Repurchase Price and Price Differential owing to such assignee (the “ Register ”). The entries in the Register shall be conclusive absent manifest error. Buyer and Seller shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as the owner of the applicable rights and obligations and no transfer or assignment shall be effective unless duly noted in the Register. The Register shall be available for inspection by Seller at any reasonable time and from time to time upon reasonable request.

(d) Buyer and each assignee, if any that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Seller, maintain a register on which it records such sale, the name and address of the applicable participant and, with respect to each such participant, the participated Repurchase Price and Price Differential (the “ Participant Register ”). Neither Buyer nor any such assignee shall have any obligation to disclose the identity of any participant or any information relating to a participant’s interest in any obligations under any Transaction Document to any Person except (i) to the extent that the Internal Revenue Service requests such disclosure (from Seller, Guarantor, Buyer, such assignee or otherwise) or such disclosure is otherwise reasonably determined to be required to establish that such obligation is in registered form under Section 5f.103-1I of the United States Treasury Regulations (the “ Treasury Regulations ”), and (ii) the portion of the Participant Register relating to any such participant requesting (directly or through Buyer or an assignee) payment from Seller under the Transaction Documents shall be made available to Seller upon reasonable request. The entries in the Participant Register shall be conclusive absent manifest error. The applicable Buyer shall treat each Person whose name is recorded in the Participant Register as the owner of the applicable participation for all purposes of this Agreement and no sale of a participation shall be effective unless duly noted in the Participant Register.

(e) Subject to the foregoing, the Transaction Documents and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in the Transaction Documents, express or implied, shall give to any Person, other than the parties to the Transaction Documents and their respective successors, any benefit or any legal or equitable right, power, remedy or claim under the Transaction Documents.

20. GOVERNING LAW

This Agreement shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof. The parties hereto intend that the provisions of section 5-1401 of the New York General Obligations Law shall apply to this Agreement.

21. NO WAIVERS, ETC.

No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.

22. USE OF EMPLOYEE PLAN ASSETS

(a) If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 (“ ERISA ”) are intended to be used by either party hereto (the “ Plan Party ”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA, and the other party may proceed in reliance thereon but shall not be required so to proceed.

(b) Subject to the last sentence of subparagraph (a) of this Section, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available unaudited statement of its financial condition.

(c) By entering into a Transaction pursuant to this Section, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.

23. INTENT

(a) The parties recognize and agree that: (i) each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code and a “securities contract” as that term is defined in Section 741(7) of the Bankruptcy Code, (ii) payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 741 of the Bankruptcy Code, and (iii) the grant of a security interest set forth in Sections 6 and 29(b) hereof and the Guaranty, each of which secures the rights of Buyer hereunder also constitutes a “repurchase agreement” as contemplated by Section 101(47)(A)(v) of the Bankruptcy Code and a “securities contract” as contemplated by Section 741(7)(A)(xi) of the Bankruptcy Code. It is further understood that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, as amended, with respect to the Transaction so constituting a “repurchase agreement” or “securities contract”. The parties intend and recognize that the arrangements under this Agreement are to constitute a “title transfer financial collateral arrangement” or a “security financial collateral arrangement” for the purposes of the Financial Collateral Arrangements (No 2) Regulations 2003 (the “ FCA Regulations ”).

(b) The parties recognize and agree that each of Buyer and Seller is a “repo participant” as that term is defined in Section 101(46) of the Bankruptcy Code.

(c) The parties recognize and agree that each party (for so long as each is either a “financial institution,” “financial participant,” repo participant, or “master netting participant” or other entity listed in Section 555, 559, 561, 362(b)(6), or 362(b)(7) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract” and a “master netting

agreement,” including (x) the rights set forth in Sections 3 and 14 and in Section 555, 559, and 561 of the Bankruptcy Code to liquidate the Purchased Loans and/or accelerate or terminate this Agreement, and (y) the right to offset or net out termination payments, payment amounts or other transfer obligations and otherwise exercise contractual rights as set forth in Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), and 546 of the Bankruptcy Code.

(d) Each party hereto hereby further agrees that it shall not challenge the characterization of (i) this Agreement as a “repurchase agreement”, “securities contract” and/or “master netting agreement”, or (ii) each party as a “repo participant” within the meaning of the Bankruptcy Code except insofar as, in the case of a “repurchase agreement”, the term of the Transactions, would render such definition inapplicable.

(e) It is understood that either party’s right to accelerate or terminate this Agreement or to liquidate assets delivered to it in connection with the Transactions hereunder or to exercise any other remedies pursuant to Section 14 or 29 hereof is a contractual right to accelerate, terminate or liquidate this Agreement or the Transactions as described in Sections 555 and 559 of the Bankruptcy Code. It is further understood and agreed that either party’s right to cause the termination, liquidation, or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with, this Agreement or the Transactions hereunder is a contractual right to cause the termination, liquidation, or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with, this Agreement as described in Section 561 of the Bankruptcy Code.

(f) The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“ FDIA ”), then each of the Transactions hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to the Transactions would render such definition inapplicable).

(g) The parties agree and acknowledge that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“ FDICIA ”) and each payment entitlement and payment obligation under the Transactions hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

(h) In light of the intent set forth above in this Section 23, each Party agrees that, from time to time upon the written request of the other Party (the “ Requesting Party ”), each Party will execute and deliver any supplements, modifications, addendums or other documents as may be necessary or desirable, in the Requesting Party’s good faith discretion, in order to cause this Agreement and the Transactions contemplated hereby to qualify for, comply with the provisions of, or otherwise satisfy, maintain or preserve the criteria for safe harbor treatment under the Bankruptcy Code for “repurchase agreements”, “securities contracts” and “master netting agreements”; provided, however, that either Party’s failure to request, or either Party’s failure to execute, such supplements, modifications, addendums or other documents does not in any way alter or otherwise change the intention of the parties hereto that this Agreement and the Transactions hereunder constitute “repurchase agreements”, “securities contracts” and/or a “master netting agreement” as such terms are defined in the Bankruptcy Code.

(i) Notwithstanding anything to the contrary in this Agreement, it is the intention of the parties that, for U.S. Federal, state and local income and franchise tax purposes, the Transactions constitute a loan from Buyer to Seller, and that Seller is and, so long as no Event of Default shall have occurred and be continuing, will continue to be, treated as the owner of the Purchased Loans for such purposes. Unless prohibited by applicable law, Seller and Buyer (and its assignees and participants, if any) shall treat the Transactions as described in the preceding sentence for all U.S. Federal, state and local income and franchise tax purposes (including, without limitations, on any and all filings with any U.S. Federal, state or local taxing authority).

24. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“ SEC ”) under Section 15 of the Securities Exchange Act of 1934 (“ 1934 Act ”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“ SIPA ”) do not protect the other party with respect to any Transaction hereunder;

(b) in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder;

(c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable; and

(d) in the case of Transactions that may be a financial service in Australia, Citibank, N.A. relies upon various exemptions from the need to hold an Australian Financial Services Licence (“ AFSL ”) including the exemption in ASIC Class Order CO 03/1101. Citibank, N.A. is incorporated in the United States of America and its principal regulators are the US Office of the Comptroller of Currency and Federal Reserve under US laws, which differ from Australian laws. It does not hold an AFSL under the Corporations Act 2001 (Cth) as it enjoys the benefit of an exemption under ASIC Class Order CO 03/1101; and

(e) in the case of Transactions in Canada, the Buyer may be subject to Canadian Anti-Money Laundering & Anti-Terrorism Legislation and “know your customer” rules and regulations, and they hereby notify all parties that in order to comply with such legislation, rules and regulations, they may be, among other things, required to obtain, verify and record information pertaining to the parties, which information may relate to, among other things, the names, addresses, corporate directors, corporate registration numbers, corporate tax numbers, corporate shareholders and banking transactions of the parties. The Seller hereby agrees to take such actions and to provide, upon request, such information and access to information regarding the Seller that is required to enable the Buyer to comply with such Canadian Anti-Money Laundering & Anti-Terrorism Legislation and “know your customer” rules and regulations.

25. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

(a) Each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under this Agreement or relating in any way to this Agreement or any Transaction under this Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.

(b) To the extent that either party has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, such party hereby irrevocably waives and agrees not to plead or claim such immunity in respect of any action brought to enforce its obligations under this Agreement or relating in any way to this Agreement or any Transaction under this Agreement.

(c) The parties hereby irrevocably waive, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding and irrevocably consent to the service of any summons and complaint and any other process by the mailing of copies of such process to them at their respective address specified herein. The parties hereby agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Section 25 shall affect the right of Buyer or Seller to serve legal process in any other manner permitted by law or affect the right of Buyer or Seller to bring any action or proceeding against the other party or its property in the courts of other jurisdictions.

(d) EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

26. NO RELIANCE

Each of Buyer and Seller hereby acknowledges, represents and warrants to the other that, in connection with the negotiation of, the entering into, and the performance under, the Transaction Documents and each Transaction thereunder:

(a) It is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the other party to the Transaction Documents, other than the representations expressly set forth in the Transaction Documents;

(b) It has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and it has made its own investment, hedging and trading decisions (including decisions regarding the suitability of any Transaction) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the other party;

(c) It is a sophisticated and informed Person that has a full understanding of all the terms, conditions and risks (economic and otherwise) of the Transaction Documents and each Transaction thereunder and is capable of assuming and willing to assume (financially and otherwise) those risks;

(d) It is entering into the Transaction Documents and each Transaction thereunder for the purposes of managing its borrowings or investments or hedging its underlying assets or liabilities and not for purposes of speculation; and

(e) It is not acting as a fiduciary or financial, investment or commodity trading advisor for the other party and has not given the other party (directly or indirectly through any other Person) any assurance, guaranty or representation whatsoever as to the merits (either legal, regulatory, tax, business, investment, financial accounting or otherwise) of the Transaction Documents or any Transaction thereunder.

27. INDEMNITY

Seller hereby agrees to indemnify Buyer and each of its officers, directors, employees and agents (“ Indemnified Parties ”) from and against any and all actual out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including reasonable attorneys’ fees and disbursements of outside counsel) or disbursements (all of the foregoing, collectively “ Indemnified Amounts ”) which may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transactions shall have been repaid in full) be imposed on or asserted against any Indemnified Party in any way whatsoever arising out of or in connection with, or relating to, this Agreement or any Transactions thereunder or any action taken or omitted to be taken by any Indemnified Party under or in connection with any of the foregoing; provided , that Seller shall not be liable for Indemnified Amounts resulting from the gross negligence or willful misconduct of any Indemnified Party. Without limiting the generality of the foregoing, Seller agrees to hold Buyer harmless from and indemnify Buyer against all Indemnified Amounts with respect to all Purchased Loans relating to or arising out of any violation or alleged violation of any Environmental Law, rule or regulation or any consumer credit laws, including without limitation ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act, that, in each case, results from anything other than Buyer’s gross negligence or willful misconduct. In any suit, proceeding or action brought by Buyer in connection with any Purchased Loan for any sum owing thereunder, or to enforce any provisions of any Purchased Loan, Seller will save, indemnify and hold Buyer harmless from and against all actual out-of-pocket expense (including reasonable attorneys’ fees of outside counsel), actual out-of-pocket loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller. This Section 27 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

28. DUE DILIGENCE

Seller acknowledges that, at reasonable times and upon reasonable notice to Seller, Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable prior written notice to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Purchased Loan Files, Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Loans in the possession or under the control of Seller, any other servicer or subservicer of Seller and/or the Custodian. Seller also shall make available to Buyer upon reasonable advance written notice a knowledgeable financial or accounting officer for the purpose of answering financial or accounting questions respecting the Purchased Loan Files and the Purchased Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may enter into Transactions with Seller based solely upon the information provided by Seller to Buyer and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Loans. Buyer may underwrite such Purchased Loans itself or engage a third party underwriter to perform such underwriting. Seller agrees to reasonably cooperate with Buyer and any third party underwriter reasonably acceptable to Seller in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Loans in the possession, or under the control, of Seller. Seller further agrees that Seller shall reimburse Buyer for any and all actual costs and expenses reasonably incurred by Buyer in connection with Buyer’s activities pursuant to this Section 28 and for Buyer’s actual costs and out-of-pocket expenses incurred in connection with due diligence reviews with respect to Eligible Loans which Seller proposes to make the subject of a Transaction under this Agreement. Notwithstanding the foregoing, (x) Seller’s obligation to reimburse Buyer for Buyer’s out-of-pocket costs and expenses (including legal expenses) incurred in connection with Eligible Loans which Seller proposes to make the subject of a Transaction shall not exceed (1) with respect to each U.S. Purchased Loan, $15,000 with respect to any individual Eligible Loan without Seller’s prior consent and (2) with respect to each Foreign Purchased Loan, an amount to be agreed upon in writing by Seller and Buyer prior to the commencement of due diligence, each acting reasonably and (y) so long as an Event of Default has not occurred and is not continuing, with respect to any due diligence Buyer proposes to perform with respect to any Purchased Loan after the related Purchase Date which would create a reimbursement obligation on the part of Seller, Buyer shall provide to Seller prior written notice of such due diligence activities (including an estimate of the cost) and a reasonable opportunity for Seller to demonstrate to Buyer that such due diligence need not be performed, provided the final determination to perform or not perform such due diligence shall be made by Buyer.

29. SERVICING

(a) Seller and Buyer agree that all Servicing Rights with respect to the Purchased Loans are being transferred hereunder to Buyer on the applicable Purchase Date and such Servicing Rights shall be transferred by Buyer to Seller upon Seller’s payment of the Repurchase Price for such applicable Purchased Loan. Notwithstanding the purchase and sale of the Purchased Loans and Servicing Rights hereby, Seller or, upon request by Seller, Servicer shall be granted a revocable license to exercise the Servicing Rights with respect to the Purchased Loans for the benefit of Buyer and, if Buyer shall exercise its rights to pledge or hypothecate a Purchased Loan prior to the Repurchase Date pursuant to Section 8, Buyer’s assigns (which license shall be deemed automatically revoked upon the occurrence and during the continuance of an Event of Default); provided , however , that the obligations of Seller or Servicer to service the Purchased Loans shall cease, at Seller’s option, upon the payment by Seller to Buyer of the Repurchase Price therefor. Seller shall cause Servicer to service the Purchased Loans pursuant to the Servicing Agreement, in each case, in accordance with Accepted Servicing Practices. Seller shall obtain the written consent of Buyer prior to appointing any third party Servicer for a Purchased Loan or entering into any Servicing Agreement with a Servicer (other than the initial Servicing Agreement with Midland Loan Services as initial Servicer).

(b) Seller agrees that Buyer is the owner of all servicing records, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of Purchased Loans (collectively, the “ Servicing Records ”) so long as the Purchased Loans are subject to this Agreement. Seller grants Buyer a security interest in all servicing fees and rights relating to the Purchased Loans and all Servicing Records to secure the obligation of Seller or Servicer to service in conformity with this Section and any other obligation of Seller to Buyer. Seller covenants to safeguard such Servicing Records which are in Seller’s possession and to deliver them promptly to Buyer or its designee (including the Custodian) at Buyer’s request.

(c) Upon the occurrence and during the continuance of an Event of Default, Buyer may, in its sole discretion, (i) sell its right to the Purchased Loans on a servicing released basis or (ii) terminate any Seller or Servicer of the Purchased Loans with or without cause, in each case without payment of any termination fee to the extent provided in the Servicing Agreement.

(d) Seller shall not employ or permit Servicer to employ sub-servicers to service the Purchased Loans without (x) in the case of U.S. Purchased Loans only, the prior written approval of Buyer in its sole discretion, except to the extent permitted in the applicable Servicing Agreement so long as, such employment of a sub-servicer constitutes a delegation of duties by Servicer which does not relieve Servicer of its primary obligation to perform such duties or (y) in the case of Foreign Purchased Loans, prior to consummating any such appointment, a consultation with Buyer.

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

(f) With respect to each CLO Participation A-1 issued pursuant to a CLO Participation Agreement, in the event of any inconsistency between the provisions of this Section 29 and of each CLO Participation Agreement and the CLO Servicing Agreement, the terms of such CLO Participation Agreement and the CLO Servicing Agreement shall control with respect to such CLO Participation A-1 only.

30. MISCELLANEOUS

(a) All rights, remedies and powers of Buyer hereunder and in connection herewith are irrevocable and cumulative, and not alternative or exclusive, and shall be in addition to all other rights, remedies and powers of Buyer whether under law, equity or agreement. In addition to the rights and remedies granted to it in this Agreement, to the extent this Agreement is determined to create a security interest, Buyer shall have all rights and remedies of a secured party under the UCC or, with respect to Foreign Purchased Loans, the equivalent Requirements of Law in the relevant non-U.S. jurisdiction.

(b) The Transaction Documents may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures.

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

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

(e) Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or be invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(f) This Agreement contains a final and complete integration of all prior expressions by the parties with respect to the subject matter hereof and thereof and shall constitute the entire agreement among the parties with respect to such subject matter, superseding all prior oral or written understandings.

(g) The parties understand that this Agreement is a legally binding agreement that may affect such party’s rights. Each party represents to the other that it has received legal advice from counsel of its choice regarding the meaning and legal significance of this Agreement and that it is satisfied with its legal counsel and the advice received from it.

(h) Should any provision of this Agreement require judicial interpretation, it is agreed that a court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any Person by reason of the rule of construction that a document is to be construed more strictly against the Person who itself or through its agent prepared the same, it being agreed that all parties have participated in the preparation of this Agreement.

(i) The parties recognize that each Transaction is a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended.

(j) The Transaction with respect to the Purchased Loan referred to as 190 Bowery shall remain as a Transaction for all purposes under the Agreement, but shall not be counted towards the Facility Amount for purposes of determining availability with respect to proposed Purchased Loans or for purpose of Section 3(a)(i) of this Agreement.

31. TAXES

(a) Any and all payments by or on account of any obligation of Seller under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Tax from any such payment, then Seller shall make (or cause to be made) such deduction or withholding and shall timely pay (or cause to be timely paid) the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable shall be increased by Seller as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 31) Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) Seller shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Seller shall indemnify Buyer, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 31) payable or paid by Buyer or required to be withheld or deducted from a payment to Buyer, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail calculation of the amount of such payment or liability (together with a certified copy of the return reporting such payment, if applicable or other evidence of such payment reasonably satisfactory to Seller) delivered to Seller by Buyer shall be conclusive absent manifest error.

(d) Buyer shall deliver to Seller such documentation as prescribed by applicable law or as reasonably requested by Seller as will enable Seller to determine whether or not payments hereunder or under any other Transaction Document to or for the benefit of Buyer (or any assignee or participant thereof) is subject to tax withholding, backup withholding or information reporting requirements. Without limiting the generality of the foregoing, if Buyer (or an assignee or participant thereof) is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Transaction Document, Buyer shall deliver to Seller, at the time or times prescribed by applicable law and otherwise as reasonably requested by Seller, such properly completed and executed documentation as prescribed by applicable law or as reasonably requested by Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. Without limiting the generality of the foregoing:

(i) On or prior to the date on which Buyer becomes a Buyer under this Agreement and prior to the entry in the Register of any assignment to a U.S. Person (and from time to time thereafter as required by applicable law or upon the reasonable request of Seller) Buyer shall deliver to Seller two (2) executed originals of IRS Form W-9 (or successor forms) certifying that Buyer (and/or such assignee) is exempt from U.S. federal backup withholding tax.

(ii) On or prior to entry in the Register of an assignment to an assignee that is not a U.S. Person (and from time to time thereafter as required by applicable law or upon the reasonable request of Seller) Buyer shall deliver to Seller two (2) executed originals of IRS Forms W-8ECI, W-8BEN, W-8BEN-E, W-8IMY (or any successor forms thereof, as applicable) or other applicable form, certificate or document prescribed by the United States Internal Revenue Service certifying as to such person’s entitlement to exemption from, or reduction in the rate of, withholding Taxes.

(e) If a payment made to Buyer (or any assignee or participant thereof) under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such person were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such person shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA and to determine that such person has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (c), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(f) Buyer may not effect an assignment (and may not reflect such assignment in the Register) to an assignee that is not a U.S. Person, unless such assignee delivers a valid U.S. branch withholding certificate on IRS Form W-8IMY (or any successor thereto) evidencing its agreement with Buyer and Seller to be treated as a U.S. Person for U.S. federal withholding purposes.

(g) Buyer (and each applicable assignee and participant) agrees that if any form or certification it previously delivered (on behalf of itself or any assignee or any participant thereof) expires or becomes obsolete or inaccurate in any respect, it shall update (in the case of an assignee or participant, by obtaining such updated form for such person) such form or certification or promptly notify Seller in writing of its legal inability to do so.

(h) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 31 (including by the payment of additional amounts pursuant to this Section 31), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 31 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 31(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 31(h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 31(h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 31(h) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

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

(j) Buyer (and each of its designees) and Parlex 2 UK each confirm that it is entitled to full exemption from tax imposed by the United Kingdom on interest under the terms of the double taxation agreement between the United Kingdom and the United States of America. Buyer (and each of its designees) and Parlex 2 AU each confirm that it is entitled to full exemption from tax imposed by Australia on interest under the terms of the Convention between the Government of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income [1983] ATS 16 and Protocol [2003] ATS 14 .

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

(l) Each party’s obligations under this Section 31 shall survive any assignment of rights by, or the replacement of, Buyer, the termination of the Transactions and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

32. JOINT AND SEVERAL OBLIGATIONS

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

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

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first written above.


BUYER :

CITIBANK, N.A.

By:		/s/ Richard B. Schlenger
Name:		Richard B. Schlenger
Title:		Authorized Signatory

[SIGNATURES CONTINUE ON NEXT PAGE]

Signature Page to Fourth Amended and Restated Master Repurchase Agreement


SELLER :

PARLEX 2 FINANCE, LLC ,
a Delaware limited liability company

By:		/s/ Douglas N. Armer
Name		Douglas N. Armer:
Title:		Managing Director, Head of Capital Markets and Treasurer

PARLEX 2A FINCO, LLC ,
a Delaware limited liability company

By:		/s/ Douglas N. Armer
Name		Douglas N. Armer:
Title:		Managing Director, Head of Capital Markets and Treasurer

PARLEX 2 UK FINCO, LLC ,
a Delaware limited liability company

By:		/s/ Douglas N. Armer
Name		Douglas N. Armer:
Title:		Managing Director, Head of Capital Markets and Treasurer

PARLEX 2 EUR FINCO, LLC ,
a Delaware limited liability company

By:		/s/ Douglas N. Armer
Name		Douglas N. Armer:
Title:		Managing Director, Head of Capital Markets and Treasurer

PARLEX 2 AU FINCO, LLC ,
a Delaware limited liability company

By:		/s/ Douglas N. Armer
Name		Douglas N. Armer:
Title:		Managing Director, Head of Capital Markets and Treasurer

[SIGNATURES CONTINUE ON NEXT PAGE]


PARLEX 2 CAD FINCO, LLC ,
a Delaware limited liability company

By:		/s/ Douglas N. Armer
Name		Douglas N. Armer:
Title:		Managing Director, Head of Capital Markets and Treasurer

Exhibit 10.2

EXECUTION VERSION

FIFTH AMENDMENT TO LIMITED GUARANTY

THIS FIFTH AMENDMENT TO LIMITED GUARANTY (this “ Amendment ”) is made as of February 15, 2019 (the “ Effective Date ”), by and between BLACKSTONE MORTGAGE TRUST, INC. , a Maryland corporation (“ Guarantor ”), and CITIBANK, N.A. , a national banking association (“ Buyer ”).

RECITALS:

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

WHEREAS , Original Sellers, Parlex 2 UK Finco, LLC, a Delaware limited liability company (“ Parlex 2 UK ”) and Parlex 2 EUR Finco, LLC, a Delaware limited liability company (“ Parlex 2 EUR ”), and Buyer entered into that certain Second Amended and Restated Master Repurchase Agreement, dated as of March 31, 2017 (the “ Second A&R Repurchase Agreement ”), which Second A&R Repurchase Agreement amended, restated and replaced in its entirety the First A&R Repurchase Agreement, as amended by that certain First Amendment to Master Repurchase Agreement, dated as of December 21, 2017 and that certain Second Amendment to Master Repurchase Agreement, dated as of March 30, 2018;

WHEREAS , in connection with the Original Repurchase Agreement, Guarantor entered into that certain Limited Guaranty dated as of June 12, 2013, as amended by that certain First Amendment to Limited Guaranty dated as of November 20, 2013, as further amended by that certain Second Amendment to Limited Guaranty, dated as of February 24, 2014, as further amended by that certain Third Amendment to Limited Guaranty, dated as of March 31, 2017 (collectively, the “ Original Guaranty ”), in favor of Buyer, guaranteeing certain obligations of Original Sellers, Parlex 2 UK and Parlex 2 EUR;

WHEREAS , Original Sellers, Parlex 2 UK, Parlex 2 EUR, Parlex 2 AU Finco, LLC, a Delaware limited liability company (“ Parlex 2 AU ”), and Buyer entered into that certain Third Amended and Restated Master Repurchase Agreement dated as of October 12, 2018 (as the same may be amended, supplemented, extended, restated, replaced or otherwise modified from time to time, the “ Third A&R Repurchase Agreement ”), which Third A&R Repurchase Agreement amended, restated and replaced in its entirety the Second A&R Repurchase Agreement;

WHEREAS , in connection with the Third A&R Repurchase Agreement, Guarantor and Buyer entered into that certain Fourth Amendment to Limited Guaranty dated as of October 12, 2018 (the “ Fourth Amendment to Guaranty ” together with the Original Guaranty, the “ Guaranty ”);

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

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

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

AGREEMENT:

1. A MENDMENTS TO G UARANTY . The Guaranty is hereby amended and modified as follows:

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

2. R EAFFIRMATION OF G UARANTY . Guarantor hereby (i) acknowledges and consents to the Fourth A&R Repurchase Agreement and the execution and delivery of this Amendment and (ii) represents, warrants and covenants that notwithstanding the execution and delivery of this Amendment and the Fourth A&R Repurchase Agreement, all of Guarantor’s obligations under the Guaranty remain in full force and effect and the same are hereby irrevocably and unconditionally ratified and confirmed by Guarantor in all respects.

3. G UARANTOR ’ S R EPRESENTATIONS . Guarantor represents and warrants that (i) Guarantor has taken all necessary action to authorize the execution, delivery and performance of this Amendment, (ii) this Amendment has been duly executed and delivered by or on behalf of Guarantor and constitutes the legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles, (iii) no Event of Default has occurred and is continuing, and no Event of Default will occur as a result of the execution, delivery and performance by Guarantor of this Amendment, and (iv) any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Guarantor of this Amendment has been obtained and is in full force and effect (other than consents, approvals, authorizations, orders, registrations or qualifications that if not obtained, are not reasonably likely to have a Material Adverse Effect).

4. G OVERNING L AW ; W AIVER OF J URY T RIAL ; C ONSENT TO J URISDICTION . This Amendment shall be governed in accordance with the terms and provisions of Sections 19, 21 and 27(c) of the Guaranty, mutatis mutandis .

5. S EVERABILITY . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment.

6. C OUNTERPARTS . This Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures.

7. S UCCESSORS AND A SSIGNS . This Amendment shall inure to the benefit of and shall be binding on the parties hereto and their respective successors and assigns.

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

[NO FURTHER TEXT ON THIS PAGE]

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


GUARANTOR :

BLACKSTONE MORTGAGE TRUST, INC.,
a Maryland corporation

By:	/s/ Douglas N. Armer
	Name:	Douglas N. Armer
	Title:	Executive Vice President, Capital Markets, and Treasurer

[Signatures Continued on Next Page]

[Fifth Amendment to Limited Guaranty – Citi/BXMT]


BUYER:

CITIBANK, N.A.

By:		/s/ Richard B. Schlenger
		Name: Richard B. Schlenger
		Title: Authorized Signatory

[Fifth Amendment to Limited Guaranty – Citi/BXMT]

Exhibit 10.3

EXECUTION VERSION

AMENDMENT NO. 5 TO AMENDED AND

RESTATED MASTER REPURCHASE AGREEMENT

AMENDMENT NO. 5 TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of February 22, 2019 (this “ Amendment ”), by and among PARLEX 15 FINCO, LLC, a Delaware limited liability company, (“ Master Seller ”), on behalf of itself and each Series Seller, and DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, a branch of a foreign banking institution (“ Buyer ”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).

RECITALS

WHEREAS, Master Seller and Buyer are parties to that certain Amended and Restated Master Repurchase Agreement, dated as of February 9, 2017 which amended and restated that certain Master Repurchase Agreement, dated as of August 2, 2016, by and between Master Seller and Buyer, as amended by Amendment No. 1 to Master Repurchase Agreement and Guaranty, dated as of March 24, 2017, as further amended by Amendment No. 2 to Amended and Restated Master Repurchase Agreement and Omnibus Amendment to Confirmations, dated as of October 17, 2017, as further amended by Amendment No. 3 to Amended and Restated Master Repurchase Agreement, dated as of October 30, 2018, and as further amended by Amendment No. 4 to Amended and Restated Master Repurchase Agreement, dated as of November 20, 2018 (as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “ Repurchase Agreement ”);

WHEREAS, Master Seller and Buyer have agreed to further amend certain provisions of the Repurchase Agreement in the manner set forth herein, and Guarantor hereby agrees to make the acknowledgements set forth herein.

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

SECTION 1. Repurchase Agreement Amendments . Master Seller and Buyer agree as follows with respect to the Repurchase Agreement:

The definition of “ Maximum Amount ,” as set forth in Section 2(a) of the Repurchase Agreement is hereby amended by replacing the dollar figure “$1,100,000,000” set forth therein with the dollar figure “$1,160,000,000”.

SECTION 2. Conditions Precedent . This Amendment and its provisions shall become effective on the date hereof (the “ Amendment Effective Date ”) provided that this Amendment is duly executed and delivered by a duly authorized officer of each of Master Seller, Buyer and Guarantor.

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

SECTION 4. Acknowledgments of Guarantor . Guarantor hereby acknowledges the execution and delivery of this Amendment by Master Seller and Buyer and Guarantor agrees that it continues to be bound by the Guaranty notwithstanding the execution and delivery of this Amendment and the impact of the changes set forth herein.

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

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

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

SECTION 8. Expenses . Seller agrees to pay and reimburse Buyer for all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with the preparation, execution and delivery of this Amendment in accordance with the Repurchase Agreement.

-2-

SECTION 9. GOVERNING LAW . THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

[SIGNATURES FOLLOW]

-3-

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


MASTER SELLER :

PARLEX 15 FINCO, LLC, a Delaware limited liability company

By:	/s/ Thomas C. Ruffing
	Name:	Thomas C. Ruffing
	Title:	Managing Director, Head of Asset Management

ACKNOWLEDGED AND AGREED:

GUARANTOR :

BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation

By:	/s/ Thomas C. Ruffing
	Name:	Thomas C. Ruffing
	Title:	Managing Director, Head of Asset Management

[Signature Page to Amendment No. 5 to Amended and Restated Master Repurchase Agreement]


BUYER :

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH

By:	/s/ Thomas Rugg
	Name:	Thomas Rugg
	Title:	Managing Director

By:	/s/ Murray Mackinnon
	Name:	Murray Mackinnon
	Title:	Director

[Signature Page to Amendment No. 5 to Amended and Restated Master Repurchase Agreement]

Exhibit 10.4

FORM OF

RESTRICTED STOCK AWARD AGREEMENT

(2018 Stock Incentive Plan)

THIS RESTRICTED STOCK AGREEMENT (the “ Agreement ”), is made effective as of the date set forth on the signature page (the “ Signature Page ”) attached hereto (the “ Date of Grant ”), between Blackstone Mortgage Trust, Inc., a Maryland corporation (the “ Company ”) and the participant identified on the Signature Page attached hereto (the “ Participant ”).

R E C I T A L S :

WHEREAS, the Company has adopted the Blackstone Mortgage Trust, Inc. 2018 Stock Incentive Plan (the “ Plan ”), the terms of which Plan are incorporated herein by reference and made a part of this Agreement, and capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

WHEREAS, the Company has determined that it would be in the best interests of the Company and its stockholders to grant the restricted stock award provided for herein to the Participant pursuant to the Plan and the terms set forth herein;

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1. Grant of Restricted Stock . Subject to the terms and conditions of the Plan and the additional terms and conditions set forth in this Agreement, the Company hereby grants to the Participant the number of shares of Restricted Stock appearing on the signature page attached hereto (the “ Award ”).

2. Vesting of Restricted Stock .

(a) Vesting Schedule . The Award shall initially be unvested. Provided that the Participant has not undergone a Termination (except as provided below) and a Manager Termination Event has not occurred, if the Participant is a Manager Employee, the Award shall vest in substantially equal quarterly installments over the three (3) year period following the Date of Grant; provided that the exact amounts and dates of each installment vesting shall be determined by the Company.

(b) Termination . Except as provided below, upon any Manager Termination Event, Qualifying Manager Termination or if the Participant undergoes a Termination, this Award shall be treated in accordance with the Plan.

(i) Upon the Participant’s Termination on account of the Retirement of the Participant, (A) 50% of the then unvested shares of Restricted Stock subject to the Award shall continue to vest in accordance with the vesting schedule and on the vesting dates set forth in Section 2(a) above, subject to any accelerated vesting on account of a Qualifying Manager Termination, Change in Control or as otherwise provided in the Plan, as applicable, provided that in applying this Retirement vesting provision, each vesting tranche will be reduced by 50%, and (B) all other unvested shares of Restricted Stock shall immediately be forfeited without any further action by the Company or the Participant, and without any payment of consideration therefor.

(ii) For purposes hereof, “ Retirement ” shall mean the voluntary Termination of the Participant by the Participant after (A) the Participant has reached age 65 and has at least five full years of service with the Company and its Affiliates (including the Manager and its Affiliates) (“ Years of Service ”) or (B) (x) the Participant’s age plus Years of Service totals at least 65, (y) the Participant has reached age 55, and (z) the Participant has had a minimum of five Years of Service.

3. Book Entry; Certificates . The Company shall recognize the Participant’s ownership through uncertificated book entry. If elected by the Company, certificates evidencing the Common Stock granted hereunder may be issued by the Company and any such certificates shall be registered in the Participant’s name on the stock transfer books of the Company promptly after the date hereof, but shall remain in the physical custody of the Company or its designee at all times prior to the later of (x) the vesting of the Award pursuant to this Agreement and (y) the expiration of any transfer restrictions set forth in this Agreement or otherwise applicable to the Common Stock subject to the Award. As soon as practicable following such time, any certificates for the Common Stock subject to the Award shall be issued to the Participant or to the Participant’s legal guardian or representative along with the stock powers relating thereto. No certificates shall be issued for fractional shares. To the extent required by the Company, the Participant shall deliver to the Company a stock power, duly endorsed in blank, relating to any portion of the Award that has not previously vested. However, the Company shall not be liable to the Participant for damages relating to any delays in issuing the certificates (if any) to the Participant, any loss by the Participant of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves.

4. Rights as a Stockholder . The Participant shall be the record owner of the shares of Restricted Stock until or unless such shares are forfeited pursuant to the terms of this Agreement, and as record owner shall be entitled to all rights of a common stockholder of the Company, including, without limitation, participating in gains and losses of the Company, voting rights and rights to dividends with respect to shares of Restricted Stock; provided that shares of Restricted Stock shall be subject to the limitations on transfer and encumbrance set forth in Section 7 .

5. Restrictions . Any Common Stock issued to the Participant pursuant to the Award shall be subject to such stop transfer orders and other restrictions as the Committee (or its designee) may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Common Stock are listed and any applicable U.S. or non-U.S. federal, state or local laws, and the Committee (or its designee) may cause a notation or notations to be entered into the books and records of the Company to make appropriate reference to such restrictions.

6. No Right to Continued Employment or Service. Neither the Plan nor this Agreement nor the granting of the Award hereunder shall impose any obligation on the Company or any Affiliate of the Company to continue the employment or engagement of the Participant. Further, the Company or any Affiliate of the Company (as applicable) may at any time terminate the Participant, free from any liability or claim under the Plan or this Agreement, except as otherwise expressly provided herein.

7. Transferability .

(a) Shares of Restricted Stock may not, at any time prior to becoming vested pursuant to the terms of this Agreement, be Transferred and any such purported Transfer shall be void and unenforceable against the Company or any Affiliate of the Company; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

(b) “ Transfer ” shall mean (in either the noun or the verb form, including with respect to the verb form, all conjugations thereof within their correlative meanings) with respect to any security, the gift, sale, assignment, transfer, pledge, hypothecation or other disposition (whether for or without consideration, whether directly or indirectly, and whether voluntary, involuntary or by operation of law) of such security or any interest therein.

8. Securities Laws; Cooperation . Upon the vesting of the Award (or any portion thereof), the Participant will make or enter into such written representations, warranties and agreements as the Company may request in order to comply with applicable securities laws, the Plan or with this Agreement.

9. Notices . Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company or its Affiliates for such Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

10. Choice of Law . This Grant shall be governed by and construed in accordance with the laws of the state of Maryland without regard to conflicts of laws.

11. Restricted Stock Subject to Plan . By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. Shares of Restricted Stock granted hereunder are subject to the Plan. The terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

12. Signature in Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[ Signatures on next page. ]

IN WITNESS WHEREOF, the parties have caused this Agreement to be effective as of the date set forth on the Company’s signature page.


		Participant


		Name:

		Blackstone Mortgage Trust, Inc.


		Name:
		Title:

		Dated:


Number of Shares of Restricted Stock		[•]
Date of Grant		[•]

Exhibit 10.5

FORM OF

RESTRICTED STOCK AWARD AGREEMENT

(2018 Manager Incentive Plan)

R E C I T A L S :

WHEREAS, the Company has adopted the Blackstone Mortgage Trust, Inc. 2018 Manager Incentive Plan (the “ Plan ”), the terms of which Plan are incorporated herein by reference and made a part of this Agreement, and capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

2. Vesting of Restricted Stock .

(a) Vesting Schedule . The Award shall initially be unvested. Provided that a Termination has not occurred, the Award shall vest in substantially equal quarterly installments over the three (3) year period following the Date of Grant; provided that the exact amounts and dates of each installment vesting shall be determined by the Company.

(b) Termination . Upon a Termination or Qualifying Termination this Award shall be treated in accordance with the Plan.

6. No Right to Continued Service. Neither the Plan nor this Agreement nor the granting of the Award hereunder shall impose any obligation on the Company or any Affiliate of the Company to continue the engagement of the Participant.

7. Transferability .

9. Notices . Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address as set forth on the Signature Page or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

10. Choice of Law . This Grant shall be governed by and construed in accordance with the laws of the state of Maryland without regard to conflicts of laws.

[ Signatures on next page. ]

IN WITNESS WHEREOF, the parties have caused this Agreement to be effective as of the date set forth on the Company’s signature page.

Participant

BXMT Advisors L.L.C.

By:

Name:

Title:

Blackstone Mortgage Trust, Inc.

Name:

Title:

Dated:

Participant Address:


Number of Shares of Restricted Stock		[•]
Date of Grant		[•]

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen D. Plavin, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Blackstone Mortgage Trust, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 23, 2019

/s/ Stephen D. Plavin

Stephen D. Plavin

Chief Executive Officer

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Anthony F. Marone, Jr., certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Blackstone Mortgage Trust, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

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)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 23, 2019

/s/ Anthony F. Marone, Jr.

Anthony F. Marone, Jr.

Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Blackstone Mortgage Trust, Inc. (the “ Company ”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “ Report ”), I, Stephen D. Plavin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 23, 2019

/s/ Stephen D. Plavin

Stephen D. Plavin

Chief Executive Officer

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Blackstone Mortgage Trust, Inc. (the “ Company ”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “ Report ”), I, Anthony F. Marone, Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 23, 2019

/s/ Anthony F. Marone, Jr.

Anthony F. Marone, Jr.

Chief Financial Officer