Document:

Exhibit 10.37

 

AMENDMENT
NO. 1 TO

MASTER REPURCHASE AGREEMENT

 

AMENDMENT NO. 1 TO MASTER
REPURCHASE AGREEMENT, dated as of October 7, 2008 (this “Amendment”),
by and among NRFC JP HOLDINGS, LLC (the “Seller”), and JPMORGAN CHASE
BANK, N.A. (the “Buyer”).  Capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Existing Repurchase Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Seller and the Buyer are parties to that certain Master Repurchase Agreement, dated August 8,
2007 (the “Existing Repurchase Agreement”); and

 

WHEREAS, the Seller and the Buyer have agreed to amend the Existing
Repurchase Agreement to remove the concept of the Facility Amount (while
maintaining the uncommitted nature of the facility), to modify the servicing
provisions and to eliminate the existing Advance Rates and Applicable Pricing Rates.

 

Therefore, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Seller and the Buyer hereby agree as follows:

 

SECTION 1.                            Amendments.

 

(a)                                  Article 2
of the Existing Repurchase Agreement is hereby modified by deleting the defined
terms “Asset Type Grouping” and “Facility Amount” in their entirety.

 

(b)                                 Article 2
of the Existing Repurchase Agreement is hereby modified by inserting the
following new defined term in its proper alphabetical order:

 

““Wachovia Credit Facility” shall mean that certain Credit
Agreement, dated as of November 6, 2007, by and among NRFC WA Holdings,
LLC, NRFC WA Holdings II, LLC, NRFC WA Holdings VII, LLC, NRFC WA Holdings X,
LLC, NRFC WA Holdings XII, LLC, NorthStar Realty Finance Corp., NorthStar
Realty Finance L.P. and Wachovia Bank, National Association, as Administrative
Agent.”

 

(c)                                  Article 2
of the Existing Repurchase Agreement is hereby modified by inserting the
following new defined term in its proper alphabetical order:

 

““Servicing Rights” shall mean rights of any Person, to
administer, service or subservice, the Purchased Assets or to possess related
Servicing Records.”

 

(d)                                 Article 2
of the Existing Repurchase Agreement is hereby modified by deleting the defined
term “Applicable Spread” in its entirety and inserting the following defined
term in lieu thereof:

 

 

““Applicable
Spread” shall mean, with respect to a Transaction
involving any Purchased Asset:

 

(i)                                     so
long as no Event of Default shall have occurred and be continuing, the
incremental per annum rate (expressed as a number of “basis points”, each basis
point being equivalent to 1/100 of 1%) as may be determined by Buyer in its
sole discretion, as determined by Buyer on each Pricing Rate Determination Date
in accordance with Article 3(d), and

 

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

 

(e)                                  Article 2 of the
Existing Repurchase Agreement is hereby modified by deleting the defined term “Maximum
Advance Rate” in its entirety and inserting the following defined term in lieu
thereof:

 

““Maximum Advance Rate”
shall mean, with respect to each Purchased Asset, the “Advance Rate” as
determined by Buyer in its sole and absolute discretion.”

 

(f)                                    Article 2 of
the Existing Repurchase Agreement is hereby modified by deleting the defined
term “Purchase Price” in its entirety and inserting the following defined term
in lieu thereof:

 

““Purchase Price”
shall mean, with respect to any Purchased Asset, the price at which such
Purchased Asset is transferred by a Seller to Buyer on the applicable Purchase
Date, adjusted after the Purchase Date as set forth below.  The Purchase Price as of the Purchase Date
for any Purchased Asset shall be an amount (expressed in dollars) equal to the
product obtained by multiplying (i) the Market Value of such Purchased
Asset (or the par amount of such Purchased Asset, if lower than Market Value)
by (ii) the “Advance Rate” for such Purchased Asset, as determined by
Buyer in its sole and absolute discretion. 
The Purchase Price of any Purchased Asset shall be (x) increased by
any Future Funding Amounts disbursed by Buyer to Seller or the related borrower
with respect to such Purchased Asset and (y) decreased by (i) the
portion of any Principal Payments on such Purchased Asset that are applied
pursuant to Article 5 hereof to reduce such Purchase Price and (ii) any
other amounts paid to Buyer by Seller to reduce such Purchase Price.”

 

(g)                                 Article 3
of the Existing Repurchase Agreement is hereby modified by deleting the
existing title heading in its entirety and inserting the following title
heading in lieu thereof:

 

“ARTICLE 3.

INITIATION; CONFIRMATION;
TERMINATION; FEES”

 

(h)                                 Article 3
of the Existing Repurchase Agreement is hereby modified by deleting the
existing Article 3(a)(xiii) and inserting the following paragraph in lieu
thereof:

 

2

 

“Buyer shall have received payment from Seller, as consideration for
Buyer’s agreement to enter into this Agreement, an up-front structuring fee in
an amount equal to $350,000, such amount to be paid to Buyer in U.S. Dollars on
the Closing Date, in immediately available funds, without deduction, set-off or
counterclaim (the “Structuring Fee”); and”

 

(i)                                     Article 3
of the Existing Repurchase Agreement is hereby modified by deleting Article 3(b)(i)
in its entirety.

 

(j)                                     Article 3
of the Existing Repurchase Agreement is hereby modified by deleting the
existing Article 3(b)(iii)(C) and inserting the following paragraph in
lieu thereof:

 

“Buyer shall have determined the Pricing Rate
applicable to the Transaction (including the Applicable Spread);”

 

(k)                                  Article 3
of the Existing Repurchase Agreement is hereby modified by deleting the
existing Article 3(d) and inserting the following paragraph in lieu
thereof:

 

“With respect to
any Transaction, the Pricing Rate shall be determined initially on the Pricing
Rate Determination Date applicable to the first Pricing Rate Period for such
Transaction, and shall be reset on the Pricing Rate Determination Date for all
of the next succeeding Pricing Rate Periods for such Transaction.  Buyer or its agent shall determine in
accordance with the terms of this Agreement the Pricing Rate on each Pricing
Rate Determination Date for the related Pricing Rate Period in Buyer’s sole and
absolute discretion, exercised in good faith, and notify Seller of such rate
for such period each such Pricing Rate Determination Date.”

 

(l)                                     Article 3
of the Existing Repurchase Agreement is hereby modified by deleting the
existing Article 3(n)(ii) and inserting the following paragraph in lieu
thereof:

 

“Upon written request of a Seller delivered to Buyer at least thirty
(30) days, but in no event earlier than sixty (60) days, prior to the then
current Final Maturity Date, and so long as no Margin Deficit, Default or Event
of Default and no event which has a Material Adverse Effect shall have occurred
and be continuing on the then current Final Maturity Date, Buyer may in its
sole discretion agree to extend the Maturity Date, for a period not to exceed
three-hundred and sixty-four (364) additional days (the “Wind Down Period”)
by giving notice to such Seller of such extension and of the end of the Wind
Down Period determined by Buyer; provided, that any failure by Buyer to
deliver notice to such Seller of any objection or rejection to such Wind Down
Period within fifteen (15) days from the date first received by Buyer shall be
deemed to be Buyer’s determination to extend the Final Maturity Date.  In no event shall the Final Maturity Date be
extended for more than one (1) Wind Down Period.  Prior to the Wind Down Period, Seller shall
pay down an amount equal to ten percent (10%) of the aggregate
Repurchase Price of all Purchased Assets subject to Transactions then
outstanding.  During the Wind Down Period, (i) Buyer
shall not finance any additional Eligible Assets from any Seller and (ii) for
each of the four (4) successive calendar quarters, Seller is required to pay
down an amount equal to twenty-five percent (25%) of the aggregate
Repurchase Price of all Purchased Assets subject to Transactions then
outstanding (determined as of the time
at which the ten 

 

3

 

percent (10%) amount specified above was calculated) at the end of each
calendar quarter.  Notwithstanding any
other provision of this Article 3(n)(ii) or otherwise herein,
neither Buyer nor any of its Affiliates shall be under any obligation to extend
the original Final Maturity Date, as the same may have been extended pursuant
to this Article 3(n)(ii).”

 

(m)                               Article 4
of the Existing Repurchase Agreement is hereby modified by deleting existing Article 4(a)
and inserting the following paragraph in lieu thereof:

 

“If at any time
Buyer’s Margin Amount for all Purchased Assets is less than the Repurchase
Price for all Purchased Assets (a “Margin Deficit”), then Buyer may by
notice to Seller in the form of Exhibit XII (a “Margin Deficit
Notice”) require Seller to, at Seller’s option, no later than one (1) Business
Day following the receipt of a Margin Deficit Notice (the “Margin Deadline”)
(provided that if such Margin Deficit Notice is received by Seller after
8:00 a.m. EST, Seller shall have two (2) Business Days after receipt
thereof) to the extent such Margin Deficit equals or exceeds the Minimum
Transfer Amount, (i) transfer to Buyer for no additional consideration (by
transfer to Buyer or its designee (including the Custodian) Additional Eligible
Collateral, (ii) repurchase some or all of the Purchased Assets at their
respective Repurchase Prices, (iii) make a payment in reduction of the
Purchase Price (which payment may be paid by the withdrawal by Buyer of funds
held in the Depository Account after allocation and payment of any allocated
amounts then due and payable to Buyer and its Affiliates), or (iv) choose
any combination of the foregoing, such that, after giving effect to such
transfers, repurchases and payments, Buyer’s Margin Amount for all Purchased
Assets, shall be equal to or greater than the related Repurchase Price for all
Purchased Assets.”

 

(n)                                 Article 4
of the Existing Repurchase Agreement is hereby modified by deleting Article 4(b)
in its entirety.

 

(o)                                 Article 6
of the Existing Repurchase Agreement is hereby modified by inserting the
following paragraph as a new Article 6(e):

 

“Seller and
Guarantor each acknowledge that it has no rights to service the Purchased
Assets but only has rights as a party to the current Servicing Agreement or any
other servicing agreement with respect to the Purchased Assets.  Without limiting the generality of the
foregoing and in the event that any Seller or Guarantor is deemed to retain any
residual Servicing Rights, and for the avoidance of doubt, each Seller and
Guarantor grants, assigns and pledges to Buyer a security interest in the
Servicing Rights and proceeds related thereto and in all instances, whether now
owned or hereafter acquired, now existing or hereafter created.  The foregoing provision is intended to
constitute a security agreement or other arrangement or other credit
enhancement related to the Agreement and Transactions hereunder as defined
under Sections 101(47)(v) and 741(7)(x) of the Bankruptcy Code.”

 

(p)                                 Article 11
of the Existing Repurchase Agreement is hereby modified by deleting the
existing Article 11(l) and inserting the following paragraph in lieu
thereof:

 

4

 

“permit Guarantor’s
Liquidity to be less than the greater of (i) $15,000,000 or (ii) an
amount equal to ten percent (10%) of Guarantor’s and its consolidated Subsidiaries’
total Indebtedness (excluding (1) Non-Recourse Indebtedness and (2) Indebtedness
maturing after the Maturity Date) plus five
percent (5%) of the then-current aggregate outstanding amount due under the
Wachovia Credit Facility;”

 

(q)                                 Article 11
of the Existing Repurchase Agreement is hereby modified by deleting the
existing Article 11(p) and inserting the following paragraph in lieu
thereof:

 

“permit the ratio
of (A) Guarantor’s and its consolidated Subsidiaries’ Indebtedness
(excluding Non-Recourse Indebtedness, borrowings under the Unsecured Credit
Facility and trust preferred securities) to (B) Adjusted Total Assets of
Guarantor and its consolidated Subsidiaries to exceed 0.12 to 1.00;”

 

(r)                                    Article 28
of the Existing Repurchase Agreement is hereby modified by inserting the
following paragraph as a new Article 28(g):

 

“For the avoidance
of doubt, no Seller retains any economic rights to the servicing, other than a
Seller’s rights under the Servicing Agreement or any other servicing agreement
related to the Purchased Assets.  As
such, each Seller expressly acknowledges that the Purchased Assets are sold to
Buyer on a “servicing released” basis with such servicing retained by the
Servicer.”

 

(s)                                  Schedule
I to the Existing Repurchase Agreement is hereby modified by deleting such
Schedule I in its entirety.

 

SECTION 2.                            Other
Agreements.

 

(a)          The
Seller and Buyer acknowledge and agree that any references to the Facility
Amount or a maximum available amount are hereby deleted in their entirety and
shall have no further force or effect; provided, however, that the
Existing Repurchase Agreement (as modified by this Amendment) shall continue to
be an uncommitted repurchase facility and that Buyer shall enter into any
further Transactions in its sole and absolute discretion.

 

(b)         Each
Transaction and all new Transactions shall be subject to and governed by the
terms of the related Confirmation (including, but not limited to, the
Applicable Spread and Pricing Rate contained therein) which terms shall not be
amended without the prior written consent of the Seller and Buyer.

 

(c)          Buyer shall continue to be entitled to make a
determination, in the exercise of its sole discretion, that, in the case of any
new Transaction, it shall or shall not purchase any or all of the assets
proposed to be sold to Buyer by Seller. 
If Buyer makes such a determination to purchase one or more assets proposed to be sold by Seller, in no event
shall, both immediately prior to the requested Transaction and also after
giving effect thereto, the aggregate Repurchase Price for all Purchased
Assets subject to Transactions then outstanding exceed $150,000,000.

 

5

 

SECTION 3.                            Conditions
Precedent.  This Amendment and its
provisions shall become effective on the date on which the Buyer shall have
received this Amendment, executed and delivered by a duly authorized officer of
each Seller and the Buyer (the “Amendment Effective Date”).

 

SECTION 4.                            Representations
and Warranties.  Seller hereby
represents and warrants to the Buyer, as of the date hereof and as of the
Amendment Effective Date, that (i) the Seller is in compliance with all of
the terms and provisions set forth in the Existing Repurchase Agreement and the
other Transaction Documents on its part to be observed or performed, (ii) no
Default or Event of Default has occurred or is continuing, (iii) the Seller
has no, and hereby waives all, defenses, rights of setoff, claims,
counterclaims or causes of action of any kind or description against the Buyer
arising under or in respect of the Existing Repurchase Agreement or any other Transaction
Document and (iv) the Buyer is in full compliance with its undertakings
and obligations under the Existing Repurchase Agreement and the other Transaction
Documents.  Seller hereby confirms and
reaffirms the representations and warranties contained in the Existing Repurchase
Agreement and all of the other Transaction Documents.

 

SECTION 5.                            Limited
Effect.  Except as expressly amended
and modified by this Amendment, the Existing Repurchase Agreement and each of
the other Transaction Documents shall continue to be, and shall remain, in full
force and effect in accordance with their respective terms; provided, however,
that upon the Amendment Effective Date, each reference therein and herein to
the “Transaction Documents” shall be deemed to include, in any event, this
Amendment and each reference to the “Repurchase Agreement” in any of the Transaction
Documents shall be deemed to be a reference to the Existing Repurchase
Agreement as amended hereby.

 

SECTION 6.                            Counterparts.  This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be
an original and all of which taken together shall constitute one and the same
instrument.  Delivery of an executed counterpart of a signature page to this Amendment
in Portable Document Format (PDF) or by facsimile transmission shall be
effective as delivery of a manually executed original counterpart thereof.

 

SECTION 7.                            Expenses.  The Seller agrees to pay and reimburse the
Buyer for all of the out-of-pocket costs and expenses incurred by the Buyer in
connection with the preparation, execution and delivery of this Amendment,
including, without limitation, the fees and disbursements of Cadwalader,
Wickersham & Taft LLP, counsel to the Buyer.

 

SECTION 8.                            GOVERNING
LAW.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

[SIGNATURES FOLLOW]

 

6

 

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed and delivered as
of the day and year first above written.

 

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  NRFC JP HOLDINGS, LLC, a Delaware

  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Albert Tylis

  
	
   

  	
   

  	
  Name: Albert Tylis

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, General Counsel
  & Secretary

  

 

[SIGNATURES CONTINUE ON
FOLLOWING PAGE]

 

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., a
  national

  banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kunal K. Singh

  
	
   

  	
   

  	
    Name: Kunal K. Singh

  
	
   

  	
   

  	
    Title: Vice President

  

 

7Exhibit 10.38

 

AMENDED
AND RESTATED

GUARANTEE AGREEMENT

 

AMENDED
AND RESTATED GUARANTEE AGREEMENT, dated as of October 7, 2008 (as amended,
restated, supplemented, or otherwise modified from time to time, this “Guarantee”),
made by NORTHSTAR REALTY FINANCE CORP., a Maryland corporation, having
its principal place of business at 399
Park Avenue, 18th Floor, New York, New York  10022  (the
“Guarantor”), in favor of the Buyer referred to below.

 

RECITALS

 

Pursuant
to that certain Master Repurchase Agreement, dated as of August 8, 2007
(as amended, supplemented or otherwise modified from time to time, the “Existing
Repurchase Agreement”), among JP Morgan Chase Bank, N.A. (as the “Buyer”)
and NRFC JP HOLDINGS, LLC (the “Seller”), the Seller has agreed to sell,
from time to time, to the Buyer certain Senior Mortgage Loans, Construction
Loans, B-Notes/Junior Interests, Mezzanine Loans, Condo
Conversion Loans, CMBS, CRE CDO and Land Loans, each as defined in the Existing
Repurchase Agreement (collectively, the “Purchased Assets”), upon the
terms and subject to the conditions as set forth therein.  Pursuant to the terms of that certain
Custodial Agreement dated August 8, 2007 (the “Custodial Agreement”)
by and between the Buyer, the Seller and Wells Fargo Bank, N.A. (the “Custodian”),
the Custodian is required to take possession of the Purchased Assets, along
with certain other documents specified in the Custodial Agreement, as the
Custodian of the Buyer and any future purchaser, on several delivery dates, in
accordance with the terms and conditions of the Custodial Agreement.  The Existing Repurchase Agreement, the
Custodial Agreement, this Guarantee and any other agreements executed in
connection with the Repurchase Agreement and the Custodial Agreement shall be
referred to herein as the “Governing Agreements”.

 

In
connection with the Existing Repurchase Agreement, the Guarantor entered into
in favor of the Buyer that certain Guarantee Agreement, dated as of August 8,
2007 (the “Existing Guarantee”). 
The Existing Repurchase Agreement is being amended by that certain
Amendment No. 1 to Master Repurchase Agreement, of even date herewith (“Repurchase
Agreement”).

 

It is
a condition precedent to the purchasing by the Buyer of the Purchased Assets
pursuant to the Repurchase Agreement that the Guarantor shall have executed and
delivered this Guarantee with respect to the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all of the following: (a) all payment obligations owing by the Seller
to the Buyer under or in connection with the Repurchase Agreement and any other
Governing Agreements; (b) any and all extensions, renewals, modifications,
amendments or substitutions of the foregoing; (c) all expenses, including,
without limitation, reasonable attorneys’ fees and disbursements, that are
incurred by the Buyer in the enforcement of any of the foregoing or any
obligation of the Guarantor hereunder; and (d) any other obligations of the
Seller with respect to the Buyer under each of the Governing Agreements (collectively,
the “Obligations”).

 

 

NOW,
THEREFORE, in consideration of the foregoing, to induce the Buyer to enter into
the Governing Agreements and to enter into the transactions contemplated
thereunder, the Guarantor hereby agrees with the Buyer, as follows:

 

1.             Defined Terms.  Unless otherwise defined herein, terms which
are defined in the Repurchase Agreement and used herein are so used as so
defined.

 

2.             Guarantee.  (a)  The Guarantor hereby
unconditionally and irrevocably guarantees to the Buyer the prompt and complete
payment and performance of the Obligations by the Seller when due (whether at
the stated maturity, by acceleration or otherwise), as the case may be, and
agrees to indemnify and hold harmless the Buyer from any and all claims,
damages, losses, liabilities, costs and expenses that may be incurred by or
asserted or awarded against the Buyer, in each case relating to or arising out
of the Obligations, as the case may be.

 

(b)           The Guarantor
further agrees to pay any and all reasonable expenses (including, without
limitation, all reasonable fees and disbursements of counsel) which may be paid
or incurred by the Buyer in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee.  This
Guarantee shall remain in full force and effect until the later of (i) the
date upon which the Obligations are paid in full and (ii) the termination
of the Repurchase Agreement, notwithstanding that from time to time prior
thereto the Seller may be free from any Obligations.

 

(c)           No payment or
payments made by the Seller or any other Person or received or collected by the
Buyer from the Seller or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application, at any time or from time to
time, in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the Guarantor
hereunder which shall, notwithstanding any such payment or payments, remain
liable for the amount of the Obligations under this Agreement until the
Obligations are paid in full.

 

(d)           The Guarantor agrees
that whenever, at any time, or from time to time, the Guarantor shall make any
payment to the Buyer on account of any liability hereunder, the Guarantor will
notify the Buyer in writing that such payment is made under this Guarantee for
such purpose.

 

3.             Subrogation.  Upon making any payment hereunder, the
Guarantor shall be subrogated to the rights of the Buyer against the Seller and
any collateral for any Obligations with respect to such payment; provided, that
Guarantor shall not seek to enforce any right or receive any payment by way of
subrogation until all amounts due and payable by the Seller to the Buyer under
the Governing Agreements or any related documents have been paid in full;
provided, further, that such subrogation rights shall be subordinate in all
respects to all amounts owing to the Buyer under the Governing Agreements.

 

4.             Amendments, etc. with Respect to
the Obligations.  The Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against the Guarantor, and without notice to or further assent by the Guarantor,
any demand for payment of 

 

2

 

any of the Obligations made by the Buyer may
be rescinded by the Buyer 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 Buyer, and any Governing Agreement and any other document in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Buyer may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Buyer for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released.  The Buyer shall have no obligation
to protect, secure, perfect or insure any lien at any time held by it as
security for the Obligations or for this Guarantee or any property subject
thereto.  When making any demand
hereunder against the Guarantor, the Buyer may, but shall be under no obligation
to, make a similar demand on the Seller or any other Person, and any failure by
the Buyer to make any such demand or to collect any payments from the Seller or
any such other Person or any release of the Seller or such other Person shall
not relieve the Guarantor 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 Buyer against the Guarantor.  For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

 

5.             Guarantee Absolute and
Unconditional.  (a)  The
Guarantor hereby agrees that its obligations under this Guarantee constitute a
guarantee of payment when due and not of collection.  The Guarantor 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 Buyer upon this Guarantee or acceptance of this
Guarantee; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this Guarantee; and
all dealings between the Seller or the Guarantor, on the one hand, and the
Buyer, on the other hand, shall likewise be conclusively presumed to have been
had or consummated in reliance upon this Guarantee.  The Guarantor waives promptness, diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Seller or the Guarantee with respect to the Obligations.  This Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to (i) the
validity, regularity or enforceability of any agreement, any of the Obligations
or any collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Buyer, (ii) 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 Seller
against the Buyer, (iii) any requirement that the Buyer exhaust any right
to take any action against the Seller or any other Person prior to or
contemporaneously with proceeding to exercise any right against the Guarantor
under this Guarantee or (iv) any other circumstance whatsoever (with or
without notice to or knowledge of the Seller or the Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Seller for the Obligations or of the Guarantor under this
Guarantee, in bankruptcy or in any other instance.  When pursuing its rights and remedies
hereunder against the Guarantor, the Buyer may, but shall be under no
obligation, to pursue such rights and remedies that the Buyer may have against the
Seller 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 Buyer to pursue such other rights or remedies or to collect any payments
from the Seller 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 Seller or any such other Person or any such 

 

3

 

collateral security, guarantee or right of
offset, shall not relieve the Guarantor 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 Buyer against the Guarantor.  This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon each
Guarantor and its respective successors and assigns thereof, and shall inure to
the benefit of the Buyer, and its respective successors, endorsees, transferees
and assigns, until all the Obligations and the obligations of the Guarantor
under this Guarantee shall have been satisfied by payment in full,
notwithstanding that from time to time during the term of the Governing
Agreements the Seller may be free from any Obligations.

 

(b)           Without limiting the
generality of the foregoing, the Guarantor hereby agrees, acknowledges, and
represents and warrants to the Buyer as follows:

 

(i)            The Guarantor
hereby waives any defense arising by reason of, and any and all right to assert
against the Buyer any claim or defense based upon, an election of remedies by the
Buyer which in any manner impairs, affects, reduces, releases, destroys and/or
extinguishes the Guarantor’s subrogation rights, rights to proceed against the
Seller, or any other guarantor for reimbursement or contribution, and/or any
other rights of the Guarantor to proceed against the Seller against any other
guarantor, or against any other person or security.

 

(ii)           The Guarantor is
presently informed of the financial condition of the Seller and of all other
circumstances which diligent inquiry would reveal and which bear upon the risk
of nonpayment of the Obligations.  The
Guarantor hereby covenants that it will make its own investigation and will continue
to keep itself informed about the Seller’s financial condition, the status of
other guarantors, if any, of all other circumstances which bear upon the risk
of nonpayment and that it will continue to rely upon sources other than the
Buyer for such information and will not rely upon the Buyer for any such
information.  Absent a written request
for such information by the Guarantor to the Buyer, the Guarantor hereby waives
the right, if any, to require the Buyer to disclose to Guarantor any
information which the Buyer may now or hereafter acquire concerning such
condition or circumstances including, but not limited to, the release of or
revocation by any other guarantor.

 

(iii)          The Guarantor has
independently reviewed the Governing Agreements and related agreements and has
made an independent determination as to the validity and enforceability
thereof, and in executing and delivering this Guarantee to the Buyer, the
Guarantor is not in any manner relying upon the validity, and/or
enforceability, and/or attachment, and/or perfection of any liens or security
interests of any kind or nature granted by the Seller or any other guarantor to
the Buyer, now or at any time and from time to time in the future.

 

6.             Reinstatement.  This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Buyer upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Seller or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer 

 

4

 

for, the Seller or any substantial part of the
Seller’s property, or otherwise, all as though such payments had not been made.

 

7.             Payments.  The Guarantor hereby agrees that the Obligations
will be paid to the Buyer without set-off or counterclaim in U.S. Dollars at
the address specified in writing by the Buyer.

 

8.             Representations and Warranties.  The Guarantor represents and warrants that:

 

(a)           The Guarantor has
the legal capacity and the legal right to execute and deliver this Guarantee
and to perform its obligations hereunder;

 

(b)           no consent or
authorization of, filing with, or other act by or in respect of, any arbitrator
or governmental authority and no consent of any other Person (including,
without limitation, any creditor of the Guarantor) is required in connection
with the execution, delivery, performance, validity or enforceability of this
Guarantee;

 

(c)           this Guarantee has
been duly executed and delivered by the Guarantor and constitutes a legal,
valid and binding obligation of the Guarantor enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (whether
enforcement is sought in proceedings in equity or at law);

 

(d)           the execution,
delivery and performance of this Guarantee will not violate any law, treaty, rule
or regulation or determination of an arbitrator, a court or other governmental
authority, applicable to or binding upon the Guarantor or any of its property
or to which the Guarantor or any of its property is subject (“Requirement of
Law”), or any provision of any security issued by the Guarantor or of any
agreement, instrument or other undertaking to which the Guarantor is a party or
by which it or any of its property is bound (“Contractual Obligation”),
and will not result in or require the creation or imposition of any lien on any
of the properties or revenues of the Guarantor pursuant to any Requirement of
Law or Contractual Obligation of the Guarantor;

 

(e)           no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Guarantor, threatened by or
against the Guarantor or against any of the Guarantor’s properties or revenues
with respect to this Guarantee or any of the transactions contemplated hereby;
and

 

(f)            except as disclosed
in writing to the Buyer prior to the date hereof, the Guarantor has filed or
caused to be filed all tax returns which, to the knowledge of the Guarantor,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against him or any of the Guarantor’s
property and all other taxes, fees or other charges imposed on him or any of the
Guarantor’s property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings); no tax lien has been filed, and, to the knowledge of the
Guarantor, no claim is being asserted, with respect to any such tax, fee or
other charge.

 

5

 

The
Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by the Guarantor on the date of each Transaction under
the Repurchase Agreement, on and as of such date of the Transaction, as though
made hereunder on and as of such date.

 

9.             Severability.  Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

10.           Paragraph Headings.  The paragraph headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

 

11.           No Waiver; Cumulative Remedies.  The Buyer shall not by any act (except by a
written instrument pursuant to paragraph 13 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default or event of default or in any breach of any
of the terms and conditions hereof.  No
failure to exercise, nor any delay in exercising, on the part of the Buyer, any
right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the Buyer of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Buyer would otherwise have on any future occasion.  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.

 

12.           Waivers and Amendments; Successors
and Assigns; Governing Law.  None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Guarantor
and the Buyer.  This Guarantee shall be
binding upon the heirs, personal representatives, successors and assigns of the
Guarantor and shall inure to the benefit of the Buyer, and their respective
successors and assigns.  THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

13.           Notices.  Notices by the Buyer to the Guarantor may be
given by mail, or by telecopy transmission, addressed to the Guarantor at the
address or transmission number set forth under its signature below and shall be
effective (a) in the case of mail, five days after deposit in the postal
system, first class certified mail and postage pre-paid, (b) one Business
Day following timely delivery to a nationally recognized overnight courier
service for next Business Day delivery and (c) in the case of telecopy
transmissions, when sent, transmission electronically confirmed.

 

14.           SUBMISSION TO JURISDICTION;
WAIVERS.  THE GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

 

6

 

(A)          SUBMITS FOR THE
GUARANTOR’S PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE AND THE OTHER LOAN DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY, OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND APPELLATE COURTS FROM ANY THEREOF;

 

(B)           CONSENTS THAT ANY
SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY
OBJECTION THAT GUARANTOR MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

 

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

 

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

 

15.           Integration.  This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no promises
or representations by the Buyer relative to the subject matter hereof not
reflected herein.

 

16.           Acknowledgments.  The Guarantor hereby acknowledges that:

 

(a)           the
Guarantor has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the related documents;

 

(b)           the Buyer has no
fiduciary relationship to the Guarantor, and the relationship between the Buyer
and the Guarantor is solely that of surety and creditor; and

 

(c)           no joint venture
exists between or among any of the Buyer, the Guarantor and the Seller.

 

17.           Amendment and Restatement.  The Existing Guarantee is amended, restated
and superceded in its entirety by this Guarantee.  The Guarantor confirms and agrees that it has
no, and it hereby waives all, defenses, rights of setoff, claims, counterclaims
or causes of action of any kind or description against Buyer arising under or
in respect of the Existing Guarantee or any related document and the Guarantor
hereby confirms, as of the date hereof, that Buyer is in full compliance with
all of its undertakings and obligations under the Governing Agreements.

 

7

 

18.           WAIVERS OF JURY TRIAL.  EACH OF THE GUARANTOR AND THE BUYER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY
COUNTERCLAIM HEREIN OR THEREIN.

 

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

8

 

IN
WITNESS WHEREOF, the undersigned has caused this Guarantee Agreement to be duly
executed and delivered as of the date first above written.

 

 

	
   

  	
  NORTHSTAR REALTY
  FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Albert Tylis

  
	
   

  	
   

  	
  Name: Albert Tylis

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President, General Counsel &
  Secretary

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