Exhibit 10.7

 

 

PARENT GUARANTY AND INDEMNITY

made by

BLACKSTONE MORTGAGE TRUST, INC.,

as Guarantor,

in favor of

MORGAN STANLEY BANK, N.A.,

as Buyer

 

 

Paul Hastings LLP

75 East 55th Street

New York, NY 10022

 

 

Dated: March 3, 2014

 

 

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PARENT GUARANTY AND INDEMNITY

This Parent Guaranty and Indemnity (the “Guaranty”) is made as of March 3, 2014
by BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation (the “Guarantor”) in
favor of MORGAN STANLEY BANK, N.A., a national banking association “Morgan
Stanley” and together with its successors and assigns, the “Buyer”).

W I T N E S S E T H:

WHEREAS, Morgan Stanley and Parlex 6 UK Finco, LLC, a Delaware limited liability
company (the “Seller”), are parties to that certain Master Repurchase and
Securities Contract Agreement dated as of the date hereof (as said agreement may
be modified, amended or restated from time to time, the “Repurchase Agreement”
and together with all other Transaction Documents now or hereafter executed by
the Seller in connection therewith, collectively, the “Repurchase Documents”).

WHEREAS, Guarantor indirectly owns one hundred percent (100%) of the legal and
beneficial limited liability company interest in the Seller, and the Guarantor
will derive benefits, directly and indirectly, from the execution, delivery and
performance by the Seller of the Repurchase Documents, and the transactions
contemplated by the Repurchase Agreement (collectively, the “Transactions”); and

WHEREAS, it is a condition to the effectiveness of the Repurchase Agreement and
the consummation of the Transactions that the Guarantor execute and deliver this
Guaranty for the benefit of the Buyer.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor hereby covenants and agrees as
follows:

Section 1. Capitalized Terms. All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in
the Repurchase Agreement.

Section 2. Guaranty.

(a) Subject to the Guaranteed Cap Amount (defined below), Guarantor hereby
unconditionally and irrevocably guarantees to the Buyer the due and punctual
payment when due, whether at the stated due date, by acceleration or otherwise,
of any and all Repurchase Obligations (all the foregoing obligations and
undertakings are collectively referred to hereinafter as the “Guaranteed
Obligations”). “Guaranteed Cap Amount” shall mean twenty-five percent (25%) of
the then-currently outstanding Purchase Price advanced to Seller pursuant to,
and in accordance with, the Repurchase Documents.

(b) This Guaranty is an absolute and unconditional guaranty of payment when due
under the Repurchase Documents, and not of performance or collection of any
indebtedness contained in or arising under the Repurchase Documents. This
Guaranty is in no way conditioned upon any attempt to collect from the Seller or
upon any other event or contingency, and shall be binding upon and enforceable
against the Guarantor without regard to the validity or enforceability of the
Repurchase Documents, or of any term thereof. If for any reason the Seller shall
fail or be unable duly and punctually to pay any such amount when due under the
Repurchase Documents, the Guarantor will forthwith pay, if not already paid by
the Seller, the same immediately upon written demand.

(c) In case any of the Repurchase Documents shall be terminated as a result of
the rejection thereof by any trustee, receiver or liquidating agent of the
Seller or any of its properties in any bankruptcy, insolvency, reorganization,
arrangement, composition, readjustment, liquidation, dissolution

 

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or similar proceeding, the Guarantor’s obligations hereunder shall continue to
the same extent as if such agreement had not been so rejected. The Guarantor
agrees that this Guaranty shall continue to be effective or shall be,
reinstated, as the case may be, if at any time payment to Buyer of the
Guaranteed Obligations or any part thereof is rescinded or must otherwise be
returned by Buyer upon the insolvency, bankruptcy or reorganization of the
Seller, or otherwise, as though such payment to Buyer had not been made.

(d) The Guarantor shall pay on demand all out-of-pocket costs, expenses and
damages actually incurred (including, without limitation, reasonable attorneys’
fees and disbursements of outside counsel) in connection with Buyer’s
enforcement of the obligations of the Guarantor under this Guaranty.

Section 3. Obligations Unconditional. The Guarantor hereby agrees that its
obligations under this Guaranty shall be continuing and unlimited, shall not be
subject to any non-compulsory counterclaim, set-off, deduction or defense (other
than payment) based upon any claim the Guarantor may have against Buyer or the
Seller or any other Person, and shall remain in full force and effect without
regard to, and shall not be released, discharged or in any way affected by any
circumstance or condition (whether or not the Guarantor shall have any knowledge
or notice thereof) whatsoever that might constitute a legal or equitable
discharge or defense, and shall be unconditional, irrespective of:

(i) the validity, enforceability, avoidance, novation or subordination of any of
the Guaranteed Obligations, the Repurchase Documents, this Guaranty, or any
other document relating thereto;

(ii) the absence of any attempt by, or on behalf of, Buyer to collect, or to
take any other action to enforce, all or any part of the Guaranteed Obligations,
whether from or against the Seller, the Guarantor, or any other Person or
entity;

(iii) the election of any remedy by, or on behalf of, Buyer with respect to all
or any part of the Guaranteed Obligations;

(iv) the waiver, rescission, compromise, acceleration, consent, extension,
forbearance or granting of any indulgence by, or on behalf of, Buyer with
respect to, or the amendment or modification of, or any release of any party
from, any of the terms and provisions of, any provision of the Repurchase
Documents or any related document, except to the extent expressly agreed to by
Buyer in writing;

(v) the failure of Buyer to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral, if any,
for the Guaranteed Obligations;

(vi) the failure of Buyer to assert any claim or demand or to enforce any right
or remedy against the Seller or any other Person under the provisions of the
Repurchase Documents or any related document or other agreement or otherwise;

(vii) the disallowance, under Section 502 of the Bankruptcy Code, of all or any
portion of the claims of Buyer for repayment of all or any part of the
Guaranteed Obligations or any expenses associated therewith;

(viii) the election by, or on behalf of, Buyer, in any proceeding instituted
under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.)
(the “Bankruptcy Code”), of the application of Section 1111(b)(2) of the
Bankruptcy Code;

 

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(ix) any change in respect of the Seller or the Guarantor, including, without
limitation, as a result of any sale of assets, merger, consolidation,
dissolution, liquidation, recapitalization, or other change of legal form or
status, whether or not permitted under the Repurchase Documents;

(x) the release, exchange, waiver or foreclosure of any security held by Buyer
for any of the Guaranteed Obligations or the invalidity or nonperfection of any
security interest securing the Guaranteed Obligations or this Guaranty, or any
other defect of any kind pertaining to the Guaranteed Obligations or any
guaranty or collateral security in respect thereof, except to the extent such
release or substitution of Guarantor expressly relieves Guarantor of any of the
Guaranteed Obligations;

(xi) the release or substitution of the Seller or the Guarantor; or

(xii) any other circumstance that might otherwise, but for this specific
agreement of the Guarantor to the contrary, result in a discharge of or the
exoneration of the Guarantor hereunder, at law or in equity, it being the intent
of the parties hereto that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

Section 4. Enforcement. The Buyer may proceed directly against the Guarantor to
collect and recover the full amount (or any portion) of the Guaranteed
Obligations, without first proceeding against the Seller or any other Person or
entity, or against any security or collateral for the Guaranteed Obligations.

Section 5. Waivers. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of receivership or
bankruptcy of the Seller or the Guarantor, protest or notice (except any
applicable notices required to be given to the Seller under the Repurchase
Documents) with respect to the Guaranteed Obligations, all setoffs and
counterclaims and all presentments, demands for performance, notices of
nonperformance (except any applicable notices required to be given under the
Repurchase Documents), protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty and all other demands (except any
applicable demands required to be given under the Repurchase Documents)
whatsoever (and shall not require that the same be made on the Seller or the
Guarantor as a condition precedent to the obligations of the Guarantor
hereunder, except as required by the Repurchase Documents), and covenants that
this Guaranty will not be discharged, except by complete payment (in cash) of
the Guaranteed Obligations and any other obligations contained herein and the
termination of the Repurchase Documents. The Guarantor further waives all
notices of the existence, creation or incurring of new or additional
indebtedness, arising either from loans extended to the Seller, any other Person
under the Repurchase Documents, the Guarantor or otherwise under any related
document.

Buyer is hereby authorized, without notice or demand and without otherwise
limiting Guarantor’s obligations hereunder, from time to time, to the extent
permitted under the Repurchase Documents, (a) to renew, extend, accelerate or
otherwise change the time for payment of, or other terms relating to, all or any
part of the Guaranteed Obligations, or to otherwise modify, amend or change the
terms of the Repurchase Documents to which Buyer is a party or any other related
document; (b) to accept partial payments on all or any part of the Guaranteed
Obligations; (c) to take and hold security or collateral for the payment of all
or any part of the Guaranteed Obligations, this Guaranty, or any other
guaranties of all or any part of the Guaranteed Obligations or other liabilities
of the Guarantor or the Seller; (d) to exchange, enforce, waive and release any
such security or collateral; (e) to apply such security or collateral and direct
the order or manner of sale thereof as in its discretion it may determine;
(f) to settle, release, exchange, enforce, waive, compromise, collect or
otherwise liquidate all or any part of the Guaranteed Obligations, and any
security or collateral for the Guaranteed Obligations; and (g) to permit the
addition of any additional Seller under the Repurchase Documents to which Buyer
is a party. Any of the foregoing may be done in any manner in accordance with
the Repurchase Documents, without affecting or impairing the obligations of the
Guarantor hereunder.

 

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Section 6. Setoff. At any time after all or any part of the Guaranteed
Obligations have become due and payable, Buyer may, without notice to the
Guarantor and regardless of the acceptance of any security or collateral for the
payment hereof, appropriate and apply toward the payment of all or any part of
the Guaranteed Obligations (i) any indebtedness due or to become due from Buyer
to the Guarantor, and (ii) any moneys, credits or other property belonging to
the Guarantor, at any time held by or coming into the possession of Buyer or its
affiliates.

Section 7. Financial Information. The Guarantor hereby assumes responsibility
for keeping itself informed of the financial condition of the Seller and any and
all endorsers and/or other guarantors of all or any part of the Guaranteed
Obligations, and of all other circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations (or any part thereof) that diligent inquiry would
reveal, and the Guarantor hereby agrees that the Buyer shall have no duty to
advise the Guarantor of information known to it regarding such condition or any
such circumstances.

Section 8. Representations and Warranties. The Guarantor hereby represents and
warrants to the Buyer that as of the date hereof and throughout the term of this
Guaranty:

(a) Existence. The Guarantor (a) is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation, (b) has all
requisite power, and has all governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) is qualified to do business, validly
existing and is, to the extent determinable, in good standing, in all other
jurisdictions in which the nature of the business conducted by it requires such
qualification.

(b) Action. The Guarantor has all necessary power, authority and legal right to
execute, deliver and perform its obligations under this Guaranty; the execution,
delivery and performance by the Guarantor has been duly authorized by all
necessary action on its part; and this Guaranty has been duly and validly
executed and delivered by the Guarantor and constitutes a legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms except as enforceability may be limited or varied by
bankruptcy, insolvency, reorganization, liquidation or other similar laws of
general application relating to enforcement of the rights of a creditor and by
general equitable principals.

(c) Litigation. Except as previously disclosed in writing to Buyer as of the
date hereof, there are no actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending or, to
Guarantor’s Knowledge after due inquiry, threatened in writing) or other legal
or arbitrable proceedings affecting the Guarantor or its Subsidiaries or, to
Guarantor’s Knowledge after due inquiry, affecting any of the Property of any of
them before any Governmental Authority that (i) questions or challenges the
validity or enforceability of this Guaranty or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim or
claims against the Guarantor in an aggregate amount greater than $25,000,000,
with respect to the Guarantor, or (iii) requires filing with the Securities and
Exchange Commission in accordance with the 1934 Act or any rules thereunder.

(d) No Breach. The execution and delivery of this Guaranty does not and will not
conflict with or result in a breach of the articles of incorporation or by-laws
of the Guarantor or any applicable law, rule or regulation, or any order, writ,
injunction or decree of any Governmental Authority, or, any other material
agreement or instrument to which the Guarantor or any of its Subsidiaries is a
party

 

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or by which any of them or any of their Property is bound or to which any of
them is subject, or constitute a default under any such material agreement or
instrument or result in the creation or imposition of any Lien upon any Property
of the Guarantor or any of its Subsidiaries pursuant to the terms of any such
agreement or instrument.

(e) Approvals. No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority or any securities exchange are
necessary for the execution, delivery or performance by the Guarantor under this
Guaranty for the legality, validity or enforceability hereof.

(f) True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Guarantor to the Buyer in connection with the negotiation, preparation or
delivery of this Guaranty and the Repurchase Documents or included herein or
therein or delivered pursuant hereto or thereto, when taken as a whole, (x) do
not contain any untrue statement of material fact and (y) contain all statements
of material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, true. All written information
furnished after the date hereof by or on behalf of the Guarantor to the Buyer in
connection with this Guaranty or the other Repurchase Documents and the
transactions contemplated hereby and thereby, will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified.

(g) Financial Covenants. Guarantor hereby represents and warrants that, as of
the Closing Date, the financial covenants set forth in Sections 9(g) through
9(j) of this Guaranty are consistent with and are no more or less restrictive
than the financial covenants currently made by Guarantor pursuant to the other
guarantees entered into by Guarantor in connection with the (i) Master
Repurchase Agreement dated as of May 21, 2013 between Bank of America, N.A., as
buyer, and Parlex 1 Finance, LLC, as seller (as the same has been and may be
amended, supplemented or otherwise modified from time to time), (ii) Master
Repurchase Agreement dated as of June 12, 2013 between Citibank, N.A., as buyer,
and Parlex 2 Finance, LLC, as seller (as the same has been and may be amended,
supplemented or otherwise modified from time to time), (iii) Master Repurchase
Agreement dated as of June 28, 2013 between JPMorgan Chase Bank, National
Association (“JPM”), as buyer, and Parlex 4 Finance, LLC, as seller (as the same
has been and may be amended, supplemented or otherwise modified from time to
time), and (iv) Master Repurchase Agreement dated as of December 20, 2013
between JPM, as buyer, and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC, as
sellers (as the same may be amended, supplemented or otherwise modified from
time to time). The foregoing representation is made only as of the Closing Date
and shall not be made or remade, or deemed to be made or remade, at any time
after the Closing Date.

Section 9. Covenants of the Guarantor. The Guarantor covenants and agrees with
the Buyer that, until payment in full of all Guaranteed Obligations:

(a) Financial Statements, Reports, etc. The Guarantor shall deliver to Buyer:

(i) The reports required to be delivered by Guarantor pursuant to Article 11(j)
of the Repurchase Agreement on the dates required thereby; and

(ii) such other reports as Buyer shall reasonably require.

(b) Litigation. The Guarantor will promptly, and in any event within five
(5) Business Days after Guarantor’s receipt of service of process on any of the
following, give to the Buyer notice of all litigation, actions suits,
arbitrations, investigations (including, without limitation, any of the

 

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foregoing which are pending or, to Guarantor’s Knowledge after due inquiry,
threatened in writing) or other legal or arbitrable proceedings affecting the
Guarantor or any of its Subsidiaries before any Governmental Authority that
(i) questions or challenges the validity or enforceability of this Guaranty or
any action to be taken by Guarantor in connection therewith, or (ii) makes a
claim or claims against the Guarantor in an aggregate amount greater than
$25,000,000.

(c) Existence, etc. The Guarantor will:

(i) preserve and maintain its legal existence and all of its material rights,
privileges, licenses and franchises;

(ii) comply with the requirements of all applicable laws, rules, regulations and
orders of Governmental Authorities (including, without limitation, all
environmental laws);

(iii) keep adequate records and books of account, in which complete entries will
be made in accordance with GAAP consistently applied;

(iv) not move its chief executive office from its address as of the date hereof
unless it shall have provided the Buyer ten (10) days’ prior written notice of
such change;

(v) pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its Property prior to the
date on which penalties attach thereto, other than any such taxes, assessments,
governmental charges or levies that are being appropriately contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been maintained in accordance with GAAP; and

(vi) permit representatives of the Buyer, during normal business hours, to
examine, copy and make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with its officers, all
to the extent reasonably requested by Buyer.

(d) Prohibition of Fundamental Changes. The Guarantor shall not enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation, winding up or dissolution) or sell
all or, substantially all of its assets, except pursuant to a pledge, a
repurchase facility or sales of such assets in the ordinary course of
Guarantor’s business that would not cause Guarantor to breach any of its other
covenants contained herein, or except as otherwise expressly permitted under or
contemplated by the Repurchase Documents; provided, that the Guarantor may enter
into a merger or consolidation if (a) the surviving or resulting entity shall be
a corporation or partnership organized under the laws of the United States or
any state thereof; (b) such entity shall expressly assume by written agreement,
in form and substance satisfactory to the Buyer in the Buyer’s sole discretion,
the performance of all of the duties and obligations under this Guaranty; and
(c) such entity shall be at least as creditworthy as the Guarantor, as
determined by the Buyer in the Buyer’s sole and absolute discretion; and,
provided, further, that if after giving effect thereto, no Default would exist
under the Repurchase Agreement.

(e) Notices. The Guarantor shall give notice to the Buyer promptly upon
Guarantor’s Knowledge of or receipt of written notice of the occurrence of any
Default or Event of Default.

(f) Limitation on Distributions. After the occurrence and during the
continuation of any Event of Default, the Guarantor shall not make any payment
on account of, or set apart assets for, a sinking or other analogous fund for
the purchase, redemption, defeasance, retirement or other acquisition

 

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of any equity or partnership interest of the Guarantor, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Guarantor.
Notwithstanding the foregoing, Guarantor shall be permitted to make
distributions to the extent required to maintain REIT status.

(g) Minimum Tangible Net Worth. Guarantor’s Tangible Net Worth shall not fall
below the sum of (i) seven hundred seventeen million one hundred ten thousand
five hundred ninety-four and 29/100 dollars ($717,110,594.29) plus
(ii) seventy-five percent (75%) of the net cash proceeds of any equity issuance
by Guarantor that occurs after the Closing Date.

(h) Minimum Cash Liquidity. Guarantor’s Cash Liquidity shall not fall below the
greater of (i) ten million dollars ($10,000,000) or (ii) five percent (5%) of
Guarantor’s Recourse Indebtedness.

(i) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Guarantor’s EBITDA
during the previous four (4) fiscal quarters to (ii) Guarantor’s Fixed Charges
during the same such previous four (4) fiscal quarters, shall not be less than
1.40:1.00 as determined as soon as practicable after the end of each fiscal
quarter, but in no event later than forty-five (45) days after the last day of
the applicable fiscal quarter.

(j) Maximum Indebtedness. The ratio, expressed as a percentage, the numerator of
which shall equal Guarantor’s and its Subsidiaries’ Indebtedness and the
denominator of which shall equal Guarantor’s and its Subsidiaries’ Total Assets,
shall not be greater than eighty percent (80.0%); provided, however that the
foregoing ratio expressed as eighty percent (80.0%) shall be amended to be
expressed as eighty-three and a third percent (83.3333%) upon Guarantor or
Seller providing Buyer written evidence reasonably satisfactory to Buyer that
the same such amendment has been made to the other guaranties entered into by
Guarantor in connection with the (i) Master Repurchase Agreement dated as of
May 21, 2013 between Bank of America, N.A., as buyer, and Parlex 1 Finance, LLC,
as seller (as the same has been and may be amended, supplemented or otherwise
modified from time to time), (ii) Master Repurchase Agreement dated as of
June 12, 2013 between Citibank, N.A., as buyer, and Parlex 2 Finance, LLC, as
seller (as the same has been and may be amended, supplemented or otherwise
modified from time to time), (iii) Master Repurchase Agreement dated as of
June 28, 2013 between JPM, as buyer, and Parlex 4 Finance, LLC, as seller (as
the same has been and may be amended, supplemented or otherwise modified from
time to time), and (iv) Master Repurchase Agreement dated as of December 20,
2013 between JPM, as buyer, and Parlex 4 UK Finco, LLC and Parlex 4 Finance,
LLC, as sellers (as the same may be amended, supplemented or otherwise modified
from time to time).

For the purposes of this Section 9, the following terms shall have the following
meanings:

“Available Borrowing Capacity” shall mean, with respect to any Person, on any
date of determination, the total unrestricted borrowing capacity which may be
drawn (taking into account required reserves and discounts) upon by such Person
or its Subsidiaries, at such Person’s or its Subsidiaries’ sole discretion,
under committed credit facilities or repurchase agreements which provide
financing to such Person or its Subsidiaries.

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

 

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“Cash Equivalents” shall mean any of the following, to the extent owned by
Guarantor or any of its Subsidiaries free and clear of all Liens and having a
maturity of not greater than ninety (90) days from the date of issuance thereof:
(a) readily marketable direct obligations of the government of the United States
or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the government of the United States,
(b) certificates of deposit of or time deposits with Buyer or a member of the
Federal Reserve System that issues (or the parent of which issues) commercial
paper rated as described in clause (c) below, is organized under the laws of the
United States or any state thereof and has combined capital and surplus of at
least $1,000,000,000 or (c) commercial paper in an aggregate amount of not more
than $50,000,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of any state of the United States and rated at least
“Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then
equivalent grade) by S&P.

“Cash Liquidity” shall mean, with respect to any Person, on any date of
determination, the sum of (i) unrestricted cash, plus (ii) Available Borrowing
Capacity, plus (iii) Cash Equivalents.

“Consolidated Net Income” shall mean, with respect to any Person, for any
period, the amount of consolidated net income (or loss) of such Person and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP.

“EBITDA” shall mean, with respect to any Person, for any period, such Person’s
Consolidated Net Income, excluding the effects of such Person’s and its
Subsidiaries’ interest expense with respect to Indebtedness, taxes,
depreciation, amortization, asset write-ups or impairment charges, provisions
for loan losses, and changes in mark-to-market value(s) (both gains and losses)
of financial instruments and noncash compensation expenses, all determined on a
consolidated basis in accordance with GAAP.

“Fixed Charges” shall mean, with respect to any Person, for any period, the
amount of interest paid in cash with respect to Indebtedness as shown on such
Person’s consolidated statement of cash flow in accordance with GAAP as offset
by the amount of receipts pursuant to net receive interest rate swap agreements
of such Person and its consolidated Subsidiaries during the applicable period.

“Indebtedness” shall mean for any Person: (i) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (ii) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (iii) Indebtedness of others secured by a lien
on the property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (iv) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; contingent or future funding obligations under any Purchased Loan or any
obligations senior to, or pari passu with, any Purchased Loan; (v) Capital Lease
Obligations of such Person; (vi) obligations of such Person under repurchase
agreements or like arrangements; (vii) Indebtedness of others Guaranteed by such
Person to the extent of such guarantee; and (viii) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person. Notwithstanding the foregoing, nonrecourse Indebtedness owing
pursuant to a securitization transaction such as a REMIC securitization, a
collateralized loan obligation transaction or other similar securitization shall
not be considered Indebtedness for any person.

“Recourse Indebtedness” shall mean, with respect to any Person, on any date of
determination, the amount of Indebtedness for which such Person has recourse
liability (such as through a guarantee agreement), exclusive of any such
Indebtedness for which such recourse liability is limited to obligations
relating to or under agreements containing customary nonrecourse carve-outs.

 

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

“Total Assets” shall mean, with respect to any Person, on any date of
determination, an amount equal to the aggregate book value of all assets owned
by such Person and the proportionate share of such Person of all assets owned by
Affiliates of such Person as consolidated in accordance with GAAP, less
(a) amounts owing to such Person from any Affiliate thereof, or from officers,
employees, partners, members, directors, shareholders or other Persons similarly
affiliated with such Person or any Affiliate thereof, (b) intangible assets, and
(c) prepaid taxes and expenses, all on or as of such date, and (d) the amount of
nonrecourse Indebtedness owing pursuant to securitization transactions such as a
REMIC securitization, a collateralized loan obligation transactions or other
similar securitizations.

Section 10. Subrogation. The Guarantor (i) shall have no right of subrogation
with respect to the Guaranteed Obligations prior to payment in full of all
obligations which shall be owing to the Buyer under the Repurchase Documents,
and (ii) waives any right to enforce any remedy which the Buyer now or may
hereafter have against the Guarantor, the Seller, any endorser or any guarantor
of all or any part of the Guaranteed Obligations or any other Person or entity,
and the Guarantor waives any benefit of, and any right to participate in, any
security or collateral given to the Buyer to secure the payment of all or any
part of the Guaranteed Obligations.

Section 11. Enforcement; Amendments; Waivers. No delay on the part of Buyer in
the exercise of any right or remedy arising under this Guaranty, the Repurchase
Documents, any other related document, or otherwise with respect to all or any
part of the Guaranteed Obligations, shall operate as a waiver thereof, and no
single or partial exercise by Buyer of any such right or remedy shall preclude
any further exercise thereof. No modification or waiver of any of the provisions
of this Guaranty shall be binding upon the Buyer, except as expressly set forth
in a writing duly signed and delivered by the Buyer. No amendment or
modification to this Guaranty shall be binding upon Guarantor or Buyer unless
expressly set forth in a writing duly signed and delivered by Guarantor and
Buyer. Failure by the Buyer at any time or times hereafter to require strict
performance by the Seller, the Guarantor, any other guarantor of all or any part
of the Guaranteed Obligations or any other Person or entity of any of the
provisions, warranties, terms and conditions contained in the Repurchase
Documents or any other related document now or at any time or times hereafter
executed and delivered to the Buyer shall not waive, affect or diminish any
right of the Buyer at any time or times hereafter to demand strict performance
thereof. Any determination by a court of competent jurisdiction which has become
final by appeal or lapse of time for appeal of the amount of the Guaranteed
Obligations owing by the Guarantor or the Seller to the Buyer shall be
conclusive and binding on the Guarantor irrespective of whether the Guarantor
was a party to the suit or action in which such determination was made.

Section 12. No Marshalling; Reinstatement. The Guarantor consents and agrees
that neither the Buyer nor any Person or entity acting for or on behalf of the
Buyer shall be under any obligation to marshal any assets in favor of the
Guarantor or against or in payment of any or all of the Guaranteed Obligations.
The Guarantor further agrees that, to the extent that the Seller, the Guarantor
or any other guarantor of all or any part of the Guaranteed Obligations makes a
payment or payments to Buyer, or Buyer receives any proceeds of collateral,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to the Seller, the Guarantor, such other guarantor or any other Person or
entity, under any bankruptcy law,

 

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state or federal law, common law or equitable cause, then, to the extent of such
payment or repayment, the part of the Guaranteed Obligations which has been
paid, reduced or satisfied by such amount shall be reinstated and continued in
full force and effect as of the time immediately preceding such initial payment,
reduction or satisfaction.

Section 13. Effectiveness; Termination. This Guaranty shall become effective
upon its execution by the Guarantor and Buyer and shall continue in full force
and effect and may not be terminated or otherwise revoked (except in a writing
duly signed and delivered by Guarantor and Buyer), but shall be terminated
automatically upon the termination of the Repurchase Documents and payment in
full of all amounts owing to the Buyer under the Repurchase Documents (including
payment obligations which mature following such termination (if any)), without
further action of the parties, subject to the provisions of this Guaranty, which
provisions expressly survive termination.

Section 14. Successors and Assigns. This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, except that the Guarantor may not assign or otherwise
transfer any of its rights or obligations hereunder (and any attempted
assignment or transfer by the Guarantor shall be null and void). Nothing in this
Guaranty, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the
Affiliates of the Buyer) any legal or equitable right, remedy or claim under or
by reason of this Guaranty.

Section 15. Governing Law. PURSUANT TO, AND IN ACCORDANCE WITH SECTION 5-1401 OF
THE NEW YORK STATE GENERAL OBLIGATIONS LAW, GUARANTOR HEREBY IRREVOCABLY AGREES
THIS GUARANTY SHALL BE CONSTRUED UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF SUCH
JURISDICTION.

Section 16. Waiver of Jury Trial. GUARANTOR AND BUYER EACH HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 17. Submission to Jurisdiction; Waivers. GUARANTOR AND BUYER EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS,
AND TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;

 

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(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE
BEEN NOTIFIED; AND

(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION.

Section 18. Notices. All notices, requests and other communications concerning
this Guaranty shall be given or made in writing (including, without limitation,
by email or facsimile) delivered to the intended recipient at the address
specified below; or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All such
communications shall be deemed to have been duly given when transmitted by email
or facsimile or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.

 

If to Buyer:

 

MORGAN STANLEY BANK, N.A.

1585 Broadway, 2nd Floor

New York, New York 10036

Attention: Geoffrey Kott

Email: Geoffrey.Kott@morganstanley.com

Telephone: (212) 761-3140

Telecopy: (718) 233-2160

  

If to Guarantor:

 

Blackstone Mortgage Trust, Inc.

345 Park Avenue

New York, New York 10154

Attention: Douglas Armer

Email: BXMTMSBRepo@blackstone.com

Telephone No.: (212) 583-5000

With a copy to:

 

MORGAN STANLEY BANK, N.A.

One Utah Center, 201 South Main Street

Salt Lake City, Utah 84111

 

MORGAN STANLEY

25 Cabot Square

Canary Wharf

London UK E14 4QA

Attention:        Andress Ross Atkins

Telephone:      + 44 20 7677-1641

Telecopy:        + 44 20 7056-0662

Email: Andrew.Atkins@morganstanley.com

 

and:

 

Paul Hastings LLP

75 East 55th Street

New York, New York 10022

Attention: John A. Cahill, Esq.

Email: johncahill@paulhastings.com

Telephone: (212) 318-6260

Telecopy: (212) 230-7682

  

With a copy to:

 

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attention: David C. Djaha

Email: david.djaha@ropesgray.com

Facsimile No.: (646) 728-2936

Telephone No.: (212) 841-0489

 

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Section 19. Entire Agreement; Severability. This Guaranty contains the final
agreement with respect to the matters contained herein by the Guarantor and may
not be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Guarantor and the Buyer. If any of the
provisions of this Guaranty shall be held invalid or unenforceable, this
Guaranty shall be construed as if not containing such provisions, and the rights
and obligations of the parties hereto shall be construed and enforced
accordingly.

Section 20. Execution in Counterparts. This Guaranty may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and the party hereto may execute this Guaranty by signing any
such counterpart.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor as an
instrument under seal as of the day and year first set forth above.

 

GUARANTOR   BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation   By:  

/s/ Douglas Armer

    Name:   Douglas Armer     Title:   Managing Director, Head of Capital
Markets and Treasurer

 

Acknowledged: MORGAN STANLEY BANK, N.A. By:  

/s/ Geoffrey Kott

  Name:   Geoffrey Kott   Title:   Authorized Signatory

 

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