Exhibit 10.53


 







 





 


$443,554,305.47


 


CREDIT AGREEMENT


 


among


 


NRFC WA HOLDINGS, LLC,


NRFC WA HOLDINGS II, LLC,


NRFC WA HOLDINGS VII, LLC,


NRFC WA HOLDINGS X, LLC,


and


NRFC WA HOLDINGS XII, LLC,


as Borrowers


 


NORTHSTAR REALTY FINANCE CORP.,


and


NORTHSTAR REALTY FINANCE L.P.,


as Guarantors,


 


THE LENDERS PARTY HERETO,


 


and


 


WACHOVIA BANK, NATIONAL ASSOCIATION,


as Administrative Agent


 


Dated as of November 6, 2007


 


WACHOVIA CAPITAL MARKETS, LLC,


as Sole Lead Arranger and Sole Bookrunner




 





 


	
   

  	
    Prepared by:

  
	
   

  	
  

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  1

  
	
  Section 1.1

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Other Definitional Provisions

  	
   

  	
  40

  
	
  Section 1.3

  	
   

  	
  Accounting Terms

  	
   

  	
  41

  
	
  Section 1.4

  	
   

  	
  Time References

  	
   

  	
  41

  
	
  Section 1.5

  	
   

  	
  Execution of Documents

  	
   

  	
  41

  
	
  Section 1.6

  	
   

  	
  UCC Terms

  	
   

  	
  41

  
	
  Section 1.7

  	
   

  	
  References to Discretion

  	
   

  	
  41

  
	
  Section 1.8

  	
   

  	
  References to Payment

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II THE LOANS; AMOUNT AND
  TERMS

  	
   

  	
  42

  
	
  Section 2.1

  	
   

  	
  Revolving Loans

  	
   

  	
  42

  
	
  Section 2.2

  	
   

  	
  Term Loan; Delayed Draw Term Loan

  	
   

  	
  48

  
	
  Section 2.3

  	
   

  	
  Fees

  	
   

  	
  52

  
	
  Section 2.4

  	
   

  	
  Commitment Reductions

  	
   

  	
  52

  
	
  Section 2.5

  	
   

  	
  Prepayments

  	
   

  	
  52

  
	
  Section 2.6

  	
   

  	
  Default Rate and Payment Dates

  	
   

  	
  55

  
	
  Section 2.7

  	
   

  	
  Conversion Options

  	
   

  	
  56

  
	
  Section 2.8

  	
   

  	
  Computation of Interest and Fees;
  Usury

  	
   

  	
  57

  
	
  Section 2.9

  	
   

  	
  Pro Rata Treatment and Payments

  	
   

  	
  58

  
	
  Section 2.10

  	
   

  	
  Non-Receipt of Funds by the
  Administrative Agent

  	
   

  	
  60

  
	
  Section 2.11

  	
   

  	
  Inability to Determine Interest
  Rate

  	
   

  	
  62

  
	
  Section 2.12

  	
   

  	
  Yield Protection

  	
   

  	
  62

  
	
  Section 2.13

  	
   

  	
  Indemnity; Eurocurrency Liabilities

  	
   

  	
  63

  
	
  Section 2.14

  	
   

  	
  Taxes

  	
   

  	
  64

  
	
  Section 2.15

  	
   

  	
  Illegality

  	
   

  	
  66

  
	
  Section 2.16

  	
   

  	
  Obligations Absolute

  	
   

  	
  66

  
	
  Section 2.17

  	
   

  	
  Replacement of Lenders

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  67

  
	
  Section 3.1

  	
   

  	
  Financial Condition

  	
   

  	
  67

  
	
  Section 3.2

  	
   

  	
  No Material Adverse Effect

  	
   

  	
  68

  
	
  Section 3.3

  	
   

  	
  Corporate Existence; Compliance
  with Law

  	
   

  	
  68

  
	
  Section 3.4

  	
   

  	
  Corporate Power; Authorization;
  Enforceable Obligations

  	
   

  	
  68

  
	
  Section 3.5

  	
   

  	
  No Legal Bar; No Default

  	
   

  	
  69

  
	
  Section 3.6

  	
   

  	
  No Material Litigation

  	
   

  	
  69

  
	
  Section 3.7

  	
   

  	
  Investment Company Act; Federal
  Power Act; Interstate Commerce Act; and Federal and State Statutes and
  Regulations

  	
   

  	
  69

  
	
  Section 3.8

  	
   

  	
  Margin Regulations

  	
   

  	
  69

  
	
  Section 3.9

  	
   

  	
  ERISA

  	
   

  	
  70

  
	
  Section 3.10

  	
   

  	
  Environmental Matters

  	
   

  	
  70

  
	
  Section 3.11

  	
   

  	
  Use of Proceeds

  	
   

  	
  71

  
	
  Section 3.12

  	
   

  	
  Subsidiaries; Joint Ventures;
  Partnerships

  	
   

  	
  71

  
	
  Section 3.13

  	
   

  	
  Ownership

  	
   

  	
  71

  
	
  Section 3.14

  	
   

  	
  Indebtedness

  	
   

  	
  71

  



 


i

















 


	
  Section 3.15

  	
   

  	
  Taxes

  	
   

  	
  71

  
	
  Section 3.16

  	
   

  	
  Solvency

  	
   

  	
  71

  
	
  Section 3.17

  	
   

  	
  [Reserved]

  	
   

  	
  71

  
	
  Section 3.18

  	
   

  	
  Location

  	
   

  	
  71

  
	
  Section 3.19

  	
   

  	
  No Burdensome Restrictions

  	
   

  	
  72

  
	
  Section 3.20

  	
   

  	
  Brokers’ Fees

  	
   

  	
  72

  
	
  Section 3.21

  	
   

  	
  [Reserved]

  	
   

  	
  72

  
	
  Section 3.22

  	
   

  	
  Accuracy and Completeness of
  Information

  	
   

  	
  72

  
	
  Section 3.23

  	
   

  	
  [Reserved]

  	
   

  	
  72

  
	
  Section 3.24

  	
   

  	
  Insurance

  	
   

  	
  72

  
	
  Section 3.25

  	
   

  	
  Security Documents

  	
   

  	
  72

  
	
  Section 3.26

  	
   

  	
  Anti-Terrorism Laws

  	
   

  	
  73

  
	
  Section 3.27

  	
   

  	
  Compliance with OFAC Rules and
  Regulations

  	
   

  	
  73

  
	
  Section 3.28

  	
   

  	
  Compliance with FCPA

  	
   

  	
  73

  
	
  Section 3.29

  	
   

  	
  Consent; Governmental
  Authorizations

  	
   

  	
  73

  
	
  Section 3.30

  	
   

  	
  Bulk Sales

  	
   

  	
  74

  
	
  Section 3.31

  	
   

  	
  Income and Required Payments

  	
   

  	
  74

  
	
  Section 3.32

  	
   

  	
  Full Payment

  	
   

  	
  74

  
	
  Section 3.33

  	
   

  	
  Irrevocable Instructions

  	
   

  	
  74

  
	
  Section 3.34

  	
   

  	
  Compliance with Covenants

  	
   

  	
  74

  
	
  Section 3.35

  	
   

  	
  Collateral Agreements

  	
   

  	
  74

  
	
  Section 3.36

  	
   

  	
  No Reliance

  	
   

  	
  74

  
	
  Section 3.37

  	
   

  	
  Collateral

  	
   

  	
  75

  
	
  Section 3.38

  	
   

  	
  REIT Status

  	
   

  	
  75

  
	
  Section 3.39

  	
   

  	
  Insider

  	
   

  	
  75

  
	
  Section 3.40

  	
   

  	
  No Defenses

  	
   

  	
  75

  
	
  Section 3.41

  	
   

  	
  [Reserved]

  	
   

  	
  75

  
	
  Section 3.42

  	
   

  	
  Value Given

  	
   

  	
  75

  
	
  Section 3.43

  	
   

  	
  Separateness

  	
   

  	
  75

  
	
  Section 3.44

  	
   

  	
  Qualified Transferees

  	
   

  	
  76

  
	
  Section 3.45

  	
   

  	
  Eligibility of Mortgage Assets

  	
   

  	
  76

  
	
  Section 3.46

  	
   

  	
  Ability to Perform

  	
   

  	
  76

  
	
  Section 3.47

  	
   

  	
  Certain Tax Matters

  	
   

  	
  76

  
	
  Section 3.48

  	
   

  	
  Set-Off, etc.

  	
   

  	
  76

  
	
  Section 3.49

  	
   

  	
  Interest Rate Protection Agreements

  	
   

  	
  77

  
	
  Section 3.50

  	
   

  	
  Representations and Warranties

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS PRECEDENT

  	
   

  	
  77

  
	
  Section 4.1

  	
   

  	
  Conditions to Closing Date

  	
   

  	
  77

  
	
  Section 4.2

  	
   

  	
  Conditions to All Extensions of
  Credit

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V AFFIRMATIVE COVENANTS

  	
   

  	
  84

  
	
  Section 5.1

  	
   

  	
  Financial Statements

  	
   

  	
  84

  
	
  Section 5.2

  	
   

  	
  Certificates; Other Information

  	
   

  	
  86

  
	
  Section 5.3

  	
   

  	
  Payment of Taxes and Other
  Obligations

  	
   

  	
  87

  
	
  Section 5.4

  	
   

  	
  Conduct of Business and Maintenance
  of Existence

  	
   

  	
  87

  
	
  Section 5.5

  	
   

  	
  Maintenance of Property; Insurance

  	
   

  	
  87

  
	
  Section 5.6

  	
   

  	
  Inspection of Property; Books and
  Records; Discussions

  	
   

  	
  87

  



 


ii

















 


	
  Section 5.7

  	
   

  	
  Notices

  	
   

  	
  87

  
	
  Section 5.8

  	
   

  	
  Environmental Laws

  	
   

  	
  89

  
	
  Section 5.9

  	
   

  	
  Financial Covenants

  	
   

  	
  89

  
	
  Section 5.10

  	
   

  	
  Additional Credit Parties

  	
   

  	
  90

  
	
  Section 5.11

  	
   

  	
  Compliance with Law

  	
   

  	
  90

  
	
  Section 5.12

  	
   

  	
  Pledged Assets

  	
   

  	
  91

  
	
  Section 5.13

  	
   

  	
  Interest Rate Protection Agreements

  	
   

  	
  91

  
	
  Section 5.14

  	
   

  	
  Control Agreements

  	
   

  	
  91

  
	
  Section 5.15

  	
   

  	
  Further Assurances

  	
   

  	
  91

  
	
  Section 5.16

  	
   

  	
  Performance and Compliance with
  Collateral

  	
   

  	
  92

  
	
  Section 5.17

  	
   

  	
  Delivery of Income and Required
  Payments

  	
   

  	
  92

  
	
  Section 5.18

  	
   

  	
  Exceptions

  	
   

  	
  92

  
	
  Section 5.19

  	
   

  	
  Distributions in Respect of
  Collateral

  	
   

  	
  92

  
	
  Section 5.20

  	
   

  	
  REIT Status

  	
   

  	
  93

  
	
  Section 5.21

  	
   

  	
  Issuances

  	
   

  	
  93

  
	
  Section 5.22

  	
   

  	
  Remittance of Prepayments

  	
   

  	
  93

  
	
  Section 5.23

  	
   

  	
  Escrow Imbalance

  	
   

  	
  93

  
	
  Section 5.24

  	
   

  	
  Separateness

  	
   

  	
  93

  
	
  Section 5.25

  	
   

  	
  Preferred Equity Interests

  	
   

  	
  94

  
	
  Section 5.26

  	
   

  	
  Registration of Securities

  	
   

  	
  94

  
	
  Section 5.27

  	
   

  	
  Termination of Securities Account

  	
   

  	
  95

  
	
  Section 5.28

  	
   

  	
  Independence of Covenants

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI NEGATIVE COVENANTS

  	
   

  	
  95

  
	
  Section 6.1

  	
   

  	
  Indebtedness

  	
   

  	
  95

  
	
  Section 6.2

  	
   

  	
  Liens

  	
   

  	
  95

  
	
  Section 6.3

  	
   

  	
  Nature of Business

  	
   

  	
  96

  
	
  Section 6.4

  	
   

  	
  Consolidation, Merger, Sale or
  Purchase of Assets, etc.

  	
   

  	
  96

  
	
  Section 6.5

  	
   

  	
  [Reserved]

  	
   

  	
  96

  
	
  Section 6.6

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  96

  
	
  Section 6.7

  	
   

  	
  Ownership of Subsidiaries; Restrictions

  	
   

  	
  97

  
	
  Section 6.8

  	
   

  	
  Corporate Changes; Material
  Contracts

  	
   

  	
  97

  
	
  Section 6.9

  	
   

  	
  [Reserved]

  	
   

  	
  97

  
	
  Section 6.10

  	
   

  	
  Restricted Payments

  	
   

  	
  97

  
	
  Section 6.11

  	
   

  	
  [Reserved]

  	
   

  	
  97

  
	
  Section 6.12

  	
   

  	
  No Further Negative Pledges

  	
   

  	
  97

  
	
  Section 6.13

  	
   

  	
  Collateral Not to be Evidenced by
  Instruments

  	
   

  	
  98

  
	
  Section 6.14

  	
   

  	
  Deposits

  	
   

  	
  98

  
	
  Section 6.15

  	
   

  	
  Servicing Agreements

  	
   

  	
  98

  
	
  Section 6.16

  	
   

  	
  Extension or Amendment of
  Collateral

  	
   

  	
  98

  
	
  Section 6.17

  	
   

  	
  [Reserved]

  	
   

  	
  98

  
	
  Section 6.18

  	
   

  	
  No Future Liens

  	
   

  	
  98

  
	
  Section 6.19

  	
   

  	
  Senior and Pari Passu Interests

  	
   

  	
  99

  
	
  Section 6.20

  	
   

  	
  Portfolio Assets

  	
   

  	
  99

  
	
  Section 6.21

  	
   

  	
  Inconsistent Agreements

  	
   

  	
  99

  
	
  Section 6.22

  	
   

  	
  Preferred Equity Interests

  	
   

  	
  99

  
	
  Section 6.23

  	
   

  	
  ERISA

  	
   

  	
  99

  



 


iii

















 


	
  ARTICLE VII EVENTS OF DEFAULT

  	
   

  	
  99

  
	
  Section 7.1

  	
   

  	
  Events of Default

  	
   

  	
  99

  
	
  Section 7.2

  	
   

  	
  Acceleration; Remedies

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII THE ADMINISTRATIVE
  AGENT

  	
   

  	
  103

  
	
  Section 8.1

  	
   

  	
  Appointment and Authority

  	
   

  	
  103

  
	
  Section 8.2

  	
   

  	
  Nature of Duties

  	
   

  	
  103

  
	
  Section 8.3

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  104

  
	
  Section 8.4

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  105

  
	
  Section 8.5

  	
   

  	
  Notice of Default

  	
   

  	
  105

  
	
  Section 8.6

  	
   

  	
  Non-Reliance on Administrative
  Agent and Other Lenders

  	
   

  	
  105

  
	
  Section 8.7

  	
   

  	
  Indemnification

  	
   

  	
  105

  
	
  Section 8.8

  	
   

  	
  Administrative Agent in Its
  Individual Capacity

  	
   

  	
  106

  
	
  Section 8.9

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  106

  
	
  Section 8.10

  	
   

  	
  Collateral and Guaranty Matters

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX ADMINISTRATION AND
  SERVICING

  	
   

  	
  107

  
	
  Section 9.1

  	
   

  	
  Servicing

  	
   

  	
  107

  
	
  Section 9.2

  	
   

  	
  Borrowers as Servicer

  	
   

  	
  108

  
	
  Section 9.3

  	
   

  	
  Third Party Servicer

  	
   

  	
  108

  
	
  Section 9.4

  	
   

  	
  Duties of the Borrowers

  	
   

  	
  108

  
	
  Section 9.5

  	
   

  	
  Authorization of the Borrowers

  	
   

  	
  109

  
	
  Section 9.6

  	
   

  	
  Event of Default

  	
   

  	
  109

  
	
  Section 9.7

  	
   

  	
  Modification

  	
   

  	
  110

  
	
  Section 9.8

  	
   

  	
  Inspection

  	
   

  	
  110

  
	
  Section 9.9

  	
   

  	
  [Reserved]

  	
   

  	
  110

  
	
  Section 9.10

  	
   

  	
  Payment of Certain Expenses by
  Servicer

  	
   

  	
  110

  
	
  Section 9.11

  	
   

  	
  Pooling and Servicing Agreements

  	
   

  	
  110

  
	
  Section 9.12

  	
   

  	
  Servicer Default

  	
   

  	
  111

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  	
  111

  
	
  Section 10.1

  	
   

  	
  Amendments, Waivers and Release of
  Collateral

  	
   

  	
  111

  
	
  Section 10.2

  	
   

  	
  Notices

  	
   

  	
  113

  
	
  Section 10.3

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  115

  
	
  Section 10.4

  	
   

  	
  Survival of Representations and
  Warranties

  	
   

  	
  115

  
	
  Section 10.5

  	
   

  	
  Payment of Expenses and Taxes;
  Indemnity

  	
   

  	
  115

  
	
  Section 10.6

  	
   

  	
  Successors and Assigns;
  Participations

  	
   

  	
  119

  
	
  Section 10.7

  	
   

  	
  Right of Set-off; Sharing of
  Payments

  	
   

  	
  122

  
	
  Section 10.8

  	
   

  	
  Table of Contents and Section
  Headings

  	
   

  	
  122

  
	
  Section 10.9

  	
   

  	
  Counterparts; Integration;
  Effectiveness; Electronic Execution

  	
   

  	
  123

  
	
  Section 10.10

  	
   

  	
  Severability

  	
   

  	
  123

  
	
  Section 10.11

  	
   

  	
  Integration

  	
   

  	
  123

  
	
  Section 10.12

  	
   

  	
  Governing Law

  	
   

  	
  123

  
	
  Section 10.13

  	
   

  	
  Consent to Jurisdiction; Service of
  Process and Venue

  	
   

  	
  123

  
	
  Section 10.14

  	
   

  	
  Confidentiality

  	
   

  	
  124

  
	
  Section 10.15

  	
   

  	
  Acknowledgments

  	
   

  	
  125

  
	
  Section 10.16

  	
   

  	
  Waivers of Jury Trial

  	
   

  	
  125

  
	
  Section 10.17

  	
   

  	
  Patriot Act Notice

  	
   

  	
  126

  



 


iv

















 


	
  Section 10.18

  	
   

  	
  Resolution of Drafting Ambiguities

  	
   

  	
  126

  
	
  Section 10.19

  	
   

  	
  Continuing Agreement

  	
   

  	
  126

  
	
  Section 10.20

  	
   

  	
  Lender Consent

  	
   

  	
  126

  
	
  Section 10.21

  	
   

  	
  Appointment of the Administrative
  Borrower

  	
   

  	
  127

  
	
  Section 10.22

  	
   

  	
  Counterclaims

  	
   

  	
  127

  
	
  Section 10.23

  	
   

  	
  Legal Matters

  	
   

  	
  127

  
	
  Section 10.24

  	
   

  	
  Recourse Against Certain Parties

  	
   

  	
  127

  
	
  Section 10.25

  	
   

  	
  Protection of Right, Title and
  Interest in the Collateral; Further Action Evidencing Loans

  	
   

  	
  128

  
	
  Section 10.26

  	
   

  	
  Credit Parties’ Waiver of Setoff

  	
   

  	
  128

  
	
  Section 10.27

  	
   

  	
  Periodic Due Diligence Review

  	
   

  	
  128

  
	
  Section 10.28

  	
   

  	
  Character of Loans for Income Tax
  Purposes

  	
   

  	
  129

  
	
  Section 10.29

  	
   

  	
  Joint and Several Liability; Full
  Recourse Obligations

  	
   

  	
  129

  



 


v

















 


	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(b)

  	
   

  	
  Collection Account

  
	
  Schedule 1.1(c)

  	
   

  	
  Asset Representations

  
	
  Schedule 1.1(d)

  	
   

  	
  Securities Account

  
	
  Schedule 1.1(e)

  	
   

  	
  Trust Preferred Securities

  
	
  Schedule 1.1(f)

  	
   

  	
  Construction Draw Deliveries

  
	
  Schedule 2.5

  	
   

  	
  Targeted Term Loan Outstanding Balances

  
	
  Schedule 3.3

  	
   

  	
  Jurisdictions of Organization and Qualification

  
	
  Schedule 3.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 3.18

  	
   

  	
  Location

  
	
  Schedule 9.3

  	
   

  	
  Servicers

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.1(a)

  	
   

  	
  Form of Account Designation Notice

  
	
  Exhibit 1.1(b)

  	
   

  	
  Form of Assignment and Assumption

  
	
  Exhibit 1.1(c)

  	
   

  	
  Form of Account Control Agreement

  
	
  Exhibit 1.1(d)(i)

  	
   

  	
  Form of Borrower Joinder Agreement

  
	
  Exhibit 1.1(d)(ii)

  	
   

  	
  Form of Guarantor Joinder Agreement

  
	
  Exhibit 1.1(e)

  	
   

  	
  Form of Notice of Borrowing

  
	
  Exhibit 1.1(f)

  	
   

  	
  Form of Notice of Conversion/Extension

  
	
  Exhibit 1.1(g)

  	
   

  	
  Form of Assignment

  
	
  Exhibit 1.1(h)

  	
   

  	
  Form of Borrower Release Letter

  
	
  Exhibit 1.1(i)

  	
   

  	
  Form of Compliance Certificate

  
	
  Exhibit 1.1(j)

  	
   

  	
  Form of Irrevocable Instruction

  
	
  Exhibit 1.1(k)

  	
   

  	
  Form of Servicer Redirection Notice

  
	
  Exhibit 1.1(l)

  	
   

  	
  Form of Warehouse Lender’s Release Letter

  
	
  Exhibit 1.1(m)

  	
   

  	
  Form of Securities Account Control Agreement

  
	
  Exhibit 2.1(a)

  	
   

  	
  Form of Funding Indemnity Letter

  
	
  Exhibit 2.1(b)

  	
   

  	
  Form of Confirmation

  
	
  Exhibit 2.1(e)

  	
   

  	
  Form of Revolving Note

  
	
  Exhibit 2.2

  	
   

  	
  Form of Term Loan Note

  
	
  Exhibit 4.1(a)

  	
   

  	
  Form of Lender Consent

  
	
  Exhibit 4.1(n)

  	
   

  	
  Form of Closing Officer’s Certificate

  
	
  Exhibit 4.1(o)

  	
   

  	
  Form of Patriot Act Certificate

  
	
  Exhibit 4.1(q)(i)

  	
   

  	
  Form of Power of Attorney for Borrower

  
	
  Exhibit 4.1(q)(ii)

  	
   

  	
  Form of Power of Attorney for Pledgor

  
	
  Exhibit 5.2(f)

  	
   

  	
  Form of Mortgage Asset Data Summary

  



 


vi

















 


CREDIT AGREEMENT,
dated as of November 6, 2007, among NRFC WA HOLDINGS, LLC, a Delaware limited
liability company (together with its successors and permitted assigns, “Holdings”),
as a Borrower, NRFC WA HOLDINGS II, LLC, a Delaware limited liability company
(together with its successors and permitted assigns, “Holdings II”), as
a Borrower, NRFC WA HOLDINGS VII, LLC, a Delaware limited liability company
(together with its successors and permitted assigns, “Holdings VII”), as
a Borrower, NRFC WA HOLDINGS X, LLC, a Delaware limited liability company
(together with it successors and assigns, “Holdings X”), as a Borrower,
as a Borrower, NRFC WA HOLDINGS XII, LLC, a Delaware limited liability company
(together with it successors and assigns, “Holdings XII”), as a
Borrower,  NORTHSTAR REALTY FINANCE CORP.,
a Maryland corporation (together with its successors and permitted assigns, “Northstar
Corp”), as a Guarantor, NORTHSTAR REALTY FINANCE L.P., a Delaware limited
partnership (together with its successors and permitted assigns, “Northstar
LP”), as a Guarantor, the other entities from time to time party hereto
pursuant to Section 5.10, the several banks and other financial institutions as
are, or may from time to time become parties to this Agreement (each, together
with its successors and assigns, a “Lender” and, collectively, the “Lenders”),
and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the “Administrative
Agent”).


 


W  I
T  N  E  S  S  E  T  H:


 


WHEREAS, the
Credit Parties (as hereinafter defined) have requested that the Lenders make
loans and other financial accommodations to the Credit Parties in an aggregate
principal amount of up to $443,554,305.47 as more particularly described
herein; and


 


WHEREAS, the
Lenders have agreed to make such loans and other financial accommodations to
the Credit Parties on the terms and conditions contained herein.


 


NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, such parties hereby agree as
follows:


 


ARTICLE I



DEFINITIONS


 


Section 1.1                                   Defined Terms.


 


As used in this Agreement, terms defined in the
preamble to this Agreement have the meanings therein indicated, and the
following terms have the following meanings:


 


“40 Act” shall mean the Investment Company
Act of 1940, as amended, restated or modified from time to time.


 


“AAA
IO” shall mean an “AAA” rated bond that is “interest only,” including any
such bond designated “X–C” or “X–P.”


 


“ABR Default Rate” shall have the meaning set
forth in Section 2.6.


 


“Accepted
Servicing Practices” shall mean, with respect to each item of Collateral,
those mortgage, mezzanine loan and/or secured lending servicing practices, as
applicable, of prudent lending


 

















 


institutions that service Collateral of the
same type, size and structure as such Collateral in the jurisdiction where the
related Underlying Mortgaged Property is located, as applicable, but in any
event, (a) in accordance with the terms of the Credit Documents and
Requirements of Law, (b) without prejudice to the interests of the
Administrative Agent or any Lender, (c) with a view to the maximization of
the recovery on such Collateral on a net present value basis and
(d) without regard to (i) any relationship that any Credit Party or
any Affiliate or any Subsidiary of  the
foregoing may have with the related Obligor, mortgagor, any Servicer, any PSA
Servicer, any Credit Party or any Affiliate or any Subsidiary of any of the
foregoing; (ii) the right of any Credit Party or any Subsidiary or
Affiliate of the foregoing to receive compensation or other fees for its
services rendered pursuant to this Agreement, the other Credit Documents, the
Mortgage Loan Documents or any other document or agreement; (iii) the
ownership, servicing or management by any Credit Party or any Affiliate or any
Subsidiary of  the foregoing for others
of any other mortgage loans, assets or mortgaged property; (iv) any obligation
of any Credit Party or any Affiliate or any Subsidiary of  the foregoing to repurchase, repay or
substitute any item of Collateral; (v) any obligation of any Credit Party
or any Affiliate or any Subsidiary of 
the foregoing to cure a breach of a representation and warranty with
respect to any Collateral and (vi) any debt any Credit Party or any
Affiliate or any Subsidiary of  the
foregoing has extended to any Obligor, mortgagor or any Affiliate of such
Obligor or mortgagor.


 


“Account Control Agreement” shall mean that
certain letter agreement, dated as of the date hereof, among the Borrowers, the
Administrative Agent and Wachovia substantially in the form of Exhibit
1.1(c) attached hereto, as amended, restated, modified or supplemented from
time to time.


 


“Account Designation Notice” shall mean the
Account Designation Notice dated as of the Closing Date from the Borrowers to
the Administrative Agent in substantially the form attached hereto as Exhibit 1.1(a),
as amended, restated, modified or supplemented from time to time.


 


“Additional Credit Party” shall mean each
Person that becomes a Borrower or Guarantor by execution of a Joinder Agreement
in accordance with Section 5.10.


 


“Adjusted Total Assets” shall mean the sum of
Total Assets plus Off—Balance Sheet Assets.


 


“Adjusted
Total Liabilities” shall mean the sum of Total Liabilities plus Off—Balance
Sheet Liabilities minus Trust Preferred Securities.


 


“Administrative Agent” or “Agent”
shall have the meaning set forth in the first paragraph of this Agreement and
shall include any successors in such capacity.


 


“Administrative Borrower” shall mean
Holdings.


 


“Administrative Questionnaire” shall mean an
Administrative Questionnaire in a form supplied by the Administrative Agent, as
amended, restated, modified or supplemented from time to time.


 


“Affiliate” shall mean, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.


 


“Agreement” or “Credit Agreement”
shall mean this Agreement, as amended, modified, extended, restated, replaced,
or supplemented from time to time in accordance with its terms.


 


“Allocated Revolving Loan Amount” shall mean,
for each item of Revolving Loan Collateral, the outstanding principal amount of
the Revolving Loans allocated by the Administrative Agent, in its


 


2

















 


discretion, to the related Revolving Loan
Collateral, which Allocated Revolving Loan Amount shall be set forth in the
related Confirmation, as increased or reduced from time to time, pursuant to
one or more additional Confirmations.


 


“Allocated Term Loan Amount” shall mean, for
each item of Term Loan Collateral, the outstanding principal amount of the Term
Loan (as may be increased by any Delayed Draw Term Loan) allocated by the
Administrative Agent, in its discretion, to the related Term Loan Collateral,
which Allocated Term Loan Amount shall be set forth in the related
Confirmation, as increased or reduced from time to time, pursuant to one or
more additional Confirmations.


 


“Alternate Base Rate” shall mean, for any
day, a rate per annum equal to the greater of (a) the Prime Rate in effect
on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. For purposes hereof: 
“Prime Rate” shall mean, at any time, the rate of interest per
annum publicly announced or otherwise identified from time to time by Wachovia
at its principal office in Charlotte, North Carolina as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on
the day such change in the Prime Rate occurs. The parties hereto acknowledge
that the rate announced publicly by Wachovia as its Prime Rate is an index or
base rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks; and “Federal Funds Effective Rate” shall mean,
for any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published on the next
succeeding Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms above, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the opening of
business on the date of such change.


 


“Alternate Base Rate Loans” shall mean Loans
that bear interest at an interest rate based on the Alternate Base Rate.


 


“Applicable Advance Rate” shall mean, with
respect to each Mortgage Asset (a) with
respect to Term Loan Collateral under the Term Loan as of the Closing Date, the
Applicable Advance Rate set forth on Schedule 1-A to the Fee Letter, (b) in the case of Collateral for the Delayed
Draw Term Loans, the Applicable Advance Rate set forth in Schedule 1-B
to the Fee Letter (as applicable) and (c)
in the case of Revolving Loan Collateral under the Revolving Loans, the
Applicable Advance Rate set forth in the related Confirmation, which shall be
no greater than the Applicable Advance Rate set forth in Schedule 1-C to
the Fee Letter (as applicable); provided, however, during the
time that any amount is outstanding under the Reindeer Facility, the Applicable
Advance Rates for one (1) or more Pledged Mortgage Assets may be reduced and/or
adjusted in such manner as the Administrative Agent shall determine in its discretion
from time to time so that the Asset Value of all Pledged Mortgage Assets is
equal to or less than the aggregate principal amount of all Loans outstanding
plus the Note Purchase Margin.


 


“Applicable Percentage” shall have the
meaning set forth in the Fee Letter.


 


“Approved Bank” shall have the meaning set
forth in the definition of “Cash Equivalents.”


 


3

















 


“Approved Fund” shall mean any Fund that is
administered, managed or underwritten
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers or manages a Lender.


 


“Arranger” shall mean Wachovia Capital
Markets, LLC, together with its successors and assigns.


 


“Asset
Schedule and Exception Report” shall have the meaning set forth in the
Custodial Agreement.


 


“Asset
Value” shall have the meaning set forth in the Fee Letter.


 


“Assignment and Assumption” shall mean an
assignment and assumption entered into by a Lender and an Eligible Assignee
(with the consent of any party whose consent is required by the definition of
Eligible Assignee and Section 10.6), and accepted by the Administrative Agent,
in substantially the form of Exhibit 1.1(b) or any other form
approved by the Administrative Agent.


 


“Assignment of Leases” shall mean, with
respect to any Mortgage, an assignment of leases thereunder, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the Underlying Mortgaged Property is located to reflect
the assignment of leases to the holder of the Mortgage or any secured party, as
applicable, as any such Assignment of Leases may be amended, restated, modified
or supplemented from time to time.


 


“Assignment
of Mortgage” shall mean, with respect to any Mortgage, an assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the assignment of the Mortgage to the holder of
the Mortgage or any secured party, as applicable, as any such Assignment of
Mortgage may be amended, restated, modified or supplemented from time to time.


 


“Assignments”
shall mean the transfer of all of the Borrowers’ rights and interests under an
Eligible Asset pursuant to an assignment executed by the Borrowers in blank,
which assignment shall be in the form of Exhibit 1.1(g) and shall be
otherwise satisfactory to the Administrative Agent in its discretion, as any
such Assignments may be amended, restated, modified or supplemented from time
to time.


 


“Authority
Documents” shall mean, as to any Person, the articles or certificate of
incorporation or formation, by-laws, limited liability company agreement,
general partnership agreement, limited partnership agreement, trust agreement,
joint venture agreement or other applicable organizational or governing
documents and the applicable resolutions of such Person.


 


“Availability”
shall mean at any time, an amount equal to the positive excess (if any) of (a) the lesser of (i) the Revolving Committed Amount, and (ii) the Asset Value of all 
Revolving Loan Collateral, minus (b)
the aggregate outstanding principal amount for all Revolving Loans on such day;
provided, however, for so long as and to the extent that the
Administrative Agent does not have a first priority perfected security interest
in any item of Collateral, then such Collateral shall be disregarded for the
purposes of calculating Availability; provided, further, however,
on and after the occurrence of the Maturity Date or an Event of Default, the
Availability shall be zero (0).


 


“Availability
Correction Deadline” shall have the meaning set forth in Section 2.5.


 


“Available
Borrowing Capacity” shall mean (a)
when the outstanding principal amount under the Term Loan (not taking into
account any portion of the Term Loan that was drawn as a Delayed Draw


 


4

















 


Term Loan) plus the Reindeer Debt is greater
than $500,000,000, $0, (b) the
outstanding principal amount under the Term Loan (not taking into account any
portion of the Term Loan that was drawn as a Delayed Draw Term Loan) plus the
Reindeer Debt is less than or equal to $500,000,000 but equal to or greater
than $450,000,000, $50,000,000 and (c)
when the outstanding principal amount under the Term Loan (not taking into
account any portion of the Term Loan that was drawn as a Delayed Draw Term
Loan) plus the Reindeer Debt is less than $450,000,000, the sum of (i) $50,000,000 plus (ii) the positive difference between
$450,000,000 and the outstanding principal amount under the Term Loan (not
taking into account any portion of the Term Loan that was drawn as a Delayed
Draw Term Loan) plus the Reindeer Debt.


 


“Bailee”
shall mean, with respect to each Table Funded  Mortgage
Asset, the related title company or other settlement agent, in each case,
approved in writing by the Administrative Agent in its reasonable discretion.


 


“Bailee
Agreement” shall mean, the Bailee Agreement among the applicable Borrower,
the Administrative Agent and the Bailee in the form of Annex 13 to
the Custodial Agreement.


 


“Bailee’s
Trust Receipt” shall have the meaning set forth in the Custodial Agreement.


 


“Bankruptcy Code” shall mean the Bankruptcy
Code in Title 11 of the United States Code, as amended, modified, succeeded or
replaced from time to time.


 


“Bankruptcy Event” shall mean any of the
events described in Section 7.1(f).


 


“Bankruptcy Event of Default” shall mean an
Event of Default specified in Section 7.1(f).


 


“Basic Mortgage Asset Documents” shall have
the meaning set forth in the Custodial Agreement.


 


“Book Value” shall mean, with respect to any
Mortgage Asset at any time, an amount as certified by the applicable Borrower,
equal to the lesser of (a) face or par
value and (b) the price that the
applicable Borrower initially paid or advanced in respect thereof plus
any additional amounts advanced by the applicable Borrower for or in respect of
such Mortgage Asset, as such Book Value may be marked down by the applicable
Borrower from time to time, including, as applicable, any loss/loss
reserve/price adjustments, less an amount equal to the sum of all
principal payments, prepayments or paydowns paid and realized losses and other
writedowns recognized relating to such Mortgage Asset; provided, however,
any such markdowns or adjustments must be made in good faith and shall be
disclosed contemporaneously therewith in writing to the Administrative Agent,
which mark downs or adjustments, without a corresponding payment and
application of principal, may result in a mandatory payment under Section 2.5.


 


“Borrower” or “Borrowers” shall mean,
individually and/or collectively, Holdings, Holdings II, Holdings VII, Holdings
X, Holdings XII and any other entity that becomes a party to this Agreement pursuant
to Section 5.10 from time to time, in each case together with their successors
and permitted assigns.


 


“Borrower Joinder Agreement” shall mean a
Borrower Joinder Agreement in substantially the form of Exhibit 1.1(d)(i),
executed and delivered by an Additional Credit Party in accordance with the
provisions of Section 5.10, as amended, restated, supplemented or modified
from time to time.


 


“Borrower
Asset Schedule” shall have the meaning set forth in the Custodial
Agreement.


 


5

















 


“Borrower
Release Letter” shall mean a letter in the form of Exhibit 1.1(h),
duly executed by the applicable Borrower.


 


“Borrowing
Capacity” shall mean the ability to obtain draws or advances at the request
of a Guarantor or any Affiliate or Subsidiary of a Guarantor in Dollars and
within three (3) Business Days of the request therefor and to use or apply
such draws or advances to repay amounts under the Credit Documents or Other
Credit Facilities.


 


“Borrowing Date” shall mean, the date any
Loan is made or any item of Collateral is pledged to the Administrative Agent
pursuant to the terms hereof and the other Credit Documents.


 


“Bridge
Loan” shall mean a performing Whole Loan that is otherwise an Eligible
Asset except that the Underlying Mortgaged Property is not stabilized or is
otherwise considered to be in a transitional state, which exceptions shall be
disclosed in writing to the Administrative Agent and such exceptions must be
acceptable to the Administrative Agent in its discretion, which acceptance may,
in the Administrative Agent’s discretion, be conditioned on additional terms,
conditions and requirements with respect to such Bridge Loan; provided, however,
the debt and equity fundings for each Bridge Loan must be sufficient to finance
100% of the completion of the improvements to the related Underlying Mortgaged
Property or there must exist sufficient net operating income or interest
reserves or guaranties or replenishments to cover the debt service related to
the Eligible Asset. Unless waived in writing by the Administrative Agent in its
discretion, a Bridge Loan must satisfy all of the terms and conditions
contained in this Agreement  (other than
those eligibility criteria waived in accordance with the first sentence of this
definition) that are applicable to Whole Loans.


 


“Business Day” shall mean any day other than
a Saturday, Sunday or other day on which commercial banks in North Carolina,
New York or Minnesota are authorized or required by Requirements of Law to
close; provided, however, that when used in connection with a
rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the
term “Business Day” shall also exclude any day on which banks in London,
England are not open for dealings in Dollar deposits in the London interbank
market.


 


“Capital Lease” shall mean any lease of (or
other agreement conveying the right to use) Property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.


 


“Capital Lease Obligations” shall mean, for
any Person and its Consolidated Subsidiaries, all obligations of such Person to
pay rent or other amounts under a Capital Lease, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.


 


“Cash Collateral” shall mean the cash or
payments received by the Administrative Agent pursuant to Section 2.5 of this
Agreement or as Income on any Collateral.


 


“Cash Equivalents” shall mean any of the
following:  (a) securities issued or directly and fully guaranteed or insured by
the United States or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof)
having maturities of not more than one (1) year from the date of
acquisition, (b) time deposits or
certificates of deposit of any commercial bank incorporated under the laws of
the United States or any state thereof, of recognized standing having capital
and unimpaired surplus in excess of $1,000,000,000 and whose short-term
commercial paper rating at the time of acquisition is at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody’s (any such bank, an “Approved Bank”), with such deposits or
certificates having maturities of not more than one (1) year from the date
of acquisition, (c) repurchase
obligations


 


6

















 


with a term of not more than seven (7)
days for underlying securities of the types described in clauses (a) and
(b) above entered into with any Approved Bank, (d)
commercial paper or finance company paper issued by any Person incorporated
under the laws of the United States or any state thereof and rated at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof
by Moody’s, and in each case maturing not more than one (1) year after the
date of acquisition, and (e) investments
in money market funds that are registered under the 40 Act, which have net
assets of at least $1,000,000,000 and at least 85% of whose assets consist of
securities and other obligations of the type described in clauses (a)
through (e) above. All such Cash Equivalents must be denominated solely for
payment in Dollars.


 


“CDO
Issuance” shall mean any securitization transaction involving the issuance
of collateralized debt obligations.


 


“CDO
Securitization Transaction” shall mean a commercial real estate cash flow
CDO securitization transaction involving some or all of the Mortgage Assets
engaged in by an Affiliate of any of the Guarantors or the Borrower.


 


“Change in Law” shall mean the occurrence,
after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any
request, guideline or directive (whether or not having the force of law) by any
Governmental Authority.


 


“Class”
shall mean with respect to a Mortgage Asset, such Mortgage Asset’s
classification as a Whole Loan, a Junior Interest, a Mezzanine Loan, a Bridge
Loan, a CMBS Security, a CTL Loan, a Subordinate CTL Loan, Senior Secured Bank
Debt or a Preferred Equity Interest.


 


“Closing
Date” shall mean the date of this Agreement.


 


“Closing
Officer’s Certificate” shall mean a certificate substantially in the form
of Exhibit 4.1(n), duly executed by each of the Credit Parties.


 


“CMBS
Security” shall mean (a) a performing
fixed or floating rate mortgage–backed pass–through certificate, representing a
beneficial ownership interest in one or more first lien mortgage loans secured
by Commercial Real Estate or (b) a performing
fixed or floating rate certificate in a CDO Issuance, in each case rated by at
least two (2) Rating Agencies as (i)
in the case of Term Loan Collateral, AAA (including AAA IO), AA+, AA, AA-, A+,
A, A-, BBB+, BBB, BBB-, BB+, BB, BB-, B+, B or B- and (ii) in the case of Revolving Loan Collateral, AAA (including AAA
IO), AA+, AA, AA-, A+, A, A-, BBB+, BBB or BBB-; provided that on a case
by case basis, the Administrative Agent may consider CMBS Securities rated BB+,
BB, BB-, B+, B or B-, subject to such terms and conditions as the
Administrative Agent may require in its discretion, such terms to be set forth
in the related Confirmation.


 


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


 


“Collateral”
shall mean the collective reference to the collateral described in the Security
Documents which secures all Obligations (including, without limitation, the
Term Loan and the Revolving Loan).


 


“Collateral
Default” shall mean any Mortgage Asset included or proposed to be included
in the Collateral (a) that is thirty (30)
or more days delinquent under the terms of the related Mortgage Loan Documents
(including any Preferred Equity Interest that has not been paid during such
period), (b) for which there is a
material non-monetary default (beyond any applicable notice and cure period)
under the 


 


7

















 


terms of the related Mortgage Loan Documents
or (c) with respect to which the related Obligor is the subject of an
Insolvency Proceeding or Insolvency Event.


 


 “Collection Account” shall mean the
account set forth on Schedule 1.1(b),
which is established in the name of one or more Borrowers and subject to the
Account Control Agreement and into which all Income and Cash Collateral shall
be deposited. Funds in the Collection Account may be invested at the direction
of the Administrative Agent in Cash Equivalents.


 


“Commercial
Real Estate” shall mean any real estate included in the definition of
Property Type.


 


“Commercial
Real Estate Loan” shall mean any loan secured directly or indirectly by
Commercial Real Estate or, as applicable, Equity Interests in an entity that
owns directly or indirectly Commercial Real Estate.


 


“Commitment”
shall mean the Revolving Commitments, Delayed Draw Term Loan Commitment and the
Term Loan Commitments, individually or collectively, as appropriate.


 


“Commitment
Fee” shall mean the “Commitment Fee” payable under the Fee Letter.


 


“Commitment
Percentage” shall mean the Revolving Commitment Percentage and/or the Term
Loan Commitment Percentage, as appropriate.


 


“Commitment
Period” shall mean the period from and including the Funding Date to but
excluding the Revolver Maturity Date.


 


“Commonly
Controlled Entity” shall mean an entity, whether or not incorporated, which
is under common control with a Borrower or any other Credit Party within the
meaning of Section 4001(b)(1) of ERISA or is part of a group which
includes any Borrower or any other Credit Party and which is treated as a
single employer under Section 414(b) or 414(c) of the Code or, solely for
purposes of Section 412 of the Code to the extent required by such
section, Section 414(m) or 414(o) of the Code.


 


“Compliance
Certificate” shall mean a certificate in the form of Exhibit 1.1(i)
attached hereto, duly executed by the Credit Parties.


 


“Confirmation”
shall have the meaning set forth in Section 2.1.


 


“Consolidated”
shall mean, when used with reference to financial statements or financial
statement items of the Borrowers, the Guarantors and their Subsidiaries or any
other Person, such statements or items on a consolidated basis in accordance
with the consolidation principles of GAAP.


 


“Consolidated
Adjusted EBITDA” shall mean, for any period, with respect to any Person,
the sum, without duplication, for such period of (a) the Net Income of
such Person and its Consolidated Subsidiaries determined on a consolidated
basis for such period, (b) the sum of the provisions for such period for
income taxes, interest expense, and depreciation and amortization expense used
in determining such Net Income for such Person and its Consolidated
Subsidiaries, (c) amounts deducted in accordance with GAAP in respect of
other non–cash expenses in determining such Net Income for such Person and its
Consolidated Subsidiaries and (d) the amount of any aggregate net loss (or
minus the amount of any gain) during such period arising from the sale,
exchange or other disposition of capital assets by such Person and its
Consolidated Subsidiaries determined on a consolidated basis, in each event, excluding
unrealized gains/losses, any fees payable to advisors for raising private
equity capital, amortization of financing fees and amortization of bond
discount associated with convertible debt outstanding.


 


8

















 


“Construction
Costs” shall mean with respect to a Mortgage Asset that is a Bridge Loan or
a Construction Loan, as of any date of determination, the reasonable hard and
soft costs of proposed construction of the improvements on the Underlying
Mortgaged Property, which reasonable costs shall be disclosed to and approved
by the Administrative in its discretion, plus the market value of the
related Underlying Mortgaged Property at such time, as determined by the
Administrative Agent in its reasonable discretion based on such sources of
information as the Administrative Agent may determine to rely on in its
discretion; provided that the market value of the Underlying Mortgaged
Property shall at no time be deemed less than the purchase price therefor.


 


“Construction
Draw Deliveries” shall mean the deliveries required in Schedule 1.1(f)
to this Agreement.


 


“Construction
Loan” shall mean a performing Whole Loan, the Underlying Mortgaged Property
for which has received all necessary entitlements and approvals to develop the
Underlying Mortgaged Property and construct improvements thereon in a manner
consistent with the applicable Borrower’s representations to the Administrative
Agent regarding such construction, which information shall be set forth in the
related Confirmation, such loan and the documents related thereto are otherwise
acceptable to the Administrative Agent in its discretion and all construction
related documents are delivered to the Custodian as a part of the Mortgage
Asset File for such Whole Loan.


 


“Contingent
Liabilities” shall mean, with respect to any Person and its Consolidated
Subsidiaries (without duplication):  (a) liabilities and obligations (including any
Guarantee Obligations) of such Person or any Consolidated Subsidiary of such
Person in respect of “off-balance sheet arrangements” (as defined in the SEC
Off-Balance Sheet Rules), (b) any
obligation, including, without limitation, any Guarantee Obligation, whether or
not required to be disclosed in the footnotes to such Person’s  and its Consolidated Subsidiaries’ financial
statements, guaranteeing partially or in whole any Non-Recourse Indebtedness,
lease, dividend or other obligation, exclusive of (i) contractual indemnities (including, without limitation, any
indemnity or price-adjustment provision relating to the purchase or sale of
securities or other assets) and (ii)
guarantees of non-monetary obligations (other than guarantees of completion,
environmental indemnities and guarantees of customary carve-out matters made in
connection with Non-Recourse Indebtedness, such as (but not limited to) fraud,
misappropriation, bankruptcy and misapplication) which have not yet been called
on or quantified, of such Person or of any other Person, and (c) any forward commitment or obligation to fund
or provide proceeds with respect to any loan or other financing which is
obligatory and non-discretionary on the part of the lender. The amount of any
Contingent Liabilities described in clause (b) shall be deemed to be, (i) with respect to a guarantee of interest or
interest and principal, or operating income guarantee, the sum of all payments
required to be made thereunder (which, in the case of an operating income
guarantee, shall be deemed to be equal to the debt service for the note secured
thereby), through, (x) in the case of an interest or interest and
principal guarantee, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder), or
(y) in the case of an operating income guarantee, the date through which
such guarantee will remain in effect, and (ii)
with respect to all guarantees not covered by the preceding clause (i), an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of such Person. As
used in this definition, the term “SEC Off-Balance Sheet Rules” means the
Disclosure in Management’s Discussion and Analysis About Off-Balance Sheet
Arrangements and Aggregate Contractual Obligations, Securities Act Release
No. 33-8182, 34-47264; FR-67 International Series Release No. 1266 File
No. S7-42-02, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR
pts. 228, 229 and 249).


 


9

















 


“Continuing
Director” shall mean (a) an
individual who is a member of any Person’s board of directors (or the
equivalent thereof) on the date hereof or (b)
any new director (or the equivalent thereof) whose appointment was approved by
a majority of the individuals who were already Continuing Directors at the time
of such appointment, election or approval.


 


“Contractual
Obligation” shall mean, as to any Person, any provision of any security
issued by such Person or of any contract, agreement, instrument or undertaking
to which such Person is a party or by which it or any of its Property is bound.


 


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


 


“Correction
Amount” shall have the meaning set forth in Section 2.5.


 


 “Credit
Documents” shall mean this Agreement, each of the Notes, any Joinder
Agreement, the Fee Letter, the Guaranty, each Notice of Borrowing, each
Confirmation, the Custodial Fee Letter and the Security Documents and all other
agreements, documents, certificates and instruments delivered to the
Administrative Agent or any Lender by any Credit Party in connection therewith,
as each such agreement, document, certificate or instrument is amended,
restated, modified or supplemented from time to time.


 


“Credit Party” shall mean any of the
Borrowers, the Guarantors, the Pledgor, any Additional Credit Party or any
pledgor or obligor under the Security Documents.


 


“Credit
Party–Related Obligations” shall mean any obligations, liabilities and/or
Indebtedness of the Credit Parties under each Credit Document and under any
other debt arrangement between any Credit Party, on the one hand, and the
Administrative Agent, any Affiliate or Subsidiary of the Administrative Agent
and/or any commercial paper conduit for which Wachovia or an Affiliate or
Subsidiary of Wachovia acts as a liquidity provider, administrator or agent, on
the other hand, including, without limitation, such obligations, liabilities
and/or Indebtedness under the Reindeer Facility, as any such Credit
Party-Related Obligations are amended, restated or modified from time to time.


 


“Credit
Tenant” shall mean the tenant or guarantor under a Credit Tenant Lease with
a credit rating of BBB– or better by at least two (2) Rating Agencies.


 


“Credit
Tenant Lease” shall mean a financeable lease of Commercial Real Estate,
which lease is a triple net lease (i.e., the tenant is responsible for all
maintenance, insurance and taxes), a double net lease (i.e., the tenant is
responsible for all taxes and insurance) or is a bondable lease.


 


“CTL
Loan” shall mean a performing Whole Loan secured by a first priority
perfected security interest in Commercial Real Estate 100% leased under a
Credit Tenant Lease to, or guaranteed in full by, a Credit Tenant and all
payments due under such Credit Tenant Lease, and such CTL Loan satisfies such
additional underwriting criteria and other terms, conditions and requirements
as the Administrative Agent may require in its discretion.


 


“Current
Appraisal” shall mean an appraisal dated within twelve (12) months of
the date of determination; provided, however, (i) in the
case of the valuation of an Underlying Mortgaged Property, such appraisal shall
be a FIRREA Appraisal and (ii) in the case of the valuation of a Mortgage
Asset, such appraisal shall be from a nationally recognized appraisal firm
(other than the Borrowers, the Guarantors or any Affiliate of the foregoing)
(A) with substantial experience valuing assets similar in type, size and


 


10

















 


structure to the Mortgage Asset in question,
(B) having substantial familiarity with the market for such Mortgage Asset
and (C) that is otherwise acceptable to the Administrative Agent in its
discretion.


 


“Custodial
Agreement” shall mean that certain Custodial Agreement, dated as of even
date herewith, by and among the Borrowers, the Administrative Agent and the
Custodian, as the same shall be amended, modified, waived, supplemented,
extended, replaced or restated from time to time.


 


“Custodial
Fee Letter” shall mean that certain Custodial Fee Letter between the
Borrowers and the Custodian, as such letter may be amended, modified, waived,
supplemented, extended, restated or replaced from time to time.


 


“Custodial
Identification Certificate” shall have the meaning set forth in the
Custodial Agreement.


 


“Custodian”
shall mean Wells Fargo Bank, National Association, and its successor in
interest as the custodian under the Custodial Agreement, and any successor
Custodian under the Custodial Agreement.


 


“Debt Issuance” shall mean any issuance of
debt securities or debt capital (whether public or private) by Northstar Corp.


 


“Debt
Net Cash Proceeds Payment” shall have the meaning set forth in Section
2.5(b)(vi).


 


“Debt
Service” shall mean, for any period, the sum of (a) Interest Expense
of NorthStar Corp and its
Subsidiaries determined on a consolidated basis for such period and
(b) all regularly scheduled principal payments made with respect to
Indebtedness of NorthStar Corp and
its Subsidiaries during such period, other than any balloon, bullet, margin or
similar principal payment which repays such Indebtedness in full.


 


“Debt
Service Coverage Ratio” or “DSCR” shall mean with respect to any
Mortgage Asset, as of any date of determination, for the period of time to be
determined in the Administrative Agent’s reasonable discretion (it being
understood that it is the Administrative Agent’s intent to make the
determination based on the period of twelve (12) consecutive complete
calendar months preceding such date (or, if such Mortgage Asset was originated
less than twelve (12) months from the date of determination, the number of
months from the date of origination)), the ratio of (a) the aggregate Net
Cash Flow in respect of the Underlying Mortgaged Properties relating to such
Mortgage Asset for such period, taking into account (i) any guaranty of the indebtedness under the related Mortgage
Asset and (ii) any applicable interest
reserves held during such time by any Borrower or Servicer on its behalf or
future funding obligations or monies available to satisfy such obligations with
respect to such Mortgage Asset and, as applicable, the senior mortgage lender
for the related Underlying Mortgaged Property, to (b) the sum of
(i) the aggregate of all amounts due for such period in respect of all
Indebtedness that was outstanding from time to time during such period that is
secured, directly or indirectly, by such Underlying Mortgaged Properties
(including, without limitation, by way of a pledge of the equity of the
owner(s) of such Underlying Mortgaged Properties) or that is otherwise owing by
the owner(s) of such Underlying Mortgaged Properties, including, without
limitation, all scheduled principal and/or interest payments due for such
period in respect of each Mortgage Asset that is secured or supported by such
Underlying Mortgaged Properties plus (ii) the amount of all Ground
Lease payments to be made in respect of such Underlying Mortgaged Properties
during such period, as any of the foregoing elements of DSCR may be adjusted by
the Administrative Agent  as determined
by the Administrative Agent in its reasonable discretion; provided, however,
that all such calculations shall be made taking into account any


 


11

















 


senior or pari passu debt
or other obligations including debt or other obligations secured directly or
indirectly by the applicable Underlying Mortgaged Property.


 


“Default” shall mean any of the events
specified in Section 7.1, whether or not any requirement for the giving of
notice or the lapse of time, or both, or any other condition, has been
satisfied.


 


“Defaulting Lender” shall mean, at any time,
any Lender that, at such time (a) has failed to make a Loan required
pursuant to the terms of this Agreement, (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant to
the terms of this Agreement and such default remains uncured, or (c) has
been deemed insolvent or has become subject to an Insolvency Proceeding,
Insolvency Event or to a receiver, trustee or similar official.


 


“Deficit” shall have the meaning set forth in
Section 2.5(b)(iii).


 


“Delayed
Draw Term Loan” shall have the meaning set forth in Section 2.2(b).


 


“Delayed
Draw Term Loan Commitment” shall mean, with respect to each Term Loan
Lender, the commitment of such Term Loan Lender to make its portion of the
Delayed Draw Term Loan in a principal amount equal to such Term Loan Lender’s
Term Loan Commitment Percentage of the Delayed Draw Term Loan Committed Amount.


 


“Delayed Draw Term Loan Committed Amount”
shall have the meaning set forth in Section 2.2(b).


 


“Derivatives
Contract”  shall mean any and all
rate swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination
of any of the foregoing (including any options to enter into any of the
foregoing), whether or not any such transaction is governed by or subject to
any master agreement. Not in limitation of the foregoing, the term “Derivatives
Contract” includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed
by, any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.


 


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


 


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


 


“Domestic Lending Office” shall mean,
initially, the office of each Lender designated as such Lender’s Domestic
Lending Office shown in such Lender’s Administrative Questionnaire; and
thereafter,


 


12

















 


such other office of such Lender as such
Lender may from time to time specify to the Administrative Agent and the
Borrowers as the office of such Lender at which Alternate Base Rate Loans of
such Lender are to be made.


 


“Domestic Subsidiary” shall mean any
Subsidiary that is organized and existing under the laws of the United States
or any state or commonwealth thereof or under the laws of the District of
Columbia.


 


“DTC” shall mean The Depository Trust Company,
a limited purpose company under the banking laws of the State of New York.


 


“Due Diligence Costs” shall have the meaning
set forth in Section 10.27.


 


“Due
Diligence Review” shall mean the performance by the Administrative Agent of
any or all of the reviews permitted under Section 10.27 with respect to any or
all of the Collateral, as desired by the Administrative Agent from time to
time.


 


“EBITDA”
shall mean, with respect to NorthStar Corp and its Consolidated Subsidiaries
for any period, the net income (or loss) of NorthStar Corp and its Consolidated
Subsidiaries for such period determined on a consolidated basis (prior to any
impact from minority interests and before deduction of preferred dividends on
preferred stock, if any, of NorthStar
Corp), in accordance with GAAP, plus the following (but only to
the extent actually included in determination of such net income (loss)):  (a)
income tax expense; (b) extraordinary or
non—recurring gains and losses; (c)
depreciation and amortization expense; (d)
interest expense; and (e) amounts
deducted in accordance with GAAP in respect of other non-cash expenses in
determining such net income. EBITDA will be adjusted to remove all impact of
FAS 141.


 


“Electronic
Transmission” shall mean the delivery of information and executed documents
in an electronic format acceptable to the applicable recipient thereof.


 


“Eligible
Asset” shall mean a Mortgage Asset that as of any date of determination:


 


(a)           is not subject to a Collateral
Default;


 


(b)           with respect to the portion of such
Mortgage Asset to be pledged to the Administrative Agent, the funding
obligations have been satisfied in full and there is no unfunded commitment
with respect thereto (unless otherwise approved by the Administrative Agent in
its discretion);


 


(c)           has been approved in writing by the
Administrative Agent in its discretion;


 


(d)           has, to the extent applicable, an LTV
not in excess of the Maximum LTV, and, with respect to Bridge Loans and
Construction Loans, an LTC not in excess of the Maximum LTC;


 


(e)           has, to the extent applicable, a DSCR
equal to or greater than the Minimum DSCR;


 


(f)            with respect to Revolving Loans and
Mortgage Assets to be included in the Revolving Loan Collateral, is not a
Construction Loan;


 


(g)           is not a loan to an operating business
(other than a hotel);


 


13

















 


(h)           the pledge of such Mortgage Asset
will not violate any applicable Sub–Limit;


 


(i)            satisfies each of the applicable
representations and warranties set forth in Article III of this Agreement
(to the extent any such representations or warranties relate to the Mortgage
Assets or the Administrative Agent’s rights or remedies with respect
thereto), in the eligibility criteria set forth in Schedule 1.1(c)
hereto and the Mortgage Loan Documents;


 


(j)            in the case a Ground Lease, the
Ground Lease has a remaining term of no less than twenty (20) years from
the maturity date of the Mortgage Asset;


 


(k)           the Underlying Mortgaged Property is
located, and the Obligor is domiciled, in the United States of America
(unless otherwise approved by the Administrative Agent subject to such
additional terms and conditions as the Administrative Agent may require in its
discretion);


 


(l)            such Mortgage Asset is denominated
and payable in Dollars;


 


(m)          the Obligor is not
a Sanctioned Person or Sanctioned Entity; and


 


(n)           does not involve an equity or similar
interest by any Credit Party that would result in (i) a conflict of
interest or a potential conflict of interest or (ii) an affiliation with
an Obligor under the terms of the Mortgage Loan Documents which results or
could result in the loss or impairment of any material rights of the holder of
the Mortgage Asset; provided, however, the Borrowers must
disclose to the Administrative Agent prior to the related Borrowing
Date all equity or similar interests held or to be held by any Credit
Party regardless of whether it satisfies any of the foregoing clauses (i)
or (ii);


 


provided, however,
notwithstanding a Mortgage Asset’s failure to conform to the criteria set forth
above (including, without limitation, a Mortgage Asset with a single or split
rating by a Rating Agency), the Administrative Agent may, in its discretion and
subject to such terms, conditions and requirements and Applicable Advance Rate
adjustments as the Administrative Agent may require in its discretion,
designate in writing any such non—compliant Mortgage Asset as an Eligible
Asset, which designation shall not be deemed a waiver of the requirement that
all other Mortgage Assets pledged to the Administrative Agent, whether existing
or in the future, must be Eligible Assets.


 


“Eligible Assignee” shall mean (a) a
Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and
(d) any other Person (other than a natural person) approved by (i) the Administrative Agent and (ii) so long as no Default or Event of Default
has occurred and is continuing, the Borrowers (such  consent not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrowers, Guarantors or any Borrower’s or
Guarantor’s Affiliates or Subsidiaries.


 


“Environmental Laws” shall mean any and all
applicable foreign, federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time be in effect during the term of this Agreement.


 


“Equity Interests” shall mean with respect to
any Person, any share, interest, participation and other equivalent (however
denominated) of capital stock of (or other ownership, equity or profit
interests in) such Person, any warrant, option or other right for the purchase
or other acquisition from such Person of any share of capital stock of (or
other ownership, equity or profit interests in) such Person, any security


 


14

















 


convertible into or exchangeable for any
share of capital stock of (or other ownership or profit interests in) such
Person or warrant, right or option for the purchase or other acquisition from
such Person of such shares (or such other interests), and any other ownership
or profit interest in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such share, warrant, option, right or other interest is authorized or
otherwise existing on any date of determination.


 


“Equity Issuance” shall mean any issuance by
Northstar Corp to any Person (other than equity based compensation issued to
officers, directors or employees of Northstar Corp) of (a) shares or
interests of its Equity Interest, (b) any shares or interests of its
Equity Interest pursuant to the exercise of options or warrants or similar
rights, (c) without duplication under any prior prepayment hereunder
pursuant to Section 2.5(b)(v), any shares or interests of its Equity Interest
pursuant to the conversion of any debt securities to equity or (d) without
duplication under any prior prepayment hereunder pursuant to Section 2.5(b)(v),
warrants or options or similar rights that are exercisable or convertible into
shares or interests of its Equity Interest. The term “Equity Issuance” shall
not include any Debt Issuance.


 


“Equity
Net Cash Proceeds Payment” shall have the meaning set forth in Section
2.5(b)(vii).


 


“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as the same are amended
from time to time, and the regulations promulgated and rulings issued
thereunder, as the same are amended from time to time.


 


“ERISA Affiliate” shall mean (a) any
corporation that is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as a Credit Party,
(b) a trade or business (whether or not incorporated) under common control
(within the meaning of Section 414(c) of the Code) with a Credit Party, or
(c) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as a Credit Party, any corporation described
in clause (a) above or any trade or business described in clause (b)
above.


 


“Event of Default” shall mean any of the events
specified in Section 7.1; provided, however, that any
requirement for the giving of notice or the lapse of time, or both, or any
other condition, has been satisfied.


 


“Exception Report” shall have the meaning set
forth in the Custodial Agreement.


 


“Exceptions” shall have the meaning set forth
in the Custodial Agreement.


 


“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.


 


“Excluded Accounts” shall mean all accounts
established to hold Obligor Reserve Payments, all accounts holding funds that
are required to be disbursed to an Obligor under the terms of the related
Mortgage Loan Documents.


 


“Excluded Taxes” shall mean, with respect to
the Administrative Agent, any Lender, or any other recipient of any payment to
be made by or on account of any obligation of the Borrowers hereunder,
(a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which a
Borrower is located and (c) in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable


 


15

















 


to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new lending office) or
is attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 2.14, except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrowers with respect to such withholding tax
pursuant to Section 2.14.


 


“Extension of Credit” shall mean, as to any
Lender, the making of a Loan by such Lender, any conversion of a Loan from one
Type to another Type, any extension of any Loan and any pledge of a Mortgage
Asset to the Administrative Agent.


 


“Extraordinary
Receipt” shall mean any Income received by or paid to or for the account of
any Credit Party relating to any item of Collateral and not in the ordinary
course of business, including tax refunds, pension plan reversions, proceeds of
insurance (other than proceeds of business interruption insurance to the extent
such proceeds constitute compensation for lost earnings), condemnation awards
(and payments in lieu thereof), indemnity payments and any purchase price
adjustments.


 


“Fair
Market Value” shall mean, with respect to (a) a security listed on a
national securities exchange or recognized automated quotation system, the
price of such security as reported on such exchange by any widely recognized
reporting method customarily relied upon by financial institutions, and
(b) with respect to any other assets or Property, including realty, the
price which could be negotiated in an arm’s-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of which is under
pressure or compulsion to complete the transaction.


 


“Federal
Funds Effective Rate” shall have the meaning set forth in the definition of
“Alternate Base Rate”.


 


“Fee
Letter” shall mean the letter agreement dated as of the date hereof, among
the Borrowers, Guarantors and the Administrative Agent, as amended, modified,
extended, restated, replaced, or supplemented from time to time.


 


“Financial
Covenants” shall mean the covenants set forth in Section 5.9 of this
Agreement.


 


“FIRREA
Appraisal” shall mean an appraisal prepared by an independent third party
appraiser approved in writing by the Administrative Agent in its discretion and
satisfying the requirements of Title XI of the Federal Institutions,
Reform, Recovery and Enforcement Act of 1989 and the regulations
promulgated thereunder (as the foregoing are amended, modified, restated,
replaced, waived, substituted, supplemented or extended from time to time), as
in effect on the date of such appraisal.


 


“Fitch”
shall mean  Fitch Ratings, Inc.


 


“Fixed
Charge Coverage Ratio” shall mean, for NorthStar Corp and its Consolidated
Subsidiaries during any period, EBITDA for such period divided by the
Fixed Charges for the same period.


 


“Fixed
Charges” shall mean, for NorthStar Corp and its Consolidated Subsidiaries
determined on a consolidated basis during any period, the sum of (without
duplication) (a) Debt Service, (b) all Preferred Dividends required
to be paid during such period, (c) Capital Lease Obligations required to
be paid during such period, and (d) all payments due under any ground
lease.


 


“Foreclosed
Loan” shall mean a loan the security for which has been foreclosed upon by
the Borrowers.


 


16

















 


“Foreign Lender” shall mean any Lender that
is organized under the laws of a jurisdiction other than that in which a
Borrower is resident for tax purposes. For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.


 


“Fund” shall mean any Person (other than a natural
person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business.


 


“Funding Date” shall mean the date upon which
all conditions set forth in Sections 4.1 and 4.2 have been satisfied.


 


“GAAP” shall mean generally accepted
accounting principles in effect in the United States of America applied on a
consistent basis, subject, however, in the case of determination
of compliance with the financial covenants set out in Section 5.9, to the
provisions of Section 1.3.


 


“Governmental Authority” shall mean the
government of the United States of America or any other nation, or of any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).


 


“Ground Lease” shall mean with respect to any
Underlying Mortgaged Property for which the Obligor has a leasehold interest in
the related Underlying Mortgaged Property or space lease within such Underlying
Mortgaged Property, the lease agreement creating such leasehold interest.


 


“Guarantee Obligation”  shall mean, 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) to induce the creation of the obligations for which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends, Contractual Obligation, Derivatives Contract
or other obligations (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 amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the maximum stated amount of the primary obligation
relating to such Guarantee Obligation (or, if less, the maximum stated
liability set forth in the instrument embodying such Guarantee Obligation); provided,
however, that in the absence of any such stated amount or stated
liability, the amount of such Guarantee Obligation shall be such guaranteeing
person’s maximum reasonably anticipated liability in respect thereof as
reasonably determined by such Person in good faith.


 


17

















 


“Guarantor” shall mean, individually and/or
collectively, Northstar Corp, Northstar LP and any other entity that becomes
party to this Agreement pursuant to Section 5.10 from time to time, in each
case together with their successors and permitted assigns.


 


“Guarantor Joinder Agreement” shall mean a
Guarantor Joinder Agreement in substantially the form of Exhibit 1.1(d)(ii),
executed and delivered by an Additional Credit Party in accordance with the
provisions of Section 5.10, as amended, restated, supplemented or modified
from time to time.


 


“Guaranty” shall mean the guaranty of the
Guarantors set forth in that certain Limited Guaranty Agreement dated as of the
date hereof by and among the Guarantors and the Administrative Agent, as
amended, restated, supplemented or modified from time to time.


 


“Holdings” shall have the meaning set forth
in the first paragraph of this Agreement.


 


“Holdings II” shall have the meaning set
forth in the first paragraph of this Agreement.


 


“Holdings VII” shall have the meaning set
forth in the first paragraph of this Agreement.


 


“Holdings X” shall have the meaning set forth
in the first paragraph of this Agreement.


 


“Holdings XII” shall have the meaning set
forth in the first paragraph of this Agreement.


 


“Income”
shall mean with respect to the Collateral  and to the
extent of a Borrower’s or the holder’s interest therein, at any time, all of
the following:  all payments,
collections, prepayments, recoveries, proceeds (including, without limitation,
insurance and condemnation proceeds), Extraordinary Receipts and all other
payments or amounts of any kind or nature whatsoever paid, received, collected,
recovered or distributed on, in connection with or in respect of the Collateral
or any other collateral for the Obligations, including, without limitation,
principal payments, interest payments, principal and interest payments,
prepayment fees, extension fees, exit fees, defeasance fees, transfer fees,
late charges, late fees and all other fees or charges of any kind or nature,
premiums, yield maintenance charges, penalties, default interest, dividends,
gains, receipts, allocations, rents, interests, profits, payments in kind,
returns or repayment of contributions and all other distributions, payments and
other amounts of any kind or nature whatsoever payable thereon, in connection
therewith, or with respect thereto, together with any amounts received from any
Interest Rate Protection Agreement; provided, however, Income
shall not include any Obligor Reserve Payments unless a Borrower, a Servicer or
a PSA Servicer has exercised rights with respect to such payments under the
terms of the related Mortgage Loan Documents, the Servicing Agreements or the
Pooling and Servicing Agreements, as applicable.


 


“Indebtedness”
shall mean with respect to any Person and its Consolidated Subsidiaries
determined on a consolidated basis, at the time of computation thereof, all of
the following (without duplication): 
(a) all obligations of such Person in respect of money borrowed
(including, without limitation, principal, interest, assumption fees,
prepayment fees, yield maintenance charges, penalties, contingent interest and
all other monetary obligations whether choate or inchoate); (b) all
obligations of such Person, whether or not for money borrowed
(i) represented by notes payable, letters of credit, or drafts accepted,
in each case representing extensions of credit, (ii) evidenced by bonds,
debentures, notes or similar instruments, (iii) constituting purchase
money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property or services rendered or (iv) in connection with the issuance of
preferred equity or trust preferred securities; (c) Capital Lease
Obligations of such Person; (d) all Off–Balance Sheet Obligations of such
Person (other than non–recourse indebtedness incurred in connection with any
CDO Securitization Transaction); (e) all


 


18

















 


obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any
Mandatory Redeemable Stock issued by such Person or any other Person (inclusive
of forward equity contracts), valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends;
(f) as applicable, all obligations of such Person (but not the obligation
of others) in respect of any keep well arrangements, credit enhancements,
contingent or future funding obligations under any Mortgage Asset or any
obligation senior to the Mortgage Asset, unfunded interest reserve amount under
any Mortgage Asset or any obligation that is senior to the Mortgage Asset,
purchase obligation, repurchase obligation, takeout commitment or forward
equity commitment, in each case evidenced by a binding agreement (excluding any
such obligation to the extent the obligation can be satisfied by the issuance
of Equity Interest (other than Mandatory Redeemable Stock)); (g) net
obligations under any Derivative Contract not entered into as a hedge against
existing indebtedness, in an amount equal to the Derivatives Termination Value
thereof; (h) all indebtedness of other Persons which such Person has
guaranteed or is otherwise recourse to such Person (except for guaranties of
customary exceptions for fraud, misapplication of funds, environmental
indemnities and other similar exceptions to recourse liability (including
exceptions relating to bankruptcy, insolvency, receivership or other similar
events)); (i) all indebtedness of another Person secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien (other than certain Permitted Liens) on Property or
assets owned by such Person, even though such Person has not assumed or become
liable for the payment of such indebtedness or other payment obligation; provided,
however, if such Person has not assumed or become liable for the payment
of such indebtedness, then for the purposes of this definition the amount of
such indebtedness shall not exceed the market value of the property subject to
such Lien and (j) Contingent Liabilities.


 


“Indemnified Amounts” shall have the meaning
set forth in Section 10.5(b).


 


“Indemnified Taxes” shall mean Taxes other
than Excluded Taxes.


 


“Indemnitee” shall have the meaning set forth
in Section 10.5(b).


 


“Independent
Director” shall mean natural Person who (a) is not at the time of
initial appointment as Independent Director, and may not have been at any time
during the five (5) years preceding such initial appointment or at any
time while serving as Independent Director, (i) a stockholder, partner,
member or direct or indirect legal or beneficial owner of a Borrower, a
Guarantor or any Subsidiary or Affiliate of any Credit Party; (ii) a
contractor, creditor, customer, supplier, director (with the exception of
serving as the Independent Director of a Borrower), officer, employee, attorney,
manager or other Person who derives any of its purchases or revenues from its
activities with a Borrower, a Guarantor or any Affiliate or Subsidiary of any
Credit Party; (iii) a natural Person who controls (directly or indirectly
or otherwise) a Borrower, a Guarantor or any Affiliate or Subsidiary of any
Credit Party or who controls or is under common control with any Person that
would be excluded from serving as an Independent Director under (i) or (ii),
above; or (iv) a member of the immediate family of a natural Person
excluded from servicing as an Independent Director under clauses (i) or (ii)
above and (b) otherwise satisfies the then current requirements of the
Rating Agencies. A Person who is an employee of a nationally recognized
organization that supplies independent directors and who otherwise satisfies
the criteria in clause (a) but for the fact that such organization
receives payment from a Borrower or a Guarantor for providing such independent
director shall not be disqualified from serving as an Independent Director
hereunder.


 


“Information
Materials” shall have the meaning set forth in Section 5.15.


 


“Insolvency” shall mean, with respect to any
Multiemployer Plan, the condition that such Plan is insolvent within the
meaning of such term as used in Section 4245 of ERISA.


 


19

















 


“Insolvency
Event” shall mean, with respect to a specified Person, (a) the filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of such Person or any substantial part of its Property in an
involuntary case under any applicable Insolvency Law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its Property, or ordering the winding-up or liquidation of such Person’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of sixty (60) consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable Insolvency Law now or
hereafter in  effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its Property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.


 


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


 


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


 


“Instrument” shall mean any “instrument” (as
defined in Article 9 of the UCC), other than an instrument that constitutes
part of chattel paper.


 


“Intercreditor Agreement” shall mean that
certain Intercreditor Agreement to be entered into by and among the
Administrative Agent and Wachovia Bank (London Branch), as purchaser under the
Reindeer Facility, as amended, restated, modified or supplemented from time to
time.


 


“Interest
Expense” shall mean for any period and any Person, total interest expense,
of such Person for such period with respect to all outstanding Indebtedness of
such Person (including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptance financing and net costs under interest rate protection agreements),
determined in accordance with GAAP, excluding amortization of deferred
financing fees and amortization of bond discounts associated with convertible
debt to the extent included in GAAP Interest Expense.


 


 “Interest
Period” shall mean, with respect to any LIBOR Rate Loan,


 


(a)           initially, the
period commencing on the Borrowing Date or conversion date, as the case may be,
with respect to such LIBOR Rate Loan and ending one, two, three or six months
thereafter, subject to availability to all applicable Lenders, as selected by
Borrowers in the Notice of Borrowing or Notice of Conversion given with respect
thereto; and


 


(b)           thereafter, each
period commencing on the last day of the immediately preceding Interest Period
applicable to such LIBOR Rate Loan and ending one, two, three or six months
thereafter, subject to availability to all applicable Lenders, as selected by the
Borrowers by irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest Period with
respect thereto; provided that the foregoing provisions are subject to
the following:


 


20

















 


(i)            if any Interest
Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;


 


(ii)           any Interest
Period pertaining to a LIBOR Rate Loan that begins on the last 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 end on the
last Business Day of the relevant calendar month;


 


(iii)          if the Borrowers
shall fail to give notice of the applicable Interest Period, in any Notice of
Borrower or otherwise, the applicable Borrower shall be deemed to have selected
a one-month LIBOR Rate Loan;


 


(iv)          no Interest
Period in respect of any Loan shall extend beyond the applicable Maturity Date
and, further with regard to the Term Loan, no Interest Period shall extend
beyond any principal amortization payment date with respect to such Term Loan
unless the portion of such Term Loan consisting of Alternate Base Rate Loans
together with the portion of such Term Loan consisting of LIBOR Rate Loans with
Interest Periods expiring prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the amount of such
principal amortization payment due on such date; and


 


(v)           no more than six
(6)  LIBOR Rate Loans may be in effect at
any time. For purposes hereof, LIBOR Rate Loans with different Interest Periods
shall be considered as separate LIBOR Rate Loans, even if they shall begin on
the same date and have the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new LIBOR Rate Loan with a
single Interest Period.


 


“Interest
Rate Protection Agreement” shall mean with respect to any or all of the
Mortgage Assets, (a) any Derivatives
Contract required under the terms of the related Mortgage Loan Documents
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, and acceptable to the Administrative Agent in its discretion and
(b) any Derivatives Contract put in place
by any Borrower, any Guarantor or any Subsidiary or Affiliate of the foregoing
with respect to any Mortgage Asset.


 


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


 


21

















 


“Irrevocable
Instruction” shall mean an irrevocable instruction letter in the form
of Exhibit 1.1(j) hereto duly executed by the applicable Credit
Party, as amended, restated, modified or supplemented from time to time.


 


“Joinder Agreement” shall mean a Borrower
Joinder Agreement and/or a Guarantor Joinder Agreement, as applicable, as each
may be amended, restated, supplemented or modified from time to time.


 


“Junior
Interest” shall mean (a) a senior, pari passu or junior participation
interest in a performing Commercial Real Estate Loan or (b) a senior, pari
passu or junior note or certificate in an “A/B” or similar structure in a
performing Commercial Real Estate Loan, in each case where the Underlying
Mortgaged Property is stabilized and non-transitional.


 


“Junior
Interest Document” shall mean the original executed promissory note,
Participation Certificate, Participation Agreement and any other evidence of a
Junior Interest, as applicable.


 


“Lender” shall have the meaning set forth in
the first paragraph of this Agreement and shall include the Revolving Lenders
and the Term Loan Lenders.


 


“Lender Commitment Letter” shall mean, with
respect to any Lender, the letter (or other correspondence) to such Lender from
the Administrative Agent notifying such Lender of its Revolving Commitment
Percentage and its portion of the Commitment Fee and/or Term Loan Commitment
Percentage, as applicable.


 


“Lender Consent” shall mean any lender
consent delivered by a Lender on the Closing Date in the form of Exhibit 4.1(a).


 


 “LIBOR”
shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London
time) two (2) Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period. If for any reason such rate is
not available, then “LIBOR” shall mean the rate per annum at which, as
determined by the Administrative Agent in accordance with its customary
practices, Dollars in an amount comparable to the Loans then requested are
being offered to leading banks at approximately 11:00 a.m. London time,
two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.


 


“LIBOR Lending Office” shall mean, initially,
the office(s) of each Lender designated as such Lender’s LIBOR Lending Office
in such Lender’s Administrative Questionnaire; and thereafter, such other
office of such Lender as such Lender may from time to time specify to the
Administrative Agent and the Borrowers as the office of such Lender at which
the LIBOR Rate Loans of such Lender are to be made.


 


“LIBOR Rate” shall mean a LIBOR rate per
annum (rounded upwards, if necessary, to the next higher 1/100th of 1%)
determined by the Administrative Agent in accordance with the definition of “LIBOR”.


 


“LIBOR
Rate Loan” shall mean Loans the rate of interest applicable to which is
based on the LIBOR Rate.


 


22

















 


 


“Lien” shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any Capital Lease having substantially the same economic effect
as any of the foregoing).


 


“Liquidity”
shall mean an amount equal to the (a) sum of (without duplication)
(i) the amount of unrestricted cash and unrestricted Cash Equivalents plus
(ii) borrowing availability under the Revolving Commitments under this
Agreement and (iii) the amount of Borrowing Capacity under the Other Credit
Facilities less, (b) amounts necessary to satisfy prepayment
obligations under this Agreement.


 


“Loan”
shall mean a Revolving Loan, Delayed Draw Term Loan and/or the Term Loan, as
appropriate.


 


“Loan–to–Value
Ratio” or “LTV” shall mean with respect to any Mortgage Asset (other
than any CMBS Security), as applicable, as of any date of determination, the
ratio of the outstanding principal amount of such Mortgage Asset to the market
value of the related Underlying Mortgaged Property at such time, (i) in
connection with the initial finance of a Mortgage Asset under the Revolving
Loans only and to the extent a Current Appraisal is available, based on the
Current Appraisal, as the LTV may be adjusted by the Administrative Agent as
the Administrative Agent determines in its discretion, and, (ii) in all
other cases, as the Administrative Agent may determine in its discretion based
on such sources of information as the Administrative Agent may determine to
rely on in its discretion; provided, however, that all such
calculations shall be made taking into account any senior or pari passu debt or other obligations, including debt or
other obligations secured directly or indirectly by the applicable Underlying
Mortgaged Property.


 


“LTC”
shall mean, with respect to any Mortgage Asset that is a Bridge Loan or a
Construction Loan, as of any date of determination, the ratio of the outstanding
principal amount of such Mortgage Asset to the Construction Costs for such
Mortgage Asset; provided, however, that all such calculations
shall be made taking into account any senior or pari passu debt
or other obligations including debt or other secured directly or indirectly by
the applicable Underlying Mortgaged Property.


 


“Mandatory
Redeemable Stock” shall mean, with respect to any Person and any Subsidiary thereof, any Equity Interests of
such Person which by the terms of such Equity Interests (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (a) matures or
is required to be redeemed, pursuant to a sinking fund obligation or otherwise
(other than an Equity Interest to the extent redeemable in exchange for common
stock or other equivalent common Equity Interests), (b) is convertible
into or exchangeable or exercisable for Indebtedness or Mandatory Redeemable
Stock, or (c) is redeemable at the option of the holder thereof, in whole
or in part (other than an Equity Interest which is redeemable solely in
exchange for common stock or other equivalent common Equity Interests); in the
case of each clause (a) through (c), on or prior to the Maturity Date.


 


“Market
Value” shall mean, as of any date of determination in respect of any
Mortgage Asset, the price at which such Mortgage Asset could readily be
sold, as determined by the Administrative Agent in its discretion based on
such sources and information (if any) as the Administrative Agent may
determine to rely on in its discretion (which value may be determined to be
zero (0)), as such Market Value may be adjusted at any time by the
Administrative Agent as the Administrative Agent determines in its
discretion.


 


“Material
Adverse Effect” shall mean, a material adverse effect on (a) the financial condition or credit quality of
any Borrower or Guarantor, (b) the
ability of any Credit Party to perform its obligations


 


23














 


under
any Credit Document or Mortgage Loan Document to which it is a party, (c) the
validity or enforceability of any of the Credit Documents, (d) the rights and
remedies of the Administrative Agent or the Lenders, (e) the timely payment of
any amounts payable under the Credit Documents or Mortgage Loan Documents or (f)
the Asset Value of the Pledged Mortgage Assets; provided, however,
the occurrence of an event under clause (e) or (f) of this definition of
Material Adverse Effect shall not, in and of itself, constitute an Event of
Default under Section 7.1(e), but such occurrence may be or form the basis for
an Event of Default under other provisions of Section 7.1 other than Section
7.1(e).


 


“Materials
of Environmental Concern” shall mean any gasoline or petroleum (including
crude oil or any extraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including, without limitation, asbestos, perchlorate, polychlorinated
biphenyls and urea-formaldehyde insulation.


 


“Maturity Date” shall mean the Revolver
Maturity Date and/or the Term Loan Maturity Date, as applicable.


 


“Maximum
LTC” shall mean with respect to any Mortgage Asset that is a Bridge Loan or
a Construction Loan, at any time the Maximum LTC for related Underlying
Mortgaged Property (a) in the case of Term Loan Collateral under the Term Loans,
a percentage determined by the Administrative Agent in its discretion between
35% and 110%, (b) in the case of Collateral for the Delayed Draw Term Loans, a
percentage determined by the Administrative Agent in its discretion between 35%
and 110% and (c) in the case of Revolving Loan Collateral under the Revolving Loans,
the Maximum LTC set forth in the related Confirmation, which shall be no
greater than the Maximum LTC set forth in Schedule 1-C to the Fee Letter;
provided, however, in no event shall the Maximum LTC for a
Construction Loan exceed 85% for the applicable Class of such Mortgage Asset
and, as applicable, the applicable Property Type of Underlying Mortgaged
Property; provided, further, however, that all such
calculations shall be made taking into account any senior or pari passu debt or other obligations, including debt or
other obligations secured directly or indirectly by the applicable Underlying
Mortgaged Property.


 


“Maximum
LTV” shall mean with respect to any Mortgage Asset (other than any CMBS
Security) at any time, the Maximum LTV for the related Underlying Mortgaged
Property (a) in the case of Term Loan Collateral under the Term Loans, a
percentage determined by the Administrative Agent in its discretion between 35%
and 110%, (b) in the case of Collateral for the Delayed Draw Term Loans, a
percentage determined by the Administrative Agent in its discretion between 35%
and 110% and (c) in the case of Revolving Loan Collateral under the Revolving Loans,
the Maximum LTV set forth in the related Confirmation, which shall be no
greater than the Maximum LTV set forth in Schedule 1-C to the Fee Letter;
provided, however, the Maximum LTV shall take into account any
senior or pari passu debt or other obligations,
including debt or other obligations secured directly or indirectly by the
applicable Underlying Mortgaged Property.


 


“Mezzanine
Loan” shall mean a performing mezzanine loan secured by pledges of all (or,
in the Administrative Agent’s discretion, less than all) the Equity Interest of
the Person that owns, directly or indirectly, income producing Underlying
Mortgaged Property that is stabilized and non-transitional.


 


“Mezzanine
Note” shall mean the original executed promissory note or other evidence of
Mezzanine Loan Indebtedness.


 


“Minimum
DSCR” shall mean with respect to any Mortgage Asset (other than any CMBS
Security), as applicable, at any time, the Minimum DSCR for the related
Underlying Mortgaged Property (a) in the case of Term Loan Collateral under the
Term Loans, a ratio determined by the Administrative Agent in its discretion to
be between 1.0 and 1.25, (b) in the case of Collateral for the Delayed Draw


 


24

















 


Term Loans, a ratio determined by the Administrative Agent in its
discretion to be between 1.0 and 1.25 and (c) in the case of Revolving Loan
Collateral under the Revolving Loans, the Minimum DSCR set forth in the related
Confirmation, which shall be no less than the Minimum DSCR set forth in Schedule
1-C to the Fee Letter; provided, however, that all such
calculations shall be made taking into account any senior or pari passu debt or other obligations, including debt or
other obligations secured directly or indirectly by the applicable Underlying
Mortgaged Property.


 


“Moody’s”
shall mean Moody’s Investors Service, Inc.


 


“Mortgage”
shall mean each mortgage, assignment of rents, security agreement and fixture
filing, or deed of trust, assignment of rents, security agreement and fixture
filing, or similar instrument creating and evidencing a Lien on real property,
fixtures and other Property and rights incidental thereto.


 


“Mortgage
Asset” shall mean a Whole Loan, a Junior Interest, a Mezzanine Loan, a
Bridge Loan, a CMBS Security, a CTL Loan, a Subordinate CTL Loan, Senior
Secured Bank Debt or a Preferred Equity Interest, (i) the Underlying
Mortgaged Property for which is included in the categories for Property Types
of Mortgage Assets; provided, however, the portion of any
Mortgage Asset to be pledged to the Administrative Agent shall not include any
Retained Interest (if any) (unless approved by the Administrative Agent in its
discretion).


 


“Mortgage
Asset Data Summary” shall have the meaning set forth in Section 5.2(g).


 


“Mortgage
Asset File” shall have the meaning set forth in the Custodial Agreement.


 


“Mortgage
Asset File Checklist” shall have the meaning set forth in the Custodial
Agreement.


 


“Mortgage
Asset Security Agreement” shall mean, with respect to any Mortgage Asset,
any contract, instrument or other document related to security for repayment
thereof (other than the related Mortgage, Mortgage Note, Mezzanine Note or any
other note, certificate or instrument) executed by an Obligor and/or others in
connection with such Mortgage Asset, including, without limitation, any
security agreement, UCC financing statement, Liens, warranties, guaranty, title
insurance policy, hazard insurance policy, chattel mortgage, letter of credit,
accounts, bank accounts or certificates of deposit or other pledged accounts,
and any other documents and records relating to any of the foregoing.


 


“Mortgage
Loan Documents” shall have the meaning set forth in the Custodial
Agreement.


 


“Mortgage
Note” shall mean, that certain original executed promissory note or other
evidence of the Indebtedness of an Obligor under a Whole Loan which is secured
by a Mortgage on the related Underlying Mortgaged Property.


 


“Mortgaged
Property” shall mean the Commercial Real Estate (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing and any Credit Tenant Lease to which such real
property is subject) and all other collateral securing repayment of the related
debt evidenced by the Mortgage Loan Documents.


 


“Mortgagee”
shall mean the record holder of a Mortgage Note secured by a Mortgage.


 


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


 


25

















 


“Net
Cash Flow” shall mean with respect to any Underlying Mortgaged Property,
for any period, the net income (or deficit) attributable to such Underlying
Mortgaged Property for such period, determined in accordance with GAAP (and if
such Property is subject to a Credit Tenant Lease, the net rents paid during
such period under such lease), less the amount of all (a) capital
expenditures incurred, (b) reserves established, (c) leasing
commissions paid (other than commissions paid from reserves held under the
Mortgage Loan Documents) and (d) tenant improvements paid during such
period (other than tenant improvements paid from reserves held under the
Mortgage Loan Documents) in each case attributable to such Underlying Mortgaged
Property plus all non–cash charges deducted in the calculation of such
net income.


 


“Net Cash Proceeds” shall mean the aggregate
cash proceeds, Cash Equivalents and the Fair Market Value of all other Property
and assets received by, or payable to, any Credit Party or any Subsidiary or
Affiliate in respect of any Equity Issuance, Debt Issuance or sale or other
disposition of any Collateral, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) associated therewith, and (b) taxes paid or payable as a
result thereof; it being understood that “Net Cash Proceeds” shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by any Credit Party, any Subsidiary or any
Affiliate in any Equity Issuance, Debt Issuance or sale or other disposition of
any Collateral.


 


“Net Cash Proceeds Payments” shall mean the
Equity Net Cash Proceeds Payments and the Debt Net Cash Proceeds Payments.


 


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


 


“Non-Recourse
Indebtedness” shall mean, with respect to any Person, Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities, and
other similar exceptions to non-recourse provisions (including exceptions
relating to bankruptcy, insolvency, receivership, non-approved transfers or
other customary or similar events)) is contractually limited to specific assets
of such Person encumbered by a Lien securing such Indebtedness.


 


“Non–Table
Funded Mortgage Asset” shall mean a Mortgage Asset that is not a Table
Funded Mortgage Asset.


 


“Non–Wachovia
Assets” shall mean any Mortgage Asset issued, extended or originated by a
Person other than Wachovia Corporation or an Affiliate of Wachovia Corporation.


 


“Northstar Corp” shall have the meaning set
forth in the first paragraph of this Agreement.


 


“Northstar LP” shall have the meaning set
forth in the first paragraph of this Agreement.


 


“Note” or “Notes” shall mean the
Revolving Notes and/or the Term Loan Notes, collectively, separately or
individually, as appropriate, as any shall be amended, restated, modified or
supplemented from time to time.


 


“Note Purchase Margin” shall mean the
difference between the Note Purchase Price and the Note Purchase Price that
would be outstanding if an 80% Advance Rate (as defined in the Reindeer
Facility) were in effect under the Reindeer Facility, as determined by the
Administrative Agent on at least a weekly basis and as converted by the
Administrative Agent in its discretion to Dollars.


 


26

















 


“Note Purchase Price” shall mean the Purchase
Price (as defined in the Reindeer Facility) outstanding under the Reindeer
Facility.


 


“Notice of Borrowing” shall mean a request
for a Loan pursuant to this Agreement, as amended, restated, modified or
supplemented from time to time. A Form of Notice of Borrowing is attached as Exhibit 1.1(e).


 


“Notice of Conversion/Extension” shall mean
the written notice of conversion of a LIBOR Rate Loan to an Alternate Base Rate
Loan or an Alternate Base Rate Loan to a LIBOR Rate Loan, or extension of a
LIBOR Rate Loan, in each case substantially in the form of Exhibit 1.1(f).


 


“Obligations” shall mean, without
duplication, all of the obligations, indebtedness and liabilities of the Credit
Parties to the Lenders and the Administrative Agent, whenever arising, under
the Loans, this Agreement, the Notes, any of the other Credit Documents and all
of the Credit Party-Related Obligations, including principal, interest, fees,
reimbursements and indemnification obligations and other amounts (including,
but not limited to, any interest accruing after the occurrence of a filing of a
petition of bankruptcy under the Bankruptcy Code with respect to any Credit
Party, regardless of whether such interest is an allowed claim under the
Bankruptcy Code).


 


“Obligor” shall mean, individually and
collectively, as the context may expressly provide or require, the borrowers,
mortgagors, obligors or debtors under a Mortgage Asset, including, but not
limited to, any guarantor, any pledgor, any subordinator, any credit support
party, any indemnitor and any Person that is directly or indirectly obligated
in respect thereof, the borrowers, mortgagors, obligors or debtors of any debt,
including any guarantor, any pledgor, any subordinator, any credit support
party, any indemnitor and any Person that is directly or indirectly obligated
in respect thereof, senior to the Mortgage Asset, including any of the
foregoing such Persons with respect to the debt secured by any Underlying
Mortgaged Property, and any Person that has not signed the related Mortgage
Note, Junior Interest Documents, Mezzanine Note or other note, certificate or
instrument but owns an interest in the related Underlying Mortgaged Property,
which interest has been encumbered to secure such Mortgage Asset.


 


“Obligor Reserve Payments” shall mean any
payments made by an Obligor under the applicable Mortgage Loan Documents which,
pursuant to the terms of such Mortgage Loan Documents, are required to be
deposited into escrow or into a reserve to be used for a specific purpose
(e.g., tax and insurance escrows).


 


“OFAC”
shall mean The Office of Foreign Assets Control of the U.S. Department of the
Treasury.


 


“Off–Balance
Sheet Assets” shall mean, 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” shall mean, 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


 


27

















 


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 Obligations” shall mean, with
respect to any Person and its Consolidated Subsidiaries determined on a
consolidated basis, as of any date of determination thereof, without
duplication and to the extent not included as a liability on the consolidated balance
sheet of such Person and its Consolidated Subsidiaries in accordance with
GAAP:  (a) the monetary obligations
under any financing lease or so-called “synthetic”, tax retention or
off-balance sheet lease transaction which, upon the application of any
Insolvency Laws to such Person or any of its Consolidated Subsidiaries, would
be characterized as indebtedness; (b) the monetary obligations under any
sale and leaseback transaction which does not create a liability on the
consolidated balance sheet of such Person and its Consolidated Subsidiaries; or
(c) any other monetary obligation arising with respect to any other
transaction which (i) is characterized as indebtedness for tax purposes
but not for accounting purposes in accordance with GAAP or (ii) is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person and its
Consolidated Subsidiaries (for purposes of this clause (c), any
transaction structured to provide tax deductibility as interest expense of any
dividend, coupon or other periodic payment will be deemed to be the functional
equivalent of a borrowing).


 


“Off–Balance
Sheet Transaction” shall mean, 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.


 


“Officer’s
Certificate” shall mean, a certificate signed by a Responsible Officer of a
Borrower or a Guarantor, as applicable.


 


“Operating
Company” shall mean an “operating company” within the meaning of 29 C.F.R.
2510.3-101(c) of the regulations of the U.S. Department of Labor.


 


“Opinion
of Counsel” shall mean, a written opinion of counsel, which opinion and
counsel are acceptable to the Administrative Agent in its reasonable discretion.


 


“Originator”
shall mean, with respect to each Mortgage Asset, the Person who originated such
Mortgage Asset.


 


“Other
Credit Facilities” shall mean any warehouse, repurchase, loan or credit
facility provided by a national banking association or any syndicate thereof
(or any other financial institution approved by the Administrative Agent in its
reasonable discretion) to a Guarantor or any Affiliate or Subsidiary of a
Guarantor (including the Unsecured Credit Facility).


 


“Other Taxes” shall mean all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or under any
other Credit Document or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Credit Document.


 


“Participant” has the meaning assigned to
such term in clause (d) of Section 10.6.


 


“Participation
Agreement” shall mean, with respect to any Junior Interest, any executed
participation agreement, sub–participation agreement, intercreditor, servicing
or administrative agreement or any agreement that is similar to any of the
foregoing agreements under which the Junior Interest is created, evidenced,
issued, serviced, administered and/or guaranteed.


 


28

















 


“Participation
Certificate” shall mean, with respect to any Junior Interest, an executed
certificate, note, instrument or other document representing the interest,
participation interest or sub–participation interest granted under a
Participation Agreement.


 


“Patriot Act” shall mean The Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56
(signed into law October 26, 2001)), as amended, restated modified or
supplemented from time to time.


 


“paying
Borrower” shall have the meaning set forth in Section 10.29(b).


 


“Payment
Date” shall mean (a) the 1st day of each calendar month; provided,
however, if such day is not a Business Day, if the next Business Day
does not occur during the succeeding month, the next succeeding Business Day and
(b) as to any Loan which is the subject of a mandatory prepayment required
pursuant to Section 2.5(b), the date on which such mandatory prepayment is
due.


 


“PBGC” shall mean the Pension Benefit
Guaranty Corporation established pursuant to Subtitle A of Title IV
of ERISA.


 


“Permitted
Indebtedness” shall mean, with respect to Preferred Equity Interests or
Indebtedness that is permitted under the related Mortgage Loan Documents and
disclosed in writing to the Administrative Agent in a Confirmation.


 


 “Permitted Liens” shall mean any of the
following as to which no enforcement, collection, execution, levy or
foreclosure proceeding shall have been commenced:  (a) Liens for state, municipal or other
local Taxes if such Taxes shall not at the time be due and payable,
(b) Liens imposed by Requirements of Law, such as materialmen’s, mechanics’,
carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising in
the ordinary course of business securing obligations that are not overdue for a
period of more than thirty (30) days, (c) Liens granted pursuant to
or by the Security Documents, and (d) in the case of the Mortgage Assets only
and not any Borrower’s interest therein, with respect to any Underlying
Mortgaged Property, Liens which are permitted pursuant to the terms of the
Mortgage Loan Documents.


 


“Person” shall mean any natural person,
corporation, limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.


 


“Plan” shall mean any
plan, including single employer and multi–employer plans, to which section
4021(a) of ERISA applies or any retirement medical plan, each as established or
maintained for employees of any Credit Party or any ERISA Affiliate of any
Credit Party to which Section 4021(a) of ERISA applies.


 


“Plan Asset Regulations”
shall mean 29 C.F.R. 2510.3-101, et. seq.


 


“Plan Assets” shall mean “Plan assets” within
the meaning of the Plan Asset Regulations.


 


“Pledge Agreements” shall mean each of the
Pledge and Security Agreement and the Preferred Equity Pledge and Security
Agreement, as each such agreement as amended, modified, restated or
supplemented from time to time.


 


“Pledge
and Security Agreement” shall mean the Pledge and Security Agreement, dated
as of the date hereof, between the Administrative Agent, the Pledgor, the
Guarantors and the other parties from


 


29

















 


time to time party thereto, as amended, modified, waived, supplemented,
extended, restated or replaced from time to time.


 


“Pledged
Collateral” shall have the meaning given to such term in the Pledge and
Security Agreement.


 


“Pledged
Mortgage Asset” shall mean the Mortgage Assets that have been pledged to
the Administrative Agent as Collateral under the Security Documents.


 


“Pledgor”
shall mean NRFC Sub-REIT Corp., a Maryland corporation, together with its
successors and assigns.


 


“Pooling
and Servicing Agreements” shall mean any and all pooling and servicing
agreements, trust agreements or indentures governing servicing and other
matters entered into in connection with (a) a CMBS Security or (b) a
securitization of one (1) or more interests that are senior, junior or pari passu with a Mortgage Asset.


 


“Preferred
Dividends” shall mean, for any period and without duplication, all
Restricted Payments paid or required to be paid during such period on Preferred
Securities issued by NorthStar Corp or
any Consolidated Subsidiary. Preferred Dividends shall not include dividends or
distributions (a) paid or payable solely in Equity Interests (other than
Mandatory Redeemable Stock) payable to holders of such class of Equity
Interests; (b) paid or payable to NorthStar Corp or any Consolidated Subsidiary; or (c) constituting or
resulting in the redemption of Preferred Securities, other than scheduled
redemptions not constituting balloon, bullet or similar redemptions in full.


 


“Preferred
Equity Grantor” shall mean the entity in which a Preferred Equity Interest
represents an Investment.


 


“Preferred
Equity Interest” shall mean all (or, if approved by the Administrative
Agent in its discretion, less than all) of the Equity Interests representing
the preferred equity interest in an entity that owns, directly or indirectly,
stabilized and non-transitional Commercial Real Estate, including, but not
limited to, all equity interests representing a dividend on any of the Equity
Interests of the Preferred Equity Grantor or representing a distribution or
return of capital upon or in respect of the Equity Interests of the Preferred
Equity Grantor, in each case as it relates to a Preferred Equity Interest; provided,
however, (a) such Preferred Equity Interest must contain a synthetic
maturity feature acceptable to the Administrative Agent in its discretion, (b)
the funding of the Preferred Equity Interest is subject to regulatory and
compliance criteria, (c) the Preferred Equity Interest is structured so as
to avoid consolidation of the Preferred Equity Interest and the other equity
interests in the Preferred Equity Grantor, as required by customary legal and
GAAP accounting requirements applicable to the Borrowers and the Administrative
Agent, and (d) the Administrative Agent reserves the right, in its reasonable
discretion, to require that each Preferred Equity Interest be acquired by and
pledged to the Administrative Agent by a bankruptcy remote special purpose
entity, which entity shall join the Credit Documents as a co–Borrower pursuant
to a Borrower Joinder Agreement as a condition to the pledge of the Preferred
Equity Interest, and for the Equity Interests in such Borrower to be pledged to
the Administrative Agent as additional Collateral for the Obligations. All
references to, and calculations required to be made in respect of, any
principal and/or interest associated with any Mortgage Asset, shall, with
respect to Mortgage Assets consisting of Preferred Equity Interests, be deemed
to refer, respectively, to the face amount of such Preferred Equity Interest
and the preferred return or yield (however such terms are denominated, as set
forth in the related Mortgage Loan Documents), whether payable or accrued.


 


30

















 


“Preferred
Equity Interest Documents” shall mean the Authority Documents of the
Preferred Equity Grantor, together with a certificate, instrument or other
tangible evidence of the Equity Interests in the Preferred Equity Grantor.


 


“Preferred
Equity Pledge and Security Agreement” shall mean the Preferred Equity
Pledge and Security Agreement, dated as of the date hereof, between the
Administrative Agent and each Borrower, as amended, modified, waived,
supplemented, extended, restated or replaced from time to time.


 


“Preferred
Securities” shall mean, with respect to any Person, Equity Interests in
such Person that are entitled to preference or priority over any other Equity
Interests in such Person in respect of the payment (or accrual) of dividends or
distribution of assets upon liquidation, or both.


 


“Prime Rate” shall have the meaning set forth
in the definition of Alternate Base Rate.


 


“Private Information” shall have the meaning
set forth in Section 5.15.


 


“Property”
shall mean any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed, and whether tangible or intangible; provided
that the term “Property” or “Properties” as used in Section 3.10 shall include
only the right or interest in or to property of any kind whatsoever, whether
real, personal or mixed, and whether tangible or intangible of any Credit
Party.


 


“Property
Type” shall mean with respect to a Mortgage Asset, such Mortgaged Property’s
classification as one of the following: 
multifamily, mobile home park, retail, office, industrial, hotel,
self–storage facility, condominium, conversions or entitled land.


 


“PSA
Servicer” shall mean a third party servicer (other than a Borrower)
servicing all or a portion of the Collateral under a Pooling and Servicing
Agreement.


 


“Public
Information” shall have the meaning set forth in Section 5.15.


 


“Rating Agencies” shall mean each of S&P,
Moody’s, Fitch and any other nationally recognized statistical rating agency
that has been requested to issue a rating with respect to the matter at issue,
including successors of the foregoing.


 


“Register” shall have the meaning set forth
in Section 10.6(c).


 


“Reindeer Debt” shall mean, as of any date of
determination, the Note Purchase Price, as converted to Dollars by the
Administrative Agent in its discretion as of any date of determination.


 


“Reindeer
Facility” shall mean that certain facility entered into and evidenced by,
among other agreements, the Note Purchase Agreement, dated as of March 29,
2007, between NRF–Reindeer Ltd., a Cayman Islands exempted limited liability
company, and Wachovia Bank, N.A. (London Branch), as amended, modified,
restated, replaced, waived, substituted, supplemented or extended from time to
time, together with all other documents executed in connection therewith, as
the same are amended modified, restated, replaced, waived, substituted,
supplemented or extended from time to time.


 


“REIT”
shall mean a “real estate investment trust” within the meaning of the Code.


 


“Related Parties” shall mean, with respect to
any Person, such Person’s Subsidiaries and Affiliates and the partners,
directors, officers, employees, agents  and advisors
of such Person and of such Person’s Subsidiaries and Affiliates.


 


31

















 


“Related
Party Loan” shall mean, any loan, Indebtedness or preferred equity
investment identified or presented as a related party loan in such Person’s and
its Consolidated Subsidiaries’ consolidated financial statements or in the
notes to the consolidated financial statements, in accordance with GAAP; provided,
however, the term Related Party Loan shall not include negotiated,
arms–length, market standard loan transactions with third parties.


 


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


 


“Release Amount” shall mean (a) with respect
to any Revolving Loan Collateral, the aggregate Allocated Revolving Loan Amount
for all Revolving Loans allocated to such item of Revolving Loan Collateral by
the Administrative Agent,  and (b) with
respect to any Term Loan Collateral, the aggregate Allocated Term Loan Amount
for all Term Loans allocated to such item of Term Loan Collateral by the
Administrative Agent (including the aggregate amount of Delayed Draw Term Loans
funded with respect to such Term Loan Collateral), in each case, without
reduction for or on account of any principal payments, prepayments or
reductions in such Allocated Revolving Loan Amount or Allocated Term Loan
Amount, as applicable.


 


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


 


“REMIC” shall mean a real estate mortgage
investment conduit.


 


“Removal
Date” shall mean those dates listed on Schedule 1.1(e).


 


“REO
Property” shall mean real property acquired by the Borrowers, including a
Mortgaged Property, acquired through foreclosure of a Mortgage Asset or by deed
in lieu of such foreclosure.


 


“Reorganization” shall mean, with respect to
any Multiemployer Plan, the condition that such Plan is in reorganization
within the meaning of such term as used in Section 4241 of ERISA.


 


“Reportable Event” shall mean any of the
events set forth in Section 4043(c) of ERISA, other than those events as to
which the thirty-day notice period is waived under PBGC Reg. §4043.


 


“Required Lenders” shall mean, as of any date
of determination, Lenders holding at least a majority of (a) the outstanding
Revolving Commitments, Delayed Draw Term Loan Commitments (to the extent such
Delayed Draw Term Loan Commitments have not been funded and remain in effect)
and the Term Loan or (b) if the Commitments have been terminated, the
outstanding Loans; provided, however, that if any Lender shall be
a Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders the Obligations owing to such Defaulting
Lender and such Defaulting Lender’s Commitments.


 


32

















 


“Required
Payments” shall mean all payments required under Section 2.5(b)(v)
through (vii) of this Agreement or subject to or required to be subject to an
Irrevocable Instruction, which amounts shall be free of any deductions for or
on account of any set–off, counterclaim or defense and shall be deposited into
the Collection Account for application in accordance with the terms of this
Agreement.


 


“Requirement of Law” shall mean, as to any
Person, (a) the Authority Documents of such Person, and (b) all
international, foreign, Federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes, executive orders, and
administrative or judicial precedents or authorities, including the interpretation
or administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority (in each case
whether or not having the force of law); in each case applicable to or binding
upon such Person or any of its Property or to which such Person or any of its Property
is subject.


 


“Responsible Officer” shall mean, for any
Credit Party, any duly authorized officer thereof and also, with respect to any
particular matter, any other duly authorized officer with knowledge of or
familiarity with the particular subject matter and, in each case, the
Administrative Agent has an incumbency certificate indicating such officer is a
duly authorized officer thereof.


 


“Restricted Payment” shall mean (a) any
dividend or other distribution, direct or indirect, on account of any Equity
Interests of Northstar Corp or
any Consolidated Subsidiary of Northstar
Corp now or hereafter outstanding, except a dividend payable solely in
Equity Interests of identical class to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests of Northstar Corp or
any Consolidated Subsidiary of Northstar
Corp now or hereafter outstanding; and (c) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any Equity Interests of Northstar Corp or any Consolidated Subsidiary of Northstar Corp now or hereafter
outstanding.


 


“Retained
Interest” shall mean (a) with respect to any Mortgage Asset with
an unfunded commitment on the part of a Borrower, all of the obligations,
if any, to provide additional funding, contributions, payments or credits with
respect to such Mortgage Asset, (b) all duties, obligations and
liabilities of a Borrower under any Mortgage Asset or any related
Interest Rate Protection Agreement, including but not limited to any payment or
indemnity obligations and (c) with respect to any Mortgage Asset that
is pledged or to be pledged to the Administrative Agent, (i) all
of the obligations, if any, of the agent(s), trustee(s), servicer(s),
administrators or other similar Persons under the documentation evidencing such
Mortgage Asset and (ii) the applicable portion of the interests, rights
and obligations under the documentation evidencing such Mortgage Asset that
relate to such portion(s) of the Indebtedness that is owned by another lender
or is being retained by a Borrower pursuant to clause (a) of this
definition.


 


“Revolver Maturity Date” shall mean the date
that is two (2) years following the Closing Date or as may be extended on the anniversary
of such date pursuant to Section 2.1(g).


 


“Revolving Commitment” shall mean, with
respect to each Revolving Lender, the commitment of such Revolving Lender to
make Revolving Loans in an aggregate principal amount at any time outstanding
up to an amount equal to such Revolving Lender’s Revolving Commitment
Percentage of the Revolving Committed Amount.


 


“Revolving Commitment Percentage” shall mean,
for each Lender, the percentage identified as its Revolving Commitment
Percentage in its Lender Commitment Letter or in the Assignment and


 


33

















 


Assumption pursuant to which such Lender became a Lender hereunder, as
such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 10.6(c).


 


“Revolving Committed Amount” shall have the meaning
set forth in Section 2.1(a).


 


“Revolving Lender” shall mean, as of any date
of determination, a Lender holding a Revolving Commitment or a Revolving Loan such
date.


 


“Revolving Loan” shall have the meaning set
forth in Section 2.1.


 


“Revolving
Loan Average Advance Rate” shall mean a fraction, the numerator of which is
the outstanding principal amount of all Revolving Loans, and the denominator of
which is the Asset Value of all Revolving Loan Collateral (without taking into
account any Applicable Advance Rates).


 


“Revolving
Loan Collateral” shall mean the portion of the Pledged Mortgage Assets
included in the Collateral with respect to which Revolving Loans (if any) are
calculated and determined.


 


“Revolving Note” or “Revolving Notes”
shall mean the promissory notes of the Borrowers provided pursuant to
Section 2.1(e) in favor of any of the Revolving Lenders evidencing the
Revolving Loan provided by any such Revolving Lender pursuant to Section 2.1(a),
individually or collectively, as appropriate, as such promissory notes may be amended,
modified, extended, restated, replaced, or supplemented from time to time.


 


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


 


“Sanctioned Entity” shall mean (a) a
country or a government of a country, (b) an agency of the government of a
country, (c) an organization directly or indirectly controlled by a
country or its government, or (d) a person or entity resident in or
determined to be resident in a country, that is subject to a country sanctions
program administered and enforced by OFAC described or referenced at http://www.ustreas.gov/offices/enforcement/ofac/
or as otherwise published from time to time.


 


“Sanctioned
Person” shall mean a person named on the list of Specially Designated
Nationals maintained by OFAC available at or through http://www.ustreas.gov/offices/enforcement/ofac/
or as otherwise published from time to time.


 


“Sarbanes-Oxley”
shall mean the Sarbanes-Oxley Act of 2002, as amended or modified from time to
time.


 


“SEC”
shall mean the Securities and Exchange Commission or any successor Governmental
Authority.


 


“Secured
Parties” shall mean the Administrative Agent and the Lenders.


 


“Securities
Act” shall mean the Securities Act of 1933, together with any
amendment thereto or replacement thereof and any rules or regulations
promulgated thereunder.


 


“Securities
Account” shall mean the securities account set forth on Schedule 1.1(d)
established in the name of the Borrowers into which all CMBS Securities that
are Pledged Mortgage Assets and other Collateral related thereto shall be
deposited (except those CMBS Securities that are certificated securities within
the meaning of Article 8 of the UCC), which Securities Account shall be
subject to the Securities


 


34

















 


Account Control Agreement. Any Income on deposit or credited to the
Securities Account shall be transferred by the Administrative Agent from the
Securities Account to the Collection Account on or prior to each Payment Date.


 


“Securities
Account Control Agreement” shall mean a letter agreement, dated as of even
date herewith, among the Borrowers, the Administrative Agent and Wachovia in
the form of Exhibit 1.1(m) attached hereto.


 


“Securities
Laws” shall mean the Securities Act, the Exchange Act, Sarbanes-Oxley and
the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the Public
Company Accounting Oversight Board, as each of the foregoing may be amended and
in effect on any applicable date hereunder.


 


“Security
Agreement” shall mean the Security Agreement dated as of the Closing Date executed
by the Borrowers in favor of the Administrative Agent, for the benefit of the
Secured Parties, as amended, modified, extended, restated, replaced, or
supplemented from time to time in accordance with its terms.


 


“Security Documents” shall mean the Security
Agreement, the Account Control Agreement, the Securities Account Control
Agreement, the Custodial Agreement, all Assignments, all Irrevocable
Instructions, the Pledge Agreements and all other agreements, documents and
instruments relating to, arising out of, or in any way connected with any of
the foregoing documents or granting to the Administrative Agent Liens or
security interests to secure, inter alia, the Obligations whether now or
hereafter executed and/or filed, each as may be amended from time to time in
accordance with the terms hereof, executed and delivered in connection with the
granting, attachment and perfection of the Administrative Agent’s security
interests and Liens arising thereunder, including, without limitation, UCC
financing statements, as such agreements or instruments are amended, restated,
modified or supplemented from time to time.


 


“Senior
Secured Bank Debt” shall mean an assignment of or participation in all or a
portion of a secured senior term loan to a Obligor, which loan (a) is
rated B- or better by at least two (2) Rating Agencies, (b) is senior
or pari passu with other secured
obligations of such Obligor and (c) is secured by (i) 100% of the
Equity Interest of each existing and subsequently acquired or organized direct
or indirect Domestic Subsidiary of the Obligor and (ii) substantially all
tangible and intangible assets (including, but not limited to, inventory,
accounts receivable, plant, machinery, equipment, fixtures, Commercial Real
Estate, leasehold interests, intellectual property, contracts, license rights
and other general intangibles and investment property) of the Obligor. Each
Senior Secured Bank Debt is subject to such additional underwriting criteria
and other terms, conditions and requirements as the Administrative Agent may
require in its discretion.


 


“Servicer”
shall mean a Person (other than a Borrower) servicing all or a portion of a Mortgage
Asset under a Servicing Agreement, which Servicer shall be acceptable to the
Administrative Agent in its reasonable discretion.


 


“Servicer
Account” shall mean any account established by a Servicer or a PSA Servicer
in connection with the servicing of the Mortgage Asset.


 


“Servicer
Default” shall have the meaning set forth in Section 9.12.


 


“Servicer
Redirection Notice” shall mean, the notice from a Borrower to a Servicer,
substantially in the form of Exhibit 1.1(k) attached hereto, duly
executed by the parties thereto.


 


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“Servicing
Agreement” shall mean an agreement entered into by the applicable Borrower
and a third party for the servicing of a Mortgage Asset, the form and substance
of which has been approved in writing by the Administrative Agent in its
reasonable discretion.


 


“Servicing
File” shall mean, with respect to each Mortgage Asset, the file retained by
a Borrower consisting of the originals of all documents in the Mortgage Asset
File that are not delivered to the Custodian and copies of all documents in the
Mortgage Asset File set forth in Section 3.1  of
the Custodial Agreement.


 


“Servicing
Records” shall have the meaning set forth in Section 9.2.


 


“Single Employer Plan” shall mean any Plan
that is not a Multiemployer Plan.


 


“Solvent”
shall mean, as to any Person at any time, having a state of affairs such that
all of the following conditions are met: (a) the fair value of the
Property of such Person is greater than the amount of such Person’s liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(32) of
the Bankruptcy Code; (b) the present fair salable value of the Property of
such Person in an orderly liquidation of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability  to pay as such debts and liabilities  mature;
and (e) such Person is  not engaged in
a business or a transaction, and is not about to engage in a business or a
transaction, for which such Person’s Property would constitute unreasonably
small capital.


 


“Subordinate
CTL Loan” shall mean (a) a loan that is a CTL Loan in all respects except
for the failure to satisfy the ratings requirements for a Credit Tenant or (b)
a performing Junior Interest or Mezzanine Loan in which the related senior loan
is secured by a first priority perfected security interest in Commercial Real
Estate 100% leased to, or guaranteed in full by, a Credit Tenant, and such
Junior Interest or Mezzanine Loan, as applicable, itself is secured by a first
priority perfected security interest in and to the payments under the Credit
Tenant Lease; provided, however, in the case of both
clauses (a) and (b), such Subordinate CTL Loan satisfies such additional
underwriting criteria and other terms, conditions and requirements as the
Administrative Agent may require in its discretion.


 


“Subsidiary” shall mean, as to any Person, a
corporation, partnership, limited liability company or other entity of which
shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, limited liability company,
partnership or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary”
or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or
Subsidiaries of any Credit Party.


 


“Table
Funded Mortgage Asset” shall mean a Mortgage Asset which is pledged to the
Administrative Agent simultaneously with the origination or acquisition
thereof, which origination or acquisition, pursuant to a Borrower’s request, is
financed with the proceeds of a Revolving Loan and paid directly to a title company
or other settlement agent, in each case, approved in writing by the
Administrative Agent in its discretion, for disbursement to the parties
entitled thereto in connection with such origination or acquisition. A Mortgage
Asset shall cease to be a Table Funded Mortgage Asset after


 


36

















 


the Custodian has delivered a Trust Receipt (along with a completed
Mortgage Asset File Checklist attached thereto) to the Administrative Agent
certifying its receipt of the Mortgage Asset File therefor.


 


“Table
Funded Trust Receipt” shall mean a Trust Receipt in the form of Annex 2–B
to the Custodial Agreement.


 


“Tangible
Net Worth” shall mean, as of a particular date and as to any Person:


 


(a)           all
amounts that would be included under stockholder equity (or the equivalent) on
a balance sheet of such Person and its Consolidated Subsidiaries (including
minority interests relating to NorthStar LP) determined on a consolidated basis
at such date determined in accordance with GAAP plus accumulated depreciation
on owned real estate assets,  less


 


(b)           in
each case with respect to such Person and its Consolidated Subsidiaries
determined on a consolidated basis (i) amounts owing to such Person from
Affiliates, or from officers, employees, partners, members, directors,
shareholders or other Persons similarly affiliated with such Person or its
respective Affiliates, (ii) intangible assets of such Person, as
determined in accordance with GAAP, except for FAS 141 intangible assets,
(iii) the value of REO Property and Foreclosed Loans of such Person,
(iv) prepaid taxes and expenses, (v) unamortized hedging positions
under Derivatives Contracts, and (vi) (without duplication) Related Party Loans.


 


“Taxes” shall mean all present or future taxes,
levies, imposts, duties, deductions, withholdings, assessments, fees or other
charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.


 


“Term
Loan” shall have the meaning set forth in Section 2.2(a); provided
that for the avoidance of doubt, any outstanding Delayed Draw Term Loan shall constitute
a “Term Loan” hereunder.


 


“Term
Loan Average Advance Rate” shall mean a fraction, the numerator of which is
the outstanding principal amount of all Term Loans plus the Reindeer Debt, and
the denominator of which is the Asset Value of all Term Loan Collateral
(without taking into account any Applicable Advance Rates) plus the Asset Value
(as defined in the Note Purchase Agreement) of the note collateral under the
Reindeer Facility as converted by the Administrative Agent in its discretion
from time to time to Dollars.


 


“Term
Loan Collateral” shall mean the portion of the Pledged Mortgage Assets
included in the Collateral with respect to which advances under the Term Loan
and Delayed Draw Term Loan (if any) are calculated and determined.


 


“Term Loan Commitment” shall mean, with
respect to each Term Loan Lender, the commitment of such Term Loan Lender to
make its portion of the Term Loan and the Delayed Draw Term Loan, as
applicable, in a principal amount equal to such Term Loan Lender’s Term Loan
Commitment Percentage of the Term Loan Committed Amount and Delayed Draw
Committed Amount, as applicable.


 


“Term Loan Commitment Percentage” shall mean,
for any Term Loan Lender, the percentage identified as its Term Loan Commitment
Percentage in its Lender Commitment Letter, or in the Assignment and Assumption
pursuant to which such Lender became a Lender hereunder, as such percentage may
be modified in connection with any assignment made in accordance with the
provisions of Section 10.6(c).


 


37

















 


“Term Loan Committed Amount” shall have the
meaning set forth in Section 2.2(a) and as such amount may be increased
pursuant to Section 2.2(b).


 


“Term Loan Lender” shall mean a Lender
holding a Term Loan Commitment or a Delayed Draw Term Loan Commitment or a
portion of the outstanding Term Loan.


 


“Term Loan Maturity Date” shall mean the date
that is two (2) years following the Closing Date or as may be extended on the
anniversary of such date pursuant to Section 2.2(a)(iv).


 


“Term Loan Note” or “Term Loan Notes”
shall mean the promissory notes of the Borrowers (if any) in favor of any of
the Term Loan Lenders evidencing the portion of the Term Loan provided by any
such Term Loan Lender pursuant to Section 2.2(a), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, extended, restated, replaced, or supplemented from time to time.


 


“Test
Period” shall mean the most recent calendar quarter.


 


“Total
Assets” shall mean, at any time, an amount equal to the aggregate
undepreciated book value of (a) all assets owned by any Person(s) (on a
consolidated basis) and (b) the proportionate share of assets owned by
non-consolidated Subsidiaries of such Person(s), less (i) amounts
owing to such Person(s) from any Affiliates thereof, or from officers,
employees, partners, members, directors, shareholders or other Persons
similarly affiliated with such Person(s) or their respective Affiliates,
(ii) intangible assets (other than Interest Rate Protection Agreements
specifically related to the Mortgaged Assets, excluding FAS 141 intangible
assets) and (iii) prepaid taxes and/or expenses.


 


“Total
Liabilities” shall mean, all Indebtedness and Contingent Liabilities of any
Person (without duplication) and all Subsidiaries thereof determined on a
consolidated basis in accordance with GAAP.


 


“Tranche” shall mean the collective reference
to (a) LIBOR Rate Loans whose Interest Periods begin and end on the same
day and (b) Alternate Base Rate Loans made on the same day.


 


“Transactions” shall mean the closing of this
Agreement, the other Credit Documents and the other transactions contemplated
hereby to occur in connection with such closing (including, without limitation,
the initial borrowings under the Credit Documents and the payment of fees and
expenses in connection with all of the foregoing).


 


“Transfer Effective Date” shall have the
meaning set forth in each Assignment and Assumption.


 


“Trust
Preferred Securities” shall mean those REIT trust preferred securities
issued by NorthStar Corp or its Affiliates identified on Schedule 1.1(e)
attached hereto and such other REIT trust preferred securities issued by
NorthStar Corp and/or an Affiliate which are approved by the Administrative
Agent in its discretion, in each case which are expressly subordinated to all
other Indebtedness of NorthStar Corp and its Affiliates. REIT trust preferred
securities issued by NorthStar Corp and/or its Affiliates shall be deemed
approved by the Administrative Agent if such securities are issued on terms
substantially similar to those securities listed on Schedule 1.1(e),
as determined by the Administrative Agent in its reasonable discretion.


 


“Trust
Receipt” shall have the meaning set forth in the Custodial Agreement.


 


“Type” shall mean, as to any Loan, its nature
as an Alternate Base Rate Loan or LIBOR Rate Loan, as the case may be.


 


38

















 


“UCC” shall mean the Uniform Commercial Code
from time to time in effect in any applicable jurisdiction.


 


“Underlying
Mortgaged Property” shall mean (a) in the case of a Whole Loan, the
Mortgaged Property securing the Whole Loan, (b) in the case of a Junior Interest,
the Mortgaged Property securing such Junior Interest (if the Junior Interest is
of the type described in clause (b) of the definition thereof), or the
Mortgaged Property securing the mortgage loan in which such Junior Interest
represents a participation (if the Junior Interest is of the type described in
clause (a) of the definition thereof), (c) in the case of a Mezzanine
Loan or a Junior Interest in a Mezzanine Loan, the Mortgaged Property that
secures the senior mortgage loan, (d) in the case of a Bridge Loan, CTL Loan
or Subordinate CTL Loan, the Mortgaged Property securing the Whole Loan, Junior
Interest or Mezzanine Loan, as applicable, (e) in the case of a CMBS
Security, the Mortgaged Properties backing such CMBS Securities, (f) in
the case of Senior Secured Bank Debt, the Mortgaged Property, if any, securing
such Senior Secured Bank Debt and (g) in the case of a Preferred Equity
Interest, the Mortgaged Property owned directly or indirectly by the Preferred
Equity Grantor.


 


“Underwriting
Package” shall mean, with respect to any Mortgage Asset (other than a CMBS
Security), the Underwriting Package shall include, to the extent applicable, (a)
a copy of the Current Appraisal or, if unavailable, any other recent appraisal,
(b) the current rent roll, (c) a minimum of two (2) years of property
level financial statements to the extent available, (d) the current financial
statements of the Obligor under the Mortgage Asset, and, if such Mortgage Asset
is not a Whole Loan, the Obligor under the Commercial Real Estate Loan to the
extent provided to or reasonably available to the applicable Borrower upon
request, (e) the loan documents, Authority Documents and title
commitment/policy to be included in the Mortgage Asset File, together with
copies of any appraisals, environmental reports, studies or assessments (to
include, at a minimum, a phase I report), evidence of zoning compliance,
property management agreements, assignments of property management agreements,
contracts, licenses and permits, in each case to the extent in the Borrower’s
possession or reasonably available to the Borrower and, if the Mortgage Asset
is pledged by the Administrative Agent, assignments of such documents by the
Borrower in blank to the extent covered by assignments in blank delivered to
the Custodian, (f) any financial analysis, site inspection, market studies,
environmental reports and any other diligence conducted by or provided to the
Borrower and (g) such further documents or information as the Administrative
Agent may reasonably request. With respect to any CMBS Security, the
Underwriting Package shall consist of, to the extent applicable, (i) the
related prospectus or offering circular, (ii) all structural and
collateral term sheets and all other computational or other similar materials
provided to the applicable Borrower in connection with its acquisition of such
CMBS Security, (iii) all distribution date statements issued in respect
thereof during the immediately preceding twelve (12) months (or, if less,
since the date such CMBS Security was issued), (iv) all monthly reporting
packages issued in respect of such CMBS Security during the immediately
preceding twelve (12) months (or, if less, since the date such CMBS
Security was issued), (v) all Rating Agency pre–sale reports, (vi) all
asset summaries and any other due diligence materials, including, without
limitation, reports prepared by third parties, provided to the Borrower in
connection with its acquisition of such CMBS Security, and (vii) such
further documents or information as the Administrative Agent may reasonably
request. With respect to Bridge Loans and Construction Loans, the Underwriting
Package shall include the Construction Draw Deliveries for each Extension of
Credit.


 


“Unsecured
Credit Facility” shall mean the credit facility represented by the
Revolving Credit Agreement, dated as of November 3, 2006, among NorthStar
Realty Finance Corp., NorthStar Realty Finance Limited Partnership, the Pledgor
and NS Advisors, LLC, as borrowers, the lenders from time to time party
thereto, KeyBank National Association, as administrative agent, Keybanc Capital
Markets and Bank of America, N.A., as co–lead arrangers, KeyBank Capital
Markets, as sole book manager, Bank of


 


39

















 


America, N.A., as syndication agent, and Citicorp North America, Inc.,
as documentation agent, as amended, modified, restated, replaced, waived,
substituted, supplemented or extended from time to time, together with all
other documents executed in connection therewith, as the same are amended,
modified, restated, replaced, waived, substituted, supplemented or extended
from time to time.


 


“VFCC
Repurchase Facility” shall mean that certain facility evidenced by, among
other agreements, the Master Repurchase Agreement, dated as of May 14, 2007,
between the Borrowers, as the sellers, Variable Funding Capital Company LLC, as
the purchaser, Wachovia, as the swingline purchaser, Wachovia Capital Markets,
LLC, as the deal agent, and the Guarantors, as the guarantors, as such
agreements are amended, modified, restated, replaced, waived, substituted,
supplemented or extended from time to time.


 


“Voting
Interests” shall mean, with respect to any Person, Equity Interests issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.


 


“Wachovia” shall mean Wachovia Bank, National
Association, a national banking association, together with its successors
and/or assigns.


 


“Wachovia
Assets” shall mean, any Mortgage Asset issued, extended or originated by
Wachovia Corporation or an Affiliate of Wachovia Corporation.


 


“Wachovia
Repurchase Facility” shall mean that certain facility evidenced by, among
other agreements, the Amended and Restated Master Repurchase Agreement, dated
as of June 5, 2007, between the Borrowers, as the sellers, Wachovia, as the
purchaser, and the Guarantors, as the guarantors, as such agreements are
amended, modified, restated, replaced, waived, substituted, supplemented or
extended from time to time.


 


“Warehouse
Lender’s Release Letter” shall mean a letter in the form of Exhibit 1.1(l)
hereto, duly executed by the applicable warehouse lender.


 


“Whole
Loan” shall mean a performing Commercial Real Estate whole loan secured by
a first priority security interest in stabilized and non-transitional
Underlying Mortgaged Property; provided that, for purposes of the Term Loan
Collateral, Whole Loans may include Construction Loans.


 


Section 1.2            Other Definitional
Provisions.


 


The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include,” “includes” and “including” shall be deemed
to be followed by the phrase “without limitation.”  The word “will” shall be construed to have
the same meaning and effect as the word “shall.”  Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns,
(c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) any
reference to any law or regulation herein shall, unless


 


40

















 


otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time and (f) the word “asset” shall
be construed to have the same meaning and effect as Property.


 


Section 1.3            Accounting Terms.


 


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 consistent basis; provided
that,, if the Borrowers shall notify the Administrative Agent that they wish to
amend any definitions or covenant incorporated in Section 5.9 to eliminate
the effect of any change in GAAP on the operation of any such definition or
provision (or if the Administrative Agent notifies the Borrowers that the
Required Lenders wish to amend any such definition or provision for such
purpose), then the Borrowers’ compliance with such provisions 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
definition or provision is amended in a manner satisfactory to the Borrowers,
the Administrative Agent and the Required Lenders.


 


The Borrowers shall deliver to the Administrative
Agent and each Lender at the same time as the delivery of any annual or
quarterly financial statements given in accordance with the provisions of
Section 5.1, (a) a description in reasonable detail of any material
change in the application of accounting principles employed in the preparation
of such financial statements from those applied in the most recently preceding
quarterly or annual financial statements as to which no objection shall have
been made in accordance with the provisions above and (b) a reasonable
estimate of the effect on the financial statements on account of such changes
in application.


 


Section 1.4            Time References.


 


Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable). Reference to day or days
without further qualification means calendar days. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word “from” means “from and including” and the
words “to” and “until” each mean “to but excluding”.


 


Section 1.5            Execution of Documents.


 


Unless
otherwise specified, all Credit Documents and all other certificates executed
in connection therewith must be signed by a Responsible Officer. Unless
otherwise expressly provided in this Agreement, reference to any notice,
request, approval, consent or determination provided for, permitted or required
under the terms of the Credit Documents with respect to the Credit
Parties, the Administrative Agent and the Lenders means, in order for such
notice, request, approval, consent or determination to be effective hereunder,
such notice, request, approval or consent must be in writing.


 


Section 1.6            UCC Terms.


 


All
terms used in Articles 8 and 9 of the UCC in the State of New York, and
used but not specifically defined herein, are used herein as defined in such
Article 8 and 9.


 


Section 1.7            References to Discretion.


 


The
term “discretion” shall have the meaning set forth in the Fee Letter.


 


41

















 


Section 1.8            References to Payment.


 


Unless
otherwise specifically provided herein, all payments due by any Credit Party to
the Administrative Agent or the Lenders shall be due by 3:00 p.m. on the date
due.


 


ARTICLE II


 


THE LOANS; AMOUNT AND TERMS


 


Section 2.1            Revolving Loans.


 


(a)           Revolving
Commitment. During the
Commitment Period, subject to the terms and conditions hereof, each Revolving
Lender severally, but not jointly, agrees to make revolving credit loans in
Dollars (“Revolving Loans”) to the Borrowers from time to time in an
aggregate principal amount of up to THREE HUNDRED MILLION DOLLARS
($300,000,000) (as such aggregate maximum amount may be reduced from
time to time as provided in Section 2.4, the “Revolving Committed
Amount”) for the purposes hereinafter set forth; provided, however,
that (i) with regard to each Revolving Lender individually, the sum of such
Revolving Lender’s Revolving Commitment Percentage of the aggregate principal
amount of outstanding Revolving Loans shall not exceed such Revolving Lender’s
Revolving Commitment and with regard to the Revolving Lenders collectively, the
sum of the aggregate principal amount of outstanding Revolving Loans shall not
exceed the Revolving Committed Amount then in effect and (ii) the sum of the
aggregate principal amount of outstanding Revolving Loans shall not exceed the Available
Borrowing Capacity.


 


No Revolving Loan shall be made by any Revolving
Lender if (i) such Revolving Loan and the Revolving Loan Collateral therefor
are not approved by the Administrative Agent in its discretion, (ii) before or
after giving effect to such Revolving Loan, the Availability is or would be
negative, (iii) before or after giving effect to such Revolving Loan, the
aggregate principal amount of outstanding Revolving Loans would exceed the
Available Borrowing Capacity and (iv) the conditions to Extensions of
Credit in Section 4.2 are not satisfied. Revolving Loans may consist of
Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrowers may request, and may be repaid and reborrowed in accordance with the
provisions hereof; provided, however, the Revolving Loans made on
the Closing Date or any of the three (3) Business Days following the
Closing Date, may only consist of Alternate Base Rate Loans unless the Borrowers
deliver a funding indemnity letter, substantially in the form of Exhibit 2.1(a),
reasonably acceptable to the Administrative Agent not less than three (3)
Business Days prior to the Closing Date. LIBOR Rate Loans shall be made by each
Revolving Lender at its LIBOR Lending Office and Alternate Base Rate Loans at
its Domestic Lending Office.


 


(b)           Revolving
Loan Borrowings.


 


(i)            Notice of Borrowing.


 


(1) The Borrowers may
request Revolving Loans for the purpose of financing Eligible Assets approved
by the Administrative Agent in its discretion and for no other purpose. The Borrowers
shall request a Revolving Loan borrowing by delivering a written Notice of
Borrowing (or telephone notice promptly confirmed in writing by delivery of a written
Notice of Borrowing, which delivery may be by Electronic Transmission) to the
Administrative Agent


 


42

















 


along with a Compliance Certificate, Borrower Asset
Schedule and Underwriting Package for the related Eligible Asset(s) to be
financed not later than (A) ten (10) Business Days for Non-Wachovia Assets and
(B) seven (7) Business Days for Wachovia Assets from the delivery of the
applicable Notice of Borrowing. Each such Notice of Borrowing shall specify (A) that
a Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount to be
borrowed, (D) whether the borrowing shall be comprised of Alternate Base
Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans
are requested, the Interest Period(s) therefor, (E) the applicable Borrower and
the Eligible Asset to be financed, (F) a calculation of Availability and (G) the
amount of Available Borrowing Capacity. If the Borrowers shall fail to specify
in any such Notice of Borrowing (1) an applicable Interest Period in the
case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for
an Interest Period of one month, or (2) the Type of Revolving Loan
requested, then such notice shall be deemed to be a request for a one-month
LIBOR Rate Loan.


 


(2)           The
Administrative Agent shall notify the applicable
Borrower in writing of the Administrative Agent’s tentative approval
(and the proposed Allocated Revolving Loan Amount for each Eligible Asset) or
final disapproval of each proposed Eligible Asset within, (i) in the case
of Non–Wachovia Assets, eight (8) Business Days (or such greater time as the
Administrative Agent determines in its discretion for multiple assets or assets
with multiple Mortgaged Properties) and, (ii) in the case of Wachovia
Assets, five (5) Business Days (or such greater time as the Administrative
Agent determines in its discretion for multiple assets or assets with multiple
Mortgaged Properties) after its receipt of the Notice of Borrowing, the
Borrower Asset Schedule, the Compliance Certificate, the complete Underwriting
Package and any supplemental requests (requested orally or in writing) relating
to such proposed Eligible Asset. Unless the Administrative Agent notifies the Borrowers in writing of the Administrative
Agent’s approval of such proposed Eligible Asset within the applicable period,
the Administrative Agent shall be deemed not to have approved such proposed
Eligible Asset. The Administrative Agent in its discretion may waive, shorten
or increase any of the applicable time periods for the review of proposed
Eligible Assets or the delivery of documents.


 


(3)           Provided
that the Administrative Agent on behalf of the Lenders has tentatively agreed to
finance the Eligible Asset described in the Notice of Borrowing and the
proposed Allocated Revolving Loan Amount is acceptable to the applicable
Borrower, the applicable Borrower shall forward to the Administrative Agent,
via Electronic Transmission, at least two (2) Business Days prior to the
requested Borrowing Date (which must be received by the Administrative Agent no
later than 5:00 p.m. two (2) Business Days prior to the requested Borrowing
Date) an executed confirmation for each Eligible Asset, substantially in the
form of Exhibit 2.1(b) attached hereto (a “Confirmation”). The
Confirmation shall specify the Allocated Revolving Loan Amount for the related
Eligible Asset and any additional terms or conditions of the related Revolving Loan
not inconsistent with this Agreement. The Confirmation executed by the Borrower
shall be irrevocable unless consented to by the Administrative Agent in its
discretion. The delivery of the Confirmation to the Administrative Agent shall
be deemed to be a certification by the applicable


 


43

















 


Borrower
that, among other things, all conditions precedent to such Revolving Loan set
forth in Articles II and IV have been satisfied (except the Administrative
Agent’s consent). Unless otherwise agreed in writing, upon receipt of the
Confirmation, the Administrative Agent, on behalf of the Lenders, may, in the
Administrative Agent’s discretion, agree to enter into the requested Revolving Loan
with respect to an Eligible Asset, and such agreement shall be evidenced by the
Administrative Agent’s signature on the Confirmation. Any Confirmation executed
by the Administrative Agent shall be deemed to have been received by the applicable
Borrower on the date actually received by the applicable Borrower.


 


(4)           Upon
receipt of the Confirmation executed by the Administrative Agent, (i) the applicable Borrower
shall release or cause to be released to the Custodian in accordance with the
Custodial Agreement (1) in the case of a single Non–Table Funded Mortgage
Asset, no later than 1:00 p.m. one (1) Business Day (for more than one (1)
Non-Table Funded Mortgage Assets, two (2) Business Days) prior to the requested
Borrowing Date, and (2) in the case of a Table Funded Mortgage Asset, no
later than 1:00 p.m. three (3) Business Days following the applicable
Borrowing Date, the Mortgage Asset File pertaining to each Eligible Asset to be
financed by the Revolving Lenders,
and (ii) the applicable Borrower shall deliver to the Custodian, in
connection with the applicable delivery under clause (i) above, a
Custodial Identification Certificate and a Mortgage Asset File Checklist
required under Section 3.2 of the Custodial Agreement.


 


(5)           Each
Confirmation, together with this Agreement, shall constitute conclusive
evidence of the terms agreed between the Administrative Agent and the applicable Borrower with respect to the Revolving Loan
to which the Confirmation relates, and the applicable Borrower’s acceptance of
the related proceeds shall constitute the applicable Borrower’s agreement to
the terms of such Confirmation. It is the intention of the parties that each
Confirmation shall not be separate from this Agreement but shall be made a part
of this Agreement. To the extent of a conflict between this Agreement and the
related Confirmation, the Confirmation shall control.


 


(6)           Pursuant
to the Custodial Agreement, the Custodian shall deliver to the Administrative
Agent and the applicable Borrower by 1:00 p.m. on the Borrowing Date for each
Non–Table Funded Mortgage Asset a Trust Receipt (along with a completed
Mortgage Asset File Checklist attached thereto) and an Asset Schedule and
Exception Report relating to the Basic Mortgage Asset Documents with respect to
the Eligible Assets that the applicable Borrower has requested the Revolving
Lenders to finance on such Borrowing Date. With respect to each Table Funded
Mortgage Asset, the applicable Borrower shall cause the Bailee to deliver to
the Custodian with a copy to the Administrative Agent no later than 1:00 p.m.
on the Borrowing Date by facsimile the related Basic Mortgage Asset Documents,
the insured closing letter (if any), the escrow instructions (if any), a fully
executed Bailee Agreement, a Bailee’s Trust Receipt issued by the Bailee
thereunder and such other evidence satisfactory to the Administrative Agent in
its discretion that all documents necessary to effect a pledge of the related
Eligible Asset and the related Collateral to the Administrative Agent on behalf
of the Lenders have been delivered to Bailee.


 


44

















 


With
respect to each Table Funded Mortgage Asset, the Custodian shall deliver to the
Administrative Agent a Table Funded Trust Receipt no later than 3:00 p.m.
on the Borrowing Date, which documents shall be acceptable to the
Administrative Agent in its discretion. In the case of a Table Funded Mortgage
Asset, no later than 3:00 p.m. on the second (2nd) Business Day following
the Custodian’s receipt of the related Mortgage Loan Documents comprising the
Mortgage Asset File, the Custodian shall deliver to the Administrative Agent a
Trust Receipt (along with a completed Mortgage Asset File Checklist attached
thereto) certifying its receipt of the documents required to be delivered
pursuant to the Custodial Agreement, together with an Asset Schedule and
Exception Report relating to the Basic Mortgage Asset Documents, with any
Exceptions identified by the Custodian as of the date and time of delivery of such
Asset Schedule and Exception Report. The Custodian shall deliver to the
Administrative Agent an Asset Schedule and Exception Report relating to all of
the Mortgage Loan Documents within five (5) Business Days of its receipt
of the related Mortgage Asset Files.


 


(7)           Once the Confirmation is executed by the Administrative Agent, the
Administrative Agent shall give notice to each Revolving Lender at least one
(1) Business Day prior to the Borrowing Date  of
each such Revolving Lender’s share thereof.


 


(ii)           Minimum Amounts. Each Revolving Loan that is made as an
Alternate Base Rate Loan shall be in a minimum aggregate amount of $1,000,000
and in integral multiples of $100,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less). Each Revolving Loan that is
made as a LIBOR Rate Loan shall be in a minimum aggregate amount of $1,000,000
and in integral multiples of $100,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less).


 


(iii)          Advances. Each Revolving Lender will make its Revolving Commitment Percentage
of each Revolving Loan borrowing available to the Administrative Agent for the
account of the applicable Borrower at the office of the Administrative Agent
specified in Section 10.2, or at such other office as the Administrative Agent
may designate in writing, by 1:00 p.m. on the Borrowing Date, in Dollars
and in funds immediately available to the Administrative Agent. Such borrowing
will then be made available to the applicable Borrower by 5:00 p.m. on the
Borrowing Date by the Administrative Agent by crediting the account of the applicable
Borrower on the books of such office (or such other account that the Borrowers
may designate in writing to the Administrative Agent) with the aggregate of the
amounts made available to the Administrative Agent by the Revolving Lenders and
in like funds as received by the Administrative Agent.


 


(iv)          Additional Revolving Loans. The Borrowers may request additional
Revolving Loans with respect to the then existing Revolving Loan Collateral; provided
that (A) such request is subject to the Administrative Agent’s approval in its
discretion, (B) before and after giving effect to such Extension of Credit, the
Availability is not and would not be negative, (C) before or after giving
effect to such Revolving Loan, the aggregate principal amount of outstanding
Revolving Loans would not exceed the Available Borrowing Capacity, (D) no
Default or Event of Default exists, (E) the Borrowers deliver a Notice of
Borrowing, a Compliance Certificate and such other


 


45

















 


information and documents as the Administrative
Agent shall require in its discretion at least three (3) Business Days prior to
the requested Borrowing Date and (F) to the extent approved by the
Administrative Agent, the Administrative Agent shall notify the Borrowers of
the amount of Revolving Loans so approved and the Borrowers and the
Administrative Agent shall execute one (1) or more amended Confirmations
evidencing the new Allocated Revolving Loan Amounts for the Revolving Loan
Collateral with respect to which the Administrative Agent has determined to
permit such additional Extension of Credit, together with such other terms and
conditions as the Administrative Agent may require in its discretion, and the
Borrowers shall deliver to the Custodian any additional Mortgage Loan
Documents, as applicable, in connection with such funding. Unless the
Administrative Agent notifies the Borrowers in writing of its approval of such
Revolving Loans, the Administrative Agent shall be deemed not to have approved
such request.


 


(c)           Repayment. Subject to the terms of this Agreement, Revolving Loans may be
borrowed, repaid and reborrowed during the Commitment Period. The principal amount
of all Revolving Loans shall be due and payable in full on the Revolver Maturity
Date, unless accelerated sooner pursuant to Section 7.2. The Borrowers
shall have the right to repay Revolving Loans in whole or in part from time to
time; provided, however; that each partial repayment of a
Revolving Loan shall be in a minimum principal amount of $1,000,000 and
integral multiples of $100,000 in excess thereof (or the remaining outstanding
principal amount). Such repayment will be applied to the outstanding Revolving
Loans and Revolving Loan Collateral in such manner as the Borrower may elect in
its sole discretion until the outstanding principal amount of the Revolving
Loans has been paid in full.


 


(d)           Interest. Subject to the provisions of Section 2.6, Revolving Loans shall
bear interest as follows:


 


(i)            Alternate Base Rate Loans. During such periods as any Revolving Loans
shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan
shall bear interest at a per annum rate equal to the sum of the Alternate Base
Rate plus the Applicable Percentage; and


 


(ii)           LIBOR Rate Loans. During such periods as Revolving Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage.


 


Interest on Revolving Loans shall be payable in
arrears on each Payment Date.


 


(e)           Revolving Notes; Covenant to Pay. The Borrowers’ obligation to pay each Revolving
Lender shall be evidenced by this Agreement and, upon such Revolving Lender’s
request, by a duly executed promissory note of the Borrowers to such Revolving Lender
in substantially the form of Exhibit 2.1(e). The Borrowers covenant
and agree to pay the Revolving Loans in accordance with the terms of this
Agreement.


 


(f)            Extension
of Revolver Maturity Date. Not
less than forty-five (45) days, but not more than ninety (90) days, prior to
the Revolver Maturity Date, the Borrowers may request in writing that the
Revolving Lenders extend the Revolver Maturity Date for an additional year (and
the Administrative Agent shall promptly give the Revolving Lenders notice of
any such request). Such request to extend the Revolver Maturity Date shall be
granted so long as (i) the Revolving Loan Average Advance Rate on the Revolving
Loan Collateral is not greater than 65%, (ii) no


 


46

















 


Default
or Event of Default has occurred and is continuing, (iii) no Revolving Loan
Collateral is in a Collateral Default, (iv) the Commitments, both as of the
date of such extension request and immediately after giving effect to such
extension request plus the Reindeer Debt shall not exceed $400,000,000 and (v)
the Borrowers pay any extension fee due under the Fee Letter.


 


(g)           Optional Increase of the Aggregate Revolving
Committed Amount. Subject to
the terms and conditions set forth herein, the Borrowers shall have the right,
at any time and from time to time prior to the Revolver Maturity Date, and upon
not less that three (3) Business Days prior written notice to the
Administrative Agent, to request an increase in the Aggregate Revolving
Committed Amount under this Credit Agreement by an aggregate amount equal to
the difference of (i) $500,000,000 minus (ii) the outstanding Term
Loans, plus the Reindeer Debt, plus the Aggregate Revolving Committed Amount
prior to giving effect to such increase under this Section. The following terms
and conditions shall apply to each increase in the Aggregate Revolving
Committed Amount:


 


(A)          the Administrative Agent shall have approved of such increase in its
discretion;


 


(B)           in connection with each proposed increase, the Borrowers shall obtain
such commitments from (a) any existing Lenders (provided that no Lender shall
have an obligation to commit to all or a portion of the proposed increase) or
(b) any other banks, financial institutions, or investment funds;


 


(C)           each increase in the Aggregate Revolving Committed Amount shall be in
an aggregate amount of at least $5,000,000 and integral multiples of $1,000,000  in excess thereof, or in each case if less, the principal
amount of increases to the Aggregate Revolving Committed Amount that are
available under this Section 2.1(g);


 


(D)          the Administrative Agent shall have received such documentation as is
deemed necessary by the Administrative Agent (including, without limitation, (y)
an opinion or opinions of counsel for the Credit Parties, addressed to the
Administrative Agent and the Lenders, in form and substance reasonably
acceptable to the Administrative Agent and (z) appropriate authorizing
resolutions as the Administrative Agent may reasonably request);


 


(E)           the conditions to Extensions of Credit in Section 4.2 shall have been
satisfied; and


 


(F)           the Administrative Agent shall have received from the Borrowers a Compliance
Certificate, in form and substance satisfactory thereto demonstrating that,
after giving effect to borrowings under any such increase on a pro forma basis,
the Borrowers will be in compliance with the financial covenants set forth in
Section 5.9.


 


(iii)          In the event that any existing Lender or any new lender commits to such
requested increase, (A) any new lender shall enter into such joinder agreements
to give effect thereto as the Administrative Agent may reasonably request, (B)
the outstanding Revolving Loans shall be reallocated by causing such fundings
and repayments (which shall not be subject to any processing and/or recordation
fees) among the Lenders (which the Borrowers shall be responsible for any costs
arising under Section 2.13  resulting from
such reallocation and repayments) of Revolving Loans as necessary such that,
after giving effect to such increase, each Lender will hold Revolving Loans
based on its Revolving Commitment (after giving effect to


 


47

















 


such increase); and (C) the Administrative Agent
shall be authorized to enter into, on behalf of the Lenders, any amendment to
this Credit Agreement or any other Credit Document as may be necessary to
incorporate the terms of any new increase in the Aggregate Revolving Committed
Amount.


 


(h)           Confirmations. Notwithstanding anything to the contrary in
this Section 2.1 and notwithstanding any oral or verbal approval of an Extension
of Credit by the Administrative Agent, no Extension of Credit shall be deemed
approved until a Confirmation or revised Confirmation, as applicable, has been
executed by the Administrative Agent. Each pledge of a Mortgage Asset,
regardless of whether a Loan is made to the Borrowers in connection therewith,
shall be evidenced by a Confirmation.


 


Section 2.2            Term Loan; Delayed Draw Term
Loan.


 


(a)           Term Loan. Subject to the terms and conditions hereof (including, without
limitation, Sections 4.1 and 4.2 of this Agreement) and in reliance upon the
representations and warranties set forth herein, each Term Loan Lender
severally, but not jointly, agrees to make available to the Borrowers (through
the Administrative Agent) on the Funding Date  such
Term Loan Lender’s Term Loan Commitment Percentage of a term loan in Dollars
(the “Term Loan”) in the aggregate principal amount of THREE HUNDRED FORTY-NINE MILLION ONE HUNDRED SIXTY-FIVE THOUSAND FIVE
HUNDRED TWENTY-SIX DOLLARS AND FORTY-SEVEN CENTS ($349,165,526.47), which
amount shall equal the aggregate Allocated Term Loan Amount and approved by the
Administrative Agent in its discretion for the Eligible Assets approved by the
Administrative Agent in its discretion and included in the Term Loan Collateral
(as the same may be increased as provided in Section 2.2(b), the “Term Loan
Committed Amount”) for the purposes hereinafter set forth. The Term Loan
Collateral and the Allocated Term Loan Amount for each item of Term Loan Collateral
shall be evidenced by Confirmations executed by the applicable Borrower and the
Administrative Agent. Upon receipt by the Administrative Agent of the proceeds
of the Term Loan, such proceeds will then be made available to the Borrowers by
the Administrative Agent by crediting the account of the Borrowers on the books
of the office of the Administrative Agent specified in Section 10.2, or at such
other office as the Administrative Agent may designate in writing, with the
aggregate of such proceeds made available to the Administrative Agent by the
Term Loan Lenders and in like funds as received by the Administrative Agent (or
by crediting such other account(s) as directed by the Borrowers). The Term Loan
may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrowers’ may request; provided, however, that the
Term Loan made on the Closing Date or any of the three (3) Business Days
following the Closing Date may only consist of Alternate Base Rate Loans unless
the Borrowers deliver a funding indemnity letter, substantially in the form of Exhibit 2.1(a),
reasonably acceptable to the Administrative Agent not less than three (3)
Business Days prior to the Closing Date. LIBOR Rate Loans shall be made by each
Term Loan Lender at its LIBOR Lending Office and Alternate Base Rate Loans at
its Domestic Lending Office.


 


(i)            Repayment of Term Loan. The principal amount of the Term Loan shall
be due and payable in full on the Term Loan Maturity Date unless accelerated
sooner pursuant to Section 7.2. Amounts repaid or prepaid on the Term Loan may
not be reborrowed. Any repayment hereunder will be applied to the outstanding
Term Loans in accordance with Section 2.5(b)(ix)(1)(A) until the outstanding
principal amount of the Term Loans has been paid in full.


 


48

















 


(ii)           Interest on the Term Loan. Subject to the provisions of Section 2.6,
the Term Loan shall bear interest as follows:


 


(A)          Alternate Base Rate Loans. During such periods as the Term Loan shall
be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan
shall bear interest at a per annum rate equal to the sum of the Alternate Base
Rate plus the Applicable Percentage; and


 


(B)           LIBOR Rate Loans. During such periods as the Term Loan shall
be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest
at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage.


 


Interest on the Term Loan shall be payable in
arrears on each Payment Date.


 


(iii)          Term Loan Notes; Covenant to Pay. The Borrowers’ obligation to pay each Term Loan
Lender shall be evidenced by this Agreement and, upon such Term Loan Lender’s
request, by a duly executed promissory note of the Borrowers to such Term Loan
Lender in substantially the form of Exhibit 2.2. The Borrowers
covenant and agree to pay the Term Loan in accordance with the terms of this
Agreement.


 


(iv)          Extension
of Term Loan Maturity Date. Not
less than forty-five (45) days, but not more than ninety (90) days, prior to
the Term Loan Maturity Date, the Borrowers may request in writing that the Term
Loan Lenders extend the Term Loan Maturity Date for an additional year (and the
Administrative Agent shall promptly give the Term Loan Lenders notice of any
such request). Such request to extend the Term Loan Maturity Date shall be
granted so long as (i) the Term Loan Average Advance Rate on the Term Loan
Collateral plus the note collateral under the Reindeer Facility is not greater
than 65%, (ii) no Default or Event of Default has occurred and is continuing, (iii)
no Term Loan Collateral is in a Collateral Default, (iv) the Commitments plus
the Reindeer Debt, both as of the date of such extension request and immediately
after giving effect to such extension request, shall not exceed $400,000,000
and (v) the Borrowers pay any extension fee due under the Fee Letter.


 


(b)           Delayed Draw Term Loan. Until the Term Loan Maturity Date and subject
to the terms and conditions hereof and in reliance upon the representations and
warranties set forth herein, each Term Loan Lender severally, but not jointly,
agrees to make available to the Borrowers (through the Administrative Agent)
from time to time, in accordance with clause (C) below, such Term Loan Lender’s
Term Loan Commitment Percentage of a term loan in Dollars (each, a “Delayed
Draw Term Loan”) in the aggregate principal amount, after giving effect to
all Delayed Draw Term Loan borrowings, of up to NINETY FOUR
MILLION THREE HUNDRED EIGHTY-EIGHT THOUSAND SEVEN HUNDRED SEVENTY-NINE DOLLARS ($94,388,779.00),
which amount shall equal the maximum aggregate Allocated Term Loan
Amount for the future fundings approved by the Administrative Agent in its
discretion on Term Loan Collateral as provided below  (the
“Delayed Draw Term Loan Committed Amount”) for the purposes hereinafter
set forth. A Delayed Draw Term Loan borrowing may consist of Alternate Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request; provided, however, that on the Closing Date and for the
two (2) Business Days following the Closing Date, a Delayed Draw Term Loan borrowing
shall only consist of Alternate Base Rate Loans. Amounts repaid or prepaid on a
Delayed Draw Term Loan may not be reborrowed.


 


49

















 


(i)            Delayed Draw Term Loan Borrowings.


 


(A)          Notice of Borrowing.


 


(1)           The Borrowers may request a Delayed Draw Term Loan for the purpose of
financing unfunded future funding obligations under the Term Loan Collateral
approved by the Administrative Agent in its discretion and for no other purpose;
provided that (1) such request is subject to the Administrative Agents
approval in its discretion, (2) before and after giving effect to such Delayed
Draw Term Loan, the aggregate principal amount of all Delayed Draw Term Loans
shall not exceed the Delayed Draw Term Loan Committed Amount, (3) no Default or
Event of Default exists, (4) the Borrowers deliver a Notice of Borrowing, a
Compliance Certificate, the Construction Draw Deliveries and such other
information and documents as the Administrative Agent shall require in its
discretion at least three (3) Business Days prior to the requested Borrowing
Date, (5) to the extent approved by the Administrative Agent, the
Administrative Agent shall notify the Borrowers of the amount of the Delayed
Draw Term Loan so approved and the Borrowers and the Administrative Agent shall
execute one (1) or more amended Confirmations evidencing the new Allocated Term
Loan Amount for the Term Loan Collateral with respect to which the
Administrative Agent has determined to permit such Extension of Credit, together
with such other terms and conditions as the Administrative Agent may require in
its discretion and (6) the Borrowers shall deliver to the Custodian any
additional Mortgage Loan Documents, as applicable, in connection with such
funding. Unless the Administrative Agent notifies the Borrowers in writing of the Administrative Agent’s approval of the
requested Delayed Draw Term Loan, the Administrative Agent shall be deemed not
to have approved such proposed future funding. The Administrative Agent in its
discretion may waive, shorten or increase any of the applicable time periods
for the review of proposed future fundings  or the
delivery of documents in connection therewith.


 


(2)           The
delivery of the Confirmation to the Administrative Agent shall be irrevocable
and shall be deemed to be a certification by the applicable Borrower that,
among other things, all conditions precedent to such Delayed Draw Term Loan set
forth in Articles II and IV  have been
satisfied (except the Administrative Agent’s consent). Each amended Confirmation,
together with this Agreement, shall constitute conclusive evidence of the terms
agreed between the Administrative Agent
and the applicable Borrower with respect to the Delayed Draw Term Loan to which
the Confirmation relates, and the applicable Borrower’s acceptance of the
related proceeds shall constitute the applicable Borrower’s agreement to the
terms of such Confirmation. It is the intention of the parties that each
Confirmation shall not be separate from this Agreement but shall be made a part
of this Agreement. To the extent of a conflict between this Agreement and the
related Confirmation, the Confirmation shall control.


 


50

















 


(3)           Once
the Confirmation is executed by the Administrative Agent, the Administrative
Agent shall give notice to each Term Loan Lender at least one (1) Business Day
prior to the Borrowing Date  of each such Term
Loan Lender’s share thereof.


 


(B)           Minimum Amounts. Each Delayed Draw Term Loan borrowing that
is made as an Alternate Base Rate Loan shall be in a minimum aggregate amount
of $1,000,000 and in integral multiples of $100,000 in excess thereof (or the
remaining amount of the Delayed Draw Term Loan Committed Amount, if less). Each
Delayed Draw Term Loan borrowing that is made as a LIBOR Rate Loan shall be in
a minimum aggregate amount of $1,000,000 and in integral multiples of $100,000
in excess thereof (or the remaining amount of the Delayed Draw Term Loan
Committed Amount, if less).


 


(C)           Advances. Each Term Loan Lender will make its Term Loan Commitment Percentage
of each Delayed Draw Term Loan borrowing available to the Administrative Agent
for the account of the applicable Borrower at the office of the Administrative
Agent specified in Section 10.2, or at such other office as the Administrative
Agent may designate in writing, by 1:00 p.m. on the Borrowing Date, in
Dollars and in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the applicable Borrower by 5:00 p.m.
on the Borrowing Date by the Administrative Agent by crediting the account of
the applicable Borrower on the books of such office (or such other account that
the Borrowers may designate in writing to the Administrative Agent) with the
aggregate of the amounts made available to the Administrative Agent by the Term
Loan Lenders and in like funds as received by the Administrative Agent.


 


(ii)           Repayment of Delayed Draw Term Loan. Upon a borrowing of a Delayed Draw Term Loan,
the Term Loan Committed Amount shall be increased to take into account such
Delayed Draw Term Loan and the Delayed Draw Term Loan Committed Amount shall be
reduced by the amount of such Delayed Draw Term Loans. Any drawn Delayed Draw
Term Loans will constitute a Term Loan hereunder and all terms and conditions
of Section 2.2(a) shall apply to such Delayed Draw Term Loan.


 


(c)           Confirmations. Notwithstanding anything to the contrary in
this Section 2.2 and notwithstanding any oral or verbal approval of an
Extension of Credit by the Administrative Agent, no Extension of Credit shall
be deemed approved until a Confirmation or revised Confirmation, as applicable,
has been executed by the Administrative Agent. Each pledge of a Mortgage Asset,
regardless of whether a Loan is made to the Borrowers in connection therewith,
shall be evidenced by a Confirmation. Each Confirmation, together with this
Agreement, shall constitute conclusive evidence of the terms agreed between the
Administrative Agent and the
applicable Borrower with respect to the Term Loan to which the Confirmation
relates, and the applicable Borrower’s acceptance of the related proceeds shall
constitute the applicable Borrower’s agreement to the terms of such
Confirmation. It is the intention of the parties that each Confirmation shall
not be separate from this Agreement but shall be made a part of this Agreement.
To the extent of a conflict between this Agreement and the related
Confirmation, the Confirmation shall control.


 


51

















 


Section 2.3            Fees.


 


The Borrowers shall pay all fees provided for in the
Fee Letter to the Administrative Agent for distribution to the Lenders and the
Administrative Agent in accordance therewith.


 


Section 2.4            Commitment Reductions.


 


(a)           Voluntary Reductions. The Borrowers shall have the right to
terminate or permanently reduce the unused portion of the Revolving Committed
Amount and/or the Delayed Draw Committed Amount at any time or from time to
time upon not less than five (5) Business Days’ prior written notice to
the Administrative Agent (which shall notify the Lenders thereof as soon as
practicable) of each such termination or reduction, which notice shall specify
the effective date thereof and the amount of any such reduction which shall be
in a minimum amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent; provided that no such reduction or termination
shall be permitted if after giving effect thereto, and to any prepayments of
the Loans made on the effective date thereof, (i) the sum of the aggregate
principal amount of outstanding Revolving Loans would exceed the Revolving
Committed Amount then in effect, (ii) the Availability would be negative
or (iii) the sum of the aggregate principal amount of outstanding Delayed Draw
Term Loans would exceed $94,388,779.00 (i.e. the initial Delayed Draw Term Loan
Committed Amount).


 


(b)           Maturity Date. The Commitments shall automatically
terminate on the Maturity Date unless accelerated sooner pursuant to Section
7.2 hereof.


 


Section 2.5            Prepayments.


 


(a)           Optional
Prepayments. The Borrowers
shall have the right to prepay the Term Loans in whole or in part from time to
time; provided, however, that each partial prepayment of a Term Loan
shall be in a minimum principal amount of $1,000,000 and integral multiples of $500,000
in excess thereof (or the remaining outstanding principal amount). The Borrowers
shall give three Business Days’ irrevocable notice of prepayment in the case of
LIBOR Rate Loans and same-day irrevocable notice on any Business Day in the
case of Alternate Base Rate Loans, to the Administrative Agent (which shall
notify the Lenders thereof as soon as practicable). To the extent that the
Borrowers elect to prepay the Term Loans, amounts prepaid under this Section
shall be applied (i) to the extent the outstanding principal amount under the
Term Loans and the Reindeer Facility, both before and after giving effect to
such optional prepayment, is greater than $300,000,000 and there are more than fifteen
(15) Pledged Mortgage Assets, as the Borrowers may direct in their discretion
and (ii) to the extent the outstanding principal amount under the Term Loans
and the Reindeer Facility, either before or after giving effect to such
optional prepayment, is less than or equal to $300,000,000 or there are less
than or equal to fifteen (15) Pledged Mortgage Assets, as the Administrative
Agent may elect in its reasonable discretion. Within the foregoing parameters,
prepayments under this Section shall be applied first to Alternate Base Rate Loans
and then to LIBOR Rate Loans in direct order of Interest Period maturities. All
prepayments under this Section shall be subject to Section 2.13, but
otherwise without premium or penalty. Interest on the principal amount prepaid
shall be payable on the next occurring Payment Date that would have occurred
had such Loan not been prepaid or, at the request of the Administrative Agent,
interest on the principal amount prepaid shall be payable on any date that a
prepayment is made hereunder through the date of prepayment.


 


52

















 


(b)           Mandatory Prepayments.


 


(i)            Availability and Revolving Committed Amount.


 


(A)          Availability. Subject to the definition of Asset Value, the
Administrative Agent may calculate Availability on any day. If the Availability
is negative on any day, as determined by the Administrative Agent in its
discretion, the Borrowers shall, immediately upon notice from the
Administrative Agent and, in any event, within one (1) Business Day upon notice
from the Administrative Agent (the “Availability Correction Deadline”),
prepay the Revolving Loans in cash in an amount determined by the
Administrative Agent so that, after giving effect to such payment, the
Availability will not be negative (each such amount, a “Correction Amount”).


 


(B)           Revolving Loan Committed Amount. If at any time after the Closing Date, the
sum of the aggregate principal amount of outstanding Revolving Loans shall (1) exceed
the Revolving Committed Amount or (2) exceed the Available Borrowing Capacity,
the Borrowers shall immediately prepay the Revolving Loans in an amount
sufficient to eliminate such excess.


 


(C)           Delayed Draw Term Loan Committed Amount. If at any time after the Closing Date, the
sum of the funded Delayed Draw Term Loans shall exceed $94,388,779.00 (i.e. the
initial Delayed Draw Term Loan Committed Amount), the Borrowers shall
immediately prepay the Term Loans in an amount sufficient to eliminate such excess.


 


(ii)           Defaulted Collateral Prepayment. To the extent any (1) Term Loan Collateral
is in a Collateral Default, the Borrowers shall prepay the Term Loans, within
one (1) Business Day of such Collateral Default, in an amount equal to
Allocated Term Loan Amount for such item of defaulted Collateral which shall be
applied to such defaulted Collateral and (2) Revolving Loan Collateral is in a
Collateral Default, the Borrowers shall prepay the outstanding Revolving Loans,
within one (1) Business Day of such Collateral Default, in an amount equal to
Allocated Revolving Loan Amount for such item of defaulted Collateral which
shall be applied to such defaulted Collateral; provided, that it is
acknowledged and agreed that nothing set forth in the definition Asset Value
shall affect the obligation of the Borrowers to make a prepayment under this
clause (ii).


 


(iii)          Reduction of Asset Value Prepayment.
Subject to the definition of Asset Value, if the Administrative Agent
determines at any time in its discretion that (A) the Asset Value for any item
of Term Loan Collateral is or should be reduced for any reason in its
discretion (other than as excluded in the definition of Asset Value), the
Borrowers shall prepay the outstanding Term Loans, within one (1) Business Day of
the Administrative Agent’s request, in an amount equal to the reduction
determined by the Administrative Agent, (B) the Asset Value for any item of
Revolving Loan Collateral is or should be reduced for any reason in its
discretion (other than as excluded in the definition of Asset Value), the
Borrowers shall prepay the outstanding Revolving Loans, within one (1) Business
Day of the Administrative Agent’s request, in an amount equal to the reduction
determined by the Administrative Agent and (C) the Asset Value of all Pledged
Mortgage Assets, as determined in the Administrative Agent’s discretion, is
less (including by reason of reductions in the Asset Value as determined by the


 


53














 


Administrative Agent (other than as excluded in the
definition of Asset Value)) than the outstanding principal amount of all Loans
(including Term Loans and Revolving Loans) plus the Note Purchase Margin
(in each case, a “Deficit”), the Borrowers shall prepay the Revolving Loans
and the Term Loans within one (1) Business Day of the Administrative Agent’s
request, in the amount of the Deficit. The Administrative Agent’s election, in
its discretion, not to deliver any notice under this clause (iii) shall not in
any way limit or impair its right to deliver such notice at any time.


 


(iv)          Collateral Release Prepayment. With respect to any repayment, prepayment,
reduction or removal of any Collateral, such mandatory prepayment shall be
governed by the terms of the Fee Letter.


 


(v)           Issuances of Debt. To the extent the principal amount
outstanding under the Term Loan plus the Reindeer Debt is greater than the
applicable amount set forth on Schedule 2.5 for the applicable period
and in connection with the closing of any Debt Issuance, the Borrowers shall
prepay the Loans, within one (1) Business Day of the closing of any Debt
Issuance,  in an aggregate amount equal
to the lesser of (1) 35% of the Net Cash Proceeds of each such Debt Issuance and
(2) the difference between the outstanding principal Term Loan amount plus the
Reindeer Debt and the applicable amount set forth on Schedule 2.5 (to
the extent positive) (the “Debt Net Cash Proceeds Payment”) and, in
connection therewith, shall, pursuant to Irrevocable Instructions, cause the
Persons obligated to pay such Net Cash  Proceeds to
remit the Debt Net Cash Proceeds Payment by wire transfer in immediately
available funds directly to the Collection Account  on
the closing date of the Debt Issuance instead of paying such amounts to any Credit
Party or a Subsidiary or Affiliate of a Credit Party. Such prepayment shall be
prepaid in accordance with clause (ix) below.


 


(vi)          Issuances of Equity. To the extent the principal amount
outstanding under the Term Loan plus the Reindeer Debt is greater than the
applicable amount set forth on Schedule 2.5 for the applicable period
and in connection with the closing of any Equity Issuance,  the Borrowers shall prepay the Loans, within
one (1) Business Day of the closing of any Equity Issuance, in an aggregate
amount equal to the lesser of (1) 35% of the Net Cash Proceeds of each such
Equity Issuance and (2) the difference between the outstanding principal Term
Loan amount plus the Reindeer Debt and the applicable amount set forth on Schedule
2.5 (to the extent positive) (the “Equity Net Cash Proceeds Payment”)
and, in connection therewith, shall, pursuant to Irrevocable Instructions,
cause the Persons obligated to pay such Net Cash Proceeds to remit the Equity
Net Cash Proceeds Payment by wire transfer in immediately available funds
directly to the Collection Account on the closing date of the Equity Issuance
instead of paying such amounts to any Credit Party or a Subsidiary or Affiliate
of a Credit Party. Such prepayment shall be prepaid in accordance with clause
(ix) below.


 


(vii)         [Reserved].


 


(viii)        Extraordinary Receipts.
Immediately, and in any event, within one (1) Business Day upon receipt by any
Credit Party or any of its Subsidiaries of proceeds from any Extraordinary
Receipt, the Borrowers shall prepay the Term Loans and/or the Revolving Loans,
as applicable, in an aggregate principal amount equal to the lesser of (1) one
hundred percent (100%) of such Extraordinary Receipt and (2) the Allocated Term
Loan Amount or Allocated Revolving Loan Amount, as applicable, to be applied to
the Term Loan and/or the Revolving Loans depending on whether the Extraordinary



 


54

















 


Receipt is from Term Loan Collateral or Revolving Loan
Collateral. Such prepayment shall be prepaid in accordance with clause (ix)
below.


 


(ix)           Application of Mandatory Prepayments.


 


(1)           Unless otherwise set forth above in Section 2.5(a), Section 2.5(b)(i),
(ii), (iii) and (iv), all amounts required to be paid pursuant to this Section
shall be applied as follows: (A) first, to the outstanding Term Loans and Term
Loan Collateral, as follows: (i) to the extent the outstanding principal amount
under the Term Loans and the Reindeer Facility, both before and after giving
effect to such optional prepayment, is greater than $300,000,000 and there are
more than fifteen (15) Pledged Mortgage Assets, as the Borrowers may direct in
their discretion and (ii) to the extent the outstanding principal amount under
the Term Loans and the Reindeer Facility, either before or after giving effect
to such optional prepayment, is less than or equal to $300,000,000 or there are
less than or equal to fifteen (15) Pledged Mortgage Assets, as the
Administrative Agent may elect in its reasonable discretion,  in each case until the outstanding principal
amount of the Term Loans has been paid and full and (B) second, to the
outstanding Revolving Loans and Revolving Loan Collateral in such manner as the
Borrower may elect in its discretion until the outstanding principal amount of
the Revolving Loans has been paid in full. Within the parameters of the
applications set forth above, prepayments shall be applied first to Alternate
Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section shall be subject to
Section 2.13 and be accompanied by interest on the principal amount
prepaid through the date of prepayment, but otherwise without premium or
penalty; and


 


(2)           All amounts required to be paid pursuant to this Section shall be deposited
in the Collection Account and shall be accompanied by any applicable costs
incurred pursuant to Section 2.13 (if any) and any applicable interest
payments.


 


Section 2.6            Default Rate and Payment
Dates.


 


(a)           If all or a portion of the principal amount of any Loan which is a
LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate Loan in
accordance with the provisions of Section 2.7 (whether at the stated
maturity, by acceleration or otherwise), such overdue principal amount of such Loan
shall be converted to an Alternate Base Rate Loan at the end of the Interest
Period applicable thereto.


 


(b)           (i) If all or a portion of the principal amount of any LIBOR Rate Loan
shall not be paid when due, such overdue amount shall bear interest at a rate
per annum which is equal to the rate that would otherwise be applicable thereto
plus 2%, until the end of the Interest Period applicable thereto, and
thereafter at a rate per annum which is equal to the Alternate Base Rate plus
the sum of the Applicable Percentage then in effect for Alternate Base Rate Loans
and 2% (the “ABR Default Rate”) or (ii) if any interest payable on
the principal amount of any Loan or any fee or other amount, including the
principal amount of any Alternate Base Rate Loan, payable hereunder shall not
be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which
is equal to the ABR Default Rate, in each case from the date of such
non-payment until such amount is paid in full (after as well as before
judgment). Upon the occurrence, and during the continuance, of any 


 


55

















 


other Event of Default hereunder, at the option of
the Required Lenders, the principal of and, to the extent permitted by
Requirements of Law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents shall bear interest, payable on
demand, at a per annum rate which is (A) in the case of principal, the
rate that would otherwise be applicable thereto plus 2% or (B) in
the case of interest, fees or other amounts, the ABR Default Rate (after as
well as before judgment).


 


(c)           Interest on each Loan shall be payable in arrears on each Payment Date;
provided that interest accruing pursuant to paragraph (b) of this
Section shall be payable from time to time on demand.


 


Section 2.7            Conversion Options.


 


(a)           The Borrowers may, in the case of Revolving Loans and the Term Loan,
elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans
by delivering a Notice of Conversion/Extension to the Administrative Agent at
least three Business Days prior to the proposed date of conversion. In
addition, the Borrowers may elect from time to time to convert all or any
portion of a LIBOR Rate Loan to an Alternate Base Rate Loan by giving the
Administrative Agent irrevocable written notice thereof by 12:00 p.m. one (1)
Business Day prior to the proposed date of conversion. If the date upon which
an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a
Business Day, then such conversion shall be made on the next succeeding
Business Day and during the period from such last day of an Interest Period to
such succeeding Business Day such Loan shall bear interest as if it were an
Alternate Base Rate Loan. LIBOR Rate Loans may only be converted to Alternate
Base Rate Loans on the last day of the applicable Interest Period. If the date
upon which a LIBOR Rate Loan is to be converted to an Alternate Base Rate Loan
is not a Business Day, then such conversion shall be made on the next
succeeding Business Day and during the period from such last day of an Interest
Period to such succeeding Business Day such Loan shall bear interest as if it
were an Alternate Base Rate Loan. All or any part of outstanding Alternate Base
Rate Loans may be converted as provided herein; provided that
(i) no Loan may be converted into a LIBOR Rate Loan when any Default or
Event of Default has occurred and is continuing and (ii) partial
conversions shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $100,000 in excess thereof. All or any part of outstanding LIBOR
Rate Loans may be converted as provided herein; provided that partial
conversions shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $100,000 in excess thereof.


 


(b)           Any LIBOR Rate Loans may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Borrowers with the
notice provisions contained in Section 2.7(a); provided, that no
LIBOR Rate Loan may be continued as such when any Default or Event of Default
has occurred and is continuing, in which case such Loan shall be automatically
converted to an Alternate Base Rate Loan at the end of the applicable Interest
Period with respect thereto. So long as no Default or Event of Default has
occurred and is continuing and all conditions set forth in Section 4.2 have
been satisfied and the Borrowers shall fail to give timely notice of an
election to continue a LIBOR Rate Loan, such LIBOR Rate Loans shall be
automatically converted to a one-month LIBOR Rate Loan at the end of the
applicable Interest Period with respect thereto. To the extent a Default or
Event of Default has occurred and is continuing and the Borrowers shall fail to
give timely notice of an election to continue a LIBOR Rate Loan or the
continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans
shall automatically be converted to Alternate Base Rate Loans at the end of the
applicable Interest Period with respect thereto.


 


56

















 


Section 2.8            Computation of Interest and
Fees; Usury.


 


(a)           Interest payable hereunder with respect to any Alternate Base Rate Loan
based on the Prime Rate shall be calculated on the basis of a year of 365 days
(or 366 days, as applicable) for the actual days elapsed. All other fees,
interest and all other amounts payable hereunder shall be calculated on the
basis of a 360-day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrowers and the Lenders of each
determination of a LIBOR Rate on the Business Day of the determination thereof.
Any change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrowers and the
Lenders of the effective date and the amount of each such change.


 


(b)           Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrowers, deliver to the Borrowers
a statement showing the computations used by the Administrative Agent in
determining any interest rate.


 


(c)           It is the intent of the Lenders and the Credit Parties to conform to
and contract in strict compliance with applicable usury law from time to time
in effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this subsection which shall override and control
all such agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency (including, but not
limited to, prepayment or acceleration of the maturity of any Obligation),
shall the interest taken, reserved, contracted for, charged, or received under this
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under Requirements of Law. If, from any possible construction of
any of the Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such construction
shall be subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under Requirements
of Law, without the necessity of execution of any amendment or new document. If
any Lender shall ever receive anything of value which is characterized as
interest on the Loans under Requirements of Law and which would, apart from
this provision, be in excess of the maximum nonusurious amount, an amount equal
to the amount which would have been excessive interest shall, without penalty,
be applied to the reduction of the principal amount owing on the Loans and not
to the payment of interest, or refunded to the Borrowers or the other payor
thereof if and to the extent such amount which would have been excessive
exceeds such unpaid principal amount of the Loans. The right to demand payment
of the Loans or any other Indebtedness evidenced by any of the Credit Documents
does not include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand. All interest paid or
agreed to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by Requirements of Law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of the Loans
so that the amount of interest on account of such Indebtedness does not exceed
the maximum nonusurious amount permitted by Requirements of Law.


 


57

















 


Section 2.9            Pro Rata Treatment and
Payments.


 


(a)           Allocation of Payments Prior to Exercise of
Remedies.


 


(i)            Each borrowing of Revolving Loans and any reduction of
the Revolving Commitments shall be made pro rata according to the respective
Revolving Commitment Percentages of the Revolving Lenders. Each payment on
account of any fees pursuant to Section 2.3 shall be made pro rata in
accordance with the respective amounts due and owing. Each payment (other than
prepayments) by the Borrowers on account of principal of and interest on the
Revolving Loans and on the Term Loan, as applicable, shall be applied to such Loans,
as applicable, on a pro rata basis in accordance with the terms of Section 2.5(a)
hereof. Each optional prepayment on account of principal of the Loans shall be
applied in accordance with Section 2.5(a). Each mandatory prepayment on
account of principal of the Loans shall be applied in accordance with Sections
2.2(b) and 2.5(b). Unless payments are specifically payable to Revolving Loans
or Term Loans, all payments are shared pari passu and
pro rata (based on the amounts of such Loans) between Revolving Loans and Term Loans.
All payments (including prepayments) to be made by the Borrowers on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim and shall be made to the Administrative Agent for the account of
the Lenders at the Administrative Agent’s office specified on Section 10.2 in
Dollars and in immediately available funds not later than 1:00 p.m. on the
date when due. The Administrative Agent shall distribute such payments to the
Lenders entitled thereto promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day, and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension. If any payment on a LIBOR Rate Loan becomes due and payable on
a day other than a Business Day, such payment date shall be extended to the
next succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.


 


(ii)           The Administrative Agent as agent for the Secured Parties shall be
entitled to receive an amount equal to all Income paid or distributed on or in
respect of the Collateral, which amount shall be deposited by the Borrowers and
any Servicer or PSA Servicer under a Pooling and Servicing Agreement into the
Collection Account. The Borrowers hereby agree to instruct each applicable
Servicer to transfer within two (2) Business Days of receipt thereof, and
each applicable PSA Servicer under a Pooling and Servicing Agreement to deposit
within two (2) Business Days of the date on which such Person is obligated
under the applicable Pooling and Servicing Agreement to disburse such funds,
all Income with respect to the Collateral directly into the Collection Account.
On each Payment Date, any Cash Collateral and any amounts on deposit in the
Collection Account shall be withdrawn by the Administrative Agent and shall be
applied as follows:


 


FIRST, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) to the payment of all fees, expenses, and other
obligations then due to the Administrative Agent and the Lenders pursuant to
this Agreement and/or the Fee Letter, other than the interest and principal on
the Loans;


 


SECOND, to
the extent not paid by the Borrowers, to the payment of fees and expenses owed
to the Custodian under the Custodial Agreement or Custodial Fee Letter;


 


58

















 


THIRD, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) to the Lenders for the payment of accrued and unpaid
interest on the Loans outstanding;


 


FOURTH,
without limiting the Borrowers’ obligations to make mandatory prepayments under
Section 2.5(b) in a timely manner as provided in this Article II, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) for the payment of the amounts and Loans provided
for in Section 2.5(b);


 


FIFTH, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) to the extent any Income or Cash Collateral includes
payments or prepayments of principal on or from any Collateral (including,
without limitation, insurance or condemnation proceeds or recoveries from any
foreclosures not otherwise applied under Section 2.5(b) or clause FOURTH above),
such payments shall be applied to reduce the Allocated Term Loan Amount and/or
Allocated Revolving Loan Amount for the related Term Loan Collateral or Revolving
Loan Collateral, as applicable;


 


SIXTH, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) to the extent not previously paid pursuant to
Article II, to the Lenders to pay any other principal payments then due or
required to be paid;


 


SEVENTH, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) to the payment of all other amounts then due and
owing to the Administrative Agent, the Lenders or any other Person pursuant to
this Agreement and the other Credit Documents; and


 


EIGHTH, to
the Borrowers, for such purposes as the Borrowers
shall determine in their sole discretion;


 


provided, however,
that if a Default or Event of Default has occurred and is continuing or a
mandatory prepayment under Section 2.5 is due but not yet payable, such amounts
under clause “EIGHTH” shall not be transferred to the Borrowers but shall
remain in the Collection Account and applied (i) in the case of a mandatory
prepayment under Section 2.5, in reduction of such mandatory prepayments when
due and payable, with the balance being remitted to the Borrowers and (ii) in
the case of a Default or Event of Default, in reduction of the Obligations in
accordance with Section 2.9(b).


 


Notwithstanding
anything to the contrary contained herein, in the event any Obligor Reserve
Payments  are deposited into the Collection
Account, such Obligor Reserve Payments  shall, upon
written request of the Borrowers, be promptly transferred from the Collection
Account to the Borrowers for the Borrowers to transfer into the appropriate
escrow or reserve accounts.


 


In
carrying out the foregoing, amounts received shall be applied in the numerical
order provided until exhausted prior to application of the next succeeding
category.


 


(b)           Allocation of Payments After Exercise of
Remedies. Notwithstanding
any other provisions of this Agreement to the contrary, after the exercise of
remedies (other than the invocation of default interest pursuant to
Section 2.6) by the Administrative Agent or the Lenders pursuant to
Section 7.2 (or after the Commitments shall automatically terminate and
the Loans (with accrued interest thereon) and all other amounts under the
Credit Documents shall automatically become due and payable in accordance with
the terms of such Section), all amounts collected or received by the
Administrative Agent or any Lender on account of the Obligations or 


 


59

















 


any other amounts outstanding under any of the
Credit Documents or in respect of the Collateral and all amounts on deposit in
the Collection Account shall be paid over or delivered to the Administrative
Agent and applied as follows (irrespective of whether the following costs,
expenses, fees, interest, premiums, scheduled periodic payments or Obligations
are allowed, permitted or recognized as a claim in any proceeding resulting
from the occurrence of a Bankruptcy Event):


 


FIRST, to the payment of all
reasonable out-of-pocket costs and expenses (including without limitation
reasonable attorneys’ fees) of the Administrative Agent in connection with
enforcing the rights of the Lenders under the Credit Documents and any
protective advances made by the Administrative Agent with respect to the
Collateral under or pursuant to the terms of the Security Documents;


 


SECOND, to the payment of
any fees owed by the Borrowers to the Administrative Agent;


 


THIRD, pari passu
and pro rata (based on the amounts owed to such Persons under this clause) to
the payment of all reasonable out-of-pocket costs and expenses (including
without limitation, reasonable attorneys’ fees) of each of the Lenders in
connection with enforcing its rights under the Credit Documents or otherwise
with respect to the Obligations owing to such Lender;


 


FOURTH pari passu
and pro rata (based on the amounts owed to such Persons under this clause) to
the payment of all of the Obligations consisting of accrued fees and interest;


 


FIFTH pari passu
and pro rata (based on the amounts owed to such Persons under this clause) to
the payment of the outstanding principal amount of the Obligations;


 


SIXTH, pari passu
and pro rata (based on the amounts owed to such Persons under this clause) to
all other Obligations and other obligations which shall have become due and
payable under the Credit Documents or otherwise and not repaid pursuant to
clauses ”FIRST” through “FIFTH” above; and


 


SEVENTH, pari passu and pro rata (based on the amounts owed to such
Persons under this clause) to the payment of the surplus, if any, to whoever
may be lawfully entitled to receive such surplus.


 


In carrying out the
foregoing, (a) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category;
and (b) each of the Lenders shall receive an amount equal to its pro rata
share (based on the proportion of the then outstanding Loans held by such
Lender) of amounts available to be applied pursuant to clauses ”THIRD”, “FOURTH”,
“FIFTH” and “SIXTH” above.


 


Section 2.10         Non-Receipt of Funds by the
Administrative Agent.


 


(a)           Funding by Lenders; Presumption by
Administrative Agent. Unless
the Administrative Agent shall have received written notice from a Lender prior
to the proposed date of any Extension of Credit that such Lender will not make
available to the Administrative Agent such Lender’s share of such Extension of
Credit, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with this Agreement and may, 


 


60

















 


in reliance upon such assumption, make available to
the Borrowers a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Extension of Credit available to the
Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrowers to but excluding the date of payment
to the Administrative Agent, at (i) in the case of a payment to be made by
such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (ii) in the case of a payment to be
made by the Borrowers, the interest rate applicable to Alternate Base Rate Loans.
If the Borrowers and such Lender shall pay such interest to the Administrative
Agent for the same or an overlapping period, the Administrative Agent shall
promptly remit to the Borrowers the amount of such interest paid by the Borrowers
for such period. If such Lender pays its share of the applicable Extension of
Credit to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such Extension of Credit. Any payment by the Borrowers
shall be without prejudice to any claim the Borrowers may have against a Lender
that shall have failed to make such payment to the Administrative Agent.


 


(b)           Payments by Borrowers; Presumptions by
Administrative Agent. Unless
the Administrative Agent shall have received notice from the Borrowers prior to
the date on which any payment is due to the Administrative Agent for the
account of the Lenders hereunder that the Borrowers will not make such payment,
the Administrative Agent may assume that the Borrowers have made such payment
on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender, with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.


 


A notice of the Administrative Agent to any Lender
or the Borrowers with respect to any amount owing under subsections (a)
and (b) of this Section shall be conclusive, absent manifest error.


 


(c)           Failure
to Satisfy Conditions Precedent.
If any Lender makes available to the Administrative Agent funds for any Loan to
be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrowers by the
Administrative Agent because the conditions to the applicable Extension of
Credit set forth in Article IV are not satisfied or waived in accordance
with the terms thereof, the Administrative Agent shall return such funds (in
like funds as received from such Lender) to such Lender, without interest.


 


(d)           Obligations
of Lenders Several. The
obligations of the Lenders hereunder to make Term Loans and Revolving Loans,
and to make payments pursuant to Section 10.5(c) are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to
make any such payment under Sections 8.7 and 10.5(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Sections 8.7 and 10.5(c).


 


61

















 


(e)           Funding
Source. Nothing herein shall
be deemed to obligate any Lender to obtain the funds for any Loan in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan in any particular place
or manner.


 


Section 2.11         Inability to Determine
Interest Rate.


 


Notwithstanding any other provision of this
Agreement, if (a) the Administrative Agent shall reasonably determine
(which determination shall be conclusive and binding absent manifest error)
that, by reason of circumstances affecting the relevant market, reasonable and
adequate means do not exist for ascertaining the LIBOR Rate for such Interest
Period, or (b) the Required Lenders shall reasonably determine (which
determination shall be conclusive and binding absent manifest error) that the
LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of
funding LIBOR Rate Loans that the Borrowers have requested be outstanding as a
LIBOR Tranche during such Interest Period, the Administrative Agent shall
forthwith give telephone notice of such determination, confirmed in writing, to
the Borrowers and the Lenders at least two (2) Business Days prior to the
first day of such Interest Period. Unless the Borrowers shall have notified the
Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR Rate Loans shall be made as Alternate Base
Rate Loans and any Loans that were requested to be converted into or continued
as LIBOR Rate Loans shall remain as or be converted into Alternate Base Rate Loans.
Until any such notice has been withdrawn by the Administrative Agent, no
further Loans shall be made as, continued as, or converted into, LIBOR Rate Loans
for the Interest Periods so affected.


 


Section 2.12         Yield Protection.


 


(a)           Increased
Costs Generally. If any
Change in Law shall:


 


(i)            impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
reflected in the LIBOR Rate);


 


(ii)           subject any Lender to any tax of any kind whatsoever with respect to
this Agreement or any LIBOR Rate Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 2.14 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender); or


 


(iii)          impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or LIBOR Rate Loans made by
such Lender;


 


and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any LIBOR Rate Loan (or of maintaining its obligation
to make any such Loan), or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or any
other amount), then, within five (5) Business Days of a request by such Lender,
the Borrowers will pay to such Lender, such additional amount or amounts as
will compensate such Lender for such additional costs incurred or reduction
suffered.


 


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(b)           Capital Requirements. If any Lender determines that any Change in
Law affecting such Lender or any lending office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by such Lender, to
a level below that which such Lender or such Lender’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time, but in any event within five (5)
Business Days, the Borrowers will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for any
such reduction suffered.


 


(c)           Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company,
as the case may be, as specified in paragraph (a) or (b) of this
Section and delivered to the Borrowers shall be conclusive absent manifest
error. The Borrowers shall pay such Lender the amount shown as due on any such
certificate within ten (10) days after receipt thereof.


 


(d)           Delay in Requests. Failure or delay on the part of any Lender
to demand compensation pursuant to this Section shall not constitute a waiver
of such Lender’s right to demand such compensation.


 


The provisions of this Section shall survive the
termination of this Agreement and the payment in full of the Obligations.


 


Section 2.13         Indemnity; Eurocurrency
Liabilities.


 


(a)           The Credit Parties hereby agree to indemnify each Lender and to hold
such Lender harmless from any actual, out-of-pocket funding loss or expense
which each Lender may sustain or incur as a consequence of (a) the failure
by the Borrowers to pay the principal amount of or interest on any Loan by any
Lender in accordance with the terms hereof, (b) the failure by the Borrowers
to accept a borrowing after the Borrowers have given a notice in accordance
with the terms hereof, (c) default by the Borrowers in making any
prepayment after the Borrowers have given a notice in accordance with the terms
hereof, and/or (d) the making by the Borrowers of a prepayment of a Loan,
or the conversion thereof, on a day which is not the last day of the Interest
Period with respect thereto, in each case including, but not limited to, any
such loss or expense arising from interest or fees payable by any Lender to
lenders of funds obtained by it in order to maintain its Loans hereunder. A
certificate setting forth in reasonable detail as to any additional amounts
payable pursuant to this Section submitted by any Lender, through the
Administrative Agent, to the Borrowers shall be conclusive in the absence of
manifest error. The agreements in this Section shall survive termination of
this Agreement and payment of the Obligations.


 


(b)           The Borrowers shall pay to each Lender, as long as such Lender shall be
required to maintain reserves under Regulation D with respect to “Eurocurrency
liabilities” within the meaning of Regulation D, or under any similar or successor
regulation with respect to Eurocurrency liabilities or Eurocurrency funding,
additional interest on the unpaid principal amount of each LIBOR Loan equal to
the actual costs of such reserves allocated to such LIBOR Loan by such Lender
(as determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such LIBOR Loan, provided the Borrowers shall have received at least
fifteen (15) days prior notice 


 


63

















 


(with a copy to the Administrative Agent) of such
additional interest from such Lender. If a Lender fails to give notice fifteen
(15) days prior to the relevant Payment Date, such additional interest shall be
due and payable fifteen (15) days from receipt of such notice.


 


Section 2.14         Taxes.


 


(a)           Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Credit Party hereunder or under any other Credit Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if any Credit Party shall
be required by Requirements of Law to deduct any Indemnified Taxes (including
any Other Taxes) from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent or any Lender receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Credit Party shall
make such deductions and (iii) such Credit Party shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with Requirements
of Law.


 


(b)           Payment of Other Taxes by the Borrowers. Without limiting the provisions of
paragraph (a) above, the Credit Parties shall timely pay any Other Taxes
to the relevant Governmental Authority in accordance with Requirements of Law.


 


(c)           Indemnification by the Borrowers. The Credit Parties shall indemnify the
Administrative Agent and each Lender, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section) paid by the Administrative Agent or such
Lender and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the Borrowers
by a Lender (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.


 


(d)           Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Credit Party to a Governmental
Authority, the Borrowers shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.


 


(e)           Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which any Credit Party is a resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Credit Document shall deliver to the Borrowers
(with a copy to the Administrative Agent), at the time or times prescribed by Requirements
of Law or reasonably requested by the Borrowers or the Administrative Agent,
such properly completed and executed documentation prescribed by Requirements
of Law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the Borrowers
or the Administrative Agent, shall deliver such other documentation prescribed
by Requirements of Law or reasonably requested by the Borrowers or the
Administrative Agent as will enable the Borrowers or the Administrative Agent
to determine 


 


64

















 


whether or not such Lender is subject to backup
withholding or information reporting requirements.


 


(f)            Foreign Lenders. Without limiting the generality of the
foregoing, in the event that any Credit Party is resident for tax purposes in
the United States of America, any Foreign Lender shall deliver to the Borrowers
and the Administrative Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request
of the Borrowers or the Administrative Agent, but only if such Foreign Lender
is legally entitled to do so), whichever of the following is applicable:


 


(i)            duly completed copies of Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income tax treaty
to which the United States of America is a party,


 


(ii)           duly completed copies of Internal Revenue Service Form W-8ECI,


 


(iii)          in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under section 881(c) of the Code, (i) a certificate
to the effect that such Foreign Lender is not (A) a “bank” within the
meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of any Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code and (ii) duly completed copies
of  Internal Revenue Service Form W-8BEN,
or


 


(iv)          any other form prescribed by Requirements of Law as a basis for
claiming exemption from or a reduction in United States Federal withholding tax
duly completed together with such supplementary documentation as may be
prescribed by Requirements of Law to permit the Credit Parties to determine the
withholding or deduction required to be made.


 


(g)           Treatment
of Certain Refunds. If the
Administrative Agent or a Lender determines, in its reasonable discretion, that
it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which the Credit Parties have
paid additional amounts pursuant to this Section, it shall pay to the Credit
Parties an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Credit Parties under this
Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent or such Lender,
as the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided
that the Credit Parties, upon the request of the Administrative Agent or such
Lender agrees to repay the amount paid over to the Credit Parties (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender, in the event the
Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require the Administrative
Agent, or any Lender to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Credit
Parties or any other Person.


 


The
provisions of this Section shall survive the termination of this Agreement and
the payment in full of the Obligations.


 


65

















 


Section 2.15         Illegality.


 


Notwithstanding any other provision of this Credit
Agreement, if any Change in Law shall make it unlawful for such Lender or its
LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated by
this Credit Agreement or to obtain in the interbank eurodollar market through
its LIBOR Lending Office the funds with which to make such Loans, (a) such
Lender shall promptly notify the Administrative Agent and the Borrowers
thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans
or continue LIBOR Rate Loans as such shall forthwith be suspended until the
Administrative Agent shall give notice that the condition or situation which
gave rise to the suspension shall no longer exist, and (c) such Lender’s Loans
then outstanding as LIBOR Rate Loans, if any, shall be converted on the last
day of the Interest Period for such Loans or within such earlier period as
required by Requirements of Law as Alternate Base Rate Loans. The Borrowers hereby
agree to promptly pay any Lender, upon its demand, any additional amounts
necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to, any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder. A certificate (which
certificate shall include a description of the basis for the computation) as to
any additional amounts payable pursuant to this Section submitted by such
Lender, through the Administrative Agent, to the Borrowers shall be conclusive
in the absence of manifest error.


 


Section 2.16         Obligations Absolute.


 


Except
as set forth to the contrary in the Credit Documents, all sums payable by the Credit
Parties hereunder or under the Credit Documents shall be paid without notice,
demand, counterclaim, setoff, deduction or defense (as to any Person or any
reason whatsoever) and without abatement, suspension, deferment, diminution or
reduction (as to any Person or any reason whatsoever), and the obligations and
liabilities of each Credit Party hereunder shall in no way be released,
discharged or otherwise affected (except as expressly provided herein) by
reason of:  (a) any damage to or
destruction of or any taking of any asset, any Property, any Collateral or any
portion of the foregoing; (b) any restriction or prevention of or
interference with any use of any asset, any Property, any Collateral or any
portion of the foregoing; (c) any title defect or encumbrance or any
eviction from any Property, by title paramount or otherwise; (d) any
Insolvency Proceeding relating to any Credit Party, any Affiliate or Subsidiary
of the foregoing or any Obligor, account debtor or indemnitor under the
Collateral, or any action taken with respect to this Agreement or any other Credit
Document by any trustee or receiver of any Credit Party, any Affiliate or Subsidiary
of the foregoing or any Obligor, account debtor or indemnitor under the
Collateral, or by any court, in any such proceeding; (e) any claim that
any Credit Party has or might have against the Administrative Agent, any Lender
and/or any Indemnitee; (f) any default or failure on the part of the
Administrative Agent, any Lender and/or any Indemnitee to perform or comply
with any of the terms hereof, the Credit Documents or of any other agreement
with any Credit Party, any Subsidiary or Affiliate of the foregoing and/or any
other Person; (g) the invalidity or unenforceability of any Collateral or Loan;
(h) anything related to or arising out of any Credit-Party-Related
Obligation; or (i) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not any Credit Party or any Affiliate
or Subsidiary of the foregoing shall have notice or knowledge of any of the
foregoing.


 


Section 2.17         Replacement of Lenders.


 


(a)           Designation of a Different Lending Office. If any Lender requests compensation under
Section 2.12 or Section 2.15, or requires the Borrowers to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.14, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its 


 


66

















 


offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.12, Section 2.14 or
Section 2.15, as the case may be, in the future and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.


 


(b)           Replacement of Lenders. If any Lender requests compensation under
Section 2.12 or Section 2.15, or if the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.14, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrowers may, at their sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by,
Section 10.6), all of its interests, rights and obligations under this
Agreement and the related Credit Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts
such assignment), provided that:


 


(i)            such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Credit Documents (including any amounts under Section 2.13) from
the assignee (to the extent of such outstanding principal and accrued interest
and fees) or the Borrowers (in the case of all other amounts);


 


(ii)           in the case of any such assignment resulting from a claim for
compensation under Section 2.12 or Section 2.15 or payments required to be
made pursuant to Section 2.14, such assignment will result in a reduction
in such compensation or payments thereafter; and


 


(iii)          such assignment does not conflict with applicable law.


 


A Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES


 


To induce the Lenders to enter into this Agreement
and to make the Extensions of Credit herein provided for, the Credit Parties
hereby represent and warrant, as of the date of this Agreement and on any date
a Loan is made hereunder and at all times while any Credit Document or any Loan
is in full force and effect, to the Administrative Agent and to each Lender
that:


 


Section 3.1            Financial Condition.


 


The
audited consolidated balance sheet of NorthStar Corp and its Consolidated
Subsidiaries as of the fiscal year ending December 31, 2006, provided to
the Administrative Agent and the related audited consolidated statements of
income and retained earnings and of cash flows for the year then ended, setting



 


67

















 


forth
in each case in comparative form the figures for the previous year, reported on
without a “going concern” or like qualification arising out of the scope of the
audit conducted by Grant Thornton, copies of which have heretofore been
furnished to the Administrative Agent, are complete and correct and present
fairly in all material respects the consolidated financial condition of
NorthStar Corp and its Consolidated Subsidiaries of the foregoing as of such
date, and the consolidated results of their operations and their consolidated
cash flows for the fiscal year then ended. All such financial statements,
including the related schedules and notes thereto (if any), have been prepared
in accordance with GAAP applied consistently throughout the periods involved
(except as disclosed therein). Neither NorthStar Corp nor any of its Consolidated
Subsidiaries had, as of the date of the most recent balance sheet referred to
above, any material contingent liability or liability for taxes, or any long
term lease or unusual forward or long term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other financial derivative, that is not reflected in the foregoing
statements or in the notes thereto. Except as otherwise disclosed publicly,
during the period from December 31, 2006, to and including the date
hereof, there has been no sale, transfer or other disposition by the Borrowers,
the Guarantor or any Consolidated Subsidiaries of the foregoing of any material
part of their business or Property and no purchase or other acquisition of any
business or Property (including any Equity Interests of any other Person)
material in relation to the consolidated financial condition of the Borrowers,
the Guarantor or any Consolidated Subsidiaries of the foregoing on the date
hereof.


 


Section 3.2            No Material Adverse Effect.


 


Since  December 31,
2006 (and, in addition, after delivery of annual audited financial
statements in accordance with Section 5.1(a), from the date of the most
recently delivered annual audited financial statements), there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.


 


Section 3.3            Corporate Existence;
Compliance with Law.


 


Each of the Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, organization or formation, (b) has the
requisite power and authority and the legal right to own, operate and pledge
all its Property, to lease the Property it operates as lessee and to conduct
the business in which it is currently engaged and has taken all actions
necessary to maintain all rights, privileges, licenses and franchises necessary
or required in the normal conduct of its business, (c) is duly qualified
to conduct business and in good standing under the laws of (i) the
jurisdiction of its organization or formation, (ii) the jurisdiction where
its chief executive office is located and (iii) each other jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification, (d) is in compliance with all
Requirements of Law (including, without limitation, all government permit and
licensing requirements), Authority Documents, government permits and government
licenses and (e) is in material compliance with all Contractual Obligations,
Indebtedness and Guarantee Obligations. The jurisdiction of incorporation or
organization, as applicable, and the chief executive office of each of the
Credit Parties are listed on Schedule 3.3 along with each Credit Parties
chief executive office. The Borrowers shall update Schedule 3.3
from time to time, in accordance with Section 5.2, to update information
and to add Additional Credit Parties.


 


Section 3.4            Corporate Power;
Authorization; Enforceable Obligations.


 


Each of the Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company,
partnership or corporate action to authorize the execution, delivery and
performance by it of the Credit Documents to which it is party. Each Credit
Document to which it is a party has been duly executed and delivered on behalf
of each Credit Party. Each Credit Document to which it is a party constitutes a
legal, 


 


68

















 


valid
and binding obligation of each Credit Party, enforceable against such Credit
Party in accordance with its terms, except as enforceability may be limited by
applicable Insolvency Laws and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).


 


Section 3.5            No Legal Bar; No Default.


 


The execution, delivery and performance by each
Credit Party of the Credit Documents to which such Credit Party is a party, the
borrowing of Loans hereunder, pledge of Collateral under the Credit Documents
and the use of the proceeds of the Loans (a) will not violate any Requirement
of Law, (b) will not conflict with, result in a breach of or constitute a
default under Authority Documents of the Credit Parties or any Contractual
Obligation, Indebtedness or Guarantee Obligations of any Credit Party (except
those as to which waivers or consents were obtained) or any material approval
or material consent from any Governmental Authority relating to such Credit
Party, and (c) will not result in, or require, the creation or imposition
of any Lien on any Credit Party’s Properties or revenues pursuant to any Requirement
of Law, Contractual Obligations, Indebtedness or Guarantee Obligations other
than the Liens arising under or contemplated in connection with the Credit
Documents or Permitted Liens. No Credit Party is in default under or with
respect to any of its Contractual Obligation, Indebtedness or Guarantee
Obligations in any material respect. No Default or Event of Default has
occurred and is continuing.


 


Section 3.6            No Material Litigation.


 


No litigation, investigation, claim, criminal
prosecution, civil investigative demand, imposition of criminal or civil fines
and penalties, or any other proceeding of or before any arbitrator or
Governmental Authority is pending or, to the actual knowledge of the Credit
Parties, threatened by or against any Credit Party or any of its Subsidiaries
or Affiliates or against any of its or their respective properties or revenues
(a) with respect to the Credit Documents, any Extension of Credit, any
Collateral or any of the transactions contemplated hereby, or (b) which
could reasonably be expected to have a Material Adverse Effect. No permanent
injunction, temporary restraining order or similar decree has been issued
against any Credit Party or any of its Subsidiaries or Affiliates, which could
reasonably be expected to have a Material Adverse Effect.


 


Section 3.7            Investment Company Act; Federal
Power Act; Interstate Commerce Act; and Federal and State Statutes and
Regulations.


 


No Credit Party is required to register as an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the 40 Act. No Credit Party is subject to regulation under the
Federal Power Act, the Interstate Commerce Act, or any federal or state statute
or regulation limiting its ability to incur the Obligations.


 


Section 3.8            Margin Regulations.


 


No
part of the proceeds of any Extension of Credit hereunder will be used directly
or indirectly for any purpose that violates, or that would require any Lender
to make any filings in accordance with, the provisions of Regulation T, U
or X of the Board of Governors of the Federal Reserve System as now and from
time to time hereafter in effect. The Credit Parties (a) are not engaged,
principally or as one of their important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” “margin stock”
within the respective meanings of each of such terms under Regulation U and
(b) taken as a group do not own “margin stock”. No Borrower is subject to
any Requirement of Law that purports to restrict or regulate its ability to
borrow money.


 


69

















 


Section 3.9            ERISA.


 


(a)  No Credit
Party has established nor maintained any Plan; and (b) each Credit Party either
(1) qualifies as an Operating Company; (2) complies with an exception set forth
in the Plan Asset Regulations such that the assets of such Person would not be
subject to Title I of ERISA or Section 4975 of the Internal Revenue Code; or
(3) does not hold any Plan Assets that are subject to ERISA.


 


Section 3.10         Environmental Matters.


 


Except
as could not reasonably be expected to have a Material Adverse Effect:


 


(a)           The Properties owned, leased or operated by the Credit Parties do not
contain any Materials of Environmental Concern in amounts or concentrations
which (i) constitute a violation of, or (ii) could reasonably give
rise to liability on behalf of any Credit Party under, any Environmental Law.


 


(b)           The Properties and all operations of the Credit Parties at the
Properties are in compliance, and have in the last five years been in
compliance, in all material respects with all applicable Environmental Laws,
and none of the Credit Parties and to the actual knowledge of the Credit
Parties, no other Person has caused any contamination at, under or about the
Properties.


 


(c)           No Credit Party has received any written or actual notice of violation,
alleged violation, non-compliance, liability or potential liability on behalf
of any Credit Party with respect to environmental matters or Environmental Laws
regarding any of the Properties, nor do the Credit Parties have actual knowledge
or reason to believe that any such notice will be received or is being
threatened.


 


(d)           None of the Credit Parties, and to the actual knowledge of the Credit
Parties, no other Person has transported or disposed of from the Properties in
violation of, or in a manner or to a location that could give rise to liability
on behalf of any Credit Party under any Environmental Law, and no Materials of
Environmental Concern have been generated, treated, stored or disposed of at,
on or under any of the Properties in violation of, or in a manner that could
reasonably be expected to give rise to liability on behalf of any Credit Party
under, any applicable Environmental Law.


 


(e)           No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Credit Parties, threatened, under any
Environmental Law to which any Credit Party is or will be named as a party with
respect to the Properties, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect
to the Properties.


 


(f)            There has been no release or to the actual
knowledge of the Credit Parties, threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of any Credit Party in connection with the Properties, in
violation of or in amounts or in a manner that could give rise to liability on
behalf of any Credit Party under Environmental Laws.


 


70

















 


Section 3.11         Use of Proceeds.


 


The proceeds of the Extensions of Credit shall be
used by the Borrowers (a) to acquire or finance Eligible Assets and (b) subject
to Section 3.8, for other general corporate purposes.


 


Section 3.12         Subsidiaries; Joint
Ventures; Partnerships.


 


The
organizational chart attached as Schedule 3.12 sets forth the name of
each Consolidated Subsidiary of each Credit Party. The Borrowers are
Subsidiaries of the Guarantors. The Borrowers do not have any Subsidiaries.


 


Section 3.13         Ownership.


 


Each
of the Borrowers is the owner of, and has good and marketable title to or a
valid leasehold interest in, all of its respective Properties that constitute
Collateral. None of the Collateral is subject to any Lien other than Permitted
Liens.


 


Section 3.14         Indebtedness.


 


Except
as otherwise permitted under Section 6.1, the Borrowers have no Indebtedness or
Guarantee Obligations. To each Borrower’s knowledge, no material defaults or
events of default exist under the Indebtedness permitted under Section 6.1.


 


Section 3.15         Taxes.


 


Each
of the Credit Parties has filed, or caused to be filed, all income tax returns
and all other material tax returns (federal, state, local and foreign) required
to be filed and paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) that are not yet delinquent or (ii) that are being
contested in good faith and by proper proceedings, and against which adequate
reserves are being maintained in accordance with GAAP. None of the Credit
Parties is aware of any proposed tax assessments against it.


 


Section 3.16         Solvency.


 


No
Credit Party is the subject of any Insolvency Proceeding or Insolvency Event. The
Loans under this Agreement and any other Credit Document do not and will not
render any Credit Party not Solvent. The Credit Parties are not entering into
the Credit Documents or any Extension of Credit with the intent to hinder,
delay or defraud any creditor of the Credit Parties or any Subsidiary and the Credit
Parties have received or will receive reasonably equivalent value for the
Credit Documents and each Extension of Credit.


 


Section 3.17         [Reserved].


 


Section 3.18         Location.


 


Each
Credit Parties’ location (within the meaning of Article 9 of the UCC) is
set forth on Schedule 3.18. The office where each Credit Party keeps all
the records (within the meaning of Article 9 of the UCC) is at the address
set forth on Schedule 3.18 to this Agreement (or at such other locations
as to 


 


71

















 


which
the notice and other requirements specified in Section 10.2 shall have been
satisfied). Each Credit Party’s organizational identification number and tax
identification number is as set forth in the Fee Letter.


 


Section 3.19         No Burdensome Restrictions.


 


None
of the Credit Parties or their Subsidiaries or Affiliates is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any Requirement of Law which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.


 


Section 3.20         Brokers’ Fees.


 


None
of the Credit Parties or their Subsidiaries or Affiliates has any obligation to
any Person in respect of any finder’s, broker’s, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Agreement and as set forth in the Fee Letter.


 


Section 3.21         [Reserved].


 


Section 3.22         Accuracy and Completeness of
Information.


 


To
each Credit Parties’ actual knowledge, the information, reports, certificates,
documents, financial statements, books, records, files, exhibits and schedules
furnished in writing by or on behalf of each Credit Party to the Administrative
Agent in connection with the negotiation, preparation or delivery of this
Agreement and the other Credit Documents or included herein or therein or
delivered pursuant hereto or thereto, when taken as a whole, do not contain any
untrue statement of material fact or omit to state any material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading. All written information furnished after
the date hereof by or on behalf of each Credit Party to the Administrative
Agent and the Lenders in connection with this Agreement and the other Credit
Documents and the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect, or (in the case of
projections) based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to a Responsible
Officer of any Credit Party, after due inquiry, that could reasonably be
expected to have a Material Adverse Effect that has not been disclosed to the
Administrative Agent. All projections furnished on behalf of each Credit Party
to the Administrative Agent were prepared and presented in good faith by or on
behalf of each Credit Party.


 


Section 3.23         [Reserved].


 


Section 3.24         Insurance.


 


Each
Credit Party has and maintains, with respect to its Properties and business,
insurance which meets the requirements of Section  5.5.


 


Section 3.25         Security Documents.


 


The
Security Documents create valid security interests in, and Liens on, the
Collateral purported to be covered thereby. Except as set forth in the Security
Documents, such security interests and Liens are currently (or will be, upon
(a) the filing of appropriate financing statements with the Secretary of
State of the state of incorporation or organization for each Credit Party, in
each case in favor of the Administrative Agent, on behalf of the Lenders, and
(b) the Administrative Agent obtaining control  or possession over those items of Collateral
in which a security interest is perfected through control or 


 


72

















 


possession)
perfected security interests and Liens, prior to all other Liens other than
Permitted Liens. None of the Credit Parties nor any Person claiming through or
under any Credit Party shall have any claim to or interest in the Collection
Account or the Security Account Control Agreement, except for the interest of
the Borrowers in such property as a debtor for purposes of the UCC.


 


Section 3.26         Anti-Terrorism Laws.


 


Neither any Credit Party nor any of its Subsidiaries is
an “enemy” or an “ally of the enemy” within the meaning of Section 2 of
the Trading with the Enemy Act of the United States of America (50 U.S.C. App.
§§ 1 et seq.), as amended. Neither any Credit
Party nor any or its Subsidiaries is in violation of (a) the Trading with
the Enemy Act, as amended, (b) any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto or (c) the Patriot Act. None of the Credit Parties or any
Subsidiary of any Credit Party (i) is a blocked person described in Section 1 of the
Anti-Terrorism Order or (ii) to the best of its knowledge, engages in any
dealings or transactions, or is otherwise associated, with any such blocked
person.


 


Section 3.27         Compliance with OFAC Rules
and Regulations.


 


(a)           None
of the Credit Parties or their Subsidiaries is in violation of and shall not
violate any of the country or list based economic and trade sanctions
administered and enforced by OFAC that are described or referenced at
http://www.ustreas.gov/offices/enforcement/ofac/ or as otherwise published from
time to time.


 


(b)           None
of the Credit Parties or their Subsidiaries (i) is a Sanctioned Person or
a Sanctioned Entity, (ii) has a more than 10% of its assets located in
Sanctioned Entities, or (iii) derives more than 10% of its operating
income from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities. The proceeds of any Loan will not be used and have not
been used to fund any operations in, finance any investments or activities in
or make any payments to, a Sanctioned Person or a Sanctioned Entity.


 


Section 3.28         Compliance with FCPA.


 


Each
of the Credit Parties and their Subsidiaries is in compliance with the Foreign
Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and
any foreign counterpart thereto. None of the Credit Parties or their
Subsidiaries has made a payment, offering, or promise to pay, or authorized the
payment of, money or anything of value (a) in order to assist in obtaining
or retaining business for or with, or directing business to, any foreign
official, foreign political party, party official or candidate for foreign
political office, (b) to a foreign official, foreign political party or
party official or any candidate for foreign political office, and (c) with
the intent to induce the recipient to misuse his or her official position to
direct business wrongfully to such Credit Party or its Subsidiary, its
Affiliates or to any other Person, in violation of the Foreign Corrupt
Practices Act, 15 U.S.C. §§ 78dd-1, et seq.


 


Section 3.29         Consent; Governmental
Authorizations.


 


No
approval, consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with acceptance of Extensions of Credit by the Borrowers or the
making of the Guaranty or with the execution, delivery or performance of any
Credit Document by the Credit Parties (other than those which have been
obtained) or with the validity or 


 


73

















 


enforceability
of any Credit Document against the Credit Parties (except such filings as are
necessary in connection with the perfection of the Liens created by such Credit
Documents).


 


Section 3.30         Bulk Sales.


 


The
execution, delivery and performance of this Agreement, the Credit Documents and
the transactions contemplated hereby do not require compliance with any “bulk
sales” act or similar law by any Credit Party.


 


Section 3.31         Income and Required Payments.


 


Each
Credit Party acknowledges that all Income and Required Payments received, after
the Closing Date, by it or its Affiliates or its Subsidiaries or any Person
acting on its behalf with respect to the Collateral shall be held for the
benefit of the Administrative Agent until deposited into the Collection Account
as required herein.


 


Section 3.32         Full Payment.


 


No
Credit Party has any knowledge of any fact that should lead it to expect that
each Loan will not be paid in full.


 


Section 3.33         Irrevocable Instructions.


 


The
Borrowers have delivered each Irrevocable Instruction required to be delivered
by the terms of this Agreement. The Credit Parties are not aware of any
Required Payment that has been made after the date of this Agreement but has
not been deposited into the Collection Account. No Irrevocable Instruction
violates any Requirement of Law, any Contractual Obligation or other
prohibition and such Irrevocable Instructions are the valid and binding
obligations of the parties thereto.


 


Section 3.34         Compliance with Covenants.


 


The
Credit Parties are in full compliance with the Financial Covenants and all Credit
Parties are in full compliance with all other applicable covenants, duties and
agreements contained in the Credit Documents.


 


Section 3.35         Collateral Agreements.


 


The
Credit Parties have delivered to the Administrative Agent or the Custodian all
documents and agreements related to, governing or affecting the Collateral,
including, without limitation, the Mortgage Loan Documents, the Servicer Agreements,
the Pooling and Servicing Agreements and all public documents relating to any
Debt Issuance or Equity Issuance, and, to the best of the Borrowers’ knowledge,
no material default or event of default exists thereunder.


 


Section 3.36         No Reliance.


 


Each
Credit Party has made its own independent decisions to enter into the Credit
Documents and each Loan and as to whether such Loan is appropriate and proper
for it based upon its own judgment and upon advice from such advisors
(including, without limitation, legal counsel and accountants) as it has deemed
necessary. No Credit Party is relying upon any advice from the Administrative
Agent or any Lender as to any aspect of the Loans, including, without
limitation, the legal, accounting or tax treatment of such Loans.


 


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Section 3.37         Collateral.


 


(a)
There are no outstanding rights, options, warrants or agreements for the
purchase, sale or issuance of the Collateral created by, through, or as a
result of any Credit Party’s actions or inactions; (b) there are no
agreements on the part of any Credit Party to issue, sell or distribute the
Collateral, other than this Agreement and the Credit Documents; and (c) no Credit
Party has any obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any securities or any interest therein or to pay any dividend
or make any distribution in respect of the Collateral, except, in the case of
(a) and (b), for purchase rights that may be contained in any applicable
intercreditor agreement included in the Mortgage Asset File.


 


Section 3.38         REIT Status.


 


Subject
to Section 5.20, NorthStar Corp qualifies as a REIT and is listed on and is in
good standing with a national recognized securities exchange.


 


Section 3.39         Insider.


 


No
Credit Party is an “executive officer”, “director”, or “person who directly or
indirectly or acting through or in concert with one or more persons owns,
controls, or has the power to vote more than 10% of any class of voting
securities” (as those terms are defined in 12 U.S.C. § 375(b) or in
regulations promulgated pursuant thereto) of any Lender, of a bank holding company
of which any Lender is a Subsidiary, or of any Subsidiary of a bank holding company
of which any Lender is a Subsidiary, of any bank at which any Lender maintains
a correspondent account or of any Lender which maintains a correspondent
account with any Lender.


 


Section 3.40         No Defenses.


 


To
the actual knowledge of the Credit Parties, there are no defenses, offsets,
counterclaims, abatements, rights of rescission or other claims, legal or
equitable, available to any Credit Party with respect to this Agreement, the
Credit Documents, the Collateral or any other instrument, document and/or
agreement described herein or in the other Credit Documents, or with respect to
the obligation of the Credit Parties to repay the Obligations or any other
obligation under the Credit Documents.


 


Section 3.41         [Reserved].


 


Section 3.42         Value Given.


 


To
the extent a Borrower acquired Mortgage Assets, such Borrower shall have given
reasonably equivalent value to each transferor in consideration for such
transfer to such Borrower, no such transfer shall have been made for or on
account of an antecedent debt owed by the transferor thereunder to such Borrower,
and no such transfer is or may be voidable or subject to avoidance under any
section of the Bankruptcy Code.


 


Section 3.43         Separateness.


 


As
of the date hereof, each Borrower is in compliance with the requirements of Section
5.24.


 


75

















 


Section 3.44         Qualified Transferees.


 


With
respect to each Mortgage Asset, each Borrower and any national bank are “qualified
transferees”, “qualified institutional lenders” or “qualified lenders” (however,
such terms are phrased or denominated) under the terms of the applicable
Mortgage Loan Documents with respect to each party’s ability to hold and/or to
be a pledgee and/or transferee of each such Mortgage Asset. The Assignments and
the pledge of the Mortgage Assets to the Administrative Agent, on behalf of the
Lenders, do not violate any provisions of the underlying Mortgage Loan
Documents, subject to any post-pledge obligations set forth in such Mortgage
Loan Documents.


 


Section 3.45         Eligibility of Mortgage
Assets.


 


With
respect to each Mortgage Asset, such asset is an Eligible Asset and, except as
disclosed to the Administrative Agent in a Confirmation, the eligibility
criteria under Schedule 1.1(c) is true and correct in all material
respects, except as disclosed to the Administrative Agent.


 


Section 3.46         Ability to Perform.


 


None
of the Credit Parties believes, or has any reason or cause to believe, that it
cannot perform each and every agreement, duty, obligation and covenant
contained in the Credit Documents applicable to it and to which it is a party. None
of the Credit Parties is subject to any restriction which would unduly burden
its ability to timely and fully perform each and every applicable covenant,
duty, obligation and agreement contained in the Credit Documents and/or the
Mortgage Loan Documents. None of the Credit Parties is a party to any agreement
or instrument or subject to any restriction which could reasonably be expected
to have a Material Adverse Effect.


 


Section 3.47         Certain Tax Matters.


 


Each
Borrower represents and warrants, and acknowledges and agrees, that it does not
intend to treat the Loans and the related transactions hereunder as being a “reportable
transaction” (within the meaning of United States Treasury Department
Regulation Section 1.60114). In the event a Borrower determines to take any
action inconsistent with such intention, it will promptly notify the Administrative
Agent and the Lenders. If a Borrower so notifies the Administrative Agent and
the Lenders, the Borrowers acknowledge and agree that the Administrative Agent
and the Lenders may treat the Loans as part of a transaction that is subject to
United States Treasury Department Regulation Section 301.61121, and the
Administrative Agent and the Lenders will maintain the lists and other records
required by such Treasury Regulation.


 


Section 3.48         Set-Off, etc.


 


No
Collateral has been compromised, adjusted, extended, satisfied, subordinated,
rescinded, set-off or modified by the Credit Parties or, to the Credit Party’s
actual knowledge, any obligor thereof, and no Collateral is subject to
compromise, adjustment, extension (except as set forth in the related documents
provided to the Administrative Agent), satisfaction, subordination, rescission,
set-off, counterclaim, defense, abatement, suspension, deferment, deduction,
reduction, termination or modification, whether arising out of transactions
concerning the Collateral or otherwise, by the Credit Parties or, to the Credit
Party’s actual knowledge, any obligor with respect thereto.


 


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Section 3.49         Interest Rate Protection
Agreements.


 


The
Borrowers and the Guarantors represent and warrant that no “default” has
occurred or is continuing under any Interest Rate Protection Agreement to which
it is a party.


 


Section 3.50         Representations and
Warranties.


 


The
representations and warranties contained herein, required by or identified in
this Agreement and the other Credit Documents and the review and inquiries made
on behalf of the Credit Parties in connection therewith have all been made by
Persons having the requisite expertise, knowledge and background to provide such
representations and warranties. On the Borrowing Date for each Extension of
Credit and on each day that Collateral remains subject to this Agreement and
the Credit Documents, the Credit Parties shall be deemed to restate and make
each of the representations and warranties made by it in this Article III of
this Agreement.


 


ARTICLE IV


 


CONDITIONS PRECEDENT


 


Section 4.1            Conditions to Closing Date.


 


This
Agreement shall become effective upon the satisfaction of the following
conditions precedent:


 


(a)           Execution
of Credit Agreement; Credit Documents and Lender Consents. The Administrative Agent shall have
received (i) counterparts of this Agreement, executed by a duly authorized
officer of each party hereto, (ii) for the account of each Revolving Lender
requesting a promissory note, a Revolving Note, (iii) for the account of each Term
Loan Lender requesting a promissory note, a Term Loan Note, (iv) counterparts
of the Security Documents, in each case conforming to the requirements of this
Agreement and executed by duly authorized officers of the Credit Parties or
other Person, as applicable, (vi) counterparts of any other Credit
Document, executed by the duly authorized officers of the parties thereto and
(vii) to the extent Lenders other than Wachovia, become party to this
Agreement on the Closing Date, executed consents, in the form of Exhibit
4.1(a), from each such Lender authorizing the Administrative Agent to enter
this Credit Agreement on their behalf.


 


(b)           Authority
Documents. The
Administrative Agent shall have received the following:


 


(i)            Authority
Documents. Original
certified Authority Documents of each Credit Party certified (A) by a
Responsible Officer of such Credit Party (pursuant to the Closing Officer’s Certificate)
as of the Closing Date to be true and correct and in force and effect as of
such date, and (B) in the case of the articles of incorporation, certificates
of formation or other Authority Documents filed with a Governmental Authority, to
be true and complete as of a recent date by the appropriate Governmental
Authority of the state of its incorporation or organization, as applicable.


 


(ii)           Resolutions. Copies of resolutions of the board of
directors or comparable managing body of each Credit Party approving and
adopting the Credit Documents, the transactions contemplated therein and
authorizing execution and delivery 


 


77

















 


thereof,
certified by a Responsible Officer of such Credit Party (pursuant to the
Closing Officer’s Certificate) as of the Closing Date to be true and correct
and in force and effect as of such date.


 


(iii)          Good
Standing. Original
certificates of good standing, existence or its equivalent with respect to each
Credit Party certified as of a recent date by the appropriate Governmental
Authorities of the state of incorporation or organization and each other state
in which the failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect.


 


(iv)          Incumbency. An incumbency certificate of each Credit
Party certified by a Responsible Officer (pursuant to the Closing Officer’s Certificate)
to be true and correct as of the Closing Date.


 


(c)           Legal
Opinion of Counsel. The
Administrative Agent shall have received one (1) or more Opinions of Counsel
(including, if requested by the Administrative Agent, local counsel opinions) of
counsel for the Credit Parties, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, in form and substance reasonably acceptable
to the Administrative Agent (which shall include, without limitation, opinions
with respect to the due organization and valid existence of each Credit Party,
opinions as to perfection of the Liens granted to the Administrative Agent
pursuant to the Security Documents and opinions as to the non-contravention of
the Credit Parties’ organizational documents and material contracts).


 


(d)           Personal
Property Collateral. The
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent:


 


(i)            (A) searches
of UCC filings in the jurisdiction of incorporation or formation, as applicable,
of each Credit Party, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist (or the same have been
appropriately terminated) other than Permitted Liens and (B) tax lien,
judgment and pending litigation searches, the results of which shall be
acceptable to the Administrative Agent in its discretion;


 


(ii)           completed
UCC financing statements for each appropriate jurisdiction as is necessary, in
the Administrative Agent’s discretion, to perfect the Administrative Agent’s
security interest in the Collateral;


 


(iii)          to
the extent applicable, stock or membership certificates, if any, evidencing the
Equity Interests pledged to the Administrative Agent pursuant to the Pledge
Agreements and duly executed in blank undated stock or transfer powers;


 


(iv)          duly
executed consents as are necessary, in the Administrative Agent’s discretion,
to perfect the Lenders’ security interest in the Collateral;


 


(v)           all
Instruments and chattel paper in the possession of any of the Credit Parties,
together with allonges or assignments as may be necessary or appropriate to
perfect the Administrative Agent’s and the Lenders’ security interest in the
Collateral;


 


(vi)          the Account
Control Agreement and the Securities Account Control Agreement; and


 


78

















 


(vii)         if
applicable, executed control agreements necessary to perfect any Collateral
where the perfection thereof is by control.


 


(e)           [Reserved].


 


(f)            Account
Designation Notice. The
Administrative Agent shall have received the executed Account Designation
Notice in the form of Exhibit 1.1(a) hereto.


 


(g)           Notice
of Borrowing. The
Administrative Agent shall have received a Notice of Borrowing with respect to
the Loans to be made on the Closing Date, together with all other documents,
agreements or instruments required by Section 4.2.


 


(h)           Consents. The Administrative Agent shall have
received evidence that all boards of directors, governmental, shareholder and
material third party consents and approvals necessary in connection with the
Transactions have been obtained and all applicable waiting periods have expired
without any action being taken by any authority that could restrain, prevent or
impose any material adverse conditions on such transactions or that could seek
or threaten any of the foregoing.


 


(i)            Compliance
with Laws. The financings
and other Transactions contemplated hereby shall be in compliance with all Requirements
of Law (including all applicable Securities Laws and banking laws, rules and
regulations).


 


(j)            Bankruptcy. There shall be no Insolvency Proceedings pending
with respect to any Credit Party.


 


(k)           [Reserved.]


 


(l)            Financial
Statements. The
Administrative Agent and the Lenders shall have received copies of the
financial statements referred to in Section 3.1, as filed with the SEC.


 


(m)          No
Material Adverse Change. No
Material Adverse Effect shall have occurred.


 


(n)           [Reserved].


 


(o)           Patriot
Act Certificate. At least
five (5) Business Days prior to the Closing Date,  the
Administrative Agent shall have received a certificate satisfactory thereto,
substantially in the form of Exhibit 4.1(o), for benefit of itself
and the Lenders, provided by the Credit Parties that sets forth information
required by the Patriot Act including, without limitation, the identity of the Credit
Parties, the name and address of the Credit Parties and other information that
will allow the Administrative Agent or any Lender, as applicable, to identify
the Credit Parties in accordance with the Patriot Act.


 


(p)           [Reserved].


 


(q)           Power
of Attorney. The
Administrative Agent shall have received duly executed powers of attorney in
the form attached as Exhibit 4.1(q)(i) and Exhibit 4.1(q)(i),
as applicable, from each Borrower and each Pledgor under a Pledge Agreement.


 


(r)            Fees
and Expenses. The
Administrative Agent and the Lenders shall have received all fees and expenses,
if any, owing pursuant to the Fee Letter and Section 2.3.


 


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(s)           Additional
Matters. All other documents
and legal matters in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably satisfactory in
form and substance to the Administrative Agent and its counsel.


 


Section 4.2            Conditions to All Extensions
of Credit.


 


 (a) The
obligation of each Lender to make any Extension of Credit hereunder, including
the obligation of each Lender to make the Term Loan on the Funding Date and (b)
the pledge by any Borrower of any Collateral, in each case is subject to the
following conditions:


 


(a)           Representations
and Warranties. The
representations and warranties made by the Credit Parties herein, in the Credit
Documents, in any schedule to the Credit Documents, in the Mortgage Documents
and which are contained in any certificate, document, report or notice
furnished at any time under or in connection herewith or the other Credit
Documents shall (i) with respect to representations and warranties that
contain a materiality qualification, be true and correct and (ii) with
respect to representations and warranties that do not contain a materiality
qualification, be true and correct in all material respects, in each case on
and as of the date of such Extension of Credit as if made on and as of such
date.


 


(b)           No
Default or Event of Default.
No Default or Event of Default shall have occurred and be continuing on such
date or after giving effect to the Extension of Credit to be made on such date
unless such Default or Event of Default shall have been waived in accordance
with this Agreement.


 


(c)           Compliance
with Commitments. Before and
immediately after giving effect to the making of any Revolving Loan (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans shall not exceed  the Revolving Committed Amount then in effect, (ii) the Availability
shall not be negative and (iii) the aggregate principal amount of outstanding
Revolving Loans would not exceed the Available Borrowing Capacity. Before and
immediately after giving effect to the making of any Delayed Draw Term Loan
(and the application of the proceeds thereof), the sum of all Term Loans drawn
as Delayed Draw Term Loans shall not exceed $94,388,779.00 (i.e. the initial
Delayed Draw Term Loan Committed Amount).


 


(d)           Additional
Conditions to Revolving Loans.
If a Revolving Loan is requested, all requirements and conditions set forth in
Section 2.1 or other applicable Sections of this Agreement shall have been
satisfied.


 


(e)           Requirement
of Law. No Requirement of
Law shall prohibit or render it unlawful, and no order, judgment or decree of
Governmental Authority shall prohibit, enjoin or render it unlawful, to enter
into such Extension of Credit in accordance with the provisions hereof or any
other transaction contemplated herein.


 


(f)            Confirmation. The Borrowers shall have delivered a
Confirmation, via Electronic Transmission, in accordance with the procedures
set forth in Sections 2.1 and 2.2, and the Administrative Agent shall have
determined that the Mortgage Asset described in such Confirmation is an
Eligible Asset, shall have approved in writing in its discretion the pledge of
the related Eligible Asset (which approval shall be evidenced by the
Administrative Agent’s execution of the related Confirmation) and shall have
obtained all necessary internal credit and other approvals for such Extension
of Credit. With respect to requirements for additional 


 


80

















 


Revolving
Loans on existing Revolving Loan Collateral under Section 2.1(b)(iv), all
requirements and conditions of such Section are satisfied.


 


(g)           Compliance
Certificate. The
Administrative Agent shall have received a Compliance Certificate in the form
of Exhibit 1.1(i) from a Responsible Officer of the Credit Parties.


 


(h)           Due
Diligence. Subject to the
Administrative Agent’s right to perform one or more Due Diligence Reviews
pursuant to Section 10.27, the Administrative Agent shall have completed its
due diligence review of the Mortgage Asset File and the Underwriting Package
for each Mortgage Asset and such other documents, records, agreements,
instruments, mortgaged properties or information relating to such Mortgage
Asset as the Administrative Agent in its discretion deems appropriate to review
and such review shall be satisfactory to the Administrative Agent in its
discretion.


 


(i)            Servicing
Agreements. With respect to
any Eligible Asset to be pledged hereunder on the related Borrowing Date that
is not serviced by a Borrower, the applicable Borrower shall have provided to
the Administrative Agent copies of the related Servicing Agreements and the
Pooling and Servicing Agreements, certified as true, correct and complete
copies of the originals, together with Servicer Redirection Notices fully
executed by the applicable Borrower and the Servicer or PSA Servicer, as
applicable, or such other evidence satisfactory to the Administrative Agent in
its discretion that the applicable Servicer or PSA Servicer has been instructed
to deliver all Income with respect to the Collateral to the Collection Account,
which instructions may not be modified without the Administrative Agent’s prior
written consent.


 


(j)            Fees
and Expenses. The
Administrative Agent shall have received all fees and expenses of the
Administrative Agent, the Lenders and counsel to the Administrative Agent due
hereunder and under the Fee Letter and, to the extent the Borrowers are
required hereunder to reimburse the Administrative Agent for such amounts, the
Administrative Agent shall have received the reasonable costs and expenses
incurred by them in connection with the entering into of any Extension of
Credit hereunder, including, without limitation, costs associated with due
diligence recording or other administrative expenses necessary or incidental to
the execution of any transaction hereunder, which amounts, at the
Administrative Agent’s option, may be withheld from the sale proceeds of any Extension
of Credit hereunder.


 


(k)           Material
Adverse Change. There shall
not have occurred a material adverse change in the financial condition of the
Administrative Agent or any Lender that affects (or can reasonably be expected
to affect) materially and adversely the ability of the Administrative Agent or
any Lender to fund its obligations under this Agreement and no Material Adverse
Effect shall have occurred.


 


(l)            Trust
Receipt.       For each
Non–Table Funded Mortgage Asset, the Administrative Agent shall have received
from the Custodian on or before each Borrowing Date a Trust Receipt (along with
a completed Mortgage Asset File Checklist attached thereto) and an Asset
Schedule and Exception Report with respect to the Basic Mortgage Asset
Documents for each Eligible Asset, in each case dated the Borrowing Date, duly
completed and, in the case of the Asset Schedule and Exception Report, with
exceptions acceptable to the Administrative Agent in its discretion in respect
of Eligible Assets to be pledged hereunder on such Business Day. In the case of
a Table Funded Mortgage Asset, the Administrative Agent shall have received on
the related Borrowing Date the Table Funded Trust Receipt and all other items 


 


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described
in the second (2nd) sentence of Subsection 2.1(b)(6), each in form and
substance satisfactory to the Administrative Agent in its discretion, provided
that the Administrative Agent subsequently receives the items described in Subsections
2.1(b)(4) and (6) and the other delivery requirements under the Custodial
Agreement on or before the date and time specified herein and therein, which
items shall be in form and substance satisfactory to the Administrative Agent
in its discretion. In the case of Term Loans, the Custodian shall have
possession of all Mortgage Loan Documents for the Term Loan Collateral and the
Administrative Agent shall be in receipt of Trust Receipts for the Term Loan
Collateral and all other conditions under the Custodial Agreement are satisfied
with respect to such Term Loan Collateral.


 


(m)          Release
Letters. The Administrative
Agent shall have received from the applicable Borrower a Warehouse Lender’s
Release Letter (or such other form acceptable to the Administrative Agent), if
applicable, or a Borrower’s Release Letter (or such other form acceptable to
the Administrative Agent) covering each Eligible Asset to be pledged to the
Administrative Agent.


 


(n)           Covenants
and Agreements. On and as of
such day, the Credit Parties and the Custodian shall have performed all of the
covenants and agreements and satisfied all other conditions contained in the
Credit Documents to be performed or satisfied by such Person on or prior to
such day.


 


(o)           Irrevocable
Instruction. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that, in connection with any Required Payment, the payor
thereof has been instructed to deliver the Net Cash Proceeds to the Collection
Account, which instructions may not be modified without the prior written consent
of the Administrative Agent, and the Borrowers shall have delivered all notices
and instructions and obtained all certifications, acknowledgments, agreements
and registrations required to perfect any CMBS Security.


 


(p)           Certificates
of Good Standing. If
applicable and to the extent required for the Administrative Agent or any
Lender to assert its rights with respect to an Eligible Asset, a certification
of good standing for the Borrowers in each jurisdiction where the Underlying Mortgaged
Property is located.


 


(q)           Power
of Attorney. To the extent
there are additional Borrowers other than the initial Borrowers, the additional
Borrowers shall each deliver to the Administrative Agent a duly executed power
of attorney in the form attached as Exhibit 4.1(q)(i), a Joinder
Agreement in form and substance satisfactory to the Administrative Agent in its
discretion and all other agreements, documents, certifications, UCC financing
statements and Opinions of Counsel required of the Borrowers hereunder at the
Closing Date or under the Joinder Agreement.


 


(r)            Control
Agreements. With respect to
any Mortgage Asset or collateral for a Mortgage Asset that is an uncertificated
security (as defined in the UCC), securities entitlement (as defined in the
UCC) or is held in a securities account (as defined in the UCC), the Borrower
shall provide to the Administrative Agent a control agreement, which shall be
acceptable to the Administrative Agent in its discretion and shall be delivered
to the Custodian under the Custodial Agreement, executed by the issuer of the
Mortgage Asset or the collateral for the Mortgage Asset or the related
securities intermediary (as defined in the UCC), as applicable, granting
control (as defined in the UCC) of such Mortgage Asset or collateral for such
Mortgage Asset to the Administrative Agent and providing that, after an Event
of Default, the Administrative agent shall be entitled to notify the issuer or
securities intermediary, as applicable, that such issuer or 


 


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securities
intermediary shall comply exclusively with the instructions or entitlement
orders (as defined in the UCC), as applicable, of the Administrative Agent
without the consent of the Borrower or any other Person and no longer follow
the instructions or entitlement orders, as applicable, of the Borrower or any
other Person (other than the Administrative Agent). All of the Borrowers’
right, title and interest in the Mortgage Assets that constitute CMBS
Securities shall be pledged to the Administrative Agent on the applicable
Borrowing Date. The Borrowers shall deliver to the Custodian on behalf of the
Administrative Agent as agent for the Lenders a complete set of all transfer
documents to be completed by the Administrative Agent as agent for the Lenders
and executed copies of any transfer documents to be completed by the applicable
Borrower, in either case in blank, but in form sufficient to allow transfer and
registration of such Mortgage Assets to the Administrative Agent as agent for
the Lenders no later than the proposed Borrowing Date for the relevant Mortgage
Asset, and such CMBS Securities shall be medallion guaranteed. All transfers of
certificated securities from the Borrowers to the Administrative Agent as agent
for the Lenders shall be effected by physical delivery to the Custodian of the
Mortgage Assets (duly endorsed by the applicable Borrower, in blank), together
with a stock power executed by the applicable Borrower, in blank. With respect
to Mortgage Assets that shall be delivered through the DTC or the National Book
Entry System of the Federal Reserve or any similar firm or agency, as
applicable, in book–entry form and credited to or otherwise held in an account,
the Borrowers shall take such actions necessary to provide instruction to the
relevant financial institution, clearing corporation, securities intermediary
or other entity to effect and perfect a legally valid delivery of the relevant
interest granted herein to the Administrative Agent as agent for the Lenders hereunder
to be held in the Securities Account. Mortgage Assets delivered in book–entry
form shall be under the custody of and held in the name of the Administrative
Agent as agent for the Lenders in the Securities Account.


 


(s)           Consents. Any and all consents, approvals and waivers
applicable to the Collateral shall have been obtained.


 


(t)            Custodial
Agreement Insurance. The
Administrative Agent shall be in receipt of the evidence of insurance (if any)
required by Section 9.1 of the Custodial Agreement.


 


(u)           Pledge
Provisions. To the extent
the Mortgage Loan Documents for the related Eligible Asset contain notice, cure
and other provisions in favor of a pledgee of the Eligible Asset under a
repurchase or warehouse facility, the applicable Borrower shall provide
evidence to the Administrative Agent that the applicable Borrower has given
notice to the applicable Persons of the Administrative Agent’s interest in such
Eligible Asset and otherwise satisfied any other applicable requirements under
such pledgee provisions so that the Administrative Agent is entitled to receive
the benefits and exercise the rights of a pledgee under the terms of such
pledgee provisions contained in the related Mortgage Loan Documents.


 


(v)           Mandatory
Prepayments. There shall be
no mandatory prepayments outstanding or payable but not yet due.


 


(w)          Existing
Indebtedness of the Borrowers.
All of the existing Indebtedness for borrowed money of the Borrowers (other
than Indebtedness permitted to exist pursuant to Section 6.1) shall be
repaid in full and all security interests related thereto shall be terminated
on or prior to the Closing Date, including, without limitation, the Wachovia
Repurchase Facility and the VFCC Repurchase Facility.


 


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(x)            Notice
of Borrowing. The Administrative Agent shall have received a Notice of
Borrowing with respect to the Loans to be made on each Borrowing Date, together
with all other documents, agreements or instruments required by Section 4.2.


 


(y)           Documents,
Reports, Certifications, Etc. The Administrative Agent shall have received
all such other and further documents, reports, certifications, approvals and opinions
of Counsel as the Administrative Agent in its discretion shall reasonably
require.


 


The
failure of any Credit Party, as applicable, to satisfy any of the foregoing
conditions precedent in respect of any Extension of Credit shall, unless such
failure was expressly waived in writing by the Administrative Agent on or prior
to the related Borrowing Date, give rise to a right of the Administrative
Agent, which right may be exercised at any time on the demand of the
Administrative Agent, to rescind the related Extension of Credit and direct the
Borrowers to pay to the Administrative Agent as agent for the Lenders an amount
equal to the outstanding principal amount of such Extension of Credit, accrued
interest and other amounts due in connection therewith during any such time
that any of the foregoing conditions precedent were not satisfied.


 


Each request for an Extension of Credit and each
acceptance by the Borrowers of any such Extension of Credit shall be deemed to
constitute representations and warranties by the Credit Parties as of the date
of the request and as of the date of such Extension of Credit that the
conditions set forth in Sections 4.1 and 4.2 have been satisfied.


 


ARTICLE V


 


AFFIRMATIVE COVENANTS


 


Each of the Credit Parties hereby covenants and
agrees that on the Closing Date, and thereafter (a) for so long as this
Agreement is in effect, (b) until the Commitments have terminated, and (c) until
no Note remains outstanding and unpaid and the Obligations and all other
amounts owing to the Administrative Agent or any Lender hereunder are paid in
full, such Credit Party shall, and shall cause each of their Subsidiaries (other
than in the case of Sections 5.1 or 5.2 hereof), to:


 


Section 5.1                                   Financial
Statements.


 


Furnish to the Administrative Agent and each of the
Lenders:


 


(a)           Annual
Financial Statements. As soon as available, and in any event within
ninety (90) days after the end of each fiscal year of the Borrowers and
the Guarantors, the audited (in the case of the Guarantors) or the signed (in
the case of the Borrowers) consolidated balance sheets of the Borrowers, the
Guarantors and their Consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained earnings
and of cash flows for the Borrowers,
the Guarantors and their Consolidated Subsidiaries for such year, and, in the
case of the Guarantors only, setting forth in each case in comparative form the
figures for the previous year, accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which opinion
shall not be qualified as to scope of audit or going concern and shall state
that said consolidated financial statements fairly present in all material
respects the consolidated financial condition and results of operations of the Borrowers, the Guarantors and their
Consolidated Subsidiaries as at the end of, and for, such fiscal year in
accordance with GAAP;


 


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(b)           Quarterly
Financial Statements. As soon as available, and in any event within
forty-five (45) calendar days after the end of the first three (3) fiscal
quarters of the Borrowers and the Guarantors, the unaudited consolidated and
consolidating balance sheets of the Borrowers, the Guarantors and their
Consolidated Subsidiaries as at the end of such period and the related unaudited
consolidated statements of income and retained earnings and of cash flows for
the Borrowers, the Guarantors and their Consolidated Subsidiaries for such
period and the portion of the fiscal year through the end of such period,
accompanied by a certificate of a Responsible Officer, which certificate shall state that said consolidated financial
statements fairly present in all material respects the consolidated financial
condition and results of operations of the Borrowers, the Guarantors and their
Consolidated Subsidiaries in accordance with GAAP, consistently applied, as at
the end of, and for, such period (subject to normal year-end adjustments);


 


(c)           Obligor
Operating Statement and Rent Rolls. With respect to each Mortgage Asset, if
provided to the Borrowers, the Guarantors or any Servicer or PSA Servicer by
any Obligor under any Mortgage Asset, as soon as available, but in any event
not later than forty–five (45) days after the end of each fiscal quarter of the
Borrowers, the operating statement and rent roll for each Underlying Mortgaged
Property; provided, however, the Administrative Agent reserves
the right in its discretion to request such information on a monthly basis (to
be provided no later than thirty (30) days after the end of each month)
but the Borrowers’ failure to obtain such information shall not be a breach of
this covenant provided the related Mortgage Asset with respect to which
information was not provided is included in the Collateral for less than
six (6) months;


 


(d)           Obligor
Balance Sheet. With respect to each Mortgage Asset, if provided to the
Borrowers or the Guarantors by any Obligor under the terms of the Mortgage Loan
Documents for a Mortgage Asset, as soon as available, but in any event not
later than thirty (30) days after receipt thereof, the annual balance
sheet with respect to such Obligor;
and


 


(e)           Securitization
Report. With respect to each Mortgage Asset, as soon as available but in
any event not later than thirty (30) days after receipt thereof,
(A) the related monthly securitization report, if any, and any other
reports delivered under the Pooling and Servicing Agreements to the Borrowers
or the Guarantors, if any, and, (B) within forty–five (45) days after
the end of each quarter, a copy of the standard monthly exception report (if
any), prepared by the Borrowers in the ordinary course of its business in
respect of the related Mortgage Asset or Underlying Mortgaged Property;


 


all
such financial statements to be complete and correct in all material respects
(subject, in the case of interim statements, to normal recurring year-end audit
adjustments) and to be prepared in reasonable detail and, in the case of the
annual and quarterly financial statements provided in accordance with
subsections (a) and (b) above, in accordance with GAAP applied
consistently throughout the periods reflected therein, provided that any
financial statements delivered with respect to an Obligor under any Mortgage
Asset may be delivered to the Administrative Agent in the form received.


 


Notwithstanding
the foregoing, financial statements and reports required to be delivered
pursuant to the foregoing provisions of this Section may be delivered by
Electronic Transmission and if so, shall be deemed to have been delivered on
the date on which the Administrative Agent receives such reports from the Borrowers
through electronic mail; provided that, upon the Administrative Agent’s
request, the Borrowers shall provide paper copies of any documents required
hereby to the Administrative Agent.


 


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Section 5.2                                   Certificates;
Other Information.


 


Furnish to the Administrative Agent and each of the
Lenders:


 


(a)           [Reserved].


 


(b)           Compliance
Certificate. Concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and (b) and in connection with the delivery
of each Notice of Borrowing and each Extension of Credit a Compliance
Certificate from a Responsible Officer of each Credit Party, which Compliance
Certificate shall, among other things, on a quarterly basis describe in detail
the calculations supporting the Responsible Officer’s certification of the Borrowers’
and the Guarantors’ compliance with the Financial Covenants.


 


(c)           Updated
Schedules. Concurrently with
or prior to the delivery of the financial statements referred to in
Sections 5.1(a) and 5.1(b) above, an updated copy of Schedule 3.3
and Schedule 3.12 if the Borrowers or any of their Subsidiaries
have formed or acquired a new Subsidiary since the Closing Date or since such
Schedule was last updated, as applicable.


 


(d)           [Reserved].


 


(e)           Reports. Within thirty (30) days of the end of
each calendar quarter, the Borrowers shall provide the Administrative Agent
with a quarterly report, which report shall include, among other items, a summary
of the Borrowers’ delinquency and loss experience with respect to Mortgage
Assets serviced by the Borrowers, any Servicer, any PSA Servicer or any
designee of the foregoing, the Borrowers’ internal risk rating, the Borrowers’
and any Servicer’s or any PSA Servicer’s surveillance reports on the Mortgage
Assets, and the operating statements, the occupancy status and other property
level information with respect to each Mortgage Asset, (B) within ten (10) days
of receipt thereof by the Borrowers, any Servicer or PSA Servicer, any
remittance reports with respect to the servicing of any Collateral and
(C) promptly, any such additional reports as the Administrative Agent may
reasonably request with respect to the Borrowers, any Servicer or PSA Servicer
servicing the portfolio, or pending originations of Mortgage Assets.


 


(f)            Mortgage
Asset Data Summary. No later
than the fifteenth (15th) day of each month, with respect to each Mortgage
Asset, a Mortgage Asset Data Summary, substantially in the form of Exhibit
5.2(f) (“Mortgage Asset Data Summary”), properly completed.


 


(g)           Mortgage
Assets. The Borrowers shall
promptly deliver or cause to be delivered to the Administrative Agent
(i) any report or material notice received by the Borrowers from any
Obligor or obligor under the Collateral promptly following receipt thereof and
(ii) any other such document or information relating to the Collateral as
the Administrative Agent may reasonably request in writing from time to time.


 


(h)           Underwriting
Package. Promptly, any modifications
or additions to the items contained in the Underwriting Package.


 


(i)            General
Information. Promptly, such
additional financial and other information as the Administrative Agent or any
Lender may from time to time reasonably request.


 


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Section 5.3            Payment of Taxes and Other
Obligations.


 


Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, subject, where
applicable, to specified grace periods, (a) all of its taxes (Federal,
state, local and any other Taxes) and (b) all of its other obligations and
liabilities of whatever nature in accordance with industry practice and
(c) any additional costs that are imposed as a result of any failure to so
pay, discharge or otherwise satisfy such Taxes, obligations and liabilities,
except when the amount or validity of any such Taxes, obligations and
liabilities are currently being contested in good faith by appropriate
proceedings and reserves, if applicable, in conformity with GAAP with respect
thereto have been provided on the books of the Credit Parties.


 


Section 5.4            Conduct of Business and
Maintenance of Existence.


 


Continue to engage in business of the similar
general type as now conducted by it on the Closing Date and preserve, renew and
keep in full force and effect its corporate or other formative existence and
good standing, take all action to maintain all rights, privileges, licenses and
franchises necessary, required or desirable in the normal conduct of its
business and to maintain its goodwill and comply with all Contractual Obligations
and Requirements of Law.


 


Section 5.5            Maintenance of Property;
Insurance.


 


(a)           Keep all material Property useful and necessary in its business in good
working order and condition (ordinary wear and tear and obsolescence excepted).


 


(b)           Maintain with financially sound and reputable insurance companies
liability, casualty, property and business interruption in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar business; and
furnish to the Administrative Agent, upon the request of the Administrative
Agent, full information as to the insurance carried.


 


Section 5.6            Inspection of Property;
Books and Records; Discussions.


 


Keep proper books, records and accounts in which
full, true and correct entries in conformity with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to its
businesses and activities; and permit, during regular business hours and upon
reasonable notice by the Administrative Agent or any Lender, the Administrative
Agent or any Lender to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any reasonable time and as
often as may reasonably be desired, and to discuss the business, operations,
properties, financial conditions and other conditions of the Credit Parties and
their Subsidiaries and Affiliates with officers and employees of the Credit
Parties and their Subsidiaries and Affiliates and with its independent
certified public accountants.


 


Section 5.7            Notices.


 


Give notice in writing to the Administrative Agent
(which shall promptly transmit such notice to each Lender):


 


(a)           promptly, but in any event within two (2) Business Days after any
Credit Party knows thereof, the occurrence of any Default or Event of Default;


 


87

















 


(b)           promptly, (i) any default or event of default under any Contractual
Obligation, Indebtedness or Guarantee Obligation of any Credit Party which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or involve a monetary claim in excess of $250,000 with
respect to any Borrower and $1,000,000 with respect to any Guarantor, or (ii)
any material default or event of default (beyond any applicable notice and cure
period) related to any Collateral or Required Payment;


 


(c)           promptly, any litigation, or any investigation or proceeding known or
threatened to any Credit Party (i) affecting any Credit Party which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect or involve a monetary claim in excess of $250,000 with respect to any
Borrower and $1,000,000 with respect to any Guarantor or involving injunctions
or requesting injunctive relief by or against any Credit Party, (ii) affecting
or with respect to this Agreement, any other Credit Document, any security interest
or Lien created under any Security Document, any Collateral or any Required
Payment, or (iii) by any Governmental Authority relating to the Credit
Parties and alleging fraud, deception or willful misconduct by such Person;


 


(d)           promptly upon notice or knowledge thereof, notice that any eligibility
criteria set forth in Schedule 1.1(c) to this Agreement is or was not
satisfied in any material respect any time;


 


(e)           of any attachment, judgment, levy or order exceeding $250,000 with
respect to any Borrower and $1,000,000 with respect to any Guarantor that may
be assessed against or threatened against any Credit Party, or of any Lien or
claim asserted against any Collateral, other than Permitted Liens;


 


(f)            [Reserved];


 


(g)           promptly, any notice of any violation received by any Credit Party from
any Governmental Authority including, without limitation, any notice of
violation of Environmental Laws; and


 


(h)           promptly
upon notice or knowledge thereof, notice of any change in NorthStar’s status as
a REIT or membership or good standing on any recognized securities exchange;


 


(i)            promptly
upon notice or knowledge thereof, notice of the termination of any Servicer
under any Servicing Agreement relating to any Collateral or of any PSA Servicer
under any Pooling and Servicing Agreement;


 


(j)            [Reserved];


 


(k)           with
respect to any Collateral hereunder, promptly upon receipt of notice or
knowledge that the Underlying Mortgaged Property has been damaged by waste,
fire, earthquake or earth movement, flood, tornado or other casualty, or
otherwise damaged so as to affect materially adversely the Asset Value of such
Collateral;


 


(l)            promptly upon notice or knowledge thereof,
provide written notice to the Administrative Agent of any loss or expected loss
in the value of any Collateral, any Required Payment, any Property or asset of
any Credit Party (to the extent that such loss with respect to any such
Property or asset could reasonably be expected to have a Material Adverse
Effect), or any other event or change in circumstances or expected event or
change in circumstances that could reasonably be expected to result (A) in a
default with respect to any Mortgage Asset 


 


88

















 


included in the Collateral, or (B) in a material
decline in value or cash flow of any Collateral, any Underlying Mortgaged
Property for any Collateral, any Required Payment or any Property or asset of a
Credit Party (to the extent that such event or change with respect to any such
Property or asset could reasonably be expected to have a Material Adverse
Effect);


 


(m)          [Reserved]


 


(n)           promptly, any other development or event which could reasonably be
expected to have a Material Adverse Effect.


 


Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Credit Parties propose to take with respect thereto.
In the case of any notice of a Default or Event of Default, the Borrowers shall
specify that such notice is a Default or Event of Default notice on the face
thereof.


 


Section 5.8            Environmental Laws.


 


(a)           Except as could not reasonably be expected, either individually or in
the aggregate, to have a Material Adverse Effect, comply with, and ensure compliance
in all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws;


 


(b)           Except as could not reasonably be expected, either individually or in
the aggregate, to have a Material Adverse Effect, conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in
good faith by appropriate proceedings; and


 


(c)           Defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective employees, agents, officers and directors and
affiliates, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Credit Parties or any of
their Subsidiaries or the Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation, reasonable
attorney’s and consultant’s fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. The provisions of this Section shall
survive the termination of this Agreement and the payment in full of the
Obligations.


 


Section 5.9            Financial Covenants.


 


The
Borrowers and the Guarantors, as applicable, shall comply with the following
Financial Covenants:


 


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(a)           Maintenance
of Liquidity. For each Test
Period, Northstar Corp shall not permit its Liquidity for such Test Period to
be less than $15,000,000, at least $7,500,000 of which shall consist of cash or
Cash Equivalents.


 


(b)           Maintenance
of Tangible Net Worth. For
each Test Period, NorthStar Corp shall not permit Northstar Corp’s and its
Consolidated Subsidiaries’ Tangible Net Worth at any time to be less than the
sum of (A) $675,000,000 plus (B) an amount equal to 75% of the
aggregate net proceeds after costs and expenses received by Northstar Corp or
any Consolidated Subsidiaries of Northstar Corp in connection with the offering
or issuance of any Equity Interests of Northstar Corp or any Consolidated
Subsidiaries of Northstar Corp (in each case only to the extent such Equity
Interests would be included in Tangible Net Worth) after the Closing Date.


 


(c)           Interest
Coverage. For each Test
Period, the Borrowers shall not permit the ratio of (A) the sum of Consolidated
Adjusted EBITDA for all Borrowers for such Test Period to (B) Interest Expense
for all Borrowers for such Test Period to be less than 1.5 to 1.0.


 


(d)           Leverage
Ratio. For each Test Period,
Northstar Corp shall not permit the ratio of (A) Northstar Corp’s and its
Consolidated Subsidiaries’ Adjusted Total Liabilities to (B) Northstar Corp’s
and its Consolidated Subsidiaries’ Adjusted Total Assets to exceed 0.90 to
1.00.


 


(e)           Recourse
Debt Ratio. For each Test
Period, Northstar Corp shall not permit the ratio of (A) Northstar Corp’s and
its Consolidated Subsidiaries’ Indebtedness (excluding Non–Recourse
Indebtedness, borrowings under the Unsecured Credit Facility and Trust
Preferred Securities) to (B) Adjusted Total Assets of Northstar Corp and its
Consolidated Subsidiaries to exceed .10 to 1.00.


 


(f)            Fixed
Charge Coverage. For each
Test Period, Northstar Corp shall maintain a minimum Fixed Charge Coverage
Ratio of 1.25 to 1.0.


 


Section 5.10         Additional Credit Parties.


 


(a)           Additional
Borrowers. To the extent any
new Borrower is approved by the Administrative Agent, in its discretion, the
Credit Parties shall deliver to the Administrative Agent, with respect to each
new Borrower to the extent applicable, substantially the same documentation
required pursuant to Sections 4.1 and 5.12 and such other documents or
agreements as the Administrative Agent may reasonably request, including
without limitation a Borrower Joinder Agreement.


 


(b)           Additional Guarantors. To the extent any new Guarantor is approved
by the Administrative Agent, in its discretion, the Credit Parties shall
deliver to the Administrative Agent, with respect to each new Guarantor to the
extent applicable, substantially the same documentation required pursuant to Sections
4.1 and 5.12 and such other documents or agreements as the Administrative Agent
may reasonably request, including without limitation a Guarantor Joinder
Agreement.


 


Section 5.11         Compliance with Law.


 


(a)           Comply with all Requirements of Law (including Environmental Laws) and
all applicable restrictions imposed by all Governmental Authorities, applicable
to it and the Collateral.


 


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(b)           Comply in all material respects with all Contractual Obligations, all
Indebtedness and all Guarantee Obligations.


 


Section 5.12         Pledged Assets.


 


With
respect to the Collateral, the Credit Parties shall (a) at the Administrative
Agent’s request, take all action necessary to perfect, protect and more fully
evidence the Administrative Agent’s first priority perfected security interest
in the Collateral, including, without limitation, (i) executing or causing to
be executed such instruments, notices or control agreements as may be necessary
or appropriate, and (ii) to the extent that anyone other than Wachovia is
the Administrative Agent, entering into a new Account Control Agreement and
Securities Account Control Agreement, and (iii) taking all additional action
that the Administrative Agent may reasonably request to perfect, protect and
more fully evidence the respective interests of the parties to this Agreement
and the Credit Documents in such Collateral. To the extent any Collateral is
created or comes into existence after the Closing Date, the Credit Parties
shall take such actions as the Administrative Agent shall require to obtain a
first priority perfected security interest in such Collateral.


 


Section 5.13         Interest Rate Protection
Agreements.


 


Each
Credit Party shall perform its duties and obligations under and shall otherwise
maintain any existing Interest Rate Protection Agreements to which it is a
party.


 


Section 5.14         Control Agreements.


 


The
Borrowers shall maintain the Account Control Agreement and the Securities
Account Control Agreement in full force and effect and shall not amend or
modify the Account Control Agreement or the Securities Account Control
Agreement or waive compliance with any provisions thereunder without the prior
written consent of the Administrative Agent.


 


Section 5.15         Further Assurances.


 


(a)           Public/Private
Designation. The Credit
Parties will cooperate with the Administrative Agent in connection with the
publication of certain materials and/or information provided by or on behalf of
the Credit Parties to the Administrative Agent and Lenders (collectively, “Information
Materials”) pursuant to this Article V or the other Credit Documents and
will designate Information Materials (i) that are either available to the
public or not material with respect to the Credit Parties and their
Subsidiaries or any of their respective securities for purposes of United
States federal and state securities laws as “Public Information” and (ii) that
are not Public Information as “Private Information”.


 


(b)           Additional
Information. The Credit
Parties shall provide such information regarding the operations, business
affairs and financial condition of the Credit Parties or any of their
Subsidiaries or Affiliates as the Administrative Agent or any Lender may
reasonably request.


 


(c)           Visits
and Inspections. The Credit
Parties shall permit representatives of the Administrative Agent or any Lender,
from time to time upon prior reasonable notice and at such times during normal
business hours, to visit and inspect its Properties; inspect, audit and make
extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business 


 


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prospects.
Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent or any Lender may do any of the foregoing at any time
without advance notice.


 


(d)           Intercreditor
Agreement. The Credit
Parties shall acknowledge and agree to the Intercreditor Agreement to the
extent the Administrative Agent deems that such Intercreditor Agreement is
necessary.


 


Section 5.16         Performance and Compliance
with Collateral.


 


The
Credit Parties shall, at their expense, timely and fully perform and comply
(and shall cause their Consolidated Subsidiaries to timely and fully perform
and comply) with all provisions, covenants and other promises required to be
observed by them under the Collateral and all other agreements related to such
Collateral.


 


Section 5.17         Delivery of Income and
Required Payments.


 


The
Credit Parties shall deposit, and shall cause the other Credit Parties, each of
their Subsidiaries and all other Persons to deposit, all Income, Required
Payments and other amounts payable to the Borrowers in respect of the
Collateral or payable to any Credit Party or Subsidiary or Affiliate in respect
of any Required Payment into the Collection Account within two (2) Business
Days of such Person’s receipt thereof. The Borrowers shall deposit, or cause to
be deposited, into the Collection Account, on or before the date required by
the Credit Documents, all other amounts required by the terms of the Credit
Documents. The Credit Parties shall provide the Administrative Agent with fully
executed copies of all Irrevocable Instructions required by this Agreement. The
Credit Parties shall take steps necessary to enforce such Irrevocable
Instructions and shall immediately inform the Administrative Agent of, and
rectify any default, breach, failure or unwillingness to perform thereunder,
any dispute or controversy in connection therewith or any other matter that
may, could or will result in payments not being made as contemplated under the terms
of such Irrevocable Instructions. The Credit Parties shall not, and shall not
permit any Credit Party or any Subsidiary or Affiliate to, modify or revoke or
permit any modifications or revocations of the Irrevocable Instructions without
the Administrative Agent’s prior written consent in its discretion. The
Borrowers shall deliver such other Irrevocable Instructions as the
Administrative Agent may require in its discretion. All distributions from the
Collection Account and the Securities Account shall be made solely in
accordance with the terms, provisions and conditions of this Agreement, the
Account Control Agreement and the Securities Account Control Agreement.


 


Section 5.18         Exceptions.


 


The
Borrowers shall promptly correct any and all  Exceptions  set forth on any  Asset Schedule
and Exception Report.


 


Section 5.19         Distributions in Respect of
Collateral.


 


If
the Credit Parties or any Subsidiary or Affiliate shall receive any rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any Collateral, or otherwise in respect thereof, the Credit Parties shall
accept the same as the Administrative Agent’s agent, hold the same in trust for
the Administrative Agent and deliver the same forthwith to the Administrative
Agent (or its designee) in the exact form received, together with duly executed
instruments of transfer, assignments in blank, executed and undated stock
powers in blank and such other documentation as the Administrative Agent shall
reasonably request. If any sums of money or property are paid or distributed in
respect of the Collateral (other than the Obligor Reserve Payments) and
received by any Credit Party or any Subsidiary or 


 


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Affiliate,
the Credit Parties shall promptly pay or deliver, or caused to be paid or
delivered, such money or property to the Administrative Agent and, until such
money or property is so paid or delivered to the Administrative Agent, hold
such money or property in trust for the Administrative Agent, segregated from other
funds of the Credit Parties, their Subsidiaries and Affiliates and other
Persons.


 


Section 5.20         REIT Status.


 


NorthStar
Corp shall remain listed on a nationally recognized securities exchange in good
standing. NorthStar Corp may change its status as a REIT provided it remains in
compliance with the Financial Covenants in all respects.


 


Section 5.21         Issuances.


 


Other
than under the Reindeer Facility and subject to Section 2.5(b), with respect to
each Debt Issuance or Equity Issuance engaged in by Northstar Corp, Northstar Corp
shall (a) not transfer or grant any Lien or encumbrance on its rights to the
Net Cash Proceeds Payments (other than Permitted Liens), (b) execute and comply
and cause all other Persons to execute and comply with Irrevocable Instructions
to require the Net Cash Proceeds Payments to be paid directly to the Collection
Account and not to any Credit Party, any Subsidiary or Affiliate or any other
Person, (c) provide the Administrative Agent with all public documents related
to such Debt Issuance or Equity Issuance, (d) enforce its rights to the Net
Cash Proceeds Payments and (e) immediately notify the Administrative Agent in
writing of any provision of this covenant is not satisfied or is breached in
any respect.


 


Section 5.22         Remittance of Prepayments.


 


The
Borrowers shall remit or cause to be remitted to the Administrative Agent, with
sufficient detail, via Electronic Transmission, to enable the Administrative
Agent to appropriately identify the Collateral to which any amount remitted
applies, all full or partial principal prepayments (regardless of the source of
repayment) on any Collateral that a Borrower, a Servicer or a PSA Servicer has
received or that have been deposited into the Collection Account no later than three
(3) Business Days following the date such prepayment was received or deposited.


 


Section 5.23         Escrow Imbalance.


 


The
Borrowers shall (to the extent it is acting as a servicer) or shall cause the
Servicer to, no later than five (5) Business Days after learning (from any
source) of any material imbalance in any reserve or escrow account related to
any Collateral, fully and completely correct and eliminate such imbalance,
including, without limitation, depositing its own funds into such account to
eliminate any overdraw or deficit, to the extent required by the applicable
Servicing Agreement (in the case of a Servicer).


 


Section 5.24         Separateness.


 


Notwithstanding
any term contained in this Agreement or the other Credit Documents to the
contrary, each Borrower shall (a) own no assets, and shall not engage in any
business, other than the assets and transactions specifically contemplated by
this Agreement and the Credit Documents; (b) not incur any Indebtedness or
obligation, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) pursuant hereto and
under the agreements and documents evidencing, securing or in any other way
related to the Mortgage Assets and the related Collateral, (ii) customary
representations, warranties, indemnities and other agreements in connection
with the origination, acquisition, servicing, collection, enforcement,
financing, participation, securitization, sale or other disposition of the
Mortgage Assets, and (iii) obligations under zoning and 


 


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other
governmental regulations, rules, prohibitions and ordinances and proposed
restrictions, covenants, conditions, limitations, easements, rights–of–way and
other matters existing of public record or proposed to be recorded or filed in
the future governing or affecting mortgaged real Property or that may otherwise
require the consent of or joinder by a mortgagee; (c) not make any loans or
advances to any Affiliate other than loans to a Guarantor which are disclosed
in writing to and approved in writing by the Administrative Agent, and shall
not acquire obligations or securities of its Affiliates; (iv) pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) only from its own assets; (d) comply with the provisions of its
Authority Documents; (vi) do all things necessary to observe
organizational formalities and to preserve its existence, and will not amend,
modify or otherwise change its Authority Documents without the consent of the
Administrative Agent; (e) maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates (except that
such financial statements may be consolidated to the extent consolidation is
required under the GAAP consistently applied or as a matter of the Requirements
of Law) and file its own tax returns (except to the extent consolidation is
required or permitted under Requirements of Law); (f) be, and at all times will
hold itself out to the public as, a legal entity separate and distinct from any
other entity (including any Affiliate), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, and shall not identify itself or any of its
Affiliates as a division of the other; (g) maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations; (h) not engage
in or suffer any change of ownership, dissolution, winding up, liquidation,
consolidation or merger in whole or in part; (i) not commingle its funds or
other assets with those of any Affiliate or any other Person; (j) maintain its
accounts separate from those of any Affiliate or any other Person; (k) shall
not hold itself out to be responsible for the debts or obligations of any other
Person; (l) shall not, without the vote of its Independent Director, (i) file
or consent to the filing of any Insolvency Proceeding with respect to itself,
institute any proceedings under any applicable Insolvency Law or otherwise seek
any relief under any Requirements of Law relating to the relief from debts or
the protection of debtors generally with respect to itself, (ii) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for itself or a substantial
portion of its properties, or (iii) make any assignment for the benefit of it’s
creditors; (m) shall have at all times at least one (1) Independent
Director (or such greater number as required by the Administrative Agent or the
Rating Agencies); (n) shall maintain an arm’s length relationship with its
Affiliates; (o) maintain a sufficient number of employees in light of
contemplated business operations; (p) use separate stationary, invoices and
checks; and (q) allocate fairly and reasonably any overhead for shared office
space.


 


Section 5.25         Preferred Equity Interests.


 


The
Borrowers shall or shall cause each Preferred Equity Grantor to preserve and
maintain its legal and valid existence, rights, franchises, privileges and good
standing in the jurisdiction of its formation and will qualify and remain
qualified in good standing in each other jurisdiction where, due to the nature
of its business or Property, such qualification is necessary. The Borrowers
shall provide evidence to the Administrative Agent, upon request, of the
Preferred Equity Grantor’s compliance with the requirements of this subsection.


 


Section 5.26         Registration of Securities.


 


In
the case of any Pledged Mortgage Asset not physically delivered to the
Administrative Agent as agent for the Lenders (or the Custodian on its behalf)
unless otherwise consented to by the Administrative Agent, the Borrowers shall
maintain, or cause to be maintained, each of the Securities (as defined in the
UCC) with either DTC or with the National Book Entry System of the Federal
Reserve, DTC or any similar firm or agency, as applicable, in the name of the Administrative
Agent as agent for the Lenders.


 


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Section 5.27         Termination of Securities
Account.


 


Upon
the Borrowers’ receipt of notice from any securities intermediary (as defined
in the UCC) of its intent to terminate any securities account (as defined in
the UCC) of the Borrowers held by such securities intermediary and relating to
a Pledged Mortgage Asset or collateral for a Pledged Mortgage Asset, prior to
the termination of such securities account the collateral in such account (a) shall
be transferred to a new securities account, upon the request of the
Administrative Agent, which shall be subject to an executed control agreement
as provided in Section 5.12 of this Agreement or (b) transferred to an account
held by the Administrative Agent as agent for the Lenders in which such
collateral will be held until a new securities account is established with an
executed control agreement acceptable to the Administrative Agent in its
discretion.


 


Section 5.28         Independence of Covenants.


 


All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or be otherwise within the limitations
of, another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists.


 


ARTICLE VI


 


NEGATIVE COVENANTS


 


Each of the Credit Parties hereby covenants and
agrees that on the Closing Date, and thereafter (a) for so long as this
Agreement is in effect, (b) until the Commitments have terminated, (c) until
no Note remains outstanding and unpaid and the Obligations and all other
amounts owing to the Administrative Agent or any Lender hereunder are paid in
full, that:


 


Section 6.1            Indebtedness.


 


The
Borrowers shall not create, incur, assume or suffer to exist any Indebtedness
(including, but not limited to, any credit or repurchase facility), Guarantee
Obligation or Contractual Obligation of the Borrowers, except Indebtedness,
Guarantee Obligations and Contractual Obligations of the Borrowers permitted
under this Agreement.


 


Section 6.2            Liens.


 


The
Credit Parties and the Subsidiaries and Affiliates shall not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume, suffer
or permit to exist any Lien on all or any portion of the Collateral or the
Required Payments, other than Permitted Liens, whether now existing or
hereafter transferred hereunder, or any interest therein, and the Credit
Parties and the Subsidiaries and Affiliates shall not sell, pledge, assign or
suffer to exist any Lien, or any circumstance which, if adversely determined,
would be reasonably likely to give rise to a Lien, on its interest, if any,
hereunder or under the other Credit Documents. Immediately upon notice to any Credit
Party of a Lien or any circumstance which, if adversely determined would be
reasonably likely to give rise to a Lien (other than in favor of the
Administrative Agent or created by or through the Administrative Agent), on all
or any portion of the Collateral or the Required Payments, the Borrowers shall
notify the Administrative Agent and the Borrowers shall further defend the
Collateral and the Required Payments against, and will take such other action
as is necessary to remove, any Lien or claim on or to the Collateral or the
Required Payments 


 


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(other
than any Permitted Liens created under this Agreement and the Credit Documents),
and the Borrowers shall defend the right, title and interest of the Credit
Parties and their Subsidiaries and Affiliates in and to any of the Collateral
and the Required Payments against the claims and demands of all Persons
whomsoever. Notwithstanding the foregoing, if a Credit Party or any Subsidiary
or Affiliate shall grant a Lien on any of the Collateral or Required Payments
in violation of this Section, then it shall be deemed to have simultaneously
granted an equal and ratable Lien on any such Collateral or Required Payments
in favor of the Administrative Agent for the ratable benefit of the Lenders to
the extent such Lien has not already been granted to the Administrative Agent.


 


Section 6.3            Nature of Business.


 


No
Borrower will alter the character of its business in any material respect from
that conducted as of the Closing Date. The Borrowers shall not engage in any
activity other than activities specifically permitted by this Agreement,
including, but not limited to, investment in mortgage loans, mezzanine loans,
participations, preferred equity and other real estate related assets and the
purchasing, financing and holding of commercial mortgage-backed securities and
activities incident thereto.


 


Section 6.4            Consolidation, Merger, Sale
or Purchase of Assets, etc.


 


(a)           Neither
the Borrowers nor the Guarantors shall enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation, winding up or dissolution) or sell all or substantially
all of its assets; provided, however, that the Borrowers or the
Guarantors may merge or consolidate with (i) any wholly owned Subsidiary
of such Person, or (ii) any other Person if (A) a Borrower or a Guarantor
is the surviving corporation or (B) if the surviving entity is not in the
Administrative Agent’s reasonable opinion materially weaker in its financial
condition (in the aggregate) than the prior entities pre–merger or
pre–consolidation; provided, that, (x) if after giving
effect thereto, no Event of Default would exist hereunder, and (y) the new
entity (if any) assumes the obligations, liabilities and Indebtedness under the
Credit Documents, if applicable, and the Interest Rate Protection Agreements.


 


(b)           Neither
the Borrowers nor the Guarantors shall permit a Person or two or more Persons
acting in concert to acquire a “beneficial ownership”, directly or indirectly,
of, or acquire by contract or otherwise, or shall have entered into a contract
or arrangement that upon consummation, will result in its or their acquisition
of or control over the Voting Interests of a Borrower or a Guarantor (or other
securities convertible into such Voting Interests) representing more
than 50% of the combined voting power of all Voting Interests of any
Borrower or any Guarantor unless if after giving effect thereto, no
Event of Default would exist hereunder and the purchaser is not in the
Administrative Agent’s reasonable opinion materially weaker in its financial
condition (in the aggregate) than (i) the prior owner or (ii) such Borrower or Guarantor,
as applicable.


 


Section 6.5            [Reserved].


 


Section 6.6            Transactions with Affiliates.


 


The Credit Parties will not, nor will they permit
any Subsidiary to, enter into any transaction or series of transactions, whether
or not in the ordinary course of business, with any officer, director,
shareholder or Affiliate other than on terms and conditions substantially as
favorable as would be obtainable in a comparable arm’s-length transaction with
a Person that is not an officer, director, shareholder or Affiliate.


 


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Section 6.7            Ownership of Subsidiaries;
Restrictions.


 


The
Borrowers shall not create, form or permit to exist any Subsidiary prior to the
later of (i) the Maturity Date (as it may be extended in accordance with
this Agreement) and (ii) the indefeasible payment in full of the
Obligations.


 


Section 6.8            Corporate Changes; Material
Contracts.


 


No Credit Party will (a) change its fiscal
year, (b) amend, modify or change its Authority Documents in any respect
that would impact, impair or affect the Collateral or any Required Payment or
is otherwise adverse to the interests of the Lenders without the prior written
consent of the Administrative Agent; provided that no Credit Party shall
(i)  alter its legal existence or (iii) change its registered legal
name, without providing thirty (30) days prior written notice to the
Administrative Agent and without filing (or confirming that the Administrative
Agent has filed) such financing statements and amendments to any previously
filed financing statements as the Administrative Agent may require, (c) amend,
modify, cancel or terminate or fail to renew or extend or permit the amendment,
modification, cancellation or termination of any of its material contracts in
any respect materially adverse to the interests of the Lenders without the
prior written consent of the Administrative Agent, (d) change its state of
incorporation, organization or formation without the consent of the Administrative
Agent or have more than one state of incorporation, organization or formation
or (e) change its accounting method (except in accordance with GAAP) in
any manner adverse to the interests of the Lenders without the prior written
consent of the Required Lenders.


 


Section 6.9            [Reserved].


 


Section 6.10         Restricted Payments.


 


Except
as otherwise required or permitted by the Credit Documents, no Credit Party
shall declare or make any payment on account of, or set apart assets for, a
sinking or other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of any Equity Interest of any Credit Party
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or Property or in
obligations of any Credit Party, except that a Credit Party may declare and pay
dividends in accordance with its respective Authority Documents and purchase or
redeem Equity Interests of any Credit Party, and without restriction as to
amount, so long as, in the case of the Credit Party, (a) no Default or Event of
Default shall have occurred, (b) no mandatory prepayment obligation is
outstanding and (c) the distribution of such funds will not violate any
Financial Covenant. Notwithstanding the preceding sentence and irrespective of
the occurrence of the events described in clauses (a), (b) or (c) of the
immediately preceding sentence, the Guarantors may at all times pay dividends
either (i) as required by Applicable Law to maintain its REIT status and/or (ii)
to its preferred equity holders.


 


Section 6.11         [Reserved].


 


Section 6.12         No Further Negative Pledges.


 


None
of the Borrowers shall grant, allow or enter into any agreement or arrangement
with any Person that prohibits or restricts, or purports to prohibit or
restrict, the granting of any Lien or other encumbrance on any of the assets or
Properties of the Borrowers; provided, however, that the
foregoing shall not apply to (i) the negative pledge contained in Section
6.18, (ii) Indebtedness identified on 


 


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Schedule 6.1(b) or (iii) any other negative pledge
or grant of any Lien or other encumbrance approved by the Administrative Agent
in its discretion.


 


Section 6.13         Collateral Not to be
Evidenced by Instruments.


 


No
Credit Party shall take any action to cause all or any portion of the
Collateral that is not, as of the applicable Borrowing Date, evidenced by an
Instrument  to be so evidenced except, with the
Administrative Agent’s consent, in connection with the enforcement or
collection of such Collateral.


 


Section 6.14         Deposits.


 


The
Credit Parties will not deposit or otherwise credit, or cause or permit to be
so deposited or credited, to the Collection Account or Securities Account cash
or cash proceeds other than (i) in the case of the Collection Account, Income
in respect  of  Collateral,
Cash Collateral and other payments required to be deposited therein under the
Credit Documents, and (ii) in the case of the Securities Account, the CMBS
Securities that are Mortgage Assets and other Collateral related thereto
(except those CMBS Securities that are certificated securities within the
meaning of Article 8 of the UCC).


 


Section 6.15         Servicing Agreements.


 


The
Credit Parties will not materially amend, modify, waive or terminate any
provision of any Servicing Agreement or Pooling and Servicing Agreement without
the prior written consent of the Administrative Agent. Notwithstanding the
foregoing, but subject to the Administrative Agent’s rights under Article IX, the Borrowers shall have the right to terminate
any of the foregoing upon the occurrence of a material default (beyond any
applicable notice and cure period) of the other party thereto.


 


Section 6.16         Extension or Amendment of
Collateral.


 


Except as provided in Section 6.7, the Borrowers
will not extend, amend, waive or otherwise modify, or permit any Servicer or
PSA Servicer (except as provided in a Pooling and Servicing Agreement) to
extend, amend, waive or otherwise modify the material terms of any Collateral
or the Mortgage Loan Documents related thereto or to exercise the material
rights of a holder of said Collateral, provided that the foregoing shall not
prohibit the Borrowers, a Servicer or a PSA Servicer from permitting, prior to a
default thereunder, any Obligor to exercise an extension option contained in
any Mortgage Loan Documents. Unless otherwise agreed to by the Administrative Agent in its
discretion, the Borrowers, the Servicers and the PSA Servicers (except as
provided in a Pooling and Servicing Agreement) shall have no right to waive,
amend, modify or alter the material terms of any Collateral or the related
Mortgage Loan Documents thereto or otherwise exercise any material right of the
holder of any Collateral.


 


Section 6.17         [Reserved].


 


Section 6.18         No Future Liens.


 


No
Credit Party shall grant or permit, or suffer to be granted or permitted, any
Lien on, or any encumbrances upon any Collateral and any Required Payment, in
favor of any Person, other than Liens in favor of the Administrative Agent and
the Lenders.


 


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Section 6.19         Senior and Pari Passu Interests.


 


Unless
agreed to by the Administrative Agent in its reasonable discretion, no Credit
Party shall acquire or maintain any right or interest in any Mortgage Asset
(or, directly or indirectly, the Underlying Mortgaged Property with respect
thereto) that is senior to or pari passu with
the rights and interests of the Administrative Agent therein under this
Agreement and the Credit Documents unless such interest is also part of the
Collateral; provided that the foregoing negative covenant shall not
apply to CMBS Securities.


 


Section 6.20         Portfolio Assets.


 


To
the extent the Administrative Agent acquires a pledge of multiple Mortgage
Assets as a part of a portfolio or package, the Borrowers shall not repay or
obtain the release of any Lien on less than all such Collateral without
repaying all Loans related to all such Collateral included in the portfolio or
package, unless the Administrative Agent otherwise consents in its discretion.


 


Section 6.21         Inconsistent Agreements.


 


The
Credit Parties shall not directly or indirectly, enter into any agreement
containing any provision that would be violated or breached by any transaction,
Loan or pledge of Collateral under the Credit Documents or by the performance
by any Credit Party of its duties, covenants or obligations under any Credit
Document.


 


Section 6.22         Preferred Equity Interests.


 


The
Borrowers shall not permit any Equity Interest that is the subject of a
Preferred Equity Interest to consist of an interest in an entity other than a
partnership or limited liability company and, with respect to such limited
partnership and limited liability company interests, shall not permit any such
interest to:  (a) be dealt in or traded
on a securities exchange or in a securities market or (b) be held in a
Securities Account. The Borrowers shall execute and deliver, or cause to be
executed or delivered, to the Administrative Agent as agent for the Lenders (or
the Custodian on its behalf) such agreements, documents and instruments as the
Administrative Agent  may reasonably
require to perfect its security interest in any such Equity Interest.


 


Section 6.23         ERISA.


 


Each of the Credit Parties will not without the
prior approval of the Administrative Agent, establish or maintain any Plan, nor
take any action that would (i) cause it to fail to qualify as an Operating
Company or (ii) cause it to fail to otherwise meet an exception under the Plan
Asset Regulations which would prevent the assets of such Person from being
subject to Title I of ERISA or Section 4975 of the Code.


 


ARTICLE VII


 


EVENTS OF DEFAULT


 


Section 7.1            Events of Default.


 


An Event of Default shall exist upon the occurrence
of any of the following specified events (each an “Event of Default”):


 


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(a)           Payment. (i) The Borrowers shall fail to pay any principal or interest on any Loan
or Note when due (whether at maturity, by reason of mandatory or optional
prepayment, by reason of acceleration or otherwise) in accordance with the
terms hereof or thereof; or (ii) the Borrowers shall fail to pay any fee or
other amount payable hereunder or under the Credit Documents when due (whether
at maturity, by reason of mandatory or optional prepayment, by reason of
acceleration or otherwise) in accordance with the terms hereof and such failure
shall continue unremedied for two (2) Business Days after written notice from
the Administrative Agent; or (iii) or any Guarantor shall fail to pay on the
Guaranty in respect of any of the foregoing or in respect of any other Obligations
under the Credit Documents (after giving effect to the grace period in clause
(ii) above; or (iv) any other Credit Party shall fail to pay any amounts owed
by it under the Credit Documents to which it is a party (after giving effect to
the grace period in clause (ii) above); or


 


(b)           Misrepresentation. Any representation or warranty made or
deemed made herein, in the Security Documents or in any of the other Credit
Documents or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this
Agreement or the Credit Documents (in each case other than the eligibility criteria
contained in Schedule 1.1(c) to this Agreement unless any Borrower shall
have affirmed or confirmed any such eligibility criteria with actual knowledge
that it was not satisfied in any material respect) shall prove to have been
incorrect, false or misleading on or as of the date made or deemed made and
continues to be unremedied for a period of twenty (20) Business Days after
the earlier to occur of (i) the date on which written notice of such
incorrectness requiring the same to be remedied shall have been given to the
Credit Parties by the Administrative Agent, and (ii) the date on which the
Credit Parties become aware thereof; or


 


(c)           Covenant Default. (i) Any Credit Party shall fail to
perform, comply with or observe any term, covenant or agreement applicable to
it contained in Sections 5.9 or 6.4; or (ii) any Credit Party shall fail
to comply with any other covenant contained in this Agreement or the other
Credit Documents or any other agreement, document or instrument among any
Credit Party, the Administrative Agent and the Lenders or executed by any
Credit Party in favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a) or 7.1(c)(i) above), and such breach or
failure to comply is not cured within twenty (20) days after the earlier
to occur of (i) the date on which written notice of such failure requiring
the same to be remedied shall have been given to the Credit Parties by the
Administrative Agent, and (ii) the date on which the Credit Parties become
aware thereof (provided, however, in the case of a failure which
is capable of cure but cannot reasonably be cured within such twenty (20)
day period (other than the payment of money), and provided the Credit Parties
shall have timely commenced to cure such failure within such twenty (20)
day period (with evidence of same delivered to the Administrative Agent) and
thereafter diligently and expeditiously proceeds to cure the same, such
twenty (20) day period shall be extended for an additional twenty (20)
day period); or


 


(d)           Indebtedness
Cross-Default. (A) No
Borrower, the Guarantor or Pledgor shall have defaulted in any payment due with
respect to any material Indebtedness in excess of (1) $5,000,000 in the
case of a Guarantor or a Pledgor and (2) $1,000,000 in the case of any
Borrower (in each case including, without limitation, recourse debt), any
Guarantee Obligations or any material Contractual Obligation in excess of
$5,000,000 in the case of a Guarantor or a Pledgor, and $1,000,000 in the case
of any Borrower, to which a Borrower, Guarantor or Pledgor as applicable, is a
party, or a default or an event or condition shall have occurred that would
permit acceleration of any of the foregoing whether or not such event or
condition has been waived, (B) no Borrower, Guarantor or Pledgor shall be
in default of any monetary obligation with respect to any Credit Party–Related
Obligation or (C) no Borrower, Guarantor or Pledgor 


 


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shall
be in default with respect to any obligation under the Interest Rate Protection
Agreements; or


 


(e)           [Reserved].


 


(f)            Bankruptcy
Default. (i) A Credit
Party shall commence any case, proceeding or other action (A) under any
existing or future Requirements of Law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official for it
or for all or any substantial part of its assets, or a Credit Party shall make
a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against a Credit Party any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of sixty (60) days; or  (iii) there
shall be commenced against a Credit Party any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of their assets which results in
the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from
the entry thereof; or (iv) a Credit Party shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or  (v) a Credit Party shall generally not, or shall be
unable to, or shall admit in writing their inability to, pay its debts as they
become due; or


 


(g)           Judgment
Default. One or more final non-appealable
judgments or decrees shall be entered against a Credit Party involving in the
aggregate a liability (to the extent not covered by insurance) of $1,000,000 or
more with respect to any Borrower or $5,000,000 or more with respect to any
Guarantor or Pledgor and all such judgments or decrees shall not have been paid
and satisfied, vacated, discharged, stayed or bonded pending appeal within thirty
(30) Business Days from the entry thereof; or


 


(h)           ERISA
Default. A Credit Party or
an ERISA Affiliate shall engage in a non–exempt prohibited transaction (as
defined in Section 406 of ERISA or Section 4975 of the Code); or


 


(i)            [Reserved]


 


(j)            Invalidity
of Credit Documents. (i) Any
Credit Document, or any Lien or security interest granted thereunder, shall
(except in accordance with its terms), in whole or in part, terminate, cease to
be effective, be declared null and void, cease to be in full force and effect
or cease to be the legally valid, binding and/or enforceable obligation of any
Credit Party, as applicable, (ii) any Credit Party or any other Person shall,
directly or indirectly, contest in any manner the effectiveness, validity,
binding nature or enforceability of any Credit Document or any Lien or security
interest thereunder or deny or disaffirm such Person’s obligations under any
Credit Document, (iii) the Liens contemplated under the Credit Documents shall
cease or fail to be first priority perfected Liens on any Collateral in favor
of the Administrative Agent or shall be Liens in favor of any Person other than
the Administrative Agent, (iv) any Credit Party shall grant, or permit or
suffer to exist, any Lien on any Collateral except Permitted Liens, or (v) any
Credit Party or any Subsidiary or Affiliate of the foregoing shall grant, or
permit or suffer to exist, any Lien on any Required Payment; or


 


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(k)           [Reserved]


 


(l)            Equity
Ownership. The Pledgor shall
cease to own directly 100% of the issued and outstanding Equity Interests of
each of the Borrowers; or


 


(m)          40
Act. Any Credit Party shall
become required to register as an “investment company” within the meaning of
the 40 Act or the arrangements contemplated by the Credit Documents shall
require registration as an “investment company” within the meaning of the
40 Act; or


 


(n)           Material
Adverse Effect. There shall
exist any event or occurrence set forth in clause (a), (b), (c) or (d) in the
definition of Material Adverse Effect; or


 


(o)           [Reserved]


 


(p)           [Reserved]


 


(q)           Irrevocable
Instructions. Any Credit
Party’s failure to deliver any Irrevocable Instruction required under this
Agreement or any Person’s attempt to disavow, revoke or act contrary to, the
failure of any Person to abide by or perform, or any Credit Party’s failure to
enforce, the terms of any Irrevocable Instruction; or


 


(r)            Solvency. Any Credit Party is not Solvent or shall
admit its inability to, or its intentions not to, perform its obligations,
covenants, duties or agreements under any Credit Document, any Obligation or
any Credit Party-Related Document; or


 


(s)           [Reserved].


 


(t)            Commitment. The aggregate principal amount of all
Revolving Loans outstanding on any day exceeds the Revolving Commitment and the
same continues unremedied for two (2) Business Days after notice from the
Administrative Agent; provided, however, during the period of
time that such event remains unremedied, no additional Revolving Loans will be
made under this Agreement; or


 


(u)           Servicer
Default. A Servicer Default
occurs and is continuing; or


 


(v)           Income. Any Credit Party’s, any Servicer’s or any
PSA Servicer’s failure to deposit to the Collection Account all Income and
other Cash Collateral as required by this Agreement or the failure of the
Borrowers to deposit or credit to the Securities Account any uncertificated
CMBS Security and related Collateral required to be deposited or credited to
such account; or


 


(w)          Consent. Any Credit Party engages in any conduct or
action where the Administrative Agent’s and/or any Lender’s prior written
consent is required by the terms of this Agreement or the other Credit
Documents and any Credit Party fails to obtain such consent; or


 


(x)            [Reserved].


 


(y)           Other
Defaults. Any event or
occurrence under this Agreement or any of the other Credit Documents that, by
the express terms of this Agreement or the other Credit 


 


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Documents,
is deemed to constitute an Event of Default after giving effect to the
applicable notice and/or cure periods.


 


In
making a determination as to whether an Event of Default has occurred, the
Administrative Agent and the Lenders shall be entitled to rely on reports
published or broadcast by media sources believed by the Administrative Agent
and/or any Lender to be generally reliable and on information provided to it by
any other sources believed by it to be generally reliable, provided that the
Administrative Agent and/or the Lender reasonably and in good faith believes
such information to be accurate and has taken such steps as may be reasonable
in the circumstances to attempt to verify such information. Notwithstanding
anything contained in the Credit Documents to the contrary, unless waived by
the Administrative Agent in its discretion, neither the Credit Parties nor any
other Person shall be permitted to cure an Event of Default after the
acceleration of any of the Obligations.


 


Section 7.2            Acceleration; Remedies.


 


Upon the occurrence and during the continuance of an
Event of Default, then, and in any such event, (a) if such event is a
Bankruptcy Event of Default, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon), and all Obligations
and other amounts under the Credit Documents shall immediately become due and
payable, and (b) if such event is any other Event of Default, any or all
of the following actions may be taken: 
(i) with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; (ii) the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, declare the Loans (with accrued interest
thereon) and all Obligations and other amounts owing under this the Credit
Documents to be due and payable forthwith, whereupon the same shall immediately
become due and payable; and/or (iii) with the written consent of the
Required Lenders, the Administrative Agent may, or upon the written request of
the Required Lenders, the Administrative Agent shall, exercise such other
rights and remedies as provided under the Credit Documents and under Requirements
of Law.


 


ARTICLE VIII


 


THE ADMINISTRATIVE AGENT


 


Section 8.1            Appointment and Authority.


 


Each of the Lenders hereby irrevocably appoints
Wachovia to act on its behalf as the Administrative Agent hereunder and under
the other Credit Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent and the Lenders, and
neither the Borrowers nor any other Credit Party shall have rights as a third
party beneficiary of any of such provisions.


 


Section 8.2            Nature of Duties.


 


Anything
herein to the contrary notwithstanding, none of the bookrunners, Arrangers or
other agents listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Credit Documents,
except in its capacity, as applicable, as the Administrative Agent, or a Lender
hereunder. Without limiting the foregoing, none of the Lenders or 


 


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other
Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the other Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.


 


The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Credit Document by or through
any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective
Related Parties. The exculpatory provisions of this Article shall apply to any
such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.


 


Section 8.3            Exculpatory Provisions.


 


The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Credit
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:


 


(a)           shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;


 


(b)           shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Credit Documents that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Credit Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Credit Document or Requirements of Law;
and


 


(c)           shall not, except as expressly set forth herein and in the other Credit
Documents, have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrowers or any of their
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.


 


The
Administrative Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.1 and 7.2) or (ii) in the
absence of its own gross negligence or willful misconduct.


 


The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with this Agreement or any other Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default or Event of
Default, (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement, any other Credit Document or any other agreement, instrument
or document or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.


 


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Section 8.4            Reliance by Administrative
Agent.


 


The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including
any electronic message, internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The Administrative Agent also may
rely upon any statement made to it orally or by telephone and believed by it to
have been made by the proper Person, and shall not incur any liability for
relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, that by its terms must be fulfilled to the satisfaction of a
Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.


 


Section 8.5            Notice of Default.


 


The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or one of the Borrowers referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders; provided,
however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not taken, only with the
consent or upon the authorization of the Required Lenders, or all of the
Lenders, as the case may be.


 


Section 8.6            Non-Reliance on
Administrative Agent and Other Lenders.


 


Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representation or warranty to it
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of any Credit Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Credit Document or any related
agreement or any document furnished hereunder or thereunder.


 


Section 8.7            Indemnification.


 


The Lenders agree to indemnify the Administrative
Agent in its capacity hereunder and its Affiliates and its respective officers,
directors, agents and employees (to the extent not reimbursed by the 


 


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Borrowers
and without limiting the obligation of the Borrowers to do so), ratably
according to their respective Commitment Percentages in effect on the date on
which indemnification is sought under this Section, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the Obligations)
be imposed on, incurred by or asserted against any such indemnitee in any way
relating to or arising out of any Credit Document or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any such indemnitee under or in
connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from such indemnitee’s gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction. The provisions of this Section shall survive the termination of
this Agreement and the payment in full of the Obligations.


 


Section 8.8            Administrative Agent in Its
Individual Capacity.


 


The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual capacity.
Such Person and its Affiliates may accept deposits from, lend money to, act as
the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with the Borrowers or any Subsidiary or other
Affiliate thereof as if such Person were not the Administrative Agent hereunder
and without any duty to account therefor to the Lenders.


 


Section 8.9            Successor Administrative
Agent.


 


The Administrative Agent may at any time give notice
of its resignation to the Lenders and the Borrowers; provided, that the
Borrower has approved such resignation which such approval shall not be
unreasonably withheld, conditioned or delayed. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, in consultation with
the Borrowers, to appoint a successor, or an Affiliate of any such bank. If no
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above provided that
if the Administrative Agent shall notify the Borrowers and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents (except that in the
case of any Collateral held by the Administrative Agent on behalf of the
Lenders under any of the Credit Documents, the retiring Administrative Agent
shall continue to hold such Collateral until such time as a successor
Administrative Agent is appointed) and (b) all payments, communications
and determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender directly, until such time as
the Required Lenders appoint a successor Administrative Agent as provided for
above in this paragraph. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or retired) Administrative Agent, and the retiring Administrative Agent shall
be discharged from all of its duties and obligations hereunder or under the
other Credit Documents (if not already discharged therefrom as provided above
in this paragraph). The fees payable by the Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrowers and such successor. After the
retiring Administrative Agent’s resignation 


 


106

















 


hereunder
and under the other Credit Documents, the provisions of this Article and Section
10.5  shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.


 


Section 8.10         Collateral and Guaranty
Matters.


 


(a)           The Lenders irrevocably authorize and direct the Administrative Agent:


 


(i)            to release any Lien on any Collateral granted
to or held by the Administrative Agent under any Credit Document (i) upon
termination of the Revolving Commitments and payment in full of all Obligations
(other than contingent indemnification obligations for which no claim has been
made or cannot be reasonably identified by an Indemnitee based on the
then-known facts and circumstances), or (ii) subject to Section 10.1, if
approved, authorized or ratified in writing by the Required Lenders;


 


(ii)           to subordinate any Lien on any Collateral granted to or held by the Administrative
Agent under any Credit Document to the holder of any Lien on such Collateral
that is permitted by Section 6.2; and


 


(iii)          to release any Guarantor from its obligations under the applicable
Guaranty if such Person ceases to be a Guarantor as a result of a transaction
permitted hereunder.


 


(b)           In
connection with a termination or release pursuant to this Section, the
Administrative Agent shall promptly execute and deliver to the applicable
Credit Party, at the  Borrowers’
expense, all documents that the applicable Credit Party shall reasonably
request to evidence such termination or release. Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing the
Administrative Agent’s authority to release or subordinate its interest in
particular types or items of Collateral, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section.


 


ARTICLE IX


 


ADMINISTRATION AND SERVICING


 


Section 9.1            Servicing.


 


(a)           The
Administrative Agent hereby appoints each of the Borrowers as its agent to
service the Collateral and enforce its rights in and under such Collateral. The
Borrowers hereby accept such appointment and agree to perform the duties and
obligations with respect thereto as set forth herein.


 


(b)           The
Borrowers covenants to maintain or cause the servicing of the Collateral to be
maintained in conformity with Accepted Servicing Practices and in a manner at
least equal in quality to the servicing Borrowers provides for Mortgage Assets
that it owns. In the event that the preceding language is interpreted as constituting
one or more servicing contracts, each such servicing contract shall terminate
automatically upon the earliest of (i) an Event of Default, (ii) the
date on which this Agreement terminates or the Administrative Agent releases
its Lien 


 


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with
respect to the related item of Collateral or (iii) the transfer of
servicing approved in writing by the Administrative Agent.


 


Section 9.2            Borrowers as Servicer.


 


If
the Collateral is serviced by the Borrowers, the Borrowers agree that, until
the item of Collateral is released from the Administrative Agent’s Lien, the
Administrative Agent has a security interest in all servicing records for the
period that the Administrative Agent has a Lien on the Collateral, including,
but not limited to, any and all servicing agreements, files, documents,
records, data bases, computer tapes, copies of computer tapes, computer
programs, proof of insurance coverage, insurance policies, appraisals, other
closing documentation, payment history records, and any other records relating
to or evidencing the servicing of such Collateral (the “Servicing Records”).
The Borrowers covenant to safeguard such Servicing Records and to deliver them
promptly to Administrative Agent or its designee (including the Custodian) at
the Administrative Agent’s request.


 


Section 9.3            Third Party Servicer.


 


The
Borrowers shall not cause the Collateral to be serviced by a third party other
than pursuant to the Servicing Agreements or the Pooling and Servicing
Agreements or, if not serviced thereunder, by any Servicer other than a
Servicer approved in writing by the Administrative Agent in its reasonable
discretion, which approval shall be deemed granted by the Administrative Agent
with respect to each Servicer listed on Schedule 9.3 attached
hereto, as such schedule may be amended or supplemented from time to time,
after the execution of this Agreement. If the Collateral is serviced by a
Servicer or a PSA Servicer pursuant to a Servicing Agreement or Pooling and
Servicing Agreement, as applicable, the Borrowers (i) shall, in accordance
with Section 4.2, provide to the Administrative Agent (subject to the last
sentence of this Section) a copy of each Servicing Agreement and Pooling and
Servicing Agreement, which agreements shall be in form and substance acceptable
to the Administrative Agent, and a Servicer Redirection Notice, fully executed
by the Borrowers and the related Servicer or PSA Servicer, and (ii) hereby
irrevocably assigns to the Administrative Agent and the Administrative Agent’s
successors and assigns all right, title and interest of the Borrowers in, to
and under, and the benefits of (but not the obligations of), each Servicing
Agreement and each Pooling and Servicing Agreement with respect to the Collateral.
Notwithstanding the fact that the Borrowers have contracted with the Servicers
or PSA Servicers to service the Collateral, the Borrowers shall remain liable
to the Administrative Agent for the acts of the Servicers and PSA Servicers and
for the performance of the duties and obligations set forth herein. The
Borrowers agree that no Person shall assume the servicing obligations with
respect to the Collateral as successor to a Servicer or PSA Servicer unless
such successor is reasonably approved in writing by the Administrative Agent
prior to such assumption of servicing obligations. Unless otherwise approved in
writing by the Administrative Agent, if the Collateral is serviced by a
Servicer or PSA Servicer, such servicing shall be performed pursuant to a
written Servicing Agreement or Pooling and Servicing Agreement approved by the
Administrative Agent.


 


Section 9.4            Duties of the Borrowers.


 


(a)           Duties. The Borrowers shall take or cause to be
taken all such actions as may be necessary or advisable to collect all Income
and other amounts due or recoverable with respect to the Collateral from time
to time, all in accordance with Applicable Laws, with reasonable care and
diligence, and in accordance with the standard set forth in
Section 9.1(b).


 


(b)           Administrative
Agent’s Rights. Notwithstanding
anything to the contrary contained herein, the exercise by the Administrative
Agent of its rights hereunder shall not release the Borrowers from any of its
duties or responsibilities with respect to the Collateral. The 


 


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Administrative
Agent shall not have any obligation or liability with respect to any
Collateral, nor shall any of them be obligated to perform any of the
obligations of the Borrowers hereunder.


 


(c)           Servicing
Programs. In the event that
the Borrowers or the Servicers use any software program in servicing the
Collateral that is licensed from a third party, the Borrowers shall use their
reasonable efforts to obtain, either before the Closing Date or as soon as
possible thereafter, whatever licenses or approvals are necessary to allow the
Administrative Agent to use such programs.


 


Section 9.5            Authorization of the
Borrowers.


 


(a)           The
Administrative Agent hereby authorizes the Borrowers (including any successor
thereto) to take any and all reasonable steps in its name and on its behalf
necessary or desirable and not inconsistent with the pledge of the Collateral
to the Administrative Agent to collect all amounts due under any and all
Collateral, including, without limitation, endorsing any checks and other
instruments representing Income, executing and delivering any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Collateral
and, after the delinquency of any Collateral and to the extent permitted under
and in compliance with Requirements of Law, to commence proceedings with
respect to enforcing payment thereof, to the same extent as the Borrowers could
have done if it had continued to own such Collateral free of the Lien of the
Administrative Agent. The Administrative Agent shall furnish the Borrowers (and
any successors thereto) with any powers of attorney and other documents
necessary or appropriate to enable the Borrowers to carry out their servicing
and administrative duties hereunder and shall cooperate with the Borrowers to
the fullest extent in order to ensure the collectibility of the Collateral. In
no event shall the Borrowers be entitled to make the Administrative Agent a
party to any litigation without the Administrative Agent’s express prior
written consent.


 


(b)           Subject
to all other rights of the Administrative Agent contained herein, after an
Event of Default has occurred and is continuing, at the direction of the
Administrative Agent, the Borrowers shall take such action as the
Administrative Agent may deem necessary or advisable to enforce collection of
the Collateral; provided, however, subject to all other rights of
the Administrative Agent contained herein, the Administrative Agent may, at any
time that an Event of Default or Default has occurred and is continuing, notify
any Obligor with respect to any
Collateral of the assignment of such Collateral to the Administrative Agent and
direct that payments of all amounts due or to become due be made directly to
the Administrative Agent or any servicer, collection agent or lock–box or other
account designated by the Administrative Agent and, upon such notification and
at the expense of the Borrowers, the Administrative Agent may enforce
collection of any such Collateral and adjust, settle or compromise the amount
or payment thereof.


 


Section 9.6            Event of Default.


 


If
the servicer of the Collateral is any Borrower, upon the occurrence of an Event
of Default, the Administrative Agent shall have the right to terminate the Borrowers as the servicer of the
Collateral and transfer servicing to its designee, at no cost or expense to the
Administrative Agent, at any time thereafter. If the servicer of the Collateral
is not any of the Borrowers, the Administrative Agent shall have the right, as
contemplated in the applicable Servicer Redirection Notice, upon the occurrence
of an Event of Default, to terminate any Servicer and any applicable Servicing
Agreement and any PSA Servicer and any applicable Pooling and Servicing
Agreement to the extent a PSA Servicer signed a Servicer Redirection Notice
and, in each case, to transfer servicing to its designee, at no cost or expense
to the Administrative 


 


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Agent,
it being agreed that the Borrowers will pay any and all fees required to
terminate each such Servicer, PSA Servicer, Servicing Agreement and Pooling and
Servicing Agreement and to effectuate the transfer of servicing to the designee
of the Administrative Agent. The Borrowers shall cooperate fully and shall
cause all Servicers and applicable PSA Servicers to cooperate fully with the
Administrative Agent in transferring the servicing of the Collateral to the
Administrative Agent’s designee.


 


Section 9.7            Modification.


 


Unless
otherwise agreed to by the Administrative Agent in its discretion until the
Administrative Agent releases its Lien on any item of Collateral, neither the
Borrowers, the Servicers, PSA Servicer (unless otherwise provided in a Pooling
and Servicing Agreement) nor any other Person acting on behalf of the foregoing
shall have any right without the Administrative Agent’s prior written consent
in its discretion to (i) waive, amend, modify or alter the material
economic terms of any item or Collateral (including, without limitation, the
related Mortgage Loan Documents), the Servicing Agreements or the Pooling and
Servicing Agreements or (ii) exercise any material rights of a holder of
any item of Collateral under any document or agreement governing or relating to
such Collateral.


 


Section 9.8            Inspection.


 


In
the event the Borrowers or their Affiliates are servicing the Collateral, the
Borrowers shall permit the Administrative Agent to inspect the Borrowers’ and
any of their Affiliates’ servicing facilities, books and records and related
documents and information, as the case may be, for the purpose of satisfying
the Administrative Agent that that Borrowers or their Affiliates, as the case
may be, have the ability to service and are servicing the Collateral as
provided in this Agreement. If a Servicer or PSA Servicer is servicing any
Collateral, the Borrowers shall cooperate with the Administrative Agent in
causing each Servicer and PSA Servicer to permit inspections of the Servicer’s
and PSA Servicer’s facilities, books and records and related documents and
information relating to the Collateral.


 


Section 9.9            [Reserved].


 


Section 9.10         Payment of Certain Expenses
by Servicer.


 


The
Borrowers and any Servicer will be required to pay all expenses incurred by
them in connection with their activities under this Agreement and the other
Credit Documents, including fees and disbursements of independent accountants,
Taxes imposed on the Borrowers or the Servicers, expenses incurred in
connection with payments and reports pursuant to this Agreement and the other
Credit Documents, and all other fees and expenses under this Agreement and the
other Credit Documents for the account of the Borrowers. The Borrowers shall be
required to pay all reasonable fees and expenses owing to any bank or trust
company in connection with the maintenance of the Collection Account and all
other collection, reserve or lock–box accounts related to the Collateral.


 


Section 9.11         Pooling and Servicing
Agreements.


 


Notwithstanding
the provisions of this Article IX, to the extent the Collateral (or
portions thereof) are serviced by a PSA Servicer (other than the Borrowers or
any Servicer) under a Pooling and Servicing Agreement, (a) the standards
for servicing such items of Collateral shall be those set forth in the
applicable Pooling and Servicing Agreement, to the extent of the items covered
therein, and otherwise as provided in this Agreement, (b) the Borrowers
shall enforce its rights and interests under such agreements for and on behalf
of itself and the Administrative Agent, (c) the Borrowers shall instruct
the applicable PSA Servicer to deposit all Income received in respect of the
Collateral into the Collection Account in accordance with Section 5.17 of
this Agreement, (d) the Borrowers shall not take any action or fail to
take 


 


110

















 


any
action or consent to any action or inaction under any Pooling and Servicing
Agreement where the effect of such action or inaction would prejudice or
adversely affect the interests of the Administrative Agent, (e) the
Administrative Agent shall be entitled to exercise any and all rights of the
Borrowers or the holder of any such item of Collateral under such Pooling and
Servicing Agreements as such rights relate to the Collateral, and (f) the
Borrowers shall not consent to any amendment or modification to any Pooling and
Servicing Agreement without the prior written consent of the Administrative
Agent in its reasonable discretion.


 


Section 9.12         Servicer Default.


 


Any
material breach by the Borrowers of the obligations contained in this
Article IX or in Sections 2.9(a) and 5.17 shall constitute a “Servicer
Default”.


 


ARTICLE X


 


MISCELLANEOUS


 


Section 10.1         Amendments, Waivers and
Release of Collateral.


 


Neither this Agreement nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, modified, waived, extended,
restated, replaced, or supplemented (by amendment, waiver, consent or otherwise)
except in accordance with the provisions of this Section nor may Collateral be
released except as specifically provided herein or in the Security Documents or
in accordance with the provisions of this Section. The Required Lenders may or,
with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Borrowers written amendments,
supplements or modifications hereto and to the other Credit Documents for the
purpose of adding any provisions to this Agreement or the other Credit
Documents or changing in any manner the rights of the Lenders or of the Borrowers
hereunder or thereunder or (b) waive or consent to the departure from, on
such terms and conditions as the Required Lenders may specify in such
instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such amendment, supplement, modification, release,
waiver or consent shall:


 


(i)            reduce the amount or extend the scheduled
date of maturity of any Loan or Note or any installment thereon (except in
accordance with Section 2.1(f) or Section 2.2(a)), or reduce the stated rate of
any interest or fee payable hereunder (except in connection with a waiver of
interest at the increased post-default rate set forth in Section 2.6 which
shall be determined by a vote of the Required Lenders) or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration
date of any Lender’s Commitment, in each case without the written consent of
each Lender directly affected thereby; provided that, it is understood
and agreed that (A) no waiver, reduction or deferral of a mandatory
prepayment required pursuant to Section 2.5(b), nor any amendment of
Section 2.5(b) or the definitions of Asset Value, Debt Issuance, Equity
Issuance or Extraordinary Receipt,  shall
constitute a reduction of the amount of, or an extension of the scheduled date
of, the scheduled date of maturity of, or any installment of, any Loan or Note,
(B) any reduction in the stated rate of interest on Revolving Loans shall
only require the written consent of each Lender holding a Revolving Commitment
and (C) any reduction in the stated rate of interest on the Term Loan
shall only require the written consent of each Lender holding a portion of the
outstanding Term Loan; or


 


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(ii)           amend, modify or waive any provision of this Section or reduce the
percentage specified in the definition of Required Lenders, without the written
consent of all the Lenders; or


 


(iii)          release any Borrower or all or substantially all of the Guarantors from
obligations under the Guaranty, without the written consent of all of the
Lenders; or


 


(iv)          release all or substantially all of the Collateral without the written
consent of all of the Lenders; or


 


(v)           subordinate the Loans to any other Indebtedness without the written
consent of all of the Lenders; or


 


(vi)          permit any Borrower to assign or transfer any of its rights or
obligations under this Agreement or other Credit Documents without the written
consent of all of the Lenders; or


 


(vii)         amend, modify or waive any provision of the Credit Documents requiring
consent, approval or request of the Required Lenders or all Lenders without the
written consent of the Required Lenders or all the Lenders as appropriate; or


 


(viii)        without the consent of Revolving Lenders holding in the aggregate more
than 50% of the outstanding Revolving Commitments (or if the Revolving  Commitments have been terminated, the
aggregate principal amount of outstanding Revolving Loans), amend, modify or
waive any provision in Section 4.2 or waive any Default or Event of
Default (or amend any Credit Document to effectively waive any Default or Event
of Default) if the effect of such amendment, modification or waiver is that the
Revolving Lenders shall be required to fund Revolving Loans when such Lenders
would otherwise not be required to do so; or


 


(ix)           amend, modify or waive the order in which Obligations are paid or in a
manner that would alter the pro rata sharing of payments by and among the Lenders
in Section 2.9 without the written consent of each Lender and directly
affected thereby; or


 


(x)            amend, modify or waive any provision of
Article VIII without the written consent of the then Administrative Agent;
or


 


(xi)           amend, modify or waive any provision in Sections 3.3 through 3.6
without the written consent of the Custodian; or


 


(xii)          amend or modify the definition of Obligations to delete or exclude any
obligation or liability described therein without the written consent of each
Lender directly affected thereby;


 


provided, further,
that no amendment, waiver or consent affecting the rights or duties of the
Administrative Agent under any Credit Document shall in any event be effective,
unless in writing and signed by the Administrative Agent, in addition to the
Lenders required hereinabove to take such action. Unless otherwise expressly
provided herein, waivers shall be effective only in the specific instance and
for the specific purpose for which given.


 


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Any such waiver, any such amendment, supplement or
modification and any such release shall apply equally to each of the Lenders
and shall be binding upon the Borrowers, the other Credit Parties, the Lenders,
the Administrative Agent and all future holders of the Notes. In the case of
any waiver, the Borrowers, the other Credit Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Credit Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.


 


Notwithstanding any of the foregoing to the
contrary, the consent of the Borrowers and the other Credit Parties shall not
be required for any amendment, modification or waiver of the provisions of
Article VIII (other than the provisions of Section 8.9).


 


Notwithstanding the fact that the consent of all the
Lenders is required in certain circumstances as set forth above, (a) each
Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein and (b) the Required Lenders
may consent to allow a Credit Party to use cash collateral in the context of a
bankruptcy or insolvency proceeding.


 


For
the avoidance of doubt and notwithstanding any provision to the contrary
contained in this Section 10.1, this Agreement may be amended (or amended and
restated) with the written consent of the Credit Parties and the Required
Lenders (i) to increase the aggregate Commitments of the Lenders (provided
that no Lender shall be required to increase its commitment without its consent),
(ii) to add one or more additional borrowing Tranches to this Agreement
and to provide for the ratable sharing of the benefits of this Agreement and
the other Credit Documents with the other then outstanding Obligations in
respect of the extensions of credit from time to time outstanding under such
additional borrowing Tranche(s) and the accrued interest and fees in respect
thereof and (iii) to include appropriately the lenders under such
additional borrowing Tranches in any determination of the Required Lenders
and/or to provide consent rights to such lenders under subsections (ix)
and/or (x) of Section 10.1 corresponding to the consent rights of the other
Lenders thereunder.


 


Section 10.2         Notices.


 


(a)           Notices Generally. Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows:


 


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(i)            If to the Borrowers or any other Credit
Party:


 


	
  c/o NorthStar Realty
  Finance Corp.

  
	
  399 Park Avenue, 18th
  floor

  
	
  New York, New York 10022

  
	
  Attention:

  	
  Andy Richardson

  	 

	
   

  	
  Al Tylis, Esq.

  	 

	
   

  	
  Daniel R. Gilbert

  	 

	
  Facsimile No.:

  	
  (212) 547–2700

  	 

	
  Confirmation No.:

  	
  (212) 547–2650

  	 

	
   

  	
  (212) 547–2641

  	 

	
   

  	
  (212) 547–2680

  	 

	
   

  	 

	
  with a copy to:

  	 

	
   

  	 

	
  Paul Hastings Janofsky
  & Walker LLP

  	 

	
  75 East 55th
  Street

  	 

	
  New York, New York 10022

  	 

	
  Attention:

  	
  Robert J. Grados, Esq.

  	 

	
  Facsimile No.:

  	
  (212) 230–7830

  	 

	
  Confirmation No.:

  	
  (212) 318–6923

  	 

					



 


(ii)           If to the Administrative Agent:


 


	
  Wachovia Bank, National
  Association

  	
   

  
	
  One Wachovia Center,
  NC0166

  	
   

  
	
  301 Couth College Street

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
  Lee Goins

  
	
  Facsimile No.:

  	
  (704) 715-0666

  
	
  Confirmation No.:

  	
  (704) 715-7655

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Wachovia Bank, National
  Association

  	
   

  
	
  One Wachovia Center,
  NC0166

  	
   

  
	
  301 South College Street

  	
   

  
	
  Charlotte, North Carolina
  28288

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
  Marianne Hickman

  
	
  Facsimile No.:

  	
  (704) 715–0066

  
	
  Confirmation No.:

  	
  (704) 715–7818

  



 


(iii)          if to a Lender, to it at its address (or
telecopier number) set forth in its Administrative Questionnaire.


 


Notices sent by hand or overnight courier service,
or mailed by certified or registered mail, shall be deemed to have been given
when received; notices sent by telecopier shall be deemed to have been given
when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next business day for the recipient). Notices delivered through electronic
communications to the extent provided in paragraph (b) below, shall be
effective as provided in said paragraph (b).


 


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(b)           Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall
not apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrowers may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.


 


Unless the Administrative Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available
and identifying the website address therefor.


 


(c)           Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.


 


Section 10.3         No Waiver; Cumulative
Remedies.


 


No failure to exercise and no delay in exercising,
on the part of the Administrative Agent or any Lender, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Requirements of Law.


 


Section 10.4         Survival of Representations
and Warranties.


 


All representations and warranties made hereunder
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans; provided that all such
representations and warranties shall terminate on the date upon which the Commitments
have been terminated and all Obligations owing under any Notes or the other
Credit Documents have been paid in full.


 


Section 10.5         Payment of Expenses and Taxes;
Indemnity.


 


(a)           Costs and Expenses. The Borrowers shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent) in connection with the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Credit
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by
the Administrative Agent or any Lender, (including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender) in
connection with the enforcement or protection of its rights (A) in
connection with


 


115

















 


this Agreement and the other Credit Documents,
including its rights under this Section, or (B) in connection with the Loans
made, including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans, (iii) the
Borrowers shall pay on demand any and all stamp, sales, excise and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, the Credit Documents or the
other documents to be delivered hereunder or thereunder or the funding or
maintenance of Loans hereunder and (iv) all reasonable due diligence,
inspection, audit, testing, review, recording, travel, lodging or other
administrative expenses and costs incurred by the Administrative Agent or any
Lender in connection with the review, consideration, pledge or proposed pledge
of any Mortgage Asset or other Collateral or proposed Collateral (including any
costs necessary or incidental to the pledge of the Mortgage Assets or other
Collateral or the making of any Loan in connection therewith). The provisions
of this Section shall survive the termination of this Agreement and the payment
in full of the Obligations.


 


(b)           Indemnification by the Borrowers.


 


(i)            The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all actual,
out-of-pocket losses; claims; penalties; fines; actual, out-of-pocket damages;
actual, out-of-pocket liabilities and related actual, out-of-pocket expenses
(including the reasonable fees, charges and disbursements of any counsel for
any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Borrowers or any other Credit Party (collectively,
the “Indemnified Amounts”) arising out of, in connection with, or as a
result of (A) this Agreement, the Credit
Documents, any Loan, any Collateral, the Mortgage Loan Documents, any
transaction or Extension of Credit contemplated hereby or thereby, or any
amendment, supplement, extension or modification of, or any waiver or consent
under or in respect of this Agreement, the Credit Documents, any Loan, any
Collateral, the Mortgage Loan Documents or any transaction or Extension of
Credit contemplated hereby or thereby, (B)
any Mortgage Asset or any other Collateral under the Credit Documents, (C) any violation or alleged violation of,
non–compliance with or liability under any Requirement of Law (including, without
limitation, violation of Securities Laws and Environmental Laws), (D) ownership of, Liens on, security interests
in or the exercise of rights and/or remedies under the Credit Documents, the
Mortgage Loan Documents, the Collateral, any other collateral under the Credit
Documents, the Underlying Mortgaged Property, any other related Property or
collateral or any part thereof or any interest therein or receipt of any Income
or rents, (E) any accident, injury to or
death of any person or loss of or damage to Property occurring in, on or about
any Underlying Mortgaged Property, any other related Property or collateral or
any part thereof, the related Collateral or on the adjoining sidewalks, curbs,
parking areas, streets or ways, (F) any
use, nonuse or condition in, on or about, or possession, alteration, repair,
operation, maintenance or management of, any Underlying Mortgaged Property, any
other related Property or collateral or any part thereof or on the adjoining
sidewalks, curbs, parking areas, streets or ways, (G) any failure on the part of the Credit Parties to perform or
comply with any of the terms of the Mortgage Loan Documents, the Credit
Documents, the Collateral or any other collateral under the Credit Documents, (H) performance of any labor or services or the
furnishing of any materials or other Property in respect of the Underlying
Mortgaged Property, any other related Property or collateral, the Collateral or
any part thereof, (I) any claim by
brokers, finders or similar Persons claiming to be entitled to a


 


116

















 


commission
in connection with any lease or other transaction involving any Underlying
Mortgaged Property, any other related Property or collateral, the Collateral or
any part thereof or the Credit Documents, (J)
any Taxes including, without limitation, any Taxes attributable to the
execution, delivery, filing or recording of any Credit Document, any Mortgage Loan
Document or any memorandum of any of the foregoing, (K) any Lien or claim arising on or against the Underlying Mortgaged
Property, any other related Property or collateral, the Collateral or any part
thereof under any Requirement of Law or any liability asserted against the
Administrative Agent or any Lender with respect thereto, (L) the claims of any lessee or any Person
acting through or under any lessee or otherwise arising under or as a consequence
of any leases with respect to any Underlying Mortgaged Property, related
Property or collateral, or any claims of an Obligor, (M) any civil penalty or fine assessed by OFAC against, and all
reasonable costs and expenses (including counsel fees and disbursements)
incurred in connection with the defense thereof, by any Indemnitee as a result
of conduct of any Credit Party that violates any sanction enforced by OFAC, (N) any and all Indemnified Amounts arising out
of, attributable or relating to, accruing out of, or resulting from (1) a
past, present or future violation or alleged violation of any Environmental
Laws in connection with any Property or Underlying Mortgaged Property by any
Person or other source, whether related or unrelated to any other Credit Party
or any Obligor, (2) any presence of any Materials of Environmental Concern
in, on, within, above, under, near, affecting or emanating from any Property or
Underlying Mortgaged Property, (3) the failure to timely perform any
Remedial Work, (4) any past, present or future activity by any Person or other
source, whether related or unrelated to any Credit Party or any Obligor in
connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from any Property or Underlying
Mortgaged Property of any Materials of Environmental Concern at any time located
in, under, on, above or affecting any Property or Underlying Mortgaged
Property, (5) any past, present or future actual Release (whether
intentional or unintentional, direct or indirect, foreseeable or unforeseeable)
to, from, on, within, in, under, near or affecting any Property or Underlying
Mortgaged Property by any Person or other source, whether related or unrelated
to any Credit Party or any Obligor, (6) the imposition, recording or
filing or the threatened imposition, recording or filing of any Lien on any
Property or Underlying Mortgaged Property with regard to, or as a result of,
any Materials of Environmental Concern or pursuant to any Environmental Law, or
(7) any misrepresentation or inaccuracy in any representation or warranty
in any material respect or material breach or failure to perform any covenants
or other obligations pursuant to this Agreement, the other Credit Documents or
any of the Mortgage Loan Documents or relating to environmental matters in any
way including, without limitation, under any of the Mortgage Loan Documents or
(O) any Credit Party’s conduct,
activities, actions and/or inactions in connection with, relating to or arising
out of any of the foregoing clauses of this Section that, in each case, results
from anything other than any Indemnitee’s gross negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnitee in
connection with any Collateral or any other collateral under the Credit
Documents for any sum owing thereunder, or to enforce any provisions of any
Collateral or any other collateral under the Credit Documents, the Credit
Parties shall save, indemnify and hold such Indemnitee harmless from and
against all expense, loss or damage suffered by reason of any defense, set–off,
counterclaim, recoupment or reduction of liability whatsoever of the account
debtor, obligor or Obligor thereunder arising out of a breach by any Credit
Party of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in


 


117

















 


favor
of such account debtor, obligor or Obligor or its successors from any Credit
Party. Each of the Credit Parties also agrees to reimburse an Indemnitee as and
when billed by such Indemnitee for all such Indemnitee’s costs, expenses and
fees incurred in connection with the enforcement or the preservation of such
Indemnitee’s rights under this Agreement, the Credit Documents, the Mortgage Loan
Documents and any transaction or Extension of Credit contemplated hereby or
thereby, including, without limitation, the reasonable fees and disbursements
of its counsel. In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is
brought by any Credit Party and/or any of their officers, directors,
shareholders, employees or creditors, an Indemnitee or any other Person or any
Indemnitee is otherwise a party thereto and whether or not any transaction
contemplated hereby is consummated.


 


(ii)           Any amounts subject to the indemnification provisions of this Section
shall be paid by the Credit Parties to the Indemnitee within thirty (30)
Business Days following such Person’s demand therefor. For the avoidance of
doubt, an Indemnitee may seek payment of any Indemnified Amount at any time and
regardless of whether a Default or an Event of Default then exists or is
continuing.


 


(iii)          If for any reason the indemnification provided in this Section is
unavailable to the Indemnitee or is insufficient to hold an Indemnitee
harmless, then the Credit Parties shall contribute to the amount paid or
payable by such Indemnitee as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnitee on the one hand and the Credit Parties on the other
hand but also the relative fault of such Indemnitee as well as any other
relevant equitable considerations.


 


(iv)          The obligations of the Credit Parties under this Article X are
joint and several and shall survive the termination of this Agreement.


 


(v)           Indemnification under this Section shall be in an amount necessary to
make the Indemnitee whole after taking into account any tax consequences to the
Indemnitee of the receipt of the indemnity provided hereunder, including the
effect of such tax or refund on the amount of tax measured by net income or
profits that is or was payable by the Indemnitee.


 


(c)           Reimbursement by Lenders. To the extent that the Borrowers for any
reason fail to indefeasibly pay any amount required under paragraph (a)
or (b) of this Section to be paid by it to the Administrative Agent (or
any sub-agent thereof), or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), or such Related Party, as the case may be, such Lender’s Commitment
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) in connection with such capacity.


 


(d)           Waiver of Consequential Damages, Etc. To the fullest extent permitted by Requirements
of Law, the Credit Parties and the Lenders shall not assert, and hereby waive,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or


 


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punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Credit Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee
referred to in paragraph (b) above shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Credit
Documents or the transactions contemplated hereby or thereby. The provisions of
this Section shall survive the termination of this Agreement and the payment in
full of the Obligations.


 


Section 10.6         Successors and Assigns;
Participations.


 


(a)           Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the Borrowers
nor any other Credit Party (other than as permitted under Section 6.4) may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in paragraph (d) of
this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.


 


(b)           Assignments by Lenders. Any Lender may at any time assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to
the following conditions:


 


(i)            Minimum Amounts.


 


(A)          in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and


 


(B)           in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate principal amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of
the Trade Date) shall not be less than $1,000,000, in the case of any
assignment in respect of a revolving facility, or $1,000,000, in the case of
any assignment in respect of a term facility (provided, however,
that simultaneous assignments shall be aggregated in respect of a Lender and
its


 


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Approved
Funds), unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrowers otherwise consent (each
such consent not to be unreasonably withheld or delayed).


 


(ii)           Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment assigned,
except that this clause (ii) shall not prohibit any Lender from assigning
all or a portion of its rights and obligations among separate Tranches on a
non-pro rata basis.


 


(iii)          Required Consents. No consent shall be required for any
assignment except to the extent required by paragraph (b)(i)(B) of this
Section and, in addition:


 


(A)          the consent of the Borrowers (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) an Event of Default has
occurred and is continuing at the time of such assignment or (y) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and


 


(B)           the consent of the Administrative Agent (such consent not to be
unreasonably withheld, conditioned or delayed) shall be required for assignments
in respect of (i) a Revolving Commitment if such assignment is to a Person
that is not a Lender with a Commitment in respect of such facility, an
Affiliate of such Lender or an Approved Fund with respect to such Lender or
(ii) a Term Loan Commitment to a Person who is not a Lender, an Affiliate
of a Lender or an Approved Fund.


 


(iv)          Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500  and
the assignee, if it is not a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire.


 


(v)           No Assignment to Credit Parties. No such assignment shall be made to any Credit
Party or any of the Credit Parties’ Affiliates or Subsidiaries of a Credit
Party.


 


(vi)          No Assignment to Natural Persons. No such assignment shall be made to a
natural person.


 


Subject to acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 2.12 and 10.5  with respect
to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this
Section.


 


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(c)           Register. The Administrative Agent, acting solely for this purpose as an agent
of the Borrowers, shall maintain at one of its offices in Charlotte, North
Carolina a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrowers and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.


 


(d)           Participations. With the consent of the Administrative
Agent, any Lender may at any time, without the consent of, or notice to, the Borrowers,
sell participations to any Person (other than a natural person or the Credit
Parties or any of the Credit Parties’ Affiliates or Subsidiaries of a Credit
Party) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers,
the Administrative Agent and the Lenders, shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.


 


Any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any  provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that affects such Participant. Subject
to paragraph (e) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.12 and 2.13 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent
permitted by Requirements of Law, each Participant also shall be entitled to
the benefits of Section 10.7  as though it
were a Lender, provided such Participant agrees to be subject to Section 2.9  as though it were a Lender.


 


(e)           Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 2.12 and 2.14 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers’ prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.14 unless the Borrowers are notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrowers, to comply with Section 2.14  as though it were a Lender.


 


(f)            Certain Pledges. Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.


 


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Section 10.7         Right of Set-off; Sharing of
Payments.


 


(a)           If an Event of Default shall have occurred and be
continuing, each Lender, and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted
by Requirements of Law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by
such Lender or any such Affiliate to or for the credit or the account of the Borrowers
against any and all of the obligations of the Borrowers now or hereafter
existing under this Agreement or any other Credit Document to such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement or any other Credit Document and although such obligations of
the Borrowers may be contingent or unmatured or are owed to a branch or office
of such Lender different from the branch or office holding such deposit or
obligated on such indebtedness. The foregoing right shall not apply to Excluded
Accounts. The rights of each Lender and its respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender or its respective Affiliates may have. Each Lender
agrees to notify the Borrowers and the Administrative Agent promptly after any
such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.


 


(b)           If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans or other obligations hereunder resulting in such Lender’s
receiving payment of a proportion of the aggregate principal amount of its Loans
and accrued interest thereon or other such obligations greater than its pro
rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (i) notify the Administrative Agent of such fact,
and (ii) purchase (for cash at face value) participations in the Loans and
such other obligations of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them, provided
that:


 


(i)            if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest; and


 


(ii)           the provisions of this paragraph shall not be construed to apply to (A) any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans
to any assignee or participant, other than to the Credit Parties or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply).


 


(c)           Each Credit Party consents to the foregoing and agrees, to the extent
it may effectively do so under Requirements of Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Credit Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of each Credit
Party in the amount of such participation.


 


Section 10.8         Table of Contents and
Section Headings.


 


The table of contents and the Section and subsection
headings herein are intended for convenience only and shall be ignored in
construing this Agreement.


 


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Section 10.9         Counterparts; Integration; Effectiveness;
Electronic Execution.


 


(a)           Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Credit
Documents, and any separate letter agreements with respect to fees payable to
the Administrative Agent, constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.1, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto. Delivery
of an executed counterpart of a signature page of this Agreement by telecopy or
email shall be effective as delivery of a manually executed counterpart of this
Agreement.


 


(b)           Electronic Execution of Assignments. The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption shall be deemed to
include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any Requirement of Law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.


 


Section 10.10       Severability.


 


Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


Section 10.11       Integration.


 


This Agreement and the other Credit Documents
represent the agreement of the Borrowers, the other Credit Parties, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent, the Borrowers, the other Credit Parties, or any Lender
relative to the subject matter hereof not expressly set forth or referred to
herein or therein.


 


Section 10.12       Governing Law.


 


This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.


 


Section 10.13       Consent to Jurisdiction; Service
of Process and Venue.


 


(a)           Consent to Jurisdiction. Each of the Borrowers and each other Credit
Party irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the courts of the State of New York  and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Credit


 


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Document, or for recognition or enforcement of any
judgment, and each of the parties hereto irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York  sitting State
court or, to the fullest extent permitted by Requirements of Law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
Requirements of Law. Nothing in this Agreement or in any other Credit Document
shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Credit Document against the Borrowers or any other Credit Party or
its properties in the courts of any jurisdiction.


 


(b)           Service of Process. Each party hereto irrevocably consents to
service of process in the manner provided for notices in Section 10.2. Nothing
in this Agreement will affect the right of any party hereto to serve process in
any other manner permitted by Requirements of Law.


 


(c)           Venue. The Borrowers and each other Credit Party irrevocably and unconditionally
waives, to the fullest extent permitted by Requirements of Law, any objection
that it may now or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement or any other Credit
Document in any court referred to in paragraph (b) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by Requirements of Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.


 


The
provisions of this Section shall survive the termination of this Agreement and
the payment in full of the Obligations.


 


Section 10.14       Confidentiality.


 


Each
of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and other
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by Requirements of
Law or by any subpoena or similar legal process, (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder,
under any other Credit Document or any action or proceeding relating to this
Agreement, any other Credit Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement and/or the other Credit Documents,
(g) (i) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Credit Parties and their
obligations, (ii) an investor or prospective investor in securities issued
by an Approved Fund that also agrees that Information shall be used solely for
the purpose of evaluating an investment in such securities issued by the
Approved Fund, (iii) a trustee, collateral manager, custodian, servicer,
backup servicer, noteholder or secured party in connection with the
administration, servicing and reporting on the assets serving as collateral for
securities issued by an Approved Fund, or (iv) a nationally recognized
rating agency that requires access to information regarding the Credit Parties,
the Loans and Credit Documents in connection with ratings issued in respect of
securities issued by an Approved Fund (in each case, it being understood that
the Persons to whom such disclosure is made will be informed of the
confidential nature of such information and instructed to keep such information
confidential), (h) with


 


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the
consent of the applicable Credit Parties or (i) to the extent such
Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative
Agent, any Lender, or any of their respective Affiliates on a nonconfidential
basis from a source other than the Credit Parties.


 


For
purposes of this Section, “Information” means all information received
from the Credit Parties or any of their Subsidiaries relating to the Credit
Parties or any of their Subsidiaries or any of their respective businesses,
other than any such information that is available to the Administrative Agent
or any Lender on a nonconfidential basis prior to disclosure by the Credit
Parties or any of their Subsidiaries, provided that, in the case of
information received from the Credit Parties or any of their Subsidiaries after
the date hereof, such information is clearly identified at the time of delivery
as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.


 


Notwithstanding
anything to the contrary contained herein or in any Credit Document, the Credit
Parties shall be entitled to disclose any and all terms of any Credit Document
(including the public filing thereof) if any Credit Party, in its sole
discretion, deems it necessary or appropriate under the rules or regulations of
the SEC and/or the New York Stock Exchange.


 


The
provisions of this Section shall survive the termination of this Agreement and
the payment in full of the Obligations.


 


Section 10.15       Acknowledgments.


 


The Borrowers and the other Credit Parties each
hereby acknowledge that:


 


(a)           it has been advised by counsel in the
negotiation, execution and delivery of each Credit Document;


 


(b)           neither the Administrative Agent nor any
Lender has any fiduciary relationship with or duty to the Borrowers or any
other Credit Party arising out of or in connection with this Agreement and the
relationship between the Administrative Agent and the Lenders, on one hand, and
the Borrowers and the other Credit Parties, on the other hand, in connection
herewith is solely that of debtor and creditor; and


 


(c)           no joint venture exists among the Lenders or
among the Borrowers or the other Credit Parties, the Lenders and the
Administrative Agent.


 


Section 10.16       Waivers of Jury Trial.


 


EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND


 


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THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


 


The
provisions of this Section shall survive the termination of this Agreement and
the payment in full of the Obligations.


 


Section 10.17       Patriot Act Notice.


 


Each
Lender and the Administrative Agent (for itself and not on behalf of any other
party) hereby notifies the Borrowers that, pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies
the Borrowers and the other Credit Parties, which information includes the name
and address of the Borrowers and the other Credit Parties and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrowers and the other Credit Parties in accordance with the
Patriot Act.


 


Section 10.18       Resolution of Drafting
Ambiguities.


 


Each
Credit Party acknowledges and agrees that it was represented by counsel in connection
with the execution and delivery of this Agreement and the other Credit
Documents to which it is a party, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and thereof and that any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation hereof or
thereof.


 


Section 10.19       Continuing Agreement.


 


This
Credit Agreement shall be a continuing agreement and shall remain in full force
and effect until all Loans, interest, fees and other Obligations (other than
those obligations that expressly survive the termination of this Credit
Agreement) have been paid in full and all Commitments have been terminated. Upon
termination, the Credit Parties shall have no further obligations (other than
those obligations that expressly survive the termination of this Credit
Agreement) under the Credit Documents and the Administrative Agent shall, at the
request and expense of the Borrowers, deliver all the Collateral in its
possession to the Borrowers and release all Liens on the Collateral; provided
that should any payment, in whole or in part, of the Obligations be rescinded
or otherwise required to be restored or returned by the Administrative Agent or
any Lender, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, then the Credit Documents shall automatically be
reinstated and all Liens of the Administrative Agent shall reattach to the
Collateral and all amounts required to be restored or returned and all costs
and expenses incurred by the Administrative Agent or any Lender in connection
therewith shall be deemed included as part of the Obligations.


 


Section 10.20       Lender Consent.


 


Each
Person signing a Lender Consent (a) approves of this Agreement and the
other Credit Documents, (b) authorizes and appoints the Administrative
Agent as its agent in accordance with the terms of Article VIII, (c) authorizes
the Administrative Agent to execute and deliver this Agreement on its behalf,
and (d) is a Lender hereunder and therefore shall have all the rights and
obligations of a Lender under this Agreement as if such Person had directly
executed and delivered a signature page to this Agreement.


 


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Section 10.21       Appointment of the
Administrative Borrower.


 


Each
of the Borrowers hereby appoint the Administrative Borrower to act as its agent
for all purposes under this Agreement (including, without limitation, with
respect to all matters related to the borrowing and repayment of Loans) and
agree that (a) the Administrative Borrower may execute such documents on behalf
of such Borrower as the Administrative Borrower deems appropriate in its sole
discretion and each Borrower shall be obligated by all of the terms of any such
document executed on its behalf, (b) any notice or communication delivered by
the Administrative Agent or the Lender to the Administrative Borrower shall be
deemed delivered to each Borrower and (c) the Administrative Agent or the
Lenders may accept, and be permitted to rely on, any document, instrument or
agreement executed by the Administrative Borrower on behalf of each Borrower.


 


Section 10.22       Counterclaims.


 


The
Credit Parties each hereby knowingly, voluntarily and intentionally waives any
right to assert a counterclaim, other than a compulsory counterclaim, in any
action or proceeding brought against it by the Administrative Agent, the
Lenders or any of the Affiliates or agents of the foregoing. The provisions of
this Section shall survive the termination of this Agreement and the payment in
full of the Obligations.


 


Section 10.23       Legal Matters.


 


In
the event of any conflict between the terms of this Agreement, any other Credit
Document or any Confirmation with respect to any Collateral, the documents
shall control in the following order of priority:  first, the terms of the related Confirmation
shall prevail, then the terms of this Agreement shall prevail, and then the
terms of the other Credit Documents shall prevail.


 


Section 10.24       Recourse Against Certain
Parties.


 


No
recourse under or with respect to any obligation, covenant or agreement
(including, without limitation, the payment of any fees or any other obligations)
of the Administrative Agent, the Lenders, or the Credit Parties, as contained
in this Agreement, the Credit Documents or any other agreement, instrument or
document entered into by the Administrative Agent, the Lenders, the Credit
Parties or any such party pursuant hereto or thereto or in connection herewith
or therewith shall be had against any administrator of the Administrative
Agent, the Lenders, or the Credit Parties or any incorporator, Affiliate
(direct or indirect), owner, member, partner, stockholder, officer, director,
employee, agent or attorney of the Administrative Agent, the Lenders, or the
Credit Parties or of any such administrator, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and
understood that the agreements of the Administrative Agent, the Lenders or
the Credit Parties contained in this Agreement, the Credit Documents and all of
the other agreements, instruments and documents entered into by it pursuant
hereto or thereto or in connection herewith or therewith are, in each case,
solely the corporate obligations of the Administrative Agent, the Lenders or
the Credit Parties and that no personal liability whatsoever shall attach to or
be incurred by any administrator of the Administrative Agent, the Lenders or
the Credit Parties or any incorporator, owner, member, partner, stockholder,
Affiliate (direct or indirect), officer, director, employee, agent or attorney
of the Administrative Agent, the Lenders or the Credit Parties or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of the Administrative Agent, the Lenders
or the Credit Parties contained in this Agreement, the Credit Documents or in
any other such instruments, documents or agreements, or that are implied
therefrom, and that any and all personal liability of every such administrator
of the Administrative Agent, the Lenders or the Credit Parties and each
incorporator, owner, member, partner, stockholder, Affiliate (direct or
indirect), officer, director, employee, agent or attorney of the Administrative
Agent, the Lenders, the


 


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Credit
Parties or of any such administrator, or any of them, for breaches by the
Administrative Agent, the Lenders, or the Credit Parties of any such
obligations, covenants or agreements, which liability may arise either at
common law or at equity, by statute or constitution, or otherwise, is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement. The provisions of this Section shall survive the
termination of this Agreement and the payment in full of the Obligations.


 


Section 10.25       Protection of Right, Title
and Interest in the Collateral; Further Action Evidencing Loans.


 


(a)           The Credit Parties shall cause all financing statements and
continuation statements and any other necessary documents covering the right,
title and interest of the Administrative Agent to the Collateral to be promptly
recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by Requirements of Law fully to preserve and protect the right, title and
interest of the Administrative Agent (on behalf of the Lenders) hereunder to
all Property comprising the Collateral. The Credit Parties shall deliver to the
Administrative Agent file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available following
such recording, registration or filing. The Credit Parties shall execute any
and all documents reasonably required to fulfill the intent of this Section.


 


(b)           The Credit Parties agree that from time to time, at their expense, they
will promptly execute and deliver all instruments and documents, and take all
actions, that the Administrative Agent or any Lender may reasonably request in
order to perfect, protect or more fully evidence the Loans hereunder and the
security interest granted in the Collateral, or to enable the Administrative
Agent to exercise and enforce their rights and remedies hereunder or under any
Credit Document.


 


(c)           If the Credit Parties fail to perform any of their obligations
hereunder, the Administrative Agent may (but shall not be required to) perform,
or cause performance of, such obligation; and the Administrative Agent’s reasonable
costs and expenses incurred in connection therewith shall be payable by the
Borrowers. The Credit Parties irrevocably appoint the Administrative Agent as
their attorney-in-fact and authorize the Administrative Agent to act on behalf
of the Credit Parties (i) to execute on behalf of the Credit Parties as
debtor and to file financing statements necessary or desirable in the
Administrative Agent’s discretion to perfect and to maintain the perfection and
priority of the interest in the Collateral, and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Collateral as a financing statement in such offices as the
Administrative Agent in its discretion deems necessary or desirable to perfect
and to maintain the perfection and priority of the interests in the Collateral.
This appointment is coupled with an interest and is irrevocable.


 


Section 10.26       Credit Parties’ Waiver of
Setoff.


 


Each
Credit Party hereby waives any right of setoff it may have or to which it may
be entitled under this Agreement, the other Credit Documents or otherwise from
time to time against the Administrative Agent, any Lender, or any Property or
assets, or any of the foregoing.


 


Section 10.27       Periodic Due Diligence
Review.


 


Each
Credit Party acknowledges that the Administrative Agent and each Lender has the
right to perform continuing due diligence reviews with respect to the
Collateral and the Credit Parties and Consolidated Subsidiaries of the
foregoing for purposes of verifying compliance with the representations,


 


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warranties, covenants, agreements and specifications made hereunder, or
otherwise, and each Credit Party agrees that upon reasonable (but no less than
three (3) Business Day) prior notice, unless an Event of Default shall have
occurred, in which case no notice is required, to the Credit Parties, as
applicable, the Administrative Agent, the Lenders or their authorized
representatives shall be permitted during normal business hours to examine,
inspect, and make copies and extracts of, the Collateral and any and all
documents, records, agreements, instruments or information relating to such
Collateral, the Credit Parties and the Consolidated Subsidiaries of the
foregoing in the possession or under the control of any Credit Party. Each Credit
Party also shall make available to the Administrative Agent a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Collateral, the Credit Parties and the Consolidated Subsidiaries
of the foregoing. Each Credit Party shall also make available to the
Administrative Agent and the Lenders any accountants or auditors of any Credit
Party to answer any questions or provide any documents as the Administrative
Agent or the Lenders may require. The Borrowers shall pay all reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent and/or the Lenders in
connection with the Administrative Agent’s and the Lenders’ activities pursuant
to this Section  (“Due Diligence Costs”). The Credit Parties
acknowledge that the Administrative Agent has the right at any time to review
all aspects of the Collateral and the Asset Value thereof, which review shall
occur no less than quarterly and such reviews may result in mandatory
prepayments under Section 2.5.


 


Section 10.28       Character of Loans for
Income Tax Purposes.


 


The
Lenders and the Borrowers shall treat all Loans hereunder as indebtedness of
the Borrowers for United States federal income tax purposes.


 


Section 10.29       Joint and Several Liability;
Full Recourse Obligations.


 


(a)           At all times during which there is more than one (1) Borrower
under this Agreement, each Borrower hereby acknowledges and agrees that
(i) such Borrower shall be jointly and severally liable to the
Administrative Agent and the Lenders to the maximum extent permitted by the
Requirements of Law for all representations, warranties, covenants, duties and
indemnities of the Borrowers, arising under this Agreement and the other Credit
Documents, as applicable, and the Obligations, (ii) such Borrower has consented
to the Administrative Borrower delivering all Notices of Borrowing on behalf of
all Borrowers and any such Notice of Borrowing delivered by the Administrative
Borrower on behalf of the Borrowers is binding upon and enforceable against
each Borrower, (iii) the liability of each Borrower (A) shall be
absolute and unconditional and shall remain in full force and effect (or be
reinstated) until all the Obligations shall have been paid in full and the
expiration of any applicable preference or similar period pursuant to any
bankruptcy, insolvency, reorganization, moratorium or similar law, or at law or
in equity, without any claim having been made before the expiration of such
period asserting an interest in all or any part of any payment(s) received by
the Administrative Agent, and (B) until such payment has been made, shall
not be discharged, affected, modified or impaired on the happening from time to
time of any event, including, without limitation, any of the following, whether
or not with notice to or the consent of the Credit Parties or any other Person,
(1) the waiver, compromise, settlement, release, termination or amendment
(including, without limitation, any extension or postponement of the time for
payment or performance or renewal or refinancing) of any or all of the
obligations or agreements of any Credit Party under this Agreement or any
Credit Document, (2) the failure to give notice to the Credit Parties of
the occurrence of an Event of Default under any of the Credit Documents,
(3) the release, substitution or exchange by the Administrative Agent of
any or all of the Collateral (whether with or without consideration) or the
acceptance by the Administrative Agent of any additional collateral or the
availability or claimed availability of any other collateral or source of
repayment or any nonperfection or other impairment of collateral, (4) the
release of any Person primarily or


 


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secondarily
liable for all or any part of the Obligations, whether by the Administrative
Agent or in connection with any voluntary or involuntary liquidation,
dissolution, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors or similar event or proceeding affecting any or all of the Credit
Parties or any other Person who, or any of whose Property, shall at the time in
question be obligated in respect of the Obligations or any part thereof, or
(5) to the extent permitted by Requirements of Law, any other event,
occurrence, action or circumstance that would, in the absence of this Section,
result in the release or discharge of any or all of the Borrowers from the
performance or observance of any obligation, covenant or agreement contained in
this Agreement or the Credit Documents, (iv) the Administrative Agent
shall not be required first to initiate any suit or to exhaust its remedies
against the Credit Parties or any other Person to become liable, or against any
of the Collateral, in order to enforce this Agreement or the Credit Documents
and the Credit Parties expressly agree that, notwithstanding the occurrence of
any of the foregoing, each Borrower shall be and remain directly and primarily
liable for all sums due under this Agreement or any of the other Credit
Documents, (v) when making any demand hereunder against any Borrower, the
Administrative Agent or the Lenders may, but shall be under no obligation to,
make a similar demand on the other Borrowers, and any failure by the
Administrative Agent or Lenders to make any such demand or to collect any
payments from the other Borrowers, or any release of such other Borrowers,
shall not relieve any Borrower in respect of which a demand or collection is
not made or the Borrowers not so released of their obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent or the Lenders
against the Borrowers and (vi) on disposition by the Administrative Agent
of any Property encumbered by any Collateral, each Borrower shall be and shall
remain jointly and severally liable for any deficiency.


 


(b)           Each Borrower hereby agrees that, to the extent another Borrower shall
have paid more than its proportionate share of any payment made hereunder, the
Borrowers shall be entitled to seek and receive contribution from and against
any other Borrowers which have not paid their proportionate share of such
payment; provided  however, that the provisions of this Section
shall in no respect limit the obligations and liabilities of each Borrower to
the Administrative Agent and the Lenders and, notwithstanding any payment or
payments made by a Borrower (the “paying Borrower”) hereunder or any
set-off or application of funds of the paying Borrower by the Administrative
Agent or the Lenders, the paying Borrower shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or the Lenders
against any other Borrowers or any collateral security or guarantee or right of
offset held by the Administrative Agent or the Lenders, nor shall the paying
Borrower seek or be entitled to seek any contribution or reimbursement from the
other Borrowers in respect of payments made by the paying Borrower hereunder,
until all amounts owing to the Administrative Agent and the Lenders by the
Borrowers under the Credit Documents and the Obligations (but only to the
extent that an event of default, an event that, with the notice or the lapse of
time, would become an event of default, or any acceleration has occurred with
respect to such other 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 such amounts shall not have been paid in full, such amount shall be
held by the paying Borrower in trust for the Administrative Agent, 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 amounts owing to
the Administrative Agent and the Lenders by the Borrowers under the Credit
Documents and the Obligations (but only to the extent that an event of default,
an event that, with the notice or the lapse of time, would become an event of
default, or any acceleration has occurred with respect to such other
Obligations) in such order as the Administrative Agent may determine in its
discretion.


 


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(c)           The obligations of the Borrowers under the Credit Documents are full
recourse obligations to each Borrower and the Borrowers hereby forever waive,
demise, acquit and discharge any and all defenses, and shall at no time assert
or allege any defense, to the contrary.


 


[Signature Pages Follow]


 


131

















 


NORTHSTAR REALTY FINANCE
CORP.


CREDIT AGREEMENT


 


IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by its proper and duly authorized
officers as of the day and year first above written.


 


	
  BORROWERS:

  	
  NRFC WA HOLDINGS, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NRFC WA HOLDINGS II, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NRFC WA HOLDINGS VII, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NRFC WA HOLDINGS X, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NRFC WA HOLDINGS XII, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  



 

















 


NORTHSTAR REALTY FINANCE
CORP.


CREDIT AGREEMENT


 


	
  GUARANTORS:

  	
  NORTHSTAR REALTY FINANCE CORP.,

  
	
   

  	
  a Maryland  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORTHSTAR REALTY FINANCE L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Albert Tylis

  	
   

  
	
   

  	
  Name: Albert Tylis

  
	
   

  	
  Title:   Executive Vice President and General Counsel

  



 

















 


NORTHSTAR REALTY FINANCE
CORP.


CREDIT AGREEMENT


 


	
  ADMINISTRATIVE AGENT:

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, as Administrative Agent on behalf of

  the Lenders

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Lee Goins

  	
   

  
	
   

  	
  Name: Lee Goins

  
	
   

  	
  Title:   Vice President