--------------------------------------------------------------------------------

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REVOLVING CREDIT AGREEMENT
 
 
dated as of November 3, 2006
 
 
among
 
NORTHSTAR REALTY FINANCE CORP.,
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP,
NRFC SUB-REIT CORP.
AND
NS ADVISORS, LLC,
as Borrowers,
 
 
THE LENDERS FROM TIME TO TIME PARTY HERETO,
 
 
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent,
 

KEYBANC CAPITAL MARKETS,
and
BANK OF AMERICA, N.A.,
as Co-Lead Arrangers,

KEYBANC CAPITAL MARKETS,
as Sole Book Manager,
 
 
BANK OF AMERICA, N.A.,
as Syndication Agent,
 
and
 
CITICORP NORTH AMERICA, INC.
as Documentation Agent
 

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TABLE OF CONTENTS
 

 
Page
     
ARTICLE I DEFINITIONS
1
 
Section 1.1
Definitions.
1
 
Section 1.2
Accounting Terms and Determinations
23
 
Section 1.3
Types of Borrowings
23
 
ARTICLE II THE Commitments
23
 
Section 2.1
Commitments to Lend
23
 
Section 2.2
Notice of Committed Borrowing
24
 
Section 2.3
Notice to Lenders; Funding of Loans.
25
 
Section 2.4
Notes.
27
 
Section 2.5
Letters of Credit
27
 
Section 2.6
Method of Electing Interest Rates.
30
 
Section 2.7
Interest Rates.
31
 
Section 2.8
Fees.
32
 
Section 2.9
Maturity Date
33
 
Section 2.10
Mandatory Prepayment.
33
 
Section 2.11
Optional Prepayments.
34
 
Section 2.12
General Provisions as to Payments.
35
 
Section 2.13
Funding Losses
36
 
Section 2.14
Computation of Interest and Fees
36
 
Section 2.15
Use of Proceeds
36
 
Section 2.16
Letter of Credit Usage Absolute
36
 
Section 2.17
Joint and Several Obligations; Limitation on Liability.
37
 
Section 2.18
Increase in Facility Amount.
39
 
Section 2.19
Revolving Facility
41
 
Section 2.20
Delinquent Lenders.
41
 
ARTICLE III CONDITIONS
42
 
Section 3.1
Closing
42
 
Section 3.2
Borrowings
45
 
ARTICLE IV REPRESENTATIONS AND WARRANTIES
46
 
Section 4.1
Existence and Power
46
 
Section 4.2
Power and Authority
47
 
Section 4.3
No Violation
47
 
Section 4.4
Financial Information
47
 
Section 4.5
Litigation
48
 
Section 4.6
Compliance with ERISA.
48
 
Section 4.7
Borrowing Base Assets
48
 
Section 4.8
Environmental Matters
49
 
Section 4.9
Taxes
49
 
Section 4.10
Full Disclosure
49
 
Section 4.11
Solvency
49
 
Section 4.12
Use of Proceeds; Margin Regulations
50
 
Section 4.13
Governmental Approvals
50
 

 
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Section 4.14
Investment Company Act
50
 
Section 4.15
Principal Offices
50
 
Section 4.16
REIT Status
50
 
Section 4.17
Qualified REIT Subsidiary Status
50
 
Section 4.18
Patents, Trademarks, etc.
50
 
Section 4.19
No Default
50
 
Section 4.20
Licenses, etc.
51
 
Section 4.21
Compliance With Law
51
 
Section 4.22
No Burdensome Restrictions
51
 
Section 4.23
Brokers’ Fees
51
 
Section 4.24
Labor Matters
51
 
Section 4.25
Insurance
51
 
Section 4.26
Organizational Documents
51
 
ARTICLE V AFFIRMATIVE AND NEGATIVE COVENANTS
52
 
Section 5.1
Information
52
 
Section 5.2
Payment of Obligations
54
 
Section 5.3
Maintenance of Property
54
 
Section 5.4
Conduct of Business and Maintenance of Existence
54
 
Section 5.5
Compliance with Laws
55
 
Section 5.6
Inspection of Books and Records
55
 
Section 5.7
Existence
55
 
Section 5.8
Financial Covenants
55
 
Section 5.9
Restriction on Fundamental Changes.
56
 
Section 5.10
[Reserved]
57
 
Section 5.11
Margin Stock
57
 
Section 5.12
NorthStar, NorthStar OP and NRFC Sub-REIT Status
57
 
Section 5.13
Disposition of Borrowing Base Assets
57
 
Section 5.14
Liens; Release of Liens
58
 
Section 5.15
Business Loans
58
 
Section 5.16
Limitation on Changes in Fiscal Year; Accounting Methods; Valuation Methodology.
58
 
Section 5.17
Ownership of Borrowing Base Assets
58
 
Section 5.18
Limitation on Negative Pledge Clauses, Distribution Restrictions
58
 
Section 5.19
Addition of Borrowing Base Assets.
58
 
Section 5.20
Failure of Certain Borrowing Base Assets Representations and Warranties.
60
 
Section 5.21
Limitation on Transactions with Affiliates
60
 
Section 5.22
CDO Subsidiaries
60
 
Section 5.23
Guaranties
61
 
Section 5.24
Subsidiary Guarantors
61
 
Section 5.25
Release of Certain Subsidiary Guarantors
62
 
ARTICLE VI DEFAULTS
62
 
Section 6.1
Events of Default
62
 
Section 6.2
Rights and Remedies.
65
 
Section 6.3
Notice of Default
66
 
Section 6.4
Actions in Respect of Letters of Credit.
66
 
ARTICLE VII THE AGENTS
67
 
Section 7.1
Appointment and Authorization
67
 

 
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Section 7.2
Agency and Affiliates.
68
 
Section 7.3
Action by Administrative Agent
68
 
Section 7.4
Consultation with Experts
68
 
Section 7.5
Liability of Administrative Agent
68
 
Section 7.6
Indemnification
68
 
Section 7.7
Credit Decision
69
 
Section 7.8
Successor Administrative Agent
69
 
Section 7.9
Receipt of Notices
69
 
ARTICLE VIII CHANGE IN CIRCUMSTANCES
69
 
Section 8.1
Basis for Determining Interest Rate Inadequate or Unfair
69
 
Section 8.2
Illegality
70
 
Section 8.3
Increased Cost and Reduced Return.
71
 
Section 8.4
Taxes.
72
 
Section 8.5
Alternate Base Rate Loans Substituted for Affected LIBOR Loans
74
 
ARTICLE IX MISCELLANEOUS
74
 
Section 9.1
Notices
74
 
Section 9.2
No Waivers
75
 
Section 9.3
Expenses; Indemnification.
75
 
Section 9.4
Sharing of Set-Offs
76
 
Section 9.5
Amendments and Waivers.
77
 
Section 9.6
Successors and Assigns.
77
 
Section 9.7
Collateral
79
 
Section 9.8
Governing Law; Submission to Jurisdiction
79
 
Section 9.9
Marshalling; Recapture
79
 
Section 9.10
Counterparts; Integration; Effectiveness
80
 
Section 9.11
WAIVER OF JURY TRIAL
80
 
Section 9.12
Survival
80
 
Section 9.13
Domicile of Loans
80
 
Section 9.14
Limitation of Liability
80
 
Section 9.15
Recourse Obligation
80
 
Section 9.16
Confidentiality
80
 
Section 9.17
Legal Rate
81
 
Section 9.18
USA Patriot Act Notice
81
 
 
 
 
 

 
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EXHIBITS
 
Exhibit A
-
Form of Note
Exhibit B
-
Form of Assignment and Assumption Agreement
Exhibit C
-
Initial Borrowing Base Assets
Exhibit D
-
Form of Borrowing Base Certificate
Exhibit E
-
Form of Continuing Compliance Certificate
Exhibit F
-
First Mortgage Asset Representations and Warranties
Exhibit G
-
Real Property Asset Representations and Warranties
Exhibit H
-
Real Estate Security Asset Representations and Warranties
Exhibit I
-
Subordinate Assets Representations and Warranties
Exhibit J
-
CDO Retained Asset Representations and Warranties

 
SCHEDULES
 
Schedule 1.1
TruPS Securities
Schedule 4.4(c)
Post-June 30, 2006 Material Indebtedness and Contingent Obligations

 
 
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REVOLVING CREDIT AGREEMENT
 
THIS REVOLVING CREDIT AGREEMENT (this “Agreement”) is dated as of November 3,
2006 among NORTHSTAR REALTY FINANCE CORP., a Maryland corporation (“NorthStar”),
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP, a Delaware limited partnership
(“NorthStar OP”), NRFC SUB-REIT CORP., a Maryland corporation (“NRFC Sub-REIT”),
NS ADVISORS, LLC, a Delaware limited liability company (“NS Advisors”)
(NorthStar, NorthStar OP, NRFC Sub-REIT and NS Advisors are hereinafter referred
to individually as a “Borrower” and collectively as the “Borrowers”), the
Lenders (as defined herein), KEYBANK NATIONAL ASSOCIATION, as Administrative
Agent, KEYBANC CAPITAL MARKETS and BANK OF AMERICA, N.A, as Co-Lead Arrangers,
KEYBANC CAPITAL MARKETS, as Sole Book Manager, BANK OF AMERICA, N.A, as
Syndication Agent and CITICORP NORTH AMERICA, INC., as Documentation Agent.

RECITALS
 
1. The Borrowers have requested that the Lenders establish a revolving credit
facility for the Borrowers for the purposes of refinancing certain existing
indebtedness, financing the acquisition by the Borrowers of real estate and
finance assets and for other business purposes of the Borrowers.
 
2. The Borrowers have requested that the Lenders set forth the terms and
conditions upon which the Lenders will provide financing to the Borrowers.
 
3. The Lenders have agreed to provide that financing to Borrowers on, and
subject to, the terms and conditions of, this Agreement.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
Section 1.1 Definitions. The following terms, as used herein, have the following
meanings:
 
“Adjusted London Interbank Offered Rate” has the meaning set forth in Section
2.7(c).
 
“Administrative Agent” shall mean KeyBank National Association in its capacity
as Administrative Agent hereunder, and its permitted successors in such capacity
in accordance with the terms of this Agreement.
 
“Administrative Questionnaire” means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrowers) duly
completed by such Lender.
 
“Affiliate” means, as to any Person, any other Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, “control” of
a Person (including, with its correlative meanings, “controlled by” and “under
common control with”) means the power, directly or indirectly, either to (a)
vote 33 1/3% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
 

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“Adjusted Funds from Operations” means Funds From Operations minus (or plus) (i)
normalized recurring capitalized expenditures necessary to maintain properties
(e.g. leasing commissions, and tenant improvement allowances), (ii) an
adjustment to reverse the effect of Straight-Lining of Rents and fair value of
lease revenue under SFAS 141, (iii) the amortization or accrual of various
deferred costs including intangible assets and equity based compensation, (iv)
non-recurring charges incurred in connection with the early extinguishment of
debt, (v) an adjustment to reverse “mark-to-market” gains and losses related to
interest rate changes on off balance sheet warehouse facilities, and (vi) such
other adjustments approved by the Administrative Agent.
 
“Agreement” shall mean this Revolving Credit Agreement as the same may from time
to time hereafter be modified, supplemented or amended.
 
“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (i) the Prime Rate or (ii) the Federal Funds Rate plus one-half percent
(0.5%).
 
“Alternate Base Rate Loan” means a Committed Loan to be made by a Lender as an
Alternate Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or pursuant to Article II.
 
“Applicable Lending Office” means, with respect to any Lender, (i) in the case
of its Alternate Base Rate Loans, its Domestic Lending Office, and (ii) in the
case of its LIBOR Loans, its LIBOR Lending Office.
 
“Applicable Margin” means, for any day, the rate per annum set forth below
opposite the applicable Leverage Ratio then in effect.
 
Leverage Ratio (as calculated pursuant to the most-recently delivered officer’s
certificate pursuant to Section 5.1(c) hereof)
Applicable Margin for LIBOR Loans and Letter of Credit Fees
Applicable Margin for Alternate Base Rate Loans
> 85%
2.50%
1.00%
> 75% to < 85%
2.25%
0.75%
< 75%
2.00%
0.50%

 
The Applicable Margin shall be adjusted effective on the next Business Day
following any change in the Leverage Ratio using the information provided in the
most-recently delivered officer’s certificate pursuant to Section 5.1(c) hereof.
 
Notwithstanding anything to the contrary contained in the foregoing, to the
extent the Borrowers fail to deliver any officer’s certificate as of the date
required pursuant to Section 5.1(c), the Applicable Margin as of the date
immediately following such required date of delivery and until the delivery of
such officer’s certificate shall be the greatest Applicable Margin specified in
the foregoing chart.
 
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“Approval Request” has the meaning set forth in Section 5.19(a).
 
“Approval Request Package” has the meaning set forth in Section 5.19(b).
 
“Approved Uses” has the meaning set forth in Section 2.15.
 
“Approved Bank” means a bank or other financial institution which has (i)(a) a
minimum net worth of $500,000,000 and/or (b) total assets of $10,000,000,000,
and (ii) a minimum long term debt rating of (a) BBB+ or higher by S&P, and (b)
Baa1 or higher by Moody’s.
 
“Arranger” means KeyBanc Capital Markets, in its capacity as Sole Lead Arranger
of the Commitments and Sole Book Manager of the Commitments.
 
“Asset Disposition” means the disposition of any assets (including without
limitation the Capital Stock of a Subsidiary) of any Consolidated Party whether
by sale, lease (but excluding the lease of assets in the ordinary course of
business), transfer or otherwise to a Person other than a Consolidated Party.
 
“Assignee” has the meaning set forth in Section 9.6(b).
 
“Available Commitment” means, with respect to each Lender, at any time, the
amount obtained by multiplying such Lender’s Commitment at such time by a
fraction, the numerator of which is the Total Available Commitments at such
time, and the denominator of which is the aggregate of all Commitments at such
time.
 
“Bankruptcy Code” means Title 11 of the United States Code, entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes.
 
“Benefit Arrangement” means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
 
“Book Value” means as to any asset, the value of such asset determined in
accordance with GAAP, as consistently applied in connection with the preparation
of the financial statements filed by NorthStar with the Securities and Exchange
Commission.
 
“Borrowers” means, collectively, NorthStar, NorthStar OP, NRFC Sub-REIT and NS
Advisors , and “Borrower” means any one of the foregoing.
 
“Borrowing” has the meaning set forth in Section 1.3.
 
“Borrowing Base Assets” means assets one hundred percent (100%) owned (legally
and equitably) by a Borrowing Base Entity and which consist of Eligible CDO
Retained Assets, Eligible First Mortgage Assets, Eligible Subordinated Assets,
Eligible Property Equity Interests and Eligible Real Estate Securities.
 
“Borrowing Base Assets Pool” means, collectively at any time, all Borrowing Base
Assets.
 
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“Borrowing Base Availability” means, at any time of determination, an amount
equal to the lesser of (i) the aggregate Borrowing Base Value of all Borrowing
Base Assets in the Borrowing Base Assets Pool at such time and (ii) the
aggregate amount that would cause the ratio of (i) the sum of (A) the aggregate
recurring cash dividend and distribution income actually received from all
Eligible CDO Equity Interests and Preferred Securities constituting Eligible
Subordinated Assets during such period, (B) the aggregate recurring cash income
(after debt service in respect of the related Real Property Asset, if
applicable) actually received in respect of Eligible Property Equity Interests
during such period, and (C) the aggregate recurring cash interest income
actually received from all Eligible CDO Debt Assets, Eligible First Mortgage
Assets, Eligible Subordinated Debt Assets and Eligible Real Estate Securities
during such period, in each case calculated as of the end of each fiscal quarter
on an annualized basis for the quarterly period then ended with respect to
Borrowing Base Assets in the Borrowing Base Assets Pool as of the date of
determination as reflected on the most recent Borrowing Base Certificate, to
(ii) Facility Interest Expense for such period, to be not less than 2:00 to
1:00.
 
“Borrowing Base Certificate” has the meaning set forth in Section 2.2.
 
“Borrowing Base Entity” means a Subsidiary Guarantor, a Real Property Subsidiary
or a CDO Subsidiary.
 
“Borrowing Base Value” means, as to any Borrowing Base Asset at any time of
determination, the maximum aggregate amount of Loans and Letters of Credit which
Borrowers shall be entitled to borrow, draw, or have issued or outstanding
pursuant to the terms of this Agreement with respect to such Borrowing Base
Asset, which shall be (i) with respect to any Eligible CDO Retained Asset, the
lesser of (a) forty percent (40%) of the Eligible CDO Retained Asset Value of
such asset, and (b) an amount equal to (1) the sum of (A) the recurring annual
interest or dividend income of the Borrowers in respect of such Eligible CDO
Retained Asset (determined by annualizing the interest or dividend income
received by the Borrowers in respect of such Eligible CDO Retained Asset during
the quarter most recently ended) and (B) the annual Senior Management Fees
received by the Borrowers from such Eligible CDO Retained Asset (determined by
annualizing the Senior Management Fees received by the Borrowers in respect of
such Eligible CDO Retained Asset during the quarter most recently ended) divided
by (2) three and one-half (3.5), and divided by (3) the average Facility
Interest Rate during the quarter most recently ended, (ii) with respect to any
Eligible First Mortgage Asset, the lesser of (a) eighty percent (80%) of the
Underlying Real Estate Value on such date of the Underlying Asset securing such
Eligible First Mortgage Asset, and (b) ninety percent (90%) of the lesser of (1)
the outstanding principal amount of such Eligible First Mortgage Asset on such
date and (2) the Book Value of such Eligible First Mortgage Asset on such date,
(iii) with respect to any Eligible Subordinated Asset, the lesser of (a) eighty
percent (80%) of (1) the Underlying Real Estate Value on such date of the
Underlying Asset relating to such Eligible Subordinated Asset minus (2) the
aggregate outstanding principal amount on such date of any senior indebtedness
encumbering the Underlying Asset relating to such Eligible Subordinated Asset
and (b) sixty percent (60%) of the lesser of (1) the outstanding principal
amount of such Eligible Subordinated Asset on such date and (2) the Book Value
of such Eligible Subordinated Asset on such date, (iv) with respect to any
Eligible Property Equity Interest, forty percent (40%) of the Net Equity Value
on such date of such Eligible Property Equity Interest, (v) with respect to any
Investment Grade Eligible Real Estate Security, eighty percent (80%) of the Fair
Market Value of such Investment Grade Eligible Real Estate Security on such
date, and (vi) with respect to any Eligible Real Estate Security that is not
Investment Grade, sixty-five percent (65%) of the Fair Market Value of such
non-Investment Grade Eligible Real Estate Security on such date.
 
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“Capitalization Rate” means, as to any Real Property Assets or Underlying Assets
that are at leased 95% leased to tenants (or such tenant’s parent) having an
Investment Grade Credit Rating, seven percent (7.00%) per annum, and, as to all
other Real Property Assets or Underlying Assets, nine percent (9.00%) per annum.
 
“Capital Replacement Reserve” means, with respect to any Real Property Asset or
Underlying Asset, a normalized annual reserve for replacement reserves, capital
expenditures, tenant improvements, and leasing commissions in the amount of
$0.10 per year per square foot of net leaseable area contained in such Real
Property Asset or Underlying Asset. When the Capital Replacement Reserve is used
in computing an amount with respect to a period which is shorter than a year,
said amount shall be appropriately prorated.
 
“Capital Stock” means, with respect to any Person, any capital stock (including
preferred stock), shares, interests, participations or other ownership interests
(however designated) of such Person and any rights (other than debt securities
convertible into or exchangeable for corporate stock), warrants or options to
purchase any thereof.
 
“Cash and Cash Equivalents” means (i) cash, (ii) direct obligations of the
United States Government, including without limitation, treasury bills, notes
and bonds, (iii) interest bearing or discounted obligations of Federal agencies
and Government sponsored entities or pools of such instruments offered by
Approved Banks and dealers, including without limitation, Federal Home Loan
Mortgage Corporation participation sale certificates, Government National
Mortgage Association modified pass through certificates, Federal National
Mortgage Association bonds and notes, and Federal Farm Credit System securities,
(iv) time deposits, Domestic and Eurodollar certificates of deposit, bankers’
acceptances, commercial paper rated at least A-2 by S&P and P-2 by Moody’s
and/or guaranteed by a Person with an Aa3 rating by Moody’s, an AA- rating by
S&P or better rated credit, floating rate notes, other money market instruments
each issued by an Approved Bank (provided that the same shall cease to be a
“Cash or Cash Equivalent” if at any time any such bank shall cease to be an
Approved Bank), (v) obligations of domestic corporations, including, without
limitation, commercial paper, bonds, debentures and loan participations, each of
which is rated at least AA- by S&P and/or Aa3 by Moody’s and/or guaranteed by a
Person with an Aa3 rating by Moody’s and/or a AA- rating by S&P or better rated
credit, (vi) obligations issued by states and local governments or their
agencies, rated at least MIG-2 by Moody’s and/or SP-2 by S&P, (vii) repurchase
agreements with major banks and primary government security dealers fully
secured by the U.S. Government or agency collateral equal to or exceeding the
principal amount on a daily basis and held in safekeeping, and (viii) real
estate loan pool participations, guaranteed by a Person with an AA- rating given
by S&P or Aa3 rating given by Moody’s or better rated credit.
 
“CDO Debt Asset” means with respect to any Eligible CDO, any and all performing
debt obligations issued by such Eligible CDO and owned by a Borrowing Base
Entity.

“CDO Equity Interest” means with respect to any Eligible CDO, any and all
shares, interests, participations or other equivalents (however designated) of
capital stock of, and any and all equivalent ownership interests in, such
Eligible CDO owned by a Borrowing Base Entity, including partnership interests
and limited liability company membership interests.

“CDO Retained Asset” means a CDO Debt Asset or a CDO Equity Interest.

“CDO Indenture” means the indenture relating to any Eligible CDO Retained Asset.
 
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“CDO Subsidiary” has the meaning set forth in Section 5.22.
 
“Charges” has the meaning set forth in Section 9.17.
 
“Closing Date” means the date on or after the Effective Date on which the
conditions set forth in Section 3.1 shall have been satisfied to the
satisfaction of the Administrative Agent or waived by the Administrative Agent
in its sole discretion.
 
“Code” means the Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
 
“Commitment” means, with respect to each Lender, the amount set forth opposite
the name of such Lender on the signature pages hereof (and, for each Lender
which is an Assignee, the amount set forth in the Assignment and Assumption
Agreement entered into pursuant to Section 9.6(b) as the Assignee’s Commitment),
as such amount may be reduced from time to time pursuant to Section 2.11(c) or
in connection with an assignment to an Assignee, or increased pursuant to
Section 2.18.
 
“Commitment Fee Quarterly Period” has the meaning set forth in Section 2.8(c).
 
“Committed Loan” means a loan made by a Lender pursuant to Section 2.1; provided
that, if any such loan or loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term “Committed Loan” shall
refer to the combined principal amount resulting from such combination or to
each of the separate principal amounts resulting from such subdivision, as the
case may be.
 
“Consolidated Parties” means, collectively, NorthStar and its Consolidated
Subsidiaries.
 
“Consolidated Subsidiary” means at any date any Subsidiary or other entity which
is consolidated with NorthStar in accordance with GAAP or which is required
under GAAP to be consolidated with NorthStar.
 
“Consolidated Tangible Net Worth” means, without duplication, at any date (a)
the amounts included in “stockholders’ equity” on the balance sheet of the
Consolidated Parties (including minority interests relating to NorthStar OP),
less (b) the consolidated Intangible Assets of the Consolidated Parties
(excluding FAS 141 intangibles), all determined as of such date in accordance
with GAAP. For purposes of this definition “Intangible Assets” means goodwill,
patents, trademarks, service marks, trade names, anticipated future benefit of
tax loss carry forwards, copyrights, organization or developmental expenses and
other intangible assets determined in accordance with GAAP.
 
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“Contingent Obligation” means, as to any Person, without duplication, (i) any
contingent obligation of such Person required to be shown on such Person’s
balance sheet in accordance with GAAP, (ii) any obligation (including, without
limitation, any Guarantee Obligation) required to be disclosed in the footnotes
to such Person’s financial statements, guaranteeing partially or in whole any
Non-Recourse Debt, lease, dividend or other obligation, exclusive of contractual
indemnities (including, without limitation, any indemnity or price-adjustment
provision relating to the purchase or sale of securities or other assets) and
guarantees of non-monetary obligations which have not yet been called on or
quantified, of such Person or of any other Person, and (iii) with respect to
such Person’s forward commitments or obligations to fund or provide proceeds
with respect to any loan or other financing which are obligatory and
non-discretionary as of any date of determination, the aggregate amount of the
reserves established for such commitments or obligations in accordance with
Rating Agency requirements in respect of the three (3) month period following
the date of determination. The Borrowers will promptly notify the Administrative
Agent of the amounts initially established as, and any change from time to time
in, the Rating Agency requirements in respect of the reserves referred to in the
foregoing sentence. Notwithstanding the foregoing, “Contingent Liabilities”
shall not include guarantees of customary carve-out matters made in connection
with Indebtedness, such as fraud, misappropriation, bankruptcy, misapplication
and environmental matters, unless a claim for payment or performance has been
made thereunder (which has not been satisfied). The amount of any Contingent
Obligation described in clause (ii) shall be deemed to be (a) with respect to a
guarantee of interest or interest and principal, or operating income guarantee,
the present value of the sum of all payments required to be made thereunder
(which in the case of an operating income guarantee shall be deemed to be equal
to the debt service for the note secured thereby), through (x) in the case of an
interest or interest and principal guarantee, the stated date of maturity of the
obligation (and commencing on the date interest could first be payable
thereunder), or (y) in the case of an operating income guarantee, the date
through which such guarantee will remain in effect, and (b) with respect to all
guarantees not covered by the preceding clause (a), an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to the
most recent financial statements of the Borrowers required to be delivered
pursuant to Section 5.1 hereof.
 
“Credit Rating” means, with respect to any Person, the rating assigned by the
Rating Agencies (one of which, in all instances, must be S&P or Moody’s or
Fitch) to such Person’s long-term unsecured indebtedness.
 
“Credit Underwriting Documents” has the meaning set forth in Section 5.19(a).
 
“Default” means any condition or event which with the giving of notice or lapse
of time or both would, unless cured or waived, become an Event of Default.
 
“Default Rate” has the meaning set forth in Section 2.7(c).
 
“Derivative Exposure” means, as of any date, the aggregate maximum net liability
(including costs, fees and expenses), based upon a liquidation or termination as
of such date, of any Person under all interest rate swaps, collars, caps or
other interest rate protection agreements, treasury locks, equity forward
contracts, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
agreements.
 
“Distribution” means with respect to any Person, the declaration or payment of
any cash, cash flow, dividend or distribution (however payable, whether in cash,
assets, capital stock or otherwise) on or in respect of any shares of any class
of capital stock, partnership interest, membership interest or other beneficial
interest of such Person; the purchase, redemption, exchange or other retirement
of any shares of any class of capital stock, partnership interest, membership
interest or other beneficial interest of such Person, directly or indirectly
through a Subsidiary of such Person or otherwise; the return of capital by such
Person to its shareholders, partners, members or other owners as such; or any
other distribution on or in respect of any shares of any class of capital stock
or other beneficial interest of such Person.

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“Domestic Business Day” means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

“Domestic Lending Office” means, as to each Lender, its office located at its
address in the United States set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Lender may hereafter designate as its Domestic
Lending Office by notice to the Borrowers and the Administrative Agent.
 
“EBITDA” means, for any period, the sum of, without duplication, (i) aggregate
Net Income during such period calculated before the payment of Preferred
Distributions, plus (ii) an amount which, in the determination of Net Income for
such period, has been deducted for (A) Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes and (C)
depreciation and amortization expense, plus (iii) the minority interest
attributable to NorthStar OP, plus (iii) losses from extraordinary items,
non-recurring items, Asset Dispositions, or forgiveness of debt, plus (iv)
compensation expense for equity or option based compensation minus (v) gains
from extraordinary items, non-recurring items, Asset Dispositions, write-up of
assets (including any loan accretion attributable to any asset), minus (v)
interest income accrued but not actually received in cash, each of the above
determined in accordance with GAAP and to the extent included in the calculation
of Net Income and plus, (vi) interest income received in cash in such period to
the extent such interest income had been subtracted from Net Income pursuant to
the foregoing clause (v) with respect to any earlier period; provided, that such
sum shall be exclusive of any adjustment for such period attributable to the
Straight-Lining of Rents.
 
“Effective Date” means November 3, 2006.
 
“Eligible Assignee” means any Person that is: (a) a Lender; (b) an Affiliate of
a Lender; (c) a commercial bank, trust company, savings and loan association
savings bank, insurance company, investment bank or pension fund organized under
the laws of the United States of America, any state thereof or the District of
Columbia, and having total assets in excess of $5,000,000,000; or (d) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Co-operation and Development, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. No Borrower and no Affiliate of a
Borrower shall qualify as an Eligible Assignee. Provided no Default or Event of
Default has occurred and is continuing, no direct competitor of the Borrowers or
any hedge fund principally engaged in the acquisition of “distressed” debt (each
as determined by the Administrative Agent in its reasonable discretion) shall
qualify as an Eligible Assignee.
 
“Eligible CDO” means a Special Purpose Entity, the common “ordinary” shares or
limited liability company interests of which are wholly-owned by NorthStar or a
Wholly-Owned Subsidiary of NorthStar and which is managed by NorthStar or a
Wholly-Owned Subsidiary of NorthStar, that issues classes of securities
representing rights to receive payments from assets held by such entity, the
assets of which are (a) real estate securities or real estate-related debt
obligations and/or (b) such other assets consistent with NorthStar’s current
business practices.

“Eligible CDO Debt Asset” means a CDO Debt Asset that that at all times complies
with the CDO Retained Asset Representations and Warranties set forth on Exhibit
“J” attached hereto.
 
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“Eligible CDO Equity Interest” means a CDO Equity Interest that at all times
complies with the CDO Retained Asset Representations and Warranties set forth on
Exhibit “J” attached hereto.

“Eligible CDO Retained Asset” means any Eligible CDO Equity Interest and/or any
Eligible CDO Debt Asset.
 
“Eligible CDO Retained Asset Value” means with respect to any Eligible CDO
Retained Asset, an amount equal to (i) in the case of an Eligible CDO Debt
Asset, the Fair Market Value of such Eligible CDO Retained Asset and (b) in the
case of an Eligible CDO Equity Interest, the Net Equity CDO Value of such
Eligible CDO Equity Interest.

“Eligible First Mortgage Asset” means any First Mortgage Asset that at all times
complies with the First Mortgage Asset Representations and Warranties set forth
on Exhibit “F” attached hereto.
 
“Eligible Property Equity Interest” means any Property Equity Interest that at
all times complies with the Property Equity Interest Representations and
Warranties set forth on Exhibit “G” attached hereto.
 
“Eligible Real Estate Security” means any Real Estate Security that at all times
complies with the Real Estate Security Asset Representations and Warranties set
forth on Exhibit “H” attached hereto.
 
“Eligible Subordinated Asset” means any Subordinated Asset that at all times
complies with the Subordinated Asset Representations and Warranties set forth on
Exhibit “I” attached hereto.
 
“Environmental Affiliate” means any partnership, joint venture, trust, limited
liability company, corporation or other entity which is subject to an
Environmental Claim and which is a Consolidated Subsidiary of NorthStar or, as
to any partnership, in which NorthStar or a Consolidated Subsidiary is a general
partner, either directly or indirectly.
 
“Environmental Approvals” means any permit, license, approval, ruling, variance,
exemption or other authorization required under applicable Environmental Laws.
 
“Environmental Claim” means, with respect to any Person, any notice, claim,
demand or similar communication (written or oral) by any other Person alleging
potential liability of such Person for investigatory costs, cleanup costs,
governmental response costs, natural resources damage, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law, in each case (with respect to both (i) and (ii) above) as
to which there is a reasonable possibility of an adverse determination with
respect thereto and which, if adversely determined, would have a Material
Adverse Effect on any Borrower.
 
“Environmental Laws” means any and all federal, state, and local statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants, licenses, agreements and other
governmental restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Materials of Environmental Concern or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Materials of Environmental Concern or wastes or the
clean-up or other remediation thereof.
 
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“Equity Issuance” means any issuance by a Consolidated Party to any Person which
is not a Consolidated Party of (a) shares of its Capital Stock, (b) any shares
of its Capital Stock pursuant to the exercise of options or warrants or (c) any
shares of its Capital Stock pursuant to the conversion of any debt securities to
equity.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.
 
“ERISA Group” means NorthStar, any Subsidiary and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with NorthStar or any Subsidiary, are
treated as a single employer under Section 414 of the Code.
 
“Event of Default” has the meaning set forth in Section 6.1.
 
“Excepted Liens” shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (ii) Liens in connection with worker’s compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) vendors’, carriers’, warehousemen’s, repairmen's,
mechanics’, workmen’s, materialmen’s, construction or other like Liens arising
by operation of law in the ordinary course of business, each of which is either
(a) subordinate to the lien of the applicable Borrowing Base Asset or (b) been
adequately insured or bonded or (c) being contested in good faith by appropriate
proceedings and for which adequate reserves have been maintained in accordance
with GAAP; (iv) easements, rights of way, zoning restrictions and other similar
Liens relating to a Real Property Asset or Underlying Asset, which do not
individually or in the aggregate materially impair the use of such Real Property
Asset or Underlying Asset or materially impair the value of such Real Property
Asset or Underlying Asset subject thereto.
 
“Exceptions Summary” has the meaning set forth in Section 5.19(a).
 
“Expenses” means, when used with respect to any asset, the costs of maintaining
such asset which are the responsibility of the owner thereof, including, without
limitation, taxes, insurance, repairs and maintenance.
 
“Facility” means the revolving credit facility established pursuant to this
Agreement.
 
“Facility Amount” means one-hundred million dollars ($100,000,000) subject to
increase pursuant to Section 2.18 hereof or decrease pursuant to Section 2.11
hereof.
 
“Facility Interest Expense” means, as of any date of determination for a
particular period, an amount equal to the interest that would accrue during such
period on the Outstanding Balance on such date of determination at an interest
rate equal to the sum of (i) the Adjusted London Interbank Offered Rate on such
date of determination for an Interest Period of one (1) month plus (ii) the
Applicable Margin for LIBOR Loans on such date of determination.
 
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“Facility Interest Rate” means as of any date of determination the rate at which
the Loans are accruing interest in accordance with Section 2.7.
 
“Fair Market Value” means as to any asset, the current market value of such
asset as determined quarterly by an independent third party reasonably
acceptable to the Administrative Agent utilizing valuation methodologies
reasonably acceptable to the Administrative Agent.
 
“Federal Funds Rate” means, for any day, the rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day, provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day, and (ii) if no such rate is so published on
such next succeeding Domestic Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to KeyBank National Association on such day on
such transactions as determined by the Administrative Agent.
 
“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System as constituted from time to time.
 
“Fee Letter” means that certain Fee Letter between the Borrowers and KeyBank
dated on or about the date hereof, as amended, supplemented or otherwise
modified from time to time.
 
“Fees” means all fees payable or to be payable by the Borrowers as provided for
in Section 2.8 and in the Fee Letter.
 
“First Mortgage Asset” means as to any Person, indebtedness owed to such Person,
which is not the subject of a bankruptcy or similar proceeding, is fully
performing as to payment and material nonpayment obligations thereunder and is
secured by a first Lien of a properly recorded mortgage, deed of trust or other
similar security instrument on a fee interest or a leasehold interest in real
property and all collateral security related thereto (regardless of whether such
Person’s interest therein is characterized as equity according to GAAP).
 
“Fitch” means Fitch, Inc. or any successor thereto.
 
“Fixed Charges” means, with respect to the Consolidated Parties for any period,
the sum of (i) Interest Expense for the such period plus (ii) Preferred
Distributions permitted hereunder for the applicable period plus (iii) Scheduled
Amortization Payments for the applicable period.
 
“Fixed Charge Ratio” means, as of the end of each fiscal quarter of the
Consolidated Parties for the quarterly period ending on such date, the ratio of
(a) EBITDA for the applicable period to (b) Fixed Charges for the applicable
period.
 
“Floating Rate Indebtedness” means, with respect to any Person, Indebtedness of
such Person which accrues interest at a rate which may vary during the term of
such Indebtedness (other than due solely to a default thereunder).
 
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“Floating Rate Assets” means with respect to any Person, the assets of such
Person on the balance sheet of such Person which generate income that fluctuates
based on changes in interest rates.
 
“Fronting Lender” means any Lender which is a party hereto which shall issue a
Letter of Credit with respect to such Notice of Borrowing, subject, however, to
the limitations set forth in Section 2.5. For purposes of this Agreement, the
Fronting Lender shall, unless and until the Administrative Agent shall elect
otherwise (subject, except during the continuance of an Event of Default, to the
prior written consent of the Borrower, which consent shall not be unreasonably
withheld, conditioned or delayed), be KeyBank.
 
“Funded Indebtedness” means, with respect to any Person, without duplication,
all Indebtedness of such Person other than Indebtedness of the types referred to
in clauses (f) and (h) of the definition of "Indebtedness" set forth in this
Section 1.1.
 
“Funds from Operations” means with respect to any Person for any period, an
amount equal to the Net Income of such Person for such period, computed in
accordance with GAAP, excluding gains or losses from sales of depreciable
properties, the cumulative effect of changes in accounting principles, and real
estate depreciation and amortization. Funds from Operations shall be computed in
accordance with the standards established by the National Association of Real
Estate Investment Trusts (NAREIT).

“GAAP” means generally accepted accounting principles recognized as such in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the Financial Accounting Standards
Board.
 
“Group of Loans” means, at any time, a group of Loans consisting of (i) all
Committed Loans which are Alternate Base Rate Loans at such time, or (ii) all
Committed Loans which are LIBOR Loans having the same Interest Period at such
time.
 
“Guarantee Obligation” means as to any Person (the “guaranteeing person”),
without duplication, any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) guaranteeing any Indebtedness, leases, dividends or other obligations
(the “primary obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The terms “Guarantee”
and “Guaranteed” used as a verb shall have a correlative meaning.
 
“Guaranty” means the Unconditional Guaranty of Payment and Performance, dated of
even date herewith, made by the Subsidiary Guarantors in favor of the
Administrative Agent and the Lenders, as the same may be modified or amended,
such Guaranty to be in form and substance satisfactory to the Administrative
Agent.
 
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“Indebtedness” of any Person, without duplication, means, in each case whether
direct or contingent, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (d) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence thereof)
which would appear as liabilities on a balance sheet of such Person, (e) all
indebtedness of others secured by (or for which the holder of such indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(f) all Guarantee Obligations of such Person, (g) the principal portion of all
obligations of such Person under Capital Leases, (h) all Derivative Exposure and
other obligations of such Person in respect of interest rate swap, collar, cap
or other interest rate protection agreements, treasury locks, equity forward
contracts, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
agreements (including, but not limited to, Match Funding Agreements), (i) all
obligations of such Person to repurchase any securities which repurchase
obligation is related to the issuance thereof, (j) the maximum amount of all
letters of credit issued or bankers’ acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such Person
and required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date, (l) the principal portion of all
obligations of such Person for any Off Balance Sheet Liabilities and (m) such
Person’s pro rata portion of the indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.
 
“Indemnitee” has the meaning set forth in Section 9.3(b).
 
“Interest Expense” means, for any period, the interest expense (including,
without limitation, the interest component under Capital Leases) of the
Consolidated Parties for such period, as determined in accordance with GAAP.
 
“Interest Payment Date” means (a) as to Alternate Base Rate Loans, the first day
of each calendar month (as to interest through the end of the prior calendar
month) and the Maturity Date and (b) as to LIBOR Loans, the last day of each
applicable Interest Period and the Maturity Date.
 
“Interest Period” means:
 
(a) with respect to each LIBOR Borrowing, the period commencing on the date of
such Borrowing specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and ending one, two
or three months thereafter, as the Borrower may elect in the applicable Notice
of Borrowing or Notice of Interest Rate Election; provided that:
 
(i) any Interest Period which would otherwise end on a day which is not a LIBOR
Business Day shall be extended to the next succeeding LIBOR Business Day unless
such LIBOR Business Day falls in another calendar month, in which case such
Interest Period shall end on the immediately preceding LIBOR Business Day;
 
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(ii) any Interest Period which begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to
clause (iii) below, end on the last LIBOR Business Day of a calendar month; and
 
(iii) if any Interest Period includes a date on which a payment of principal of
the Loans is required to be made under Section 2.10 but does not end on such
date, then (x) the principal amount (if any) of each LIBOR Loan required to be
repaid on such date shall have an Interest Period ending on such date and (y)
the remainder (if any) of each such LIBOR Loan shall have an Interest Period
determined as set forth above.
 
(b) With respect to each Alternate Base Rate Borrowing, the period commencing on
the date of such Borrowing specified in the applicable Notice of Borrowing or on
the date specified (or deemed specified) in the applicable Notice of Interest
Rate Election and ending on the last day of the calendar month in which such
Notice of Borrowing or Notice of Interest Rate Election was made (or deemed
made); provided that if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.13 but does not
end on such date, then (i) the principal amount (if any) of each Alternate Base
Rate Loan required to be repaid on such date shall have an Interest Period
ending on such date and (ii) the remainder (if any) of each such Alternate Base
Rate Loan shall have an Interest Period determined as set forth above.
 
“Investment Grade” means, as to any asset or Person, such asset or the senior
unsecured indebtedness of such Person is rated by at least one Rating Agency,
and (i) if rated by S&P, having a rating of “BBB-” or higher and (ii) if rated
by Fitch, having a rating of “BBB-“ or higher, and (iii) if rated by Moody’s,
having a rating of “Baa3 “ or higher.
 
“KeyBank” means KeyBank National Association and its successors.
 
“Legal Rate” has the meaning set forth in Section 9.17.
 
“Lender” means each lender listed on the signature pages hereof, each Assignee
which becomes a Lender pursuant to Section 9.6(b), and their respective
successors.
 
“Letter(s) of Credit” has the meaning set forth in Section 2.2.
 
“Letter of Credit Fee” has the meaning set forth in Section 2.8(b).
 
“Letter of Credit Collateral” has the meaning set forth in Section 6.4.
 
“Letter of Credit Collateral Account” has the meaning set forth in Section 6.4.
 
“Letter of Credit Documents” has the meaning set forth in Section 2.16.
 
“Letter of Credit Usage” means at any time the sum of (i) the aggregate maximum
amount available to be drawn under the Letters of Credit then outstanding,
assuming compliance with all requirements for drawing referred to in such
Letters of Credit, and (ii) the aggregate amount which has been drawn under
Letters Credit but for which the applicable Fronting Lender and/or Lenders have
not been reimbursed at such time.
 
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“Leverage Ratio” means, as of any date of calculation, the ratio of (i) Total
Liabilities to (ii) Total Assets of the Consolidated Parties.
 
“LIBOR Business Day” means any Domestic Business Day on which commercial banks
are open for international business (including dealings in dollar deposits) in
London.
 
“LIBOR Lending Office” means, as to each Lender, its office, branch or affiliate
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its LIBOR Lending Office) or
such other office, branch or affiliate of such Lender as it may hereafter
designate as its LIBOR Lending Office by notice to the Borrowers and the
Administrative Agent.
 
“LIBOR Loan” means a Committed Loan to be made by a Lender as a LIBOR Loan in
accordance with the applicable Notice of Committed Borrowing.
 
“Lien” means, with respect to any asset, any mortgage, lien (including any tax
lien or assessment), pledge, charge, security interest or encumbrance of any
kind, or any other type of preferential arrangement that has the effect of
creating a security interest. For purposes of this Agreement, the term “Lien”
shall not include any Excepted Lien. For the purposes of this Agreement, any
Borrowing Base Entity shall be deemed to own subject to a Lien any asset which
it has acquired or holds subject to the interest of a vendor or lessor under any
conditional or installment sales agreement, capital lease or other title
retention agreement relating to such asset.
 
“Loan” means an Alternate Base Rate Loan or a LIBOR Loan and “Loans” means
Alternate Base Rate Loans or LIBOR Loans or any combination of the foregoing.
 
“Loan Documents” means a collective reference to this Agreement, the Notes, the
Guaranty, the Letter of Credit Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case, as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time).
 
“London Interbank Offered Rate” has the meaning set forth in Section 2.7(c).
 
“Margin Stock” has the meaning provided such term in Regulation U of the Federal
Reserve Board.
 
“Match Funding Agreements” shall mean any and all agreements, devices or
arrangements, the counterparty to which has a Credit Rating of at least A- by
Standard & Poor’s or A3 by Moody’s or is otherwise acceptable to the
Administrative Agent, designed to protect any Consolidated Party which is a
party thereto from the fluctuations of interest rate, exchange rate or forward
rate differences between individual assets owned by a Consolidated Party and the
Indebtedness incurred by a Consolidated Party in connection with the origination
or financing of such individual assets, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, Treasury
locks, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts and
warrants.
 
“Material Adverse Effect” means an effect resulting from any circumstance or
event or series of circumstances or events, of whatever nature (but excluding
general economic conditions), which, taken as a whole, (i) could reasonably be
expected to materially and adversely affect the business, operations,
properties, assets or financial condition of NorthStar, any other Borrower, or,
with respect to the Borrowing Base Entities, the Borrowing Base Entities taken
as a whole, or (ii) could reasonably be expected to impair the ability of
NorthStar, any other Borrower or any Borrowing Base Entity to fulfill its
material obligations, including, if applicable, their ability to perform their
respective obligations under the Loan Documents or which causes a Default under
Section 5.8 hereof.
 
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“Material Plan” means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $1,000,000.
 
“Materials of Environmental Concern” means and includes pollutants,
contaminants, wastes, toxic and hazardous substances, petroleum and petroleum
by-products.
 
“Maturity Date” means the date when all of the Obligations hereunder shall be
due and payable which shall be November 3, 2009, unless accelerated pursuant to
the terms hereof.
 
“Moody’s” means Moody’s Investors Services, Inc. or any successor thereto.
 
“Multiemployer Plan” means at any time an employee pension benefit plan within
the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
 
“Net Equity Proceeds” means the aggregate cash proceeds received by the
Consolidated Parties in respect of any Equity Issuance, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking fees
and sales commissions) and (b) taxes paid or payable as a result thereof; it
being understood, (i) that “Net Equity Proceeds” shall include, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received by the Consolidated Parties in any Equity Issuance, and
(ii) that “Net Equity Proceeds” shall not include cash proceeds that are applied
within thirty (30) days of the date of the related Equity Issuance to retire
Capital Stock.
 
“Net Equity Value” means with respect to any Property Equity Interest, the
lesser of (i) the un-depreciated Book Value of the related Real Property Asset
(inclusive of any FAS 141 intangibles incurred in connection with the
acquisition of such Real Property Asset) and (ii) the Underlying Real Estate
Value of the related Real Property Asset less, in each case, any Indebtedness of
any Person relating to such Real Property Asset which is permitted by the terms
of Exhibit G hereto.
 
“Net Equity CDO Value” means with respect to any Eligible CDO Equity Interest,
the lesser of (a) (i) with respect to an Eligible CDO Equity Interest in an
Eligible CDO that is not a Consolidated Party, the Fair Market Value of such
Eligible CDO Equity Interest, and (ii) with respect to an Eligible CDO Equity
Interest in an Eligible CDO that is a Consolidated Party, an amount equal to (A)
the Book Value to the extent the CDO collateral consists of loans or (B) the
Fair Market Value to the extent the CDO collateral consists of real estate
securities, as the case may be, minus the outstanding principal amount of all
notes or real estate securities (including any capitalized interest thereon)
issued by the related Eligible CDO (other than the Eligible CDO Equity Interest
being valued), plus or minus the Fair Market Value of any interest rate swap
relating to such Eligible CDO Equity Interest, and (b) the Net Outstanding
Portfolio Balance under the CDO Indenture to which such Eligible CDO Equity
Interest relates minus the outstanding principal amount of all notes or debt
securities (including any capitalized interest thereon) issued by the related
Eligible CDO.
 
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“Net Income” means, for any period, net income or loss after taxes for such
period of the Consolidated Parties, as determined in accordance with GAAP.
 
“Net Outstanding Portfolio Balance” shall have the meaning set forth in the
reports issued by the trustees pursuant to the applicable CDO Indentures; “Net
Outstanding Portfolio Balance” may also refer to the “Principal Coverage Amount”
as defined in the applicable CDO Indenture provided that such definition is
acceptable to the Administrative Agent. If such term is not defined in any
trustee report or by reference to the applicable CDO Indenture or the
Administrative Agent reasonably determines that such definition is not
acceptable, such term shall have the meaning agreed to by NorthStar and the
Administrative Agent.

“NNN Holdings” means NRFC NNN Holdings, LLC, a Delaware limited liability
company.

“Non-Wholly-Owned Subsidiary” means a Subsidiary which is not a Wholly-Owned
Subsidiary.

“Non-Recourse Debt” as to any Person means Indebtedness (i) for which the right
of recovery of the obligee thereof is limited to recourse against the asset
securing such Indebtedness (subject to such customary carve-out matters for
which such Person has a Guarantee Obligation made in connection with such
Indebtedness, such as fraud, misappropriation, bankruptcy, misapplication and
environmental indemnities, unless, until and for so long as a claim for payment
or performance has been made thereunder (which has not been satisfied) at which
time the obligations with respect to any such customary carve-out shall not be
considered Non-Recourse Debt, to the extent that such claim is a liability of
such Person for GAAP purposes) and/or (ii) other Indebtedness for which such
Person has no Guarantee Obligation (other than guarantees of customary carve-out
matters made in connection with such Indebtedness, such as fraud,
misappropriation, bankruptcy, environmental matters and misapplication, unless,
until and for so long as a claim for payment or performance has been made
thereunder (which has not been satisfied), at which time such guarantee of any
such customary carve-out shall not be considered Non-Recourse Debt of such
Person, to the extent that such claim is a liability of such Person for GAAP
purposes).
 
“Non-NorthStar Plan” means any Plan other than a NorthStar Plan.
 
“NorthStar’s 2005 Form 10-K” means NorthStar’s annual report on Form 10-K for
the Fiscal Year ended December 31, 2005, as filed with respect to NorthStar with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934.
 
“NorthStar’s 2006 Form 10-Q” means the quarterly report on Form 10-Q for the
fiscal quarter ended June 30, 2006, as filed with respect to NorthStar with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
 
“NorthStar Plan” means a Plan in the ERISA Group sponsored, maintained or
contributed to by NorthStar, NorthStar OP or any other Borrower.
 
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“Notes” means promissory notes of the Borrowers, substantially in the form of
Exhibit “A” hereto, evidencing the obligation of the Borrowers to repay the
Loans, and “Note” means any one of such promissory notes issued hereunder.
 
“Notice of Borrowing” means a Notice of Committed Borrowing (as defined in
Section 2.3).
 
“Notice of Interest Rate Election” has the meaning set forth in Section 2.6.
 
“NS Holdings I” means NS Holdings I, LLC, a Delaware limited liability company.

“NS Holdings II” means NS Holdings II, LLC, a Delaware limited liability
company.

“NS Holdings III” means NS Holdings III, LLC, a Delaware limited liability
company.

“Obligations” means all obligations, liabilities and indebtedness of every
nature of the Borrowers, from time to time owing to any Lender under or in
connection with this Agreement or any other Loan Document, including, without
limitation, (i) the outstanding principal amount of the Committed Loans at such
time, plus (ii) the Letter of Credit Usage at such time.
 
“Off Balance Sheet Asset” means, with respect to any Person, any asset that is
subject to an Off Balance Sheet Financing, and as a result of such transaction
such asset does not (and is not required pursuant to GAAP) to appear as an asset
on the balance sheet of such Person.
 
“Off Balance Sheet Liabilities” means, with respect to any Person, any (a)
repurchase obligation or liability, contingent or otherwise, of such Person with
respect to any mortgages, mortgage notes, accounts or notes receivable sold,
transferred or otherwise disposed of by such Person, (b) repurchase obligation
or liability, contingent or otherwise, of such Person with respect to property
or assets leased by such Person as lessee and (c) obligations, contingent or
otherwise, of such Person under any Off Balance Sheet Transaction, in each case,
if the transaction giving rise to such obligation (i) is considered Indebtedness
for borrowed money for tax purposes, and (ii) does not (and is not required
pursuant to GAAP) to appear as a liability on the balance sheet of such Person.
 
“Off Balance Sheet Transaction” means, with respect to any Person, any synthetic
lease, tax retention operating lease, commercial mortgage backed securities
transaction, securitization transaction, collateralized debt obligation
transaction, off balance sheet loan or similar off balance sheet financing.
 
“Outstanding Balance” means at any time, and from time to time, the sum of (i)
the aggregate outstanding principal balance of all Committed Loans and (ii) the
Letter of Credit Usage.
 
“Parent” means, with respect to any Lender, any Person controlling such Lender.
 
“Participant” has the meaning set forth in Section 9.6(c).
 
“Partnership” means any general or limited partnership, joint venture,
corporation, limited liability company, limited liability partnership, limited
liability limited partnership or other Person which is not a natural Person or
the estate of a deceased natural Person and which owns directly an interest in
real property.
 
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“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
 
“Person” means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
 
“Plan” means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
 
“Preferred Distributions” means for any period, the amount of any and all
Distributions paid, declared but not yet paid or otherwise due and payable to
the holders of any form of preferred stock or partnership interest (whether
perpetual, convertible or otherwise) or other ownership or beneficial interest
in NorthStar or any Subsidiary thereof that entitles the holders thereof to
preferential payment or distribution priority with respect to dividends,
distributions, assets or other payments over the holders of any other stock,
partnership interest or other ownership or beneficial interest in such Person.

“Preferred Securities” means any stock, shares or other such interests (which is
not the subject of a bankruptcy or similar proceeding) in and to a Person
primarily and directly engaged (directly or through a Subsidiary) in the
business of the ownership, operation and/or management of real property, the
terms of which stock, shares or other interests provide the holders of the
shares thereof with a liquidation preference in the assets of such Person in
relation to the holders of the common stock of such Person.

“Prime Rate” means the rate of interest publicly announced by KeyBank from time
to time as its Prime Rate.

“Property Equity Interest” means, with respect to a Real Property Asset, the
ownership interest in such Real Property Asset.

“Property Expenses” means, with respect to any applicable time period for any
Real Property Asset, the costs of maintaining such Real Property Asset which are
the responsibility of the owner thereof, including, without limitation, taxes,
insurance, repairs and maintenance during such period.

“Property NOI” means, with respect to any applicable time period for any Real
Property Asset, (a) Property Revenues for such period with respect to such Real
Property Asset less (b) the sum of (i) Property Expenses for such period with
respect to such Real Property Asset, plus (ii) the Capital Replacement Reserve
amount for such Real Property Asset during such period (but only to the extent
NorthStar or an Affiliate of NorthStar is responsible for such costs), plus
(iii) a management fee in the amount of three percent (3%) of total revenues
derived from the Real Property Asset during such period; provided, that such
amount shall be exclusive of any adjustment for such period attributable to the
Straight-Lining of Rents.
 
“Property Revenues” means, with respect to any applicable time period for any
Real Property Asset, the base rent, expense reimbursement and other recurring
rental income received during such period (other than prepaid rents and revenues
and security deposits except to the extent applied in satisfaction of tenants’
obligations for rent).
 
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“Rating Agencies” means, collectively, S&P, Moody’s and Fitch.
 
“Real Estate Securities” means securities issued (i) pursuant to a
securitization of commercial mortgage loans or (ii) by a real estate operating
company or REIT.
 
“Real Property Assets” means, as of any time as to any Person, the real property
assets in which such Person has a fee title ownership interest or possesses a
leasehold interest at such time.
 
“Real Property Subsidiary” has the meaning set forth in Section 5.23.
 
“Recourse Debt” as to any Person means all Indebtedness other than Non-Recourse
Debt. TruPS shall be considered Recourse Debt for purposes of Section 6.1(e).
 
“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
 
“Required Lenders” means at any time Lenders having at least 66.67% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes and/or participations in Letters of Credit evidencing
at least 66.67% of the aggregate unpaid principal amount of the Committed Loans
and Letter of Credit Usage.
 
“Scheduled Amortization Payments” means, for a given period, the sum of all
scheduled payments of principal on Funded Indebtedness for the Consolidated
Parties for the applicable period ending on such date (including the principal
component of payments due on Capital Leases during the applicable period); it
being understood that Scheduled Amortization Payments shall not include any
one-time “bullet”, “lump sum” or “balloon” payments due in respect of Funded
Indebtedness.
 
“Senior Management Fees” means revenue derived from senior management fees
payable to NS Advisors in respect of the management of a Borrowing Base Asset
less any costs incurred by the Consolidated Parties that are allocable to the
such revenues.
 
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereto.
 
“Solvent” means, with respect to any Person, that (i) the fair saleable value of
such Person’s assets exceeds the Indebtedness of such Person, (ii) such Person
has the ability to generally pay its debts and other liabilities as they become
due in ordinary course of business and (iii) such Person has sufficient capital
to conduct its business in the ordinary course of business.
 
“Special Purpose Entity” means any entity whose structure and organizational and
governing documents satisfy, in form and substance, Rating Agency special
purpose entity requirements.
 
“Straight-Lining of Rents” means, with respect to any lease, the method by which
rent with respect to such lease is considered earned or expensed equally over
the term of such lease despite the existence of (i) any free rent periods under
such lease and (ii) any rent step-up provisions under such lease.
 
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“Subordinated Assets” means Subordinated Debt Assets and Preferred Securities.
 
“Subordinated Debt Assets” means as to any Person, mezzanine or other
subordinated indebtedness owed to such Person, which is not the subject of a
bankruptcy or similar proceeding, is fully performing as to payment and material
nonpayment obligations thereunder and is secured by (i) a Lien of a properly
recorded mortgage, deed of trust or other similar security instrument on a fee
interest or a leasehold interest in real property and all collateral security
related thereto, which indebtedness is subject to only to a first Lien of a
recorded mortgage, deed of trust or other similar security instrument or (ii) a
pledge of the direct or indirect ownership interests in the Person owing such
mezzanine or other indebtedness, which ownership interests are subject to no
other Lien.
 
“Subsidiary” means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions are at the time
directly or indirectly owned by NorthStar.
 
“Subsidiary Guarantor” means (i) each Subsidiary of a Borrower that owns
Borrowing Base Assets included in the Borrowing Base Assets Pool (other than any
Real Property Subsidiary or any CDO Subsidiary), (ii) NNN Holdings, (iii) NS
Holdings I, (iv) NS Holdings II and (v) NS Holdings III, together with any
Subsidiary of a Borrower that shall become a Subsidiary Guarantor pursuant to
Section 5.24.
 
“Syndication Agent” means Bank of America, N.A., in its capacity as Syndication
Agent hereunder, and its permitted successors in such capacity in accordance
with the terms of this Agreement.
 
“Term” has the meaning set forth in Section 2.9.
 
“Termination Event” means, with respect to a NorthStar Plan, or with respect to
a Non-NorthStar Plan (but, as to any Non-NorthStar Plan, only to the extent an
event described in (i) through (v) below would result in a Material Adverse
Effect), (i) a “reportable event”, as such term is described in Section 4043 of
ERISA (other than a “reportable event” not subject to the provision for 30-day
notice to the PBGC), or an event described in Section 4062(e) of ERISA, (ii) the
withdrawal by any member of the ERISA Group from a Multiemployer Plan during a
plan year in which it is a “substantial employer” (as defined in Section
4001(a)(2) of ERISA), or the incurrence of liability by any member of the ERISA
Group under Section 4064 of ERISA upon the termination of a Multiemployer Plan,
(iii) the filing of a notice of intent to terminate any Plan under Section 4041
of ERISA, other than in a standard termination within the meaning of Section
4041 of ERISA, or the treatment of a Plan amendment as a distress termination
under Section 4041 of ERISA, (iv) the institution by the PBGC of proceedings to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or cause a trustee to be appointed to administer, any Plan
or (v) any other event or condition that would constitute grounds for the
termination of, or the appointment of a trustee to administer, any Plan or the
imposition of any liability or encumbrance or Lien on any Real Property Assets
or any member of the ERISA Group under ERISA.
 
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“Total Available Commitments” means, at any time of determination, the lesser of
(a) the aggregate amount of the Commitments at such time, or (b) the then
Borrowing Base Availability.
 
“Total Assets” means, as to any Person as of any date, all assets of such Person
determined in accordance with GAAP, adjusted (i) to give effect to the
proportional ownership by such Person of any Non-Wholly-Owned Subsidiary of such
Person and any partnership or unincorporated joint venture in which such Person
is a general partner or a joint venturer and (ii) to include on the balance
sheet of such Person any Off Balance Sheet Assets of such Person.
 
“Total Liabilities” means the sum of (i) total liabilities of the Consolidated
Parties, as determined in accordance with GAAP (exclusive of escrow deposits and
other liabilities for which cash has been received and is classified under
“restricted cash” on the balance sheet of such Person), plus (ii) the total
Contingent Obligations of the Consolidated Parties, in each case adjusted (A) to
give effect to the proportional ownership by such Person of any Non-Wholly-Owned
Subsidiary of such Person and any partnership or unincorporated joint venture in
which such Person is a general partner or a joint venturer and (B) to include on
the balance sheet of such Person any Off Balance Sheet Liabilities of such
Person, minus, Indebtedness of the Consolidated Parties in respect of TruPS.
 
“TruPS” means those REIT trust preferred securities issued by a Consolidated
Party identified on Schedule 1.1 hereto and such other REIT trust preferred
securities issued by a Consolidated Party which are approved by the
Administrative Agent, in each case which are expressly subordinated to all other
Indebtedness of the Consolidated Parties. REIT trust preferred securities issued
by a Consolidated Party shall be approved by the Administrative Agent if such
securities are issued on terms substantially similar to those securities listed
on Schedule 1.1, as determined by the Administrative Agent in its reasonable
discretion.
 
“Underlying Asset” means as to any First Mortgage Asset or Subordinated Debt
Asset, the real property encumbered thereby or, as to any Preferred Securities,
the real property which is owned directly by the Person in which the Securities
are part of the equity structure thereof.
 
“Underlying Real Estate Value” means as to any Real Property Assets or any
Underlying Assets (a) the appraised value of the real property as reflected in
the most recent MAI appraisal in form and substance reasonably acceptable to the
Administrative Agent or (b) where no MAI appraisal is available, (i) the
annualized Property NOI for such property based upon the most recently completed
two fiscal quarters, divided by (ii) the Capitalization Rate.
 
“Unfunded Liabilities” means, with respect to any Plan at any time, the amount
(if any) by which (i) the value of all benefit liabilities under such Plan,
determined on a plan termination basis using the assumptions prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value
of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a reasonably likely liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
 
“United States” means the United States of America, including the fifty states
and the District of Columbia.
 
“Unused Commitment Fee” has the meaning set forth in Section 2.8(c).
 
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“Wholly-Owned Subsidiary” means, with respect to any Person, a Subsidiary of
such Person of which one hundred percent (100%) of the outstanding shares of
stock or other equity interests are owned, directly or indirectly, by such
Person (excluding, in the case of NRFC Sub-REIT, preferred shares that are owned
by a Person other than a Borrower solely for purposes of compliance with the
REIT minimum number of shareholders rules).
 
Section 1.2 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP applied on a
basis consistent (except for changes concurred in by NorthStar’s independent
public accountants) with the most recent audited consolidated financial
statements of NorthStar and its Consolidated Subsidiaries delivered to the
Administrative Agent; provided that, if the Borrowers notify the Administrative
Agent that the Borrowers wish to amend any covenant in Article V to eliminate
the effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrowers that the Required Lenders wish to
amend Article V for such purpose), then the applicable Person’s compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective until either such notice is
withdrawn or such covenant is amended in a manner reasonably satisfactory to the
Borrowers and the Required Lenders. All calculations with respect to the defined
terms and the covenants in Article V shall be done without duplication.
 
Section 1.3 Types of Borrowings. The term “Borrowing” denotes the aggregation of
Loans of one or more Lenders to be made to the Borrowers pursuant to Article II
on the same date, all of which Loans are of the same type (subject to Article
VIII) and, except in the case of Alternate Base Rate Loans, have the same
Interest Period. Borrowings are classified for purposes of this Agreement either
by reference to the pricing of Loans comprising such Borrowing (e.g., a “LIBOR
Borrowing” is a Borrowing comprised of LIBOR Loans) or by reference to the
provisions of Article II under which participation therein is determined (i.e.,
a “Committed Borrowing” is a Borrowing under Section 2.1 in which all Lenders
participate in proportion to their Commitments).
 
ARTICLE II
 
THE COMMITMENTS
 
Section 2.1 Commitments to Lend. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Committed Loans to the Borrowers
or participate in Letters of Credit issued by the Fronting Lender on behalf of
Borrowers pursuant to this Article from time to time during the term hereof in
amounts such that the aggregate principal amount of Committed Loans by such
Lender at any one time outstanding plus such Lender’s pro rata share (based on
the ratio of its Commitment to the aggregate of all Commitments) of Letter of
Credit Usage shall not exceed the amount of its Available Commitment. The
aggregate amount of Committed Loans together with the Letter of Credit Usage
shall not exceed the lesser of (i) the Facility Amount and (ii) the Total
Available Commitments. The aggregate dollar amount of Letters of Credit Usage
shall not at any time exceed Ten Million Dollars ($10,000,000). Each Borrowing
outstanding under this Section 2.1 (other than a Borrowing in connection with a
draw under a Letter of Credit) shall be in an aggregate principal amount of
$5,000,000 (for LIBOR Loans) or $1,000,000 (for Alternate Base Rate Loans), or
in each case an integral multiple of $1,000,000 in excess thereof (except that
any such Borrowing may be in the aggregate amount available in accordance with
Section 3.2(c)) and shall be made from the several Lenders ratably in proportion
to their respective Commitments. Subject to the limitations set forth herein,
any amounts repaid may be reborrowed.
 
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Section 2.2 Notice of Committed Borrowing. The Borrowers shall give
Administrative Agent notice not later than 12:00 noon (New York, New York time)
(x) one (1) Domestic Business Day before each Alternate Base Rate Borrowing, or
(y) three (3) LIBOR Business Days before each LIBOR Borrowing, specifying:
 
(i) the date of such Borrowing, which shall be a Domestic Business Day in the
case of a Domestic Borrowing or a LIBOR Business Day in the case of a LIBOR
Borrowing,
 
(ii) the aggregate amount of such Borrowing,
 
(iii) whether the Loans comprising such Borrowing are to be Alternate Base Rate
Loans or LIBOR Loans,
 
(iv) in the case of a LIBOR Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of Interest
Period,
 
(v) the Total Available Commitments,
 
(vi) the Outstanding Balance.
 
Together with the notice to the Administrative Agent as specified immediately
above, the Borrowers shall deliver to the Administrative Agent a completed,
current certificate, identifying the Borrowing Base Assets against which the
Borrowing is being requested, setting forth the calculation of Borrowing Base
Availability, and providing other information concerning the Borrowing Base and
the Borrowers, in the form attached hereto as Exhibit D (a “Borrowing Base
Certificate”).
 
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The Borrowers shall give the Administrative Agent and the designated Fronting
Lender, written notice that it desires to have Letters of Credit (a “Letter of
Credit”) issued hereunder no later than 10:00 A.M., New York, New York time, at
least five (5) Domestic Business Days prior to the date of such issuance. Each
such notice shall specify (i) the designated Fronting Lender (if other than
KeyBank and, if not KeyBank, such other Fronting Lender shall be subject to the
approval of the Administrative Agent), (ii) the aggregate amount of the
requested Letters of Credit, (iii) the individual amount of each requested
Letter of Credit and the number of Letters of Credit to be issued, (iv) the date
of such issuance (which shall be a Domestic Business Day), (v) the name and
address of the beneficiary, (vi) the expiration date of the Letter of Credit
(which in no event shall be in excess of twelve (12) months from the date of
issuance or less than thirty (30) days prior to the Maturity Date), (vii) the
purpose and circumstances for which such Letter of Credit is being issued,
(viii) the terms upon which such Letter of Credit may be drawn down (which terms
shall be approved by the Fronting Lender), (ix) the Total Available Commitments,
(x) the Borrowing Base Assets against which the issuance of the Letter(s) of
Credit is being requested and the Borrowing Base Value of such Borrowing Base
Assets (taking into consideration the amount of all Borrowings and Letter of
Credit Usage outstanding with respect to such Borrowing Base Assets), including
a certification from the chief financial officer or chief accounting officer of
NorthStar setting forth in reasonable detail the manner by which the foregoing
calculations have been made, and (xi) the Outstanding Balance. Together with the
notice to the Administrative Agent as specified immediately above, the Borrowers
shall deliver to the Administrative Agent a completed, current Borrowing Base
Certificate stating that, after taking into account the issuance of any such
Letter(s) of Credit, the Borrowers shall be in full compliance with all of the
covenants contained in Section 5.8 of this Agreement and that the requirements
with respect to the Borrowing Base Values shall be met. Each such notice may be
revoked telephonically by Borrowers to each of the applicable Fronting Lender
and the Administrative Agent any time prior to the date of issuance of the
Letter of Credit by the applicable Fronting Lender, provided such revocation is
confirmed in writing by Borrowers to Fronting Lender and the Administrative
Agent within one (1) Domestic Business Day by facsimile. No later than 10:00
A.M. New York, New York time on the date that is five (5) Domestic Business Days
prior to the date of issuance, Borrowers shall specify a precise description of
the documents and the verbatim text of any certificate to be presented by the
beneficiary of such Letter of Credit, which if presented by such beneficiary
prior to the expiration date of the Letter of Credit would require Fronting
Lender to make a payment under the Letter of Credit; provided that Fronting
Lender may, in its reasonable judgment, require reasonable changes in any such
documents and certificates only in conformity with changes in customary and
commercially reasonable practice or law and provided further, that no Letter of
Credit shall require payment against a conforming draft to be made thereunder on
the following Domestic Business Day that such draft is presented if such
presentation is made later than 10:00 A.M. New York, New York time (except that
if the beneficiary of any Letter of Credit requests at the time of the issuance
of its Letter of Credit that payment be made on the same Domestic Business Day
against a conforming draft, such beneficiary shall be entitled to such a same
day draw, provided such draft is presented to the applicable Fronting Lender no
later than 10:00 A.M. New York, New York time and provided further that, prior
to the issuance of such Letter of Credit, Borrowers shall have requested to
Fronting Lender and the Administrative Agent that such beneficiary shall be
entitled to a same day draw). In determining whether to pay on such Letter of
Credit, Fronting Lender shall be responsible only to determine that the
documents and certificates required to be delivered under the Letter of Credit
have been delivered and that they comply on their face with the requirements of
that Letter of Credit.
 
Section 2.3 Notice to Lenders; Funding of Loans.
 
(a) Upon receipt of a notice from Borrowers in accordance with Section 2.2
hereof (each such notice being a “Notice of Committed Borrowing”), the
Administrative Agent shall, on the date such Notice of Committed Borrowing is
received by the Administrative Agent, notify each Lender of the contents thereof
and of such Lender’s share of such Borrowing, of the interest rate determined
pursuant thereto and the Interest Period(s) (if different from those requested
by the Borrowers) and (unless such Notice of Committed Borrowing is for the
issuance of a Letter of Credit) such Notice of Committed Borrowing shall not
thereafter be revocable by the Borrowers, except as is otherwise specifically
provided for in this Agreement.
 
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(b) Not later than 1:00 p.m. (New York, New York time) on the date of each
Borrowing as indicated in the Notice of Committed Borrowing, each Lender shall
(except with respect to Notices of Committed Borrowing for issuances of Letters
of Credit) make available its share of such Borrowing in Federal funds
immediately available in New York, New York, to the Administrative Agent at its
address referred to in Section 9.1. If Borrowers have requested the issuance of
a Letter of Credit, no later than 12:00 Noon (New York, New York time) on the
date of such issuance as indicated in the Notice of Committed Borrowing,
Fronting Lender shall issue such Letter of Credit in the amount so requested and
deliver the same to Borrower, with a copy thereof to the Administrative Agent.
Immediately upon the issuance of each Letter of Credit by Fronting Lender, such
Fronting Lender shall be deemed to have sold and transferred to each other
Lender, and each such other Lender shall be deemed to, and hereby agrees to,
have irrevocably and unconditionally purchased and received from Fronting
Lender, without recourse or warranty, an undivided interest and a participation
in such Letter of Credit, any drawing thereunder, and the obligations of
Borrowers hereunder with respect thereto, and any security therefor or guaranty
pertaining thereto, in an amount equal to such Lender’s ratable share thereof
(based upon the ratio its Commitment bears to the aggregate of all Commitments).
Upon any change in any of the Commitments in accordance herewith, there shall be
an automatic adjustment to such participations to reflect such changed shares.
The applicable Fronting Lender shall have the primary obligation to fund any and
all draws made with respect to such Letter of Credit notwithstanding any failure
of a participating Lender to fund its ratable share of any such draw. Unless the
Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will instruct the
applicable Fronting Lender to make such Letter of Credit available to the
Borrowers and such Fronting Lender shall make such Letter of Credit available to
the Borrowers at the Borrowers’ aforesaid address on the date of the issuance of
such Letter of Credit. Without in any way implying a right of Fronting Lender
not to issue a Letter of Credit as provided for herein, if a Fronting Lender
shall fail to issue a Letter of Credit (notwithstanding that the applicable
conditions specified in Article III have been satisfied), the Borrowers may
designate a substitute Fronting Lender, provided that the notice periods set
forth in Section 2.2(b) above shall begin anew.
 
(c) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.3 and the Administrative Agent may, in reliance
upon such assumption, but shall not be obligated to, make available to the
Borrowers on such date a corresponding amount on behalf of such Lender. If and
to the extent that such Lender shall not have so made such share available to
the Administrative Agent, such Lender and, without prejudice with respect to its
rights and remedies against such Lender, the Borrowers, severally agree to repay
to the Administrative Agent, within one (1) Domestic Business Day following
receipt of demand, such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrowers until the
date such amount is repaid to the Administrative Agent, at (i) in the case of
the Borrowers, a rate per annum equal to the interest rate applicable thereto
pursuant to Section 2.6 and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Lender’s Loan included in
such Borrowing for purposes of this Agreement. If at any time, any Lender shall
fail to make available to the Administrative Agent such Lender’s share of any
such Borrowing, as provided for in this Section 2.3(c), the Borrowers shall have
the right, upon five (5) Domestic Business Day’s notice to the Administrative
Agent to either (x) cause a bank, reasonably acceptable to the Administrative
Agent, to offer to purchase the Commitments of such Lender for an amount equal
to such Lender’s outstanding Committed Loans, and to become a Lender hereunder,
which offer such Lender is hereby required to accept, or (y) to repay in full
all Committed Loans then outstanding of such Lender, together with interest and
all other amounts due thereon, upon which event, such Lender’s Commitment shall
be deemed to be cancelled pursuant to Section 2.11(c) and the Facility Amount
shall be reduced by a corresponding amount.
 
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Section 2.4 Notes.
 
(a) The Committed Loans of each Lender shall be evidenced by a single Note
payable to the order of such Lender for the account of its Applicable Lending
Office.
 
(b) Each Lender may, by notice to the Borrowers and the Administrative Agent,
request that its Committed Loans be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Committed Loans. Any
additional costs incurred by the Administrative Agent, the Borrowers or the
Lenders in connection with preparing such a Note shall be at the sole cost and
expense of the Lender requesting such Note. In the event any Committed Loans
evidenced by such a Note are paid in full prior to the Maturity Date, any such
Lender shall return such Note to the Borrowers. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate modifications to
reflect the fact that it evidences solely Loans of the relevant type. Each
reference in this Agreement to the “Note” of such Lender shall be deemed to
refer to and include any or all of such Notes, as the context may require.
 
(c) Upon receipt of each Lender’s Note pursuant to Section 3.1(a), the
Administrative Agent shall forward such Note to such Lender. Each Lender shall
record in its records the date, amount, type and maturity of each Loan made by
it and the date and amount of each payment of principal made by the Borrowers
with respect thereto, and may, if such Lender so elects in connection with any
transfer or enforcement of its Note, endorse on the appropriate schedule
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding; provided that the failure of any Lender to make any
such recordation or endorsement shall not affect the obligations of the
Borrowers hereunder or under the Notes. Each Lender is hereby irrevocably
authorized by the Borrowers so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
 
(d) The Loans shall mature, and the remaining principal amount thereof shall be
due and payable by the Borrowers, on the Maturity Date.
 
(e) There shall be no more than six (6) Interest Periods applicable to the LIBOR
Loans outstanding at any one time. Notwithstanding the foregoing, subject to the
approval of the Administrative Agent, in the event the Borrowers wish to combine
one or more LIBOR Loans into a single Interest Period, the Borrowers may from
time to time be entitled to select an Interest Period of less than one month,
with interest at a rate per annum equal to the sum of (i) the Adjusted London
Interbank Offered Rate on the date of determination for an Interest Period of
one (1) month plus (ii) the Applicable Margin for LIBOR Loans on such date of
determination.
 
Section 2.5 Letters of Credit.
 
(a) Subject to the terms contained in this Agreement and the other Loan
Documents, upon the receipt of a Notice of Committed Borrowing requesting the
issuance of a Letter of Credit, Fronting Lender shall issue a Letter of Credit
or Letters of Credit in such form as is reasonably acceptable to Borrowers, in
an aggregate amount equal to the amount requested, provided that after the
issuance of such Letters of Credit, (i) the aggregate amount of issued and
outstanding Letters of Credit shall not exceed Ten Million Dollars
($10,000,000), and (ii) the Letter of Credit Usage, when added to the aggregate
principal amount of the Committed Loans outstanding, shall not exceed the lesser
of (y) the Total Available Commitments, and (z) the Facility Amount. Fronting
Lender shall promptly notify Administrative Agent and each Lender of the
issuance of any such Letter of Credit, together with the amount thereof,
simultaneously therewith.
 
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(b) Each Letter of Credit shall be issued in the minimum aggregate amount of One
Million Dollars ($1,000,000) or any amount in excess thereof.
 
(c) In the event of any request for a drawing under any Letter of Credit by the
beneficiary thereunder, Fronting Lender shall promptly notify Borrowers and the
Administrative Agent (and the Administrative Agent shall promptly notify each
Lender thereof) on or before the date on which Fronting Lender intends to honor
such drawing, and, except as provided in this subsection (c), Borrowers shall
reimburse Fronting Lender, in immediately available funds, on the same day on
which such drawing is honored in an amount equal to the amount of such drawing.
Notwithstanding anything contained herein to the contrary, however, unless
Borrowers shall have notified the Administrative Agent and Fronting Lender prior
to 10:00 a.m. (New York, New York time) on the date of such drawing (provided
that the same shall be a Domestic Business Day) that Borrowers intend to
reimburse Fronting Lender for the amount of such drawing with funds other than
the proceeds of the Loans, Borrowers shall be deemed to have timely given a
Notice of Committed Borrowing pursuant to Section 2.2 to the Administrative
Agent, requesting a Borrowing of Alternate Base Rate Loans on the date on which
such drawing is honored and in an amount equal to the amount of such drawing.
Each Lender shall, in accordance with Section 2.3(b), make available its share
of such Borrowing to the Administrative Agent, the proceeds of which shall be
applied directly by the Administrative Agent to reimburse Fronting Lender for
the amount of such draw. In the event that any Lender fails to make available to
Fronting Lender the amount of such Lender’s participation on the date of a
drawing, Fronting Lender shall be entitled to recover such amount on demand from
such Lender together with interest at the Federal Funds Rate commencing on the
date of drawing.
 
(d) If, after the date hereof, any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (a) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit issued by, or assets held by, or deposits in or for the account of, or
participations in any letter of credit, upon any Lender (including Fronting
Lender) or (b) impose on any Lender any other condition regarding this Agreement
or such Lender (including Fronting Lender) as it pertains to the Letters of
Credit or any participation therein and the result of any event referred to in
the preceding clause (a) or (b) shall be to increase the cost to the Fronting
Lender or any Lender of issuing or maintaining any Letter of Credit or
participating therein then the Borrowers shall pay to the Fronting Lender or
such Lender, upon written demand therefor to the Borrowers from the
Administrative Agent (provided such demand is received by the Borrowers within
one hundred twenty (120) days following the date on which such increased cost
becomes effective as against the Fronting Lender or such Lender), such
additional amounts as shall be required to compensate the Fronting Lender or
such Lender for such increased costs or reduction in amounts received or
receivable hereunder together with interest thereon at the Federal Funds Rate
plus the Applicable Margin on Alternate Base Rate Loans at such time. The amount
specified in the written demand shall be conclusive in the absence of
demonstrable error.
 
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(e) Borrower hereby agrees to protect, indemnify, pay and save Fronting Lender
harmless from and against any and all actual claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable, actual
attorneys’ fees and disbursements) which Fronting Lender may incur or be subject
to as a result of (i) the issuance of the Letters of Credit, other than as a
result of the gross negligence or willful misconduct of Fronting Lender or (ii)
the failure of Fronting Lender to honor a drawing under any Letter of Credit as
a result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (collectively,
“Governmental Acts”). As between Borrowers or any Fronting Lender, Borrowers
assume all risks of the acts and omissions of, or misuses of the Letters of
Credit issued by Fronting Lender by, the beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the foregoing, Fronting Lender
shall not be responsible (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of such Letters of Credit, even if it
should in fact prove to be in any and all respects invalid, insufficient,
inaccurate, fraudulent or forged unless the Fronting Lender’s payment of under
such Letter of Credit constitutes gross negligence or willful misconduct; (ii)
for the validity or insufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit unless the Fronting Lender’s acquiescence to
such noncompliance constitutes gross negligence or willful misconduct; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
message, by mail, cable, telegraph, telex, facsimile transmission, or otherwise;
(v) for errors in interpretation of any technical terms; (vi) for any loss or
delay in the transmission or otherwise of any documents required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof; (vii)
for the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of such Letter of Credit; and (viii) for any consequence arising from
causes beyond the control of Fronting Lender including any Government Acts. None
of the above shall affect, impair or prevent the vesting of Fronting Lender’s
rights and powers hereunder. In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action taken or omitted by
Fronting Lender under or in connection with the Letters of Credit issued by it
or the related certificates, if taken or omitted in good faith, shall not put
Fronting Lender under any resulting liability to the Borrowers.
 
(f) If Fronting Lender or the Administrative Agent is required at any time,
pursuant to any bankruptcy, insolvency, liquidation or reorganization law or
otherwise, to return to any Borrower any reimbursement by any Borrower of any
drawing under any Letter of Credit, each Lender shall pay to Fronting Lender or
the Administrative Agent, as the case may be, its share of such payment, but
without interest thereon unless Fronting Lender or the Administrative Agent is
required to pay interest on such amounts to the person recovering such payment,
in which case with interest thereon, computed at the same rate, and on the same
basis, as the interest that Fronting Lender or the Administrative Agent is
required to pay.
 
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Section 2.6 Method of Electing Interest Rates.
 
(a) The Loans included in each Borrowing shall bear interest initially at the
type of rate specified by the Borrowers in the applicable Notice of Committed
Borrowing. Thereafter, the Borrowers may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article VIII), as follows:
 
(i) if such Loans are Alternate Base Rate Loans, the Borrowers may elect to
convert such Loans to LIBOR Loans as of any LIBOR Business Day; or
 
(ii) if such Loans are LIBOR Loans, the Borrowers may elect to convert such
Loans to Alternate Base Rate Loans or elect to continue such Loans as LIBOR
Loans for an additional Interest Period, in each case effective on the last day
of the then current Interest Period applicable to such Loans, or on such other
date designated by Borrowers in the Notice of Interest Rate Election, provided
Borrowers shall pay any losses pursuant to Section 2.13.
 
Each such election shall be made by delivering a notice (a “Notice of Interest
Rate Election”) to the Administrative Agent at least three (3) LIBOR Business
Days before the conversion or continuation selected in such notice is to be
effective. A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group, (ii) the portion to which such Notice of Interest Rate Election
applies, and the remaining portion to which it does not apply, are each $500,000
or any larger multiple of $100,000, (iii) there shall be no more than six (6)
Interest Periods applicable to the LIBOR Loans outstanding at any one time, (iv)
no Loan may be continued as, or converted into, a LIBOR Loan when any Event of
Default has occurred and is continuing, and (v) no Interest Period shall extend
beyond the Maturity Date.
 
(b) Each Notice of Interest Rate Election shall specify:
 
(i) the Group of Loans (or portion thereof) to which such notice applies;
 
(ii) the date on which the conversion or continuation selected in such notice is
to be effective, which shall comply with the applicable clause of subsection (a)
above;
 
(iii) if the Loans comprising such Group of Loans are to be converted, the new
type of Loans and, if such new Loans are LIBOR Loans, the duration of the
initial Interest Period applicable thereto; and
 
(iv) if such Loans are to be continued as LIBOR Loans for an additional Interest
Period, the duration of such additional Interest Period.
 
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
 
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(c) Upon receipt of a Notice of Interest Rate Election from the Borrowers
pursuant to subsection (a) above, the Administrative Agent shall notify each
Lender the same day as it receives such Notice of Interest Rate Election of the
contents thereof, the interest rates determined pursuant thereto and the
Interest Periods (if different from those requested by the Borrowers) and such
Notice of Interest Rate Election shall not thereafter be revocable by the
Borrowers. If the Borrowers fail to deliver a timely Notice of Interest Rate
Election to the Administrative Agent for any Group of LIBOR Loans, such Loans
shall be converted into a LIBOR Loan with an Interest Period applicable thereto
of one (1) month.
 
Section 2.7 Interest Rates.
 
(a) Each Alternate Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until the
date it is repaid or converted into a LIBOR Loan pursuant to Section 2.6 or at
the Maturity Date, at a rate per annum equal to the sum of the Applicable Margin
for Alternate Base Rate Loans for such day plus the Alternate Base Rate. Such
interest shall be payable for each Interest Period on each Interest Payment
Date.
 
(b) Each LIBOR Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin for LIBOR Loans for such day
plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on each Interest
Payment Date.
 
The “Adjusted London Interbank Offered Rate” applicable to a particular Interest
Period shall mean a rate per annum equal to the product arrived at by
multiplying the London Interbank Offered Rate applicable to such Interest Period
by a fraction (expressed as a decimal), the numerator of which shall be the
number one and the denominator of which shall be the number one minus the
aggregate reserve percentages (expressed as a decimal) from time to time
established by the Board of Governors of the Federal Reserve System of the
United States and any other banking authority to which the Administrative Agent
is now or hereafter subject, including, but not limited to, any reserve on
Eurocurrency Liabilities as defined in Regulation D of the Board of Governors of
the Federal Reserve System of the United States at the ratios provided in such
Regulation from time to time, it being agreed that each LIBOR Loan shall be
deemed to constitute Eurocurrency Liabilities, as defined by such Regulation,
and it being further agreed that such Eurocurrency Liabilities shall be deemed
to be subject to such reserve requirements without benefit of or credit for
prorations, exceptions or offsets that may be available to the Administrative
Agent from time to time under such Regulation and irrespective of whether the
Administrative Agent actually maintains all or any portion of such reserve.
 
The “London Interbank Offered Rate” applicable to a particular Interest Period
shall mean a rate per annum equal to the rate for U.S. dollar deposits with
maturities comparable to such Interest Period as shown in Dow Jones Markets
(formerly Telerate) (Page 3750) as of 11:00 a.m., London time, two (2) LIBOR
Business Days prior to the commencement of such Interest Period; provided,
however, that if such rate does not appear on Dow Jones Markets, the “London
Interbank Offered Rate” applicable to a particular Interest Period shall mean a
rate per annum equal to the rate at which U.S. dollar deposits in an amount
approximately equal to the applicable LIBOR Loan(s), and with maturities
comparable to the last day of the Interest Period with respect to which such
London Interbank Offered Rate is applicable, are offered in immediately
available funds in the London Interbank Market to the London office of the
Administrative Agent by leading banks in the Eurodollar market at 11:00 a.m.,
London time, two (2) LIBOR Business Days prior to the commencement of the
Interest Period to which such London Interbank Offered Rate is applicable.
 
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(c) In the event that, and for so long as, any Event of Default shall have
occurred and be continuing, the outstanding principal amount of the Committed
Loans, and, to the extent permitted by applicable law, overdue interest in
respect of all Committed Loans shall bear interest at the annual rate equal to
the sum of three percent (3%) plus the rate otherwise applicable to the Loans
(the “Default Rate”). Any amounts due and unpaid hereunder shall be payable upon
demand therefor.
 
(d) The Administrative Agent shall determine each interest rate applicable to
the Committed Loans hereunder. The Administrative Agent shall give prompt notice
to the Borrowers and the Lenders of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of demonstrable error.
The Administrative Agent shall send an invoice to the Borrowers setting forth
the interest due at least five (5) Domestic Business Days prior to any Interest
Payment Date, provided that failure to do so shall not affect the Borrowers’
obligations hereunder to pay interest. It is understood that the Borrowers shall
not be in Default under Section 6.1(a) as to interest for so long as it shall
pay in accordance with the provisions hereof any amounts indicated on any such
invoices or revised invoices.
 
Section 2.8 Fees.
 
(a) Fees. The Borrowers shall pay to the Administrative Agent (when and as due
for the benefit of KeyBank or KeyBanc Capital Markets, as applicable) the Fees
as provided for in the Fee Letter.
 
(b) Letter of Credit Fee. During the Term, the Borrowers shall pay to the
Administrative Agent, for the account of the Lenders in proportion to their
interests in respective undrawn issued Letters of Credit, a fee (the “Letter of
Credit Fee”) in an amount equal to the rate per annum of the Applicable Margin
for LIBOR Loans on the daily average of the amount undrawn and available under
issued Letters of Credit, which fee shall be payable, in arrears, on the first
Domestic Business Day of each January, April, July and October and on the
Maturity Date, provided, that, from the occurrence and during the continuance of
an Event of Default, the Letter of Credit Fee shall be increased to such
Applicable Margin plus three percent (3%) per annum on the daily average amount
of such issued and undrawn Letters of Credit.
 
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(c) Unused Commitment Fee. During the Term, the Borrowers shall pay
Administrative Agent for the account of the Lenders, ratably in proportion to
their respective Commitments and with respect to that period of time during any
applicable Commitment Fee Quarterly Period for which any such Lender or Lenders
had its respective Commitment or Commitments outstanding to the effect that the
Unused Commitment Fee shall be duly prorated, an annual commitment fee (the
“Unused Commitment Fee”) in quarterly amounts equal to the product of (i) the
average daily difference during the three (3) month period immediately preceding
the due date of the Unused Commitment Fee installment (each such three month
period being the “Commitment Fee Quarterly Period”) between (A) the aggregate
amount of the Commitments in effect from time to time, as such may be increased
or decreased from time to time pursuant to the terms of this Agreement, and (B)
the Outstanding Balance, multiplied by (ii) thirty basis points (.30%) (or
fifteen basis points (.15%) if the resulting amount of (A) less (B) is less than
fifty percent (50%) of the Facility Amount) per annum (in each case based upon a
360 day year) and (iii) the actual number of days in such three (3) month
period. For purposes of calculating the Unused Commitment Fee hereunder, all
Letters of Credit outstanding during the applicable Commitment Fee Quarterly
Period under this Agreement shall be deemed to be drawn. The Unused Commitment
Fee shall be payable quarterly, in arrears, on the first Domestic Business Day
of each January, April, July, and October during the Term and on the Maturity
Date, commencing January 1, 2007. Notwithstanding the foregoing, (i) the
installment of the Unused Commitment Fee payable on January 1, 2007 shall be
determined for the period commencing on the Closing Date and ending on December
31, 2006, and (ii) the installment of the Unused Commitment Fee payable on the
Maturity Date shall be prorated for the period commencing on the payment date of
the last quarterly installment of the Unused Commitment Fee and ending on the
Maturity Date.
 
(d) Fronting Fee. In addition to the Letter of Credit Fee payable pursuant to
clause (b) above and in addition to all other fees payable pursuant to the terms
of this Agreement, the Borrowers promise, with respect to each Letter of Credit,
to pay to the Fronting Lender (i) a letter of credit fronting fee (payable upon
issuance or extension of each Letter of Credit) equal to the greater of (A) of
one-eighth of one percent (0.125%) on the maximum amount available to be drawn
under such Letter of Credit (whether or not such maximum amount is then in
effect under such Letter of Credit), and (B) $500, and (ii) the customary
charges from time to time of the Fronting Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit. Such fees shall be due and payable on
demand, shall be fully earned when paid and shall not be refundable for any
reason whatsoever. For purposes of this Section 2.8(d), each renewal of any
Letter of Credit, including an auto-renewal of any Letter of Credit, shall be
considered an issuance of a new Letter of Credit.
 
(e) Fees Non-Refundable. All Fees set forth in this Section 2.8 and in the Fee
Letter shall be deemed to have been earned on the date payment is due in
accordance with the provisions hereof and thereof and shall be non-refundable.
The obligation of the Borrowers to pay such Fees in accordance with the
provisions hereof shall be binding upon the Borrowers and shall inure to the
benefit of the Administrative Agent and the Lenders regardless of whether any
Loans are actually made.
 
Section 2.9 Maturity Date.  The term (the “Term”) of the Commitments shall
terminate and expire on the Maturity Date. Upon the date of the termination of
the Term, any Committed Loans then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
 
Section 2.10 Mandatory Prepayment.
 
(a) If at any time during the Term, the Outstanding Balance at such time exceeds
the amount of the Total Available Commitments (with the amount of any such
excess being referred to herein as the “Borrowing Base Deficit”), then the
Borrowers shall (provided no Event of Default then exists, in which event this
Section shall be subject to the terms and provisions of Section 6.2) within two
(2) Domestic Business Days following the occurrence of such event, pay to the
Administrative Agent in cash, for the account of the Lenders, an amount equal to
the Borrowing Base Deficit.
 
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(b) The Borrowers shall not sell, or voluntarily permit the full or partial
redemption, prepayment or refinancing of a Borrowing Base Asset unless, after
giving effect to such transaction, either (i) Borrowers shall remain in
compliance with the provisions hereof, including without limitation, the
Outstanding Balance will not exceed the Total Available Commitments, or (ii)
Borrowers shall, concurrently with or before such sale, prepay the Committed
Loans in an amount at least equal to the amount required such that the
Outstanding Balance will not exceed the Total Available Commitments.
 
Section 2.11 Optional Prepayments.
 
(a) The Borrowers may, upon at least one (1) Domestic Business Day’s notice to
the Administrative Agent, prepay any Alternate Base Rate Borrowing in whole at
any time, or from time to time in part in amounts aggregating One Million
Dollars ($1,000,000) or any larger multiple of One Hundred Thousand Dollars
($100,000), by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Committed Loans of the several Lenders included
in such Borrowing.
 
(b) The Borrowers may, upon at least three (3) LIBOR Business Days’ notice to
the Administrative Agent, prepay any LIBOR Loan as of the last day of the
Interest Period applicable thereto. Except as provided in Article VIII, the
Borrowers may not prepay all or any portion of the principal amount of any LIBOR
Loan prior to the end of the Interest Period applicable thereto unless the
Borrowers shall also pay any applicable expenses pursuant to Section 2.13. The
Administrative Agent shall notify the Borrowers of any amounts due pursuant to
Section 2.13 in connection with such prepayment within one (1) LIBOR Business
Day after receipt of such notice of prepayment from the Borrowers (but subject
to the right to submit subsequently a corrected statement). Each such optional
prepayment shall be in the amounts set forth in Section 2.11(a) above and shall
be applied to prepay ratably the Committed Loans of the Lenders included.
 
(c) The Borrowers may at any time and from time to time cancel all or any part
of the Commitments in a minimum amount of Ten Million Dollars ($10,000,000) or
any larger multiple of One Million Dollars ($1,000,000), by the delivery to the
Administrative Agent of a notice of cancellation within the applicable time
periods set forth in Sections 2.11(a) and (b) if there are Committed Loans then
outstanding or, if there are no Committed Loans outstanding at such time as to
which the Commitments with respect thereto are being cancelled, upon at least
one (1) Domestic Business Day’s notice to the Administrative Agent whereupon, in
either event, all or such portion of the Commitments, as applicable, shall
terminate as to the Lenders, pro rata on the date set forth in such notice of
cancellation, and, if there are any Committed Loans then outstanding, Borrowers
shall prepay, as applicable, all or such portion of Committed Loans outstanding
on such date in accordance with the requirements of Section 2.11(a) and (b). The
Commitments may not be reduced to an amount less than $25,000,000 except in the
event of the termination of the Commitments in full. Borrowers shall be
permitted to designate in its notice of cancellation which Committed Loans, if
any, are to be prepaid. In no event shall Borrowers be permitted to cancel
Commitments for which a Letter of Credit has been issued and is outstanding
unless Borrowers return such Letter of Credit, undrawn, to the applicable
Fronting Lender. The Facility Amount shall be reduced by the dollar amount of
any reduction of the Commitments pursuant to this Section 2.11(c).
 
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(d) The Borrowers may at any time return any undrawn Letters of Credit to the
Fronting Lender in whole, but not in part, and the Fronting Lender shall
promptly cancel such returned Letters of Credit and give the Borrowers, the
Administrative Agent and each of the Lenders notice of such cancellation.
 
(e) Upon receipt of a notice of prepayment or cancellation or a return of an
undrawn Letter of Credit pursuant to this Section, the Administrative Agent
shall promptly notify each Lender of the contents thereof and of such Lender’s
ratable share (if any) of such prepayment or cancellation and such notice shall
not thereafter be revocable by the Borrowers.
 
(f) Any amounts so prepaid pursuant to Section 2.11(a) or (b) may be reborrowed.
In the event Borrowers elect to cancel all or any portion of the Commitments
pursuant to Section 2.11(c) hereof, such amounts may not be reborrowed.
 
Section 2.12 General Provisions as to Payments.
 
(a) The Borrowers shall make each payment of interest on the Committed Loans and
of Fees hereunder, not later than 12:00 noon (New York, New York time) on the
date when due, in Federal or other funds immediately available in New York, New
York, to the Administrative Agent at its address referred to in Section 9.1.
Such payments and all other payments made on account of the Loan Documents to
the Administrative Agent (provided such payments are made in accordance with
terms hereof) shall be deemed to have been properly made. The Administrative
Agent will promptly distribute to each Lender its ratable share of each such
payment received by the Administrative Agent for the account of the Lenders.
Whenever any payment of principal of, or interest on the Alternate Base Rate
Loans or of Fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the LIBOR
Loans shall be due on a day which is not a LIBOR Business Day, the date for
payment thereof shall be extended to the next succeeding LIBOR Business Day
unless such LIBOR Business Day falls in another calendar month, in which case
the date for payment thereof shall be the next preceding LIBOR Business Day. If
the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
 
(b) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Lenders hereunder
that the Borrowers will not make such payment in full, the Administrative Agent
may assume that the Borrowers have made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent that the
Borrowers shall not have so made such payment, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
 
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Section 2.13 Funding Losses. If (i) the Borrowers make any payment of principal
with respect to any LIBOR Loan (pursuant to Article II, VI, VIII or otherwise)
on any day other than the last day of the Interest Period applicable thereto
(subject to Section 2.12(a) hereof), or (ii) the Borrowers fail to borrow any
LIBOR Loans after notice has been given to any Lender in accordance with Section
2.3(a), or (iii) Borrowers shall deliver a Notice of Interest Rate Election
specifying that a LIBOR Loan shall be converted on a date other than the last
day of the then current Interest Period applicable thereto, the Borrowers shall
reimburse each Lender within three (3) Domestic Business Days after Borrowers’
receipt from the Administrative Agent of a certification of such Lender of such
loss or expense (which shall be delivered by each such Lender to Administrative
Agent for delivery to Borrowers not later than ten (10) Domestic Business Days
after such Lender incurred such loss or expense) for any resulting actual loss
or expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to borrow, provided that
such Lender shall have delivered to Administrative Agent and Administrative
Agent shall have delivered to the Borrowers a certification as to the amount of
such loss or expense, which certification shall set forth the basis for such
loss or expense and shall be conclusive in the absence of demonstrable error.
Failure or delay on the part of any Lender to demand compensation within the
time periods set forth in this Section shall constitute a waiver of such right
to demand compensation.
 
Section 2.14 Computation of Interest and Fees. All interest and Fees payable
under the Loan Documents shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed (including the first day but
excluding the last day).
 
Section 2.15 Use of Proceeds. The Borrowers shall use the proceeds of the Loans
made hereunder and shall use the Letters of Credit issued hereunder only for (i)
the acquisition, financing or refinancing of direct or indirect interests in
real estate and/or real estate debt investments, (ii) the repayment of debt, and
(iii) other lawful corporate, partnership or limited liability company purposes
(exclusive of the purchase of Margin Stock) (the “Approved Uses”).
 
Section 2.16 Letter of Credit Usage Absolute. The reimbursement obligations of
the Borrowers under this Agreement in respect of any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and such other agreement or instrument under all
circumstances, including, without limitation, to the extent permitted by law,
the following circumstances:
 
(a) any lack of validity or enforceability of any Letter of Credit or any other
agreement or instrument relating thereto (collectively, the “Letter of Credit
Documents”) or any Loan Document;
 
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of the Borrowers in respect of the Letters of
Credit or any other amendment or waiver of or any consent by the Borrowers to
departure from all or any of the Letter of Credit Documents or any Loan
Document, provided that no Fronting Lender shall consent to any such change or
amendment unless previously consented to in writing by the Borrowers;
 
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(c) any exchange, release or non-perfection of any collateral, or any release or
amendment or waiver of or consent to departure from any guaranty, for all or any
of the obligations of the Borrowers in respect of the Letters of Credit;
 
(d) the existence of any claim, set-off, defense or other right that the
Borrowers may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent or any Lender (other than a
defense based on the gross negligence or willful misconduct of the
Administrative Agent, Fronting Lender or such Lender) or any other Person,
whether in connection with the Loan Documents, the transactions contemplated
hereby or by the Letters of Credit Documents or any unrelated transaction;
 
(e) any draft or any other document presented under or in connection with any
Letter of Credit or other Loan Document proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; provided that payment by the Fronting Lender under
such Letter of Credit against presentation of such draft or document shall not
have constituted gross negligence or willful misconduct of the Fronting Lender;
 
(f) payment by the Fronting Lender against presentation of a draft or
certificate that does not comply with the terms of the Letter of Credit;
provided that such payment shall not have constituted gross negligence or
willful misconduct of the Fronting Lender; and
 
(g) any other circumstance or happening whatsoever other than the payment in
full of all obligations hereunder in respect of any Letter of Credit or any
agreement or instrument relating to any Letter of Credit, whether or not similar
to any of the foregoing, that might otherwise constitute a defense available to,
or a discharge of, the Borrowers; provided that such other circumstance or
happening shall not have been the result of gross negligence or willful
misconduct of the Fronting Lender or any issuing Lender.
 
Section 2.17 Joint and Several Obligations; Limitation on Liability. 
 
(a) The Obligations constitute the joint and several obligations of each
Borrower hereunder. Each Borrower hereby assumes, guarantees and agrees to
discharge all Obligations of each other Borrower hereunder. Anything herein or
in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Borrower hereunder and under the other Loan Documents shall in
no event exceed the amount for which such Borrower can be liable under
applicable federal and state laws relating to the insolvency of debtors.
 
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(b) Notwithstanding any payment or payments made by any Borrower (the “paying
Borrower”) hereunder or any set-off or application of funds of the paying
Borrower by any Lender, the paying Borrower shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the other Borrower(s) or any collateral security or guarantee or right
of offset held by any Lender for the payment of the Obligations, nor shall the
paying Borrower seek or be entitled to seek any contribution or reimbursement
from the other Borrower in respect of payments made by the paying Borrower
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Borrowers on account of the Obligations are paid in full. If any amount
shall be paid to the paying Borrower on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by the paying Borrower in trust for the Administrative
Agent and the Lenders, segregated from other funds of the paying Borrower, and
shall, forthwith upon receipt by the paying Borrower, be turned over to the
Administrative Agent in the exact form received by the paying Borrower (duly
indorsed by the paying Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
 
(c) Each Borrower shall remain obligated hereunder notwithstanding that, without
any reservation of rights against such Borrower and without notice to or further
assent by such Borrower, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by such party and any
of the Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and this Agreement, the Notes and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders, as the case may be) may deem advisable from time
to time, and any collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither of
the Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or any property subject thereto. When making any demand hereunder
against any Borrower, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the other Borrower or any
guarantor, and any failure by the Administrative Agent or any Lender to make any
such demand or to collect any payments from such other Borrower or any guarantor
or any release of such other Borrower or guarantor shall not relieve the
Borrower in respect of which a demand or collection is not made or the Borrower
not so released of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Administrative Agent or any Lender against any Borrower. For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.
 
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(d) Each Borrower waives any and all notice of the creation, renewal, extension
or accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon such Borrower or acceptance of the
obligations of such Borrower under this Agreement, and the Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
obligations of each Borrower under this Agreement; and all dealings between the
Borrowers, on the one hand, and the Administrative Agent and the Lenders, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the obligations of all of the Borrowers. Except as
is otherwise specifically provided for in this Agreement or in the other Loan
Documents, each of the Borrowers waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the other Borrower or
such Borrower with respect to the Obligations. Each Borrower understands and
agrees that it shall continue to be jointly and severally liable under this
Agreement and the other Loan Documents without regard to (a) the validity,
regularity or enforceability of this Agreement, any Note or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or, except as is otherwise specifically provided for in this Agreement
or the other Loan Documents, right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the other
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of such Borrower
or the other Borrower) which constitutes, or might be construed to constitute,
an equitable or legal discharge of the other Borrower for the Obligations, or of
such Borrower under this Agreement, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against any Borrower, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the other Borrower or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from the other Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the other Borrower or any such other Person
or any such collateral security, guarantee or right of offset, shall not relieve
such Borrower of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent and the Lenders against such Borrower.
 
Section 2.18 Increase in Facility Amount.
 
(a) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to the Administrative Agent (which shall promptly notify the
Lenders), the Borrowers may request an increase in the Facility Amount by an
aggregate amount not exceeding $25,000,000; provided that any such request for
an increase shall be in a minimum amount of $10,000,000. At the time of sending
such notice, the Borrowers (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond as to
whether such Lender agrees to increase the amount of its Commitment in
accordance with Section 2.18(b).
 
(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its
Commitment and, if so, by what amount (which need not be its pro rata share
thereof). Any Lender not responding within such time period shall be deemed to
have declined to increase its Commitment.
 
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(c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify the Borrowers and each Lender of the Lenders’ responses to
each request made hereunder. To achieve the full amount of a requested increase
in the Facility Amount and subject to the approval of the Administrative Agent
and the Fronting Bank (which approvals shall not be unreasonably withheld), the
Borrowers may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance reasonably satisfactory to
the Administrative Agent and its counsel.
 
(d) Effective Date and Allocations. If the aggregate Commitments (including due
to new Commitments by additional Lenders) are increased in accordance with this
Section 2.18, the Administrative Agent and the Borrowers shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrowers and the
Lenders (including any additional Lenders) of the final allocation of such
increase and the Increase Effective Date.
 
(e) Conditions to Effectiveness of Increase. Any increase in the Facility Amount
pursuant to this Section 2.18 shall be subject to the following conditions:
 
(i) The Borrowers shall have paid to (A) the Administrative Agent, such fees as
shall be due to Administrative Agent at such time under the Fee Letter, and (B)
to each Lender, such fees, if any, as shall have been agreed upon by the
Borrower and the Administrative Agent.
 
(ii) As of the Increase Effective Date, no Default or Event of Default then
exists or would result from such increase in the Facility Amount (including on a
pro forma basis relative to financial covenant compliance).
 
(iii) The Borrowers shall have delivered to the Administrative Agent a
certificate dated as of the Increase Effective Date (in sufficient copies for
each Lender) (A) certifying and attaching the resolutions adopted by the
Borrowers approving or consenting to such increase, and (B) certifying that,
before and after giving effect to such increase, (1) the representations and
warranties of the Borrowers in this Agreement and in each other Loan Document
are true and correct on and as of the Increase Effective Date, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case, to the knowledge of the Borrowers, they are true and
correct as of such earlier date, and except to the extent of changes resulting
from transactions contemplated and permitted by this Agreement and changes
occurring in the ordinary course of business (in each case to the extent not
constituting a Default or Event of Default), (2) no Default or Event of Default
exists or would result from such increase in the Facility Amount (including on a
pro forma basis relative to financial covenant compliance), and (3) the
incurrence of Indebtedness in an aggregate principal amount equal to the full
Facility Amount after giving effect to all Commitment increases and new
Commitments would not result in a breach of, or a default under, any agreement
to which any Borrower is a party.
 
(iv) The Borrowers shall prepay any Committed Loans outstanding on the Increase
Effective Date (and pay any additional amounts required pursuant to
Section 2.13) to the extent necessary to keep the outstanding Committed Loans
ratable with any revised Commitment allocations arising from any nonratable
increase in the Commitments under this Section 2.18. Notwithstanding any
provisions of this Agreement to the contrary, the Borrowers may borrow from the
Lenders providing such increase in the Commitments (on a non pro rata basis with
Lenders not providing such increase) in order to fund such prepayment.
 
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(v) The Borrowers will execute and deliver to each applicable Lender a new Note
in the appropriate stated amount, and will execute and deliver or otherwise
provide to the Administrative Agent and the Lenders such other documents and
instruments as the Administrative Agent or Lenders reasonably may require.
 
(vi) The Subsidiary Guarantors will execute and deliver to the Administrative
Agent a ratification of the Guaranty acknowledging the increase of the Facility
Amount.
 
(f) The provisions of this Section 2.18 shall not constitute a “commitment” to
lend, and the Commitments of the Lenders shall not be increased until
satisfaction of the provisions of this Section 2.18 and actual increase of the
Commitments as provided herein.
 
Section 2.19 Revolving Facility. Except as otherwise specifically provided for
herein, the Facility is a revolving credit facility and, accordingly, subject to
the terms, provisions and conditions set forth in this Agreement, amounts
borrowed and repaid may be reborrowed.
 
Section 2.20 Delinquent Lenders.
 
(a) If for any reason any Lender shall fail or refuse to abide by its
obligations under this Agreement, including without limitation its obligation to
make available to the Administrative Agent its pro rata share of any Loans,
expenses or setoff (a “Delinquent Lender”) and such failure is not cured within
two (2) Domestic Business Days of receipt from the Administrative Agent of
written notice thereof, then, in addition to the rights and remedies that may be
available to the Administrative Agent, the other Lenders, or the Borrowers at
law or in equity, and not in limitation thereof, (i) such Delinquent Lender’s
right to participate in the administration of, or decision-making rights related
to, the Loans, this Loan Agreement or the other Loan Documents shall be
suspended during the pendency of such failure or refusal, and (ii) a Delinquent
Lender shall be deemed to have assigned any and all payments due to it from the
Borrowers, whether on account of outstanding Loans, interest, fees or otherwise,
to the non-delinquent Lenders for application to, and reduction of, their
proportionate shares of all outstanding Loans until, as a result of application
of such assigned payments the Lenders’ respective pro rata shares of all
outstanding Loans shall have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such
delinquency. The Delinquent Lender’s decision-making and participation rights
and rights to payments as set forth in clauses (i) and (ii) hereinabove shall be
restored only upon the payment by the Delinquent Lender of its pro rata share of
any Loans or expenses as to which it is delinquent, together with interest
thereon at the Default Rate from the date when originally due until the date
upon which any such amounts are actually paid.
 
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(b) The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration, (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right) the Delinquent Lender’s Commitment to
fund future Loans (the “Future Commitment”). Upon any such purchase of the pro
rata share of any Delinquent Lender’s Future Commitment, the Delinquent Lender’s
share in future Loans and its rights under the Loan Documents with respect
thereto shall terminate on the date of purchase, and the Delinquent Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest, including, if so requested, an Assignment and Acceptance. Each
Delinquent Lender shall indemnify the Administrative Agent and each
non-delinquent Lender from and against any and all loss, damage or expenses,
including but not limited to reasonable attorneys’ fees and funds advanced by
the Administrative Agent or by any non-delinquent Lender, on account of a
Delinquent Lender’s failure to timely fund its pro rata share of a Loan or to
otherwise perform its obligations under the Loan Documents.
 
ARTICLE III
 
CONDITIONS
 
Section 3.1 Closing. The closing hereunder shall occur on the date (the “Closing
Date”) when each of the following conditions is satisfied (or waived by the
Administrative Agent and the Lenders), each document to be dated the Closing
Date unless otherwise indicated:
 
(a) the Borrowers shall have executed and delivered to the Administrative Agent
a Note for the account of each Lender dated on or before the Closing Date
complying with the provisions of Section 2.4;
 
(b) the Borrowers, the Administrative Agent and each of the Lenders shall have
executed and delivered to the Borrowers and the Administrative Agent a duly
executed original of this Agreement;
 
(c) the Subsidiary Guarantors shall have executed and delivered to the
Administrative Agent the Guaranty;
 
(d) the Administrative Agent shall have received an opinion from each of Paul,
Hastings, Janofsky & Walker LLP and Venable LLP, counsel for the Borrowers and
the Subsidiary Guarantors, with respect to the Borrowers’ and Subsidiary
Guarantors’ due authorization, execution and delivery of the Loan Documents, the
enforceability of the Loan Documents, and such other matters reasonably
requested by the Administrative Agent, such opinion to be reasonably acceptable
to the Administrative Agent and its counsel;
 
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(e) the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrowers and the Borrowing Base Entities, the authority for and the validity of
this Agreement and the other Loan Documents, and any other matters relevant
hereto, all in form and substance satisfactory to the Administrative Agent. Such
documentation shall include, without limitation, (i) the organizational
documents of NorthStar, as amended, modified or supplemented to the Closing
Date, certified to be true, correct and complete by an officer of NorthStar as
of a date not more than ten (10) days prior to the Closing Date, together with a
good standing certificate as to NorthStar from the Secretary of State (or the
equivalent thereof) of Maryland, to be dated not more than forty-five (45) days
prior to the Closing Date, (ii) the partnership agreement of NorthStar OP,
certified as of a date not more than ten (10) days prior to the Closing Date,
together with a certificate of existence as to NorthStar OP from the Secretary
of State of Delaware, to be dated not more than forty-five (45) days prior to
the Closing Date, (iii) the organizational documents of NRFC Sub-REIT, as
amended, modified or supplemented to the Closing Date, certified to be true,
correct and complete by an officer of NRFC Sub-REIT as of a date not more than
ten (10) days prior to the Closing Date, together with a good standing
certificate as to NRFC Sub-REIT from the Secretary of State (or the equivalent
thereof) of Maryland, to be dated not more than forty-five (45) days prior to
the Closing Date, (iv) the limited liability company agreement of NS Advisors,
certified to be true, correct and complete by an officer of NS Advisors as of a
date not more than ten (10) days prior to the Closing Date, together with a
certificate of existence as to NS Advisors from the Secretary of State of
Delaware, to be dated not more than forty-five (45) days prior to the Closing
Date, (v) the limited liability company agreement of NNN Holdings, certified to
be true, correct and complete by an officer of NNN Holdings as of a date not
more than ten (10) days prior to the Closing Date, together with a certificate
of existence as to NNN Holdings from the Secretary of State of Delaware, to be
dated not more than forty-five (45) days prior to the Closing Date, (vi) the
limited liability company agreement of NS Holdings I, certified to be true,
correct and complete by an officer of NS Holdings I as of a date not more than
ten (10) days prior to the Closing Date, together with a certificate of
existence as to NS Holdings I from the Secretary of State of Delaware, to be
dated not more than forty-five (45) days prior to the Closing Date, (vii) the
limited liability company agreement of NS Holdings II, certified to be true,
correct and complete by an officer of NS Holdings II as of a date not more than
ten (10) days prior to the Closing Date, together with a certificate of
existence as to NS Holdings II from the Secretary of State of Delaware, to be
dated not more than forty-five (45) days prior to the Closing Date, and (viii)
the limited liability company agreement of NS Holdings III, certified to be
true, correct and complete by an officer of NS Holdings III as of a date not
more than ten (10) days prior to the Closing Date, together with a certificate
of existence as to NS Holdings III from the Secretary of State of Delaware, to
be dated not more than forty-five (45) days prior to the Closing Date;
 
(f) the Administrative Agent shall have received all certificates, agreements
and other documents and papers referred to in this Section 3.1 and the Notice of
Borrowing referred to in Section 3.2, if applicable, unless otherwise specified,
in sufficient counterparts, satisfactory in form and substance to the
Administrative Agent in its sole discretion;
 
(g) the Administrative Agent shall have received a certificate or certificates
executed by an authorized officer of NorthStar as of the Closing Date stating
that (A) each Consolidated Party is in compliance with all existing financial
obligations, (B) all governmental, shareholder and third party consents and
approvals necessary for the Borrowers and the Subsidiary Guarantors to enter
into the Loan Documents and fully perform thereunder, if any, have been
obtained, (C) no action, suit, investigation or proceeding is pending or
threatened in writing in any court or before any arbitrator or governmental
instrumentality that purports to affect any Consolidated Party or any
transaction contemplated by the Loan Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a Material
Adverse Effect, and (D) immediately after giving effect to this Loan Agreement,
the other Loan Documents and all the transactions contemplated therein to occur
on such date, (1) each of the Borrowers and the Borrowing Base Entities is
Solvent, (2) no Default or Event of Default exists, (3) all representations and
warranties contained herein and in the other Loan Documents are true and correct
in all material respects, and (4) the Borrowers are in compliance with each of
the financial covenants set forth in Section 5.8 hereof.
 
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(h) the Borrowers and the Subsidiary Guarantors shall have taken all actions
required to authorize the execution and delivery of this Agreement and the other
Loan Documents and the performance thereof by the Borrowers and the Subsidiary
Guarantors;
 
(i) no development or event which has had or could reasonably be expected to
have a Material Adverse Effect shall have occurred since December 31, 2005;
 
(j) the Administrative Agent shall have received wire transfer instructions in
connection with the Loans, if any, to be made on the Closing Date;
 
(k) the Administrative Agent shall have received, for its and any other Lender’s
account, all Fees due and payable pursuant to Section 2.8 hereof or pursuant to
the Fee Letter on or before the Closing Date, and the reasonable fees and
expenses accrued through the Closing Date of counsel to the Administrative Agent
with respect to the transactions contemplated hereby;
 
(l) the Administrative Agent shall have received copies of all consents,
licenses and approvals, if any, required in connection with the execution,
delivery and performance by NorthStar and the applicable Consolidated
Subsidiaries, and the validity and enforceability, of the Loan Documents, or in
connection with any of the transactions contemplated thereby, and such consents,
licenses and approvals shall be in full force and effect;  
 
(m) the Administrative Agent shall have received all available financial
information with respect to NorthStar and its Affiliates (other than Morgans
Hotels and NorthStar Capital Co.) reasonably requested by it or any Lender;
 
(n) the Administrative Agent shall have received a completed current Borrowing
Base Certificate and a completed current Continuing Compliance Certificate;
 
(o) the Administrative Agent shall have received satisfactory reports
(collectively, the “UCC Searches”), of UCC, tax lien, judgment and litigation
searches conducted by a search firm reasonably acceptable to Administrative
Agent with respect to the Borrowers and the Subsidiary Guarantors, such searches
to be conducted by Borrowers’ counsel in each of the locations specified by the
Administrative Agent;
 
(p) (i) the Administrative Agent shall have received evidence that each Real
Property Subsidiary is a Wholly-Owned Subsidiary of NNN Holdings and (ii) the
Administrative Agent shall have received evidence that each CDO Retained Asset
included in the Borrowing Base Assets Pool is beneficially owned by NS Holdings
I or NS Holdings II or NS Holdings III or a direct Wholly-Owned Subsidiary of NS
Holdings I or NS Holdings II or NS Holdings III (no later than the date that is
thirty (30) days after the Closing Date, the Borrowers also shall deliver to the
Administrative Agent evidence that each CDO Retained Interest is owned of record
by NS Holdings I or NS Holdings II or NS Holdings III or a direct Wholly-Owned
Subsidiary of NS Holdings I or NS Holdings II or NS Holdings III); and
 
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(q) the Administrative Agent shall have received a payoff letter, in form and
substance satisfactory to the Administrative Agent, relating to the Borrowers’
credit facility with Bank of America, N.A.
 
Section 3.2 Borrowings. The obligation of any Lender to make a Loan or to
participate in any Letter of Credit issued by the Fronting Lender and the
obligation of the Fronting Lender to issue a Letter of Credit is subject to the
satisfaction of the following conditions (as reasonably determined by the
Administrative Agent):
 
(a) receipt by the Administrative Agent of a Notice of Borrowing as required by
Section 2.2 and 2.3, together with a certificate or certificates executed by an
authorized officer of NorthStar as of the date of such Notice of Borrowing as to
the matters set forth in Section 3.1(g);
 
(b) receipt by the Administrative Agent of a fully completed Borrowing Base
Certificate stating that, after taking into account any such Loan, the Borrowers
shall be in full compliance with all of the covenants contained in Section 5.8
of this Agreement and that the requirements with respect to the Borrowing Base
Values shall be met;
 
(c) immediately after such Borrowing or issuance of such Letter of Credit, the
Outstanding Balance will not exceed the aggregate amount of the Total Available
Commitments;
 
(d) immediately before and after such Borrowing or issuance of such Letter of
Credit, no Default or Event of Default shall have occurred and be continuing
both before and after giving effect to the making of such Loans or issuing of
such Letters of Credit;
 
(e) the representations and warranties of the Borrowers contained in this
Agreement shall be true and correct in all material respects on and as of the
date of such Borrowing both before and after giving effect to the making of such
Loans, except to the extent any such representation or warranty relates solely
to an earlier date and except for such exceptions as may be disclosed by the
Borrowers to the Administrative Agent and approved by the Administrative Agent;
 
(f) no law or regulation shall have been adopted, no order, judgment or decree
of any governmental authority shall have been issued, and no litigation shall be
pending, which does or seeks to enjoin, prohibit or restrain, the making or
repayment of the Loans, the issuance of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated by
this Agreement;
 
(g) no event, act or condition shall have occurred after the Closing Date which,
in the reasonable judgment of the Administrative Agent, has had or is likely to
have a Material Adverse Effect; and
 
(h) immediately after such Borrowing or issuance of such Letter of Credit, the
aggregate outstanding undrawn issued Letters of Credit shall not exceed Ten
Million Dollars ($10,000,000).
 
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Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrowers on the date of such Borrowing as to the facts specified in clauses
(d), (e), (f), (g) and (h) (to the extent that Borrowers are aware of any
Material Adverse Effect) of this Section.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
In order to induce the Administrative Agent and each of the Lenders which is or
may become a party to this Agreement to make the Loans, the Borrowers make the
following representations and warranties as of the Closing Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.
 
Section 4.1 Existence and Power. NorthStar is a corporation, duly formed,
validly existing and in good standing as a corporation under the laws of
Maryland and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction except where the failure to have such licenses, authorizations,
consents or approvals or to be so qualified and/or in good standing is not
likely to have a Material Adverse Effect. NorthStar OP is a limited partnership,
duly formed, validly existing and in good standing as a limited partnership
under the laws of Delaware and has all powers and all material governmental
licenses, authorizations, consents and approvals required to own its property
and assets and carry on its business as now conducted or as it presently
proposes to conduct and has been duly qualified and is in good standing in every
jurisdiction except where the failure to have such licenses, authorizations,
consents or approvals or to be so qualified and/or in good standing is not
likely to have a Material Adverse Effect. NRFC Sub-REIT is a corporation,
wholly-owned by NorthStar OP and duly formed and validly existing as a
corporation under the laws of the Sate of Maryland and has all powers and all
material governmental licenses, authorizations, consents and approvals required
to own its property and assets and carry on its business as now conducted or as
it presently proposes to conduct and has been duly qualified and is in good
standing in every jurisdiction except where the failure to have such licenses,
authorizations, consents or approvals or to be so qualified and/or in good
standing is not likely to have a Material Adverse Effect. NS Advisors is a
limited liability company duly formed and validly existing as a limited
liability company under the laws of the State of Delaware and has all powers and
all material governmental licenses, authorizations, consents and approvals
required to own its property and assets and carry on its business as now
conducted or as it presently proposes to conduct and has been duly qualified and
is in good standing in every jurisdiction except where the failure to have such
licenses, authorizations, consents or approvals or to be so qualified and/or in
good standing is not likely to have a Material Adverse Effect. Each Borrowing
Base Entity is a Wholly-Owned Subsidiary of NRFC Sub-REIT and is a corporation,
limited partnership, limited liability company or trust duly organized under the
laws of its state of organization and is validly existing and in good standing
under the laws thereof and has all powers and all material governmental
licenses, authorizations, consents and approvals required to own its property
and assets and carry on its business as now conducted or as it presently
proposes to conduct and has been duly qualified and is in good standing in every
jurisdiction except where the failure to have such licenses, authorizations,
consents or approvals or to be so qualified and/or in good standing is not
likely to have a Material Adverse Effect.
 
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Section 4.2 Power and Authority. Each Borrower and Borrowing Base Entity has the
trust, corporate, partnership or limited liability company power, as applicable,
and authority to execute, deliver and carry out the terms and provisions of each
of the Loan Documents to which it is a party and has taken all necessary trust,
corporate, partnership or limited liability company action, as applicable, to
authorize the execution and delivery on behalf of such Borrower or Borrowing
Base Entity and the performance by such Borrower or Borrowing Base Entity of
such Loan Documents. Each Borrower and Borrowing Base Entity has duly executed
and delivered each Loan Document to which it is a party in accordance with the
terms of this Agreement, and each such Loan Document constitutes the legal,
valid and binding obligation of such Borrower or Borrowing Base Entity,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable insolvency, bankruptcy or other laws affecting creditors
rights generally, or general principles of equity, whether such enforceability
is considered in a proceeding in equity or at law.
 
Section 4.3 No Violation. Neither the execution, delivery or performance by or
on behalf of any Borrower or Borrowing Base Entity of the Loan Documents to
which it is a party, nor compliance by any Borrower or Borrowing Base Entity
with the terms and provisions thereof nor the consummation of the transactions
contemplated by the Loan Documents, (i) will materially contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, or (ii) will
materially conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of such Borrower or Borrowing Base
Entity or any Consolidated Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or other instrument to which such
Borrower (or of any partnership of which such Borrower or Borrowing Base Entity
is a partner) or any Consolidated Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it is subject, or (iii) will
cause a material default by such Borrower or Borrowing Base Entity under any
organizational document of any Person in which such Borrower or Borrowing Base
Entity has an interest, or cause a material default under such Borrowers’
limited liability company agreement, partnership agreement, trust agreement or
articles of incorporation or by-laws, as applicable.
 
Section 4.4 Financial Information
 
(a) The consolidated balance sheet of NorthStar and its Consolidated
Subsidiaries dated as of December 31, 2005 and the related consolidated
statements of NorthStar’s financial position for the fiscal year then ended,
auditied by Grant Thorton, LLP and set forth in NorthStar’s 2005 Form 10-K, a
copy of which has been delivered to the Administrative Agent, fairly present in
all material respects, in conformity with GAAP, the consolidated financial
position of NorthStar and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such fiscal year.
 
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(b) The consolidated statements of NorthStar’s financial position as set forth
in NorthStar’s 2006 Form 10-Q for the fiscal quarter ended June 30, 2006, a copy
of which has been delivered to the Administrative Agent, fairly present in all
material respects, in conformity with GAAP, the consolidated financial position
of NorthStar and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations and cash flows for such periods.
 
(c) Since NorthStar’s most recent Form 10-Q, (i) nothing has occurred having a
Material Adverse Effect, and (ii) NorthStar and the Consolidated Subsidiaries
have not incurred any material Indebtedness or Contingent Obligation except in
the ordinary course of business.
 
Section 4.5 Litigation. There is no action, suit, investigation, or proceeding
pending against, or to the knowledge of the Borrowers threatened in writing
against or affecting, (i) any Borrower, any Borrowing Base Entity or any
Consolidated Subsidiary, (ii) the Loan Documents or any of the transactions
contemplated by the Loan Documents or (iii) any of their assets, before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could, individually, or
in the aggregate have a Material Adverse Effect or which in any manner draws
into question the validity of this Agreement or the other Loan Documents.
 
Section 4.6 Compliance with ERISA. With respect to each NorthStar Plan, and each
Non-NorthStar Plan (but, as to any Non-NorthStar Plan, only to the extent that
the failure to do so would have a Material Adverse Effect), each member of the
ERISA Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Plan. With respect to each NorthStar Plan, and each
Non-NorthStar Plan (but, as to any Non-NorthStar Plan, only to the extent that
the occurrence of any of (i) through (iii) below would cause a Material Adverse
Effect), no member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Code in respect of any Plan, (ii)
failed to make any contribution or payment to any Plan or Multiemployer Plan or
made any amendment to any Plan, which failure to make contribution or payment or
making of any amendment has resulted or would result in the imposition of a Lien
or the posting of a bond or other security under ERISA or the Code or (iii)
incurred any liability under Title IV of ERISA other than liability to the PBGC
for premiums under Section 4007 of ERISA. 
 
(a) The transactions contemplated by the Loan Documents will not constitute a
nonexempt prohibited transaction (as such term is defined in Section 4975 of the
Code or Section 406 of ERISA) that could subject the Administrative Agent or the
Lenders to any tax or penalty or prohibited transactions imposed under Section
4975 of the Code or Section 502(i) of ERISA by reason of the assets of any
Borrower being plan assets within the meaning of the Department of Labor
Regulation Section 2510.3-101 of Section 401 of ERISA or in connection with any
Plan or Benefit Arrangement.
 
Section 4.7 Borrowing Base Assets. Each and every representation and warranty
with respect to (i) any Eligible First Mortgage Asset included in the Borrowing
Base Assets Pool as set forth on “Exhibit “F” hereto is true and correct, (ii)
any Eligible Property Equity Interest included in the Borrowing Base Assets Pool
as set forth on Exhibit “G” hereto is true and correct, (iii) any Eligible Real
Estate Security included in the Borrowing Base Assets Pool as set forth on
Exhibit “H” hereto is true and correct, (iv) any Eligible Subordinated Asset
included in the Borrowing Base Assets Pool as set forth on Exhibit “I” hereto is
true and correct and (v) any Eligible CDO Retained Asset included in the
Borrowing Base Assets Pool as set forth on Exhibit “J” hereto is true and
correct.
 
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Section 4.8  Environmental Matters. In the ordinary course of its business, the
Borrowers conduct periodic reviews of the effect of Environmental Laws on the
business, operations and properties of the Borrowers and the Consolidated
Subsidiaries, including without limitation, the Real Property Assets and the
Underlying Assets, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently owned, any
capital or operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
and any actual or potential liabilities to third parties, including employees,
and any related costs and expenses). On the basis of this review, the Borrowers
have reasonably concluded that such associated liabilities and costs, including
the costs of compliance with Environmental Laws, are unlikely to have a Material
Adverse Effect.
 
Section 4.9 Taxes. United States Federal income tax returns of the Borrowers and
the Consolidated Subsidiaries have been prepared and filed through the fiscal
year ended December 31, 2005. The Borrowers and their Consolidated Subsidiaries
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrowers
or any Consolidated Subsidiary. The charges, accruals and reserves on the books
of the Borrowers and the Consolidated Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrowers, adequate.
 
Section 4.10 Full Disclosure. All information furnished in writing by the
Borrowers to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby (i) if
prepared by the Borrowers or any Affiliate of the Borrowers is true and accurate
in all material respects on the date as of which such information is stated or
certified and (ii) if prepared by any Person other than the Borrowers or any
Affiliate of the Borrowers, to the best of Borrowers’ knowledge, after the
Borrowers have conducted reasonable investigation with due diligence, is true
and accurate in all material respects on the date as of which such information
is stated or certified; provided, that, with respect to projected financial
information, the Borrowers represent and warrant only that such information
represents the Borrowers expectations regarding future performance based upon
historical information and reasonable assumptions, it being understood, however,
that actual results may differ from the projected results described in the
financial projections. The Borrowers have disclosed to the Administrative Agent
and the Lenders in writing any and all facts which have or which is likely to
have (to the extent the Borrowers can now reasonably foresee) a Material Adverse
Effect.
 
Section 4.11 Solvency(a) . On the Closing Date and after giving effect to the
transactions contemplated by the Loan Documents occurring on the Closing Date,
each of the Borrowers and the Borrowing Base Entities will be Solvent.
 
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Section 4.12 Use of Proceeds; Margin Regulations. All proceeds of the Loans will
be used by the Borrowers and all Letters of Credit shall be issued for the
Borrowers only in accordance with the provisions hereof. No part of the proceeds
of any Loan or any Letter of Credit will be used by the Borrowers to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan, the
issuance of any Letter of Credit, nor the use of the proceeds of the foregoing
will violate or be inconsistent with the provisions of Regulations T, U or X of
the Federal Reserve Board.
 
Section 4.13 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of any Loan Document or the consummation of
any of the transactions contemplated thereby other than (i) the filing of a
report on form 8-K with the Securities and Exchange Commission describing the
transactions contemplated hereby, or (ii) those that have already been duly made
or obtained and remain in full force and effect or (iii) those which, if not
made or obtained, would not have a Material Adverse Effect.
 
Section 4.14 Investment Company Act. Neither the Borrowers nor any Consolidated
Subsidiary is (i) 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 (ii) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.
 
Section 4.15 Principal Offices. As of the Closing Date, the principal office,
chief executive office and principal place of business of each of the Borrowers
is 527 Madison Avenue, 16th Floor, New York, New York 10022. No Borrower shall
change its principal office or state of formation without having given the
Administrative Agent at least thirty (30) days prior written notice; provided no
such notice is required in connection with the changing of the Borrowers’
principal office to 399 Park Avenue, New York, New York during the second fiscal
quarter of 2007.
 
Section 4.16 REIT Status. For its first fiscal year and continuously thereafter
NorthStar has qualified, and NorthStar shall continue to qualify, as a real
estate investment trust under the Code.
 
Section 4.17 Qualified REIT Subsidiary Status. Each of NorthStar OP and NRFC
Sub-REIT qualify as of the Closing Date, and intend to continue to qualify, as a
qualified real estate investment subsidiary under the Code.
 
Section 4.18 Patents, Trademarks, etc. The Borrowers have obtained and hold in
full force and effect all patents, trademarks, servicemarks, trade names,
copyrights and other such rights, free from burdensome restrictions, which are
necessary for the operation of its business as presently conducted, the
impairment of which is likely to have a Material Adverse Effect. 
 
Section 4.19 No Default. No Event of Default or, to the Borrowers’ knowledge,
Default exists under or with respect to any Loan Document and the Borrowers are
not in default in any material respect beyond any applicable grace period under
or with respect to any other material agreement, instrument or undertaking to
which it is a party or by which it or any of its property is bound in any
respect, the existence of which default is likely to result in a Material
Adverse Effect.
 
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Section 4.20 Licenses, etc. The Borrowers have obtained and do hold in full
force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other consents and approvals which are necessary for the operation of its
businesses as presently conducted, the absence of which is likely to have a
Material Adverse Effect.
 
Section 4.21 Compliance With Law. Each of the Borrowers and, to the Borrowers’
knowledge, each of the Borrowing Base Assets, are in compliance with all laws,
rules, regulations, orders, judgments, writs and decrees, including, without
limitation, all building and zoning ordinances and codes, the failure to comply
with which is likely to have a Material Adverse Effect.
 
Section 4.22 No Burdensome Restrictions. Except as may have been disclosed by
the Borrowers in writing to the Administrative Agent, no Borrower is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is likely to have a Material Adverse Effect.
 
Section 4.23 Brokers’ Fees. The Borrowers have not dealt with any broker or
finder with respect to the transactions contemplated by this Agreement or
otherwise in connection with this Agreement, and the Borrowers have not done any
act, had any negotiations or conversation, or made any agreements or promises
which will in any way create or give rise to any obligation or liability for the
payment by the Borrowers of any brokerage fee, charge, commission or other
compensation to any party with respect to the transactions contemplated by the
Loan Documents, other than the Fees payable to the Administrative Agent and the
Lenders, and certain other Persons as previously disclosed in writing to the
Administrative Agent.
 
Section 4.24 Labor Matters. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Borrowers as of the Closing
Date and the Borrowers have not suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years which,
individually or in the aggregate, are likely to have a Material Adverse Effect.
 
Section 4.25 Insurance. As to each Borrowing Base Asset (other than Eligible CDO
Retained Assets), the Borrowers (or a Borrowing Base Entity) maintain (or
require that the borrower thereunder to maintain) insurance in amounts that a
prudent owner of such assets would maintain.
 
Section 4.26 Organizational Documents. The documents delivered pursuant to
Section 3.1(e) constitute, as of the Closing Date, all of the organizational
documents (together with all amendments and modifications thereof) of the
Borrowers and the Subsidiary Guarantors. The Borrowers represent that they have
delivered to the Administrative Agent true, correct and complete copies of each
of the documents described in Section 3.1(e).
 
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ARTICLE V
 
AFFIRMATIVE AND NEGATIVE COVENANTS
 
The Borrowers covenant and agree that, so long as any Lender has any Commitment
hereunder or any Obligations remain unpaid:
 
Section 5.1 Information. The Borrowers will deliver to the Administrative Agent,
in a manner satisfactory to Administrative Agent:
 
(a) As soon as available, and in any event within 90 days after the close of
each fiscal year of the Consolidated Parties, a consolidated balance sheet and
income statement of the Consolidated Parties, as of the end of such fiscal year,
together with related consolidated statements of operations and retained
earnings and of cash flows for such fiscal year, setting forth in comparative
form consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited by
Grant Thorton or such other independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative Agent
and whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the audit or
qualified as to the status of the Consolidated Parties as a going concern.
 
(b) As soon as available, and in any event within 45 days after the close of
each fiscal quarter of the Consolidated Parties (excluding the fourth fiscal
quarter), a consolidated balance sheet and income statement of the Consolidated
Parties, as of the end of such fiscal quarter, together with related
consolidated statements of operations and retained earnings and of cash flows
for such fiscal quarter in each case setting forth in comparative form
consolidated figures for the corresponding period of the preceding fiscal year,
all such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Administrative Agent, and accompanied by
a certificate of the chief financial officer of NorthStar to the effect that
such quarterly financial statements fairly present in all material respects the
financial condition of the Consolidated Parties and have been prepared in
accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments and the omission of footnotes.
 
(c) As soon as available, and in any event (i) within 45 days after the close of
each fiscal quarter of the Consolidated Parties (excluding the fourth fiscal
quarter), (ii) within 80 days after the close of the fourth fiscal quarter of
the Consolidated Parties and (iii) at such other times as is required pursuant
to the terms of this Agreement, (A) a fully completed current Borrowing Base
Certificate and (B) a fully completed certificate of the chief financial officer
or the chief accounting officer of NorthStar (the “Continuing Compliance
Certificate”) in the form attached hereto as Exhibit “E.”
 
(d) (i) within five (5) Domestic Business Days after any officer of any Borrower
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer, the chief accounting officer,
controller, or other executive officer of NorthStar setting forth the details
thereof and the action which the Borrowers are taking or propose to take with
respect thereto; and (ii) promptly and in any event within five (5) Domestic
Business Days after the Borrowers obtain knowledge thereof, notice of (x) any
litigation or governmental proceeding pending or threatened against any Borrower
or the Borrowing Base Assets as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, is likely to
individually or in the aggregate result in a Material Adverse Effect, (y) any
other event, act or condition which is likely to result in a Material Adverse
Effect, and (z) any event giving rise to a mandatory prepayment pursuant to
Section 2.10;
 
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(e) (i) promptly upon the mailing thereof (A) to the shareholders of NorthStar
generally, copies of all financial statements, reports and proxy statements so
mailed and (B) to the investors in any Eligible CDO, all trustee reports,
collateral manager reports and other investor information so mailed and (ii)
promptly upon receipt of knowledge thereof by the Borrowers (A) the breach of
any over-collateralization or interest coverage covenant or requirement under
any CDO Indenture to which any Affiliate of a Borrower is a party, (B) the
failure of any scheduled Distribution to be paid when due under any CDO
Indenture to which any Affiliate (other than Morgans Hotels and NorthStar
Capital Co.) of a Borrower is a party, or (C) the occurrence of margin calls or
related pay-down requirements being made in any seven day period in respect of
any financing arrangements to which a Borrower or any Affiliate of a Borrower is
a party which, individually or in the aggregate, require the posting of
collateral or a pay-down of obligations in an amount equal to or greater than
$15,000,000.
 
(f) promptly upon the filing thereof, copies of all reports on Forms 10-K and
10-Q (or their equivalents) (other than the exhibits thereto, which exhibits
will be provided upon request therefor by any Lender) which NorthStar shall have
filed with the Securities and Exchange Commission;
 
(g) if and when any member of the ERISA Group, with respect to a NorthStar Plan,
or a Non-NorthStar Plan (but, as to any Non-NorthStar Plan, only to the extent
the occurrence of any of the following would cause a Material Adverse Effect),
(i) gives or is required to give notice to the PBGC of any “reportable event”
(as defined in Section 4043 of ERISA) with respect to any Plan which would
constitute reasonable grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or makes any amendment to any Plan that has
resulted or will result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the chief
accounting officer of NorthStar setting forth details as to such occurrence and
action, if any, which NorthStar or the applicable member of the ERISA Group is
required or proposes to take;
 
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(h) promptly and in any event within five (5) Domestic Business Days after any
Borrower obtains actual knowledge of any of the following events, a certificate
of NorthStar, executed by an officer of NorthStar, specifying the nature of such
condition, and the Borrowers’ or, if the Borrowers have actual knowledge
thereof, the Environmental Affiliate’s proposed initial response thereto: (i)
the receipt by any Borrower, or, if any Borrower has actual knowledge thereof,
any of the Environmental Affiliates of any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
any Borrower, or, if any Borrower has actual knowledge thereof, any of the
Environmental Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii)
any Borrower shall obtain actual knowledge that there exists any Environmental
Claim pending against any Borrower or any Environmental Affiliate and such
Environmental Claim is likely to have a Material Adverse Effect or (iii) any
Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Material of Environmental Concern that is likely to form the
basis of any Environmental Claim against any Borrower or any Environmental
Affiliate which in any such event is likely to have a Material Adverse Effect;
 
(i) promptly and in any event within ten (10) Domestic Business Days after
receipt of any material notices or correspondence from any company or agent for
any company providing insurance coverage to any Borrower relating to any loss in
excess of $5,000,000 of the Borrower, copies of such notices and correspondence;
and
 
(j) from time to time such additional information regarding the Borrowing Base
Assets or the financial position or business of the Borrowers, the Borrowing
Base Entities or their Subsidiaries as the Administrative Agent, at the request
of any Lender, may reasonably request in writing.
 
Section 5.2 Payment of Obligations. The Borrowers will pay and discharge, at or
before maturity, all of their respective material obligations and liabilities
including, without limitation, any obligation pursuant to any agreement by which
it or any of its properties is bound and any liabilities, except where such
liabilities may be contested in good faith by appropriate proceedings, and will
maintain in accordance with GAAP, appropriate reserves for the accrual of any of
the same. 
 
Section 5.3 Maintenance of Property. The Borrowers will keep, and will cause
each Consolidated Subsidiary to keep, all property useful and necessary in its
business insured in an amount not less than a commercially reasonable amount and
in good order and repair, ordinary wear and tear and loss by condemnation or
casualty excepted.
 
Section 5.4 Conduct of Business and Maintenance of Existence. Each Borrower and
Borrowing Base Entity will continue to engage in business of the same general
type as now conducted by such Borrower or Borrowing Base Entity and will not
enter into any business which is not of the same general type as now conducted
by such Borrower or Borrowing Base Entity (it being understood that a Borrower
may enter into new lines of business provided such new lines of business do not
constitute a material portion of the Borrower’s business). Each Borrower and
Borrowing Base Entity will preserve, renew and keep in full force and effect,
its trust, corporate, partnership or limited liability company existence, as
applicable, and its respective rights, privileges and franchises necessary for
the normal conduct of business.
 
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Section 5.5 Compliance with Laws. Each Borrower and Borrowing Base Entity will
comply in all material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including, without
limitation, Environmental Laws, and all federal securities laws) except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to comply would not be likely to have a
Material Adverse Effect. Each Borrower and Borrowing Base Entity shall (i)
ensure that no Person having a legal or beneficial title to a controlling
interest in such Borrower or Borrowing Base Entity or a right to acquire such an
interest (each an “Owner”) shall be listed on the Specially Designated Nationals
and Blocked Person List or other similar lists maintained by the Office of
Foreign Assets Control (“OFAC”), the Department of the Treasury or included in
any Executive Orders, (ii) not use or permit the use of the proceeds of the
Facility or any other financial accommodation from the Administrative Agent or
the Lenders to violate any of the foreign asset control regulations of OFAC or
other applicable law, (iii) comply with all applicable Bank Secrecy Act laws and
regulations, as amended from time to time, and (iv) otherwise comply with the
USA Patriot Act as required by federal law.
 
Section 5.6 Inspection of Books and Records. Each Borrower and Borrowing Base
Entity will keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit representatives of Administrative
Agent at the expense of the Administrative Agent or the Lender requesting the
Administrative Agent to conduct such visit and inspection, to visit and inspect
any of its properties, to examine and make abstracts from any of its books and
records and to discuss its affairs, finances and accounts with its officers and
independent public accountants, all at such reasonable times, upon reasonable
prior notice and as often as may reasonably be desired, but conducted in such a
manner as to not unreasonably interfere with the conduct of Borrowers’ or
Borrowing Base Entity’s business.
 
Section 5.7 Existence. Each Borrower and Borrowing Base Entity shall do or cause
to be done, all things necessary to preserve and keep in full force and effect
its and the Consolidated Subsidiaries’ existence and its patents, trademarks,
servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditation, easements, rights
of way and other rights, consents and approvals the nonexistence of which is
likely to have a Material Adverse Effect.
 
Section 5.8 Financial Covenants. The Borrowers shall comply with the following
financial covenants, which covenants shall be calculated for NorthStar and its
Consolidated Subsidiaries:
 
(a) Leverage Ratio. As of the end of each fiscal quarter, the Leverage Ratio
shall not exceed ninety percent (90%).
 
(b) Fixed Charge Ratio. As of the end of each fiscal quarter, the Fixed Charge
Ratio shall not be less than 1.30 to 1.00.
 
(c) Consolidated Tangible Net Worth. As of the end of each fiscal quarter, the
Consolidated Tangible Net Worth shall be greater than or equal to the sum of (i)
$85% of Consolidated Tangible Net Worth at closing, plus (ii) an amount equal to
75.0% of the Net Equity Proceeds received by the Consolidated Parties in
connection with any Equity Issuance subsequent to the Closing Date calculated on
a cumulative basis as of the end of each fiscal quarter of the Consolidated
Parties following the Closing Date.
 
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(d) Recourse Debt to Total Assets. As of the end of each fiscal quarter, the
ratio of (i) the Recourse Debt of the Consolidated Parties (excluding
Indebtedness hereunder and TruPS) to (ii) the Total Assets of the Consolidated
Parties shall not exceed 0.10 to 1.00.
 
(e) Dividends. NorthStar will not, at any time pay any Distributions in respect
of NorthStar’s common stock in excess of 100% of NorthStar’s Adjusted Funds from
Operations for the trailing four (4) consecutive calendar quarter period;
provided that notwithstanding the foregoing, NorthStar may pay Distributions
necessary to maintain its status as a real estate investment trust under the
Code. During the continuance of a monetary Event of Default, NorthStar shall
make no Distributions.
 
(f) Interest Rate Exposure. The Consolidated Parties will at all times maintain
a notional amount of Match Funding Agreements in effect such that fluctuations
(increases or decreases) in interest rates of 100 basis points or more in any
fiscal quarter in respect of the Floating Rate Indebtedness and/or Floating Rate
Assets of the Consolidated Parties will not impact negatively NorthStar’s
Adjusted Funds from Operations in such fiscal quarter annualized by greater than
10.0%.
 
Notwithstanding that the Financial Covenants set forth in this Section 5.8 may
be tested on a quarterly (or, in some cases, more frequent) basis, the Person to
which such Financial Covenants apply must be in full and complete compliance
with such Financial Covenants at all times.
 
Section 5.9 Restriction on Fundamental Changes.
 
(a) No Borrowing Base Entity shall enter into any merger or consolidation
without the prior written consent of the Required Lenders, which consent may be
withheld by the Required Lenders in their respective sole and absolute
discretion. Neither NorthStar nor NorthStar OP shall enter into any merger or
consolidation unless (i) NorthStar or NorthStar OP is the surviving entity, (ii)
the nature of NorthStar’s or NorthStar OP’s business following such merger or
consolidation shall remain substantially similar to the nature of NorthStar’s or
NorthStar OP’s business immediately prior to such merger or consolidation, (iii)
NorthStar or NorthStar OP, as the surviving entity, shall, at the time of such
merger or consolidation and at all times thereafter, be and remain in compliance
with all of the terms and conditions of this Agreement including, without
limitation, the Financial Covenants set forth in Section 5.8, (iv) at the time
of such merger or consolidation, NorthStar or NorthStar OP shall deliver to the
Administrative Agent a fully completed Continuing Compliance Certificate,
together with a proforma (with respect to the four (4) consecutive calendar
quarters immediately following such merger or consolidation) cash flow and
Financial Covenant compliance projection, in form, content and detail reasonably
acceptable to the Administrative Agent, (v) NorthStar or NorthStar OP, as the
surviving entity, shall execute and deliver to the Administrative Agent at the
time of such merger or consolidation a ratification and reaffirmation of all its
Obligations under this Agreement and the other Loan Documents, in form, content
and detail acceptable to the Administrative Agent, (vi) no Default or Event of
Default shall have occurred and be continuing at the time of such merger or
consolidation, and (vii) such merger or consolidation shall be accomplished in
accordance with all terms, conditions and restrictions being imposed thereon by
the Securities and Exchange Commission and/or any other applicable regulatory
agency having jurisdiction with respect to such merger or consolidation.
 
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(b) NorthStar shall not amend its certificate of incorporation, bylaws or other
organizational documents so as to change the purpose or business of NorthStar in
any manner which is likely to have a Material Adverse Effect without the
Administrative Agent’s prior written consent.
 
(c) NorthStar OP shall not amend its partnership agreement or other
organizational documents in any manner which is likely to have a Material
Adverse Effect without the Administrative Agent’s prior written consent.
 
(d) No Borrowing Base Entity shall amend its certificate of incorporation,
limited liability company agreement or other organizational documents in any
manner which is likely to have a Material Adverse Effect without the
Administrative Agent’s prior written consent.
 
(e) The Borrowers shall deliver to the Administrative Agent copies of all
amendments to any trust agreement, articles of incorporation, by-laws, limited
liability company agreement or other organizational document, as applicable, of
any Borrower or Borrowing Base Entity no less than ten (10) Domestic Business
Days after the effective date of any such amendment.
 
Section 5.10 [Reserved].
 
Section 5.11 Margin Stock. None of the proceeds of the Loan will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock.
 
Section 5.12 NorthStar, NorthStar OP and NRFC Sub-REIT Status. NorthStar shall
at all times (i) remain a publicly traded company listed, quoted or traded on
the New York Stock Exchange, NASDAQ or any such other nationally recognized
stock exchange, and (ii) maintain its status as a self-directed and
self-administered real estate investment trust under the Code. NorthStar OP and
NRFC Sub-REIT shall at all times (i) maintain their status as qualified real
estate investment trust subsidiaries under the Code, and (ii) have the majority
of their capital stock owned by NorthStar. Each Borrowing Base Entity Subsidiary
(other than the Borrowing Base Entity owning the CDO Retained Asset in CDO I)
shall be a Wholly-Owned Subsidiary of NorthStar OP.
 
Section 5.13 Disposition of Borrowing Base Assets. The Borrowers shall deliver
written notice to the Administrative Agent of any sale, liquidation, disposition
or transfer of, or the release or termination of a Borrower’s or Borrowing Base
Entity’s interest in, any Borrowing Base Asset together with an updated
Borrowing Base Certificate giving effect to the completion of such sale,
liquidation, disposition, transfer, or other event, which notice and Borrowing
Base Certificate shall be delivered (i) in the event there is no Outstanding
Balance, promptly after the completion of such sale, liquidation, disposition,
transfer, or other event or (ii) in the event that there is any Outstanding
Balance, prior to the completion of such sale, liquidation, disposition,
transfer, or other event.
 
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Section 5.14 Liens; Indebtedness. The Borrowers shall not at any time during the
Term directly or indirectly create, incur, assume or permit to exist any Lien on
or with respect to any Borrowing Base Asset or any Capital Stock of NorthStar
OP, NRFC Sub-REIT or any Borrowing Base Entity (or any Subsidiary of a Borrower
or a Subsidiary Guarantor owning, directly or indirectly, the Capital Stock of
any Borrowing Base Entity) for borrowed monies or any other Lien, unless the
same is being contested in good faith or the same is discharged, bonded off or
paid within thirty (30) days of filing of such Lien. Notwithstanding the
foregoing, the Borrowers may permit Liens (i) encumbering the Real Property
Assets relating to Eligible Property Equity Interests, provided that such Liens
may only secure Indebtedness permitted by Exhibit G hereto and (ii) on the
Capital Stock of Real Property Subsidiaries, provided that such Liens may only
secure Indebtedness permitted by Exhibit G hereto (including any replacement
financing of such Indebtedness to the extent permitted by Exhibit G hereto). No
Subsidiary Guarantor shall at any time owe, create, incur or assume or otherwise
be obligated in respect of any Indebtedness; provided that NNN Holdings may
incur Indebtedness consisting of guarantees of customary carve-out matters such
as fraud, misappropriation, bankruptcy, misapplication and environmental matters
which guarantees are made in connection with Indebtedness incurred by a
Subsidiary of NNN Holdings.
 
Section 5.15 Business Loans. The Borrowers acknowledge that all of the Loans are
business loans and no portion of the proceeds of the Loans will be used for
personal, family or household purposes.
 
Section 5.16 Limitation on Changes in Fiscal Year; Accounting Methods; Valuation
Methodology. No Borrower shall (i) permit the fiscal year of such Borrower to
end on a day other than December 31, (ii) change its method or procedures of
accounting from those in effect as of the Closing Date (except as permitted by
Section 1.2 hereof or as required by the Securities and Exchange Commission); or
(iii) change in any material respect its current methodology by which it values
the Borrowing Base Assets.
 
Section 5.17 Ownership of Borrowing Base Assets. All Borrowing Base Assets
included in the Borrowing Base Assets Pool shall be owned by a Borrowing Base
Entity.
 
Section 5.18 Limitation on Negative Pledge Clauses, Distribution Restrictions.
Neither NorthStar OP, NRFC Sub-REIT nor any Borrowing Base Entity shall enter
into with any Person any agreement which prohibits or limits the ability of
NorthStar OP, NRFC Sub-REIT or such Borrowing Base Entity to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, nor will NorthStar, NorthStar OP, NRFC
Sub-REIT or any Borrowing Base Entity, as applicable, enter into any such
agreement with respect to the Capital Stock of NorthStar OP, NRFC Sub-REIT or
any Borrowing Base Entity.
 
Section 5.19 Addition of Borrowing Base Assets.
 
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(a) With the approval of the Administrative Agent, the Borrowers may from time
to time have included as Borrowing Base Assets eligible assets not included as
initial Borrowing Base Assets hereunder as set forth on the schedule of initial
Borrowing Base Assets annexed hereto as Exhibit “C”. In such event, the
Borrowers shall provide to the Administrative Agent written notice thereof (each
an “Approval Request”) no later than 10:00 a.m. (New York, New York time) on the
Business Day that is at least ten (10) Business Days prior to the date on which
Borrowers wish to have such asset included within the Borrowing Base Assets
Pool, such Approval Request to state (i) whether such asset is proposed to be an
Eligible First Mortgage Asset, an Eligible Property Equity Interest, an Eligible
Real Estate Security, an Eligible Subordinated Asset or an Eligible CDO Retained
Asset, (ii) the value of such asset as proposed to be reflected on a Borrowing
Base Certificate, and (iii) that such asset complies with all of the
representations and warranties applicable to such asset contained in Exhibit F,
Exhibit G, Exhibit H, Exhibit I or Exhibit J, as the case may be, and if not, a
detailed description of each exception to such compliance (each an “Exceptions
Summary”). Together with the Approval Request, the Borrowers shall deliver to
the Administrative Agent a completed, (i) a current Borrowing Base Certificate,
(ii) the Borrowers’ credit write-up and approval memo relating to such
prospective Borrowing Base Asset, and (iii) if requested by the Administrative
Agent, (A) an appraisal report relating to any Real Property Asset or Underlying
Asset relating to such prospective Borrowing Base Asset, (B) a copy of any
mortgage note relating to such prospective Borrowing Base Asset, (C) a copy of
the documents establishing the rights of any Preferred Securities, (D) a copy of
the deed to any Real Property Asset, (E) a copy of the CDO Indenture and
offering memorandum or circular relating to any Eligible CDO Retained Asset and
the most recent monthly and quarterly trustee reports relating to any CDO
Retained Asset in the possession of the Borrowers, any and (F) such other
documents as the Administrative Agent may request from time to time
(collectively, the “Credit Underwriting Documents”). With respect to any asset
which Borrowers have requested be added to the Borrowing Base Assets Pool,
Borrowers shall be deemed to represent and warrant hereunder that, except as
specified in the Exceptions Summary, if any, with respect to such asset (i) all
of the First Mortgage Asset Representations and Warranties as set forth on
Exhibit “F” hereto are true and correct as to any such asset which is to be an
Eligible First Mortgage Asset, (ii) all of the Real Property Asset
Representations and Warranties as set forth on Exhibit “G” hereto are true and
correct as to any such asset which is to be an Eligible Property Equity
Interest, (iii) all of the Real Estate Security Asset Representations and
Warranties as set forth on Exhibit “H” hereto are true and correct as to any
such asset which is to be an Eligible Real Estate Security, (iv) all of the
Subordinated Asset Representations and Warranties as set forth on Exhibit “I”
hereto are true and correct as to any such asset which is to be an Eligible
Subordinated Asset, and (v) all of the CDO Retained Asset Representations and
Warranties as set forth on Exhibit “J” hereto are true and correct as to any
such asset which is to be an Eligible Subordinated Asset. Promptly upon receipt
of an Approval Request and all related Credit Underwriting Documents
(collectively, each, an “Approval Request Package”), the Administrative Agent
shall provide copies thereof to each Lender.
 
(b) On or before 5:00 P.M., New York time, on the tenth (10th) Domestic Business
Day following the Administrative Agent’s receipt of an Approved Request Package,
the Administrative Agent will advise the Borrowers as to whether the
Administrative Agent has approved the Approval Request. If the Administrative
Agent does not respond to the Approval Request within the time period set forth
herein, the Approval Request shall be deemed denied and the prospective
Borrowing Base Asset identified in the Approval Request shall not be included in
the Borrowing Base Asset Pool. If an Approval Request has been approved, the
subject asset shall thereupon become a Borrowing Base Asset hereunder.
 
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(c) All determinations by the Administrative Agent as to whether to approve any
Approval Request shall be in the Administrative Agent’s good faith discretion.
 
Section 5.20 Failure of Certain Borrowing Base Assets Representations and
Warranties. If at any time Borrowers shall become aware that (a) as to any First
Mortgage Asset in the Borrowing Base Asset Pool, any First Mortgage Asset
Representation or Warranty is no longer true and correct, (b) as to any Real
Property Asset in the Borrowing Base Assets Pool, any Real Property Asset
Representation or Warranty is no longer true and correct, (c) as to any Real
Estate Security in the Borrowing Base Assets Pool, any Real Estate Security
Representation or Warranty is no longer true and correct, (d) as to Subordinated
Asset in the Borrowing Base Assets Pool, any Subordinated Asset Representation
or Warranty is no longer true and correct or (e) as to CDO Retained Assets in
the Borrowing Base Assets Pool, any CDO Retained Asset Representation or
Warranty is no longer true and correct, Borrowers shall promptly notify the
Administrative Agent in writing of such event, together with a detailed
description of the factual circumstances giving rise thereto. If the event
relates to any breach arising as a result of any payment default in respect of
the applicable Borrowing Base Asset whereby any payment in respect of the
applicable Borrowing Base Asset is past due for more than thirty (30) but less
than forty-five (45) days, the Administrative Agent may, and at the direction of
the Required Lenders shall, require that the asset no longer be considered a
Borrowing Base Asset for purposes hereof and require that such asset be removed
from the Borrowing Base Assets Pool. If the event relates to any breach arising
as a result of any payment default in respect of the applicable Borrowing Base
Asset whereby any payment in respect of the applicable Borrowing Base Asset is
past due for more than forty-five (45) days, the asset shall automatically no
longer be considered a Borrowing Base Asset for purposes hereof and such asset
shall be removed from the Borrowing Base Assets Pool. If the event relates to
any breach (other than any breach arising as a result of any payment default) in
respect of the applicable Borrowing Base Asset which continues after any
applicable cure period, the Administrative Agent may require that the asset no
longer be considered a Borrowing Base Asset for purposes hereof and require that
such asset be removed from the Borrowing Base Assets Pool. Upon the
determination that an asset shall no longer be considered a Borrowing Base Asset
for purposes hereof, the provisions of Section 2.10(a) shall apply.
 
Section 5.21 Limitation on Transactions with Affiliates. No Borrower nor any
Subsidiary shall enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or other assets or the rendering
of any service, with any Affiliate unless such transaction is (a) otherwise
permitted under this Agreement or (b) upon fair and reasonable terms no less
favorable to Borrowers or such Subsidiary, as the case may be, than it would
obtain in a comparable arm’s length transaction with a Person which is not an
Affiliate.
 
Section 5.22 CDO Subsidiaries. The organizational agreements of a Subsidiary
which owns Eligible CDO Retained Assets may as a result of structuring
requirements of the Eligible CDO, prohibit such Subsidiary from becoming a
Guarantor. The Eligible CDO Retained Assets owned by such Subsidiary may be
included in the Borrowing Base Assets Pool subject to the satisfaction at all
times of the following conditions (such a Subsidiary which satisfies the
conditions in this Section 5.22 shall be a “CDO Subsidiary”):
 
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(i) such CDO Subsidiary shall be a Wholly-Owned Subsidiary of a Subsidiary
Guarantor;

(ii) such CDO Subsidiary shall be a Special Purpose Entity;

(iii)  the interest of the owning Subsidiary Guarantor in such CDO Subsidiary
shall be free and clear of all Liens;

(iv)  such CDO Subsidiary shall not create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness; and

(v) such CDO Subsidiary shall comply with the terms of its organizational
agreements and shall not amend such organizational agreements in any manner
which could have a Material Adverse Effect without the prior written consent of
the Administrative Agent. In the event that any Eligible CDO Retained Asset held
by a CDO Subsidiary is no longer required to be held in a Special Purpose Entity
that is prohibited from being a Subsidiary Guarantor, the Borrowers shall cause
such Eligible CDO Retained Asset to be transferred to a Subsidiary Guarantor.

Section 5.23 Real Property Subsidiaries. The organizational agreements of a
Subsidiary which owns Eligible Real Property Equity Interests may, as a result
of structuring requirements of the documents relating to Indebtedness of such
Subsidiary, prohibit such Subsidiary from becoming a Guarantor. The Eligible
Real Property Equity Interests owned by such Subsidiary may be included in the
Borrowing Base Assets Pool subject to the satisfaction at all times of the
following conditions (such a Subsidiary which satisfies the conditions in this
Section 5.23 shall be a “Real Property Subsidiary”):
 
(i) such Real Property Subsidiary shall be a Wholly-Owned Subsidiary of a
Subsidiary Guarantor;

(ii) the interest of the owning Subsidiary Guarantor (or any Subsidiary of the
Subsidiary Guarantor owning, directly or indirectly, the Capital Stock of such
Real Property Subsidiary) in such Real Property Subsidiary shall be free and
clear of all Liens except Liens securing Indebtedness permitted by Exhibit G
hereto;

(iii) such Real Property Subsidiary shall not create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness except Indebtedness permitted by Exhibit G hereto; and

(iv) such Real Property Subsidiary shall comply with the terms of its
organizational agreements and shall not amend such organizational agreements in
any manner which could have a Material Adverse Effect without the prior written
consent of the Administrative Agent. In the event that the restrictions against
a Real Property Subsidiary from becoming a Subsidiary Guarantor are no longer
effective, such Real Property Subsidiary shall promptly become a Subsidiary
Guarantor pursuant to Section 5.25.

Section 5.24 Guaranties. The Obligations shall be guaranteed by the Subsidiary
Guarantors pursuant to the Guaranty.
 
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Section 5.25 Subsidiary Guarantors. In the event any Subsidiary of a Borrower
(or, subject to the terms of Section 5.22 or Section 5.23, a CDO Subsidiary or a
Real Property Subsidiary) desires to include a Borrowing Base Asset owned by
such Subsidiary (or, subject to the terms of Section 5.22 or Section 5.23, a CDO
Retained Asset or a Property Equity Interest) in the Borrowing Base Assets Pool,
such Subsidiary (and any other direct or indirect Subsidiary owning an interest
therein), but excluding a CDO Subsidiary or any Real Property Subsidiary with
respect to clause (i) below, shall, simultaneously with the inclusion of such
Borrowing Base Asset in the Borrowing Base Asset Pool, deliver to the
Administrative Agent each of the following items, each in form and substance
satisfactory to the Agent: (i) a joinder agreement to the Guaranty executed by
such Subsidiary and (ii) such organizational agreements, resolutions, consents,
opinions and other documents and instruments as the Administrative Agent may
reasonably require. Additionally, in the event that any Subsidiary of a
Borrower, whether presently existing or hereafter formed or acquired, which is
not a Subsidiary Guarantor at such time, shall after the date hereof become a
guarantor under any existing or future unsecured Indebtedness of a Borrower,
then the Borrower shall cause each such Subsidiary to execute and deliver the
items described in clauses (i) and (ii) of this Section 5.25 .
 
Section 5.26 Release of Certain Subsidiary Guarantors. Provided that no Default
or Event of Default has occurred and is continuing, upon the request of a
Borrower or any Subsidiary Guarantor, the Administrative Agent shall release
such Borrower or Subsidiary Guarantor from liability hereunder or under the
Guaranty; provided that (x) the Borrower shall deliver to Administrative Agent
evidence satisfactory to Administrative Agent that the Borrowers will be in
compliance with all covenants of this Agreement after giving effect to such sale
and release and (y) all Borrowing Base Assets owned by such Subsidiary and all
CDO Subsidiaries or Real Property Subsidiaries owned by such Subsidiary shall
cease to be included in the Borrowing Base Assets Pool from the date of release
of such Subsidiary from the Guaranty. Delivery by a Borrower to the
Administrative Agent of any such request for a release shall constitute a
representation by the Borrowers that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request.
 
Section 5.27 Distribution of proceeds of CDO Retained Interests. The Borrowers
shall cause each CDO Subsidiary to promptly distribute to the Borrower or
Subsidiary Guarantor that owns such CDO Subsidiary all payments made with
respect to the Eligible CDO Retained Asset(s) owned by such CDO Subsidiary.
 
 
ARTICLE VI
 
DEFAULTS
 
Section 6.1 Events of Default. The occurrence and continuation of one or more of
the following events (each, an “Event of Default”) shall constitute an event of
default hereunder:
 
(a) (i) the Borrowers shall fail to pay when due any principal of any Loan, (ii)
the Borrowers shall fail to pay when due interest on any Loan and such failure
continues for a period of three (3) Domestic Business Days, or (iii) the
Borrowers shall fail to pay any Fees or any other amount payable hereunder or,
as to Fees, under the Fee Letter, and the same shall continue for a period of
five (5) Domestic Business Days after Borrowers have received notice thereof;
 
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(b) any Borrower shall fail to observe or perform any covenant contained in
Section 5.1 and Sections 5.8 to 5.26, inclusive;
 
(c) any Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by clause (a) or (b)
above) for thirty (30) days after written notice thereof has been given to such
Borrower by the Administrative Agent, or if such default is of such a nature
that is capable of being remedied but that cannot with reasonable effort be
completely remedied within said period of thirty (30) days, such additional
period of time as may be reasonably necessary to cure same, provided such
Borrower commence such cure within said thirty (30) day period and diligently
prosecutes same, until completion, but in no event shall such extended period
exceed one hundred twenty (120) days;
 
(d) any representation, warranty, certification or statement made by (i) any
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement or (ii) any Subsidiary Guarantor
in the Guaranty or in any document delivered pursuant to the Guaranty shall
prove to have been incorrect in any material respect when made (or deemed made)
and such representation, warranty, certification or statement is not made
correct in all material respects within thirty (30) days after the earlier to
occur of (i) the date on which the Administrative Agent notifies the Borrowers
of such incorrect representation, warranty, certification or statement, and (ii)
the date on which any Borrower or Subsidiary Guarantor first becomes aware of
any such incorrect representation, warranty, certification or statement;
provided, however, that, no breach of any of the representations and warranties
contained in Section 4.7 hereof shall constitute an “Event of Default” hereunder
(and the sole remedy of the Administrative Agent and Lenders in respect of any
such breach shall be as set forth in Section 5.20 hereof) unless such
representation and warranty was untrue or incorrect when made and a Borrower or
Subsidiary Guarantor had knowledge, at the time such representation and warranty
was made, that the representation and warranty was untrue or incorrect;
 
(e) a default (however defined) shall occur with respect to (i) any Recourse
Debt of any Borrower or any Consolidated Subsidiary the aggregate outstanding
principal amount of which is in excess of $20,000,000 (other than the
Obligations) or (ii) any Non-Recourse Debt of any Borrower or any Consolidated
Subsidiary the aggregate outstanding principal amount of which is in excess of
$35,000,000;
 
(f) any Borrower or Subsidiary Guarantor shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
 
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(g) an involuntary case or other proceeding shall be commenced against any
Borrower or Subsidiary Guarantor seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of ninety (90) days; or an
order for relief shall be entered against any Borrower or any Subsidiary
Guarantor under the federal bankruptcy laws as now or hereafter in effect;
 
(h) one or more final, non-appealable judgments or decrees in an aggregate
amount of $20,000,000 or more shall be entered by a court or courts of competent
jurisdiction against any Borrower or any Subsidiary Guarantor (other than any
judgment as to which, and only to the extent, a reputable insurance company has
acknowledged coverage of such claim in writing) and (i) any such judgments or
decrees shall not be stayed, discharged, paid, bonded or vacated within thirty
(30) days or (ii) enforcement proceedings shall be commenced by any creditor on
any such judgments or decrees;
 
(i) without the Required Lenders’ prior written consent (which the Required
Lenders may withhold in their respective sole and absolute discretion), there
shall be a change in the majority of the Board of Directors of NorthStar (a)
during any twelve (12) month period following a change in “control” (as defined
in Rule 405 of the regulations promulgated under the Securities Act of 1933), or
(b) during any period where a so-called “proxy fight” is in process (or during
the twelve (12) month period after any related shareholders’ meeting) concerning
either the composition of the Board of Directors or a sale of NorthStar;
 
(j) without the Required Lenders’ prior written consent (which the Required
Lenders may withhold in their respective sole and absolute discretion), any
Person (including affiliates of such Person) or “group” (as such term is defined
in applicable federal securities laws and regulations) shall acquire more than
thirty percent (30%) of the common shares of NorthStar;
 
(k) NorthStar shall cease at any time to qualify as a real estate investment
trust under the Code and/or either of NorthStar OP or NRFC Sub-REIT shall cease
at any time to qualify as qualified real estate investment trust subsidiaries
under the Code;
 
(l) if any Termination Event with respect to a Plan shall occur as a result of
which Termination Event or Events any member of the ERISA Group has incurred or
will incur any liability to the PBGC or any other Person and the sum (determined
as of the date of occurrence of such Termination Event) of the insufficiency of
such Plan and the insufficiency of any and all other Plans with respect to which
such a Termination Event shall occur and be continuing at the same time (or, in
the case of a Multiple Employer Plan with respect to which a Termination Event
described in clause (ii) of the definition of Termination Event shall occur and
be continuing at the same time, the liability of any Borrower) is equal to or
greater than $5,000,000;
 
(m) if, any member of the ERISA Group shall commit a failure described in
Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the amount of
the lien determined under Section 402(f)(3) of ERISA or Section 412(n)(3) of the
Code that will be imposed on any member of the ERISA Group or their assets in
respect of such failure shall be, in the case of a NorthStar Plan, equal to or
greater than $5,000,000 or, in the case of a Non-NorthStar Plan, an amount that
would result in a Material Adverse Effect;
 
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(n) at any time, for any reason any Borrower, any Consolidated Subsidiary or any
other party (other than any Lender, the Administrative Agent or the Arranger)
which is a party to a Loan Document seeks to repudiate its obligations under any
Loan Document; or
 
(o) a default beyond any applicable notice or grace period under any of the
other Loan Documents.
 
Section 6.2 Rights and Remedies.
 
(a) Upon the occurrence of any Event of Default described in Sections 6.1(f) or
(g), the Commitments shall immediately terminate and the unpaid principal amount
of, and any and all accrued interest on, the Loans and any and all accrued Fees
and other Obligations hereunder shall automatically become immediately due and
payable, with all additional interest from time to time accrued thereon and,
except as is otherwise specifically set forth in this Agreement or the other
Loan Documents, without presentation, demand, or protest or other requirements
of any kind (including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrowers; and
upon the occurrence and during the continuance of any other Event of Default,
the Administrative Agent may (and upon the demand of the Required Lenders
shall), by written notice to the Borrowers, terminate the Commitments and may
(and upon the demand of the Required Lenders shall), in addition to the exercise
of all of the rights and remedies permitted the Administrative Agent and the
Lenders at law or equity or under any of the other Loan Documents, declare the
unpaid principal amount of and any and all accrued and unpaid interest on the
Loans and any and all accrued Fees and other Obligations hereunder to be, and
the same shall thereupon be, immediately due and payable with all additional
interest from time to time accrued thereon and, except as is otherwise
specifically set forth in this Agreement or the other Loan Documents, without
presentation, demand, or protest or other requirements of any kind other than as
provided in the Loan Documents (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrowers.
 
(b) Notwithstanding anything to the contrary contained in this Agreement or in
any other Loan Document, the Administrative Agent and the Lenders each agree
that any exercise or enforcement of the rights and remedies granted to the
Administrative Agent or the Lenders under this Agreement or at law or in equity
with respect to this Agreement or any other Loan Documents shall be commenced
and maintained by the Administrative Agent on behalf of the Administrative Agent
and/or the Lenders. The Administrative Agent shall act at the direction of the
Required Lenders in connection with the exercise of any and all remedies at law,
in equity or under any of the Loan Documents or, if the Required Lenders are
unable to reach agreement, then, from and after an Event of Default, the
Administrative Agent may pursue such rights and remedies as it may determine.
 
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Section 6.3 Notice of Default. The Administrative Agent shall give notice to the
Borrowers under Section 6.1(c) promptly upon being requested to do so by the
Required Lenders and shall thereupon notify all the Lenders thereof.
 
Section 6.4 Actions in Respect of Letters of Credit.
 
(a) If, at any time and from time to time, any Letter of Credit shall have been
issued hereunder and an Event of Default shall have occurred and be continuing,
then, upon the occurrence and during the continuation thereof, the
Administrative Agent may, whether in addition to the taking by the
Administrative Agent of any of the actions described in this Article or
otherwise, make a demand upon the Borrowers to, and immediately upon such
demand, the Borrowers shall pay to the Administrative Agent, on behalf of the
Lenders, in same day funds at the Administrative Agent’s office designated in
such demand, for deposit in a special cash collateral account (the “Letter of
Credit Collateral Account”) to be maintained in the name of the Administrative
Agent (on behalf of the Lenders) and under its sole dominion and control at such
place as shall be designated by the Administrative Agent, an amount equal to the
amount of the Letter of Credit Usage under the Letters of Credit.
 
(b) The Borrowers hereby pledge, grant and assign to the Administrative Agent,
as Administrative Agent, for its benefit and for the ratable benefit of the
Lenders a lien on and a security interest in, the following collateral (the
“Letter of Credit Collateral”):
 
(i) the Letter of Credit Collateral Account, all cash deposited therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Letter of Credit Collateral Account;
 
(ii) all notes, certificates of deposit and other instruments from time to time
hereafter delivered to or otherwise possessed by the Administrative Agent for or
on behalf of the Borrowers in substitution for or in respect of any or all of
the then existing Letter of Credit Collateral;
 
(iii) all interest, dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the then existing Letter of Credit Collateral; and
 
(iv) to the extent not covered by the above clauses, all proceeds of any or all
of the foregoing Letter of Credit Collateral.
 
The lien and security interest granted hereby secures the payment of all
obligations of the Borrowers now or hereafter existing hereunder and under any
other Loan Document.
 
(c) The Borrowers hereby authorize the Administrative Agent for the ratable
benefit of the Lenders to apply, from time to time after funds are deposited in
the Letter of Credit Collateral Account, funds then held in the Letter of Credit
Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect, as shall have become or shall become due and
payable by the Borrowers to the Lenders in respect of the Letters of Credit.
 
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(d) Neither the Borrowers nor any Person claiming or acting on behalf of or
through the Borrowers shall have any right to withdraw any of the funds held in
the Letter of Credit Collateral Account, except as provided in Section 6.4(h).
 
(e) The Borrowers agree that they will not (i) sell or otherwise dispose of any
interest in the Letter of Credit Collateral or (ii) create or permit to exist
any lien, security interest or other charge or encumbrance upon or with respect
to any of the Letter of Credit Collateral, except for the security interest
created by this Section 6.4.
 
(f) If any Event of Default shall have occurred and be continuing:
 
(i) The Administrative Agent may, in its sole discretion, without notice to the
Borrowers except as required by law and at any time from time to time, charge,
set off or otherwise apply all or any part of first, (x) amounts previously
drawn on any Letter of Credit that have not been reimbursed by the Borrowers and
(y) any Letter of Credit Usage described in clause (ii) of the definition
thereof that are then due and payable and second, any other unpaid Obligations
then due and payable, against the Letter of Credit Collateral Account or any
part thereof, in such order as the Administrative Agent shall elect. The rights
of the Administrative Agent under this Section 6.4 are in addition to any rights
and remedies which any Lender may have.
 
(ii) The Administrative Agent may also exercise, in its sole discretion, in
respect of the Letter of Credit Collateral Account, in addition to the other
rights and remedies provided herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the Uniform Commercial Code
in effect in the State of New York at that time.
 
(g) The Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Letter of Credit Collateral if the Letter
of Credit Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, it being understood that,
assuming such treatment, the Administrative Agent shall not have any
responsibility or liability with respect thereto.
 
(h) At such time as all Events of Default have been cured or waived in writing,
all amounts remaining in the Letter of Credit Collateral Account shall be
promptly returned to the Borrowers upon the written request of the Borrower.
Absent such cure or written waiver, any surplus of the funds held in the Letter
of Credit Collateral Account and remaining after payment in full of all of the
Obligations of the Borrowers hereunder and under any other Loan Document after
the Maturity Date shall be paid to the Borrowers or to whomsoever may be
lawfully entitled to receive such surplus.
 
ARTICLE VII
 
THE AGENTS
 
Section 7.1 Appointment and Authorization. Each Lender irrevocably appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto.
 
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Section 7.2 Agency and Affiliates. KeyBank and Syndication Agent shall have the
same rights and powers under this Agreement as any other Lender and may exercise
or refrain from exercising the same as though it were not the Administrative
Agent, and KeyBank and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with any Borrower or any Subsidiary
or affiliate of any Borrower as if it were not the Administrative Agent
hereunder, and the term “Lender” and “Lenders” shall include KeyBank in its
individual capacity. Syndication Agent is an agent hereunder in title only and
such designation shall impose no obligations on it.
 
Section 7.3 Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default or Event of
Default, except as expressly provided in Article VI.
 
Section 7.4 Consultation with Experts. The Administrative Agent may consult with
legal counsel, independent public accountants and other independent experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
 
Section 7.5 Liability of Administrative Agent. Neither the Administrative Agent
nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any Borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrowers; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Administrative Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the other Loan Documents or any
other instrument or writing furnished in connection herewith. The Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire,
telex or similar writing) believed by it to be genuine or to be signed by the
proper party or parties.
 
Section 7.6 Indemnification. Each Lender shall, ratably in accordance with its
Commitment, indemnify the Administrative Agent and its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrowers) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitee’s gross negligence or willful misconduct) that such
indemnitee may suffer or incur in connection with this Agreement, the other
Loan Documents or any action taken or omitted by such indemnitee hereunder. In
the event that the Administrative Agent shall, subsequent to its receipt of
indemnification payment(s) from Lenders in accordance with this section, recoup
any amount from the Borrowers, or any other party liable therefor in connection
with such indemnification, the Administrative Agent shall promptly reimburse the
Lenders which previously made the payment(s) pro rata, based upon the actual
amounts which were theretofore paid by each Lender.
 
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Section 7.7 Credit Decision. Each Lender acknowledges that (i) it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, and (ii) it has conducted its own independent investigation of the
financial condition, creditworthiness, affairs and status of NorthStar and the
Consolidated Subsidiaries and that it has not relied on any materials or
information furnished to it by the Administrative Agent, the Arranger or any of
their respective Affiliates which, if so furnished, is hereby acknowledged by
each Lender as having been furnished without representation or warranty of any
kind. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement.
 
Section 7.8 Successor Administrative Agent. The Administrative Agent may resign
at any time by giving notice thereof to the Lenders and the Borrowers and the
Administrative Agent shall resign in the event its Commitment is reduced to
zero. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent, which successor Administrative Agent
shall, provided no Event of Default has occurred and is then continuing, be
subject to Borrowers’ approval, which approval shall not be unreasonably
withheld, conditioned or delayed. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and approved by the Borrowers,
and shall have accepted such appointment, within thirty (30) days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be the Administrative Agent who shall act
until the Required Lenders shall appoint a Administrative Agent. Upon the
acceptance of its appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent’s resignation hereunder, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent.
 
Section 7.9 Receipt of Notices. Except as otherwise expressly provided herein,
all material notices, reports and information received by the Administrative
Agent with respect to the Borrowers and not otherwise delivered to the Lenders
by the Borrowers, shall be delivered to the Lenders within ten (10) Domestic
Business Days of the Administrative Agent’s receipt thereof.
 
ARTICLE VIII
 
CHANGE IN CIRCUMSTANCES
 
Section 8.1 Basis for Determining Interest Rate Inadequate or Unfair. If on or
prior to the first day of any Interest Period for any LIBOR Borrowing:
 
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(a) the Administrative Agent is advised that deposits in dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
 
(b) Lenders having fifty percent (50%) or more of the aggregate principal amount
of the affected Loans advise the Administrative Agent that the Adjusted London
Interbank Offered Rate, as determined by the Administrative Agent, will not
adequately and fairly reflect the cost to such Lenders of funding their LIBOR
Loans for such Interest Period, the Administrative Agent shall forthwith give
notice thereof to the Borrowers and the Lenders,
 
whereupon until the Administrative Agent notifies the Borrowers that the
circumstances giving rise to such results set forth in Section 8.1(a) or (b)
above no longer exist, (i) the obligations of the Lenders to make LIBOR Loans or
to continue or convert outstanding Loans as or into LIBOR Loans shall be
suspended and (ii) each outstanding LIBOR Loan shall be converted into a
Alternate Base Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Borrowers notify the Administrative Agent at
least two (2) Domestic Business Days before the date of any LIBOR Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall be an Alternate Base Rate Borrowing.
 
Section 8.2 Illegality. If, on or after the date of this Agreement, the adoption
of any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its LIBOR Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Lender (or its LIBOR Lending
Office) to make, maintain or fund its LIBOR Loans or to issue any Letter of
Credit as a Fronting Lender or to participate in any Letter of Credit issued by
a Fronting Lender, the Administrative Agent shall forthwith give notice thereof
to the other Lenders and the Borrowers, whereupon until such Lender notifies the
Borrowers and the Administrative Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Lender to make or
convert LIBOR Loans or to issue Letters of Credit shall be suspended. With
respect to LIBOR Loans, before giving any notice to the Administrative Agent
pursuant to this Section, such Lender shall designate a different LIBOR Lending
Office if such designation will avoid the need for giving such notice and will
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. If such Lender shall determine that it may not lawfully continue to
maintain and fund any of its outstanding LIBOR Loans to maturity and shall so
specify in such notice, the Borrowers shall be deemed to have delivered a Notice
of Interest Rate Election and such LIBOR Loan shall be converted as of such date
to a Alternate Base Rate Loan (without payment of any amounts that Borrowers
would otherwise be obligated to pay pursuant to Section 2.13 hereof with respect
to Loans converted pursuant to this Section 8.2) and, in the case of LIBOR
Loans, in an equal principal amount from such Lender (on which interest and
principal shall be payable contemporaneously with the related LIBOR Loans of the
other Lenders), and such Lender shall make such a Alternate Base Rate Loan.
 
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If at any time, it shall be unlawful or impossible for any Lender to make,
maintain or fund its LIBOR Loans, the Borrowers shall have the right, upon five
(5) Domestic Business Day’s notice to the Administrative Agent, to either (x)
cause a bank, reasonably acceptable to the Administrative Agent, to offer to
purchase the Commitments of such Lender for an amount equal to such Lender’s
outstanding Loans, together with all fees, accrued interest and other amounts
payable to such Lender and to become a Lender hereunder, which offer such Lender
is hereby required to accept, or (y) to repay in full all Loans then outstanding
of such Lender, together with interest and all other amounts due thereon, upon
which event, such Lender’s Commitments shall be deemed to be cancelled pursuant
to Section 2.11(c).
 
Section 8.3 Increased Cost and Reduced Return.
 
(a) If on or after the date hereof the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any LIBOR Loan any such requirement with respect to which such
Lender is entitled to compensation during the relevant Interest Period under
Section 2.7), special deposit, insurance assessment or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (or its Applicable Lending Office) or shall impose on any Lender (or
its Applicable Lending Office) or on the United States market for certificates
of deposit or the London interbank market any other condition affecting its
LIBOR Loans, its Note or its obligation to make such Loans and the result of any
of the foregoing is to increase the cost to such Lender (or its Applicable
Lending Office) of making or maintaining any such Loan, or to reduce the amount
of any sum received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Lender to be material, then, within fifteen (15) days
after demand by such Lender (with a copy to the Administrative Agent), the
Borrowers shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction.
 
(b) If any Lender shall have reasonably determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender (or its Parent) as a consequence of such Lender’s
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material, then from time to time, within
fifteen (15) days after demand by such Lender (with a copy to the Administrative
Agent), the Borrowers shall pay to such Lender such additional amount or amounts
as will compensate such Lender (or its Parent) for such reduction.
 
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(c) Each Lender will promptly notify the Borrowers and the Administrative Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate of any Lender claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of demonstrable error. In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
 
(d) If at any time, any Lender shall be owed amounts pursuant to this Section
8.3, unless such Lender shall elect to waive the right to be paid the same, the
Borrowers shall have the right, upon five (5) Domestic Business Day’s notice to
the Administrative Agent to either (x) cause a bank, reasonably acceptable to
the Administrative Agent, to offer to purchase the Commitments of such Lender
for an amount equal to such Lender’s outstanding Loans, together with all fees,
accrued interest and other amounts payable to such Lender, and to become a
Lender hereunder, which offer such Lender is hereby required to accept, or (y)
to repay in full all Loans then outstanding of such Lender, together with all
fees, accrued interest and other amounts payable to such Lender, upon which
event, such Lender’s Commitment shall be deemed to be cancelled pursuant to
Section 2.11(c).
 
Section 8.4 Taxes.
 
(a) Any and all payments by the Borrowers under any Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender, the
Fronting Lender and the Administrative Agent, taxes imposed on its income, and
franchise or similar taxes imposed on it, by (i) any jurisdiction (or political
subdivision thereof) of which the Administrative Agent, the Fronting Lender or
such Lender, as the case may be, is a citizen or resident or in which such
Person has an Applicable Lending Office, (ii) the jurisdiction (or any political
subdivision thereof) in which the Administrative Agent, the Fronting Lender or
such Lender is organized, or (iii) any jurisdiction (or political subdivision
thereof) in which such Lender, the Fronting Lender or the Administrative Agent
is presently doing business which taxes are imposed solely as a result of doing
business in such jurisdiction (all such non excluded taxes, duties, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”). If the Borrowers shall be required by law to deduct any
Taxes from or in respect of any sum payable under any Loan Document to the
Lenders, the Fronting Lender or the Administrative Agent (i) the sum payable
shall be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.4) such Lender, the Fronting Lender or the Administrative Agent
(as the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall pay the full amount deducted to the
relevant taxing authority or other governmental authority in accordance with
applicable law.
 
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(b) In addition, the Borrowers agree to pay any stamp or documentary taxes and
any other excise or property taxes, or charges or similar levies, in each case
to the extent imposed by the United States or any state (or political
subdivision thereof) which arise from any payment made in the United States
hereunder or under any Note or Letter of Credit or participation therein or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note (hereinafter referred to as “Other Taxes”).
 
(c) The Borrowers agree to indemnify each Lender, and the Administrative Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 8.4) paid by such Lender or the Administrative Agent (as the
case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within fifteen (15) days from the date such Lender or the Administrative Agent
(as the case may be) makes demand therefor.
 
(d) Each Lender organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement
in the case of each Lender listed on the signature pages hereof and on or prior
to the date on which it becomes a Lender in the case of each other Lender, and
from time to time thereafter if requested in writing by the Borrowers (but only
so long as such Lender remains eligible to do so), shall provide the Borrowers
with Internal Revenue Service form W-8ECI or W-8BEN, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from “Taxes” as defined in Section 8.4(a).
 
(e) For any period with respect to which a Lender has failed to provide the
Borrowers with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Lender
shall not be entitled to indemnification under Section 8.4(a) with respect to
Taxes imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of withholding tax,
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
 
(f) If the Borrowers are required to pay additional amounts to or for the
account of any Lender pursuant to this Section 8.4, then such Lender will change
the jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
 
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(g) (i) if at any time, any Lender shall reasonably expect to be owed amounts
pursuant to this Section 8.4, such Lender shall give the Administrative Agent
and the Borrowers notice thereof (with no liability for failing to do so) as
soon as reasonably practicable upon determining that it is reasonably likely to
do so (subject to limitations on such disclosure imposed by applicable law or
with the advice of counsel), and (ii) if any Lender at any time shall be owed
amounts pursuant to this Section 8.4, unless such Lender shall elect to waive
the right to be paid the same, the Borrowers shall have the right, upon five (5)
Domestic Business Day’s notice to the Administrative Agent to either (x) cause a
bank, reasonably acceptable to the Administrative Agent, to offer to purchase
the Commitments of such Lender for an amount equal to such Lender’s outstanding
Loans, together with all fees, accrued interest and other amounts payable to
such Lender, and to become a Lender hereunder, which offer such Lender is hereby
required to accept, or (y) to repay in full all Loans then outstanding of such
Lender, together with interest and all other amounts due thereon, upon which
event, such Lender’s Commitment shall be deemed to be cancelled pursuant to
Section 2.11(c).
 
Section 8.5 Alternate Base Rate Loans Substituted for Affected LIBOR Loans. If
(i) the obligation of any Lender to make, or convert outstanding Loans to, LIBOR
Loans has been suspended pursuant to Section 8.2 or (ii) any Lender has demanded
compensation under Section 8.3 or 8.4 with respect to its LIBOR Loans and the
Borrowers shall, by at least five (5) LIBOR Business Days’ prior notice to such
Lender through the Administrative Agent, have elected that the provisions of
this Section shall apply to such Lender, then, unless and until such Lender
notifies the Borrowers that the circumstances giving rise to such suspension or
demand for compensation no longer exist:
 
(a) Borrowers shall be deemed to have delivered a Notice of Interest Rate
Election with respect to such affected LIBOR Loans and thereafter all Loans
which would otherwise be made (or continued as or converted into, as the case
may be) by such Lender as LIBOR Loans shall be made instead as Alternate Base
Rate Loans (on which interest and principal shall be payable contemporaneously
with the related LIBOR Loans of the other Lenders); and
 
(b) after each of its LIBOR Loans (as the case may be) has been repaid (or
converted to a Alternate Base Rate Loan), all payments of principal which would
otherwise be applied to repay such Loans shall be applied to repay its Alternate
Base Rate Loans instead, and
 
(c) Borrowers will not be required to make any payment which would otherwise be
required by Section 2.13 with respect to such LIBOR Loans converted to Alternate
Base Rate Loans pursuant to clause (a) above.
 
ARTICLE IX
 
MISCELLANEOUS
 
Section 9.1 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile
transmission followed by telephonic confirmation or similar writing or e-mail
with confirmation of receipt) and shall be given to such party: (x) in the case
of the Borrowers, KeyBank (in its capacity as a Lender hereunder) and the
Administrative Agent, at its address, telex number, facsimile number or e-mail
address set forth on the signature pages hereof with a duplicate copy thereof,
in the case of the Borrowers, to the Borrowers, at 527 Madison Avenue, 16th
Floor, New York, New York 10022, Attn: Chief Financial Officer and Controller,
and with a duplicate copy, in the case of the Borrowers, to Paul, Hastings,
Janofsky & Walker LLP, Attn: Robert J. Grados, Esq., (y) in the case of any
Lender, at its address, telex number, facsimile number or e-mail address set
forth in its Administrative Questionnaire or (z) in the case of any party, such
other address, telex number, facsimile number or e-mail address as such party
may hereafter specify for the purpose by notice to the Administrative Agent and
the Borrowers. Each such notice, request or other communication shall be
effective (i) if given by telex or facsimile transmission, when such telex or
facsimile is transmitted to the telex number or facsimile number specified in
this Section and the appropriate answerback or facsimile confirmation is
received, (ii) if given by e-mail, when such e-mail is transmitted to the e-mail
address specified in this Section and the appropriate receipt acknowledgement is
received, (iii) if given by a nationally recognized overnight carrier, the next
Domestic Business Day after such communication is deposited with such carrier
with postage prepaid, or (iv) if given by any other means, when delivered at the
address specified in this Section; provided that notices to the Administrative
Agent under Article II or Article VIII shall not be effective until received.
 
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Section 9.2 No Waivers. No failure or delay by the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
 
Section 9.3 Expenses; Indemnification.
 
(a) The Borrowers shall pay (i) all reasonable out-of-pocket costs and expenses
of the Administrative Agent (including reasonable fees and disbursements of
counsel to the Administrative Agent in connection with the preparation of this
Agreement, the Loan Documents and the documents and instruments referred to
therein, or any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder) and (ii) if an Event of Default occurs,
all reasonable out-of-pocket expenses incurred by the Administrative Agent and
each Lender, including reasonable, actual fees and disbursements of counsel for
the Administrative Agent and each of the Lenders in connection with the
enforcement of the Loan Documents and the instruments referred to therein and
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
 
(b) The Borrowers agree to indemnify the Administrative Agent and each Lender,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee
harmless from and against any and all actual liabilities, losses, damages, costs
and expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) that may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, asserted against or incurred by any Indemnitee but
excluding those liabilities, losses, damages, costs and expenses incurred solely
by reason of the gross negligence or willful misconduct of any Indemnitee as
finally determined by a court of competent jurisdiction, as a result of, or
arising out of, or in any way related to or by reason of, (i) any of the
transactions contemplated by the Loan Documents or the execution, delivery or
performance of any Loan Document, (ii) any violation by the Borrowers or the
Environmental Affiliates of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by the Borrowers or any of the Environmental
Affiliates, including, without limitation, all on-site and off-site activities
involving Materials of Environmental Concern, (iv) the breach of any
environmental representation or warranty set forth herein, (v) the grant to the
Administrative Agent and the Lenders of any Lien in any property or assets of
the Borrowers or any stock or other equity interest in any Borrower, and (vi)
the exercise by the Administrative Agent and the Lenders of their rights and
remedies (including, without limitation, foreclosure) under any agreements
creating any such Lien. The Borrowers’ obligations under this Section shall
survive the termination of this Agreement and the payment of the Obligations.
 
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Section 9.4 Sharing of Set-Offs. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the
Borrowers or to any other Person, any such notice being hereby expressly waived,
but subject to the prior consent of the Administrative Agent (if the taking of
such action could limit or impair the rights and remedies of the Administrative
Agent or the Lenders under any Loan Document) and to the terms and provisions of
this Agreement and the other Loan Documents, to set off and to appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final) and any other indebtedness in the nature of an account at any time held
with such Lender or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of the Borrowers against and on account of the Obligations of the
Borrowers then due and payable to such Lender under this Agreement or under any
of the other Loan Documents, including, without limitation, all interests in
Obligations purchased by such Lender; provided, however, notwithstanding the
foregoing or anything else in this Agreement or any other Loan Document to the
contrary, neither any of the Lenders nor the Administrative Agent shall have the
right of set off with respect to any account, deposits or indebtedness to the
extent that such account, deposits or indebtedness (a) are not the exclusive
property of NorthStar or a Consolidated Subsidiary, (b) any Person (other than
the Person with which such account has been established) which is not Affiliated
with NorthStar, NorthStar OP or NRFC Sub-REIT has rights therein or (c)
constitutes collateral for a secured financing of NorthStar or a Consolidated
Party and are subject to a “control” agreement relating to such facility. Each
Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it or
Letter of Credit issued by it (in its capacity as a Fronting Lender) or
participation therein which is greater than the proportion received by any other
Lender in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Lender or Letter of Credit issued by such
other Lender (in its capacity as a Fronting Lender) or participated in by such
other Lender, the Lender receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Lenders, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Lenders shall be
shared by the Lenders pro rata; provided that nothing in this Section shall
impair the right of any Lender to exercise any right of set-off or counterclaim
it may have to any deposits not received in connection with the Loans and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrowers other than its indebtedness under the Notes. The Borrowers agree, to
the fullest extent they may effectively do so under applicable law, that any
holder of a participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrowers in the amount of such
participation. Notwithstanding anything to the contrary contained herein, any
Lender may, by separate agreement with the Borrowers, waive its right to set off
contained herein or granted by law and any such written waiver shall be
effective against such Lender under this Section 9.4.
 
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Section 9.5 Amendments and Waivers. Any provision of this Agreement or the Notes
or other Loan Documents may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrowers and the Required Lenders
(and, if the rights or duties of the Administrative Agent are affected thereby,
by the Administrative Agent) except that, to the extent provided for in this
Agreement, certain amendments and/or waivers may be consented to by the
Borrowers and the Administrative Agent without the necessity of obtaining the
consent of the Required Lenders; provided that, except to reflect or implement
matters otherwise specifically provided for in this Agreement, no such amendment
or waiver with respect to this Agreement, the Notes or any other Loan Documents
shall, unless signed by the Lenders affected thereby, (i) increase or decrease
the Commitment of any Lender or subject any Lender to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or any Fees
hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any Fees hereunder or for any reduction or termination
of any Commitment, (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Lenders, which
shall be required for the Lenders or any of them to take any action under this
Section or any other provision of this Agreement (including any amendment of the
term “Required Lenders”), (v) modify the provisions of Section 9.15, (vi) permit
Liens on the Borrowing Base Assets (other than Liens in favor of the
Administrative Agent for the ratable benefit of the Lenders), (vii) modify the
provisions of this Section 9.5, or (viii) release any Borrower or any Guarantor
of its obligations under the Loan Documents except as expressly permitted
hereunder.
 
Section 9.6 Successors and Assigns.
 
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrowers may not assign or otherwise transfer any of their
rights under this Agreement or the other Loan Documents without the prior
written consent of all Lenders and the Administrative Agent. The Administrative
Agent and the Lenders shall not assign their respective interests under this
Agreement except as set forth in Section 7.8 (with respect to the Administrative
Agent) and this Article IX (with respect to the Lenders).
 
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(b) Any Lender may, with the prior written consent of the Administrative Agent
and the Borrowers (which consent in each case shall not unreasonably be
withheld, delayed or conditioned) at any time assign to one or more Eligible
Assignees (each, an “Assignee”) all, or a portion of, its rights and obligations
under this Agreement, its Note and the other Loan Documents, provided, however,
(i) no such consent by the Borrowers shall be required (x) if a Default or Event
of Default exists, or (y) in the case of an assignment to another Lender or to
an Affiliate of another Lender, (ii) any partial assignment shall be in an
amount at least equal to $5,000,000 and, after giving effect to such assignment,
the assigning Lender (unless it has sold its entire remaining Commitment and
outstanding Loans) holds a Commitment of at least $5,000,000, and (iii) such
Assignee shall assume the assigned rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit “B”
hereto, executed by such Assignee and such transferor Lender. Upon execution and
delivery of an Assignment and Assumption Agreement and payment by such Assignee
to such transferor Lender of an amount equal to the purchase price agreed
between such transferor Lender and such Assignee, such Assignee shall be a
Lender party to this Agreement and shall have all the rights and obligations of
a Lender with a Commitment as set forth in the applicable Assignment and
Assumption Agreement, and no further consent or action by any party shall be
required and the transferor Lender shall be released from its obligations
hereunder to a corresponding extent. Upon the consummation of any assignment
pursuant to this subsection (b), the transferor Lender, the Administrative Agent
and the Borrowers shall make appropriate arrangements so that, if required, a
new Note is issued to the Assignee upon the return to the Borrowers of the old
Note marked “cancelled”. In connection with any such assignment, the transferor
Lender shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $3,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrowers and the Administrative Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.4. Any assignment made during the
continuation of an Event of Default shall not be affected by any subsequent cure
or waiver of such Event of Default.
 
(c) Any Lender may at any time grant to one or more banks or other financial
institutions (in each case, a “Participant”) participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Lender of a participating interest to a Participant, whether or not upon notice
to the Borrowers and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrowers
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrowers hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Lender will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), or (iii) of
Section 9.5 without the consent of the Participant. The Borrowers agree that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by subsection
(b), above, or (d), below, shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (c).
 
(d) Any Lender may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from its obligations hereunder.
 
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(e) No Assignee, Participant or other transferee of any Lender’s rights shall be
entitled to receive any greater payment under Section 8.3 or 8.4 than such
Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrowers’ prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Lender to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
 
Section 9.7 Collateral. Each of the Lenders represents to the Administrative
Agent and each of the other Lenders that it in good faith is not relying upon
any “margin stock” (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
 
Section 9.8 Governing Law; Submission to Jurisdiction.
 
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
 
(b) Any legal action or proceeding with respect to this Agreement or any other
Loan Document and any action for enforcement of any judgment in respect thereof
shall be brought non-exclusively in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrowers hereby accept for
themselves and in respect of their property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts. The
Borrowers irrevocably consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the hand delivery, or
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrowers at their address set forth below. The Borrowers hereby irrevocably
waive any objection which they may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waive and agree not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
the Administrative Agent to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against the Borrowers in
any other jurisdiction.
 
Section 9.9 Marshalling; Recapture. Neither of the Administrative Agent nor any
Lender shall be under any obligation to marshal any assets in favor of the
Borrowers or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Borrowers in connection with this Agreement, which payment or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to the Borrowers or their estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Obligation or part thereof which has been paid, reduced or
satisfied by the amount so repaid shall be reinstated by the amount so repaid
and shall be included within the liabilities of the Borrowers to such Lender as
of the date such initial payment, reduction or satisfaction occurred.
 
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Section 9.10 Counterparts; Integration; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Administrative Agent and
the Borrowers of counterparts hereof signed by each of the parties hereto (or,
in the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party).
 
Section 9.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
Section 9.12 Survival. All indemnities set forth herein shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making and repayment of the Loans hereunder.
 
Section 9.13 Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any domestic or foreign branch office, subsidiary or
affiliate of such Lender.
 
Section 9.14 Limitation of Liability. No claim may be made by the Borrowers or
any other Person acting by or through Borrowers against the Administrative Agent
or any Lender or the affiliates, directors, officers, employees, attorneys or
agent of any of them for any consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or by the other Loan
Documents, or any act, omission or event occurring in connection therewith; and
the Borrowers hereby waive, release and agree not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
 
Section 9.15 Recourse Obligation. This Agreement and the Obligations hereunder
are fully recourse to the Borrowers. Notwithstanding the foregoing, no recourse
under or upon any obligation, covenant, or agreement contained in this Agreement
shall be had against any officer, director, shareholder or employee of the
Borrowers except for damages, losses, costs and expenses incurred by any Lender
or the Administrative Agent with respect to any fraud or misappropriation of
funds on the part of such officer, director, shareholder or employee.
 
Section 9.16 Confidentiality. The Administrative Agent and each Lender (each, a
“Lending Party”) agrees to keep confidential any information furnished or made
available to it by the Borrowers pursuant to this Agreement; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party, (b) to any other Person if reasonably incidental
to the administration of the Facility provided herein such as an attorney or
accountant for a Lending Party, provided such Person agrees to maintain the
confidentiality of such information and uses same only in connection with the
administration or enforcement of the Facility, (c) as required by any law, rule,
or regulation, (d) upon the order of any court or administrative agency, (e)
upon the request or demand of any regulatory agency or authority, (f) that is or
becomes available to the public or that is or becomes available to any Lending
Party other than as a result of a disclosure by any Lending Party prohibited by
this Agreement, (g) in connection with any litigation to which such Lending
Party or any of its affiliates may be a party, (h) to the extent necessary in
connection with the exercise of any remedy under this Agreement or any other
Loan Document, and (i) subject to provisions substantially similar to those
contained in this Section, to any actual or proposed participant or assignee.
The Borrowers may disclose information concerning or relating to this Facility
as required by any law, rule or regulation, upon the order of any court or
administrative agency, or based upon the reasonable advice of counsel that such
disclosure should be made for legal purposes.
 
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Section 9.17 Legal Rate. Notwithstanding anything in this Agreement or any Loan
Document to the contrary, if at any time the interest rate applicable to the
Notes, together with all fees and charges which are treated as interest under
applicable law (collectively, the “Charges”), as provided for in this Agreement
or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by the Administrative
Agent, on behalf of the Lenders, shall exceed the maximum lawful rate (the
“Legal Rate”) which may be contracted for, charged, taken, received or reserved
by the Administrative Agent, on behalf of the Lenders in accordance with
applicable law, the rate of interest payable under such Notes, together with all
Charges payable, shall be limited to the Legal Rate and any interest or Charges
not so charged, taken, received or reserved by Administrative Agent, on behalf
of the Lenders at such time shall be spread, prorated or amortized over the term
of such Notes to the fullest extent permitted by law.
 
Section 9.18 USA Patriot Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
 
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.
 
 
 
 

 
BORROWERS:
 
NORTHSTAR REALTY FINANCE CORP., a Maryland corporation
 
By: /s/ Albert Tylis
Name: Albert Tylis
Title: General Counsel and Assistant Secretary
 
 
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP, a Delaware limited partnership
     
By:
NorthStar Realty Finance Corp., a Maryland corporation, its general partner
               
By: /s/ Albert Tylis
Name: Albert Tylis
Title: General Counsel and Assistant Secretary: 
     
NRFC SUB-REIT CORP., a Maryland corporation
 
By: /s/ Albert Tylis
Name: Albert Tylis
Title: General Counsel and Assistant Secretary 
 
 
NS ADVISORS, LLC, a Delaware limited liability company
 
By: /s/ Albert Tylis
Name: Albert Tylis
Title: General Counsel and Assistant Secretary 
 

 
 
S-1

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    KEYBANK NATIONAL ASSOCIATION, as Administrative Agent             Facsimile
Number: 617-385-6292 By:
/s/ Kathleen M. Ahern
  Name: Kathleen M. Ahern Address: 225 Franklin Street, 18th Floor Title: Senior
Banker   Boston, Massachusetts 02110             Attn: Ms. Kathleen Ahern      
     

S-2

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Commitment
$30,000,000.00
 
 

  KEYBANK NATIONAL ASSOCIATION, as a Lender              
By:
/s/ Kathleen M. Ahern
   
Name:  Kathleen M. Ahern
    Title:    Senior Banker

 
 
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Commitment
$30,000,000.00
 
 

  BANK OF AMERICA, N.A., as a Lender              
By:
/s/ Michael W. Edwards
   
Name:  Michael W. Edwards
    Title:    Senior Vice President

 
 
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Commitment
$25,000,000.00
 
 

  CITICORP NORTH AMERICA, INC., as a Lender              
By:
/s/ Ricardo James
   
Name:  Ricardo James
    Title:    Director

 
 
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Commitment
$15,000,000.00
 
 

  WESTLB AG, NEW YORK BRANCH, as a Lender              
By:
/s/ Lillian Tung Lum
   
Name:  Lillian Tung Lum
    Title:    Executive Director              
By:
/s/ Pui Chow
   
Name:  Pui Chow
    Title:    Director

 
 
 
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