REVOLVING
      CREDIT AGREEMENT

     

     

    dated
      as
      of November 3, 2006

     

     

    among

     

    NORTHSTAR
      REALTY FINANCE CORP.,

    NORTHSTAR
      REALTY FINANCE LIMITED PARTNERSHIP, 

    NRFC
      SUB-REIT CORP.

    AND

    NS
      ADVISORS, LLC,

    as
      Borrowers,

     

     

    THE
      LENDERS FROM TIME TO TIME PARTY HERETO,

     

     

    KEYBANK
      NATIONAL ASSOCIATION,

    as
      Administrative Agent,

     

    


    KEYBANC
      CAPITAL MARKETS,

    and
      

    BANK
      OF
      AMERICA, N.A.,

    as
      Co-Lead Arrangers, 

    


    


    KEYBANC
      CAPITAL MARKETS,

    as
      Sole
      Book Manager,

     

     

    BANK
      OF
      AMERICA, N.A., 

    as
      Syndication Agent, 

     

    and
      

     

    CITICORP
      NORTH AMERICA, INC. 

    as
      Documentation Agent 

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF
      CONTENTS

     


    
      	 	
              Page

            
	 	 	 
	
              ARTICLE
                I DEFINITIONS

            	
              1

            	 
	
              Section
                1.1

            	
              Definitions.

            	
              1

            	 
	
              Section
                1.2

            	
              Accounting
                Terms and Determinations

            	
              23

            	 
	
              Section
                1.3

            	
              Types
                of Borrowings

            	
              23

            	 
	
              ARTICLE
                II THE Commitments

            	
              23

            	 
	
              Section
                2.1

            	
              Commitments
                to Lend

            	
              23

            	 
	
              Section
                2.2

            	
              Notice
                of Committed Borrowing

            	
              24

            	 
	
              Section
                2.3

            	
              Notice
                to Lenders; Funding of Loans.

            	
              25

            	 
	
              Section
                2.4

            	
              Notes.

            	
              27

            	 
	
              Section
                2.5

            	
              Letters
                of Credit

            	
              27

            	 
	
              Section
                2.6

            	
              Method
                of Electing Interest Rates.

            	
              30

            	 
	
              Section
                2.7

            	
              Interest
                Rates.

            	
              31

            	 
	
              Section
                2.8

            	
              Fees.

            	
              32

            	 
	
              Section
                2.9

            	
              Maturity
                Date

            	
              33

            	 
	
              Section
                2.10

            	
              Mandatory
                Prepayment.

            	
              33

            	 
	
              Section
                2.11

            	
              Optional
                Prepayments.

            	
              34

            	 
	
              Section
                2.12

            	
              General
                Provisions as to Payments.

            	
              35

            	 
	
              Section
                2.13

            	
              Funding
                Losses

            	
              36

            	 
	
              Section
                2.14

            	
              Computation
                of Interest and Fees

            	
              36

            	 
	
              Section
                2.15

            	
              Use
                of Proceeds

            	
              36

            	 
	
              Section
                2.16

            	
              Letter
                of Credit Usage Absolute

            	
              36

            	 
	
              Section
                2.17

            	
              Joint
                and Several Obligations; Limitation on Liability.

            	
              37

            	 
	
              Section
                2.18

            	
              Increase
                in Facility Amount.

            	
              39

            	 
	
              Section
                2.19

            	
              Revolving
                Facility

            	
              41

            	 
	
              Section
                2.20

            	
              Delinquent
                Lenders.

            	
              41

            	 
	
              ARTICLE
                III CONDITIONS

            	
              42

            	 
	
              Section
                3.1

            	
              Closing

            	
              42

            	 
	
              Section
                3.2

            	
              Borrowings

            	
              45

            	 
	
              ARTICLE
                IV REPRESENTATIONS AND WARRANTIES

            	
              46

            	 
	
              Section
                4.1

            	
              Existence
                and Power

            	
              46

            	 
	
              Section
                4.2

            	
              Power
                and Authority

            	
              47

            	 
	
              Section
                4.3

            	
              No
                Violation

            	
              47

            	 
	
              Section
                4.4

            	
              Financial
                Information

            	
              47

            	 
	
              Section
                4.5

            	
              Litigation

            	
              48

            	 
	
              Section
                4.6

            	
              Compliance
                with ERISA.

            	
              48

            	 
	
              Section
                4.7

            	
              Borrowing
                Base Assets

            	
              48

            	 
	
              Section
                4.8

            	
              Environmental
                Matters

            	
              49

            	 
	
              Section
                4.9

            	
              Taxes

            	
              49

            	 
	
              Section
                4.10

            	
              Full
                Disclosure

            	
              49

            	 
	
              Section
                4.11

            	
              Solvency

            	
              49

            	 
	
              Section
                4.12

            	
              Use
                of Proceeds; Margin Regulations

            	
              50

            	 
	
              Section
                4.13

            	
              Governmental
                Approvals

            	
              50

            	 


    

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                4.14

            	
              Investment
                Company Act

            	
              50

            	 
	
              Section
                4.15

            	
              Principal
                Offices

            	
              50

            	 
	
              Section
                4.16

            	
              REIT
                Status

            	
              50

            	 
	
              Section
                4.17

            	
              Qualified
                REIT Subsidiary Status

            	
              50

            	 
	
              Section
                4.18

            	
              Patents,
                Trademarks, etc.

            	
              50

            	 
	
              Section
                4.19

            	
              No
                Default

            	
              50

            	 
	
              Section
                4.20

            	
              Licenses,
                etc.

            	
              51

            	 
	
              Section
                4.21

            	
              Compliance
                With Law

            	
              51

            	 
	
              Section
                4.22

            	
              No
                Burdensome Restrictions

            	
              51

            	 
	
              Section
                4.23

            	
              Brokers’
                Fees

            	
              51

            	 
	
              Section
                4.24

            	
              Labor
                Matters

            	
              51

            	 
	
              Section
                4.25

            	
              Insurance

            	
              51

            	 
	
              Section
                4.26

            	
              Organizational
                Documents

            	
              51

            	 
	
              ARTICLE
                V AFFIRMATIVE AND NEGATIVE COVENANTS

            	
              52

            	 
	
              Section
                5.1

            	
              Information

            	
              52

            	 
	
              Section
                5.2

            	
              Payment
                of Obligations

            	
              54

            	 
	
              Section
                5.3

            	
              Maintenance
                of Property

            	
              54

            	 
	
              Section
                5.4

            	
              Conduct
                of Business and Maintenance of Existence

            	
              54

            	 
	
              Section
                5.5

            	
              Compliance
                with Laws

            	
              55

            	 
	
              Section
                5.6

            	
              Inspection
                of Books and Records

            	
              55

            	 
	
              Section
                5.7

            	
              Existence

            	
              55

            	 
	
              Section
                5.8

            	
              Financial
                Covenants

            	
              55

            	 
	
              Section
                5.9

            	
              Restriction
                on Fundamental Changes.

            	
              56

            	 
	
              Section
                5.10

            	
              [Reserved]

            	
              57

            	 
	
              Section
                5.11

            	
              Margin
                Stock

            	
              57

            	 
	
              Section
                5.12

            	
              NorthStar,
                NorthStar OP and NRFC Sub-REIT Status

            	
              57

            	 
	
              Section
                5.13

            	
              Disposition
                of Borrowing Base Assets

            	
              57

            	 
	
              Section
                5.14

            	
              Liens;
                Release of Liens

            	
              58

            	 
	
              Section
                5.15

            	
              Business
                Loans

            	
              58

            	 
	
              Section
                5.16

            	
              Limitation
                on Changes in Fiscal Year; Accounting Methods; Valuation
                Methodology.

            	
              58

            	 
	
              Section
                5.17

            	
              Ownership
                of Borrowing Base Assets

            	
              58

            	 
	
              Section
                5.18

            	
              Limitation
                on Negative Pledge Clauses, Distribution Restrictions

            	
              58

            	 
	
              Section
                5.19

            	
              Addition
                of Borrowing Base Assets.

            	
              58

            	 
	
              Section
                5.20

            	
              Failure
                of Certain Borrowing Base Assets Representations and
                Warranties.

            	
              60

            	 
	
              Section
                5.21

            	
              Limitation
                on Transactions with Affiliates

            	
              60

            	 
	
              Section
                5.22

            	
              CDO
                Subsidiaries

            	
              60

            	 
	
              Section
                5.23

            	
              Guaranties

            	
              61

            	 
	
              Section
                5.24

            	
              Subsidiary
                Guarantors

            	
              61

            	 
	
              Section
                5.25

            	
              Release
                of Certain Subsidiary Guarantors

            	
              62

            	 
	
              ARTICLE
                VI DEFAULTS

            	
              62

            	 
	
              Section
                6.1

            	
              Events
                of Default

            	
              62

            	 
	
              Section
                6.2

            	
              Rights
                and Remedies.

            	
              65

            	 
	
              Section
                6.3

            	
              Notice
                of Default

            	
              66

            	 
	
              Section
                6.4

            	
              Actions
                in Respect of Letters of Credit.

            	
              66

            	 
	
              ARTICLE
                VII THE AGENTS

            	
              67

            	 
	
              Section
                7.1

            	
              Appointment
                and Authorization

            	
              67

            	 


    

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Section
                7.2

            	
              Agency
                and Affiliates.

            	
              68

            	 
	
              Section
                7.3

            	
              Action
                by Administrative Agent

            	
              68

            	 
	
              Section
                7.4

            	
              Consultation
                with Experts

            	
              68

            	 
	
              Section
                7.5

            	
              Liability
                of Administrative Agent

            	
              68

            	 
	
              Section
                7.6

            	
              Indemnification

            	
              68

            	 
	
              Section
                7.7

            	
              Credit
                Decision

            	
              69

            	 
	
              Section
                7.8

            	
              Successor
                Administrative Agent

            	
              69

            	 
	
              Section
                7.9

            	
              Receipt
                of Notices

            	
              69

            	 
	
              ARTICLE
                VIII CHANGE IN CIRCUMSTANCES

            	
              69

            	 
	
              Section
                8.1

            	
              Basis
                for Determining Interest Rate Inadequate or Unfair

            	
              69

            	 
	
              Section
                8.2

            	
              Illegality

            	
              70

            	 
	
              Section
                8.3

            	
              Increased
                Cost and Reduced Return.

            	
              71

            	 
	
              Section
                8.4

            	
              Taxes.

            	
              72

            	 
	
              Section
                8.5

            	
              Alternate
                Base Rate Loans Substituted for Affected LIBOR Loans

            	
              74

            	 
	
              ARTICLE
                IX MISCELLANEOUS

            	
              74

            	 
	
              Section
                9.1

            	
              Notices

            	
              74

            	 
	
              Section
                9.2

            	
              No
                Waivers

            	
              75

            	 
	
              Section
                9.3

            	
              Expenses;
                Indemnification.

            	
              75

            	 
	
              Section
                9.4

            	
              Sharing
                of Set-Offs

            	
              76

            	 
	
              Section
                9.5

            	
              Amendments
                and Waivers.

            	
              77

            	 
	
              Section
                9.6

            	
              Successors
                and Assigns.

            	
              77

            	 
	
              Section
                9.7

            	
              Collateral

            	
              79

            	 
	
              Section
                9.8

            	
              Governing
                Law; Submission to Jurisdiction

            	
              79

            	 
	
              Section
                9.9

            	
              Marshalling;
                Recapture

            	
              79

            	 
	
              Section
                9.10

            	
              Counterparts;
                Integration; Effectiveness

            	
              80

            	 
	
              Section
                9.11

            	
              WAIVER
                OF JURY TRIAL

            	
              80

            	 
	
              Section
                9.12

            	
              Survival

            	
              80

            	 
	
              Section
                9.13

            	
              Domicile
                of Loans

            	
              80

            	 
	
              Section
                9.14

            	
              Limitation
                of Liability

            	
              80

            	 
	
              Section
                9.15

            	
              Recourse
                Obligation

            	
              80

            	 
	
              Section
                9.16

            	
              Confidentiality

            	
              80

            	 
	
              Section
                9.17

            	
              Legal
                Rate

            	
              81

            	 
	
              Section
                9.18

            	
              USA
                Patriot Act Notice

            	
              81

            	 
	
               

            	
               

            	
               

            	 


    

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

     

    
      	
              EXHIBITS

            	
               

            
	
              Exhibit
                A

            	
              -

            	
              Form
                of Note

            
	
              Exhibit
                B

            	
              -

            	
              Form
                of Assignment and Assumption Agreement

            
	
              Exhibit
                C

            	
              -

            	
              Initial
                Borrowing Base Assets

            
	
              Exhibit
                D

            	
              -

            	
              Form
                of Borrowing Base Certificate

            
	
              Exhibit
                E

            	
              -

            	
              Form
                of Continuing Compliance Certificate

            
	
              Exhibit
                F

            	
              -

            	
              First
                Mortgage Asset Representations and Warranties

            
	
              Exhibit
                G

            	
              -

            	
              Real
                Property Asset Representations and Warranties

            
	
              Exhibit
                H

            	
              -

            	
              Real
                Estate Security Asset Representations and Warranties

            
	
              Exhibit
                I

            	
              -

            	
              Subordinate
                Assets Representations and Warranties

            
	
              Exhibit
                J

            	
              -

            	
              CDO
                Retained Asset Representations and
                Warranties

            


    

     

    
      	
              SCHEDULES

            	
               

            
	
              Schedule
                1.1

            	
              TruPS
                Securities 

            
	
              Schedule
                4.4(c)

            	
              Post-June
                30, 2006 Material Indebtedness and Contingent
                Obligations

            


    

     

     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    



    REVOLVING
      CREDIT AGREEMENT

     

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

    


    RECITALS

     

    1. The
      Borrowers have requested that the Lenders establish a revolving credit facility
      for the Borrowers for the purposes of refinancing certain existing indebtedness,
      financing the acquisition by the Borrowers of real estate and finance assets
      and
      for other business purposes of the Borrowers.

     

    2. The
      Borrowers have requested that the Lenders set forth the terms and conditions
      upon which the Lenders will provide financing to the Borrowers.

     

    3. The
      Lenders have agreed to provide that financing to Borrowers on, and subject
      to,
      the terms and conditions of, this Agreement. 

     

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

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.1 Definitions.
      The
      following terms, as used herein, have the following meanings:

     

    “Adjusted
      London Interbank Offered Rate”
has
      the
      meaning set forth in Section 2.7(c).

     

    “Administrative
      Agent”
shall
      mean KeyBank National Association in its capacity as Administrative Agent
      hereunder, and its permitted successors in such capacity in accordance with
      the
      terms of this Agreement.

     

    “Administrative
      Questionnaire”
means,
      with respect to each Lender, an administrative questionnaire in the form
      prepared by the Administrative Agent and submitted to the Administrative Agent
      (with a copy to the Borrowers) duly completed by such Lender.

     

    “Affiliate”
means,
      as to any Person, any other Person (other than a Subsidiary) which, directly
      or
      indirectly, is in control of, is controlled by, or is under common control
      with,
      such Person. For purposes of this definition, “control”
of
      a
      Person (including, with its correlative meanings, “controlled
      by”
and
      “under
      common control with”)
      means
      the power, directly or indirectly, either to (a) vote 33 1/3% or more of the
      securities having ordinary voting power for the election of directors of such
      Person or (b) direct or cause the direction of the management and policies
      of
      such Person, whether by contract or otherwise. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Adjusted
      Funds from Operations”
means
      Funds From Operations minus (or plus) (i) normalized recurring capitalized
      expenditures necessary to maintain properties (e.g. leasing commissions, and
      tenant improvement allowances), (ii) an adjustment to reverse the effect of
      Straight-Lining of Rents and fair value of lease revenue under SFAS 141, (iii)
      the amortization or accrual of various deferred costs including intangible
      assets and equity based compensation, (iv) non-recurring charges incurred in
      connection with the early extinguishment of debt, (v) an adjustment to reverse
      “mark-to-market” gains and losses related to interest rate changes on off
      balance sheet warehouse facilities, and (vi) such other adjustments approved
      by
      the Administrative Agent.

     

    “Agreement”
shall
      mean this Revolving Credit Agreement as the same may from time to time hereafter
      be modified, supplemented or amended.

     

    “Alternate
      Base Rate”
means,
      for any day, a rate per annum equal to the greater of (i) the Prime Rate or
      (ii)
      the Federal Funds Rate plus one-half percent (0.5%). 

     

    “Alternate
      Base Rate Loan”
means
      a
      Committed Loan to be made by a Lender as an Alternate Base Rate Loan in
      accordance with the applicable Notice of Committed Borrowing or pursuant to
      Article II.

     

    “Applicable
      Lending Office”
means,
      with respect to any Lender, (i) in the case of its Alternate Base Rate Loans,
      its Domestic Lending Office, and (ii) in the case of its LIBOR Loans, its LIBOR
      Lending Office.

     

    “Applicable
      Margin”
means,
      for any day, the rate per annum set forth below opposite the applicable Leverage
      Ratio then in effect.

     

    
      	
              Leverage
                Ratio (as calculated pursuant to the most-recently delivered officer’s
                certificate pursuant to Section 5.1(c) hereof)

            	
              Applicable
                Margin for LIBOR Loans and Letter of Credit Fees

            	
              Applicable
                Margin for Alternate Base Rate Loans

            
	
              >
                85%

            	
              2.50%

            	
              1.00%

            
	
              >
                75% to < 85%

            	
              2.25%

            	
              0.75%

            
	
              <
                75%

            	
              2.00%

            	
              0.50%

            


    

     

    The
      Applicable Margin shall be adjusted effective on the next Business Day following
      any change in the Leverage Ratio using the information provided in the
      most-recently delivered officer’s certificate pursuant to Section 5.1(c)
      hereof.

     

    Notwithstanding
      anything to the contrary contained in the foregoing, to the extent the Borrowers
      fail to deliver any officer’s certificate as of the date required pursuant to
      Section 5.1(c), the Applicable Margin as of the date immediately following
      such
      required date of delivery and until the delivery of such officer’s certificate
      shall be the greatest Applicable Margin specified in the foregoing
      chart.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “Approval
      Request”
has
      the
      meaning set forth in Section 5.19(a).

     

    “Approval
      Request Package”
has
      the
      meaning set forth in Section 5.19(b).

     

    “Approved
      Uses”
has
      the
      meaning set forth in Section 2.15.

     

    “Approved
      Bank”
means
      a
      bank or other financial institution which has (i)(a) a minimum net worth of
      $500,000,000 and/or (b) total assets of $10,000,000,000, and (ii) a minimum
      long
      term debt rating of (a) BBB+ or higher by S&P, and (b) Baa1 or higher by
      Moody’s. 

     

    “Arranger”
means
      KeyBanc Capital Markets, in its capacity as Sole Lead Arranger of the
      Commitments and Sole Book Manager of the Commitments.

     

    “Asset
      Disposition”
means
      the disposition of any assets (including without limitation the Capital Stock
      of
      a Subsidiary) of any Consolidated Party whether by sale, lease (but excluding
      the lease of assets in the ordinary course of business), transfer or otherwise
      to a Person other than a Consolidated Party.

     

    “Assignee”
has
      the
      meaning set forth in Section 9.6(b).

     

    “Available
      Commitment”
means,
      with respect to each Lender, at any time, the amount obtained by multiplying
      such Lender’s Commitment at such time by a fraction, the numerator of which is
      the Total Available Commitments at such time, and the denominator of which
      is
      the aggregate of all Commitments at such time.

     

    “Bankruptcy
      Code”
means
      Title 11 of the United States Code, entitled “Bankruptcy”, as amended from time
      to time, and any successor statute or statutes.

     

    “Benefit
      Arrangement”
means
      at any time an employee benefit plan within the meaning of Section 3(3) of
      ERISA
      which is not a Plan or a Multiemployer Plan and which is maintained or otherwise
      contributed to by any member of the ERISA Group.

     

    “Book
      Value”
means
      as to any asset, the value of such asset determined in accordance with GAAP,
      as
      consistently applied in connection with the preparation of the financial
      statements filed by NorthStar with the Securities and Exchange
      Commission.

     

    “Borrowers”
means,
      collectively, NorthStar, NorthStar OP, NRFC Sub-REIT and NS Advisors , and
      “Borrower”
means
      any one of the foregoing.

     

    “Borrowing”
has
      the
      meaning set forth in Section 1.3.

     

    “Borrowing
      Base Assets”
means
      assets one hundred percent (100%) owned (legally and equitably) by a Borrowing
      Base Entity and which consist of Eligible CDO Retained Assets, Eligible First
      Mortgage Assets, Eligible Subordinated Assets, Eligible Property Equity
      Interests and Eligible Real Estate Securities.

     

    “Borrowing
      Base Assets Pool”
means,
      collectively at any time, all Borrowing Base Assets.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    “Borrowing
      Base Availability”
means,
      at any time of determination, an amount equal to the lesser of (i) the aggregate
      Borrowing Base Value of all Borrowing Base Assets in the Borrowing Base Assets
      Pool at such time and (ii) the aggregate amount that would cause the ratio
      of
      (i) the sum of (A) the aggregate recurring cash dividend and distribution income
      actually received from all Eligible CDO Equity Interests and Preferred
      Securities constituting Eligible Subordinated Assets during such period, (B)
      the
      aggregate recurring cash income (after debt service in respect of the related
      Real Property Asset, if applicable) actually received in respect of Eligible
      Property Equity Interests during such period, and (C) the aggregate recurring
      cash interest income actually received from all Eligible CDO Debt Assets,
      Eligible First Mortgage Assets, Eligible Subordinated Debt Assets and Eligible
      Real Estate Securities during such period, in each case calculated as of the
      end
      of each fiscal quarter on an annualized basis for the quarterly period then
      ended with respect to Borrowing Base Assets in the Borrowing Base Assets Pool
      as
      of the date of determination as reflected on the most recent Borrowing Base
      Certificate, to (ii) Facility Interest Expense for such period, to be not less
      than 2:00 to 1:00.

     

    “Borrowing
      Base Certificate”
has
      the
      meaning set forth in Section 2.2.

     

    “Borrowing
      Base Entity”
means
      a
      Subsidiary Guarantor, a Real Property Subsidiary or a CDO Subsidiary.


     

    “Borrowing
      Base Value”
means,
      as to any Borrowing Base Asset at any time of determination, the maximum
      aggregate amount of Loans and Letters of Credit which Borrowers shall be
      entitled to borrow, draw, or have issued or outstanding pursuant to the terms
      of
      this Agreement with respect to such Borrowing Base Asset, which shall be (i)
      with respect to any Eligible CDO Retained Asset, the lesser of (a) forty percent
      (40%) of the Eligible CDO Retained Asset Value of such asset, and (b) an amount
      equal to (1) the sum of (A) the recurring annual interest or dividend income
      of
      the Borrowers in respect of such Eligible CDO Retained Asset (determined by
      annualizing the interest or dividend income received by the Borrowers in respect
      of such Eligible CDO Retained Asset during the quarter most recently ended)
      and
      (B) the annual Senior Management Fees received by the Borrowers from such
      Eligible CDO Retained Asset (determined by annualizing the Senior Management
      Fees received by the Borrowers in respect of such Eligible CDO Retained Asset
      during the quarter most recently ended) divided
      by
      (2)
      three and one-half (3.5), and divided
      by
      (3) the
      average Facility Interest Rate during the quarter most recently ended, (ii)
      with
      respect to any Eligible First Mortgage Asset, the lesser of (a) eighty percent
      (80%) of the Underlying Real Estate Value on such date of the Underlying Asset
      securing such Eligible First Mortgage Asset, and (b) ninety percent (90%) of
      the
      lesser of (1) the outstanding principal amount of such Eligible First Mortgage
      Asset on such date and (2) the Book Value of such Eligible First Mortgage Asset
      on such date, (iii) with respect to any Eligible Subordinated Asset, the lesser
      of (a) eighty percent (80%) of (1) the Underlying Real Estate Value on such
      date
      of the Underlying Asset relating to such Eligible Subordinated Asset
minus
      (2) the
      aggregate outstanding principal amount on such date of any senior indebtedness
      encumbering the Underlying Asset relating to such Eligible Subordinated Asset
      and (b) sixty percent (60%) of the lesser of (1) the outstanding principal
      amount of such Eligible Subordinated Asset on such date and (2) the Book Value
      of such Eligible Subordinated Asset on such date, (iv) with respect to any
      Eligible Property Equity Interest, forty percent (40%) of the Net Equity Value
      on such date of such Eligible Property Equity Interest, (v) with respect to
      any
      Investment Grade Eligible Real Estate Security, eighty percent (80%) of the
      Fair
      Market Value of such Investment Grade Eligible Real Estate Security on such
      date, and (vi) with respect to any Eligible Real Estate Security that is not
      Investment Grade, sixty-five percent (65%) of the Fair Market Value of such
      non-Investment Grade Eligible Real Estate Security on such date.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    “Capitalization
      Rate”
means,
      as to any Real Property Assets or Underlying Assets that are at leased 95%
      leased to tenants (or such tenant’s parent) having an Investment Grade Credit
      Rating, seven percent (7.00%) per annum, and, as to all other Real Property
      Assets or Underlying Assets, nine percent (9.00%) per annum.

     

    “Capital
      Replacement Reserve”
means,
      with respect to any Real Property Asset or Underlying Asset, a normalized annual
      reserve for replacement reserves, capital expenditures, tenant improvements,
      and
      leasing commissions in the amount of $0.10 per year per square foot of net
      leaseable area contained in such Real Property Asset or Underlying Asset. When
      the Capital Replacement Reserve is used in computing an amount with respect
      to a
      period which is shorter than a year, said amount shall be appropriately
      prorated.

     

    “Capital
      Stock”
means,
      with respect to any Person, any capital stock (including preferred stock),
      shares, interests, participations or other ownership interests (however
      designated) of such Person and any rights (other than debt securities
      convertible into or exchangeable for corporate stock), warrants or options
      to
      purchase any thereof.

     

    “Cash
      and Cash Equivalents”
means
      (i) cash, (ii) direct obligations of the United States Government, including
      without limitation, treasury bills, notes and bonds, (iii) interest bearing
      or
      discounted obligations of Federal agencies and Government sponsored entities
      or
      pools of such instruments offered by Approved Banks and dealers, including
      without limitation, Federal Home Loan Mortgage Corporation participation sale
      certificates, Government National Mortgage Association modified pass through
      certificates, Federal National Mortgage Association bonds and notes, and Federal
      Farm Credit System securities, (iv) time deposits, Domestic and Eurodollar
      certificates of deposit, bankers’ acceptances, commercial paper rated at least
      A-2 by S&P and P-2 by Moody’s and/or guaranteed by a Person with an Aa3
      rating by Moody’s, an AA- rating by S&P or better rated credit, floating
      rate notes, other money market instruments each issued by an Approved Bank
      (provided that the same shall cease to be a “Cash or Cash Equivalent” if at any
      time any such bank shall cease to be an Approved Bank), (v) obligations of
      domestic corporations, including, without limitation, commercial paper, bonds,
      debentures and loan participations, each of which is rated at least AA- by
      S&P and/or Aa3 by Moody’s and/or guaranteed by a Person with an Aa3 rating
      by Moody’s and/or a AA- rating by S&P or better rated credit, (vi)
      obligations issued by states and local governments or their agencies, rated
      at
      least MIG-2 by Moody’s and/or SP-2 by S&P, (vii) repurchase agreements with
      major banks and primary government security dealers fully secured by the U.S.
      Government or agency collateral equal to or exceeding the principal amount
      on a
      daily basis and held in safekeeping, and (viii) real estate loan pool
      participations, guaranteed by a Person with an AA- rating given by S&P or
      Aa3 rating given by Moody’s or better rated credit.

     

    “CDO
      Debt Asset”
means
      with respect to any Eligible CDO, any and all performing debt obligations issued
      by such Eligible CDO and owned by a Borrowing Base Entity. 

    


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

    


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

    


    “CDO
      Indenture”
means
      the indenture relating to any Eligible CDO Retained Asset.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    “CDO
      Subsidiary”
has
      the
      meaning set forth in Section 5.22. 

     

    “Charges”
has
      the
      meaning set forth in Section 9.17.

     

    “Closing
      Date”
means
      the date on or after the Effective Date on which the conditions set forth in
      Section 3.1 shall have been satisfied to the satisfaction of the Administrative
      Agent or waived by the Administrative Agent in its sole discretion.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended, and as it may be further amended
      from time to time, any successor statutes thereto, and applicable U.S.
      Department of Treasury regulations issued pursuant thereto in temporary or
      final
      form.

     

    “Commitment”
means,
      with respect to each Lender, the amount set forth opposite the name of such
      Lender on the signature pages hereof (and, for each Lender which is an Assignee,
      the amount set forth in the Assignment and Assumption Agreement entered into
      pursuant to Section 9.6(b) as the Assignee’s Commitment), as such amount may be
      reduced from time to time pursuant to Section 2.11(c) or in connection with
      an
      assignment to an Assignee, or increased pursuant to Section 2.18.

     

    “Commitment
      Fee Quarterly Period”
has
      the
      meaning set forth in Section 2.8(c).

     

    “Committed
      Loan”
means
      a
      loan made by a Lender pursuant to Section 2.1; provided
      that, if
      any such loan or loans (or portions thereof) are combined or subdivided pursuant
      to a Notice of Interest Rate Election, the term “Committed Loan” shall refer to
      the combined principal amount resulting from such combination or to each of
      the
      separate principal amounts resulting from such subdivision, as the case may
      be.

     

    “Consolidated
      Parties”
means,
      collectively, NorthStar and its Consolidated Subsidiaries. 

     

    “Consolidated
      Subsidiary”
means
      at any date any Subsidiary or other entity which is consolidated with NorthStar
      in accordance with GAAP or which is required under GAAP to be consolidated
      with
      NorthStar.

     

    “Consolidated
      Tangible Net Worth”
means,
      without duplication, at any date (a) the amounts included in “stockholders’
equity” on the balance sheet of the Consolidated Parties (including minority
      interests relating to NorthStar OP), less
      (b) the
      consolidated Intangible Assets of the Consolidated Parties (excluding FAS 141
      intangibles), all determined as of such date in accordance with GAAP. For
      purposes of this definition “Intangible
      Assets”
means
      goodwill, patents, trademarks, service marks, trade names, anticipated future
      benefit of tax loss carry forwards, copyrights, organization or developmental
      expenses and other intangible assets determined in accordance with
      GAAP.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    “Contingent
      Obligation”
means,
      as to any Person, without duplication, (i) any contingent obligation of such
      Person required to be shown on such Person’s balance sheet in accordance with
      GAAP, (ii) any obligation (including, without limitation, any Guarantee
      Obligation) required to be disclosed in the footnotes to such Person’s financial
      statements, guaranteeing partially or in whole any Non-Recourse Debt, lease,
      dividend or other obligation, exclusive of contractual indemnities (including,
      without limitation, any indemnity or price-adjustment provision relating to
      the
      purchase or sale of securities or other assets) and guarantees of non-monetary
      obligations which have not yet been called on or quantified, of such Person
      or
      of any other Person, and (iii) with respect to such Person’s forward commitments
      or obligations to fund or provide proceeds with respect to any loan or other
      financing which are obligatory and non-discretionary as of any date of
      determination, the aggregate amount of the reserves established for such
      commitments or obligations in accordance with Rating Agency requirements in
      respect of the three (3) month period following the date of determination.
      The
      Borrowers will promptly notify the Administrative Agent of the amounts initially
      established as, and any change from time to time in, the Rating Agency
      requirements in respect of the reserves referred to in the foregoing sentence.
      Notwithstanding the foregoing, “Contingent Liabilities” shall not include
      guarantees of customary carve-out matters made in connection with Indebtedness,
      such as fraud, misappropriation, bankruptcy, misapplication and environmental
      matters, unless a claim for payment or performance has been made thereunder
      (which has not been satisfied). The amount of any Contingent Obligation
      described in clause (ii) shall be deemed to be (a) with respect to a guarantee
      of interest or interest and principal, or operating income guarantee, the
      present value of the sum of all payments required to be made thereunder (which
      in the case of an operating income guarantee shall be deemed to be equal to
      the
      debt service for the note secured thereby), through (x) in the case of an
      interest or interest and principal guarantee, the stated date of maturity of
      the
      obligation (and commencing on the date interest could first be payable
      thereunder), or (y) in the case of an operating income guarantee, the date
      through which such guarantee will remain in effect, and (b) with respect to
      all
      guarantees not covered by the preceding clause (a), an amount equal to the
      stated or determinable amount of the primary obligation in respect of which
      such
      guarantee is made or, if not stated or determinable, the maximum reasonably
      anticipated liability in respect thereof (assuming such Person is required
      to
      perform thereunder) as recorded on the balance sheet and on the footnotes to
      the
      most recent financial statements of the Borrowers required to be delivered
      pursuant to Section 5.1 hereof.

     

    “Credit
      Rating”
means,
      with respect to any Person, the rating assigned by the Rating Agencies (one
      of
      which, in all instances, must be S&P or Moody’s or Fitch) to such Person’s
      long-term unsecured indebtedness.

     

    “Credit
      Underwriting Documents”
has
      the
      meaning set forth in Section 5.19(a). 

     

    “Default”
means
      any condition or event which with the giving of notice or lapse of time or
      both
      would, unless cured or waived, become an Event of Default.

     

    “Default
      Rate”
has
      the
      meaning set forth in Section 2.7(c).

     

    “Derivative
      Exposure”
means,
      as of any date, the aggregate maximum net liability (including costs, fees
      and
      expenses), based upon a liquidation or termination as of such date, of any
      Person under all interest rate swaps, collars, caps or other interest rate
      protection agreements, treasury locks, equity forward contracts, foreign
      currency exchange agreements, commodity purchase or option agreements or other
      interest or exchange rate or commodity price hedging agreements.

     

    “Distribution”
means
      with respect to any Person, the declaration or payment of any cash, cash flow,
      dividend or distribution (however payable, whether in cash, assets, capital
      stock or otherwise) on or in respect of any shares of any class of capital
      stock, partnership interest, membership interest or other beneficial interest
      of
      such Person; the purchase, redemption, exchange or other retirement of any
      shares of any class of capital stock, partnership interest, membership interest
      or other beneficial interest of such Person, directly or indirectly through
      a
      Subsidiary of such Person or otherwise; the return of capital by such Person
      to
      its shareholders, partners, members or other owners as such; or any other
      distribution on or in respect of any shares of any class of capital stock or
      other beneficial interest of such Person.

    


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

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

    


    “Domestic
      Lending Office”
means,
      as to each Lender, its office located at its address in the United States set
      forth in its Administrative Questionnaire (or identified in its Administrative
      Questionnaire as its Domestic Lending Office) or such other office as such
      Lender may hereafter designate as its Domestic Lending Office by notice to
      the
      Borrowers and the Administrative Agent.

     

    “EBITDA”
means,
      for any period, the sum of, without duplication, (i) aggregate Net Income during
      such period calculated before the payment of Preferred Distributions,
plus
      (ii) an
      amount which, in the determination of Net Income for such period, has been
      deducted for (A) Interest Expense, (B) total federal, state, local and foreign
      income, value added and similar taxes and (C) depreciation and amortization
      expense, plus
      (iii)
      the minority interest attributable to NorthStar OP, plus
      (iii)
      losses from extraordinary items, non-recurring items, Asset Dispositions, or
      forgiveness of debt, plus
      (iv)
      compensation expense for equity or option based compensation minus
      (v)
      gains from extraordinary items, non-recurring items, Asset Dispositions,
      write-up of assets (including any loan accretion attributable to any asset),
      minus
      (v)
      interest income accrued but not actually received in cash, each of the above
      determined in accordance with GAAP and to the extent included in the calculation
      of Net Income and plus,
      (vi)
      interest income received in cash in such period to the extent such interest
      income had been subtracted from Net Income pursuant to the foregoing clause
      (v)
      with respect to any earlier period; provided, that such sum shall be exclusive
      of any adjustment for such period attributable to the Straight-Lining of Rents.
      

     

    “Effective
      Date”
means
      November 3, 2006.

     

    “Eligible
      Assignee”
means
      any Person that is: (a) a Lender; (b) an Affiliate of a Lender; (c) a commercial
      bank, trust company, savings and loan association savings bank, insurance
      company, investment bank or pension fund organized under the laws of the United
      States of America, any state thereof or the District of Columbia, and having
      total assets in excess of $5,000,000,000; or (d) a commercial bank organized
      under the laws of any other country which is a member of the Organization for
      Economic Co-operation and Development, or a political subdivision of any such
      country, and having total assets in excess of $10,000,000,000, provided
      that
      such bank is acting through a branch or agency located in the United States
      of
      America. No Borrower and no Affiliate of a Borrower shall qualify as an Eligible
      Assignee. Provided no Default or Event of Default has occurred and is
      continuing, no direct competitor of the Borrowers or any hedge fund principally
      engaged in the acquisition of “distressed” debt (each as determined by the
      Administrative Agent in its reasonable discretion) shall qualify as an Eligible
      Assignee.

     

    “Eligible
      CDO”
means
      a
      Special Purpose Entity, the common “ordinary” shares or limited liability
      company interests of which are wholly-owned by NorthStar or a Wholly-Owned
      Subsidiary of NorthStar and which is managed by NorthStar or a Wholly-Owned
      Subsidiary of NorthStar, that issues classes of securities representing rights
      to receive payments from assets held by such entity, the assets of which are
      (a)
      real estate securities or real estate-related debt obligations and/or (b) such
      other assets consistent with NorthStar’s current business
      practices.

    


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

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

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

    


    “Eligible
      CDO Retained Asset”
means
      any Eligible
      CDO Equity Interest and/or any Eligible CDO Debt Asset.

     

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

    


    “Eligible
      First Mortgage Asset”
means
      any First Mortgage Asset that at all times complies with the First Mortgage
      Asset Representations and Warranties set forth on Exhibit
      “F”
      attached
      hereto.

     

    “Eligible
      Property Equity Interest”
means
      any Property Equity Interest that at all times complies with the Property Equity
      Interest Representations and Warranties set forth on Exhibit
      “G”
      attached
      hereto.

     

    “Eligible
      Real Estate Security”
means
      any Real Estate Security that at all times complies with the Real Estate
      Security Asset Representations and Warranties set forth on Exhibit
      “H”
      attached
      hereto. 

     

    “Eligible
      Subordinated Asset”
means
      any Subordinated Asset that at all times complies with the Subordinated Asset
      Representations and Warranties set forth on Exhibit
      “I”
      attached
      hereto.

     

    “Environmental
      Affiliate”
means
      any partnership, joint venture, trust, limited liability company, corporation
      or
      other entity which is subject to an Environmental Claim and which is a
      Consolidated Subsidiary of NorthStar or, as to any partnership, in which
      NorthStar or a Consolidated Subsidiary is a general partner, either directly
      or
      indirectly.

     

    “Environmental
      Approvals”
means
      any permit, license, approval, ruling, variance, exemption or other
      authorization required under applicable Environmental Laws.

     

    “Environmental
      Claim”
means,
      with respect to any Person, any notice, claim, demand or similar communication
      (written or oral) by any other Person alleging potential liability of such
      Person for investigatory costs, cleanup costs, governmental response costs,
      natural resources damage, property damages, personal injuries, fines or
      penalties arising out of, based on or resulting from (i) the presence, or
      release into the environment, of any Materials of Environmental Concern at
      any
      location, whether or not owned by such Person or (ii) circumstances forming
      the
      basis of any violation, or alleged violation, of any Environmental Law, in
      each
      case (with respect to both (i) and (ii) above) as to which there is a reasonable
      possibility of an adverse determination with respect thereto and which, if
      adversely determined, would have a Material Adverse Effect on any
      Borrower.

     

    “Environmental
      Laws”
means
      any and all federal, state, and local statutes, laws, judicial decisions,
      regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
      permits, concessions, grants, licenses, agreements and other governmental
      restrictions relating to the environment, the effect of the environment on
      human
      health or to emissions, discharges or releases of pollutants, contaminants,
      Materials of Environmental Concern or wastes into the environment including,
      without limitation, ambient air, surface water, ground water, or land, or
      otherwise relating to the manufacture, processing, distribution, use, treatment,
      storage, disposal, transport or handling of pollutants, contaminants, Materials
      of Environmental Concern or wastes or the clean-up or other remediation
      thereof.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    “Equity
      Issuance”
means
      any issuance by a Consolidated Party to any Person which is not a Consolidated
      Party of (a) shares of its Capital Stock, (b) any shares of its Capital Stock
      pursuant to the exercise of options or warrants or (c) any shares of its Capital
      Stock pursuant to the conversion of any debt securities to equity.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, or any
      successor statute.

     

    “ERISA
      Group”
means
      NorthStar, any Subsidiary and all members of a controlled group of corporations
      and all trades or businesses (whether or not incorporated) under common control
      which, together with NorthStar or any Subsidiary, are treated as a single
      employer under Section 414 of the Code.

     

    “Event
      of Default”
has
      the
      meaning set forth in Section 6.1.

     

    “Excepted
      Liens”
      shall
      mean: (i) Liens for taxes, assessments or other governmental charges or levies
      not yet due or which are being contested in good faith by appropriate action
      and
      for which adequate reserves have been maintained in accordance with GAAP; (ii)
      Liens in connection with worker’s compensation, unemployment insurance or other
      social security, old age pension or public liability obligations not yet due
      or
      which are being contested in good faith by appropriate action and for which
      adequate reserves have been maintained in accordance with GAAP; (iii) vendors’,
      carriers’, warehousemen’s, repairmen's, mechanics’, workmen’s, materialmen’s,
      construction or other like Liens arising by operation of law in the ordinary
      course of business, each of which is either (a) subordinate to the lien of
      the
      applicable Borrowing Base Asset or (b) been adequately insured or bonded or
      (c)
      being contested in good faith by appropriate proceedings and for which adequate
      reserves have been maintained in accordance with GAAP; (iv) easements, rights
      of
      way, zoning restrictions and other similar Liens relating to a Real Property
      Asset or Underlying Asset, which do not individually or in the aggregate
      materially impair the use of such Real Property Asset or Underlying Asset or
      materially impair the value of such Real Property Asset or Underlying Asset
      subject thereto.

     

    “Exceptions
      Summary”
has
      the
      meaning set forth in Section 5.19(a).

     

    “Expenses”
means,
      when used with respect to any asset, the costs of maintaining such asset which
      are the responsibility of the owner thereof, including, without limitation,
      taxes, insurance, repairs and maintenance.

     

    “Facility”
means
      the revolving credit facility established pursuant to this
      Agreement.

     

    “Facility
      Amount”
means
      one-hundred million dollars ($100,000,000) subject to increase pursuant to
      Section 2.18 hereof or decrease pursuant to Section 2.11 hereof.

     

    “Facility
      Interest Expense”
means,
      as of any date of determination for a particular period, an amount equal to
      the
      interest that would accrue during such period on the Outstanding Balance on
      such
      date of determination at an interest rate equal to the sum of (i) the Adjusted
      London Interbank Offered Rate on such date of determination for an Interest
      Period of one (1) month plus
      (ii) the
      Applicable Margin for LIBOR Loans on such date of determination.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    “Facility
      Interest Rate”
means
      as of any date of determination the rate at which the Loans are accruing
      interest in accordance with Section 2.7. 

     

    “Fair
      Market Value”
means
      as to any asset, the current market value of such asset as determined quarterly
      by an independent third party reasonably acceptable to the Administrative Agent
      utilizing valuation methodologies reasonably acceptable to the Administrative
      Agent. 

     

    “Federal
      Funds Rate”
means,
      for any day, the rate per annum (rounded upward, if necessary, to the nearest
      1/100th of 1%) equal to the weighted average of the rates on overnight Federal
      funds transactions with members of the Federal Reserve System arranged by
      Federal funds brokers on such day, as published by the Federal Reserve Bank
      of
      New York on the Domestic Business Day next succeeding such day, provided
      that (i)
      if such day is not a Domestic Business Day, the Federal Funds Rate for such
      day
      shall be such rate on such transactions on the next preceding Domestic Business
      Day as so published on the next succeeding Domestic Business Day, and (ii)
      if no
      such rate is so published on such next succeeding Domestic Business Day, the
      Federal Funds Rate for such day shall be the average rate quoted to KeyBank
      National Association on such day on such transactions as determined by the
      Administrative Agent.

     

    “Federal
      Reserve Board”
means
      the Board of Governors of the Federal Reserve System as constituted from time
      to
      time.

     

    “Fee
      Letter”
means
      that certain Fee Letter between the Borrowers and KeyBank dated on or about
      the
      date hereof, as amended, supplemented or otherwise modified from time to
      time.

     

    “Fees”
means
      all fees payable or to be payable by the Borrowers as provided for in Section
      2.8 and in the Fee Letter.

     

    “First
      Mortgage Asset”
means
      as to any Person, indebtedness owed to such Person, which is not the subject
      of
      a bankruptcy or similar proceeding, is fully performing as to payment and
      material nonpayment obligations thereunder and is secured by a first Lien of
      a
      properly recorded mortgage, deed of trust or other similar security instrument
      on a fee interest or a leasehold interest in real property and all collateral
      security related thereto (regardless of whether such Person’s interest therein
      is characterized as equity according to GAAP).

     

    “Fitch”
means
      Fitch, Inc. or any successor thereto. 

     

    “Fixed
      Charges”
means,
      with respect to the Consolidated Parties for any period, the sum of (i) Interest
      Expense for the such period plus
      (ii)
      Preferred Distributions permitted hereunder for the applicable period
plus
      (iii)
      Scheduled Amortization Payments for the applicable period. 

     

    “Fixed
      Charge Ratio”
means,
      as of the end of each fiscal quarter of the Consolidated Parties for the
      quarterly period ending on such date, the ratio of (a) EBITDA for the applicable
      period to (b) Fixed Charges for the applicable period. 

     

    “Floating
      Rate Indebtedness”
means,
      with respect to any Person, Indebtedness of such Person which accrues interest
      at a rate which may vary during the term of such Indebtedness (other than due
      solely to a default thereunder).

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    “Floating
      Rate Assets”
means
      with respect to any Person, the assets of such Person on the balance sheet
      of
      such Person which generate income that fluctuates based on changes in interest
      rates.

     

    “Fronting
      Lender”
means
      any Lender which is a party hereto which shall issue a Letter of Credit with
      respect to such Notice of Borrowing, subject, however, to the limitations set
      forth in Section 2.5. For purposes of this Agreement, the Fronting Lender shall,
      unless and until the Administrative Agent shall elect otherwise (subject, except
      during the continuance of an Event of Default, to the prior written consent
      of
      the Borrower, which consent shall not be unreasonably withheld, conditioned
      or
      delayed), be KeyBank.

     

    “Funded
      Indebtedness”
means,
      with respect to any Person, without duplication, all Indebtedness of such Person
      other than Indebtedness of the types referred to in clauses (f) and (h) of
      the
      definition of "Indebtedness" set forth in this Section 1.1.

     

    “Funds
      from Operations”
means
      with respect to any Person for any period, an amount equal to the Net Income
      of
      such Person for such period, computed in accordance with GAAP, excluding gains
      or losses from sales of depreciable properties, the cumulative effect of changes
      in accounting principles, and real estate depreciation and amortization. Funds
      from Operations shall be computed in accordance with the standards established
      by the National Association of Real Estate Investment Trusts (NAREIT).


    


    “GAAP”
means
      generally accepted accounting principles recognized as such in the opinions
      and
      pronouncements of the Accounting Principles Board and the American Institute
      of
      Certified Public Accountants and the Financial Accounting Standards
      Board.

     

    “Group
      of Loans”
means,
      at any time, a group of Loans consisting of (i) all Committed Loans which are
      Alternate Base Rate Loans at such time, or (ii) all Committed Loans which are
      LIBOR Loans having the same Interest Period at such time.

     

    “Guarantee
      Obligation”
means
      as to any Person (the “guaranteeing
      person”),
      without duplication, any obligation of (a) the guaranteeing person or (b)
      another Person (including, without limitation, any bank under any letter of
      credit) guaranteeing any Indebtedness, leases, dividends or other obligations
      (the “primary
      obligations”)
      of any
      other third Person (the “primary
      obligor”)
      in any
      manner, whether directly or indirectly, including, without limitation, any
      obligation of the guaranteeing person, whether or not contingent, (i) to
      purchase any such primary obligation or any property constituting direct or
      indirect security therefor, (ii) to advance or supply funds (1) for the purchase
      or payment of any such primary obligation or (2) to maintain working capital
      or
      equity capital of the primary obligor or otherwise to maintain the net worth
      or
      solvency of the primary obligor, (iii) to purchase property, securities or
      services primarily for the purpose of assuring the owner of any such primary
      obligation of the ability of the primary obligor to make payment of such primary
      obligation or (iv) otherwise to assure or hold harmless the owner of any such
      primary obligation against loss in respect thereof; provided,
      however,
      that
      the term Guarantee Obligation shall not include endorsements of instruments
      for
      deposit or collection in the ordinary course of business. The terms
“Guarantee”
and
      “Guaranteed”
used
      as
      a verb shall have a correlative meaning.

     

    “Guaranty”
means
      the Unconditional Guaranty of Payment and Performance, dated of even date
      herewith, made by
      the
      Subsidiary Guarantors in favor of the Administrative Agent and the Lenders,
      as
      the same may be modified or amended, such Guaranty to be in form and substance
      satisfactory to the Administrative Agent. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    “Indebtedness”
of
      any
      Person, without duplication, means, in each case whether direct or contingent,
      (a) all obligations of such Person for borrowed money, (b) all obligations
      of
      such Person evidenced by bonds, debentures, notes or similar instruments, or
      upon which interest payments are customarily made, (c) all obligations of such
      Person under conditional sale or other title retention agreements relating
      to
      property purchased by such Person, (d) all obligations of such Person issued
      or
      assumed as the deferred purchase price of property or services purchased by
      such
      Person (other than trade debt incurred in the ordinary course of business and
      due within six months of the incurrence thereof) which would appear as
      liabilities on a balance sheet of such Person, (e) all indebtedness of others
      secured by (or for which the holder of such indebtedness has an existing right,
      contingent or otherwise, to be secured by) any Lien on, or payable out of the
      proceeds of production from, property owned or acquired by such Person, whether
      or not the obligations secured thereby have been assumed, (f) all Guarantee
      Obligations of such Person, (g) the principal portion of all obligations of
      such
      Person under Capital Leases, (h) all Derivative Exposure and other obligations
      of such Person in respect of interest rate swap, collar, cap or other interest
      rate protection agreements, treasury locks, equity forward contracts, foreign
      currency exchange agreements, commodity purchase or option agreements or other
      interest or exchange rate or commodity price hedging agreements (including,
      but
      not limited to, Match Funding Agreements), (i) all obligations of such Person
      to
      repurchase any securities which repurchase obligation is related to the issuance
      thereof, (j) the maximum amount of all letters of credit issued or bankers’
acceptances facilities created for the account of such Person and, without
      duplication, all drafts drawn thereunder (to the extent unreimbursed), (k)
      all
      preferred Capital Stock issued by such Person and required by the terms thereof
      to be redeemed, or for which mandatory sinking fund payments are due, by a
      fixed
      date, (l) the principal portion of all obligations of such Person for any Off
      Balance Sheet Liabilities and (m) such Person’s pro rata portion of the
      indebtedness of any partnership or unincorporated joint venture in which such
      Person is a general partner or a joint venturer.

     

    “Indemnitee”
has
      the
      meaning set forth in Section 9.3(b).

     

    “Interest
      Expense”
means,
      for any period, the interest expense (including, without limitation, the
      interest component under Capital Leases) of the Consolidated Parties for such
      period, as determined in accordance with GAAP.

     

    “Interest
      Payment Date”
means
      (a) as to Alternate Base Rate Loans, the first day of each calendar month (as
      to
      interest through the end of the prior calendar month) and the Maturity Date
      and
      (b) as to LIBOR Loans, the last day of each applicable Interest Period and
      the
      Maturity Date.

     

    “Interest
      Period”
      means:

     

    (a) with
      respect to each LIBOR Borrowing, the period commencing on the date of such
      Borrowing specified in the applicable Notice of Borrowing or on the date
      specified in the applicable Notice of Interest Rate Election and ending one,
      two
      or three months thereafter, as the Borrower may elect in the applicable Notice
      of Borrowing or Notice of Interest Rate Election; provided
      that:

     

    (i) any
      Interest Period which would otherwise end on a day which is not a LIBOR Business
      Day shall be extended to the next succeeding LIBOR Business Day unless such
      LIBOR Business Day falls in another calendar month, in which case such Interest
      Period shall end on the immediately preceding LIBOR Business Day;

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (ii) any
      Interest Period which begins on the last LIBOR Business Day of a calendar month
      (or on a day for which there is no numerically corresponding day in the calendar
      month at the end of such Interest Period) shall, subject to clause (iii) below,
      end on the last LIBOR Business Day of a calendar month; and

     

    (iii) if
      any
      Interest Period includes a date on which a payment of principal of the Loans
      is
      required to be made under Section 2.10 but does not end on such date, then
      (x)
      the principal amount (if any) of each LIBOR Loan required to be repaid on such
      date shall have an Interest Period ending on such date and (y) the remainder
      (if
      any) of each such LIBOR Loan shall have an Interest Period determined as set
      forth above.

     

    (b) With
      respect to each Alternate Base Rate Borrowing, the period commencing on the
      date
      of such Borrowing specified in the applicable Notice of Borrowing or on the
      date
      specified (or deemed specified) in the applicable Notice of Interest Rate
      Election and ending on the last day of the calendar month in which such Notice
      of Borrowing or Notice of Interest Rate Election was made (or deemed made);
      provided
      that if
      any Interest Period includes a date on which a payment of principal of the
      Loans
      is required to be made under Section 2.13 but does not end on such date, then
      (i) the principal amount (if any) of each Alternate Base Rate Loan required
      to
      be repaid on such date shall have an Interest Period ending on such date and
      (ii) the remainder (if any) of each such Alternate Base Rate Loan shall have
      an
      Interest Period determined as set forth above.

     

    “Investment
      Grade”
means,
      as to any asset or Person, such asset or the senior unsecured indebtedness
      of
      such Person is rated by at least one Rating Agency, and (i) if rated by S&P,
      having a rating of “BBB-” or higher and (ii) if rated by Fitch, having a rating
      of “BBB-“ or higher, and (iii) if rated by Moody’s, having a rating of “Baa3 “
or higher.

     

    “KeyBank”
means
      KeyBank National Association and its successors.

     

    “Legal
      Rate”
has
      the
      meaning set forth in Section 9.17. 

     

    “Lender”
means
      each lender listed on the signature pages hereof, each Assignee which becomes
      a
      Lender pursuant to Section 9.6(b), and their respective successors.

     

    “Letter(s)
      of Credit”
has
      the
      meaning set forth in Section 2.2.

     

    “Letter
      of Credit Fee”
has
      the
      meaning set forth in Section 2.8(b).

     

    “Letter
      of Credit Collateral”
has
      the
      meaning set forth in Section 6.4.

     

    “Letter
      of Credit Collateral Account”
has
      the
      meaning set forth in Section 6.4.

     

    “Letter
      of Credit Documents”
has
      the
      meaning set forth in Section 2.16.

     

    “Letter
      of Credit Usage”
means
      at any time the sum of (i) the aggregate maximum amount available to be drawn
      under the Letters of Credit then outstanding, assuming compliance with all
      requirements for drawing referred to in such Letters of Credit, and (ii) the
      aggregate amount which has been drawn under Letters Credit but for which the
      applicable Fronting Lender and/or Lenders have not been reimbursed at such
      time.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    “Leverage
      Ratio”
means,
      as of any date of calculation, the ratio of (i) Total Liabilities to (ii) Total
      Assets of the Consolidated Parties.

     

    “LIBOR
      Business Day”
means
      any Domestic Business Day on which commercial banks are open for international
      business (including dealings in dollar deposits) in London.

     

    “LIBOR
      Lending Office”
means,
      as to each Lender, its office, branch or affiliate located at its address set
      forth in its Administrative Questionnaire (or identified in its Administrative
      Questionnaire as its LIBOR Lending Office) or such other office, branch or
      affiliate of such Lender as it may hereafter designate as its LIBOR Lending
      Office by notice to the Borrowers and the Administrative Agent.

     

    “LIBOR
      Loan”
means
      a
      Committed Loan to be made by a Lender as a LIBOR Loan in accordance with the
      applicable Notice of Committed Borrowing.

     

    “Lien”
means,
      with respect to any asset, any mortgage, lien (including any tax lien or
      assessment), pledge, charge, security interest or encumbrance of any kind,
      or
      any other type of preferential arrangement that has the effect of creating
      a
      security interest. For purposes of this Agreement, the term “Lien” shall not
      include any Excepted Lien. For the purposes of this Agreement, any Borrowing
      Base Entity shall be deemed to own subject to a Lien any asset which it has
      acquired or holds subject to the interest of a vendor or lessor under any
      conditional or installment sales agreement, capital lease or other title
      retention agreement relating to such asset.

     

    “Loan”
means
      an Alternate Base Rate Loan or a LIBOR Loan and “Loans”
means
      Alternate Base Rate Loans or LIBOR Loans or any combination of the
      foregoing.

     

    “Loan
      Documents”
means
      a
      collective reference to this Agreement, the Notes, the Guaranty, the Letter
      of
      Credit Documents and all other related agreements and documents issued or
      delivered hereunder or thereunder or pursuant hereto or thereto (in each case,
      as the same may be amended, modified, restated, supplemented, extended, renewed
      or replaced from time to time).

     

    “London
      Interbank Offered Rate”
has
      the
      meaning set forth in Section 2.7(c).

     

    “Margin
      Stock”
has
      the
      meaning provided such term in Regulation U of the Federal Reserve
      Board.

     

    “Match
      Funding Agreements”
shall
      mean any and all agreements, devices or arrangements, the counterparty to which
      has a Credit Rating of at least A- by Standard & Poor’s or A3 by Moody’s or
      is otherwise acceptable to the Administrative Agent, designed to protect any
      Consolidated Party which is a party thereto from the fluctuations of interest
      rate, exchange rate or forward rate differences between individual assets owned
      by a Consolidated Party and the Indebtedness incurred by a Consolidated Party
      in
      connection with the origination or financing of such individual assets,
      including, but not limited to, dollar-denominated or cross-currency interest
      rate exchange agreements, Treasury locks, forward currency exchange agreements,
      interest rate cap or collar protection agreements, forward rate currency or
      interest rate options, puts and warrants.

     

    “Material
      Adverse Effect”
means
      an effect resulting from any circumstance or event or series of circumstances
      or
      events, of whatever nature (but excluding general economic conditions), which,
      taken as a whole, (i) could reasonably be expected to materially and adversely
      affect the business, operations, properties, assets or financial condition
      of
      NorthStar, any other Borrower, or, with respect to the Borrowing Base Entities,
      the Borrowing Base Entities taken as a whole, or (ii) could reasonably be
      expected to impair the ability of NorthStar, any other Borrower or any Borrowing
      Base Entity to fulfill its material obligations, including, if applicable,
      their
      ability to perform their respective obligations under the Loan Documents or
      which causes a Default under Section 5.8 hereof.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    “Material
      Plan”
means
      at any time a Plan or Plans having aggregate Unfunded Liabilities in excess
      of
      $1,000,000.

     

    “Materials
      of Environmental Concern”
means
      and includes pollutants, contaminants, wastes, toxic and hazardous substances,
      petroleum and petroleum by-products.

     

    “Maturity
      Date”
means
      the date when all of the Obligations hereunder shall be due and payable which
      shall be November 3, 2009, unless accelerated pursuant to the terms
      hereof.

     

    “Moody’s”
means
      Moody’s Investors Services, Inc. or any successor thereto.

     

    “Multiemployer
      Plan”
means
      at any time an employee pension benefit plan within the meaning of Section
      4001(a)(3) of ERISA to which any member of the ERISA Group is then making or
      accruing an obligation to make contributions or has within the preceding five
      plan years made contributions, including for these purposes any Person which
      ceased to be a member of the ERISA Group during such five year
      period.

     

    “Net
      Equity Proceeds”
means
      the aggregate cash proceeds received by the Consolidated Parties in respect
      of
      any Equity Issuance, net of (a) direct costs (including, without limitation,
      legal, accounting and investment banking fees and sales commissions) and (b)
      taxes paid or payable as a result thereof; it being understood, (i) that “Net
      Equity Proceeds” shall include, without limitation, any cash received upon the
      sale or other disposition of any non-cash consideration received by the
      Consolidated Parties in any Equity Issuance, and (ii) that “Net Equity Proceeds”
shall not include cash proceeds that are applied within thirty (30) days of
      the
      date of the related Equity Issuance to retire Capital Stock.

     

    “Net
      Equity Value”
means
      with respect to any Property Equity Interest, the lesser of (i) the
      un-depreciated Book Value of the related Real Property Asset (inclusive of
      any
      FAS 141 intangibles incurred in connection with the acquisition of such Real
      Property Asset) and (ii) the Underlying Real Estate Value of the related Real
      Property Asset less, in each case, any Indebtedness of any Person relating
      to
      such Real Property Asset which is permitted by the terms of Exhibit
      G
      hereto.

     

    “Net
      Equity CDO Value”
means
      with respect to any Eligible CDO Equity Interest, the lesser of (a) (i) with
      respect to an Eligible CDO Equity Interest in an Eligible CDO that is not a
      Consolidated Party, the Fair Market Value of such Eligible CDO Equity Interest,
      and (ii) with respect to an Eligible CDO Equity Interest in an Eligible CDO
      that
      is a Consolidated Party, an amount equal to (A) the Book Value to the extent
      the
      CDO collateral consists of loans or (B) the Fair Market Value to the extent
      the
      CDO collateral consists of real estate securities, as the case may be, minus
      the
      outstanding principal amount of all notes or real estate securities (including
      any capitalized interest thereon) issued by the related Eligible CDO (other
      than
      the Eligible CDO Equity Interest being valued), plus or minus the Fair Market
      Value of any interest rate swap relating to such Eligible CDO Equity Interest,
      and (b) the Net Outstanding Portfolio Balance under the CDO Indenture to which
      such Eligible CDO Equity Interest relates minus the outstanding principal amount
      of all notes or debt securities (including any capitalized interest thereon)
      issued by the related Eligible CDO. 

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    “Net
      Income”
means,
      for any period, net income or loss after taxes for such period of the
      Consolidated Parties, as determined in accordance with GAAP.

     

    “Net
      Outstanding Portfolio Balance”
shall
      have the meaning set forth in the reports issued by the trustees pursuant to
      the
      applicable CDO Indentures; “Net Outstanding Portfolio Balance” may also refer to
      the “Principal Coverage Amount” as defined in the applicable CDO Indenture
      provided that such definition is acceptable to the Administrative Agent. If
      such
      term is not defined in any trustee report or by reference to the applicable
      CDO
      Indenture or the Administrative Agent reasonably determines that such definition
      is not acceptable, such term shall have the meaning agreed to by NorthStar
      and
      the Administrative Agent.

    


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

    


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

    


    “Non-Recourse
      Debt”
as
      to
      any Person means Indebtedness (i) for which the right of recovery of the obligee
      thereof is limited to recourse against the asset securing such Indebtedness
      (subject to such customary carve-out matters for which such Person has a
      Guarantee Obligation made in connection with such Indebtedness, such as fraud,
      misappropriation, bankruptcy, misapplication and environmental indemnities,
      unless, until and for so long as a claim for payment or performance has been
      made thereunder (which has not been satisfied) at which time the obligations
      with respect to any such customary carve-out shall not be considered
      Non-Recourse Debt, to the extent that such claim is a liability of such Person
      for GAAP purposes) and/or (ii) other Indebtedness for which such Person has
      no
      Guarantee Obligation (other than guarantees of customary carve-out matters
      made
      in connection with such Indebtedness, such as fraud, misappropriation,
      bankruptcy, environmental matters and misapplication, unless, until and for
      so
      long as a claim for payment or performance has been made thereunder (which
      has
      not been satisfied), at which time such guarantee of any such customary
      carve-out shall not be considered Non-Recourse Debt of such Person, to the
      extent that such claim is a liability of such Person for GAAP
      purposes).

     

    “Non-NorthStar
      Plan”
means
      any Plan other than a NorthStar Plan.

     

    “NorthStar’s
      2005 Form 10-K”
means
      NorthStar’s annual report on Form 10-K for the Fiscal Year ended December 31,
      2005, as filed with respect to NorthStar with the Securities and Exchange
      Commission pursuant to the Securities Exchange Act of 1934.

     

    “NorthStar’s
      2006 Form 10-Q”
means
      the quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2006,
      as
      filed with respect to NorthStar with the Securities and Exchange Commission
      pursuant to the Securities Exchange Act of 1934.

     

    “NorthStar
      Plan”
means
      a
      Plan in the ERISA Group sponsored, maintained or contributed to by NorthStar,
      NorthStar OP or any other Borrower.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    “Notes”
means
      promissory notes of the Borrowers, substantially in the form of Exhibit
      “A”
      hereto,
      evidencing the obligation of the Borrowers to repay the Loans, and “Note” means
      any one of such promissory notes issued hereunder.

     

    “Notice
      of Borrowing”
means
      a
      Notice of Committed Borrowing (as defined in Section 2.3).

     

    “Notice
      of Interest Rate Election”
has
      the
      meaning set forth in Section 2.6.

     

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

    


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

    


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

    


    “Obligations”
means
      all obligations, liabilities and indebtedness of every nature of the Borrowers,
      from time to time owing to any Lender under or in connection with this Agreement
      or any other Loan Document, including, without limitation, (i) the outstanding
      principal amount of the Committed Loans at such time, plus (ii) the Letter
      of
      Credit Usage at such time.

     

    “Off
      Balance Sheet Asset”
means,
      with respect to any Person, any asset that is subject to an Off Balance Sheet
      Financing, and as a result of such transaction such asset does not (and is
      not
      required pursuant to GAAP) to appear as an asset on the balance sheet of such
      Person. 

     

    “Off
      Balance Sheet Liabilities”
means,
      with respect to any Person, any (a) repurchase obligation or liability,
      contingent or otherwise, of such Person with respect to any mortgages, mortgage
      notes, accounts or notes receivable sold, transferred or otherwise disposed
      of
      by such Person, (b) repurchase obligation or liability, contingent or otherwise,
      of such Person with respect to property or assets leased by such Person as
      lessee and (c) obligations, contingent or otherwise, of such Person under any
      Off Balance Sheet Transaction, in each case, if the transaction giving rise
      to
      such obligation (i) is considered Indebtedness for borrowed money for tax
      purposes, and (ii) does not (and is not required pursuant to GAAP) to appear
      as
      a liability on the balance sheet of such Person.

     

    “Off
      Balance Sheet Transaction”
means,
      with respect to any Person, any synthetic lease, tax retention operating lease,
      commercial mortgage backed securities transaction, securitization transaction,
      collateralized debt obligation transaction, off balance sheet loan or similar
      off balance sheet financing. 

     

    “Outstanding
      Balance”
means
      at any time, and from time to time, the sum of (i) the aggregate outstanding
      principal balance of all Committed Loans and (ii) the Letter of Credit
      Usage.

     

    “Parent”
means,
      with respect to any Lender, any Person controlling such Lender.

     

    “Participant”
has
      the
      meaning set forth in Section 9.6(c).

     

    “Partnership”
means
      any general or limited partnership, joint venture, corporation, limited
      liability company, limited liability partnership, limited liability limited
      partnership or other Person which is not a natural Person or the estate of
      a
      deceased natural Person and which owns directly an interest in real
      property.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    “PBGC”
means
      the Pension Benefit Guaranty Corporation or any entity succeeding to any or
      all
      of its functions under ERISA.

     

    “Person”
means
      an individual, a corporation, a partnership, an association, a trust or any
      other entity or organization, including a government or political subdivision
      or
      an agency or instrumentality thereof.

     

    “Plan”
means
      at any time an employee pension benefit plan (other than a Multiemployer Plan)
      which is covered by Title IV of ERISA or subject to the minimum funding
      standards under Section 412 of the Code and either (i) is maintained, or
      contributed to, by any member of the ERISA Group for employees of any member
      of
      the ERISA Group or (ii) has at any time within the preceding five years been
      maintained, or contributed to, by any Person which was at such time a member
      of
      the ERISA Group for employees of any Person which was at such time a member
      of
      the ERISA Group.

     

    “Preferred
      Distributions”
means
      for any period, the amount of any and all Distributions paid, declared but
      not
      yet paid or otherwise due and payable to the holders of any form of preferred
      stock or partnership interest (whether perpetual, convertible or otherwise)
      or
      other ownership or beneficial interest in NorthStar or any Subsidiary thereof
      that entitles the holders thereof to preferential payment or distribution
      priority with respect to dividends, distributions, assets or other payments
      over
      the holders of any other stock, partnership interest or other ownership or
      beneficial interest in such Person.

    


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

    


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

    


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

    


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

    


    “Property
      NOI”
means,
      with respect to any applicable time period for any Real Property Asset, (a)
      Property Revenues for such period with respect to such Real Property Asset
      less
      (b) the
      sum of (i) Property Expenses for such period with respect to such Real Property
      Asset, plus
      (ii) the
      Capital Replacement Reserve amount for such Real Property Asset during such
      period (but only to the extent NorthStar or an Affiliate of NorthStar is
      responsible for such costs), plus
      (iii) a
      management fee in the amount of three percent (3%) of total revenues derived
      from the Real Property Asset during such period; provided, that such amount
      shall be exclusive of any adjustment for such period attributable to the
      Straight-Lining of Rents.

     

    “Property
      Revenues”
means,
      with respect to any applicable time period for any Real Property Asset, the
      base
      rent, expense reimbursement and other recurring rental income received during
      such period (other than prepaid rents and revenues and security deposits except
      to the extent applied in satisfaction of tenants’ obligations for
      rent).

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    “Rating
      Agencies”
means,
      collectively, S&P, Moody’s and Fitch.

     

    “Real
      Estate Securities”
means
      securities issued (i) pursuant to a securitization of commercial mortgage loans
      or (ii) by a real estate operating company or REIT.

     

    “Real
      Property Assets”
means,
      as of any time as to any Person, the real property assets in which such Person
      has a fee title ownership interest or possesses a leasehold interest at such
      time.

     

    “Real
      Property Subsidiary”
has
      the
      meaning set forth in Section 5.23. 

     

    “Recourse
      Debt”
as
      to
      any Person means all Indebtedness other than Non-Recourse Debt. TruPS shall
      be
      considered Recourse Debt for purposes of Section 6.1(e). 

     

    “Regulation
      U”
means
      Regulation U of the Board of Governors of the Federal Reserve System, as in
      effect from time to time.

     

    “Required
      Lenders”
means
      at any time Lenders having at least 66.67% of the aggregate amount of the
      Commitments or, if the Commitments shall have been terminated, holding Notes
      and/or participations in Letters of Credit evidencing at least 66.67% of the
      aggregate unpaid principal amount of the Committed Loans and Letter of Credit
      Usage.

     

    “Scheduled
      Amortization Payments”
means,
      for a given period, the sum of all scheduled payments of principal on Funded
      Indebtedness for the Consolidated Parties for the applicable period ending
      on
      such date (including the principal component of payments due on Capital Leases
      during the applicable period); it being understood that Scheduled Amortization
      Payments shall not include any one-time “bullet”, “lump sum” or “balloon”
payments due in respect of Funded Indebtedness.

     

    “Senior
      Management Fees”
means
      revenue derived from senior management fees payable to NS Advisors in respect
      of
      the management of a Borrowing Base Asset less any costs incurred by the
      Consolidated Parties that are allocable to the such revenues. 

     

    “S&P”
means
      Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
      Inc., or any successor thereto.

     

    “Solvent”
means,
      with respect to any Person, that (i) the fair saleable value of such Person’s
      assets exceeds the Indebtedness of such Person, (ii) such Person has the ability
      to generally pay its debts and other liabilities as they become due in ordinary
      course of business and (iii) such Person has sufficient capital to conduct
      its
      business in the ordinary course of business.

     

    “Special
      Purpose Entity”
means
      any entity whose structure and organizational and governing documents satisfy,
      in form and substance, Rating Agency special purpose entity requirements.


     

    “Straight-Lining
      of Rents”
means,
      with respect to any lease, the method by which rent with respect to such lease
      is considered earned or expensed equally over the term of such lease despite
      the
      existence of (i) any free rent periods under such lease and (ii) any rent
      step-up provisions under such lease.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    “Subordinated
      Assets”
means
      Subordinated Debt Assets and Preferred Securities.

     

    “Subordinated
      Debt Assets”
means
      as to any Person, mezzanine or other subordinated indebtedness owed to such
      Person, which is not the subject of a bankruptcy or similar proceeding, is
      fully
      performing as to payment and material nonpayment obligations thereunder and
      is
      secured by (i) a Lien of a properly recorded mortgage, deed of trust or other
      similar security instrument on a fee interest or a leasehold interest in real
      property and all collateral security related thereto, which indebtedness is
      subject to only to a first Lien of a recorded mortgage, deed of trust or other
      similar security instrument or (ii) a pledge of the direct or indirect ownership
      interests in the Person owing such mezzanine or other indebtedness, which
      ownership interests are subject to no other Lien. 

     

    “Subsidiary”
means
      any corporation or other entity of which securities or other ownership interests
      having ordinary voting power to elect a majority of the board of directors
      or
      other Persons performing similar functions are at the time directly or
      indirectly owned by NorthStar.

     

    “Subsidiary
      Guarantor”
means
      (i) each Subsidiary of a Borrower that owns Borrowing Base Assets included
      in
      the Borrowing Base Assets Pool (other than any Real Property Subsidiary or
      any
      CDO Subsidiary), (ii) NNN Holdings, (iii) NS Holdings I, (iv) NS Holdings II
      and
      (v) NS Holdings III, together with any Subsidiary of a Borrower that shall
      become a Subsidiary Guarantor pursuant to Section 5.24.

     

    “Syndication
      Agent”
means
      Bank of America, N.A., in its capacity as Syndication Agent hereunder, and
      its
      permitted successors in such capacity in accordance with the terms of this
      Agreement.

     

    “Term”
has
      the
      meaning set forth in Section 2.9.

     

    “Termination
      Event”
means,
      with respect to a NorthStar Plan, or with respect to a Non-NorthStar Plan (but,
      as to any Non-NorthStar Plan, only to the extent an event described in (i)
      through (v) below would result in a Material Adverse Effect), (i) a “reportable
      event”, as such term is described in Section 4043 of ERISA (other than a
“reportable event” not subject to the provision for 30-day notice to the PBGC),
      or an event described in Section 4062(e) of ERISA, (ii) the withdrawal by any
      member of the ERISA Group from a Multiemployer Plan during a plan year in which
      it is a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), or
      the incurrence of liability by any member of the ERISA Group under Section
      4064
      of ERISA upon the termination of a Multiemployer Plan, (iii) the filing of
      a
      notice of intent to terminate any Plan under Section 4041 of ERISA, other than
      in a standard termination within the meaning of Section 4041 of ERISA, or the
      treatment of a Plan amendment as a distress termination under Section 4041
      of
      ERISA, (iv) the institution by the PBGC of proceedings to terminate, impose
      liability (other than for premiums under Section 4007 of ERISA) in respect
      of,
      or cause a trustee to be appointed to administer, any Plan or (v) any other
      event or condition that would constitute grounds for the termination of, or
      the
      appointment of a trustee to administer, any Plan or the imposition of any
      liability or encumbrance or Lien on any Real Property Assets or any member
      of
      the ERISA Group under ERISA.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    “Total
      Available Commitments”
means,
      at any time of determination, the lesser of (a) the aggregate amount of the
      Commitments at such time, or (b) the then Borrowing Base
      Availability.

     

    “Total
      Assets”
means,
      as to any Person as of any date, all assets of such Person determined in
      accordance with GAAP, adjusted (i) to give effect to the proportional ownership
      by such Person of any Non-Wholly-Owned Subsidiary of such Person and any
      partnership or unincorporated joint venture in which such Person is a general
      partner or a joint venturer and (ii) to include on the balance sheet of such
      Person any Off Balance Sheet Assets of such Person. 

     

    “Total
      Liabilities”
means
      the sum of (i) total liabilities of the Consolidated Parties, as determined
      in
      accordance with GAAP (exclusive of escrow deposits and other liabilities for
      which cash has been received and is classified under “restricted cash” on the
      balance sheet of such Person), plus
      (ii) the
      total Contingent Obligations of the Consolidated Parties, in each case adjusted
      (A) to give effect to the proportional ownership by such Person of any
      Non-Wholly-Owned Subsidiary of such Person and any partnership or unincorporated
      joint venture in which such Person is a general partner or a joint venturer
      and
      (B) to include on the balance sheet of such Person any Off Balance Sheet
      Liabilities of such Person, minus,
      Indebtedness of the Consolidated Parties in respect of TruPS. 

     

    “TruPS”
means
      those REIT trust preferred securities issued by a Consolidated Party identified
      on Schedule 1.1 hereto and such other REIT trust preferred securities issued
      by
      a Consolidated Party which are approved by the Administrative Agent, in each
      case which are expressly subordinated to all other Indebtedness of the
      Consolidated Parties. REIT trust preferred securities issued by a Consolidated
      Party shall be approved by the Administrative Agent if such securities are
      issued on terms substantially similar to those securities listed on Schedule
      1.1, as determined by the Administrative Agent in its reasonable discretion.
      

     

    “Underlying
      Asset”
means
      as to any First Mortgage Asset or Subordinated Debt Asset, the real property
      encumbered thereby or, as to any Preferred Securities, the real property which
      is owned directly by the Person in which the Securities are part of the equity
      structure thereof.

     

    “Underlying
      Real Estate Value”
means
      as to any Real Property Assets or any Underlying Assets (a) the appraised value
      of the real property as reflected in the most recent MAI appraisal in form
      and
      substance reasonably acceptable to the Administrative Agent or (b) where no
      MAI
      appraisal is available, (i) the annualized Property NOI for such property based
      upon the most recently completed two fiscal quarters, divided
      by
      (ii) the
      Capitalization Rate. 

     

    “Unfunded
      Liabilities”
means,
      with respect to any Plan at any time, the amount (if any) by which (i) the
      value
      of all benefit liabilities under such Plan, determined on a plan termination
      basis using the assumptions prescribed by the PBGC for purposes of Section
      4044
      of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to
      such liabilities under Title IV of ERISA (excluding any accrued but unpaid
      contributions), all determined as of the then most recent valuation date for
      such Plan, but only to the extent that such excess represents a reasonably
      likely liability of a member of the ERISA Group to the PBGC or any other Person
      under Title IV of ERISA.

     

    “United
      States”
means
      the United States of America, including the fifty states and the District of
      Columbia.

     

    “Unused
      Commitment Fee”
has
      the
      meaning set forth in Section 2.8(c).

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    “Wholly-Owned
      Subsidiary”
means,
      with respect to any Person, a Subsidiary of such Person of which one hundred
      percent (100%) of the outstanding shares of stock or other equity interests
      are
      owned, directly or indirectly, by such Person (excluding, in the case of NRFC
      Sub-REIT, preferred shares that are owned by a Person other than a Borrower
      solely for purposes of compliance with the REIT minimum number of shareholders
      rules). 

     

    Section
      1.2 Accounting
      Terms and Determinations.
      Unless
      otherwise specified herein, all accounting terms used herein shall be
      interpreted, all accounting determinations
      hereunder shall be made, and all financial statements required to be delivered
      hereunder
      shall be prepared in accordance with GAAP applied on a basis consistent (except
      for changes concurred in by NorthStar’s independent public accountants) with the
      most recent audited consolidated financial statements of NorthStar and its
      Consolidated Subsidiaries delivered to the Administrative Agent; provided
      that, if
      the Borrowers notify the Administrative Agent that the Borrowers
      wish to amend any covenant in Article V to eliminate the effect of any change
      in
      GAAP on the operation of such covenant (or if the Administrative Agent notifies
      the Borrowers that the Required Lenders wish to amend Article V for such
      purpose), then the applicable Person’s compliance with such covenant shall be
      determined on the basis of GAAP in effect immediately before the relevant change
      in GAAP became effective until either such notice is withdrawn or such
      covenant is amended in a manner reasonably satisfactory to the Borrowers and
      the
      Required Lenders.
      All
      calculations with respect to the defined terms and the covenants in Article
      V
      shall be done without duplication.

     

    Section
      1.3 Types
      of Borrowings.
      The
      term “Borrowing” denotes the aggregation of Loans of one or more Lenders to be
      made to the Borrowers pursuant to Article II on the
      same
      date, all of which Loans are of the same type (subject to Article VIII) and,
      except in the case
      of
      Alternate Base Rate Loans, have the same Interest Period. Borrowings are
      classified for purposes
      of this Agreement either by reference to the pricing of Loans comprising such
      Borrowing
      (e.g.,
      a
“LIBOR
      Borrowing” is a Borrowing comprised of LIBOR Loans) or by reference to the
      provisions of Article II under which participation therein is determined
      (i.e.,
      a
“Committed Borrowing” is a Borrowing under Section 2.1 in which all Lenders
      participate in proportion to their Commitments).

     

    ARTICLE
      II

     

    THE
      COMMITMENTS

     

    Section
      2.1 Commitments
      to Lend.
      Each
      Lender severally agrees, on the terms and conditions set forth in this
      Agreement, to make Committed Loans to the Borrowers
      or
      participate in Letters of Credit issued by the Fronting Lender on behalf of
      Borrowers pursuant
      to this Article from time to time during the term hereof in amounts such that
      the aggregate principal amount
      of
      Committed Loans by such Lender at any one time outstanding plus such
Lender’s
      pro rata share (based on the ratio of its Commitment to the aggregate
of
      all
      Commitments) of Letter of Credit Usage shall not exceed the amount of its
      Available Commitment. The aggregate amount of Committed Loans together with
      the
      Letter of Credit Usage shall not exceed the lesser of (i) the Facility Amount
      and (ii) the Total Available Commitments.
      The
      aggregate dollar amount of Letters of Credit Usage shall not
      at
      any time exceed Ten Million Dollars ($10,000,000).
      Each
      Borrowing outstanding under this Section
      2.1 (other than a Borrowing in connection with a draw under a Letter of Credit)
      shall be in an aggregate principal amount of $5,000,000 (for LIBOR Loans) or
      $1,000,000 (for Alternate Base Rate Loans), or in each case an integral multiple
      of $1,000,000 in excess thereof
      (except that any such Borrowing may be in the aggregate amount available
      in accordance with Section 3.2(c)) and shall be made from the several Lenders
      ratably in proportion to their respective Commitments. Subject to the
      limitations set forth herein, any amounts repaid may be reborrowed.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    Section
      2.2 Notice
      of Committed Borrowing.
      The
      Borrowers shall give Administrative Agent notice not later than 12:00 noon
      (New
      York, New York time) (x) one (1) Domestic
      Business Day before each Alternate Base Rate Borrowing, or (y) three (3) LIBOR
      Business
      Days before each LIBOR Borrowing, specifying:

     

    (i) the
      date
      of such Borrowing, which shall be a Domestic Business Day in the case of a
      Domestic Borrowing or a LIBOR Business Day in the case of a LIBOR
      Borrowing,

     

    (ii) the
      aggregate amount of such Borrowing,

     

    (iii) whether
      the Loans comprising such Borrowing are to be Alternate Base Rate Loans or
      LIBOR
      Loans,

     

    (iv) in
      the
      case of a LIBOR Borrowing, the duration of the Interest Period applicable
      thereto, subject to the provisions of the definition of Interest Period,


     

    (v) the
      Total
      Available Commitments, 

     

    (vi) the
      Outstanding Balance.

     

    Together
      with the notice to the Administrative Agent as specified immediately above,
      the
      Borrowers shall deliver to the Administrative Agent a completed, current
      certificate, identifying the Borrowing Base Assets against which the Borrowing
      is being requested, setting forth the calculation of Borrowing Base
      Availability, and providing other information concerning the Borrowing Base
      and
      the Borrowers, in the form attached hereto as Exhibit
      D
      (a
“Borrowing Base Certificate”).

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    The
      Borrowers shall give the Administrative Agent and the designated Fronting
      Lender, written notice that it desires to have Letters of Credit (a
“Letter
      of Credit”)
      issued
      hereunder no later than 10:00 A.M., New York, New York time, at least five
      (5)
      Domestic Business Days prior to the date of such issuance. Each such notice
      shall specify (i) the designated Fronting Lender (if other than KeyBank and,
      if
      not KeyBank, such other Fronting Lender shall be subject to the approval of
      the
      Administrative Agent), (ii) the aggregate amount of the requested Letters of
      Credit, (iii) the individual amount of each requested Letter of Credit and
      the
      number of Letters of Credit to be issued, (iv) the date of such issuance (which
      shall be a Domestic Business Day), (v) the name and address of the beneficiary,
      (vi) the expiration date of the Letter of Credit (which in no event shall be
      in
      excess of twelve (12) months from the date of issuance or less than thirty
      (30)
      days prior to the Maturity Date), (vii) the purpose and circumstances for which
      such Letter of Credit is being issued, (viii) the terms upon which such Letter
      of Credit may be drawn down (which terms shall be approved by the Fronting
      Lender), (ix) the Total Available Commitments, (x) the Borrowing Base Assets
      against which the issuance of the Letter(s) of Credit is being requested and
      the
      Borrowing Base Value of such Borrowing Base Assets (taking into consideration
      the amount of all Borrowings and Letter of Credit Usage outstanding with respect
      to such Borrowing Base Assets), including a certification from the chief
      financial officer or chief accounting officer of NorthStar setting forth in
      reasonable detail the manner by which the foregoing calculations have been
      made,
      and (xi) the Outstanding Balance. Together with the notice to the Administrative
      Agent as specified immediately above, the Borrowers shall deliver to the
      Administrative Agent a completed, current Borrowing Base Certificate stating
      that, after taking into account the issuance of any such Letter(s) of Credit,
      the Borrowers shall be in full compliance with all of the covenants contained
      in
      Section 5.8 of this Agreement and that the requirements with respect to the
      Borrowing Base Values shall be met. Each such notice may be revoked
      telephonically by Borrowers to each of the applicable Fronting Lender and the
      Administrative Agent any time prior to the date of issuance of the Letter of
      Credit by the applicable Fronting Lender, provided such revocation is confirmed
      in writing by Borrowers to Fronting Lender and the Administrative Agent within
      one (1) Domestic Business Day by facsimile. No later than 10:00 A.M. New York,
      New York time on the date that is five (5) Domestic Business Days prior to
      the
      date of issuance, Borrowers shall specify a precise description of the documents
      and the verbatim text of any certificate to be presented by the beneficiary
      of
      such Letter of Credit, which if presented by such beneficiary prior to the
      expiration date of the Letter of Credit would require Fronting Lender to make
      a
      payment under the Letter of Credit; provided that Fronting Lender may, in its
      reasonable judgment, require reasonable changes in any such documents and
      certificates only in conformity with changes in customary and commercially
      reasonable practice or law and provided further, that no Letter of Credit shall
      require payment against a conforming draft to be made thereunder on the
      following Domestic Business Day that such draft is presented if such
      presentation is made later than 10:00 A.M. New York, New York time (except
      that
      if the beneficiary of any Letter of Credit requests at the time of the issuance
      of its Letter of Credit that payment be made on the same Domestic Business
      Day
      against a conforming draft, such beneficiary shall be entitled to such a same
      day draw, provided such draft is presented to the applicable Fronting Lender
      no
      later than 10:00 A.M. New York, New York time and provided further that, prior
      to the issuance of such Letter of Credit, Borrowers shall have requested to
      Fronting Lender and the Administrative Agent that such beneficiary shall be
      entitled to a same day draw). In determining whether to pay on such Letter
      of
      Credit, Fronting Lender shall be responsible only to determine that the
      documents and certificates required to be delivered under the Letter of Credit
      have been delivered and that they comply on their face with the requirements
      of
      that Letter of Credit.

     

    Section
      2.3 Notice
      to Lenders; Funding of Loans.

     

    (a) Upon
      receipt of a notice from Borrowers in accordance with Section 2.2 hereof (each
      such notice being a “Notice
      of Committed Borrowing”),
      the
      Administrative Agent shall, on the date such Notice of Committed Borrowing
      is
      received by the Administrative Agent, notify each Lender of the contents thereof
      and of such Lender’s share of such Borrowing, of the interest rate determined
      pursuant thereto and the Interest Period(s) (if different from those requested
      by the Borrowers) and (unless such Notice of Committed Borrowing is for the
      issuance of a Letter of Credit) such Notice of Committed Borrowing shall not
      thereafter be revocable by the Borrowers, except as is otherwise specifically
      provided for in this Agreement.

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    (b) Not
      later
      than 1:00 p.m. (New York, New York time) on the date of each Borrowing as
      indicated in the Notice of Committed Borrowing, each Lender shall (except with
      respect to Notices of Committed Borrowing for issuances of Letters of Credit)
      make available its share of such Borrowing in Federal funds immediately
      available in New York, New York, to the Administrative Agent at its address
      referred to in Section 9.1. If Borrowers have requested the issuance of a Letter
      of Credit, no later than 12:00 Noon (New York, New York time) on the date of
      such issuance as indicated in the Notice of Committed Borrowing, Fronting Lender
      shall issue such Letter of Credit in the amount so requested and deliver the
      same to Borrower, with a copy thereof to the Administrative Agent. Immediately
      upon the issuance of each Letter of Credit by Fronting Lender, such Fronting
      Lender shall be deemed to have sold and transferred to each other Lender, and
      each such other Lender shall be deemed to, and hereby agrees to, have
      irrevocably and unconditionally purchased and received from Fronting Lender,
      without recourse or warranty, an undivided interest and a participation in
      such
      Letter of Credit, any drawing thereunder, and the obligations of Borrowers
      hereunder with respect thereto, and any security therefor or guaranty pertaining
      thereto, in an amount equal to such Lender’s ratable share thereof (based upon
      the ratio its Commitment bears to the aggregate of all Commitments). Upon any
      change in any of the Commitments in accordance herewith, there shall be an
      automatic adjustment to such participations to reflect such changed shares.
      The
      applicable Fronting Lender shall have the primary obligation to fund any and
      all
      draws made with respect to such Letter of Credit notwithstanding any failure
      of
      a participating Lender to fund its ratable share of any such draw. Unless the
      Administrative Agent determines that any applicable condition specified in
      Article III has not been satisfied, the Administrative Agent will instruct
      the
      applicable Fronting Lender to make such Letter of Credit available to the
      Borrowers and such Fronting Lender shall make such Letter of Credit available
      to
      the Borrowers at the Borrowers’ aforesaid address on the date of the issuance of
      such Letter of Credit. Without in any way implying a right of Fronting Lender
      not to issue a Letter of Credit as provided for herein, if a Fronting Lender
      shall fail to issue a Letter of Credit (notwithstanding that the applicable
      conditions specified in Article III have been satisfied), the Borrowers may
      designate a substitute Fronting Lender, provided that the notice periods set
      forth in Section 2.2(b) above shall begin anew.

     

    (c) Unless
      the Administrative Agent shall have received notice from a Lender prior to
      the
      date of any Borrowing that such Lender will not make available to the
      Administrative Agent such Lender’s share of such Borrowing, the Administrative
      Agent may assume that such Lender has made such share available to the
      Administrative Agent on the date of such Borrowing in accordance with subsection
      (b) of this Section 2.3 and the Administrative Agent may, in reliance upon
      such
      assumption, but shall not be obligated to, make available to the Borrowers
      on
      such date a corresponding amount on behalf of such Lender. If and to the extent
      that such Lender shall not have so made such share available to the
      Administrative Agent, such Lender and, without prejudice with respect to its
      rights and remedies against such Lender, the Borrowers, severally agree to
      repay
      to the Administrative Agent, within one (1) Domestic Business Day following
      receipt of demand, such corresponding amount together with interest thereon,
      for
      each day from the date such amount is made available to the Borrowers until
      the
      date such amount is repaid to the Administrative Agent, at (i) in the case
      of
      the Borrowers, a rate per annum equal to the interest rate applicable thereto
      pursuant to Section 2.6 and (ii) in the case of such Lender, the Federal Funds
      Rate. If such Lender shall repay to the Administrative Agent such corresponding
      amount, such amount so repaid shall constitute such Lender’s Loan included in
      such Borrowing for purposes of this Agreement. If at any time, any Lender shall
      fail to make available to the Administrative Agent such Lender’s share of any
      such Borrowing, as provided for in this Section 2.3(c), the Borrowers shall
      have
      the right, upon five (5) Domestic Business Day’s notice to the Administrative
      Agent to either (x) cause a bank, reasonably acceptable to the Administrative
      Agent, to offer to purchase the Commitments of such Lender for an amount equal
      to such Lender’s outstanding Committed Loans, and to become a Lender hereunder,
      which offer such Lender is hereby required to accept, or (y) to repay in full
      all Committed Loans then outstanding of such Lender, together with interest
      and
      all other amounts due thereon, upon which event, such Lender’s Commitment shall
      be deemed to be cancelled pursuant to Section 2.11(c) and the Facility Amount
      shall be reduced by a corresponding amount.

     

    
      
        
        

      

      
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    Section
      2.4 Notes.

     

    (a) The
      Committed Loans of each Lender shall be evidenced by a single Note payable to
      the order of such Lender for the account of its Applicable Lending
      Office.

     

    (b) Each
      Lender may, by notice to the Borrowers and the Administrative Agent, request
      that its Committed Loans be evidenced by a separate Note in an amount equal
      to
      the aggregate unpaid principal amount of such Committed Loans. Any additional
      costs incurred by the Administrative Agent, the Borrowers or the Lenders in
      connection with preparing such a Note shall be at the sole cost and expense
      of
      the Lender requesting such Note. In the event any Committed Loans evidenced
      by
      such a Note are paid in full prior to the Maturity Date, any such Lender shall
      return such Note to the Borrowers. Each such Note shall be in substantially
      the
      form of Exhibit
      A
      hereto
      with appropriate modifications to reflect the fact that it evidences solely
      Loans of the relevant type. Each reference in this Agreement to the
“Note”
of
      such
      Lender shall be deemed to refer to and include any or all of such Notes, as
      the
      context may require.

     

    (c) Upon
      receipt of each Lender’s Note pursuant to Section 3.1(a), the Administrative
      Agent shall forward such Note to such Lender. Each Lender shall record in its
      records the date, amount, type and maturity of each Loan made by it and the
      date
      and amount of each payment of principal made by the Borrowers with respect
      thereto, and may, if such Lender so elects in connection with any transfer
      or
      enforcement of its Note, endorse on the appropriate schedule appropriate
      notations to evidence the foregoing information with respect to each such Loan
      then outstanding; provided
      that the
      failure of any Lender to make any such recordation or endorsement shall not
      affect the obligations of the Borrowers hereunder or under the Notes. Each
      Lender is hereby irrevocably authorized by the Borrowers so to endorse its
      Note
      and to attach to and make a part of its Note a continuation of any such schedule
      as and when required.

     

    (d) The
      Loans
      shall mature, and the remaining principal amount thereof shall be due and
      payable by the Borrowers, on the Maturity Date. 

     

    (e) There
      shall be no more than six (6) Interest Periods applicable to the LIBOR Loans
      outstanding at any one time. Notwithstanding the foregoing, subject to the
      approval of the Administrative Agent, in the event the Borrowers wish to combine
      one or more LIBOR Loans into a single Interest Period, the Borrowers may from
      time to time be entitled to select an Interest Period of less than one month,
      with interest at a rate per annum equal to the sum of (i) the Adjusted London
      Interbank Offered Rate on the date of determination for an Interest Period
      of
      one (1) month plus
      (ii) the
      Applicable Margin for LIBOR Loans on such date of determination.

     

    Section
      2.5 Letters
      of Credit.

     

    (a) Subject
      to the terms contained in this Agreement and the other Loan Documents, upon
      the
      receipt of a Notice of Committed Borrowing
      requesting the issuance of a Letter of Credit, Fronting Lender shall issue
      a
      Letter of Credit
      or
      Letters of Credit in such form as is reasonably acceptable to Borrowers, in
      an
      aggregate amount equal to the amount requested, provided that after the issuance
      of such Letters of Credit, (i)
      the
      aggregate amount of issued and outstanding Letters of Credit shall not exceed
      Ten
      Million Dollars ($10,000,000), and (ii) the Letter of Credit Usage, when added
      to the aggregate principal amount of the Committed Loans outstanding, shall
      not
      exceed the lesser of (y) the Total Available Commitments, and (z)
      the
      Facility Amount. Fronting Lender shall promptly notify Administrative Agent
      and
      each Lender of the issuance of any such Letter of Credit, together with the
      amount thereof, simultaneously therewith.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    (b) Each
      Letter of Credit shall be issued in the minimum aggregate amount of One Million
      Dollars ($1,000,000) or any amount in excess thereof.

     

    (c) In
      the
      event of any request for a drawing under any Letter of Credit by the beneficiary
      thereunder, Fronting Lender shall promptly notify Borrowers and the
      Administrative Agent (and the Administrative Agent shall promptly notify each
      Lender thereof) on or before the date on which Fronting Lender intends to honor
      such drawing, and, except as provided in this subsection (c), Borrowers shall
      reimburse Fronting Lender, in immediately available funds, on the same day
      on
      which such drawing is honored in an amount equal to the amount of such drawing.
      Notwithstanding anything contained herein to the contrary, however, unless
      Borrowers shall have notified the Administrative Agent and Fronting Lender
      prior
      to 10:00 a.m. (New York, New York time) on the date of such drawing (provided
      that the same shall be a Domestic Business Day) that Borrowers intend to
      reimburse Fronting Lender for the amount of such drawing with funds other than
      the proceeds of the Loans, Borrowers shall be deemed to have timely given a
      Notice of Committed Borrowing pursuant to Section 2.2 to the Administrative
      Agent, requesting a Borrowing of Alternate Base Rate Loans on the date on which
      such drawing is honored and in an amount equal to the amount of such drawing.
      Each Lender shall, in accordance with Section 2.3(b), make available its share
      of such Borrowing to the Administrative Agent, the proceeds of which shall
      be
      applied directly by the Administrative Agent to reimburse Fronting Lender for
      the amount of such draw. In the event that any Lender fails to make available
      to
      Fronting Lender the amount of such Lender’s participation on the date of a
      drawing, Fronting Lender shall be entitled to recover such amount on demand
      from
      such Lender together with interest at the Federal Funds Rate commencing on
      the
      date of drawing.

     

    (d) If,
      after
      the date hereof, any change in any law or regulation or in the interpretation
      thereof by any court or administrative or governmental authority charged with
      the administration thereof shall either (a) impose, modify or deem applicable
      any reserve, special deposit or similar requirement against letters of credit
      issued by, or assets held by, or deposits in or for the account of, or
      participations in any letter of credit, upon any Lender (including Fronting
      Lender) or (b) impose on any Lender any other condition regarding this Agreement
      or such Lender (including Fronting Lender) as it pertains to the Letters of
      Credit or any participation therein and the result of any event referred to
      in
      the preceding clause (a) or (b) shall be to increase the cost to the Fronting
      Lender or any Lender of issuing or maintaining any Letter of Credit or
      participating therein then the Borrowers shall pay to the Fronting Lender or
      such Lender, upon written demand therefor to the Borrowers from the
      Administrative Agent (provided such demand is received by the Borrowers within
      one hundred twenty (120) days following the date on which such increased cost
      becomes effective as against the Fronting Lender or such Lender), such
      additional amounts as shall be required to compensate the Fronting Lender or
      such Lender for such increased costs or reduction in amounts received or
      receivable hereunder together with interest thereon at the Federal Funds Rate
      plus the Applicable Margin on Alternate Base Rate Loans at such time. The amount
      specified in the written demand shall be conclusive in the absence of
      demonstrable error.

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    (e) Borrower
      hereby agrees to protect, indemnify, pay and save Fronting Lender harmless
      from
      and against any and all actual claims, demands, liabilities, damages, losses,
      costs, charges and expenses (including reasonable, actual attorneys’ fees and
      disbursements) which Fronting Lender may incur or be subject to as a result
      of
      (i) the issuance of the Letters of Credit, other than as a result of the gross
      negligence or willful misconduct of Fronting Lender or (ii) the failure of
      Fronting Lender to honor a drawing under any Letter of Credit as a result of
      any
      act or omission, whether rightful or wrongful, of any present or future de
      jure
      or de facto government or governmental authority (collectively, “Governmental
      Acts”).
      As
      between Borrowers or any Fronting Lender, Borrowers assume all risks of the
      acts
      and omissions of, or misuses of the Letters of Credit issued by Fronting Lender
      by, the beneficiaries of such Letters of Credit. In furtherance and not in
      limitation of the foregoing, Fronting Lender shall not be responsible (i) for
      the form, validity, sufficiency, accuracy, genuineness or legal effect of any
      document submitted by any party in connection with the application for and
      issuance of such Letters of Credit, even if it should in fact prove to be in
      any
      and all respects invalid, insufficient, inaccurate, fraudulent or forged unless
      the Fronting Lender’s payment of under such Letter of Credit constitutes gross
      negligence or willful misconduct; (ii) for the validity or insufficiency of
      any
      instrument transferring or assigning or purporting to transfer or assign any
      such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
      in whole or in part, which may prove to be invalid or ineffective for any
      reason; (iii) for failure of the beneficiary of any such Letter of Credit to
      comply fully with conditions required in order to draw upon such Letter of
      Credit unless the Fronting Lender’s acquiescence to such noncompliance
      constitutes gross negligence or willful misconduct; (iv) for errors, omissions,
      interruptions or delays in transmission or delivery of any message, by mail,
      cable, telegraph, telex, facsimile transmission, or otherwise; (v) for errors
      in
      interpretation of any technical terms; (vi) for any loss or delay in the
      transmission or otherwise of any documents required in order to make a drawing
      under any such Letter of Credit or of the proceeds thereof; (vii) for the
      misapplication by the beneficiary of any such Letter of Credit of the proceeds
      of such Letter of Credit; and (viii) for any consequence arising from causes
      beyond the control of Fronting Lender including any Government Acts. None of
      the
      above shall affect, impair or prevent the vesting of Fronting Lender’s rights
      and powers hereunder. In furtherance and extension and not in limitation of
      the
      specific provisions hereinabove set forth, any action taken or omitted by
      Fronting Lender under or in connection with the Letters of Credit issued by
      it
      or the related certificates, if taken or omitted in good faith, shall not put
      Fronting Lender under any resulting liability to the Borrowers.

     

    (f) If
      Fronting Lender or the Administrative Agent is required at any time, pursuant
      to
      any bankruptcy, insolvency, liquidation or reorganization law or otherwise,
      to
      return to any Borrower any reimbursement by any Borrower of any drawing under
      any Letter of Credit, each Lender shall pay to Fronting Lender or the
      Administrative Agent, as the case may be, its share of such payment, but without
      interest thereon unless Fronting Lender or the Administrative Agent is required
      to pay interest on such amounts to the person recovering such payment, in which
      case with interest thereon, computed at the same rate, and on the same basis,
      as
      the interest that Fronting Lender or the Administrative Agent is required to
      pay.

     

    
      
        
        

      

      
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    Section
      2.6 Method
      of Electing Interest Rates.

     

    (a) The
      Loans
      included in each Borrowing shall bear interest initially at the type of rate
      specified by the Borrowers in the applicable
      Notice of Committed Borrowing. Thereafter, the Borrowers may from time to time
      elect to change or continue the type of interest rate borne by each Group of
      Loans (subject in each case to the provisions of Article VIII), as
      follows:

     

    (i) if
      such
      Loans are Alternate Base Rate Loans, the Borrowers may elect to convert such
      Loans to LIBOR Loans as of any LIBOR Business Day; or

     

    (ii) if
      such
      Loans are LIBOR Loans, the Borrowers may elect to convert such Loans to
      Alternate Base Rate Loans or elect to continue such Loans as LIBOR Loans for
      an
      additional Interest Period, in each case effective on the last day of the then
      current Interest Period applicable to such Loans, or on such other date
      designated by Borrowers in the Notice of Interest Rate Election, provided
      Borrowers shall pay any losses pursuant to Section 2.13.

     

    Each
      such
      election shall be made by delivering a notice (a “Notice
      of Interest Rate Election”)
      to the
      Administrative Agent at least three (3) LIBOR Business Days before the
      conversion or continuation selected in such notice is to be effective. A Notice
      of Interest Rate Election may, if it so specifies, apply to only a portion
      of
      the aggregate principal amount of the relevant Group of Loans; provided
      that (i)
      such portion is allocated ratably among the Loans comprising such Group, (ii)
      the portion to which such Notice of Interest Rate Election applies, and the
      remaining portion to which it does not apply, are each $500,000 or any larger
      multiple of $100,000, (iii) there shall be no more than six (6) Interest Periods
      applicable to the LIBOR Loans outstanding at any one time, (iv) no Loan may
      be
      continued as, or converted into, a LIBOR Loan when any Event of Default has
      occurred and is continuing, and (v) no Interest Period shall extend beyond
      the
      Maturity Date.

     

    (b) Each
      Notice of Interest Rate Election shall specify:

     

    (i) the
      Group
      of Loans (or portion thereof) to which such notice applies;

     

    (ii) the
      date
      on which the conversion or continuation selected in such notice is to be
      effective, which shall comply with the applicable clause of subsection (a)
      above;

     

    (iii) if
      the
      Loans comprising such Group of Loans are to be converted, the new type of Loans
      and, if such new Loans are LIBOR Loans, the duration of the initial Interest
      Period applicable thereto; and

     

    (iv) if
      such
      Loans are to be continued as LIBOR Loans for an additional Interest Period,
      the
      duration of such additional Interest Period.

     

    Each
      Interest Period specified in a Notice of Interest Rate Election shall comply
      with the provisions of the definition of Interest Period.

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    (c) Upon
      receipt of a Notice of Interest Rate Election from the Borrowers pursuant to
      subsection (a) above, the Administrative Agent shall notify each Lender the
      same
      day as it receives such Notice of Interest Rate Election of the contents
      thereof, the interest rates determined pursuant thereto and the Interest Periods
      (if different from those requested by the Borrowers) and such Notice of Interest
      Rate Election shall not thereafter be revocable by the Borrowers. If the
      Borrowers fail to deliver a timely Notice of Interest Rate Election to the
      Administrative Agent for any Group of LIBOR Loans, such Loans shall be converted
      into a LIBOR Loan with an Interest Period applicable thereto of one (1)
      month.

     

    Section
      2.7 Interest
      Rates.

     

    (a) Each
      Alternate Base Rate Loan shall bear interest on the outstanding principal amount
      thereof, for each day from the date such Loan is made until the date it is
      repaid or converted into a LIBOR Loan pursuant to Section 2.6 or at the Maturity
      Date, at a rate per annum equal to the sum of the Applicable Margin for
      Alternate Base Rate Loans for such day plus the Alternate Base Rate. Such
      interest shall be payable for each Interest Period on each Interest Payment
      Date.

     

    (b) Each
      LIBOR Loan shall bear interest on the outstanding principal amount thereof,
      for
      each day during the Interest Period applicable thereto, at a rate per annum
      equal to the sum of the Applicable Margin for LIBOR Loans for such day plus
      the
      Adjusted London Interbank Offered Rate applicable to such Interest Period.
      Such
      interest shall be payable for each Interest Period on each Interest Payment
      Date.

     

    The
      “Adjusted
      London Interbank Offered Rate”
      applicable to a particular Interest Period shall mean a rate per annum equal
      to
      the product arrived at by multiplying the London Interbank Offered Rate
      applicable to such Interest Period by a fraction (expressed as a decimal),
      the
      numerator of which shall be the number one and the denominator of which shall
      be
      the number one minus the aggregate reserve percentages (expressed as a decimal)
      from time to time established by the Board of Governors of the Federal Reserve
      System of the United States and any other banking authority to which the
      Administrative Agent is now or hereafter subject, including, but not limited
      to,
      any reserve on Eurocurrency Liabilities as defined in Regulation D of the Board
      of Governors of the Federal Reserve System of the United States at the ratios
      provided in such Regulation from time to time, it being agreed that each LIBOR
      Loan shall be deemed to constitute Eurocurrency Liabilities, as defined by
      such
      Regulation, and it being further agreed that such Eurocurrency Liabilities
      shall
      be deemed to be subject to such reserve requirements without benefit of or
      credit for prorations, exceptions or offsets that may be available to the
      Administrative Agent from time to time under such Regulation and irrespective
      of
      whether the Administrative Agent actually maintains all or any portion of such
      reserve.

     

    The
      “London
      Interbank Offered Rate”
      applicable to a particular Interest Period shall mean a rate per annum equal
      to
      the rate for U.S. dollar deposits with maturities comparable to such Interest
      Period as shown in Dow Jones Markets (formerly Telerate) (Page 3750) as of
      11:00
      a.m., London time, two (2) LIBOR Business Days prior to the commencement of
      such
      Interest Period; provided,
      however,
      that if
      such rate does not appear on Dow Jones Markets, the “London Interbank Offered
      Rate” applicable to a particular Interest Period shall mean a rate per annum
      equal to the rate at which U.S. dollar deposits in an amount approximately
      equal
      to the applicable LIBOR Loan(s), and with maturities comparable to the last
      day
      of the Interest Period with respect to which such London Interbank Offered
      Rate
      is applicable, are offered in immediately available funds in the London
      Interbank Market to the London office of the Administrative Agent by leading
      banks in the Eurodollar market at 11:00 a.m., London time, two (2) LIBOR
      Business Days prior to the commencement of the Interest Period to which such
      London Interbank Offered Rate is applicable.

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    (c) In
      the
      event that, and for so long as, any Event of Default shall have occurred and
      be
      continuing, the outstanding principal amount of the Committed Loans, and, to
      the
      extent permitted by applicable law, overdue interest in respect of all Committed
      Loans shall bear interest at the annual rate equal to the sum of three percent
      (3%) plus the rate otherwise applicable to the Loans (the “Default
      Rate”).
      Any
      amounts due and unpaid hereunder shall be payable upon demand
      therefor.

     

    (d) The
      Administrative Agent shall determine each interest rate applicable to the
      Committed Loans hereunder. The Administrative Agent shall give prompt notice
      to
      the Borrowers and the Lenders of each rate of interest so determined, and its
      determination thereof shall be conclusive in the absence of demonstrable error.
      The Administrative Agent shall send an invoice to the Borrowers setting forth
      the interest due at least five (5) Domestic Business Days prior to any Interest
      Payment Date, provided that failure to do so shall not affect the Borrowers’
obligations hereunder to pay interest. It is understood that the Borrowers
      shall
      not be in Default under Section 6.1(a) as to interest for so long as it shall
      pay in accordance with the provisions hereof any amounts indicated on any such
      invoices or revised invoices.

     

    Section
      2.8 Fees.

     

    (a) Fees.
      The
      Borrowers shall pay to the Administrative Agent (when and as due for the benefit
      of KeyBank or KeyBanc Capital Markets, as applicable) the Fees as provided
      for
      in the Fee Letter.

     

    (b) Letter
      of Credit Fee.
      During
      the Term, the Borrowers shall pay to the Administrative Agent, for the account
      of the Lenders in proportion to their interests in respective undrawn issued
      Letters of Credit, a fee (the “Letter
      of Credit Fee”)
      in an
      amount equal to the rate per annum of the Applicable Margin for LIBOR Loans
      on
      the daily average of the amount undrawn and available under issued Letters
      of
      Credit, which fee shall be payable, in arrears, on the first Domestic Business
      Day of each January, April, July and October and on the Maturity Date, provided,
      that, from the occurrence and during the continuance of an Event of Default,
      the
      Letter of Credit Fee shall be increased to such Applicable Margin plus three
      percent (3%) per annum on the daily average amount of such issued and undrawn
      Letters of Credit.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    (c) Unused
      Commitment Fee.
      During
      the Term, the Borrowers shall pay Administrative Agent for the account of the
      Lenders, ratably in proportion to their respective Commitments and with respect
      to that period of time during any applicable Commitment Fee Quarterly Period
      for
      which any such Lender or Lenders had its respective Commitment or Commitments
      outstanding to the effect that the Unused Commitment Fee shall be duly prorated,
      an annual commitment fee (the “Unused
      Commitment Fee”)
      in
      quarterly amounts equal to the product of (i) the average daily difference
      during the three (3) month period immediately preceding the due date of the
      Unused Commitment Fee installment (each such three month period being the
“Commitment
      Fee Quarterly Period”)
      between (A) the aggregate amount of the Commitments in effect from time to
      time,
      as such may be increased or decreased from time to time pursuant to the terms
      of
      this Agreement, and (B) the Outstanding Balance, multiplied
      by
      (ii)
      thirty basis points (.30%) (or fifteen basis points (.15%) if the resulting
      amount of (A) less (B) is less than fifty percent (50%) of the Facility Amount)
      per annum (in each case based upon a 360 day year) and (iii) the actual number
      of days in such three (3) month period. For purposes of calculating the Unused
      Commitment Fee hereunder, all Letters of Credit outstanding during the
      applicable Commitment Fee Quarterly Period under this Agreement shall be deemed
      to be drawn. The Unused Commitment Fee shall be payable quarterly, in arrears,
      on the first Domestic Business Day of each January, April, July, and October
      during the Term and on the Maturity Date, commencing January 1, 2007.
      Notwithstanding the foregoing, (i) the installment of the Unused Commitment
      Fee
      payable on January 1, 2007 shall be determined for the period commencing on
      the
      Closing Date and ending on December 31, 2006, and (ii) the installment of the
      Unused Commitment Fee payable on the Maturity Date shall be prorated for the
      period commencing on the payment date of the last quarterly installment of
      the
      Unused Commitment Fee and ending on the Maturity Date.

     

    (d) Fronting
      Fee.
      In
      addition to the Letter of Credit Fee payable pursuant to clause (b) above and
      in
      addition to all other fees payable pursuant to the terms of this Agreement,
      the
      Borrowers promise, with respect to each Letter of Credit, to pay to the Fronting
      Lender (i) a letter of credit fronting fee (payable upon issuance or
      extension of each Letter of Credit) equal to the greater of (A) of one-eighth
      of
      one percent (0.125%) on the maximum amount available to be drawn under such
      Letter of Credit (whether or not such maximum amount is then in effect under
      such Letter of Credit), and (B) $500, and (ii) the customary charges from
      time to time of the Fronting Lender with respect to the issuance, amendment,
      transfer, administration, cancellation and conversion of, and drawings under,
      such Letters of Credit. Such fees shall be due and payable on demand, shall
      be
      fully earned when paid and shall not be refundable for any reason whatsoever.
      For purposes of this Section 2.8(d), each renewal of any Letter of Credit,
      including an auto-renewal of any Letter of Credit, shall be considered an
      issuance of a new Letter of Credit.

     

    (e) Fees
      Non-Refundable.
      All
      Fees set forth in this Section 2.8 and in the Fee Letter shall be deemed to
      have
      been earned on the date payment is due in accordance with the provisions hereof
      and thereof and shall be non-refundable. The obligation of the Borrowers to
      pay
      such Fees in accordance with the provisions hereof shall be binding upon the
      Borrowers and shall inure to the benefit of the Administrative Agent and the
      Lenders regardless of whether any Loans are actually made.

     

    Section
      2.9 Maturity
      Date. 
      The term
      (the “Term”)
      of the
      Commitments shall terminate and expire on the Maturity Date. Upon the date
      of
      the termination of the Term, any Committed Loans then outstanding (together
      with
      accrued interest thereon) shall be due and payable on such date.

     

    Section
      2.10 Mandatory
      Prepayment.

     

    (a) If
      at any
      time during the Term, the Outstanding Balance at such time exceeds the amount
      of
      the Total Available Commitments (with the amount of any such excess being
      referred to herein as the “Borrowing
      Base Deficit”),
      then
      the Borrowers shall (provided no Event of Default then exists, in which event
      this Section shall be subject to the terms and provisions of Section 6.2) within
      two (2) Domestic Business Days following the occurrence of such event, pay
      to
      the Administrative Agent in cash, for the account of the Lenders, an amount
      equal to the Borrowing Base Deficit.

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    (b) The
      Borrowers shall not sell, or voluntarily permit the full or partial redemption,
      prepayment or refinancing of a Borrowing Base Asset unless, after giving effect
      to such transaction, either (i) Borrowers shall remain in compliance with the
      provisions hereof, including without limitation, the Outstanding Balance will
      not exceed the Total Available Commitments, or (ii) Borrowers shall,
      concurrently with or before such sale, prepay the Committed Loans in an amount
      at least equal to the amount required such that the Outstanding Balance will
      not
      exceed the Total Available Commitments. 

     

    Section
      2.11 Optional
      Prepayments.

     

    (a) The
      Borrowers may, upon at least one (1) Domestic Business Day’s notice to the
      Administrative Agent, prepay any Alternate Base Rate Borrowing in whole at
      any
      time, or from time to time in part in amounts aggregating One Million Dollars
      ($1,000,000) or any larger multiple of One Hundred Thousand Dollars ($100,000),
      by paying the principal amount to be prepaid together with accrued interest
      thereon to the date of prepayment. Each such optional prepayment shall be
      applied to prepay ratably the Committed Loans of the several Lenders included
      in
      such Borrowing.

     

    (b) The
      Borrowers may, upon at least three (3) LIBOR Business Days’ notice to the
      Administrative Agent, prepay any LIBOR Loan as of the last day of the Interest
      Period applicable thereto. Except as provided in Article VIII, the Borrowers
      may
      not prepay all or any portion of the principal amount of any LIBOR Loan prior
      to
      the end of the Interest Period applicable thereto unless the Borrowers shall
      also pay any applicable expenses pursuant to Section 2.13. The Administrative
      Agent shall notify the Borrowers of any amounts due pursuant to Section 2.13
      in
      connection with such prepayment within one (1) LIBOR Business Day after receipt
      of such notice of prepayment from the Borrowers (but subject to the right to
      submit subsequently a corrected statement). Each such optional prepayment shall
      be in the amounts set forth in Section 2.11(a) above and shall be applied to
      prepay ratably the Committed Loans of the Lenders included.

     

    (c) The
      Borrowers may at any time and from time to time cancel all or any part of the
      Commitments in a minimum amount of Ten Million Dollars ($10,000,000) or any
      larger multiple of One Million Dollars ($1,000,000), by the delivery to the
      Administrative Agent of a notice of cancellation within the applicable time
      periods set forth in Sections 2.11(a) and (b) if there are Committed Loans
      then
      outstanding or, if there are no Committed Loans outstanding at such time as
      to
      which the Commitments with respect thereto are being cancelled, upon at least
      one (1) Domestic Business Day’s notice to the Administrative Agent whereupon, in
      either event, all or such portion of the Commitments, as applicable, shall
      terminate as to the Lenders, pro
      rata
      on the
      date set forth in such notice of cancellation, and, if there are any Committed
      Loans then outstanding, Borrowers shall prepay, as applicable, all or such
      portion of Committed Loans outstanding on such date in accordance with the
      requirements of Section 2.11(a) and (b). The Commitments may not be reduced
      to
      an amount less than $25,000,000 except in the event of the termination of the
      Commitments in full. Borrowers shall be permitted to designate in its notice
      of
      cancellation which Committed Loans, if any, are to be prepaid. In no event
      shall
      Borrowers be permitted to cancel Commitments for which a Letter of Credit has
      been issued and is outstanding unless Borrowers return such Letter of Credit,
      undrawn, to the applicable Fronting Lender. The Facility Amount shall be reduced
      by the dollar amount of any reduction of the Commitments pursuant to this
      Section 2.11(c).

     

    
      
        
        

      

      
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    (d) The
      Borrowers may at any time return any undrawn Letters of Credit to the Fronting
      Lender in whole, but not in part, and the Fronting Lender shall promptly cancel
      such returned Letters of Credit and give the Borrowers, the Administrative
      Agent
      and each of the Lenders notice of such cancellation.

     

    (e) Upon
      receipt of a notice of prepayment or cancellation or a return of an undrawn
      Letter of Credit pursuant to this Section, the Administrative Agent shall
      promptly notify each Lender of the contents thereof and of such Lender’s ratable
      share (if any) of such prepayment or cancellation and such notice shall not
      thereafter be revocable by the Borrowers.

     

    (f) Any
      amounts so prepaid pursuant to Section 2.11(a) or (b) may be reborrowed. In
      the
      event Borrowers elect to cancel all or any portion of the Commitments pursuant
      to Section 2.11(c) hereof, such amounts may not be reborrowed.

     

    Section
      2.12 General
      Provisions as to Payments.

     

    (a) The
      Borrowers shall make each payment of interest on the Committed Loans and of
      Fees
      hereunder, not later than 12:00 noon (New York, New York time) on the date
      when
      due, in Federal or other funds immediately available in New York, New York,
      to
      the Administrative Agent at its address referred to in Section 9.1. Such
      payments and all other payments made on account of the Loan Documents to the
      Administrative Agent (provided such payments are made in accordance with terms
      hereof) shall be deemed to have been properly made. The Administrative Agent
      will promptly distribute to each Lender its ratable share of each such payment
      received by the Administrative Agent for the account of the Lenders. Whenever
      any payment of principal of, or interest on the Alternate Base Rate Loans or
      of
      Fees shall be due on a day which is not a Domestic Business Day, the date for
      payment thereof shall be extended to the next succeeding Domestic Business
      Day.
      Whenever any payment of principal of, or interest on, the LIBOR Loans shall
      be
      due on a day which is not a LIBOR Business Day, the date for payment thereof
      shall be extended to the next succeeding LIBOR Business Day unless such LIBOR
      Business Day falls in another calendar month, in which case the date for payment
      thereof shall be the next preceding LIBOR Business Day. If the date for any
      payment of principal is extended by operation of law or otherwise, interest
      thereon shall be payable for such extended time.

     

    (b) Unless
      the Administrative Agent shall have received notice from the Borrowers prior
      to
      the date on which any payment is due to the Lenders hereunder that the Borrowers
      will not make such payment in full, the Administrative Agent may assume that
      the
      Borrowers have made such payment in full to the Administrative Agent on such
      date and the Administrative Agent may, in reliance upon such assumption, cause
      to be distributed to each Lender on such due date an amount equal to the amount
      then due such Lender. If and to the extent that the Borrowers shall not have
      so
      made such payment, each Lender shall repay to the Administrative Agent forthwith
      on demand such amount distributed to such Lender together with interest thereon,
      for each day from the date such amount is distributed to such Lender until
      the
      date such Lender repays such amount to the Administrative Agent, at the Federal
      Funds Rate.

     

    
      
        
        

      

      
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    Section
      2.13 Funding
      Losses.
      If (i)
      the Borrowers make any payment of principal with respect to any LIBOR Loan
      (pursuant to Article II, VI, VIII or otherwise) on any day other than the last
      day of the Interest Period applicable thereto (subject to Section 2.12(a)
      hereof), or (ii) the Borrowers fail to borrow any LIBOR Loans after notice
      has
      been given to any Lender in accordance with Section 2.3(a), or (iii) Borrowers
      shall deliver a Notice of Interest Rate Election specifying that a LIBOR
      Loan shall be converted on a date other than the last day of the then current
      Interest Period applicable thereto, the Borrowers shall reimburse each Lender
      within three
      (3)
      Domestic Business
      Days after Borrowers’ receipt from the Administrative Agent of a certification
      of such Lender of such loss or expense (which shall be delivered by each such
      Lender to Administrative Agent
      for
      delivery to Borrowers not later than ten (10) Domestic Business Days after
      such
      Lender incurred
      such loss or expense) for any resulting actual loss or expense incurred by
      it
      (or by an existing or prospective Participant in the related Loan), including
      (without limitation) any loss incurred in obtaining, liquidating or employing
      deposits
      from
      third parties, but excluding loss of margin for the period after any such
      payment or failure to borrow, provided that
      such
      Lender shall have delivered to Administrative Agent and Administrative Agent
      shall have delivered to the Borrowers
      a certification as to the amount of such
      loss
      or expense, which certification
      shall set forth
      the
      basis for such loss or expense and shall be conclusive in the absence of
      demonstrable error. Failure or delay on the part of any Lender to demand
      compensation within the time periods set forth in this Section shall constitute
      a waiver of such right to demand compensation.

     

    Section
      2.14 Computation
      of Interest and Fees.
      All
      interest and Fees payable under the Loan Documents shall be computed on the
      basis of a year of 360 days and paid for the actual number of days elapsed
      (including the first day but excluding the last day).

     

    Section
      2.15 Use
      of
      Proceeds.
      The
      Borrowers shall use the proceeds of the Loans made hereunder and shall use
      the
      Letters of Credit issued hereunder only for (i) the acquisition, financing
      or
      refinancing of direct or indirect interests in real estate and/or real estate
      debt investments, (ii) the repayment of debt, and (iii) other lawful
      corporate, partnership or limited liability company purposes (exclusive of
      the
      purchase of Margin Stock) (the “Approved
      Uses”).

     

    Section
      2.16 Letter
      of Credit Usage Absolute.
      The
      reimbursement obligations of the Borrowers under this Agreement in respect
      of
      any Letter of Credit shall be unconditional and irrevocable, and shall be paid
      strictly in accordance with the terms of this Agreement and such other agreement
      or instrument under all circumstances, including, without limitation, to the
      extent permitted by law, the following circumstances:

     

    (a) any
      lack
      of validity or enforceability of any Letter of Credit or any other agreement
      or
      instrument relating thereto (collectively, the “Letter
      of Credit Documents”)
      or any
      Loan Document;

     

    (b) any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the obligations of the Borrowers in respect of the Letters of Credit
      or any other amendment or waiver of or any consent by the Borrowers to departure
      from all or any of the Letter of Credit Documents or any Loan Document, provided
      that no Fronting Lender shall consent to any such change or amendment unless
      previously consented to in writing by the Borrowers;

     

    
      
        
        

      

      
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    (c) any
      exchange, release or non-perfection of any collateral, or any release or
      amendment or waiver of or consent to departure from any guaranty, for all or
      any
      of the obligations of the Borrowers in respect of the Letters of
      Credit;

     

    (d) the
      existence of any claim, set-off, defense or other right that the Borrowers
      may
      have at any time against any beneficiary or any transferee of a Letter of Credit
      (or any Persons for whom any such beneficiary or any such transferee may be
      acting), the Administrative Agent or any Lender (other than a defense based
      on
      the gross negligence or willful misconduct of the Administrative Agent, Fronting
      Lender or such Lender) or any other Person, whether in connection with the
      Loan
      Documents, the transactions contemplated hereby or by the Letters of Credit
      Documents or any unrelated transaction;

     

    (e) any
      draft
      or any other document presented under or in connection with any Letter of Credit
      or other Loan Document proving to be forged, fraudulent, invalid or insufficient
      in any respect or any statement therein being untrue or inaccurate in any
      respect; provided that payment by the Fronting Lender under such Letter of
      Credit against presentation of such draft or document shall not have constituted
      gross negligence or willful misconduct of the Fronting Lender;

     

    (f) payment
      by the Fronting Lender against presentation of a draft or certificate that
      does
      not comply with the terms of the Letter of Credit; provided that such payment
      shall not have constituted gross negligence or willful misconduct of the
      Fronting Lender; and

     

    (g) any
      other
      circumstance or happening whatsoever other than the payment in full of all
      obligations hereunder in respect of any Letter of Credit or any agreement or
      instrument relating to any Letter of Credit, whether or not similar to any
      of
      the foregoing, that might otherwise constitute a defense available to, or a
      discharge of, the Borrowers; provided that such other circumstance or happening
      shall not have been the result of gross negligence or willful misconduct of
      the
      Fronting Lender or any issuing Lender.

     

    Section
      2.17 Joint
      and Several Obligations; Limitation on Liability. 

     

    (a) The
      Obligations constitute the joint and several obligations of each Borrower
      hereunder. Each Borrower hereby assumes, guarantees and agrees to discharge
      all
      Obligations of each other Borrower hereunder. Anything herein or in any other
      Loan Document to the contrary notwithstanding, the maximum liability of each
      Borrower hereunder and under the other Loan Documents shall in no event exceed
      the amount for which such Borrower can be liable under applicable federal and
      state laws relating to the insolvency of debtors.

     

    
      
        
        

      

      
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    (b) Notwithstanding
      any payment or payments made by any Borrower (the “paying Borrower”) hereunder
      or any set-off or application of funds of the paying Borrower by any Lender,
      the
      paying Borrower shall not be entitled to be subrogated to any of the rights
      of
      the Administrative Agent or any Lender against the other Borrower(s) or any
      collateral security or guarantee or right of offset held by any Lender for
      the
      payment of the Obligations, nor shall the paying Borrower seek or be entitled
      to
      seek any contribution or reimbursement from the other Borrower in respect of
      payments made by the paying Borrower hereunder, until all amounts owing to
      the
      Administrative Agent and the Lenders by the Borrowers on account of the
      Obligations are paid in full. If any amount shall be paid to the paying Borrower
      on account of such subrogation rights at any time when all of the Obligations
      shall not have been paid in full, such amount shall be held by the paying
      Borrower in trust for the Administrative Agent and the Lenders, segregated
      from
      other funds of the paying Borrower, and shall, forthwith upon receipt by the
      paying Borrower, be turned over to the Administrative Agent in the exact form
      received by the paying Borrower (duly indorsed by the paying Borrower to the
      Administrative Agent, if required), to be applied against the Obligations,
      whether matured or unmatured, in such order as the Administrative Agent may
      determine.

     

    (c) Each
      Borrower shall remain obligated hereunder notwithstanding that, without any
      reservation of rights against such Borrower and without notice to or further
      assent by such Borrower, any demand for payment of any of the Obligations made
      by the Administrative Agent or any Lender may be rescinded by such party and
      any
      of the Obligations continued, and the Obligations, or the liability of any
      other
      party upon or for any part thereof, or any collateral security or guarantee
      therefor or right of offset with respect thereto, may, from time to time, in
      whole or in part, be renewed, extended, amended, modified, accelerated,
      compromised, waived, surrendered or released by the Administrative Agent or
      any
      Lender, and this Agreement, the Notes and the other Loan Documents and any
      other
      documents executed and delivered in connection therewith may be amended,
      modified, supplemented or terminated, in whole or in part, as the Administrative
      Agent (or the Required Lenders, as the case may be) may deem advisable from
      time
      to time, and any collateral security, guarantee or right of offset at any time
      held by the Administrative Agent or any Lender for the payment of the
      Obligations may be sold, exchanged, waived, surrendered or released. Neither
      of
      the Administrative Agent nor any Lender shall have any obligation to protect,
      secure, perfect or insure any Lien at any time held by it as security for the
      Obligations or any property subject thereto. When making any demand hereunder
      against any Borrower, the Administrative Agent or any Lender may, but shall
      be
      under no obligation to, make a similar demand on the other Borrower or any
      guarantor, and any failure by the Administrative Agent or any Lender to make
      any
      such demand or to collect any payments from such other Borrower or any guarantor
      or any release of such other Borrower or guarantor shall not relieve the
      Borrower in respect of which a demand or collection is not made or the Borrower
      not so released of its obligations or liabilities hereunder, and shall not
      impair or affect the rights and remedies, express or implied, or as a matter
      of
      law, of the Administrative Agent or any Lender against any Borrower. For the
      purposes hereof “demand” shall include the commencement and continuance of any
      legal proceedings.

     

    
      
        
        

      

      
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    (d) Each
      Borrower waives any and all notice of the creation, renewal, extension or
      accrual of any of the Obligations and notice of or proof of reliance by the
      Administrative Agent or any Lender upon such Borrower or acceptance of the
      obligations of such Borrower under this Agreement, and the Obligations, and
      any
      of them, shall conclusively be deemed to have been created, contracted or
      incurred, or renewed, extended, amended or waived, in reliance upon the
      obligations of each Borrower under this Agreement; and all dealings between
      the
      Borrowers, on the one hand, and the Administrative Agent and the Lenders, on
      the
      other hand, likewise shall be conclusively presumed to have been had or
      consummated in reliance upon the obligations of all of the Borrowers. Except
      as
      is otherwise specifically provided for in this Agreement or in the other Loan
      Documents, each of the Borrowers waives diligence, presentment, protest, demand
      for payment and notice of default or nonpayment to or upon the other Borrower
      or
      such Borrower with respect to the Obligations. Each Borrower understands and
      agrees that it shall continue to be jointly and severally liable under this
      Agreement and the other Loan Documents without regard to (a) the validity,
      regularity or enforceability of this Agreement, any Note or any other Loan
      Document, any of the Obligations or any other collateral security therefor
      or
      guarantee or, except as is otherwise specifically provided for in this Agreement
      or the other Loan Documents, right of offset with respect thereto at any time
      or
      from time to time held by the Administrative Agent or any Lender, (b) any
      defense, set-off or counterclaim (other than a defense of payment or
      performance) which may at any time be available to or be asserted by the other
      Borrower against the Administrative Agent or any Lender, or (c) any other
      circumstance whatsoever (with or without notice to or knowledge of such Borrower
      or the other Borrower) which constitutes, or might be construed to constitute,
      an equitable or legal discharge of the other Borrower for the Obligations,
      or of
      such Borrower under this Agreement, in bankruptcy or in any other instance.
      When
      pursuing its rights and remedies hereunder against any Borrower, the
      Administrative Agent and any Lender may, but shall be under no obligation to,
      pursue such rights and remedies as it may have against the other Borrower or
      any
      other Person or against any collateral security or guarantee for the Obligations
      or any right of offset with respect thereto, and any failure by the
      Administrative Agent or any Lender to pursue such other rights or remedies
      or to
      collect any payments from the other Borrower or any such other Person or to
      realize upon any such collateral security or guarantee or to exercise any such
      right of offset, or any release of the other Borrower or any such other Person
      or any such collateral security, guarantee or right of offset, shall not relieve
      such Borrower of any liability hereunder, and shall not impair or affect the
      rights and remedies, whether express, implied or available as a matter of law,
      of the Administrative Agent and the Lenders against such Borrower.

     

    Section
      2.18 Increase
      in Facility Amount.

     

    (a) Request
      for Increase.
      Provided there exists no Default or Event of Default, upon notice to the
      Administrative Agent (which shall promptly notify the Lenders), the Borrowers
      may request an increase in the Facility Amount by an aggregate amount not
      exceeding $25,000,000; provided that any such request for an increase shall
      be
      in a minimum amount of $10,000,000. At the time of sending such notice, the
      Borrowers (in consultation with the Administrative Agent) shall specify the
      time
      period within which each Lender is requested to respond as to whether such
      Lender agrees to increase the amount of its Commitment in accordance with
      Section 2.18(b).

     

    (b) Lender
      Elections to Increase.
      Each
      Lender shall notify the Administrative Agent within such time period whether
      or
      not it agrees to increase its Commitment and, if so, by what amount (which
      need
      not be its pro rata share thereof). Any Lender not responding within such time
      period shall be deemed to have declined to increase its Commitment.

     

    
      
        
        

      

      
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    (c) Notification
      by Administrative Agent; Additional Lenders.
      The
      Administrative Agent shall notify the Borrowers and each Lender of the Lenders’
responses to each request made hereunder. To achieve the full amount of a
      requested increase in the Facility Amount and subject to the approval of the
      Administrative Agent and the Fronting Bank (which approvals shall not be
      unreasonably withheld), the Borrowers may also invite additional Eligible
      Assignees to become Lenders pursuant to a joinder agreement in form and
      substance reasonably satisfactory to the Administrative Agent and its
      counsel.

     

    (d) Effective
      Date and Allocations.
      If the
      aggregate Commitments (including due to new Commitments by additional Lenders)
      are increased in accordance with this Section 2.18, the Administrative Agent
      and
      the Borrowers shall determine the effective date (the “Increase
      Effective Date”)
      and
      the final allocation of such increase. The Administrative Agent shall promptly
      notify the Borrowers and the Lenders (including any additional Lenders) of
      the
      final allocation of such increase and the Increase Effective Date.

     

    (e) Conditions
      to Effectiveness of Increase.
      Any
      increase in the Facility Amount pursuant to this Section 2.18 shall be subject
      to the following conditions:

     

    (i) The
      Borrowers shall have paid to (A) the Administrative Agent, such fees as shall
      be
      due to Administrative Agent at such time under the Fee Letter, and (B) to each
      Lender, such fees, if any, as shall have been agreed upon by the Borrower and
      the Administrative Agent.

     

    (ii) As
      of the
      Increase Effective Date, no Default or Event of Default then exists or would
      result from such increase in the Facility Amount (including on a pro forma
      basis
      relative to financial covenant compliance).

     

    (iii) The
      Borrowers shall have delivered to the Administrative Agent a certificate dated
      as of the Increase Effective Date (in sufficient copies for each Lender) (A)
      certifying and attaching the resolutions adopted by the Borrowers approving
      or
      consenting to such increase, and (B) certifying that, before and after giving
      effect to such increase, (1) the representations and warranties of the Borrowers
      in this Agreement and in each other Loan Document are true and correct on and
      as
      of the Increase Effective Date, except to the extent that such representations
      and warranties specifically refer to an earlier date, in which case, to the
      knowledge of the Borrowers, they are true and correct as of such earlier date,
      and except to the extent of changes resulting from transactions contemplated
      and
      permitted by this Agreement and changes occurring in the ordinary course of
      business (in each case to the extent not constituting a Default or Event of
      Default), (2) no Default or Event of Default exists or would result from such
      increase in the Facility Amount (including on a pro forma basis relative to
      financial covenant compliance), and (3) the incurrence of Indebtedness in an
      aggregate principal amount equal to the full Facility Amount after giving effect
      to all Commitment increases and new Commitments would not result in a breach
      of,
      or a default under, any agreement to which any Borrower is a party.

     

    (iv) The
      Borrowers shall prepay any Committed Loans outstanding on the Increase Effective
      Date (and pay any additional amounts required pursuant to Section 2.13) to
      the extent necessary to keep the outstanding Committed Loans ratable with any
      revised Commitment allocations arising from any nonratable increase in the
      Commitments under this Section 2.18. Notwithstanding any provisions of this
      Agreement to the contrary, the Borrowers may borrow from the Lenders providing
      such increase in the Commitments (on a non pro rata basis with Lenders not
      providing such increase) in order to fund such prepayment.

     

    
      
        
        

      

      
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    (v) The
      Borrowers will execute and deliver to each applicable Lender a new Note in
      the
      appropriate stated amount, and will execute and deliver or otherwise provide
      to
      the Administrative Agent and the Lenders such other documents and instruments
      as
      the Administrative Agent or Lenders reasonably may require.

     

    (vi) The
      Subsidiary Guarantors will execute and deliver to the Administrative Agent
      a
      ratification of the Guaranty acknowledging the increase of the Facility Amount.
      

     

    (f) The
      provisions of this Section 2.18 shall not constitute a “commitment” to lend, and
      the Commitments of the Lenders shall not be increased until satisfaction of
      the
      provisions of this Section 2.18 and actual increase of the Commitments as
      provided herein.

     

    Section
      2.19 Revolving
      Facility.
      Except
      as otherwise specifically provided for herein, the Facility is a revolving
      credit facility and, accordingly, subject to the terms, provisions and
      conditions set forth in this Agreement, amounts borrowed and repaid may be
      reborrowed.

     

    Section
      2.20 Delinquent
      Lenders.

     

    (a) If
      for
      any reason any Lender shall fail or refuse to abide by its obligations under
      this Agreement, including without limitation its obligation to make available
      to
      the Administrative Agent its pro rata share of any Loans, expenses or setoff
      (a
“Delinquent
      Lender”)
      and
      such failure is not cured within two (2) Domestic Business Days of receipt
      from
      the Administrative Agent of written notice thereof, then, in addition to the
      rights and remedies that may be available to the Administrative Agent, the
      other
      Lenders, or the Borrowers at law or in equity, and not in limitation thereof,
      (i) such Delinquent Lender’s right to participate in the administration of, or
      decision-making rights related to, the Loans, this Loan Agreement or the other
      Loan Documents shall be suspended during the pendency of such failure or
      refusal, and (ii) a Delinquent Lender shall be deemed to have assigned any
      and
      all payments due to it from the Borrowers, whether on account of outstanding
      Loans, interest, fees or otherwise, to the non-delinquent Lenders for
      application to, and reduction of, their proportionate shares of all outstanding
      Loans until, as a result of application of such assigned payments the Lenders’
respective pro rata shares of all outstanding Loans shall have returned to
      those
      in effect immediately prior to such delinquency and without giving effect to
      the
      nonpayment causing such delinquency. The Delinquent Lender’s decision-making and
      participation rights and rights to payments as set forth in clauses (i) and
      (ii)
      hereinabove shall be restored only upon the payment by the Delinquent Lender
      of
      its pro rata share of any Loans or expenses as to which it is delinquent,
      together with interest thereon at the Default Rate from the date when originally
      due until the date upon which any such amounts are actually paid.

     

    
      
        
        

      

      
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    (b) The
      non-delinquent Lenders shall also have the right, but not the obligation, in
      their respective, sole and absolute discretion, to acquire for no cash
      consideration, (pro rata, based on the respective Commitments of those
      Lenders electing to exercise such right) the Delinquent Lender’s Commitment to
      fund future Loans (the “Future
      Commitment”).
      Upon
      any such purchase of the pro rata share of any Delinquent Lender’s Future
      Commitment, the Delinquent Lender’s share in future Loans and its rights under
      the Loan Documents with respect thereto shall terminate on the date of purchase,
      and the Delinquent Lender shall promptly execute all documents reasonably
      requested to surrender and transfer such interest, including, if so requested,
      an Assignment and Acceptance. Each Delinquent Lender shall indemnify the
      Administrative Agent and each non-delinquent Lender from and against any and
      all
      loss, damage or expenses, including but not limited to reasonable attorneys’
fees and funds advanced by the Administrative Agent or by any non-delinquent
      Lender, on account of a Delinquent Lender’s failure to timely fund its pro rata
      share of a Loan or to otherwise perform its obligations under the Loan
      Documents.

     

    ARTICLE
      III

     

    CONDITIONS

     

    Section
      3.1 Closing.
      The
      closing hereunder shall occur on the date (the “Closing
      Date”)
      when
      each of the following conditions is satisfied (or waived by the Administrative
      Agent and the Lenders), each document to be dated the Closing Date unless
      otherwise indicated:

     

    (a) the
      Borrowers shall have executed and delivered to the Administrative Agent a Note
      for the account of each Lender dated on or before the Closing Date complying
      with the provisions of Section 2.4;

     

    (b) the
      Borrowers, the Administrative Agent and each of the Lenders shall have executed
      and delivered to the Borrowers and the Administrative Agent a duly executed
      original of this Agreement;

     

    (c) the
      Subsidiary Guarantors shall have executed and delivered to the Administrative
      Agent the Guaranty;

     

    (d) the
      Administrative Agent shall have received an opinion from each of Paul, Hastings,
      Janofsky & Walker LLP and Venable LLP, counsel for the Borrowers and the
      Subsidiary Guarantors, with respect to the Borrowers’ and Subsidiary Guarantors’
due authorization,
      execution and delivery of the Loan Documents, the enforceability of the Loan
      Documents, and such other matters reasonably requested by the Administrative
      Agent, such opinion to be reasonably acceptable to the Administrative Agent
      and
      its counsel;

     

    
      
        
        

      

      
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    (e) the
      Administrative Agent shall have received all documents the Administrative Agent
      may reasonably request relating to the existence of the Borrowers and the
      Borrowing Base Entities, the authority for and the validity of this Agreement
      and the other Loan Documents, and any other matters relevant hereto, all in
      form
      and substance satisfactory to the Administrative Agent. Such documentation
      shall
      include, without limitation, (i) the organizational documents of NorthStar,
      as
      amended, modified or supplemented to the Closing Date, certified to be true,
      correct and complete by an officer of NorthStar as of a date not more than
      ten
      (10) days prior to the Closing Date, together with a good standing certificate
      as to NorthStar from the Secretary of State (or the equivalent thereof) of
      Maryland, to be dated not more than forty-five (45) days prior to the Closing
      Date, (ii) the partnership agreement of NorthStar OP, certified as of a date
      not
      more than ten (10) days prior to the Closing Date, together with a certificate
      of existence as to NorthStar OP from the Secretary of State of Delaware, to
      be
      dated not more than forty-five (45) days prior to the Closing Date, (iii) the
      organizational documents of NRFC Sub-REIT, as amended, modified or supplemented
      to the Closing Date, certified to be true, correct and complete by an officer
      of
      NRFC Sub-REIT as of a date not more than ten (10) days prior to the Closing
      Date, together with a good standing certificate as to NRFC Sub-REIT from the
      Secretary of State (or the equivalent thereof) of Maryland, to be dated not
      more
      than forty-five (45) days prior to the Closing Date, (iv) the limited liability
      company agreement of NS Advisors, certified to be true, correct and complete
      by
      an officer of NS Advisors as of a date not more than ten (10) days prior to
      the
      Closing Date, together with a certificate of existence as to NS Advisors from
      the Secretary of State of Delaware, to be dated not more than forty-five (45)
      days prior to the Closing Date, (v) the limited liability company agreement
      of
      NNN Holdings, certified to be true, correct and complete by an officer of NNN
      Holdings as of a date not more than ten (10) days prior to the Closing Date,
      together with a certificate of existence as to NNN Holdings from the Secretary
      of State of Delaware, to be dated not more than forty-five (45) days prior
      to
      the Closing Date, (vi) the limited liability company agreement of NS Holdings
      I,
      certified to be true, correct and complete by an officer of NS Holdings I as
      of
      a date not more than ten (10) days prior to the Closing Date, together with
      a
      certificate of existence as to NS Holdings I from the Secretary of State of
      Delaware, to be dated not more than forty-five (45) days prior to the Closing
      Date, (vii) the limited liability company agreement of NS Holdings II, certified
      to be true, correct and complete by an officer of NS Holdings II as of a date
      not more than ten (10) days prior to the Closing Date, together with a
      certificate of existence as to NS Holdings II from the Secretary of State of
      Delaware, to be dated not more than forty-five (45) days prior to the Closing
      Date, and (viii) the limited liability company agreement of NS Holdings III,
      certified to be true, correct and complete by an officer of NS Holdings III
      as
      of a date not more than ten (10) days prior to the Closing Date, together with
      a
      certificate of existence as to NS Holdings III from the Secretary of State
      of
      Delaware, to be dated not more than forty-five (45) days prior to the Closing
      Date;

     

    (f) the
      Administrative Agent shall have received all certificates, agreements and other
      documents and papers referred to in this Section 3.1 and the Notice of Borrowing
      referred to in Section 3.2, if applicable, unless otherwise specified, in
      sufficient counterparts, satisfactory in form and substance to the
      Administrative Agent in its sole discretion;

     

    (g) the
      Administrative Agent shall have received a certificate or certificates executed
      by an authorized officer of NorthStar as of the Closing Date stating that (A)
      each Consolidated Party is in compliance with all existing financial
      obligations, (B) all governmental, shareholder and third party consents and
      approvals necessary for the Borrowers and the Subsidiary Guarantors to enter
      into the Loan Documents and fully perform thereunder, if any, have been
      obtained, (C) no action, suit, investigation or proceeding is pending or
      threatened in writing in any court or before any arbitrator or governmental
      instrumentality that purports to affect any Consolidated Party or any
      transaction contemplated by the Loan Documents, if such action, suit,
      investigation or proceeding could reasonably be expected to have a Material
      Adverse Effect, and (D) immediately after giving effect to this Loan Agreement,
      the other Loan Documents and all the transactions contemplated therein to occur
      on such date, (1) each of the Borrowers and the Borrowing Base Entities is
      Solvent, (2) no Default or Event of Default exists, (3) all representations
      and
      warranties contained herein and in the other Loan Documents are true and correct
      in all material respects, and (4) the Borrowers are in compliance with each
      of
      the financial covenants set forth in Section 5.8 hereof.

     

    
      
        
        

      

      
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    (h) the
      Borrowers and the Subsidiary Guarantors shall have taken all actions required
      to
      authorize the execution and delivery of this Agreement and the other Loan
      Documents and the performance thereof by the Borrowers and the Subsidiary
      Guarantors;

     

    (i) no
      development or event which has had or could reasonably be expected to have
      a
      Material Adverse Effect shall have occurred since December 31,
      2005;

     

    (j) the
      Administrative Agent shall have received wire transfer instructions in
      connection with the Loans, if any, to be made on the Closing Date;

     

    (k) the
      Administrative Agent shall have received, for its and any other Lender’s
      account, all Fees due and payable pursuant to Section 2.8 hereof or pursuant
      to
      the Fee Letter on or before the Closing Date, and the reasonable fees and
      expenses accrued through the Closing Date of counsel to the Administrative
      Agent
      with respect to the transactions contemplated hereby;

     

    (l) the
      Administrative Agent shall have received copies of all consents, licenses and
      approvals, if any, required in connection with the execution, delivery and
      performance by NorthStar and the applicable Consolidated Subsidiaries, and
      the
      validity and enforceability, of the Loan Documents, or in connection with any
      of
      the transactions contemplated thereby, and such consents, licenses and approvals
      shall be in full force and effect;  

     

    (m) the
      Administrative Agent shall have received all available financial information
      with respect to NorthStar and its Affiliates (other than Morgans Hotels and
      NorthStar Capital Co.) reasonably requested by it or any Lender;

     

    (n) the
      Administrative Agent shall have received a completed current Borrowing Base
      Certificate and a completed current Continuing Compliance Certificate;


     

    (o) the
      Administrative Agent shall have received satisfactory reports (collectively,
      the
“UCC
      Searches”),
      of
      UCC, tax lien, judgment and litigation searches conducted by a search firm
      reasonably acceptable to Administrative Agent with respect to the Borrowers
      and
      the Subsidiary Guarantors, such searches to be conducted by Borrowers’ counsel
      in each of the locations specified by the Administrative Agent;

     

    (p) (i)
      the
      Administrative Agent shall have received evidence that each Real Property
      Subsidiary is a Wholly-Owned Subsidiary of NNN Holdings and (ii) the
      Administrative Agent shall have received evidence that each CDO Retained Asset
      included in the Borrowing Base Assets Pool is beneficially owned by NS Holdings
      I or NS Holdings II or NS Holdings III or a direct Wholly-Owned Subsidiary
      of NS
      Holdings I or NS Holdings II or NS Holdings III (no later than the date that
      is
      thirty (30) days after the Closing Date, the Borrowers also shall deliver to
      the
      Administrative Agent evidence that each CDO Retained Interest is owned of record
      by NS Holdings I or NS Holdings II or NS Holdings III or a direct Wholly-Owned
      Subsidiary of NS Holdings I or NS Holdings II or NS Holdings III); and


     

    
      
        
        

      

      
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    (q) the
      Administrative Agent shall have received a payoff letter, in form and substance
      satisfactory to the Administrative Agent, relating to the Borrowers’ credit
      facility with Bank of America, N.A.

     

    Section
      3.2 Borrowings.
      The
      obligation of any Lender to make a Loan or to participate in any Letter of
      Credit issued by the Fronting Lender
      and the obligation of the Fronting Lender to issue a Letter of Credit is subject
      to the satisfaction of the following conditions (as reasonably determined by
      the
      Administrative Agent):

     

    (a) receipt
      by the Administrative Agent of a Notice of Borrowing as required by Section
      2.2
      and 2.3, together with a certificate or certificates executed by an authorized
      officer of NorthStar as of the date of such Notice of Borrowing as to the
      matters set forth in Section 3.1(g);

     

    (b) receipt
      by the Administrative Agent of a fully completed Borrowing Base Certificate
      stating that, after taking into account any such Loan, the Borrowers shall
      be in
      full compliance with all of the covenants contained in Section 5.8 of this
      Agreement and that the requirements with respect to the Borrowing Base Values
      shall be met;

     

    (c) immediately
      after such Borrowing or issuance of such Letter of Credit, the Outstanding
      Balance will not exceed the aggregate amount of the Total Available
      Commitments;

     

    (d) immediately
      before and after such Borrowing or issuance of such Letter of Credit, no Default
      or Event of Default shall have occurred and be continuing both before and after
      giving effect to the making of such Loans or issuing of such Letters of
      Credit;

     

    (e) the
      representations and warranties of the Borrowers contained in this Agreement
      shall be true and correct in all material respects on and as of the date of
      such
      Borrowing both before and after giving effect to the making of such Loans,
      except to the extent any such representation or warranty relates solely to
      an
      earlier date and except for such exceptions as may be disclosed by the Borrowers
      to the Administrative Agent and approved by the Administrative
      Agent;

     

    (f) no
      law or
      regulation shall have been adopted, no order, judgment or decree of any
      governmental authority shall have been issued, and no litigation shall be
      pending, which does or seeks to enjoin, prohibit or restrain, the making or
      repayment of the Loans, the issuance of any Letter of Credit or any
      participations therein or the consummation of the transactions contemplated
      by
      this Agreement;

     

    (g) no
      event,
      act or condition shall have occurred after the Closing Date which, in the
      reasonable judgment of the Administrative Agent, has had or is likely to have
      a
      Material Adverse Effect; and

     

    (h) immediately
      after such Borrowing or issuance of such Letter of Credit, the aggregate
      outstanding undrawn issued Letters of Credit shall not exceed Ten Million
      Dollars ($10,000,000).

     

    
      
        
        

      

      
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    Each
      Borrowing hereunder shall be deemed to be a representation and warranty by
      the
      Borrowers on the date of such Borrowing as to the facts specified in clauses
      (d), (e), (f), (g) and (h) (to the extent that Borrowers are aware of any
      Material Adverse Effect) of this Section. 

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

    In
      order
      to induce the Administrative Agent and each of the Lenders which is or may
      become a party to this Agreement to make the Loans, the Borrowers make the
      following representations and warranties as of the Closing Date. Such
      representations and warranties shall survive the effectiveness of this
      Agreement, the execution and delivery of the other Loan Documents and the making
      of the Loans.

     

    Section
      4.1 Existence
      and Power.
      NorthStar is a corporation, duly formed, validly existing and in good standing
      as a corporation under the laws of Maryland and has all powers and
      all
      material governmental licenses, authorizations, consents and approvals required
      to own its
      property and assets and carry on its business as now conducted or as it
      presently proposes to conduct
      and has been duly qualified and is in good standing in every jurisdiction
except
      where the failure to have such licenses, authorizations, consents or approvals
      or to be so qualified and/or in good standing is not likely to have a Material
      Adverse Effect.
      NorthStar OP is a limited partnership, duly formed, validly existing and in
      good
      standing as a limited partnership under the laws of Delaware and has all powers
      and all material governmental licenses, authorizations, consents and approvals
      required to own its property and assets and carry on its business as now
      conducted or as it presently proposes to conduct and has been duly qualified
      and
      is in good standing in every jurisdiction except where the failure to have
      such
      licenses, authorizations, consents or approvals or to be so qualified and/or
      in
      good standing is not likely to have a Material Adverse Effect. NRFC Sub-REIT
      is
      a
      corporation, wholly-owned by NorthStar OP and duly formed and validly existing
      as a corporation under the laws of the Sate of Maryland and has all powers
      and
      all material governmental licenses, authorizations, consents and approvals
      required to own its property
      and assets and carry on its business as now conducted or as it presently
      proposes to conduct
      and has been duly qualified and is in good standing in every jurisdiction except
      where the failure to have such licenses, authorizations, consents or approvals
      or to be so qualified and/or in good standing is not likely to have a Material
      Adverse Effect. NS
      Advisors is a limited liability company duly formed and validly existing as
      a
      limited liability company under the laws of the State of Delaware and has all
      powers and all material governmental licenses, authorizations, consents and
      approvals required to own its property and assets and carry on its business
      as
      now conducted or as it presently proposes to conduct and has been duly qualified
      and is in good standing in every jurisdiction except where the failure to have
      such licenses, authorizations, consents or approvals or to be so qualified
      and/or in good standing is not likely to have a Material Adverse Effect. Each
      Borrowing Base Entity is a Wholly-Owned Subsidiary of NRFC Sub-REIT and is
      a
      corporation, limited partnership, limited liability company or trust duly
      organized under the laws of its state of organization and is validly existing
      and in good standing under the laws thereof and has all powers and all material
      governmental licenses, authorizations, consents and approvals required to own
      its property and assets and carry on its business as now conducted or as it
      presently proposes to conduct and has been duly qualified and is in good
      standing in every jurisdiction except where the failure to have such licenses,
      authorizations, consents or approvals or to be so qualified and/or in good
      standing is not likely to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    Section
      4.2 Power
      and Authority.
      Each
      Borrower and Borrowing Base Entity has the trust, corporate, partnership or
      limited liability company power, as applicable, and authority to execute,
      deliver and carry out the terms and provisions
      of each of the Loan Documents to which it is a party and has taken all necessary
      trust,
      corporate, partnership or limited liability company action, as applicable,
      to
      authorize the execution and delivery on behalf of such Borrower or Borrowing
      Base Entity and the performance by such Borrower or Borrowing Base Entity of
      such Loan Documents. Each Borrower and Borrowing Base Entity has duly executed
      and delivered each Loan Document to which it is a
      party
      in accordance with the terms of this Agreement, and each such Loan Document
      constitutes the legal, valid and binding obligation of such Borrower or
      Borrowing Base Entity, enforceable in accordance with its terms, except as
      enforceability may be limited by applicable insolvency, bankruptcy or other
      laws
      affecting creditors rights generally, or general principles of equity, whether
      such enforceability is considered in a proceeding in equity or at
      law.

     

    Section
      4.3 No
      Violation.
      Neither
      the execution, delivery or performance by or on behalf of any Borrower or
      Borrowing Base Entity of the Loan Documents to which it is a party, nor
      compliance by any
      Borrower or Borrowing Base Entity with the terms and provisions thereof nor
      the
      consummation of the transactions contemplated by the Loan Documents, (i) will
      materially contravene any applicable provision of any
      law,
      statute, rule, regulation, order, writ, injunction or decree of any court or
      governmental instrumentality, or (ii) will materially conflict with or result
      in
      any breach of, any of the terms, covenants,
      conditions or provisions of, or constitute a default under, or result in the
      creation or imposition
      of (or the obligation to create or impose) any Lien upon any of the property
      or
      assets of such Borrower or Borrowing Base Entity or any Consolidated
      Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
      or
      other agreement or other instrument to which such Borrower (or of any
      partnership of which such Borrower or Borrowing Base Entity is a partner) or
      any
      Consolidated Subsidiaries is a party or by which it or any of its property
      or
      assets is bound or to which it is subject, or (iii) will cause a
      material default by such Borrower or Borrowing Base Entity under any
      organizational document of any Person in which such
      Borrower or Borrowing Base Entity has an interest, or cause a material default
      under such Borrowers’ limited liability company agreement, partnership
      agreement, trust agreement or articles of incorporation or by-laws, as
      applicable.

     

    Section
      4.4 Financial
      Information

     

    (a) The
      consolidated balance sheet of NorthStar and its Consolidated Subsidiaries dated
      as of December 31, 2005 and the related consolidated statements of NorthStar’s
      financial position for the fiscal year then ended, auditied by Grant Thorton,
      LLP and set forth in NorthStar’s 2005 Form 10-K, a copy of which has been
      delivered to the Administrative Agent, fairly present in all material respects,
      in conformity with GAAP, the consolidated financial position of NorthStar and
      its Consolidated Subsidiaries as of such date and their consolidated results
      of
      operations and cash flows for such fiscal year.

     

    
      
        
        

      

      
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    (b) The
      consolidated statements of NorthStar’s financial position as set forth in
      NorthStar’s 2006 Form 10-Q for the fiscal quarter ended June 30, 2006, a copy of
      which has been delivered to the Administrative Agent, fairly present in all
      material respects, in conformity with GAAP, the consolidated financial position
      of NorthStar and its Consolidated Subsidiaries as of such dates and their
      consolidated results of operations and cash flows for such periods.

     

    (c) Since
      NorthStar’s most recent Form 10-Q, (i) nothing has occurred having a Material
      Adverse Effect, and (ii) NorthStar and the Consolidated Subsidiaries have not
      incurred any material Indebtedness or Contingent Obligation except in the
      ordinary course of business.

     

    Section
      4.5 Litigation.
      There
      is no action, suit, investigation, or proceeding pending against, or to the
      knowledge of
      the
      Borrowers threatened in writing against or affecting, (i) any Borrower, any
      Borrowing Base Entity or any Consolidated
      Subsidiary, (ii) the Loan Documents or any of the transactions contemplated
      by
the
      Loan
Documents
      or (iii) any of their assets, before any court or arbitrator or any governmental
      body, agency or official in which there is a reasonable possibility of an
      adverse decision
      which could, individually, or in the aggregate have a Material Adverse Effect
      or
      which in any manner draws into question the validity of this Agreement or the
      other Loan Documents.

     

    Section
      4.6 Compliance
      with ERISA. With
      respect to each NorthStar Plan, and each Non-NorthStar Plan (but, as to any
      Non-NorthStar Plan, only to the extent that the failure to do so would have
      a
      Material Adverse Effect), each member of the ERISA Group has fulfilled its
      obligations under the minimum funding standards of ERISA and the Code with
      respect
      to each Plan and is in compliance in all material respects with the presently
      applicable provisions
      of ERISA
      and
      the Code with respect to each Plan. With respect to each NorthStar Plan, and
      each Non-NorthStar
      Plan (but, as to any Non-NorthStar Plan, only to the extent that the occurrence
      of any of (i) through (iii) below would cause a Material Adverse Effect), no
      member of the ERISA Group has (i) sought a waiver of the minimum funding
      standard under Section 412 of the Code in respect of any Plan, (ii) failed
      to
      make any contribution or payment to any Plan or Multiemployer Plan or made
      any
      amendment to any Plan,
      which failure to make contribution or payment or making of any amendment has
      resulted or would result in the imposition of a Lien or the posting of a bond
      or
other
      security under ERISA or the Code or (iii) incurred any liability under Title
      IV
      of ERISA other than liability to the PBGC for premiums under Section 4007 of
      ERISA. 

     

    (a) The
      transactions contemplated by the Loan Documents will not constitute a nonexempt
      prohibited transaction (as such term is defined in Section 4975 of the Code
      or
      Section 406 of ERISA) that could subject the Administrative Agent or the Lenders
      to any tax or penalty or prohibited transactions imposed under Section 4975
      of
      the Code or Section 502(i) of ERISA by reason of the assets of any Borrower
      being plan assets within the meaning of the Department of Labor Regulation
      Section 2510.3-101 of Section 401 of ERISA or in connection with any Plan or
      Benefit Arrangement.

     

    Section
      4.7 Borrowing
      Base Assets.
      Each
      and every representation and warranty with respect to (i) any Eligible First
      Mortgage Asset included in the Borrowing Base Assets Pool as set forth on
“Exhibit
      “F”
      hereto
      is true and correct, (ii) any Eligible Property Equity Interest included in
      the
      Borrowing Base Assets Pool as set forth on Exhibit
      “G”
hereto
      is true and correct, (iii) any Eligible Real Estate Security included in the
      Borrowing Base Assets Pool as set forth on Exhibit
      “H”
hereto
      is true and correct, (iv) any Eligible Subordinated Asset included in the
      Borrowing Base Assets Pool as set forth on Exhibit
      “I”
hereto
      is true and correct and (v) any Eligible CDO Retained Asset included in the
      Borrowing Base Assets Pool as set forth on Exhibit
      “J”
hereto
      is true and correct.

     

    
      
        
        

      

      
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    Section
      4.8  Environmental
      Matters.
      In the
      ordinary course of its business, the Borrowers conduct periodic reviews of
      the
      effect of Environmental Laws on the business, operations and properties of
      the
      Borrowers and the Consolidated Subsidiaries, including without limitation,
      the
      Real Property Assets and the Underlying Assets, in the course of which it
      identifies and evaluates associated
      liabilities and costs (including, without limitation, any capital or operating
      expenditures required for
      clean-up or closure of properties presently owned, any capital or operating
      expenditures required
      to achieve or maintain compliance with environmental protection standards
      imposed by law or as a condition of any license, permit or contract, any
related
      constraints on operating activities, and any actual or potential liabilities
      to
      third parties, including
      employees, and any related costs and expenses). On the basis of this review,
      the
      Borrowers have reasonably concluded that such associated liabilities and costs,
      including the costs
      of
      compliance with Environmental Laws, are unlikely to have a Material Adverse
      Effect.

     

    Section
      4.9 Taxes.
      United
      States Federal income tax returns of the Borrowers and the Consolidated
      Subsidiaries have been prepared and filed through the fiscal year ended
December
      31, 2005. The Borrowers and their Consolidated Subsidiaries have filed all
      United States Federal income tax returns and all other material tax returns
      which are required to be filed by
      them
      and have paid all taxes due pursuant to such returns or pursuant to any
      assessment received
      by the Borrowers or any Consolidated Subsidiary. The charges, accruals and
      reserves on
      the
      books of the Borrowers and the Consolidated Subsidiaries in respect of taxes
      or
      other governmental charges are, in the opinion of the Borrowers,
      adequate.

     

    Section
      4.10 Full
      Disclosure.
      All
      information furnished in writing by the Borrowers to the Administrative Agent
      or
      any Lender for purposes of or in connection with this Agreement or any
      transaction contemplated hereby (i) if prepared by the Borrowers or any
      Affiliate of the Borrowers is true and accurate in all material respects on
      the
      date as of which such information is stated or certified and (ii) if prepared
      by
      any Person other than the Borrowers or any Affiliate of the Borrowers, to the
      best of Borrowers’ knowledge, after the Borrowers have conducted reasonable
      investigation with due diligence, is true and accurate in all material respects
      on the date as of which such information is stated or certified; provided,
      that,
      with
      respect to projected financial information, the Borrowers represent and warrant
      only that such information represents the Borrowers expectations regarding
      future performance based upon historical information and reasonable assumptions,
      it being understood, however, that actual results may differ from the projected
      results described in the financial projections. The Borrowers have disclosed
      to
      the Administrative Agent and the Lenders in writing any and all facts which
      have
      or which is likely to have (to the extent the Borrowers can now reasonably
      foresee) a Material Adverse Effect.

     

    Section
      4.11 Solvency(a) .
      On the
      Closing Date and after giving effect to the transactions contemplated by the
      Loan Documents occurring on the Closing Date, each of the Borrowers and the
      Borrowing Base Entities will be Solvent.

     

    
      
        
        

      

      
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    Section
      4.12 Use
      of
      Proceeds; Margin Regulations.
      All
      proceeds of the Loans will be used by the Borrowers and all Letters of Credit
      shall be issued for the Borrowers only in accordance with the provisions hereof.
      No part of the proceeds of any Loan or any Letter of Credit will be used by
      the
      Borrowers to purchase or carry any Margin Stock or to extend
      credit to others for the purpose of purchasing or carrying any Margin Stock.
      Neither the making of any Loan, the issuance of any Letter of Credit, nor the
      use of the proceeds of the foregoing will violate or be inconsistent with the
      provisions of Regulations T, U or X of the Federal Reserve Board.

     

    Section
      4.13 Governmental
      Approvals.
      No
      order, consent, approval, license, authorization, or validation of, or filing,
      recording or registration with, or exemption by, any governmental
      or public body or authority, or any subdivision thereof, is required to
      authorize, or is
      required in connection with the execution, delivery and performance of any
      Loan
      Document or the consummation of any of the transactions contemplated thereby
      other than (i) the filing of a report on form 8-K with the Securities and
      Exchange Commission describing the transactions contemplated hereby, or (ii)
      those that have already
      been duly made or obtained and remain in full force and effect or (iii) those
      which, if not made or obtained, would not have a Material Adverse
      Effect.

     

    Section
      4.14 Investment
      Company Act.
      Neither
      the Borrowers nor any Consolidated Subsidiary is (i) required to register as
      an
“investment
      company”
or
      a
company
      “controlled”
by
      an
“investment
      company”,
      within
      the meaning of the Investment Company
      Act of 1940, as amended, or
      (ii)
subject
      to any other federal or state law or regulation which purports to restrict
      or
      regulate its ability to borrow money.

     

    Section
      4.15 Principal
      Offices.
      As of
      the Closing Date, the principal office, chief executive office and principal
      place of business of each of the Borrowers is 527 Madison Avenue, 16th
      Floor,
      New York, New York 10022. No Borrower shall change its principal
      office or state of formation without having given the Administrative Agent
      at
      least thirty (30) days prior written notice; provided no such notice is required
      in connection with the changing of the Borrowers’ principal office to 399 Park
      Avenue, New York, New York during the second fiscal quarter of 2007.


     

    Section
      4.16 REIT
      Status.
      For its
      first fiscal year and continuously thereafter NorthStar has qualified, and
      NorthStar shall continue to qualify, as a real estate investment trust under
      the
      Code.

     

    Section
      4.17 Qualified
      REIT Subsidiary Status.
      Each of
      NorthStar OP and NRFC Sub-REIT qualify as of the Closing Date, and intend to
      continue to qualify, as a qualified real estate investment subsidiary under
      the
      Code.

     

    Section
      4.18 Patents,
      Trademarks, etc.
      The
      Borrowers have obtained and hold in full force and effect all patents,
      trademarks, servicemarks, trade names, copyrights and other such
      rights, free from burdensome restrictions, which are necessary for the operation
      of its business
      as presently conducted, the impairment of which is likely to have a Material
      Adverse Effect. 

     

    Section
      4.19 No
      Default.
      No
      Event of Default or, to the Borrowers’ knowledge, Default exists under or with
      respect to any Loan Document and the Borrowers are not in default in any
      material respect beyond any applicable grace period under or with respect to
      any
      other material agreement, instrument or undertaking to which it is a party
      or by
      which it or any
      of
      its property is bound in any respect, the existence of which default is likely
      to result in a Material Adverse Effect.

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    Section
      4.20 Licenses,
      etc.
      The
      Borrowers have obtained and do hold in full force and effect, all franchises,
      licenses, permits, certificates, authorizations, qualifications, accreditation,
      easements, rights of way and other consents and approvals which are necessary
      for the
      operation of its businesses as presently conducted, the absence of which is
      likely to have a Material Adverse Effect.

     

    Section
      4.21 Compliance
      With Law.
      Each of
      the Borrowers and, to the Borrowers’ knowledge, each of the Borrowing Base
      Assets, are in compliance with all laws, rules, regulations, orders, judgments,
      writs
      and
      decrees, including, without limitation, all building and zoning ordinances
      and
      codes, the failure to comply with which is likely to have a Material Adverse
      Effect.

     

    Section
      4.22 No
      Burdensome Restrictions.
      Except
      as may have been disclosed by the Borrowers in writing to the Administrative
      Agent, no Borrower is a party to any agreement or instrument or subject to
      any
      other obligation or any charter or corporate or partnership
      restriction,
      as the case may be, which, individually or in the aggregate, is likely to have
      a
      Material Adverse Effect.

     

    Section
      4.23 Brokers’
      Fees.
      The
      Borrowers have not dealt with any broker or finder with respect to the
      transactions contemplated by this Agreement or otherwise in connection with
      this
      Agreement, and the Borrowers have not done any act, had any negotiations
or
      conversation, or made any agreements or promises which will in any way create
      or
      give rise to any
      obligation or liability for the payment by the Borrowers of any brokerage fee,
      charge, commission
      or other compensation to any party with respect to the transactions contemplated
      by the
      Loan
      Documents, other than the Fees payable to the Administrative Agent and the
      Lenders, and certain other Persons as previously disclosed in writing to the
      Administrative Agent.

     

    Section
      4.24 Labor
      Matters.
      There
      are no collective bargaining agreements or Multiemployer Plans covering the
      employees of the Borrowers as of the Closing Date and the Borrowers
      have not suffered any strikes, walkouts, work stoppages or other material labor
      difficulty
      within the last five years which, individually or in the aggregate, are likely
      to have a Material Adverse Effect.

     

    Section
      4.25 Insurance.
      As to
      each Borrowing Base Asset (other than Eligible CDO Retained Assets), the
      Borrowers (or a Borrowing Base Entity) maintain (or require that the borrower
      thereunder to maintain) insurance in amounts that a prudent owner of such assets
      would maintain.

     

    Section
      4.26 Organizational
      Documents.
      The
      documents delivered pursuant to Section 3.1(e) constitute, as of the Closing
      Date, all of the organizational documents (together with
      all
      amendments and modifications thereof) of the Borrowers and the Subsidiary
      Guarantors. The Borrowers represent that they
      have
      delivered to the Administrative Agent true, correct and complete copies of
      each
      of the documents described in Section 3.1(e).

     

    
      
        
        

      

      
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    ARTICLE
      V

     

    AFFIRMATIVE
      AND NEGATIVE COVENANTS

     

    The
      Borrowers covenant and agree that, so long as any Lender has any Commitment
      hereunder or any Obligations remain unpaid:

     

    Section
      5.1 Information.
      The
      Borrowers will deliver to the Administrative Agent, in a manner satisfactory
      to
      Administrative Agent:

     

    (a) As
      soon
      as available, and in any event within 90 days after the close of each fiscal
      year of the Consolidated Parties, a consolidated balance sheet and income
      statement of the Consolidated Parties, as of the end of such fiscal year,
      together with related consolidated statements of operations and retained
      earnings and of cash flows for such fiscal year, setting forth in comparative
      form consolidated figures for the preceding fiscal year, all such financial
      information described above to be in reasonable form and detail and audited
      by
      Grant Thorton or such other independent certified public accountants of
      recognized national standing reasonably acceptable to the Administrative Agent
      and whose opinion shall be to the effect that such financial statements have
      been prepared in accordance with GAAP (except for changes with which such
      accountants concur) and shall not be limited as to the scope of the audit or
      qualified as to the status of the Consolidated Parties as a going concern.
      

     

    (b) As
      soon
      as available, and in any event within 45 days after the close of each fiscal
      quarter of the Consolidated Parties (excluding the fourth fiscal quarter),
      a
      consolidated balance sheet and income statement of the Consolidated Parties,
      as
      of the end of such fiscal quarter, together with related consolidated statements
      of operations and retained earnings and of cash flows for such fiscal quarter
      in
      each case setting forth in comparative form consolidated figures for the
      corresponding period of the preceding fiscal year, all such financial
      information described above to be in reasonable form and detail and reasonably
      acceptable to the Administrative Agent, and accompanied by a certificate of
      the
      chief financial officer of NorthStar to the effect that such quarterly financial
      statements fairly present in all material respects the financial condition
      of
      the Consolidated Parties and have been prepared in accordance with GAAP, subject
      to changes resulting from audit and normal year-end audit adjustments and the
      omission of footnotes.

     

    (c) As
      soon
      as available, and in any event (i) within 45 days after the close of each fiscal
      quarter of the Consolidated Parties (excluding the fourth fiscal quarter),
      (ii)
      within 80 days after the close of the fourth fiscal quarter of the Consolidated
      Parties and (iii) at such other times as is required pursuant to the terms
      of
      this Agreement, (A) a fully completed current Borrowing Base Certificate and
      (B)
      a fully completed certificate of the chief financial officer or the chief
      accounting officer of NorthStar (the “Continuing
      Compliance Certificate”)
      in the
      form attached hereto as Exhibit
      “E.”
      

     

    (d) (i)
      within five (5) Domestic Business Days after any officer of any Borrower obtains
      knowledge of any Default, if such Default is then continuing, a certificate
      of
      the chief financial officer, the chief accounting officer, controller, or other
      executive officer of NorthStar setting forth the details thereof and the action
      which the Borrowers are taking or propose to take with respect thereto; and
      (ii)
      promptly and in any event within five (5) Domestic Business Days after the
      Borrowers obtain knowledge thereof, notice of (x) any litigation or governmental
      proceeding pending or threatened against any Borrower or the Borrowing Base
      Assets as to which there is a reasonable possibility of an adverse determination
      and which, if adversely determined, is likely to individually or in the
      aggregate result in a Material Adverse Effect, (y) any other event, act or
      condition which is likely to result in a Material Adverse Effect, and (z) any
      event giving rise to a mandatory prepayment pursuant to Section
      2.10;

     

    
      
        
        

      

      
        -52-

        
          

        

      

      
        
        

      

    

    (e) (i)
      promptly upon the mailing thereof (A) to the shareholders of NorthStar
      generally, copies of all financial statements, reports and proxy statements
      so
      mailed and (B) to the investors in any Eligible CDO, all trustee reports,
      collateral manager reports and other investor information so mailed and (ii)
      promptly upon receipt of knowledge thereof by the Borrowers (A) the breach
      of
      any over-collateralization or interest coverage covenant or requirement under
      any CDO Indenture to which any Affiliate of a Borrower is a party, (B) the
      failure of any scheduled Distribution to be paid when due under any CDO
      Indenture to which any Affiliate (other than Morgans Hotels and NorthStar
      Capital Co.) of a Borrower is a party, or (C) the occurrence of margin calls
      or
      related pay-down requirements being made in any seven day period in respect
      of
      any financing arrangements to which a Borrower or any Affiliate of a Borrower
      is
      a party which, individually or in the aggregate, require the posting of
      collateral or a pay-down of obligations in an amount equal to or greater than
      $15,000,000. 

     

    (f) promptly
      upon the filing thereof, copies of all reports on Forms 10-K and 10-Q (or their
      equivalents) (other than the exhibits thereto, which exhibits will be provided
      upon request therefor by any Lender) which NorthStar shall have filed with
      the
      Securities and Exchange Commission;

     

    (g) if
      and
      when any member of the ERISA Group, with respect to a NorthStar Plan, or a
      Non-NorthStar Plan (but, as to any Non-NorthStar Plan, only to the extent the
      occurrence of any of the following would cause a Material Adverse Effect),
      (i)
      gives or is required to give notice to the PBGC of any “reportable event” (as
      defined in Section 4043 of ERISA) with respect to any Plan which would
      constitute reasonable grounds for a termination of such Plan under Title IV
      of
      ERISA, or knows that the plan administrator of any Plan has given or is required
      to give notice of any such reportable event, a copy of the notice of such
      reportable event given or required to be given to the PBGC; (ii) receives notice
      of complete or partial withdrawal liability under Title IV of ERISA or notice
      that any Multiemployer Plan is in reorganization, is insolvent or has been
      terminated, a copy of such notice; (iii) receives notice from the PBGC under
      Title IV of ERISA of an intent to terminate, impose liability (other than for
      premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
      administer any Plan, a copy of such notice; (iv) applies for a waiver of the
      minimum funding standard under Section 412 of the Code, a copy of such
      application; (v) gives notice of intent to terminate any Plan under Section
      4041(c) of ERISA, a copy of such notice and other information filed with the
      PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
      of
      ERISA, a copy of such notice; or (vii) fails to make any payment or contribution
      to any Plan or Multiemployer Plan or makes any amendment to any Plan that has
      resulted or will result in the imposition of a Lien or the posting of a bond
      or
      other security, a certificate of the chief financial officer or the chief
      accounting officer of NorthStar setting forth details as to such occurrence
      and
      action, if any, which NorthStar or the applicable member of the ERISA Group
      is
      required or proposes to take;

     

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

    (h) promptly
      and in any event within five (5) Domestic Business Days after any Borrower
      obtains actual knowledge of any of the following events, a certificate of
      NorthStar, executed by an officer of NorthStar, specifying the nature of such
      condition, and the Borrowers’ or, if the Borrowers have actual knowledge
      thereof, the Environmental Affiliate’s proposed initial response thereto: (i)
      the receipt by any Borrower, or, if any Borrower has actual knowledge thereof,
      any of the Environmental Affiliates of any written communication, whether from
      a
      governmental authority, citizens group, employee or otherwise, that alleges
      that
      any Borrower, or, if any Borrower has actual knowledge thereof, any of the
      Environmental Affiliates, is not in compliance with applicable Environmental
      Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii)
      any Borrower shall obtain actual knowledge that there exists any Environmental
      Claim pending against any Borrower or any Environmental Affiliate and such
      Environmental Claim is likely to have a Material Adverse Effect or (iii) any
      Borrower obtains actual knowledge of any release, emission, discharge or
      disposal of any Material of Environmental Concern that is likely to form the
      basis of any Environmental Claim against any Borrower or any Environmental
      Affiliate which in any such event is likely to have a Material Adverse
      Effect;

     

    (i) promptly
      and in any event within ten (10) Domestic Business Days after receipt of any
      material notices or correspondence from any company or agent for any company
      providing insurance coverage to any Borrower relating to any loss in excess
      of
      $5,000,000 of the Borrower, copies of such notices and correspondence;
      and

     

    (j) from
      time
      to time such additional information regarding the Borrowing Base Assets or
      the
      financial position or business of the Borrowers, the Borrowing Base Entities
      or
      their Subsidiaries as the Administrative Agent, at the request of any Lender,
      may reasonably request in writing.

     

    Section
      5.2 Payment
      of Obligations.
      The
      Borrowers will pay and discharge, at or before maturity, all of their respective
      material obligations and liabilities including, without limitation, any
      obligation pursuant to any agreement by which it or any of its properties is
      bound and any liabilities, except where such liabilities may be contested
      in good faith by appropriate proceedings, and will maintain in accordance with
      GAAP, appropriate reserves for the accrual of any of the same. 

     

    Section
      5.3 Maintenance
      of Property.
      The
      Borrowers will keep, and will cause each Consolidated Subsidiary to keep, all
      property useful and necessary in its business insured in an
      amount
      not less than a commercially reasonable amount and in good order and repair,
      ordinary wear and tear and loss by condemnation or casualty
      excepted.

     

    Section
      5.4 Conduct
      of Business and Maintenance of Existence.
      Each
      Borrower and Borrowing Base Entity will continue to engage in business of the
      same general type as now conducted by such Borrower
      or Borrowing Base Entity and will not enter into any business which is not
      of
      the same general type as now conducted by such Borrower or Borrowing Base Entity
      (it being understood that a Borrower may enter into new lines of business
      provided such new lines of business do not constitute a material portion of
      the
      Borrower’s business). Each Borrower and Borrowing Base Entity will preserve,
      renew and keep in full force and effect, its trust, corporate, partnership
      or
      limited liability company existence, as applicable, and its respective rights,
      privileges and franchises necessary for the normal conduct of
      business.

     

    
      
        
        

      

      
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    Section
      5.5 Compliance
      with Laws.
      Each
      Borrower and Borrowing Base Entity will comply in all material respects with
      all
      applicable laws, ordinances, rules, regulations, and requirements of
      governmental authorities (including, without limitation, Environmental Laws,
      and
      all federal securities laws) except where the necessity of compliance therewith
      is contested in good faith by appropriate proceedings or where the failure
      to
      comply would not be likely to have a Material Adverse Effect.
      Each
Borrower
      and Borrowing Base Entity shall (i) ensure that no Person having a legal or
      beneficial title to a controlling interest in such Borrower or Borrowing Base
      Entity or a right to acquire such an interest (each an “Owner”)
      shall
      be listed on the Specially Designated Nationals and Blocked Person List or
      other
      similar lists maintained by the Office of Foreign Assets Control (“OFAC”),
      the
      Department of the Treasury or included in any Executive Orders, (ii) not use
      or
      permit the use of the proceeds of the Facility or any other financial
      accommodation from the Administrative Agent or the Lenders to violate any of
      the
      foreign asset control regulations of OFAC or other applicable law, (iii) comply
      with all applicable Bank Secrecy Act laws and regulations, as amended from
      time
      to time, and (iv) otherwise comply with the USA Patriot Act as required by
      federal law.

     

    Section
      5.6 Inspection
      of Books and Records.
      Each
      Borrower and Borrowing Base Entity will keep proper books of record and account
      in which full, true and correct entries shall be made of all
      dealings and
      transactions in relation to its business and activities; and will permit
      representatives of Administrative
      Agent at the expense of the Administrative Agent or the Lender requesting the
      Administrative Agent to conduct such visit and inspection, to visit and inspect
      any of its properties,
      to examine and make abstracts from any of its books and records and to discuss
      its affairs, finances and accounts with its officers and independent public
      accountants, all at such reasonable times, upon reasonable prior notice and
      as
      often as may reasonably be desired,
      but
      conducted in such a manner as to not unreasonably interfere with the conduct
      of
      Borrowers’ or Borrowing Base Entity’s business.

     

    Section
      5.7 Existence.
      Each
      Borrower and Borrowing Base Entity shall do or cause to be done, all things
      necessary to preserve and keep in full force and effect its and the Consolidated
      Subsidiaries’ existence
      and its patents, trademarks, servicemarks, tradenames, copyrights, franchises,
      licenses, permits,
      certificates, authorizations, qualifications, accreditation, easements, rights
      of way and other
      rights, consents and approvals the nonexistence of which is likely to have
      a
      Material Adverse Effect.

     

    Section
      5.8 Financial
      Covenants.
      The
      Borrowers shall comply with the following financial covenants, which covenants
      shall be calculated for NorthStar and its Consolidated Subsidiaries:


     

    (a) Leverage
      Ratio.
      As of
      the end of each fiscal quarter, the Leverage Ratio shall not exceed ninety
      percent (90%). 

     

    (b) Fixed
      Charge Ratio.
      As of
      the end of each fiscal quarter, the Fixed Charge Ratio shall not be less than
      1.30 to 1.00.

     

    (c) Consolidated
      Tangible Net Worth.
      As of
      the end of each fiscal quarter, the Consolidated Tangible Net Worth shall be
      greater than or equal to the sum of (i) $85% of Consolidated Tangible Net Worth
      at closing, plus
      (ii) an
      amount equal to 75.0% of the Net Equity Proceeds received by the Consolidated
      Parties in connection with any Equity Issuance subsequent to the Closing Date
      calculated on a cumulative basis as of the end of each fiscal quarter of the
      Consolidated Parties following the Closing Date.

     

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

    (d) Recourse
      Debt to Total Assets.
      As of
      the end of each fiscal quarter, the ratio of (i) the Recourse Debt of the
      Consolidated Parties (excluding Indebtedness hereunder and TruPS) to (ii) the
      Total Assets of the Consolidated Parties shall not exceed 0.10 to
      1.00.

     

    (e) Dividends.
      NorthStar will not, at any time pay any Distributions in respect of NorthStar’s
      common stock in excess of 100% of NorthStar’s Adjusted Funds from Operations for
      the trailing four (4) consecutive calendar quarter period; provided that
      notwithstanding the foregoing, NorthStar may pay Distributions necessary to
      maintain its status as a real estate investment trust under the Code. During
      the
      continuance of a monetary Event of Default, NorthStar shall make no
      Distributions.

     

    (f) Interest
      Rate Exposure.
      The
      Consolidated Parties will at all times maintain a notional amount of Match
      Funding Agreements in effect such that fluctuations (increases or decreases)
      in
      interest rates of 100 basis points or more in any fiscal quarter in respect
      of
      the Floating Rate Indebtedness and/or Floating Rate Assets of the Consolidated
      Parties will not impact negatively NorthStar’s Adjusted Funds from Operations in
      such fiscal quarter annualized by greater than 10.0%.

     

    Notwithstanding
      that the Financial Covenants set forth in this Section 5.8 may be tested on
      a
      quarterly (or, in some cases, more frequent) basis, the Person to which such
      Financial Covenants apply must be in full and complete compliance with such
      Financial Covenants at all times.

     

    Section
      5.9 Restriction
      on Fundamental Changes.

     

    (a) No
      Borrowing Base Entity shall enter into any merger or consolidation without
      the
      prior written consent of the Required Lenders, which consent may be withheld
      by
      the Required Lenders in their respective sole and absolute discretion. Neither
      NorthStar nor NorthStar OP shall enter into any merger or consolidation unless
      (i) NorthStar or NorthStar OP is the surviving entity, (ii) the nature
      of
      NorthStar’s or NorthStar OP’s business following such merger or consolidation
      shall remain substantially similar to the nature of NorthStar’s or NorthStar
      OP’s business immediately prior to such merger or consolidation, (iii) NorthStar
      or NorthStar OP, as the surviving entity, shall, at the time of such merger
      or
      consolidation and at all times thereafter,
      be and remain in compliance with all of the terms and conditions
      of this Agreement including, without limitation, the Financial Covenants set
      forth in Section 5.8, (iv) at the time of such merger or consolidation,
      NorthStar or NorthStar OP shall deliver to the Administrative Agent a fully
      completed Continuing Compliance Certificate, together with a proforma
      (with respect to the four (4) consecutive calendar quarters immediately
      following such merger or consolidation) cash flow and
      Financial Covenant compliance projection, in form, content and detail reasonably
      acceptable to the Administrative Agent, (v) NorthStar or NorthStar OP, as the
      surviving entity, shall execute and deliver to the Administrative Agent at
      the
      time of such merger or consolidation a ratification and reaffirmation of all
      its
      Obligations under this Agreement and the other Loan Documents, in form, content
      and detail acceptable to the Administrative Agent,
      (vi) no
      Default or Event of Default shall
      have occurred and be continuing at the time of such merger or consolidation,
      and
      (vii) such merger or consolidation shall be accomplished in accordance with
      all
      terms, conditions and restrictions being imposed thereon by the Securities
      and
      Exchange Commission and/or any other applicable regulatory agency having
      jurisdiction with respect to such merger or consolidation.

     

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        

      

    

    (b) NorthStar
      shall not amend its certificate of incorporation, bylaws or other organizational
      documents so as to change the purpose or business of NorthStar in any manner
      which is likely to have a Material Adverse Effect without the Administrative
      Agent’s prior written consent.

     

    (c) NorthStar
      OP shall not amend its partnership agreement or other organizational documents
      in any manner which is likely to have a Material Adverse Effect without the
      Administrative Agent’s prior written consent.

     

    (d) No
      Borrowing Base Entity shall amend its certificate of incorporation, limited
      liability company agreement or other organizational documents in any manner
      which is likely to have a Material Adverse Effect without the Administrative
      Agent’s prior written consent.

     

    (e) The
      Borrowers shall deliver to the Administrative Agent copies of all amendments
      to
      any trust agreement, articles of incorporation, by-laws, limited liability
      company agreement or other organizational document, as applicable, of any
      Borrower or Borrowing Base Entity no less than ten (10) Domestic Business Days
      after the effective date of any such amendment.

     

    Section
      5.10 [Reserved].

     

    Section
      5.11 Margin
      Stock.
      None of
      the proceeds of the Loan will be used, directly or indirectly, for the purpose,
      whether immediate, incidental or ultimate, of buying or carrying any Margin
      Stock.

     

    Section
      5.12 NorthStar,
      NorthStar OP and NRFC Sub-REIT Status.
      NorthStar shall at all times (i) remain a publicly traded company listed, quoted
      or traded on the New York Stock Exchange, NASDAQ or any such other nationally
      recognized stock exchange, and (ii) maintain
      its status as a self-directed
      and self-administered real estate investment trust under the Code. NorthStar
      OP
      and NRFC Sub-REIT shall at all times (i) maintain their status as qualified
      real
      estate investment trust
      subsidiaries under
      the
      Code, and (ii) have the majority of their capital stock owned by NorthStar.
      Each
      Borrowing Base Entity Subsidiary (other than the Borrowing Base Entity owning
      the CDO Retained Asset in CDO I) shall be a Wholly-Owned Subsidiary of NorthStar
      OP.

     

    Section
      5.13 Disposition
      of Borrowing Base Assets.
      The
      Borrowers shall deliver written notice to the Administrative Agent of any sale,
      liquidation, disposition or transfer of, or the release or termination of a
      Borrower’s or Borrowing Base Entity’s interest in, any Borrowing Base Asset
      together with an
      updated Borrowing Base Certificate
      giving
      effect to the completion of such sale, liquidation, disposition, transfer,
      or
      other event, which notice and Borrowing Base Certificate shall be delivered
      (i)
      in the event there is no Outstanding Balance, promptly after the completion
      of
      such sale, liquidation, disposition, transfer, or other event or (ii)
in
      the
      event that there is any Outstanding Balance, prior to the completion of such
      sale, liquidation, disposition, transfer, or other event. 

     

    
      
        
        

      

      
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    Section
      5.14 Liens;
      Indebtedness.
      The
      Borrowers shall not at any time during the Term directly or indirectly create,
      incur, assume or permit to exist any Lien on or with respect to any Borrowing
      Base Asset or any Capital Stock of NorthStar OP, NRFC Sub-REIT or any Borrowing
      Base Entity (or any Subsidiary of a Borrower or a Subsidiary Guarantor owning,
      directly or indirectly, the Capital Stock of any Borrowing Base Entity) for
      borrowed monies
      or
      any other Lien, unless the same is being contested
      in good faith or the same is discharged,
      bonded off or paid within thirty (30) days of filing of such Lien.
      Notwithstanding the foregoing, the Borrowers may permit Liens (i) encumbering
      the Real Property Assets relating to Eligible Property Equity Interests,
      provided that such Liens may only secure Indebtedness permitted by Exhibit
      G
      hereto
      and (ii) on the Capital Stock of Real Property Subsidiaries, provided that
      such
      Liens may only secure Indebtedness permitted by Exhibit
      G
      hereto
      (including any replacement financing of such Indebtedness to the extent
      permitted by Exhibit
      G
      hereto).
      No Subsidiary Guarantor shall at any time owe, create, incur or assume or
      otherwise be obligated in respect of any Indebtedness; provided that NNN
      Holdings may incur Indebtedness consisting of guarantees of customary carve-out
      matters such as fraud, misappropriation, bankruptcy, misapplication and
      environmental matters which guarantees are made in connection with Indebtedness
      incurred by a Subsidiary of NNN Holdings. 

     

    Section
      5.15 Business
      Loans.
      The
      Borrowers acknowledge that all of the Loans are business loans and no portion
      of
      the proceeds of the Loans will be used for personal, family or household
      purposes.

     

    Section
      5.16 Limitation
      on Changes in Fiscal Year; Accounting Methods; Valuation
      Methodology.
      No
      Borrower shall (i) permit the fiscal year of such Borrower to end on a day
      other
      than December
      31, (ii) change its method or procedures of accounting from those in effect
      as
      of the Closing Date (except as permitted by Section 1.2 hereof or as required
      by
      the Securities and Exchange Commission); or (iii) change in any material respect
      its current methodology by which it values the Borrowing Base
      Assets.

     

    Section
      5.17 Ownership
      of Borrowing Base Assets.
      All
      Borrowing Base Assets included in the Borrowing Base Assets Pool shall be owned
      by a Borrowing Base Entity.

     

    Section
      5.18 Limitation
      on Negative Pledge Clauses, Distribution Restrictions.
      Neither
      NorthStar OP, NRFC Sub-REIT nor any Borrowing Base Entity shall enter into
      with
      any Person any agreement
      which
      prohibits or limits the ability of NorthStar OP, NRFC Sub-REIT or such Borrowing
      Base Entity to create, incur, assume or suffer to exist any Lien upon any of
      its
      property, assets or revenues,
      whether now owned or hereafter acquired, nor will NorthStar, NorthStar OP,
      NRFC
      Sub-REIT or any Borrowing Base Entity, as applicable, enter into any such
      agreement with respect to the Capital Stock of NorthStar OP, NRFC Sub-REIT
      or
      any Borrowing Base Entity. 

     

    Section
      5.19 Addition
      of Borrowing Base Assets.

     

    
      
        
        

      

      
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    (a) With
      the
      approval of the Administrative Agent, the Borrowers may from time to time have
      included as Borrowing Base Assets eligible assets not included as initial
      Borrowing Base Assets hereunder as set forth on the schedule of initial
      Borrowing Base Assets annexed hereto as Exhibit
      “C”.
      In such
      event, the Borrowers shall provide to the Administrative Agent written notice
      thereof (each an “Approval
      Request”)
      no
      later than 10:00 a.m. (New York, New York time) on the Business Day that is
      at
      least ten (10) Business Days prior to the date on which Borrowers wish to have
      such asset included within the Borrowing Base Assets Pool, such Approval Request
      to state (i) whether such asset is proposed to be an Eligible First Mortgage
      Asset, an Eligible Property Equity Interest, an Eligible Real Estate Security,
      an Eligible Subordinated Asset or an Eligible CDO Retained Asset, (ii) the
      value
      of such asset as proposed to be reflected on a Borrowing Base Certificate,
      and
      (iii) that such asset complies with all of the representations and warranties
      applicable to such asset contained in Exhibit F, Exhibit G, Exhibit H, Exhibit
      I
      or Exhibit J, as the case may be, and if not, a detailed description of each
      exception to such compliance (each an “Exceptions
      Summary”).
      Together with the Approval Request, the Borrowers shall deliver to the
      Administrative Agent a completed, (i) a current Borrowing Base Certificate,
      (ii)
      the Borrowers’ credit write-up and approval memo relating to such prospective
      Borrowing Base Asset, and (iii) if requested by the Administrative Agent, (A)
      an
      appraisal report relating to any Real Property Asset or Underlying Asset
      relating to such prospective Borrowing Base Asset, (B) a copy of any mortgage
      note relating to such prospective Borrowing Base Asset, (C) a copy of the
      documents establishing the rights of any Preferred Securities, (D) a copy of
      the
      deed to any Real Property Asset, (E) a copy of the CDO Indenture and offering
      memorandum or circular relating to any Eligible CDO Retained Asset and the
      most
      recent monthly and quarterly trustee reports relating to any CDO Retained Asset
      in the possession of the Borrowers, any and (F) such other documents as the
      Administrative Agent may request from time to time (collectively, the
“Credit
      Underwriting Documents”).
      With
      respect to any asset which Borrowers have requested be added to the Borrowing
      Base Assets Pool, Borrowers shall be deemed to represent and warrant hereunder
      that, except as specified in the Exceptions Summary, if any, with respect to
      such asset (i) all of the First Mortgage Asset Representations and Warranties
      as
      set forth on Exhibit
      “F”
      hereto
      are true and correct as to any such asset which is to be an Eligible First
      Mortgage Asset, (ii) all of the Real Property Asset Representations and
      Warranties as set forth on Exhibit
      “G”
      hereto
      are true and correct as to any such asset which is to be an Eligible Property
      Equity Interest, (iii) all of the Real Estate Security Asset Representations
      and
      Warranties as set forth on Exhibit
      “H”
      hereto
      are true and correct as to any such asset which is to be an Eligible Real Estate
      Security, (iv) all of the Subordinated Asset Representations and Warranties
      as
      set forth on Exhibit
      “I”
      hereto
      are true and correct as to any such asset which is to be an Eligible
      Subordinated Asset, and (v) all of the CDO Retained Asset Representations and
      Warranties as set forth on Exhibit
      “J”
      hereto
      are true and correct as to any such asset which is to be an Eligible
      Subordinated Asset. Promptly upon receipt of an Approval Request and all related
      Credit Underwriting Documents (collectively, each, an “Approval
      Request Package”),
      the
      Administrative Agent shall provide copies thereof to each Lender. 

     

    (b) On
      or
      before 5:00 P.M., New York time, on the tenth (10th)
      Domestic Business Day following the Administrative Agent’s receipt of an
      Approved Request Package, the Administrative Agent will advise the Borrowers
      as
      to whether the Administrative Agent has approved the Approval Request. If the
      Administrative Agent does not respond to the Approval Request within the time
      period set forth herein, the Approval Request shall be deemed denied and the
      prospective Borrowing Base Asset identified in the Approval Request shall not
      be
      included in the Borrowing Base Asset Pool. If an Approval Request has been
      approved, the subject asset shall thereupon become a Borrowing Base Asset
      hereunder.

     

    
      
        
        

      

      
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    (c) All
      determinations by the Administrative Agent as to whether to approve any Approval
      Request shall be in the Administrative Agent’s good faith
      discretion.

     

    Section
      5.20 Failure
      of Certain Borrowing Base Assets Representations and Warranties.
      If
      at any
      time Borrowers shall become aware that (a) as to any First Mortgage Asset in
      the
      Borrowing Base Asset Pool, any First Mortgage Asset Representation or Warranty
      is no longer true and correct, (b) as to any Real Property Asset in the
      Borrowing Base Assets Pool, any Real Property Asset Representation or Warranty
      is no longer true and correct, (c) as to any Real Estate Security in the
      Borrowing Base Assets Pool, any Real Estate Security Representation or Warranty
      is no longer true and correct, (d) as to Subordinated Asset in the Borrowing
      Base Assets Pool, any Subordinated Asset Representation or Warranty is no longer
      true and correct or (e) as to CDO Retained Assets in the Borrowing Base Assets
      Pool, any CDO Retained Asset Representation or Warranty is no longer true and
      correct, Borrowers shall promptly notify the Administrative Agent in writing
      of
      such event, together with a detailed description of the factual circumstances
      giving rise thereto. If the event relates to any breach arising as a result
      of
      any payment default in respect of the applicable Borrowing Base Asset whereby
      any payment in respect of the applicable Borrowing Base Asset is past due for
      more than thirty (30) but less than forty-five (45) days, the Administrative
      Agent may, and at the direction of the Required Lenders shall, require that
      the
      asset no longer be considered a Borrowing Base Asset for purposes hereof and
      require that such asset be removed from the Borrowing Base Assets Pool. If
      the
      event relates to any breach arising as a result of any payment default in
      respect of the applicable Borrowing Base Asset whereby any payment in respect
      of
      the applicable Borrowing Base Asset is past due for more than forty-five (45)
      days, the asset shall automatically no longer be considered a Borrowing Base
      Asset for purposes hereof and such asset shall be removed from the Borrowing
      Base Assets Pool. If the event relates to any breach (other than any breach
      arising as a result of any payment default) in respect of the applicable
      Borrowing Base Asset which continues after any applicable cure period, the
      Administrative Agent may require that the asset no longer be considered a
      Borrowing Base Asset for purposes hereof and require that such asset be removed
      from the Borrowing Base Assets Pool. Upon the determination that an asset shall
      no longer be considered a Borrowing Base Asset for purposes hereof, the
      provisions of Section 2.10(a) shall apply.

     

    Section
      5.21 Limitation
      on Transactions with Affiliates.
      No
      Borrower nor any Subsidiary shall enter into any transaction, including, without
      limitation, any purchase, sale, lease or exchange of property or other assets
      or
      the rendering of any service, with any Affiliate unless such transaction is
      (a)
      otherwise permitted under this Agreement or (b) upon fair and reasonable terms
      no less favorable to Borrowers or such Subsidiary, as the case may be, than
      it
      would obtain in a comparable arm’s length transaction with a Person which is not
      an Affiliate.

     

    Section
      5.22 CDO
      Subsidiaries. The
      organizational agreements of a Subsidiary which owns Eligible CDO Retained
      Assets may as a result of structuring requirements of the Eligible CDO, prohibit
      such Subsidiary from becoming a Guarantor. The Eligible CDO Retained Assets
      owned by such Subsidiary may be included in the Borrowing Base Assets Pool
      subject to the satisfaction at all times of the following conditions (such
      a
      Subsidiary which satisfies the conditions in this Section 5.22 shall be a
“CDO
      Subsidiary”):

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

    (i) such
      CDO
      Subsidiary shall be a Wholly-Owned Subsidiary of a Subsidiary
      Guarantor;

    


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

    


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

    


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

    


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


    


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

     

    (i) such
      Real
      Property Subsidiary shall be a Wholly-Owned Subsidiary of a Subsidiary
      Guarantor;

    


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

    


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

    


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

    


    Section
      5.24 Guaranties.
      The
      Obligations shall be guaranteed by the Subsidiary Guarantors pursuant to the
      Guaranty.

     

    
      
        
        

      

      
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    Section
      5.25 Subsidiary
      Guarantors.
      In the
      event any Subsidiary of a Borrower (or, subject to the terms of Section 5.22
      or
      Section 5.23, a CDO Subsidiary or a Real Property Subsidiary) desires to include
      a Borrowing Base Asset owned by such Subsidiary (or, subject to the terms of
      Section 5.22 or Section 5.23, a CDO Retained Asset or a Property Equity
      Interest) in the Borrowing Base Assets Pool, such Subsidiary (and any other
      direct or indirect Subsidiary owning an interest therein), but excluding a
      CDO
      Subsidiary or any Real Property Subsidiary with respect to clause (i) below,
      shall, simultaneously with the inclusion of such Borrowing Base Asset in the
      Borrowing Base Asset Pool, deliver to the Administrative Agent each of the
      following items, each in form and substance satisfactory to the Agent: (i)
      a
      joinder agreement to the Guaranty executed by such Subsidiary and (ii) such
      organizational agreements, resolutions, consents, opinions and other documents
      and instruments as the Administrative Agent may reasonably require.
      Additionally, in the event that any Subsidiary of a Borrower, whether presently
      existing or hereafter formed or acquired, which is not a Subsidiary Guarantor
      at
      such time, shall after the date hereof become a guarantor under any existing
      or
      future unsecured Indebtedness of a Borrower, then the Borrower shall cause
      each
      such Subsidiary to execute and deliver the items described in clauses (i) and
      (ii) of this Section 5.25
      .

     

    Section
      5.26 Release
      of Certain Subsidiary Guarantors.
      Provided that no Default or Event of Default has occurred and is continuing,
      upon the request of a Borrower or any Subsidiary Guarantor, the Administrative
      Agent shall release such Borrower or Subsidiary Guarantor from liability
      hereunder or under the Guaranty; provided
      that (x)
      the Borrower shall deliver to Administrative Agent evidence satisfactory to
      Administrative Agent that the Borrowers will be in compliance with all covenants
      of this Agreement after giving effect to such sale and release and (y) all
      Borrowing Base Assets owned by such Subsidiary and all CDO Subsidiaries or
      Real
      Property Subsidiaries owned by such Subsidiary shall cease to be included in
      the
      Borrowing Base Assets Pool from the date of release of such Subsidiary from
      the
      Guaranty. Delivery by a Borrower to the Administrative Agent of any such request
      for a release shall constitute a representation by the Borrowers that the
      matters set forth in the preceding sentence (both as of the date of the giving
      of such request and as of the date of the effectiveness of such request) are
      true and correct with respect to such request.

     

    Section
      5.27 Distribution
      of proceeds of CDO Retained Interests.
      The
      Borrowers shall cause each CDO Subsidiary to promptly distribute to the Borrower
      or Subsidiary Guarantor that owns such CDO Subsidiary all payments made with
      respect to the Eligible CDO Retained Asset(s) owned by such CDO Subsidiary.
      

     

     

    ARTICLE
      VI

     

    DEFAULTS

     

    Section
      6.1 Events
      of Default.
      The
      occurrence and continuation of one or more of the following events (each, an
      “Event
      of Default”)
      shall
      constitute an event of default hereunder:

     

    (a) (i)
      the
      Borrowers shall fail to pay when due any principal of any Loan, (ii) the
      Borrowers shall fail to pay when due interest on any Loan and such failure
      continues for a period of three (3) Domestic Business Days, or (iii) the
      Borrowers shall fail to pay any Fees or any other amount payable hereunder
      or,
      as to Fees, under the Fee Letter, and the same shall continue for a period
      of
      five (5) Domestic Business Days after Borrowers have received notice
      thereof;

     

    
      
        
        

      

      
        -62-

        
          

        

      

      
        
        

      

    

    (b) any
      Borrower shall fail to observe or perform any covenant contained in Section
      5.1
      and Sections 5.8 to 5.26, inclusive;

     

    (c) any
      Borrower shall fail to observe or perform any covenant or agreement contained
      in
      this Agreement (other than those covered by clause (a) or (b) above) for thirty
      (30) days after written notice thereof has been given to such Borrower by the
      Administrative Agent, or if such default is of such a nature that is capable
      of
      being remedied but that cannot with reasonable effort be completely remedied
      within said period of thirty (30) days, such additional period of time as may
      be
      reasonably necessary to cure same, provided such Borrower commence such cure
      within said thirty (30) day period and diligently prosecutes same, until
      completion, but in no event shall such extended period exceed one hundred twenty
      (120) days;

     

    (d) any
      representation, warranty, certification or statement made by (i) any Borrower
      in
      this Agreement or in any certificate, financial statement or other document
      delivered pursuant to this Agreement or (ii) any Subsidiary Guarantor in the
      Guaranty or in any document delivered pursuant to the Guaranty shall prove
      to
      have been incorrect in any material respect when made (or deemed made) and
      such
      representation, warranty, certification or statement is not made correct in
      all
      material respects within thirty (30) days after the earlier to occur of (i)
      the
      date on which the Administrative Agent notifies the Borrowers of such incorrect
      representation, warranty, certification or statement, and (ii) the date on
      which
      any Borrower or Subsidiary Guarantor first becomes aware of any such incorrect
      representation, warranty, certification or statement; provided, however, that,
      no breach of any of the representations and warranties contained in Section
      4.7
      hereof shall constitute an “Event of Default” hereunder (and the sole remedy of
      the Administrative Agent and Lenders in respect of any such breach shall be
      as
      set forth in Section 5.20 hereof) unless such representation and warranty was
      untrue or incorrect when made and a Borrower or Subsidiary Guarantor had
      knowledge, at the time such representation and warranty was made, that the
      representation and warranty was untrue or incorrect;

     

    (e) a
      default
      (however defined) shall occur with respect to (i) any Recourse Debt of any
      Borrower or any Consolidated Subsidiary the aggregate outstanding principal
      amount of which is in excess of $20,000,000 (other than the Obligations) or
      (ii)
      any Non-Recourse Debt of any Borrower or any Consolidated Subsidiary the
      aggregate outstanding principal amount of which is in excess of
      $35,000,000;

     

    (f) any
      Borrower or Subsidiary Guarantor shall commence a voluntary case or other
      proceeding seeking liquidation, reorganization or other relief with respect
      to
      itself or its debts under any bankruptcy, insolvency or other similar law now
      or
      hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian or other similar official of it or any substantial part
      of
      its property, or shall consent to any such relief or to the appointment of
      or
      taking possession by any such official in an involuntary case or other
      proceeding commenced against it, or shall make a general assignment for the
      benefit of creditors, or shall fail generally to pay its debts as they become
      due, or shall take any corporate action to authorize any of the
      foregoing;

     

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        

      

    

    (g) an
      involuntary case or other proceeding shall be commenced against any Borrower
      or
      Subsidiary Guarantor seeking liquidation, reorganization or other relief with
      respect to it or its debts under any bankruptcy, insolvency or other similar
      law
      now or hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian or other similar official of it or any substantial part
      of
      its property, and such involuntary case or other proceeding shall remain
      undismissed and unstayed for a period of ninety (90) days; or an order for
      relief shall be entered against any Borrower or any Subsidiary Guarantor under
      the federal bankruptcy laws as now or hereafter in effect;

     

    (h) one
      or
      more final, non-appealable judgments or decrees in an aggregate amount of
      $20,000,000 or more shall be entered by a court or courts of competent
      jurisdiction against any Borrower or any Subsidiary Guarantor (other than any
      judgment as to which, and only to the extent, a reputable insurance company
      has
      acknowledged coverage of such claim in writing) and (i) any such judgments
      or
      decrees shall not be stayed, discharged, paid, bonded or vacated within thirty
      (30) days or (ii) enforcement proceedings shall be commenced by any creditor
      on
      any such judgments or decrees;

     

    (i) without
      the Required Lenders’ prior written consent (which the Required Lenders may
      withhold in their respective sole and absolute discretion), there shall be
      a
      change in the majority of the Board of Directors of NorthStar (a) during any
      twelve (12) month period following a change in “control” (as defined in Rule 405
      of the regulations promulgated under the Securities Act of 1933), or (b) during
      any period where a so-called “proxy fight” is in process (or during the twelve
      (12) month period after any related shareholders’ meeting) concerning either the
      composition of the Board of Directors or a sale of NorthStar;

     

    (j) without
      the Required Lenders’ prior written consent (which the Required Lenders may
      withhold in their respective sole and absolute discretion), any Person
      (including affiliates of such Person) or “group” (as such term is defined in
      applicable federal securities laws and regulations) shall acquire more than
      thirty percent (30%) of the common shares of NorthStar;

     

    (k) NorthStar
      shall cease at any time to qualify as a real estate investment trust under
      the
      Code and/or either of NorthStar OP or NRFC Sub-REIT shall cease at any time
      to
      qualify as qualified real estate investment trust subsidiaries under the
      Code;

     

    (l) if
      any
      Termination Event with respect to a Plan shall occur as a result of which
      Termination Event or Events any member of the ERISA Group has incurred or will
      incur any liability to the PBGC or any other Person and the sum (determined
      as
      of the date of occurrence of such Termination Event) of the insufficiency of
      such Plan and the insufficiency of any and all other Plans with respect to
      which
      such a Termination Event shall occur and be continuing at the same time (or,
      in
      the case of a Multiple Employer Plan with respect to which a Termination Event
      described in clause (ii) of the definition of Termination Event shall occur
      and
      be continuing at the same time, the liability of any Borrower) is equal to
      or
      greater than $5,000,000;

     

    (m) if,
      any
      member of the ERISA Group shall commit a failure described in Section 402(f)(1)
      of ERISA or Section 412(n)(1) of the Code and the amount of the lien determined
      under Section 402(f)(3) of ERISA or Section 412(n)(3) of the Code that will
      be
      imposed on any member of the ERISA Group or their assets in respect of such
      failure shall be, in the case of a NorthStar Plan, equal to or greater than
      $5,000,000 or, in the case of a Non-NorthStar Plan, an amount that would result
      in a Material Adverse Effect;

     

    
      
        
        

      

      
        -64-

        
          

        

      

      
        
        

      

    

    (n) at
      any
      time, for any reason any Borrower, any Consolidated Subsidiary or any other
      party (other than any Lender, the Administrative Agent or the Arranger) which
      is
      a party to a Loan Document seeks to repudiate its obligations under any Loan
      Document; or

     

    (o) a
      default
      beyond any applicable notice or grace period under any of the other Loan
      Documents.

     

    Section
      6.2 Rights
      and Remedies.

     

    (a) Upon
      the
      occurrence of any Event of Default described in Sections 6.1(f) or (g), the
      Commitments shall immediately terminate and the unpaid
      principal amount of, and any and all accrued interest on, the Loans and any
      and
      all accrued Fees and other Obligations hereunder shall automatically become
      immediately due and payable,
      with all additional interest from time to time accrued thereon and, except
      as is
      otherwise specifically set forth in this Agreement or the other Loan Documents,
      without presentation, demand, or protest or other requirements of any kind
      (including, without limitation, valuation and appraisement, diligence,
      presentment, notice of intent to demand or accelerate and notice of
      acceleration), all of which are hereby expressly waived by the Borrowers; and
      upon the occurrence
      and during the continuance of any other Event of Default, the Administrative
      Agent may
      (and
      upon the demand of the Required Lenders shall), by written notice to the
      Borrowers, terminate the Commitments and may (and upon the demand of the
      Required Lenders shall), in addition
      to the exercise of all of the rights and remedies permitted the Administrative
      Agent and the Lenders at law or equity or under any of the other Loan Documents,
      declare the unpaid principal
      amount of and any and all accrued and unpaid interest on the Loans and any
      and
      all accrued
      Fees and other Obligations hereunder to be, and the same shall thereupon be,
      immediately
      due and payable with all additional interest from time to time accrued thereon
      and, except as is otherwise specifically set forth in this Agreement or the
      other Loan Documents, without presentation, demand, or protest or other
      requirements of any kind other than as provided in the Loan Documents
      (including, without limitation, valuation and appraisement, diligence,
      presentment, notice of intent
      to
      demand or accelerate and notice of acceleration), all of which are hereby
      expressly waived by the Borrowers.

     

    (b) Notwithstanding
      anything to the contrary contained in this Agreement or in any other Loan
      Document, the Administrative Agent and the Lenders each agree that any exercise
      or enforcement of the rights and remedies granted to the Administrative Agent
      or
      the Lenders under this Agreement or at law or in equity with respect to this
      Agreement or any other Loan Documents shall be commenced and maintained by
      the
      Administrative Agent on behalf of the Administrative Agent and/or the
      Lenders. The
      Administrative Agent shall act at the direction of the Required Lenders in
      connection with the exercise of any and all remedies at law, in equity or under
      any of the Loan Documents or, if the Required Lenders are unable to reach
      agreement, then, from and after an Event of Default, the Administrative Agent
      may pursue such rights and remedies as it may determine.

     

    
      
        
        

      

      
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    Section
      6.3 Notice
      of Default.
      The
      Administrative Agent shall give notice to the Borrowers under Section 6.1(c)
      promptly upon being requested to do so by the Required Lenders and shall
      thereupon notify all the Lenders thereof.

     

    Section
      6.4 Actions
      in Respect of Letters of Credit.

     

    (a) If,
      at
      any time and from time to time, any Letter of Credit shall have been issued
      hereunder and an Event of Default shall have occurred and be continuing, then,
      upon the occurrence and during the continuation thereof,
      the Administrative Agent may, whether in addition to the taking by the
      Administrative Agent of any of the actions described in this Article or
      otherwise, make a demand upon the Borrowers to, and immediately upon such
      demand, the Borrowers shall pay to the Administrative Agent, on behalf of the
      Lenders, in same day funds at the Administrative Agent’s office designated in
      such demand, for deposit in a special
      cash collateral account (the “Letter
      of Credit Collateral Account”)
      to be
      maintained in the name
      of
      the Administrative Agent (on behalf of the Lenders) and under its sole dominion
      and control at such place as shall be designated by the Administrative Agent,
      an
      amount equal to the amount
      of
      the Letter of Credit Usage under the Letters of Credit.

     

    (b) The
      Borrowers hereby pledge, grant and assign to the Administrative Agent, as
      Administrative Agent, for its benefit and for the ratable benefit of the Lenders
      a lien on and a security interest in, the following collateral (the
“Letter
      of Credit Collateral”):

     

    (i) the
      Letter of Credit Collateral Account, all cash deposited therein and all
      certificates and instruments, if any, from time to time representing or
      evidencing the Letter of Credit Collateral Account;

     

    (ii) all
      notes, certificates of deposit and other instruments from time to time hereafter
      delivered to or otherwise possessed by the Administrative Agent for or on behalf
      of the Borrowers in substitution for or in respect of any or all of the then
      existing Letter of Credit Collateral;

     

    (iii) all
      interest, dividends, cash, instruments and other property from time to time
      received, receivable or otherwise distributed in respect of or in exchange
      for
      any or all of the then existing Letter of Credit Collateral; and

     

    (iv) to
      the
      extent not covered by the above clauses, all proceeds of any or all of the
      foregoing Letter of Credit Collateral.

     

    The
      lien
      and security interest granted hereby secures the payment of all obligations
      of
      the Borrowers now or hereafter existing hereunder and under any other Loan
      Document.

     

    (c) The
      Borrowers hereby authorize the Administrative Agent for the ratable benefit
      of
      the Lenders to apply, from time to time after funds are deposited in the Letter
      of Credit Collateral Account, funds then held in the Letter of Credit Collateral
      Account to the payment of any amounts, in such order as the Administrative
      Agent
      may elect, as shall have become or shall become due and payable by the Borrowers
      to the Lenders in respect of the Letters of Credit.

     

    
      
        
        

      

      
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    (d) Neither
      the Borrowers nor any Person claiming or acting on behalf of or through the
      Borrowers shall have any right to withdraw any of the funds held in the Letter
      of Credit Collateral Account, except as provided in Section 6.4(h).

     

    (e) The
      Borrowers agree that they will not (i) sell or otherwise dispose of any interest
      in the Letter of Credit Collateral or (ii) create or permit to exist any lien,
      security interest or other charge or encumbrance upon or with respect to any
      of
      the Letter of Credit Collateral, except for the security interest created by
      this Section 6.4.

     

    (f) If
      any
      Event of Default shall have occurred and be continuing:

     

    (i) The
      Administrative Agent may, in its sole discretion, without notice to the
      Borrowers except as required by law and at any time from time to time, charge,
      set off or otherwise apply all or any part of first,
      (x)
      amounts previously drawn on any Letter of Credit that have not been reimbursed
      by the Borrowers and (y) any Letter of Credit Usage described in clause (ii)
      of
      the definition thereof that are then due and payable and second,
      any
      other unpaid Obligations then due and payable, against the Letter of Credit
      Collateral Account or any part thereof, in such order as the Administrative
      Agent shall elect. The rights of the Administrative Agent under this Section
      6.4
      are in addition to any rights and remedies which any Lender may
      have.

     

    (ii) The
      Administrative Agent may also exercise, in its sole discretion, in respect
      of
      the Letter of Credit Collateral Account, in addition to the other rights and
      remedies provided herein or otherwise available to it, all the rights and
      remedies of a secured party upon default under the Uniform Commercial Code
      in
      effect in the State of New York at that time.

     

    (g) The
      Administrative Agent shall be deemed to have exercised reasonable care in the
      custody and preservation of the Letter of Credit Collateral if the Letter of
      Credit Collateral is accorded treatment substantially equal to that which the
      Administrative Agent accords its own property, it being understood that,
      assuming such treatment, the Administrative Agent shall not have any
      responsibility or liability with respect thereto.

     

    (h) At
      such
      time as all Events of Default have been cured or waived in writing, all amounts
      remaining in the Letter of Credit Collateral Account shall be promptly returned
      to the Borrowers upon the written request of the Borrower. Absent such cure
      or
      written waiver, any surplus of the funds held in the Letter of Credit Collateral
      Account and remaining after payment in full of all of the Obligations of the
      Borrowers hereunder and under any other Loan Document after the Maturity Date
      shall be paid to the Borrowers or to whomsoever may be lawfully entitled to
      receive such surplus.

     

    ARTICLE
      VII

     

    THE
      AGENTS

     

    Section
      7.1 Appointment
      and Authorization.
      Each
      Lender irrevocably appoints and authorizes the Administrative Agent to take
      such
      action as agent on its behalf and to exercise such
      powers under this Agreement and the other Loan Documents as are delegated to
      the
      Administrative Agent by the terms hereof or thereof, together with all such
      powers as are reasonably incidental thereto.

     

    
      
        
        

      

      
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    Section
      7.2 Agency
      and Affiliates. KeyBank
      and Syndication Agent shall have the same rights and powers under this Agreement
      as any other Lender and may exercise or refrain from exercising the same as
      though it were not the Administrative Agent, and KeyBank and its affiliates
      may
      accept deposits
      from, lend money to, and generally engage in any kind of business with any
      Borrower or
      any
      Subsidiary or affiliate of any Borrower as if it were not the Administrative
      Agent hereunder, and the term “Lender” and “Lenders” shall include KeyBank in
      its individual capacity.
      Syndication Agent is an agent hereunder in title only and such designation
      shall
      impose no obligations on it.

     

    Section
      7.3 Action
      by Administrative Agent.
      The
      obligations of the Administrative Agent hereunder are only those expressly
      set
      forth herein. Without limiting the generality
      of the foregoing, the Administrative Agent shall not be required to take any
      action with respect to any Default or Event of Default, except as expressly
      provided in Article VI.

     

    Section
      7.4 Consultation
      with Experts.
      The
      Administrative Agent may consult with legal counsel, independent public
      accountants and other
      independent experts selected by it and shall not be liable for any action taken
      or omitted to be taken by it in good faith in accordance with the advice of
      such
      counsel, accountants or experts.

     

    Section
      7.5 Liability
      of Administrative Agent.
      Neither
      the Administrative Agent nor any of its Affiliates nor any of their respective
      directors, officers, agents or employees shall be liable for any action taken
      or
      not taken by it in connection herewith (i) with the consent or
      at the
      request of the Required Lenders or (ii) in the absence of its own gross
      negligence or willful misconduct. Neither the Administrative Agent nor any
      of
      its directors, officers, agents or employees shall be responsible for or have
      any duty to ascertain, inquire into or verify (i) any statement,
      warranty or representation made in connection with this Agreement or any
      Borrowing hereunder; (ii) the performance or observance of any of the covenants
      or agreements of the Borrowers; (iii) the satisfaction of any condition
      specified in Article III, except receipt of items required
      to be delivered to the Administrative Agent; or (iv) the validity, effectiveness
      or genuineness
      of this Agreement, the
      other
      Loan Documents or any other instrument or writing furnished in connection
      herewith. The Administrative Agent shall not incur any liability by acting
      in
      reliance upon any notice, consent, certificate, statement, or other writing
      (which may be a
      bank
      wire, telex or similar writing) believed by it to be genuine or to be signed
      by
      the proper party or parties.

     

    Section
      7.6 Indemnification.
      Each
      Lender shall, ratably in accordance with its Commitment, indemnify the
      Administrative Agent and its affiliates and their respective directors,
      officers, agents and employees (to the extent not reimbursed by the Borrowers)
      against any cost, expense (including counsel fees and disbursements), claim,
      demand, action, loss or liability
      (except such as result from such indemnitee’s gross negligence or willful
      misconduct) that such indemnitee may suffer or incur in connection with this
      Agreement, the other Loan Documents
      or any action taken or omitted by such indemnitee hereunder. In the event that
      the Administrative Agent shall, subsequent to its receipt of indemnification
      payment(s) from Lenders in accordance with this section, recoup any amount
      from
      the Borrowers, or any other party liable therefor in connection with such
      indemnification, the Administrative Agent shall promptly reimburse
      the Lenders which previously made the payment(s) pro
      rata,
      based
      upon the actual amounts which were theretofore paid by each Lender.

     

    
      
        
        

      

      
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    Section
      7.7 Credit
      Decision.
      Each
      Lender acknowledges that (i) it has, independently and without reliance upon
      the
      Administrative Agent or any other Lender, and based on such documents and
      information as it has deemed appropriate, made its own credit analysis
and
      decision to enter into this Agreement, and (ii) it has conducted its own
      independent investigation
      of the financial condition, creditworthiness, affairs and status of NorthStar
      and the
      Consolidated Subsidiaries and that it has not relied on any materials or
      information furnished to it by the Administrative Agent, the Arranger or any
      of
      their respective Affiliates which, if so furnished, is hereby acknowledged
      by
      each Lender as having been furnished without representation
      or warranty of any kind. Each Lender also acknowledges that it will,
      independently and without reliance upon the Administrative Agent or any other
      Lender, and based on such documents
      and information as it shall deem appropriate at the time, continue to make
      its
      own credit decisions in taking or not taking any action under this
      Agreement.

     

    Section
      7.8 Successor
      Administrative Agent.
      The
      Administrative Agent may resign at any time by giving notice thereof to the
      Lenders and the Borrowers and the Administrative
      Agent shall resign in the event its Commitment is reduced to zero. Upon any
      such
      resignation, the Required Lenders shall have the right to appoint a successor
      Administrative Agent, which successor Administrative Agent shall, provided
      no
      Event of Default has occurred and
      is
      then continuing, be subject to Borrowers’ approval, which approval shall not be
      unreasonably withheld, conditioned or delayed. If no successor Administrative
      Agent shall have been
      so
      appointed by the Required Lenders and approved by the Borrowers, and shall
      have
accepted
      such appointment, within thirty (30) days after the retiring Administrative
      Agent gives notice of resignation, then the retiring Administrative Agent may,
      on behalf of the Lenders, appoint
      a
      successor Administrative Agent, which shall be the Administrative Agent who
      shall act until
      the
      Required Lenders shall appoint a Administrative Agent.
      Upon the acceptance of its appointment as the Administrative Agent hereunder
      by
      a successor Administrative Agent, such successor Administrative Agent shall
      thereupon succeed to and become vested with all the rights and duties of the
      retiring Administrative Agent, and the retiring Administrative Agent shall
      be
      discharged from its duties and obligations hereunder. After any retiring
      Administrative Agent’s resignation
      hereunder,
      the provisions of this Article shall inure to its benefit as to any actions
      taken or omitted to be taken by it while it was the Administrative
      Agent.

     

    Section
      7.9 Receipt
      of Notices.
      Except
      as otherwise expressly provided herein, all material notices, reports and
      information received by the Administrative Agent with respect to the Borrowers
      and not otherwise delivered to the Lenders by the Borrowers, shall be delivered
      to the Lenders within ten (10) Domestic Business Days of the Administrative
      Agent’s receipt thereof.

     

    ARTICLE
      VIII

     

    CHANGE
      IN CIRCUMSTANCES

     

    Section
      8.1 Basis
      for Determining Interest Rate Inadequate or Unfair.
      If on
      or prior to the first day of any Interest Period for any LIBOR
      Borrowing:

     

    
      
        
        

      

      
        -69-

        
          

        

      

      
        
        

      

    

    (a) the
      Administrative Agent is advised that deposits in dollars (in the applicable
      amounts) are not being offered in the relevant market for such Interest Period,
      or

     

    (b) Lenders
      having fifty percent (50%) or more of the aggregate principal amount of the
      affected Loans advise the Administrative Agent that the Adjusted London
      Interbank Offered Rate, as determined by the Administrative Agent, will not
      adequately and fairly reflect the cost to such Lenders of funding their LIBOR
      Loans for such Interest Period, the Administrative Agent shall forthwith give
      notice thereof to the Borrowers and the Lenders,

     

    whereupon
      until the Administrative Agent notifies the Borrowers that the circumstances
      giving rise to such results set forth in Section 8.1(a) or (b) above no longer
      exist, (i) the obligations of the Lenders to make LIBOR Loans or to continue
      or
      convert outstanding Loans as or into LIBOR Loans shall be suspended and (ii)
      each outstanding LIBOR Loan shall be converted into a Alternate Base Rate Loan
      on the last day of the then current Interest Period applicable thereto. Unless
      the Borrowers notify the Administrative Agent at least two (2) Domestic Business
      Days before the date of any LIBOR Borrowing for which a Notice of Borrowing
      has
      previously been given that it elects not to borrow on such date, such Borrowing
      shall be an Alternate Base Rate Borrowing. 

     

    Section
      8.2 Illegality.
      If, on
      or after the date of this Agreement, the adoption of any applicable law, rule
      or
      regulation, or any change in any applicable law, rule or regulation,
or
      any
      change in the interpretation or administration thereof by any governmental
      authority, central bank or comparable agency charged with the interpretation
      or
      administration thereof, or compliance by any Lender (or its LIBOR Lending
      Office) with any request or directive (whether or not having the force of law)
      of any such authority, central bank or comparable agency shall make it unlawful
      or impossible for any Lender (or its LIBOR Lending Office) to make,
      maintain or fund its LIBOR Loans or to issue any Letter of Credit as a Fronting
      Lender or
      to
      participate in any Letter of Credit issued by a Fronting Lender, the
      Administrative Agent shall forthwith give notice thereof to the other Lenders
      and the Borrowers, whereupon until such Lender
      notifies the Borrowers and the Administrative Agent that the circumstances
      giving rise to such
      suspension no longer exist, the obligation of such Lender to make or convert
      LIBOR Loans
      or
      to issue Letters of Credit shall be suspended. With respect to LIBOR Loans,
      before giving any notice to the Administrative Agent pursuant to this Section,
      such Lender shall designate a different LIBOR Lending Office if such designation
      will avoid the need for giving such notice and will not, in the judgment of
      such
      Lender, be otherwise disadvantageous to such Lender. If such Lender shall
      determine that it may not lawfully continue to maintain and fund any
      of
      its outstanding LIBOR Loans to maturity and shall so specify in such notice,
      the
      Borrowers shall be deemed to have delivered a Notice of Interest Rate Election
      and such LIBOR Loan shall be converted as of such date to a Alternate Base
      Rate
      Loan (without payment of any amounts that Borrowers would otherwise be obligated
      to pay pursuant to Section 2.13 hereof with respect to Loans converted pursuant
      to this Section 8.2) and, in the case of LIBOR Loans,
      in
      an equal principal amount from such Lender (on which interest and principal
      shall be
      payable contemporaneously with the related LIBOR Loans of the other Lenders),
      and such Lender shall make such a Alternate Base Rate Loan.

     

    
      
        
        

      

      
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    If
      at any
      time, it shall be unlawful or impossible for any Lender to make, maintain or
      fund its LIBOR Loans, the Borrowers shall have the right, upon five (5) Domestic
      Business Day’s notice to the Administrative Agent, to either (x) cause a bank,
      reasonably acceptable to the Administrative Agent, to offer to purchase the
      Commitments of such Lender for an amount equal to such Lender’s outstanding
      Loans, together with all fees, accrued interest and other amounts payable to
      such Lender and to become a Lender hereunder, which offer such Lender is hereby
      required to accept, or (y) to repay in full all Loans then outstanding of such
      Lender, together with interest and all other amounts due thereon, upon which
      event, such Lender’s Commitments shall be deemed to be cancelled pursuant to
      Section 2.11(c). 

     

    Section
      8.3 Increased
      Cost and Reduced Return.

     

    (a) If
      on or
      after the date hereof the adoption of any applicable law, rule or regulation,
      or
      any change in any applicable law, rule or regulation, or any change in the
      interpretation or administration thereof by any governmental authority, central
      bank or comparable agency charged with the interpretation or administration
      thereof, or compliance by any Lender (or its Applicable Lending Office) with
      any
      request or directive (whether or not having the force of law) of any such
      authority, central bank or comparable agency shall impose, modify or deem
      applicable any reserve (including, without limitation, any such requirement
      imposed by the Board of Governors of the Federal Reserve System, but excluding
      with respect to any LIBOR Loan any such requirement with respect to which such
      Lender is entitled to compensation during the relevant Interest Period under
      Section 2.7), special deposit, insurance assessment or similar requirement
      against assets of, deposits with or for the account of, or credit extended
      by,
      any Lender (or its Applicable Lending Office) or shall impose on any Lender
      (or
      its Applicable Lending Office) or on the United States market for certificates
      of deposit or the London interbank market any other condition affecting its
      LIBOR Loans, its Note or its obligation to make such Loans and the result of
      any
      of the foregoing is to increase the cost to such Lender (or its Applicable
      Lending Office) of making or maintaining any such Loan, or to reduce the amount
      of any sum received or receivable by such Lender (or its Applicable Lending
      Office) under this Agreement or under its Note with respect thereto, by an
      amount deemed by such Lender to be material, then, within fifteen (15) days
      after demand by such Lender (with a copy to the Administrative Agent), the
      Borrowers shall pay to such Lender such additional amount or amounts as will
      compensate such Lender for such increased cost or reduction.

     

    (b) If
      any
      Lender shall have reasonably determined that, after the date hereof, the
      adoption of any applicable law, rule or regulation regarding capital adequacy,
      or any change in any such law, rule or regulation, or any change in the
      interpretation or administration thereof by any governmental authority, central
      bank or comparable agency charged with the interpretation or administration
      thereof, or any request or directive regarding capital adequacy (whether or
      not
      having the force of law) of any such authority, central bank or comparable
      agency, has or would have the effect of reducing the rate of return on capital
      of such Lender (or its Parent) as a consequence of such Lender’s obligations
      hereunder to a level below that which such Lender (or its Parent) could have
      achieved but for such adoption, change, request or directive (taking into
      consideration its policies with respect to capital adequacy) by an amount
      reasonably deemed by such Lender to be material, then from time to time, within
      fifteen (15) days after demand by such Lender (with a copy to the Administrative
      Agent), the Borrowers shall pay to such Lender such additional amount or amounts
      as will compensate such Lender (or its Parent) for such reduction.

     

    
      
        
        

      

      
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    (c) Each
      Lender will promptly notify the Borrowers and the Administrative Agent of any
      event of which it has knowledge, occurring after the date hereof, which will
      entitle such Lender to compensation pursuant to this Section and will designate
      a different Applicable Lending Office if such designation will avoid the need
      for, or reduce the amount of, such compensation and will not, in the reasonable
      judgment of such Lender, be otherwise disadvantageous to such Lender. A
      certificate of any Lender claiming compensation under this Section and setting
      forth the additional amount or amounts to be paid to it hereunder shall be
      conclusive in the absence of demonstrable error. In determining such amount,
      such Lender may use any reasonable averaging and attribution
      methods.

     

    (d) If
      at any
      time, any Lender shall be owed amounts pursuant to this Section 8.3, unless
      such
      Lender shall elect to waive the right to be paid the same, the Borrowers shall
      have the right, upon five (5) Domestic Business Day’s notice to the
      Administrative Agent to either (x) cause a bank, reasonably acceptable to the
      Administrative Agent, to offer to purchase the Commitments of such Lender for
      an
      amount equal to such Lender’s outstanding Loans, together with all fees, accrued
      interest and other amounts payable to such Lender, and to become a Lender
      hereunder, which offer such Lender is hereby required to accept, or (y) to
      repay
      in full all Loans then outstanding of such Lender, together with all fees,
      accrued interest and other amounts payable to such Lender, upon which event,
      such Lender’s Commitment shall be deemed to be cancelled pursuant to Section
      2.11(c).

     

    Section
      8.4 Taxes.

     

    (a) Any
      and
      all payments by the Borrowers under any Loan Document shall be made free and
      clear of and without deduction for any and all present or future taxes, duties,
      levies, imposts, deductions, charges or withholdings, and all liabilities with
      respect thereto, excluding, in the case of each Lender, the Fronting Lender
      and
      the Administrative Agent, taxes imposed on its income, and franchise or similar
      taxes imposed on it, by (i) any jurisdiction (or political subdivision thereof)
      of which the Administrative Agent, the Fronting Lender or such Lender, as the
      case may be, is a citizen or resident or in which such Person has an Applicable
      Lending Office, (ii) the jurisdiction (or any political subdivision thereof)
      in
      which the Administrative Agent, the Fronting Lender or such Lender is organized,
      or (iii) any jurisdiction (or political subdivision thereof) in which such
      Lender, the Fronting Lender or the Administrative Agent is presently doing
      business which taxes are imposed solely as a result of doing business in such
      jurisdiction (all such non excluded taxes, duties, levies, imposts, deductions,
      charges, withholdings and liabilities being hereinafter referred to as
“Taxes”).
      If
      the Borrowers shall be required by law to deduct any Taxes from or in respect
      of
      any sum payable under any Loan Document to the Lenders, the Fronting Lender
      or
      the Administrative Agent (i) the sum payable shall be increased by the amount
      necessary so that after making all required deductions (including deductions
      applicable to additional sums payable under this Section 8.4) such Lender,
      the
      Fronting Lender or the Administrative Agent (as the case may be) shall receive
      an amount equal to the sum it would have received had no such deductions been
      made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers
      shall pay the full amount deducted to the relevant taxing authority or other
      governmental authority in accordance with applicable law.

     

    
      
        
        

      

      
        -72-

        
          

        

      

      
        
        

      

    

    (b) In
      addition, the Borrowers agree to pay any stamp or documentary taxes and any
      other excise or property taxes, or charges or similar levies, in each case
      to
      the extent imposed by the United States or any state (or political subdivision
      thereof) which arise from any payment made in the United States hereunder or
      under any Note or Letter of Credit or participation therein or from the
      execution or delivery of, or otherwise with respect to, this Agreement or any
      Note (hereinafter referred to as “Other
      Taxes”).

     

    (c) The
      Borrowers agree to indemnify each Lender, and the Administrative Agent for
      the
      full amount of Taxes or Other Taxes (including, without limitation, any Taxes
      or
      Other Taxes imposed or asserted by any jurisdiction on amounts payable under
      this Section 8.4) paid by such Lender or the Administrative Agent (as the case
      may be) and any liability (including penalties, interest and expenses) arising
      therefrom or with respect thereto. This indemnification shall be made within
      fifteen (15) days from the date such Lender or the Administrative Agent (as
      the
      case may be) makes demand therefor.

     

    (d) Each
      Lender organized under the laws of a jurisdiction outside the United States,
      on
      or prior to the date of its execution and delivery of this Agreement in the
      case
      of each Lender listed on the signature pages hereof and on or prior to the
      date
      on which it becomes a Lender in the case of each other Lender, and from time
      to
      time thereafter if requested in writing by the Borrowers (but only so long
      as
      such Lender remains eligible to do so), shall provide the Borrowers with
      Internal Revenue Service form W-8ECI or W-8BEN, as appropriate, or any successor
      form prescribed by the Internal Revenue Service, certifying that such Lender
      is
      entitled to benefits under an income tax treaty to which the United States
      is a
      party which reduces the rate of withholding tax on payments of interest or
      certifying that the income receivable pursuant to this Agreement is effectively
      connected with the conduct of a trade or business in the United States. If
      the
      form provided by a Lender at the time such Lender first becomes a party to
      this
      Agreement indicates a United States interest withholding tax rate in excess
      of
      zero, withholding tax at such rate shall be considered excluded from “Taxes” as
      defined in Section 8.4(a).

     

    (e) For
      any
      period with respect to which a Lender has failed to provide the Borrowers with
      the appropriate form pursuant to Section 8.4(d) (unless such failure is due
      to a
      change in treaty, law or regulation occurring subsequent to the date on which
      a
      form originally was required to be provided), such Lender shall not be entitled
      to indemnification under Section 8.4(a) with respect to Taxes imposed by the
      United States; provided,
      however,
      that
      should a Lender, which is otherwise exempt from or subject to a reduced rate
      of
      withholding tax, become subject to Taxes because of its failure to deliver
      a
      form required hereunder, the Borrowers shall take such steps as such Lender
      shall reasonably request to assist such Lender to recover such
      Taxes.

     

    (f) If
      the
      Borrowers are required to pay additional amounts to or for the account of any
      Lender pursuant to this Section 8.4, then such Lender will change the
      jurisdiction of its Applicable Lending Office so as to eliminate or reduce
      any
      such additional payment which may thereafter accrue if such change, in the
      judgment of such Lender, is not otherwise disadvantageous to such
      Lender.

     

    
      
        
        

      

      
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    (g) (i)
      if at
      any time, any Lender shall reasonably expect to be owed amounts pursuant to
      this
      Section 8.4, such Lender shall give the Administrative Agent and the Borrowers
      notice thereof (with no liability for failing to do so) as soon as reasonably
      practicable upon determining that it is reasonably likely to do so (subject
      to
      limitations on such disclosure imposed by applicable law or with the advice
      of
      counsel), and (ii) if any Lender at any time shall be owed amounts pursuant
      to
      this Section 8.4, unless such Lender shall elect to waive the right to be paid
      the same, the Borrowers shall have the right, upon five (5) Domestic Business
      Day’s notice to the Administrative Agent to either (x) cause a bank, reasonably
      acceptable to the Administrative Agent, to offer to purchase the Commitments
      of
      such Lender for an amount equal to such Lender’s outstanding Loans, together
      with all fees, accrued interest and other amounts payable to such Lender, and
      to
      become a Lender hereunder, which offer such Lender is hereby required to accept,
      or (y) to repay in full all Loans then outstanding of such Lender, together
      with
      interest and all other amounts due thereon, upon which event, such Lender’s
      Commitment shall be deemed to be cancelled pursuant to Section
      2.11(c).

     

    Section
      8.5 Alternate
      Base Rate Loans Substituted for Affected LIBOR Loans.
      If (i)
      the obligation of any Lender to make, or convert outstanding Loans to, LIBOR
      Loans
      has
      been suspended pursuant to Section 8.2 or (ii) any Lender has demanded
      compensation under
      Section 8.3 or 8.4 with respect to its LIBOR Loans and the Borrowers shall,
      by
      at least five (5)
      LIBOR
      Business Days’ prior notice to such Lender through the Administrative Agent,
      have elected that the provisions of this Section shall apply to such Lender,
      then, unless and until
      such Lender notifies the Borrowers that the circumstances giving rise to such
      suspension or demand for compensation no longer exist:

     

    (a) Borrowers
      shall be deemed to have delivered a Notice of Interest Rate Election with
      respect to such affected LIBOR Loans and thereafter all Loans which would
      otherwise be made (or continued as or converted into, as the case may be) by
      such Lender as LIBOR Loans shall be made instead as Alternate Base Rate Loans
      (on which interest and principal shall be payable contemporaneously with the
      related LIBOR Loans of the other Lenders); and

     

    (b) after
      each of its LIBOR Loans (as the case may be) has been repaid (or converted
      to a
      Alternate Base Rate Loan), all payments of principal which would otherwise
      be
      applied to repay such Loans shall be applied to repay its Alternate Base Rate
      Loans instead, and

     

    (c) Borrowers
      will not be required to make any payment which would otherwise be required
      by
      Section 2.13 with respect to such LIBOR Loans converted to Alternate Base Rate
      Loans pursuant to clause (a) above.

     

    ARTICLE
      IX

     

    MISCELLANEOUS

     

    Section
      9.1 Notices.
      All
      notices, requests and other communications to any party hereunder shall be
      in
      writing (including bank wire, telex, facsimile transmission followed
by
      telephonic confirmation or similar writing or e-mail with confirmation of
      receipt) and shall be given to such party: (x) in the case of the Borrowers,
      KeyBank (in its capacity as a Lender hereunder) and the Administrative Agent,
      at
      its address, telex number, facsimile number or e-mail address set forth on
      the
      signature pages hereof with a duplicate copy thereof, in the case
      of
      the Borrowers, to the Borrowers, at 527
      Madison Avenue, 16th
      Floor,
      New York, New York 10022, Attn: Chief Financial Officer and Controller, and
      with
      a duplicate copy, in the case of the Borrowers, to
      Paul,
      Hastings, Janofsky & Walker LLP, Attn: Robert J. Grados, Esq., (y) in the
      case of any Lender, at its address, telex number, facsimile number
      or
      e-mail address set forth in its Administrative
      Questionnaire
      or (z) in the case of any party, such other address, telex number, facsimile
      number
      or
      e-mail address as such party may hereafter specify for the purpose by notice
      to
      the Administrative Agent and the Borrowers. Each such notice, request or other
      communication shall be effective (i) if given by telex or facsimile
      transmission, when such telex or facsimile is transmitted to the telex number
      or
      facsimile number specified in this
      Section and the appropriate answerback or facsimile confirmation is received,
      (ii) if given by e-mail, when such e-mail is transmitted to the e-mail address
      specified in this Section and the appropriate receipt acknowledgement is
      received, (iii) if given by a nationally recognized overnight carrier, the
      next
      Domestic Business Day
      after
      such communication is deposited with such carrier with postage prepaid,
or
      (iv)
      if given by any other means,
      when delivered at the address specified in this Section; provided
      that
      notices to the Administrative Agent under Article II or Article VIII shall
      not
      be effective until received.

     

    
      
        
        

      

      
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    Section
      9.2 No
      Waivers.
      No
      failure or delay by the Administrative Agent or any Lender in exercising any
      right, power or privilege hereunder or under any Note shall operate as a waiver
      thereof nor shall any single or partial exercise thereof preclude any other
      or
      further exercise
      thereof or the exercise of any other right, power or privilege. The rights
      and
      remedies herein provided shall be cumulative and not exclusive of any rights
      or
      remedies provided by law.

     

    Section
      9.3 Expenses;
      Indemnification.

     

    (a) The
      Borrowers shall pay (i) all reasonable out-of-pocket costs and expenses of
      the
      Administrative Agent (including reasonable fees and disbursements of counsel
      to
      the Administrative Agent in connection with the preparation of this Agreement,
      the Loan Documents and the documents and instruments referred to therein, or
      any
      waiver or consent hereunder or any amendment hereof or any Default or alleged
      Default hereunder) and (ii) if an Event of Default occurs, all reasonable
      out-of-pocket expenses incurred by the Administrative Agent and each Lender,
      including reasonable, actual fees and disbursements of counsel for the
      Administrative Agent and each of the Lenders in connection with the enforcement
      of the Loan Documents and the instruments referred to therein and such Event
      of
      Default and collection, bankruptcy, insolvency and other enforcement proceedings
      resulting therefrom.

     

    (b) The
      Borrowers agree to indemnify the Administrative Agent and each Lender, their
      respective affiliates and the respective directors, officers, agents and
      employees of the foregoing (each an “Indemnitee”)
      and
      hold each Indemnitee harmless from and against any and all actual liabilities,
      losses, damages, costs and expenses of any kind, including, without limitation,
      the reasonable fees and disbursements of counsel, which may be incurred by
      such
      Indemnitee in connection with any investigative, administrative or judicial
      proceeding (whether or not such Indemnitee shall be designated a party thereto)
      that may at any time (including, without limitation, at any time following
      the
      payment of the Obligations) be imposed on, asserted against or incurred by
      any
      Indemnitee but excluding those liabilities, losses, damages, costs and expenses
      incurred solely by reason of the gross negligence or willful misconduct of
      any
      Indemnitee as finally determined by a court of competent jurisdiction, as a
      result of, or arising out of, or in any way related to or by reason of, (i)
      any
      of the transactions contemplated by the Loan Documents or the execution,
      delivery or performance of any Loan Document, (ii) any violation by the
      Borrowers or the Environmental Affiliates of any applicable Environmental Law,
      (iii) any Environmental Claim arising out of the management, use, control,
      ownership or operation of property or assets by the Borrowers or any of the
      Environmental Affiliates, including, without limitation, all on-site and
      off-site activities involving Materials of Environmental Concern, (iv) the
      breach of any environmental representation or warranty set forth herein, (v)
      the
      grant to the Administrative Agent and the Lenders of any Lien in any property
      or
      assets of the Borrowers or any stock or other equity interest in any Borrower,
      and (vi) the exercise by the Administrative Agent and the Lenders of their
      rights and remedies (including, without limitation, foreclosure) under any
      agreements creating any such Lien. The Borrowers’ obligations under this Section
      shall survive the termination of this Agreement and the payment of the
      Obligations.

     

    
      
        
        

      

      
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    Section
      9.4 Sharing
      of Set-Offs.
      In
      addition to any rights now or hereafter granted under applicable law or
      otherwise, and not by way of limitation of any such rights, upon the occurrence
      and during the continuance of any Event of Default, each Lender is hereby
      authorized at any time or from time to time, without presentment, demand,
      protest or other notice of any kind to the Borrowers or to any other Person,
      any
      such notice being hereby expressly waived, but subject to the prior consent
      of
      the Administrative Agent (if the taking of such action could limit or impair
      the
      rights and remedies of the Administrative Agent or the Lenders under any Loan
      Document) and to the terms and provisions
      of this Agreement and the other Loan Documents, to set off and to appropriate
      and
      apply
      any and all deposits (general or special, time or demand, provisional or final)
      and any other indebtedness in the nature of an account at any time held with
      such Lender or owing by such Lender (including, without limitation, by branches
      and
      agencies of such Lender wherever located) to or for the credit or the account
      of
      the Borrowers
      against and on account of the Obligations of the Borrowers then due and payable
      to such Lender under
      this Agreement or under any of the other Loan Documents, including, without
      limitation, all
      interests in Obligations purchased by such Lender; provided,
      however,
      notwithstanding the foregoing or anything else in this Agreement or any other
      Loan Document to the contrary, neither any of the Lenders nor the Administrative
      Agent shall have the right of set off with respect to
      any
      account, deposits or indebtedness to the extent that such account, deposits
      or
      indebtedness (a) are not the exclusive property of NorthStar or a Consolidated
      Subsidiary, (b) any Person (other than the Person with which such account has
      been established) which is not Affiliated with NorthStar, NorthStar OP or NRFC
      Sub-REIT has rights therein or (c) constitutes collateral for a secured
      financing of NorthStar or a Consolidated Party and are subject to a “control”
agreement relating to such facility. Each Lender agrees that if it shall, by
      exercising any right of set-off or counterclaim or otherwise, receive
      payment of a proportion of the aggregate amount of principal and interest due
      with respect to any Note held by it or Letter of
      Credit
      issued by it (in its capacity as a Fronting Lender) or participation therein
      which is greater than the proportion received by any other Lender in respect
      of
      the aggregate amount of principal and interest due with respect to any Note
      held
      by such other Lender or Letter of Credit issued by such other Lender (in its
      capacity as a Fronting
      Lender) or participated in by such other Lender, the Lender receiving such
      proportionately greater payment shall purchase such participations in the
Notes
      held by the other Lenders, and such other adjustments
      shall be made, as may be required so that all such payments of principal
and
      interest with respect to the Notes held by the Lenders shall be shared by the
      Lenders pro rata; provided
      that
      nothing in this Section shall impair the right of any Lender to exercise any
      right of set-off or counterclaim it may have to any deposits not received
      in connection with the Loans and to apply the amount subject to such exercise
      to
      the payment of indebtedness of the Borrowers other than its indebtedness under
      the Notes. The Borrowers agree, to the fullest extent they may effectively
      do
      so
      under applicable law, that any holder
      of
      a participation in a Note,
      whether or not acquired pursuant to the foregoing arrangements, may exercise
      rights of set-off or counterclaim and other rights with respect to such
participation
      as fully as if such holder of a participation were a direct creditor of the
      Borrowers in the amount of such participation. Notwithstanding anything to
      the
      contrary contained herein, any Lender may, by separate agreement with the
      Borrowers, waive its right to set off contained herein
      or
      granted by law and any such written waiver shall be effective against such
      Lender under this Section 9.4.

     

    
      
        
        

      

      
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    Section
      9.5 Amendments
      and Waivers. Any
      provision of this Agreement or the Notes or other Loan Documents may be amended
      or waived if, but only if, such amendment or
      waiver
      is in writing and is signed by the Borrowers and the Required Lenders (and,
      if
      the rights or
      duties
      of the Administrative Agent are affected thereby, by the Administrative Agent)
      except that, to the extent provided for in this Agreement, certain amendments
      and/or waivers may be consented to by the Borrowers and the Administrative
      Agent
      without the necessity of obtaining the consent of the Required Lenders;
provided
      that,
      except to reflect or implement matters otherwise specifically provided for
      in
      this Agreement, no such amendment or waiver with respect to this
      Agreement, the Notes or any other
      Loan Documents shall, unless signed by the Lenders affected thereby, (i)
      increase or decrease the Commitment of any Lender or
      subject any Lender to any additional obligation, (ii) reduce the principal
      of or
      rate of interest on any
      Loan
      or any Fees hereunder, (iii) postpone the date fixed for any payment of
      principal of or interest on any Loan or any Fees hereunder or for any reduction
      or termination of any Commitment,
      (iv) change the percentage of the Commitments or of the aggregate unpaid
      principal amount of the Notes, or the number of Lenders, which shall be required
      for the Lenders or any of them to take any action under this Section or any
      other provision of
      this
      Agreement (including any amendment of the term “Required Lenders”), (v) modify
      the provisions of Section 9.15, (vi) permit Liens on the Borrowing Base Assets
      (other than Liens in favor of the Administrative Agent for the ratable benefit
      of the Lenders), (vii) modify the provisions of this Section 9.5, or (viii)
      release any Borrower or any Guarantor of its obligations under the Loan
      Documents except as expressly permitted hereunder. 

     

    Section
      9.6 Successors
      and Assigns.

     

    (a) The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns, except that
      the
      Borrowers may not assign or otherwise transfer any of their rights under this
      Agreement or the other Loan Documents without the prior written consent of
      all
      Lenders and the Administrative Agent. The Administrative Agent and the Lenders
      shall not assign their respective interests under this Agreement except as
      set
      forth in Section 7.8 (with respect to the Administrative Agent) and this Article
      IX (with respect to the Lenders).

     

    
      
        
        

      

      
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    (b) Any
      Lender may, with the prior written consent of the Administrative Agent and
      the
      Borrowers (which consent in each case shall not unreasonably be withheld,
      delayed or conditioned) at any time assign to one or more Eligible Assignees
      (each, an “Assignee”)
      all,
      or a portion of, its rights and obligations under this Agreement, its Note
      and
      the other Loan Documents, provided,
      however,
      (i) no
      such consent by the Borrowers shall be required (x) if a Default or Event of
      Default exists, or (y) in the case of an assignment to another Lender or to
      an
      Affiliate of another Lender, (ii) any partial assignment shall be in an amount
      at least equal to $5,000,000 and, after giving effect to such assignment, the
      assigning Lender (unless it has sold its entire remaining Commitment and
      outstanding Loans) holds a Commitment of at least $5,000,000, and (iii) such
      Assignee shall assume the assigned rights and obligations, pursuant to an
      Assignment and Assumption Agreement in substantially the form of Exhibit
      “B”
hereto,
      executed by such Assignee and such transferor Lender. Upon execution and
      delivery of an Assignment and Assumption Agreement and payment by such Assignee
      to such transferor Lender of an amount equal to the purchase price agreed
      between such transferor Lender and such Assignee, such Assignee shall be a
      Lender party to this Agreement and shall have all the rights and obligations
      of
      a Lender with a Commitment as set forth in the applicable Assignment and
      Assumption Agreement, and no further consent or action by any party shall be
      required and the transferor Lender shall be released from its obligations
      hereunder to a corresponding extent. Upon the consummation of any assignment
      pursuant to this subsection (b), the transferor Lender, the Administrative
      Agent
      and the Borrowers shall make appropriate arrangements so that, if required,
      a
      new Note is issued to the Assignee upon the return to the Borrowers of the
      old
      Note marked “cancelled”. In connection with any such assignment, the transferor
      Lender shall pay to the Administrative Agent an administrative fee for
      processing such assignment in the amount of $3,500. If the Assignee is not
      incorporated under the laws of the United States of America or a state thereof,
      it shall deliver to the Borrowers and the Administrative Agent certification
      as
      to exemption from deduction or withholding of any United States federal income
      taxes in accordance with Section 8.4. Any assignment made during the
      continuation of an Event of Default shall not be affected by any subsequent
      cure
      or waiver of such Event of Default.

     

    (c) Any
      Lender may at any time grant to one or more banks or other financial
      institutions (in each case, a “Participant”)
      participating interests in its Commitment or any or all of its Loans. In the
      event of any such grant by a Lender of a participating interest to a
      Participant, whether or not upon notice to the Borrowers and the Administrative
      Agent, such Lender shall remain responsible for the performance of its
      obligations hereunder, and the Borrowers and the Administrative Agent shall
      continue to deal solely and directly with such Lender in connection with such
      Lender’s rights and obligations under this Agreement. Any agreement pursuant to
      which any Lender may grant such a participating interest shall provide that
      such
      Lender shall retain the sole right and responsibility to enforce the obligations
      of the Borrowers hereunder including, without limitation, the right to approve
      any amendment, modification or waiver of any provision of this Agreement;
provided
      that
      such participation agreement may provide that such Lender will not agree to
      any
      modification, amendment or waiver of this Agreement described in clause (i),
      (ii), or (iii) of Section 9.5 without the consent of the Participant. The
      Borrowers agree that each Participant shall, to the extent provided in its
      participation agreement, be entitled to the benefits of Article VIII with
      respect to its participating interest. An assignment or other transfer which
      is
      not permitted by subsection (b), above, or (d), below, shall be given effect
      for
      purposes of this Agreement only to the extent of a participating interest
      granted in accordance with this subsection (c).

     

    (d) Any
      Lender may at any time assign all or any portion of its rights under this
      Agreement and its Note to a Federal Reserve Bank. No such assignment shall
      release the transferor Lender from its obligations hereunder.

     

    
      
        
        

      

      
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    (e) No
      Assignee, Participant or other transferee of any Lender’s rights shall be
      entitled to receive any greater payment under Section 8.3 or 8.4 than such
      Lender would have been entitled to receive with respect to the rights
      transferred, unless such transfer is made with the Borrowers’ prior written
      consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring
      such
      Lender to designate a different Applicable Lending Office under certain
      circumstances or at a time when the circumstances giving rise to such greater
      payment did not exist.

     

    Section
      9.7 Collateral.
      Each of
      the Lenders represents to the Administrative Agent and each of the other Lenders
      that it in good faith is not relying upon any “margin stock” (as defined
      in Regulation U) as collateral in the extension or maintenance of the credit
      provided for in this Agreement.

     

    Section
      9.8 Governing
      Law; Submission to Jurisdiction.

     

    (a) THIS
      AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
      OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED
      IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
      YORK,
      WITHOUT
      GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. 

     

    (b) Any
      legal
      action or proceeding with respect to this Agreement or any other Loan Document
      and any action for enforcement of any judgment in respect thereof shall be
      brought non-exclusively in the courts of the State of New York or of the United
      States of America for the Southern District of New York, and, by execution
      and
      delivery of this Agreement, the Borrowers hereby accept for themselves and
      in
      respect of their property, generally and unconditionally, the non-exclusive
      jurisdiction of the aforesaid courts and appellate courts. The Borrowers
      irrevocably consent to the service of process out of any of the aforementioned
      courts in any such action or proceeding by the hand delivery, or mailing of
      copies thereof by registered or certified mail, postage prepaid, to the
      Borrowers at their address set forth below. The Borrowers hereby irrevocably
      waive any objection which they may now or hereafter have to the laying of venue
      of any of the aforesaid actions or proceedings arising out of or in connection
      with this Agreement or any other Loan Document brought in the courts referred
      to
      above and hereby further irrevocably waive and agree not to plead or claim
      in
      any such court that any such action or proceeding brought in any such court
      has
      been brought in an inconvenient forum. Nothing herein shall affect the right
      of
      the Administrative Agent to serve process in any other manner permitted by
      law
      or to commence legal proceedings or otherwise proceed against the Borrowers
      in
      any other jurisdiction.

     

    Section
      9.9 Marshalling;
      Recapture.
      Neither
      of the Administrative Agent nor any Lender shall be under any obligation to
      marshal any assets in favor of the Borrowers or any other
      party or against or in payment of any or all of the Obligations. To the extent
      any Lender receives any payment by or on behalf of the Borrowers in connection
      with this Agreement, which payment or any part thereof is subsequently
      invalidated, declared to be fraudulent or preferential, set aside or
required
      to be repaid to the Borrowers or their estate, trustee, receiver, custodian
      or
      any other party under any bankruptcy law, state or federal law, common law
      or
      equitable cause, then to the extent of such payment or repayment, the Obligation
      or part thereof which
      has
      been paid, reduced or satisfied by the amount so repaid shall be reinstated
      by
      the amount
      so
      repaid and shall be included within the liabilities of the Borrowers to such
      Lender as of the date such initial payment, reduction or satisfaction
      occurred.

     

    
      
        
        

      

      
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    Section
      9.10 Counterparts;
      Integration; Effectiveness.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be an
      original, with the same effect as if
      the
      signatures thereto and hereto were upon the same instrument. This Agreement
      constitutes the entire agreement and understanding among the parties hereto
      and
      supersedes any and all prior agreements and understandings, oral or written,
      relating to the subject matter hereof. This Agreement shall
      become effective upon receipt by the Administrative Agent and the Borrowers
      of
      counterparts hereof signed by each of the parties hereto (or, in the case of
      any
      party as to which
      an
      executed counterpart shall not have been received, receipt by the Administrative
      Agent in form satisfactory to it of telegraphic, telex or other written
      confirmation from such party of execution of a counterpart hereof by such
      party).

     

    Section
      9.11 WAIVER
      OF JURY TRIAL.
      EACH OF
      THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
      WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT
      OF OR
      RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     

    Section
      9.12 Survival.
      All
      indemnities set forth herein shall survive the execution and delivery of this
      Agreement and the other Loan Documents and the making and repayment of the
      Loans
      hereunder.

     

    Section
      9.13 Domicile
      of Loans.
      Each
      Lender may transfer and carry its Loans at, to or for the account of any
      domestic or foreign branch office, subsidiary or affiliate of such
      Lender.

     

    Section
      9.14 Limitation
      of Liability.
      No
      claim may be made by the Borrowers or any other Person acting by or through
      Borrowers against the Administrative Agent or any Lender or the affiliates,
      directors, officers, employees, attorneys or agent of any of them for any
      consequential or punitive damages in respect of any claim for breach of contract
      or any other theory
      of
      liability arising out of or related to the transactions contemplated by this
      Agreement or by the other Loan Documents, or any act, omission or event
      occurring in connection therewith; and
      the
      Borrowers hereby waive, release and agree not to sue upon any claim for any
      such
      damages, whether or not accrued and whether or not known or suspected to exist
      in its favor.

     

    Section
      9.15 Recourse
      Obligation.
      This
      Agreement and the Obligations hereunder are fully recourse to the Borrowers.
      Notwithstanding the foregoing, no recourse under or upon any obligation,
      covenant, or agreement contained in this Agreement shall be had against
any
      officer, director, shareholder or employee of the Borrowers except for damages,
      losses, costs and expenses incurred by any Lender or the Administrative Agent
      with respect to any fraud or misappropriation of funds on the part of such
      officer, director, shareholder or employee.

     

    Section
      9.16 Confidentiality.
      The
      Administrative Agent and each Lender (each, a “Lending
      Party”)
      agrees
      to keep confidential any information furnished or made available to it
      by the
      Borrowers pursuant to this Agreement; provided
      that
      nothing herein shall prevent any Lending Party from disclosing such information
      (a) to any other Lending Party, or any officer, director, employee, agent,
      or
      advisor of any Lending Party, (b) to
      any
      other Person
      if
      reasonably incidental to the administration
      of the Facility provided herein such as an attorney or accountant for a Lending
      Party, provided such Person agrees to maintain the confidentiality of such
      information and uses same only in connection with the administration or
      enforcement of the Facility, (c) as
      required by any law, rule, or regulation, (d) upon the order of any court or
      administrative agency, (e) upon the request or demand of any regulatory agency
      or authority, (f) that is or becomes available to the public or that is or
      becomes available to any Lending Party other than as
      a
      result of a disclosure by any Lending Party prohibited by this Agreement, (g)
      in
      connection with any litigation to which such Lending Party or any of its
affiliates
      may be a party, (h) to the extent necessary
      in connection with the exercise of any remedy
      under this Agreement or any other Loan
      Document, and (i) subject to provisions substantially
      similar to those contained in this Section, to any actual or proposed
      participant or assignee.
      The
      Borrowers may disclose information concerning or relating to this Facility
      as
      required by any law, rule or regulation, upon the order of any court or
      administrative agency, or based upon the reasonable advice of counsel that
      such
      disclosure should be made for legal purposes.

     

    
      
        
        

      

      
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    Section
      9.17 Legal
      Rate.
      Notwithstanding anything in this Agreement or any Loan Document to the contrary,
      if at any time the interest rate applicable to the Notes, together
      with all fees and charges which are treated as interest under applicable law
      (collectively, the
      “Charges”),
      as
      provided for in this Agreement or in any other document executed in connection
      herewith, or otherwise contracted for, charged, received, taken or reserved
      by
      the Administrative
      Agent, on behalf of the Lenders, shall exceed the maximum lawful rate (the
      “Legal
      Rate”)
      which
      may be contracted for, charged, taken, received or reserved by the
      Administrative Agent, on behalf of the Lenders in accordance with applicable
      law, the rate of interest payable under
      such Notes, together with all Charges payable, shall be limited to the Legal
      Rate and any interest
      or Charges not so charged, taken, received or reserved by Administrative Agent,
      on behalf
      of
      the Lenders at such time shall be spread, prorated or amortized over the term
      of
      such Notes to the fullest extent permitted by law.

     

    Section
      9.18 USA
      Patriot Act Notice.
      Each
      Lender that is subject to the Act (as hereinafter defined) and the
      Administrative Agent (for itself and not on behalf of any Lender) hereby
      notifies the Borrower that pursuant to the requirements of the USA Patriot
      Act
      (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"),
      it
      is required to obtain, verify and record information that identifies the
      Borrower, which information includes the name and address of the Borrower and
      other information that will allow such Lender or the Administrative Agent,
      as
      applicable, to identify the Borrower in accordance with the Act.

     

    [Remainder
      of page intentionally left blank]

     

     

    
      
        
        

      

      
        -81-

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
      Agreement to be duly executed and delivered as of the date first above
      written.

     

     

     

     

    
      	 	
              BORROWERS:

               

              NORTHSTAR
                REALTY FINANCE CORP., a Maryland corporation

               

              By: /s/
                Albert Tylis

              Name: Albert
                Tylis

              Title: General
                Counsel and Assistant Secretary

               

               

              NORTHSTAR
                REALTY FINANCE LIMITED PARTNERSHIP, a Delaware limited
                partnership

            
	 	 
	 	
              By:

            	
              NorthStar
                Realty Finance Corp., a Maryland corporation, its general
                partner

            
	 	 	 
	 	 	 
	 	 	
              By: /s/
                Albert Tylis

              Name: Albert
                Tylis

              Title: General
                Counsel and Assistant Secretary: 

            
	 	 
	 	
              NRFC
                SUB-REIT CORP., a Maryland corporation

               

              By: /s/
                Albert Tylis

              Name: Albert
                Tylis

              Title: General
                Counsel and Assistant Secretary 

               

               

              NS
                ADVISORS, LLC, a Delaware limited liability company

               

              By: /s/
                Albert Tylis

              Name: Albert
                Tylis

              Title: General
                Counsel and Assistant Secretary 

               

            


    

     

     

    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

      

    

    
 

    
      	 	 	KEYBANK
              NATIONAL ASSOCIATION, as Administrative Agent
	 	 	 
	 	 	 
	Facsimile
              Number: 617-385-6292	By:	
              /s/
                Kathleen M. Ahern

            
	
            	 	Name:	Kathleen M.
              Ahern
	Address:	225 Franklin
              Street,
              18th
              Floor	Title:	Senior
              Banker
	 	Boston, Massachusetts
              02110	 	 
	 	 	 	 
	Attn:	Ms. Kathleen
              Ahern	 	 
	 	 	 	 


    

    


    
      
        
        

      

      
        S-2

        
          

        

      

      
        
        

      

    


     

    Commitment

    $30,000,000.00

     

     

    
      	 	KEYBANK NATIONAL ASSOCIATION,
              as a
              Lender 
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Kathleen M. Ahern

            
	 	 	
              Name:
                 Kathleen
                M. Ahern

            
	 	 	Title:    Senior
              Banker


    

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    


     

    Commitment

    $30,000,000.00

     

     

    
      
        	 	BANK OF AMERICA, N.A.,
                as a Lender
                
	 	 	 
	 	 	 
	 	
                By:

              	
                
                  /s/
                    Michael W. Edwards

                

              
	 	 	
                Name:  Michael
                  W. Edwards

              
	 	 	Title:    Senior
                Vice President


      

       

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    Commitment

    $25,000,000.00

     

    
       

      
        
          	 	CITICORP NORTH AMERICA,
                  INC., as a
                  Lender 
	 	 	 
	 	 	 
	 	
                  By:

                	
                  
                    
                      /s/
                        Ricardo James

                    

                  

                
	 	 	
                  Name:  Ricardo
                    James

                
	 	 	Title:    Director


        

         

      

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    


     

    Commitment

    $15,000,000.00

     

    
      
         

        
          
            	 	WESTLB AG, NEW YORK
                    BRANCH, as a
                    Lender
	 	 	 
	 	 	 
	 	
                    By:

                  	
                    
                      
                        
                          /s/
                            Lillian Tung Lum

                        

                      

                    

                  
	 	 	
                    Name:  Lillian
                      Tung Lum

                  
	 	 	Title:    Executive
                    Director
	 	 	 
	 	 	 
	 	
                    By:

                  	
                    /s/
                      Pui Chow

                  
	 	 	
                    Name:  Pui
                      Chow

                  
	 	 	Title:    Director


          

           

        

      

    

     

     

    
      
        
        

      

      
        -6-