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10-Q - 10-Q - NORTHSTAR REALTY FINANCE CORP.a2194948z10-q.htm
EX-31.2 - EX-31.2 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-31_2.htm
EX-32.1 - EX-32.1 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-32_1.htm
EX-31.1 - EX-31.1 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-31_1.htm
EX-32.2 - EX-32.2 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-32_2.htm
EX-10.34 - EXHIBIT 10.34 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_34.htm
EX-10.38 - EXHIBIT 10.38 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_38.htm
EX-10.36 - EXHIBIT 10.36 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_36.htm
EX-10.35 - EXHIBIT 10.35 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_35.htm
EX-10.13 - EXHIBIT 10.13 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_13.htm
EX-10.31 - EXHIBIT 10.31 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_31.htm
EX-10.24 - EXHIBIT 10.24 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_24.htm
EX-10.37 - EXHIBIT 10.37 - NORTHSTAR REALTY FINANCE CORP.a2194948zex-10_37.htm

Exhibit 10.33

 

 

 

 

 

 

$266,575,547.29

 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

NRFC WA HOLDINGS, LLC,

NRFC WA HOLDINGS II, LLC,

NRFC WA HOLDINGS VII, LLC,

NRFC WA HOLDINGS X, LLC,

and

NRFC WA HOLDINGS XII, LLC,

as Borrowers

 

NORTHSTAR REALTY FINANCE CORP.,

and

NORTHSTAR REALTY FINANCE L.P.,

as Guarantors,

 

THE LENDERS PARTY HERETO,

 

and

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

Dated as of October 28, 2009

 

WELLS FARGO SECURITIES, LLC

(formerly known as Wachovia Capital Markets, LLC),

as Sole Lead Arranger and Sole Bookrunner

 

 

 

            

 



 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

ARTICLE I DEFINITIONS

 

1

Section 1.1

Defined Terms

 

1

Section 1.2

Other Definitional Provisions

 

40

Section 1.3

Accounting Terms

 

40

Section 1.4

Time References

 

40

Section 1.5

Execution of Documents

 

41

Section 1.6

UCC Terms

 

41

Section 1.7

References to Discretion

 

41

Section 1.8

References to Payment

 

41

 

 

 

 

ARTICLE II THE LOANS; AMOUNT AND TERMS

 

41

Section 2.1

Revolving Loans

 

41

Section 2.2

Term Loan; Delayed Draw Term Loan

 

46

Section 2.3

Fees

 

50

Section 2.4

Commitment Reductions

 

50

Section 2.5

Prepayments

 

50

Section 2.6

Default Rate and Payment Dates

 

54

Section 2.7

Conversion Options

 

54

Section 2.8

Computation of Interest and Fees; Usury

 

55

Section 2.9

Pro Rata Treatment and Payments

 

56

Section 2.10

Non-Receipt of Funds by the Administrative Agent

 

59

Section 2.11

Inability to Determine Interest Rate

 

60

Section 2.12

Yield Protection

 

60

Section 2.13

Indemnity; Eurocurrency Liabilities

 

61

Section 2.14

Taxes

 

62

Section 2.15

Illegality

 

64

Section 2.16

Obligations Absolute

 

64

Section 2.17

Replacement of Lenders

 

65

 

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES

 

66

Section 3.1

Financial Condition

 

66

Section 3.2

No Material Adverse Effect

 

66

Section 3.3

Corporate Existence; Compliance with Law

 

66

Section 3.4

Corporate Power; Authorization; Enforceable Obligations

 

67

Section 3.5

No Legal Bar; No Default

 

67

Section 3.6

No Material Litigation

 

67

Section 3.7

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

 

68

Section 3.8

Margin Regulations

 

68

Section 3.9

ERISA

 

68

Section 3.10

Environmental Matters

 

68

Section 3.11

Use of Proceeds

 

69

Section 3.12

Subsidiaries; Joint Ventures; Partnerships

 

69

Section 3.13

Ownership

 

69

Section 3.14

Indebtedness

 

69

Section 3.15

Taxes

 

69

Section 3.16

Solvency

 

70

Section 3.17

[Reserved]

 

70

Section 3.18

Location

 

70

 

i



 

Section 3.19

No Burdensome Restrictions

 

70

Section 3.20

Brokers’ Fees

 

70

Section 3.21

[Reserved]

 

70

Section 3.22

Accuracy and Completeness of Information

 

70

Section 3.23

[Reserved]

 

71

Section 3.24

Insurance

 

71

Section 3.25

Security Documents

 

71

Section 3.26

Anti-Terrorism Laws

 

71

Section 3.27

Compliance with OFAC Rules and Regulations

 

71

Section 3.28

Compliance with FCPA

 

72

Section 3.29

Consent; Governmental Authorizations

 

72

Section 3.30

Bulk Sales

 

72

Section 3.31

Income and Required Payments

 

72

Section 3.32

Full Payment

 

72

Section 3.33

Irrevocable Instructions

 

72

Section 3.34

Compliance with Covenants

 

73

Section 3.35

Collateral Agreements

 

73

Section 3.36

No Reliance

 

73

Section 3.37

Collateral

 

73

Section 3.38

REIT Status

 

73

Section 3.39

Insider

 

73

Section 3.40

No Defenses

 

74

Section 3.41

Warrant Agreements, Etc.

 

74

Section 3.42

Value Given

 

74

Section 3.43

Separateness

 

74

Section 3.44

Qualified Transferees

 

74

Section 3.45

Eligibility of Mortgage Assets

 

74

Section 3.46

Ability to Perform

 

75

Section 3.47

Certain Tax Matters

 

75

Section 3.48

Set-Off, etc.

 

75

Section 3.49

Interest Rate Protection Agreements

 

75

Section 3.50

Representations and Warranties

 

75

 

 

 

 

ARTICLE IV CONDITIONS PRECEDENT

 

76

Section 4.1

Conditions to Restatement Date

 

76

Section 4.2

Conditions to All Extensions of Credit

 

79

 

 

 

 

ARTICLE V AFFIRMATIVE COVENANTS

 

83

Section 5.1

Financial Statements

 

83

Section 5.2

Certificates; Other Information

 

85

Section 5.3

Payment of Taxes and Other Obligations

 

86

Section 5.4

Conduct of Business and Maintenance of Existence

 

86

Section 5.5

Maintenance of Property; Insurance

 

86

Section 5.6

Inspection of Property; Books and Records; Discussions

 

86

Section 5.7

Notices

 

86

Section 5.8

Environmental Laws

 

88

Section 5.9

Financial Covenants

 

88

Section 5.10

Additional Credit Parties

 

89

Section 5.11

Compliance with Law

 

89

Section 5.12

Pledged Assets

 

89

Section 5.13

Interest Rate Protection Agreements

 

90

Section 5.14

Control Agreements

 

90

 

ii



 

Section 5.15

Further Assurances

 

90

Section 5.16

Performance and Compliance with Collateral

 

90

Section 5.17

Delivery of Income and Required Payments

 

91

Section 5.18

Exceptions

 

91

Section 5.19

Distributions in Respect of Collateral

 

91

Section 5.20

REIT Status

 

91

Section 5.21

Issuances

 

92

Section 5.22

Remittance of Prepayments

 

92

Section 5.23

Escrow Imbalance

 

92

Section 5.24

Separateness

 

92

Section 5.25

Preferred Equity Interests

 

93

Section 5.26

Registration of Securities

 

93

Section 5.27

Termination of Securities Account

 

93

Section 5.28

Independent Director

 

94

Section 5.29

Main Treasury Bank

 

94

Section 5.30

Independence of Covenants

 

94

 

 

 

 

ARTICLE VI NEGATIVE COVENANTS

 

94

Section 6.1

Indebtedness

 

94

Section 6.2

Liens

 

94

Section 6.3

Nature of Business

 

95

Section 6.4

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

 

95

Section 6.5

Warrant Agreements

 

96

Section 6.6

Transactions with Affiliates

 

96

Section 6.7

Ownership of Subsidiaries; Restrictions

 

96

Section 6.8

Corporate Changes; Material Contracts

 

96

Section 6.9

[Reserved]

 

96

Section 6.10

Restricted Payments

 

96

Section 6.11

[Reserved]

 

97

Section 6.12

No Further Negative Pledges

 

97

Section 6.13

Collateral Not to be Evidenced by Instruments

 

97

Section 6.14

Deposits

 

97

Section 6.15

Servicing Agreements

 

97

Section 6.16

Extension or Amendment of Collateral

 

97

Section 6.17

Additional Covenants

 

98

Section 6.18

No Future Liens

 

98

Section 6.19

Senior and Pari Passu Interests

 

98

Section 6.20

Portfolio Assets

 

99

Section 6.21

Inconsistent Agreements

 

99

Section 6.22

Preferred Equity Interests

 

99

Section 6.23

ERISA

 

99

 

 

 

 

ARTICLE VII EVENTS OF DEFAULT

 

99

Section 7.1

Events of Default

 

99

Section 7.2

Acceleration; Remedies

 

103

 

 

 

 

ARTICLE VIII THE ADMINISTRATIVE AGENT

 

103

Section 8.1

Appointment and Authority

 

103

Section 8.2

Nature of Duties

 

103

Section 8.3

Exculpatory Provisions

 

104

Section 8.4

Reliance by Administrative Agent

 

105

Section 8.5

Notice of Default

 

105

 

iii



 

Section 8.6

Non-Reliance on Administrative Agent and Other Lenders

 

105

Section 8.7

Indemnification

 

105

Section 8.8

Administrative Agent in Its Individual Capacity

 

106

Section 8.9

Successor Administrative Agent

 

106

Section 8.10

Collateral and Guaranty Matters

 

107

 

 

 

 

ARTICLE IX ADMINISTRATION AND SERVICING

 

107

Section 9.1

Servicing

 

107

Section 9.2

Borrowers as Servicer

 

108

Section 9.3

Third Party Servicer

 

108

Section 9.4

Duties of the Borrowers

 

108

Section 9.5

Authorization of the Borrowers

 

109

Section 9.6

Event of Default

 

109

Section 9.7

Modification

 

110

Section 9.8

Inspection

 

110

Section 9.9

[Reserved]

 

110

Section 9.10

Payment of Certain Expenses by Servicer

 

110

Section 9.11

Pooling and Servicing Agreements

 

110

Section 9.12

Servicer Default

 

111

 

 

 

 

ARTICLE X MISCELLANEOUS

 

111

Section 10.1

Amendments, Waivers and Release of Collateral

 

111

Section 10.2

Notices

 

113

Section 10.3

No Waiver; Cumulative Remedies

 

115

Section 10.4

Survival of Representations and Warranties

 

115

Section 10.5

Payment of Expenses and Taxes; Indemnity

 

116

Section 10.6

Successors and Assigns; Participations

 

119

Section 10.7

Right of Set-off; Sharing of Payments

 

122

Section 10.8

Table of Contents and Section Headings

 

123

Section 10.9

Counterparts; Integration; Effectiveness; Electronic Execution

 

123

Section 10.10

Severability

 

123

Section 10.11

Integration

 

124

Section 10.12

Governing Law

 

124

Section 10.13

Consent to Jurisdiction; Service of Process and Venue

 

124

Section 10.14

Confidentiality

 

125

Section 10.15

Acknowledgments

 

126

Section 10.16

Waivers of Jury Trial

 

126

Section 10.17

Patriot Act Notice

 

126

Section 10.18

Resolution of Drafting Ambiguities

 

126

Section 10.19

Continuing Agreement

 

127

Section 10.20

Lender Consent

 

127

Section 10.21

Appointment of the Administrative Borrower

 

127

Section 10.22

Counterclaims

 

127

Section 10.23

Legal Matters

 

127

Section 10.24

Recourse Against Certain Parties

 

128

Section 10.25

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

 

128

Section 10.26

Credit Parties’ Waiver of Setoff

 

129

Section 10.27

Periodic Due Diligence Review

 

129

Section 10.28

Character of Loans for Income Tax Purposes

 

129

Section 10.29

Joint and Several Liability; Full Recourse Obligations

 

130

Section 10.30

Amendment and Restatement

 

131

 

iv



 

Section 10.31

Modification of Other Credit Documents

 

132

Section 10.32

Accredited Investor Representations

 

132

 

v



 

Schedules

 

 

 

Schedule 1.1(b)

Collection Account

Schedule 1.1(c)

Asset Representations

Schedule 1.1(d)

Securities Account

Schedule 1.1(e)

Trust Preferred Securities

Schedule 1.1(f)

Construction Draw Deliveries

Schedule 3.3

Jurisdictions of Organization and Qualification

Schedule 3.12

Subsidiaries

Schedule 3.18

Location

Schedule 5.28

Independent Director

Schedule 9.3

Servicers

 

 

Exhibits

 

 

 

Exhibit 1.1(a)

Form of Account Designation Notice

Exhibit 1.1(b)

Form of Assignment and Assumption

Exhibit 1.1(c)

Form of Account Control Agreement

Exhibit 1.1(d)(i)

Form of Borrower Joinder Agreement

Exhibit 1.1(d)(ii)

Form of Guarantor Joinder Agreement

Exhibit 1.1(e)

Form of Notice of Borrowing

Exhibit 1.1(f)

Form of Notice of Conversion/Extension

Exhibit 1.1(g)

Form of Assignment

Exhibit 1.1(h)

Form of Borrower Release Letter

Exhibit 1.1(i)

Form of Compliance Certificate

Exhibit 1.1(j)

Form of Irrevocable Instruction

Exhibit 1.1(k)

Form of Servicer Redirection Notice

Exhibit 1.1(l)

Form of Warehouse Lender’s Release Letter

Exhibit 1.1(m)

Form of Securities Account Control Agreement

Exhibit 2.1(a)

Form of Funding Indemnity Letter

Exhibit 2.1(b)

Form of Confirmation

Exhibit 2.1(e)

Form of Revolving Note

Exhibit 2.2

Form of Term Loan Note

Exhibit 4.1(a)

Form of Lender Consent

Exhibit 4.1(n)

Form of Closing Officer’s Certificate

Exhibit 4.1(o)

Form of Patriot Act Certificate

Exhibit 4.1(q)(i)

Form of Power of Attorney for Borrower

Exhibit 4.1(q)(ii)

Form of Power of Attorney for Pledgor

Exhibit 5.2(f)

Form of Mortgage Asset Data Summary

 

vi


 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 28, 2009, among NRFC WA HOLDINGS, LLC, a Delaware limited liability company (together with its successors and permitted assigns, “Holdings”), as a Borrower, NRFC WA HOLDINGS II, LLC, a Delaware limited liability company (together with its successors and permitted assigns, “Holdings II”), as a Borrower, NRFC WA HOLDINGS VII, LLC, a Delaware limited liability company (together with its successors and permitted assigns, “Holdings VII”), as a Borrower, NRFC WA HOLDINGS X, LLC, a Delaware limited liability company (together with it successors and assigns, “Holdings X”), as a Borrower, as a Borrower, NRFC WA HOLDINGS XII, LLC, a Delaware limited liability company (together with it successors and assigns, “Holdings XII”), as a Borrower,  NORTHSTAR REALTY FINANCE CORP., a Maryland corporation (together with its successors and permitted assigns, “Northstar Corp”), as a Guarantor, NORTHSTAR REALTY FINANCE L.P., a Delaware limited partnership (together with its successors and permitted assigns, “Northstar LP”), as a Guarantor, the other entities from time to time party hereto pursuant to Section 5.10, the several banks and other financial institutions as are, or may from time to time become parties to this Agreement (each, together with its successors and assigns, a “Lender” and, collectively, the “Lenders”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lenders hereunder (in such capacity, together with its successors and assigns, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers, the Guarantors, the Lenders and the Administrative Agent are parties to that certain Credit Agreement, dated as of November 6, 2007, as amended by the First Amendment to Credit Agreement, dated as of May 21, 2008 and by the Second Amendment to Credit Agreement, dated as of September 29, 2009 (the “Original Agreement”).

 

WHEREAS, the Credit Parties, the Lenders and the Administrative Agent desire to amend and restate the Original Agreement in several respects.

 

NOW, THEREFORE, based upon the foregoing Recitals, the mutual promises and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1            Defined Terms.

 

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

 

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

 

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

 



 

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

 

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

 

Account Designation Notice” shall mean the First Amended and Restated Account Designation Notice, dated as of the Restatement Date, from the Borrowers to the Administrative Agent in substantially the form attached hereto as Exhibit 1.1(a), as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

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

 

Administrative Borrower” shall mean Holdings.

 

Administrative Questionnaire” shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

2



 

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

 

Allocated Revolving Loan Amount” shall mean, for each item of Revolving Loan Collateral, the outstanding principal amount of the Revolving Loans allocated by the Administrative Agent, in its discretion, to the related Revolving Loan Collateral, which Allocated Revolving Loan Amount shall be set forth in the related Confirmation, as increased from time to time by additional Revolving Loans or reduced from time to time by the amount of any principal payments, prepayments or reductions applied against such Revolving Loans pursuant to the terms of this Agreement or the Fee Letter.

 

Allocated Term Loan Amount” shall mean, for each item of Term Loan Collateral, the outstanding principal amount of the Term Loan (as may be increased by any Delayed Draw Term Loan) allocated by the Administrative Agent, in its discretion, to the related Term Loan Collateral, which Allocated Term Loan Amount shall be set forth in the related Confirmation, as increased by any additional Delayed Draw Term Loans or reduced from time to time by the amount of any principal payments, prepayments or reductions applied against such Term Loans pursuant to the terms of this Agreement or the Fee Letter.

 

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

 

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

 

Applicable Advance Rate” shall mean, with respect to each Mortgage Asset (a) with respect to Term Loan Collateral under the Term Loans,  the Applicable Advance Rate set forth in the related Confirmation, (b) in the case of Collateral for the Delayed Draw Term Loans, the Applicable Advance Rate set forth in the related Confirmation and (c) in the case of Revolving Loan Collateral under the Revolving Loans, the Applicable Advance Rate set forth in the related Confirmation, which shall be no greater than the Applicable Advance Rate set forth in Schedule 1-C to the Fee Letter (as applicable); provided, however, during the time that any amount is outstanding under the Reindeer Facility, the Applicable Advance Rates for one (1) or more Pledged Mortgage Assets may be reduced and/or adjusted

 

3



 

in such manner as the Administrative Agent shall determine in its discretion from time to time so that the Asset Value of all Pledged Mortgage Assets is equal to or less than the aggregate principal amount of all Loans outstanding plus the Note Purchase Margin.

 

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

 

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

 

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

 

Arranger” shall mean Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC), together with its successors and assigns.

 

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

 

Asset Valuation Period” shall mean (i) with respect to Term Loans, at all times while the Borrowers are not in compliance with any Bi-Annual Principal Reduction and, (ii) with respect to Revolving Loans, at any time.

 

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

 

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

 

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

 

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

 

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

 

ATM Offering” shall mean the sales of shares of common stock of Northstar Corp in one or more transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act.

 

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

 

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

 

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

 

Available Borrowing Capacity” shall mean (a) when the outstanding principal amount under the Term Loan plus the Reindeer Debt is equal to or greater than $300,000,000, $0, and, (b) when the outstanding principal amount under the Term Loan plus the Reindeer Debt is less than $300,000,000, $300,000,000 minus (i) the aggregate outstanding principal amount for all Term Loans on such day, minus (ii) the Reindeer Debt on such day.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Bi-Annual Principal Reduction” shall mean the bi-annual principal payments of $15,000,000 in the aggregate required to be made towards the Reindeer Debt and the outstanding principal balance of the Term Loans (regardless of the source of the principal payments including, without limitation, mandatory and voluntary prepayments made in accordance with the terms of this Agreement or the Fee Letter) commencing with the date that is six months following the Restatement Date and continuing on each six-month anniversary thereof.

 

Book Value” shall mean, with respect to any Mortgage Asset at any time, an amount as certified by the applicable Borrower, equal to the lesser of (a) face or par value and (b) the price that the applicable Borrower initially paid or advanced in respect thereof plus any additional amounts advanced by the applicable Borrower for or in respect of such Mortgage Asset, as such Book Value may be marked down

 

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by the applicable Borrower from time to time, including, as applicable, any loss/loss reserve/price adjustments, less an amount equal to the sum of all principal payments, prepayments or paydowns paid and realized losses and other writedowns recognized relating to such Mortgage Asset; provided, however, any such markdowns or adjustments must be made in good faith and shall be disclosed contemporaneously therewith in writing to the Administrative Agent, which mark downs or adjustments, without a corresponding payment and application of principal, may result in a mandatory payment under Section 2.5.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Cash Equivalents” shall mean any of the following:  (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one (1) year from the date of acquisition, (b) time deposits or certificates of deposit of any commercial bank incorporated under the laws of the United States or any state thereof, of recognized standing having capital and unimpaired surplus in excess of $1,000,000,000 and whose short-term commercial paper rating at the time of acquisition is at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s (any such bank, an “Approved Bank”), with such deposits or certificates having maturities of not more than one (1) year from the date of acquisition, (c) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clauses (a) and (b) above entered into with any Approved Bank, (d) commercial paper or finance company paper issued by any Person incorporated under the laws of the United States or any state thereof and rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s, and in each case maturing not more than one (1) year after the date of acquisition, and (e) investments in money market funds that are registered under the 40 Act, which have net assets of at least $1,000,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (a) through (e) above.  All such Cash Equivalents must be denominated solely for payment in Dollars.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Collateral Default” shall mean any Mortgage Asset included or proposed to be included in the Collateral (a) that is, with respect to any default in payment of principal and/or interest, sixty (60) or more days delinquent under the terms of the related Mortgage Loan Documents (including any Preferred Equity Interest that has not been paid during such period) or, with respect to any other material payment default, seventy five (75) or more days delinquent under the terms of the related Mortgage Loan Documents (including any Preferred Equity Interest that has not been paid during such period), or (b) for which there is a material non-monetary default (beyond any applicable notice and cure period) under the terms of the related Mortgage Loan Documents (including, for the avoidance of doubt, any Insolvency Proceeding or Insolvency Event of the related Obligor) which results in acceleration.

 

Collateral Default Date” shall have the meaning set forth in Section 2.5(b)(ii).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Contingent Liabilities” shall mean, with respect to any Person and its Consolidated Subsidiaries (without duplication):  (a) liabilities and obligations (including any Guarantee Obligations) of such Person or any Consolidated Subsidiary of such Person in respect of “off-balance sheet arrangements” (as defined in the SEC Off-Balance Sheet Rules), (b) any obligation, including, without limitation, any Guarantee Obligation, whether or not required to be disclosed in the footnotes to such Person’s and its Consolidated Subsidiaries’ financial statements, guaranteeing partially or in whole any Non-Recourse Indebtedness, lease, dividend or other obligation, exclusive of (i) contractual indemnities (including, without limitation, any indemnity or price-adjustment provision relating to the purchase or sale of securities or other assets) and (ii) guarantees of non-monetary obligations (other than guarantees of completion, environmental indemnities and guarantees of customary carve-out matters made in connection with Non-Recourse

 

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Indebtedness, such as (but not limited to) fraud, misappropriation, bankruptcy and misapplication) which have not yet been called on or quantified, of such Person or of any other Person, and (c) any forward commitment or obligation to fund or provide proceeds with respect to any loan or other financing which is obligatory and non-discretionary on the part of the lender.  The amount of any Contingent Liabilities described in clause (b) shall be deemed to be, (i) with respect to a guarantee of interest or interest and principal, or operating income guarantee, the sum of all payments required to be made thereunder (which, in the case of an operating income guarantee, shall be deemed to be equal to the debt service for the note secured thereby), through, (x) in the case of an interest or interest and principal guarantee, the stated date of maturity of the obligation (and commencing on the date interest could first be payable thereunder), or (y) in the case of an operating income guarantee, the date through which such guarantee will remain in effect, and (ii) with respect to all guarantees not covered by the preceding clause (i), an amount equal to the stated or determinable amount of the primary obligation in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet and on the footnotes to the most recent financial statements of such Person.  As used in this definition, the term “SEC Off-Balance Sheet Rules” means the Disclosure in Management’s Discussion and Analysis About Off-Balance Sheet Arrangements and Aggregate Contractual Obligations, Securities Act Release No. 33-8182, 34-47264; FR-67 International Series Release No. 1266 File No. S7-42-02, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR pts. 228, 229 and 249).

 

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

 

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

 

Correction Amount” shall have the meaning set forth in Section 2.5(b)(i)(A).

 

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

 

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

 

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

 

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

 

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Credit Tenant Lease” shall mean a financeable lease of Commercial Real Estate, which lease is a triple net lease (i.e., the tenant is responsible for all maintenance, insurance and taxes), a double net lease (i.e., the tenant is responsible for all taxes and insurance) or is a bondable lease, as the same may be amended, restated, modified or supplemented from time to time.

 

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

 

Current Appraisal” shall mean an appraisal dated within twelve (12) months of the date of determination; provided, however, (i) in the case of the valuation of an Underlying Mortgaged Property, such appraisal shall be a FIRREA Appraisal and (ii) in the case of the valuation of a Mortgage Asset, such appraisal shall be from a nationally recognized appraisal firm (other than the Borrowers, the Guarantors or any Affiliate of the foregoing) (A) with substantial experience valuing assets similar in type, size and structure to the Mortgage Asset in question, (B) having substantial familiarity with the market for such Mortgage Asset and (C) that is otherwise acceptable to the Administrative Agent in its discretion.

 

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

 

Custodial Fee Letter” shall mean that certain Custodial Fee Letter, dated as of November 6, 2007, between the Borrowers and the Custodian, as such letter may be amended, modified, waived, supplemented, extended, restated or replaced from time to time.

 

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

 

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

 

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

 

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

 

Debt Service Coverage Ratio” or “DSCR” shall mean with respect to any Mortgage Asset, as of any date of determination, for the period of time to be determined in the Administrative Agent’s reasonable discretion (it being understood that it is the Administrative Agent’s intent to make the determination based on the period of twelve (12) consecutive complete calendar months preceding such date (or, if such Mortgage Asset was originated less than twelve (12) months from the date of determination, the number of months from the date of origination)), the ratio of (a) the aggregate Net Cash Flow in respect of the Underlying Mortgaged Properties relating to such Mortgage Asset for such period, taking into account (i) any guaranty of the indebtedness under the related Mortgage Asset and (ii) any applicable interest reserves held during such time by any Borrower or Servicer on its behalf or future funding obligations or monies available to satisfy such obligations with respect to such Mortgage Asset and, as applicable, the senior mortgage lender for the related Underlying Mortgaged Property, to

 

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(b) the sum of (i) the aggregate of all amounts due for such period in respect of all Indebtedness that was outstanding from time to time during such period that is secured, directly or indirectly, by such Underlying Mortgaged Properties (including, without limitation, by way of a pledge of the equity of the owner(s) of such Underlying Mortgaged Properties) or that is otherwise owing by the owner(s) of such Underlying Mortgaged Properties, including, without limitation, all scheduled principal and/or interest payments due for such period in respect of each Mortgage Asset that is secured or supported by such Underlying Mortgaged Properties plus (ii) the amount of all Ground Lease payments to be made in respect of such Underlying Mortgaged Properties during such period, as any of the foregoing elements of DSCR may be adjusted by the Administrative Agent  as determined by the Administrative Agent in its reasonable discretion; provided, however, that all such calculations shall be made taking into account any senior or pari passu debt or other obligations including debt or other obligations secured directly or indirectly by the applicable Underlying Mortgaged Property.

 

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

 

Default Rate” shall mean (a) when used with respect to the Obligations, an interest rate equal to (i) for Alternate Base Rate Loans (A) the Alternate Base Rate plus (B) the Applicable Percentage, if any, applicable to Alternate Base Rate Loans plus (C) 2% per annum and, (ii) for LIBOR Rate Loans, (A) the LIBOR Rate plus (B) the Applicable Percentage applicable to LIBOR Rate Loans plus (C) 2% per annum, and (b) when used with respect to any other fee or amount due hereunder, a rate equal to the Applicable Percentage, if any, applicable to Alternate Base Rate Loans plus 2% per annum.

 

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

 

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

 

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

 

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

 

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

 

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

 

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any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)           is not subject to a Collateral Default;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(l)            such Mortgage Asset is denominated and payable in Dollars unless otherwise approved by the Administrative Agent in its discretion;

 

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

 

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

 

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

 

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

 

Environmental Laws” shall mean any and all applicable foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any

 

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Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time be in effect during the term of this Agreement.

 

Equity Interests” shall mean with respect to any Person, any share, interest, participation and other equivalent (however denominated) of capital stock of (or other ownership, equity or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership, equity or profit interests in) such Person, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

 

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

 

Equity Net Cash Proceeds Payment” shall mean any principal payment required in accordance with Section 2.5(b)(vi).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which a Borrower is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.14, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 2.14.

 

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

 

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

 

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

 

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

 

Fee Letter” shall mean the First Amended and Restated Fee Letter, dated as of the date hereof, among the Borrowers, Guarantors and the Administrative Agent, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

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

 

Fitch” shall mean Fitch Ratings, Inc.

 

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

 

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

 

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

 

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

 

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

 

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

 

Guarantee Obligation”  shall mean, as to any Person (the “guaranteeing person”), without duplication, any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of the obligations for which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends, Contractual Obligation, Derivatives Contract or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the maximum stated amount of the primary obligation relating to such Guarantee Obligation (or, if less, the maximum stated liability set forth in the instrument embodying such Guarantee Obligation); provided, however, that in the absence of any such stated amount or stated liability, the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as reasonably determined by such Person in good faith.

 

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

 

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

 

Guaranty” shall mean the guaranty of the Guarantors set forth in that certain First Amended and Restated Guaranty Agreement, dated as of the date hereof, by and among the Guarantors and the Administrative Agent, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months thereafter, subject to availability to all applicable Lenders, as selected by the Borrowers by

 

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irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that the foregoing provisions are subject to the following:

 

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

 

(ii)           any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month;

 

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

 

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

 

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

 

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

 

Investment” shall mean, with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interests in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty or credit enhancement of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person.  Any binding commitment or option to make an Investment in any other Person shall constitute an Investment.  Except

 

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as expressly provided otherwise, for purposes of determining compliance with any covenant contained in the Credit Documents, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

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

 

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

 

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

 

Junior Interest Document” shall mean the original executed promissory note, Participation Certificate, Participation Agreement and any other evidence of a Junior Interest, as applicable, as the same may be amended, restated, modified or supplemented from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Main Treasury Account” shall have the meaning set forth in Section 5.29.

 

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

 

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

 

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to rely on in its discretion (which value may be determined to be zero (0)), as such Market Value may be adjusted at any time by the Administrative Agent as the Administrative Agent determines in its discretion.

 

Material Adverse Effect” shall mean, a material adverse effect on (a) the financial condition or credit quality of the Borrowers (taken as a whole) or any Guarantor, (b) the ability of any Credit Party to perform its obligations under any Credit Document or Mortgage Loan Document to which it is a party, (c) the validity or enforceability of any of the Credit Documents, (d) the rights and remedies of the Administrative Agent or the Lenders, (e) the timely payment of any amounts payable under the Credit Documents or Mortgage Loan Documents or (f) the Asset Value of the Pledged Mortgage Assets; provided, however, the occurrence of an event under clause (e) or (f) of this definition of Material Adverse Effect shall not, in and of itself, constitute an Event of Default under Section 7.1(e), but such occurrence may be or form the basis for an Event of Default under other provisions of Section 7.1 other than Section 7.1(e).

 

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

 

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

 

Maximum LTC” shall mean, in the case of Revolving Loan Collateral under the Revolving Loans, the Maximum LTC set forth in the related Confirmation, which shall be no greater than the Maximum LTC set forth in Schedule 1-C to the Fee Letter; provided, however, that all such calculations shall be made taking into account any senior or pari passu debt or other obligations, including debt or other obligations secured directly or indirectly by the applicable Underlying Mortgaged Property.

 

Maximum LTV” shall mean, in the case of Revolving Loan Collateral under the Revolving Loans (other than any CMBS Security), the Maximum LTV set forth in the related Confirmation, which shall be no greater than the Maximum LTV set forth in Schedule 1-C to the Fee Letter; provided, however, the Maximum LTV shall take into account any senior or pari passu debt or other obligations, including debt or other obligations secured directly or indirectly by the applicable Underlying Mortgaged Property.

 

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

 

Mezzanine Note” shall mean the original executed promissory note or other evidence of Mezzanine Loan Indebtedness, as the same may be amended, restated, modified or supplemented from time to time.

 

Minimum DSCR” shall mean, in the case of Revolving Loan Collateral under the Revolving Loans (other than any CMBS Security), the Minimum DSCR set forth in the related Confirmation, which shall be no less than the Minimum DSCR set forth in Schedule 1-C to the Fee Letter; provided, however, that all such calculations shall be made taking into account any senior or pari passu debt or other obligations, including debt or other obligations secured directly or indirectly by the applicable Underlying Mortgaged Property.

 

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

 

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Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a Lien on real property, fixtures and other Property and rights incidental thereto, as the same may be amended, restated, modified or supplemented from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

Mortgage Note” shall mean, that certain original executed promissory note or other evidence of the Indebtedness of an Obligor under a Whole Loan which is secured by a Mortgage on the related Underlying Mortgaged Property, as the same may be amended, restated, modified or supplemented from time to time.

 

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

 

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

 

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

 

Net Cash Flow” shall mean with respect to any Underlying Mortgaged Property, for any period, the net income (or deficit) attributable to such Underlying Mortgaged Property for such period, determined in accordance with GAAP (and if such Property is subject to a Credit Tenant Lease, the net rents paid during such period under such lease), less the amount of all (a) capital expenditures incurred, (b) reserves established, (c) leasing commissions paid (other than commissions paid from reserves held

 

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under the Mortgage Loan Documents) and (d) tenant improvements paid during such period (other than tenant improvements paid from reserves held under the Mortgage Loan Documents) in each case attributable to such Underlying Mortgaged Property plus all non–cash charges deducted in the calculation of such net income.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Off–Balance Sheet Assets” shall mean, with respect to any Person, any asset that is subject to an off—balance sheet financing, and as a result of such transaction such asset does not (and is not required pursuant to GAAP) to appear as an asset on the balance sheet of such Person.

 

Off–Balance Sheet Liabilities” shall mean, with respect to any Person, any (a) repurchase obligation or liability, contingent or otherwise, of such Person with respect to any mortgages, mortgage notes, accounts or notes receivable sold, transferred or otherwise disposed of by such Person, (b) repurchase obligation or liability, contingent or otherwise, of such Person with respect to Property or assets leased by such Person as lessee and (c) obligations, contingent or otherwise, of such Person under any Off—Balance Sheet Transaction, in each case, if the transaction giving rise to such obligation (i) is 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.

 

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

 

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

 

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

 

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

 

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

 

Original Agreement” shall have the meaning set forth in the Recitals hereto.

 

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

 

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

 

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

 

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

 

Participation Agreement” shall mean, with respect to any Junior Interest, any executed participation agreement, sub—participation agreement, intercreditor, servicing or administrative agreement or any agreement that is similar to any of the foregoing agreements under which the Junior Interest is

 

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created, evidenced, issued, serviced, administered and/or guaranteed, as the same may be amended, restated, modified or supplemented from time to time.

 

Participation Certificate” shall mean, with respect to any Junior Interest, an executed certificate, note, instrument or other document representing the interest, participation interest or sub—participation interest granted under a Participation Agreement, as the same may be amended, restated, modified or supplemented from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Pledge and Security Agreement” shall mean the First Amended and Restated Pledge and Security Agreement, dated as of the date hereof, between the Administrative Agent, the Pledgor, the Guarantors and the other parties from time to time party thereto, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

Pooling and Servicing Agreements” shall mean any and all pooling and servicing agreements, trust agreements or indentures governing servicing and other matters entered into in connection with (a) a CMBS Security or (b) a securitization of one (1) or more interests that are senior, junior or pari passu with a Mortgage Asset, as the same may be amended, restated, modified or supplemented from time to time.

 

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

 

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

 

Preferred Equity Interest Documents” shall have the meaning set forth in the Custodial Agreement.

 

Preferred Equity Pledge and Security Agreement” shall mean the First Amended and Restated Preferred Equity Pledge and Security Agreement, dated as of the date hereof, between the Administrative

 

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Agent and each Borrower, as amended, modified, waived, supplemented, extended, restated or replaced, from time to time in accordance with its terms.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Reindeer Facility” shall mean that certain facility entered into and evidenced by the Reindeer Note Purchase Agreement, together with all other documents executed in connection therewith, as the same are amended modified, restated, replaced, waived, substituted, supplemented or extended from time to time.

 

Reindeer Note Purchase Agreement” shall mean that certain Note Purchase Agreement, dated as of March 29, 2007, between NRF—Reindeer Ltd., a Cayman Islands exempted limited liability company, and Wachovia Bank, N.A. (London Branch), as amended, modified, restated, replaced, waived, substituted, supplemented or extended from time to time in accordance with its terms, including pursuant to the First Amendment to Note Purchase Agreement and Repurchase Documents, dated as of November 6, 2007, and the Second Amendment to Note Purchase Agreement and Repurchase Documents, dated as of October 28, 2009

 

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

 

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

 

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

 

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

 

Release Amount” shall mean (a) with respect to any Revolving Loan Collateral, the aggregate Allocated Revolving Loan Amount for all Revolving Loans allocated to such item of Revolving Loan Collateral by the Administrative Agent,  and (b) with respect to any Term Loan Collateral, the Release Amount set forth on Schedule 1-A to the Fee Letter.

 

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

 

REMIC” shall mean a real estate mortgage investment conduit.

 

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

 

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

 

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

 

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

 

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

 

Required Payments” shall mean all payments required under Section 2.5(b)(v) through (vi) of this Agreement or subject to or required to be subject to an Irrevocable Instruction, which amounts shall

 

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be free of any deductions for or on account of any set–off, counterclaim or defense and shall be deposited into the Collection Account for application in accordance with the terms of this Agreement.

 

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

 

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

 

Restatement Date” shall mean the date of this Agreement.

 

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

 

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

 

Revolver Maturity Date” shall mean the date that is three (3) years following the Restatement Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Securities Account” shall mean the securities account set forth on Schedule 1.1(d) established in the name of the Borrowers into which all CMBS Securities that are Pledged Mortgage Assets and other Collateral related thereto shall be deposited (except those CMBS Securities that are certificated securities within the meaning of Article 8 of the UCC), which Securities Account shall be subject to the Securities Account Control Agreement.  Any Income on deposit or credited to the Securities Account shall be transferred by the Administrative Agent from the Securities Account to the Collection Account on or prior to each Payment Date.

 

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Securities Account Control Agreement” shall mean a first amended and restated letter agreement, dated as of the date hereof, among the Borrowers, the Administrative Agent and Wachovia in the form of Exhibit 1.1(m) attached hereto, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Servicing Agreement” shall mean an agreement entered into by the applicable Borrower and a third party for the servicing of a Mortgage Asset, the form and substance of which has been approved in

 

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writing by the Administrative Agent in its reasonable discretion, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

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

 

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

 

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

 

Table Funded Mortgage Asset” shall mean a Mortgage Asset which is pledged to the Administrative Agent simultaneously with the origination or acquisition thereof, which origination or acquisition, pursuant to a Borrower’s request, is financed with the proceeds of a Revolving Loan and paid directly to a title company or other settlement agent, in each case, approved in writing by the Administrative Agent in its discretion, for disbursement to the parties entitled thereto in connection with such origination or acquisition.  A Mortgage Asset shall cease to be a Table Funded Mortgage Asset after the Custodian has delivered a Trust Receipt (along with a completed Mortgage Asset File Checklist attached thereto) to the Administrative Agent certifying its receipt of the Mortgage Asset File therefor.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Term Loan Maturity Date” shall mean the date that is three (3) years following the Restatement Date.

 

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

 

Test Period” shall mean the most recent calendar quarter.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Underlying Mortgaged Property” shall mean (a) in the case of a Whole Loan, the Mortgaged Property securing the Whole Loan, (b) in the case of a Junior Interest, the Mortgaged Property securing such Junior Interest (if the Junior Interest is of the type described in clause (b) of the definition thereof), or the Mortgaged Property securing the mortgage loan in which such Junior Interest represents a participation (if the Junior Interest is of the type described in clause (a) of the definition thereof), (c) in

 

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the case of a Mezzanine Loan or a Junior Interest in a Mezzanine Loan, the Mortgaged Property that secures the senior mortgage loan, (d) in the case of a Bridge Loan, CTL Loan or Subordinate CTL Loan, the Mortgaged Property securing the Whole Loan, Junior Interest or Mezzanine Loan, as applicable, (e) in the case of a CMBS Security, the Mortgaged Properties backing such CMBS Securities, (f) in the case of Senior Secured Bank Debt, the Mortgaged Property, if any, securing such Senior Secured Bank Debt and (g) in the case of a Preferred Equity Interest, the Mortgaged Property owned directly or indirectly by the Preferred Equity Grantor.

 

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

 

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

 

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

 

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

 

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

 

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Warrant Agreements” shall mean the three (3) separate Common Stock Purchase Warrants, issued on the Restatement Date, by Northstar Corp for the benefit of Wachovia, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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

 

Section 1.2            Other Definitional Provisions.

 

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

 

Section 1.3            Accounting Terms.

 

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a consistent basis; provided that,, if the Borrowers shall notify the Administrative Agent that they wish to amend any definitions or covenant incorporated in Section 5.9 to eliminate the effect of any change in GAAP on the operation of any such definition or provision (or if the Administrative Agent notifies the Borrowers that the Required Lenders wish to amend any such definition or provision for such purpose), then the Borrowers’ compliance with such provisions shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such definition or provision is amended in a manner satisfactory to the Borrowers, the Administrative Agent and the Required Lenders.

 

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

 

Section 1.4            Time References.

 

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).  Reference to day or days without further qualification means

 

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calendar days.  Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.

 

Section 1.5            Execution of Documents.

 

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

 

Section 1.6            UCC Terms.

 

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

 

Section 1.7            References to Discretion.

 

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

 

Section 1.8            References to Payment.

 

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

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1            Revolving Loans.

 

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

 

No Revolving Loan shall be made by any Revolving Lender if (i) such Revolving Loan and the Revolving Loan Collateral therefor are not approved by the Administrative Agent in its discretion, (ii) before or after giving effect to such Revolving Loan, the Availability is or would

 

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be negative, (iii) before or after giving effect to such Revolving Loan, the aggregate principal amount of outstanding Revolving Loans would exceed the Available Borrowing Capacity and (iv) the conditions to Extensions of Credit in Section 4.2 are not satisfied.  Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrowers may request, and may be repaid and reborrowed in accordance with the provisions hereof; provided, however, the Revolving Loans made on the Restatement Date or any of the three (3) Business Days following the Restatement Date may only consist of Alternate Base Rate Loans unless the Borrowers deliver a funding indemnity letter, substantially in the form of Exhibit 2.1(a), reasonably acceptable to the Administrative Agent not less than three (3) Business Days prior to the Restatement Date.  LIBOR Rate Loans shall be made by each Revolving Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b)           Revolving Loan Borrowings.

 

(i)            Notice of Borrowing.

 

(1) The Borrowers may request Revolving Loans for the purpose of financing Eligible Assets approved by the Administrative Agent in its discretion and for no other purpose.  The Borrowers shall request a Revolving Loan borrowing by delivering a written Notice of Borrowing (or telephone notice promptly confirmed in writing by delivery of a written Notice of Borrowing, which delivery may be by Electronic Transmission) to the Administrative Agent along with a Compliance Certificate, Borrower Asset Schedule and Underwriting Package for the related Eligible Asset(s) to be financed not later than (A) ten (10) Business Days for Non-Wachovia Assets and (B) seven (7) Business Days for Wachovia Assets from the delivery of the applicable Notice of Borrowing.  Each such Notice of Borrowing shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor, (E) the applicable Borrower and the Eligible Asset to be financed, (F) a calculation of Availability and (G) the amount of Available Borrowing Capacity.  If the Borrowers shall fail to specify in any such Notice of Borrowing (1) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (2) the Type of Revolving Loan requested, then such notice shall be deemed to be a request for a one-month LIBOR Rate Loan.

 

(2)           The Administrative Agent shall notify the applicable Borrower in writing of the Administrative Agent’s tentative approval (and the proposed Allocated Revolving Loan Amount for each Eligible Asset) or final disapproval of each proposed Eligible Asset within, (i) in the case of Non—Wachovia Assets, eight (8) Business Days (or such greater time as the Administrative Agent determines in its discretion for multiple assets or assets with multiple Mortgaged Properties) and, (ii) in the case of Wachovia Assets, five (5) Business Days (or such greater time as the Administrative Agent determines in its discretion for multiple assets or assets with multiple Mortgaged Properties) after its receipt of the Notice of Borrowing, the Borrower Asset Schedule, the Compliance Certificate, the complete Underwriting Package and any supplemental requests (requested orally or in writing) relating to such proposed Eligible Asset.  Unless

 

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the Administrative Agent notifies the Borrowers in writing of the Administrative Agent’s approval of such proposed Eligible Asset within the applicable period, the Administrative Agent shall be deemed not to have approved such proposed Eligible Asset.  The Administrative Agent in its discretion may waive, shorten or increase any of the applicable time periods for the review of proposed Eligible Assets or the delivery of documents.

 

(3)           Provided that the Administrative Agent on behalf of the Lenders has tentatively agreed to finance the Eligible Asset described in the Notice of Borrowing and the proposed Allocated Revolving Loan Amount is acceptable to the applicable Borrower, the applicable Borrower shall forward to the Administrative Agent, via Electronic Transmission, at least two (2) Business Days prior to the requested Borrowing Date (which must be received by the Administrative Agent no later than 5:00 p.m. two (2) Business Days prior to the requested Borrowing Date) an executed confirmation for each Eligible Asset, substantially in the form of Exhibit 2.1(b) attached hereto (a “Confirmation”).  The Confirmation shall specify the Allocated Revolving Loan Amount for the related Eligible Asset and any additional terms or conditions of the related Revolving Loan not inconsistent with this Agreement.  The Confirmation executed by the Borrower shall be irrevocable unless consented to by the Administrative Agent in its discretion.  The delivery of the Confirmation to the Administrative Agent shall be deemed to be a certification by the applicable Borrower that, among other things, all conditions precedent to such Revolving Loan set forth in Articles II and IV have been satisfied (except the Administrative Agent’s consent).  Unless otherwise agreed in writing, upon receipt of the Confirmation, the Administrative Agent, on behalf of the Lenders, may, in the Administrative Agent’s discretion, agree to enter into the requested Revolving Loan with respect to an Eligible Asset, and such agreement shall be evidenced by the Administrative Agent’s signature on the Confirmation.  Any Confirmation executed by the Administrative Agent shall be deemed to have been received by the applicable Borrower on the date actually received by the applicable Borrower.

 

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

 

(5)           Each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between the Administrative Agent and the applicable Borrower with respect to the Revolving Loan to which the Confirmation relates, and the applicable Borrower’s acceptance of the related

 

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proceeds shall constitute the applicable Borrower’s agreement to the terms of such Confirmation.  It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be made a part of this Agreement.  To the extent of a conflict between this Agreement and the related Confirmation, the Confirmation shall control.

 

(6)           Pursuant to the Custodial Agreement, the Custodian shall deliver to the Administrative Agent and the applicable Borrower by 1:00 p.m. on the Borrowing Date for each Non—Table Funded Mortgage Asset a Trust Receipt (along with a completed Mortgage Asset File Checklist attached thereto) and an Asset Schedule and Exception Report relating to the Basic Mortgage Asset Documents with respect to the Eligible Assets that the applicable Borrower has requested the Revolving Lenders to finance on such Borrowing Date.  With respect to each Table Funded Mortgage Asset, the applicable Borrower shall cause the Bailee to deliver to the Custodian with a copy to the Administrative Agent no later than 1:00 p.m. on the Borrowing Date by facsimile the related Basic Mortgage Asset Documents, the insured closing letter (if any), the escrow instructions (if any), a fully executed Bailee Agreement, a Bailee’s Trust Receipt issued by the Bailee thereunder and such other evidence satisfactory to the Administrative Agent in its discretion that all documents necessary to effect a pledge of the related Eligible Asset and the related Collateral to the Administrative Agent on behalf of the Lenders have been delivered to Bailee.  With respect to each Table Funded Mortgage Asset, the Custodian shall deliver to the Administrative Agent a Table Funded Trust Receipt no later than 3:00 p.m. on the Borrowing Date, which documents shall be acceptable to the Administrative Agent in its discretion.  In the case of a Table Funded Mortgage Asset, no later than 3:00 p.m. on the second (2nd) Business Day following the Custodian’s receipt of the related Mortgage Loan Documents comprising the Mortgage Asset File, the Custodian shall deliver to the Administrative Agent a Trust Receipt (along with a completed Mortgage Asset File Checklist attached thereto) certifying its receipt of the documents required to be delivered pursuant to the Custodial Agreement, together with an Asset Schedule and Exception Report relating to the Basic Mortgage Asset Documents, with any Exceptions identified by the Custodian as of the date and time of delivery of such Asset Schedule and Exception Report.  The Custodian shall deliver to the Administrative Agent an Asset Schedule and Exception Report relating to all of the Mortgage Loan Documents within five (5) Business Days of its receipt of the related Mortgage Asset Files.

 

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

 

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

 

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

 

(iv)          Additional Revolving Loans.  The Borrowers may request additional Revolving Loans with respect to the then existing Revolving Loan Collateral; provided that (A) such request is subject to the Administrative Agent’s approval in its discretion, (B) before and after giving effect to such Extension of Credit, the Availability is not and would not be negative, (C) before or after giving effect to such Revolving Loan, the aggregate principal amount of outstanding Revolving Loans would not exceed the Available Borrowing Capacity, (D) no Default or Event of Default exists, (E) the Borrowers deliver a Notice of Borrowing, a Compliance Certificate and such other information and documents as the Administrative Agent shall require in its discretion at least three (3) Business Days prior to the requested Borrowing Date and (F) to the extent approved by the Administrative Agent, the Administrative Agent shall notify the Borrowers of the amount of Revolving Loans so approved and the Borrowers and the Administrative Agent shall execute one (1) or more amended Confirmations evidencing the new Allocated Revolving Loan Amounts and Release Amounts for the Revolving Loan Collateral with respect to which the Administrative Agent has determined to permit such additional Extension of Credit, together with such other terms and conditions as the Administrative Agent may require in its discretion, and the Borrowers shall deliver to the Custodian any additional Mortgage Loan Documents, as applicable, in connection with such funding.  Unless the Administrative Agent notifies the Borrowers in writing of its approval of such Revolving Loans, the Administrative Agent shall be deemed not to have approved such request.

 

(c)           Repayment.  Subject to the terms of this Agreement, Revolving Loans may be borrowed, repaid and reborrowed during the Commitment Period.  All outstandings under the Revolving Loans shall be due and payable in full on the Revolver Maturity Date, unless accelerated sooner pursuant to Section 7.2.  The Borrowers shall have the right to repay Revolving Loans in whole or in part from time to time; provided, however; that each partial repayment of a Revolving Loan shall be in a minimum principal amount of $1,000,000 and integral multiples of $100,000 in excess thereof (or the remaining outstanding principal amount). Any such repayment will be applied in accordance with Section 2.5(b) of this Agreement or, as applicable, the Fee Letter, or, if not specified in Section 2.5 or the Fee Letter, in such order and manner as determined by the Administrative Agent in its reasonable discretion.

 

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

 

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

 

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

 

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

 

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

 

(f)            Confirmations.  Notwithstanding anything to the contrary in this Section 2.1 and notwithstanding any oral or verbal approval of an Extension of Credit by the Administrative Agent, no Extension of Credit shall be deemed approved until a Confirmation or revised Confirmation, as applicable, has been executed by the Administrative Agent.  Each pledge of a Mortgage Asset, regardless of whether a Loan is made to the Borrowers in connection therewith, shall be evidenced by a Confirmation.  Each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between the Administrative Agent and the applicable Borrower with respect to the Term Loan or Revolving Loan to which the Confirmation relates, and the applicable Borrower’s acceptance of the related proceeds shall constitute the applicable Borrower’s agreement to the terms of such Confirmation.  It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be made a part of this Agreement.  To the extent of a conflict between this Agreement and the related Confirmation, the Confirmation shall control.

 

Section 2.2            Term Loan; Delayed Draw Term Loan.

 

(a)           Term Loan.  Subject to the terms and conditions hereof (including, without limitation, Sections 4.1 and 4.2 of this Agreement) and in reliance upon the representations and warranties set forth herein, each Term Loan Lender severally, but not jointly, agrees to make available to the Borrowers (through the Administrative Agent) on the Restatement Date such Term Loan Lender’s Term Loan Commitment Percentage of a term loan in Dollars (the “Term Loan”) in the aggregate principal amount of TWO HUNDRED FORTY THREE MILLION SEVEN HUNDRED FIFTY FIVE THOUSAND EIGHT HUNDRED SIXTY THREE DOLLARS AND SIXTY NINE CENTS  ($243,755,863.69), which amount shall equal the aggregate Allocated Term Loan Amount approved by the Administrative Agent in its discretion for the Eligible Assets approved by the Administrative Agent in its discretion and included in the Term Loan Collateral (as the same may be increased as provided in Section 2.2(b), the “Term Loan Committed Amount”), for the purposes hereinafter set forth.  The Term Loan Collateral and the Allocated Term Loan Amount for each item of Term Loan Collateral shall be evidenced by Confirmations executed by the applicable Borrower and the Administrative Agent.  Upon receipt by the Administrative Agent of the proceeds of the Term Loan, such proceeds will then be made available to the Borrowers by 5:00 p.m. on the Borrowing Date by the Administrative Agent by crediting the account of the Borrowers on the books of the office of the Administrative Agent

 

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specified in Section 10.2, or at such other office as the Administrative Agent may designate in writing, with the aggregate of such proceeds made available to the Administrative Agent by the Term Loan Lenders and in like funds as received by the Administrative Agent (or by crediting such other account(s) as directed in writing by the Borrowers).  The Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrowers may request.  LIBOR Rate Loans shall be made by each Term Loan Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(i)            Repayment of Term Loan.  The terms and provisions governing repayment of the Term Loan are set forth in Section 2.5(b)(viii).  All outstandings under the Term Loan shall be due and payable in full on the Term Loan Maturity Date unless accelerated sooner pursuant to Section 7.2.  Amounts repaid or prepaid on the Term Loan may not be reborrowed.  Any repayment of the Term Loans will be applied in accordance with Section 2.5(b) of this Agreement or, as applicable, the Fee Letter, or, if not specified in Section 2.5 or the Fee Letter, in such order and manner as determined by the Administrative Agent in its reasonable discretion.

 

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

 

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

 

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

 

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

 

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

 

(b)           Delayed Draw Term Loan.  Until the Term Loan Maturity Date and subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each Term Loan Lender severally, but not jointly, agrees to make available to the Borrowers (through the Administrative Agent) from time to time, in accordance with clause (b)(i)(C) below, such Term Loan Lender’s Term Loan Commitment Percentage of a term loan in Dollars (each, a “Delayed Draw Term Loan”) in the aggregate principal amount, after giving effect to all Delayed Draw Term Loan borrowings, of up to TWENTY TWO MILLION EIGHT HUNDRED NINETEEN THOUSAND SIX HUNDRED EIGHTY THREE DOLLARS AND SIXTY CENTS ($22,819,683.60), which amount shall not exceed the maximum aggregate Allocated Term Loan Amount for the future fundings approved by the Administrative Agent in its discretion on Term Loan Collateral identified on Schedule 1-B to the Fee Letter (the “Delayed Draw Term Loan Committed Amount”), for the purposes hereinafter set forth.  A Delayed Draw Term Loan borrowing may consist of Alternate Base Rate Loans or

 

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LIBOR Rate Loans, or a combination thereof, as the Borrower may request.  Amounts repaid or prepaid on a Delayed Draw Term Loan may not be reborrowed.

 

(i)            Delayed Draw Term Loan Borrowings.

 

(A)          Notice of Borrowing.

 

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

 

(2)           The delivery of the Confirmation to the Administrative Agent shall be irrevocable and shall be deemed to be a certification by the applicable Borrower that, among other things, all conditions precedent to such Delayed Draw Term Loan set forth in Articles II and IV have been satisfied (except the Administrative Agent’s consent).  Each amended Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between the Administrative Agent and the applicable Borrower with respect to the Delayed Draw Term Loan and Term Loan to which the amended

 

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Confirmation relates, and the applicable Borrower’s acceptance of the related proceeds shall constitute the applicable Borrower’s agreement to the terms of such Confirmation.  It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be made a part of this Agreement.  To the extent of a conflict between this Agreement and the related Confirmation, the Confirmation shall control.

 

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

 

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

 

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

 

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

 

(c)           Confirmations.  Notwithstanding anything to the contrary in this Section 2.2 and notwithstanding any oral or verbal approval of an Extension of Credit by the Administrative Agent, no Extension of Credit shall be deemed approved until a Confirmation or revised Confirmation, as applicable, has been executed by the Administrative Agent. Each pledge of a Mortgage Asset, regardless of whether a Loan is made to the Borrowers in connection therewith, shall be evidenced by a Confirmation.  Each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between the Administrative Agent and the

 

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applicable Borrower with respect to the Term Loan to which the Confirmation relates, and the applicable Borrower’s acceptance of the related proceeds shall constitute the applicable Borrower’s agreement to the terms of such Confirmation.  It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be made a part of this Agreement.  To the extent of a conflict between this Agreement and the related Confirmation, the Confirmation shall control.

 

(d)                                 Deliveries.  The Borrower Asset Schedules, Custodial Identification Certificates, Trust Receipts, Borrower Release Letters, Warehouse Lender Release Letters and Servicer Redirection Letters delivered with respect to the Term Loan Collateral under the Original Agreement and under the other Credit Documents prior to the Restatement Date shall, notwithstanding the amendment and restatement of the Agreement and the other Credit Documents on the Restatement Date, continue to be applicable to all Term Loan Collateral on and after the Restatement Date with the same force and effect as if such documents were delivered on the Restatement Date.  All references in the Borrower Asset Schedules, Custodial Identification Certificates, Trust Receipts, Borrower Release Letters, Warehouse Lender Release Letters and Servicer Redirection Letters to the various Credit Documents shall be deemed to refer to the Credit Documents as amended and restated on the Restatement Date and as subsequently amended, modified, restated replaced, waived, substituted or extended from time to time

 

Section 2.3                                   Fees.

 

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

 

Section 2.4                                   Commitment Reductions.

 

(a)                                  Voluntary Reductions.  The Borrowers shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount and/or the Delayed Draw Term Loan Committed Amount at any time or from time to time upon not less than five (5) Business Days’ prior written notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Loans made on the effective date thereof, (i) the sum of the aggregate principal amount of outstanding Revolving Loans would exceed the Revolving Committed Amount then in effect, (ii) the Availability would be negative or (iii) the sum of the aggregate principal amount of outstanding Delayed Draw Term Loans would exceed $22,819,683.60 (i.e. the initial Delayed Draw Term Loan Committed Amount).

 

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

 

Section 2.5                                   Prepayments.

 

(a)                                  Optional Prepayments.  The Borrowers shall have the right to prepay the Term Loans in whole or in part from time to time; provided, however, that each partial prepayment of a Term Loan shall be in a minimum principal amount of $1,000,000 and integral multiples of $500,000 in excess thereof (or the remaining outstanding principal amount).  The Borrowers shall

 

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give three Business Days’ irrevocable notice of prepayment in the case of LIBOR Rate Loans and same-day irrevocable notice on any Business Day in the case of Alternate Base Rate Loans to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable).  To the extent that the Borrowers elect to prepay the Term Loans, amounts prepaid under this Section shall be applied in accordance with Section 2.5 of this Agreement and the Fee Letter, or, if not provided therein, in such order and manner as determined by the Administrative Agent in its reasonable discretion.  Within the foregoing parameters, prepayments under this Section shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this Section shall be subject to Section 2.13, but otherwise without premium or penalty.  Interest on the principal amount prepaid shall be payable on the next occurring Payment Date that would have occurred had such Loan not been prepaid or, at the request of the Administrative Agent, interest on the principal amount prepaid shall be payable on any date that a prepayment is made hereunder through the date of prepayment.

 

(b)                                 Mandatory Prepayments.

 

(i)                                     Availability and Revolving Committed Amount.

 

(A)                              Availability. Subject to the definition of Asset Value, the Administrative Agent may calculate Availability on any day.  If the Availability is negative on any day, as determined by the Administrative Agent in its discretion, the Borrowers shall, immediately upon notice from the Administrative Agent and, in any event, within three (3) Business Days upon notice from the Administrative Agent (the “Availability Correction Deadline”), prepay the Revolving Loans in cash in an amount determined by the Administrative Agent so that, after giving effect to such payment, the Availability will not be negative (each such amount, a “Correction Amount”).

 

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

 

(C)                                Delayed Draw Term Loan Committed Amount.  If at any time after the Restatement Date, the sum of the funded Delayed Draw Term Loans shall exceed $22,819,683.60 (i.e. the initial Delayed Draw Term Loan Committed Amount), the Borrowers shall immediately prepay the Term Loans in an amount sufficient to eliminate such excess.

 

(ii)                                  Defaulted Collateral Prepayment. The terms and provisions governing mandatory prepayments in connection with a Collateral Default are set forth in the Fee Letter and are hereby incorporated by reference.

 

(iii)                               Reduction of Asset Value Prepayment. Subject to the definition of Asset Value, if, at any time during an Asset Valuation Period, the Administrative Agent determines at any time in its discretion that (A) the Asset Value for any item of Term Loan Collateral is or should be reduced for any reason in its discretion (other than as excluded in the definition of Asset Value), the Borrowers shall prepay the outstanding Term Loans, within one (1) Business Day of the Administrative Agent’s request, in an

 

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amount equal to the reduction determined by the Administrative Agent, (B) the Asset Value for any item of Revolving Loan Collateral is or should be reduced for any reason in its discretion (other than as excluded in the definition of Asset Value), the Borrowers shall prepay the outstanding Revolving Loans, within one (1) Business Day of the Administrative Agent’s request, in an amount equal to the reduction determined by the Administrative Agent and (C) the Asset Value of all Pledged Mortgage Assets, as determined in the Administrative Agent’s discretion, is less (including by reason of reductions in the Asset Value as determined by the Administrative Agent (other than as excluded in the definition of Asset Value)) than the outstanding principal amount of all Loans (including Term Loans and Revolving Loans) plus the Note Purchase Margin (in each case, a “Deficit”), the Borrowers shall prepay the Revolving Loans and the Term Loans within one (1) Business Day of the Administrative Agent’s request, in the amount of the Deficit.  The Administrative Agent’s election, in its discretion, not to deliver any notice under this clause (iii) shall not in any way limit or impair its right to deliver such notice at any time.  Any payments received with respect to clause (A) or (B) shall be applied to the Pledged Mortgage Asset creating a Deficit and any payment received with respect to clause (C) shall be applied to the Term Loans, the Reindeer Debt and/or the Revolving Loans in such order and manner as determined by the Administrative Agent in its reasonable discretion.

 

(iv)                              Collateral Release Prepayment.  The terms and provisions governing mandatory prepayments in connection with repayment, prepayment reduction or removal of any Collateral are set forth in the Fee Letter and are hereby incorporated by reference.

 

(v)                                 Issuances of Debt.  At all times while the Borrowers are not in compliance with any Bi-Annual Principal Reduction and in connection with the closing of any Debt Issuance, the Borrowers shall prepay the Loans, within one (1) Business Day of the closing of any Debt Issuance,  in an aggregate amount equal to the greater of (1) 35% of the Net Cash Proceeds of each such Debt Issuance and (2) the difference between Bi-Annual Principal Reduction payments that are due and payable and the principal payments that have been applied to the outstanding principal balance of the Term Loans and the Reindeer Debt (to the extent positive) (the “Debt Net Cash Proceeds Payment”) and, in connection therewith, shall, pursuant to Irrevocable Instructions, cause the Persons obligated to pay such Net Cash Proceeds to remit the Debt Net Cash Proceeds Payment by wire transfer in immediately available funds directly to the Collection Account on the closing date of the Debt Issuance instead of paying such amounts to any Credit Party or a Subsidiary or Affiliate of a Credit Party.  Such prepayment shall be prepaid in accordance with clause (ix) below.

 

(vi)                              Issuances of Equity.  (A) At all times while the Borrowers are not in compliance with any Bi-Annual Principal Reduction and in connection with the closing of any Equity Issuance,  the Borrowers shall prepay the Loans, within one (1) Business Day of the closing of any Equity Issuance, in an aggregate amount equal to the greater of (x) the product of thirty five percent (35%) and the Net Cash Proceeds of each such Equity Issuance  and (y) the difference between Bi-Annual Principal Reduction payments that are due and payable and the principal payments that have been applied to the outstanding principal balance of the Term Loans and the Reindeer Debt (to the extent positive), and, (B) at all times while the Borrowers are in compliance with each Bi-Annual Principal Reduction and in connection with the closing of any Equity Issuance,  the Borrowers shall prepay the Loans, within one (1) Business Day of the closing of any Equity Issuance, in an aggregate amount equal the product of ten percent (10%) and the

 

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Net Cash Proceeds of each such Equity Issuance.  In connection therewith, the Borrowers shall, pursuant to Irrevocable Instructions, cause the Persons obligated to pay such Net Cash Proceeds to remit the Equity Net Cash Proceeds Payment by wire transfer in immediately available funds directly to the Collection Account on the closing date of the Equity Issuance instead of paying such amounts to any Credit Party or a Subsidiary or Affiliate of a Credit Party.  Such prepayment shall be prepaid in accordance with clause (ix) below; provided, however, that any Net Cash Proceeds received with respect to an ATM Offering shall be payable no later than three (3) Business Days following the filing of the related quarterly report made with the SEC.

 

(vii)                           Repayment of Term Loans.  The Borrowers shall repay the outstanding principal balance of the Term Loans (regardless of the source of the principal payments including, without limitation, mandatory and voluntary prepayments made in accordance with the terms of this Agreement or the Fee Letter) in the amounts and on or before the dates described in the definition of Bi-Annual Principal Reduction.  In the event that the Borrowers fail to comply with any Bi-Annual Principal Reduction and such failure is not cured within three (3) Business Days, such failure shall constitute an Event of Default under the Credit Documents.  Any payments received pursuant to this Section 2.5(b)(vii) shall be applied in accordance with Section 2.5(b)(ix).

 

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

 

(ix)                                Application of Mandatory Prepayments.

 

(1)                                  Unless otherwise set forth above in Section 2.5(a), Section 2.5(b)(i), (ii), (iii), (iv), (v) or (vi) or the Fee Letter, all amounts required to be paid pursuant to this Section, all amounts received by the Administrative Agent pursuant to Section 4(k) of the Reindeer Note Purchase Agreement and all other voluntary or involuntary prepayments shall be applied as follows: (A) first, to the outstanding Term Loans, the Term Loan Collateral and the Reindeer Debt, in such order and manner as determined by the Administrative Agent in its reasonable discretion,  in each case until the outstanding principal amount of the Term Loans and the Reindeer Debt has been paid and full and (B) second, to the outstanding Revolving Loans and Revolving Loan Collateral in such order and manner as determined by the Administrative Agent in its reasonable discretion until the outstanding principal amount of the Revolving Loans has been paid in full.  Within the parameters of the applications set forth above, prepayments shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this Section shall be subject to Section 2.13 and be accompanied by interest on the principal amount prepaid through the date of prepayment, but otherwise without premium or penalty; and

 

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(2)                                  All amounts required to be paid pursuant to this Section shall be deposited in the Collection Account and applied at the time of receipt in accordance with this Section or the Fee Letter and shall be accompanied by any applicable costs incurred pursuant to Section 2.13 (if any) and any applicable interest payments.

 

Section 2.6                                   Default Rate and Payment Dates.

 

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

 

(b)                                 (i) If all or a portion of the principal amount of any LIBOR Rate Loan shall not be paid when due, such overdue amount shall bear interest at a rate per annum equal to the Default Rate or (ii) if any interest payable on the principal amount of any Loan or any fee or other amount, including the principal amount of any Alternate Base Rate Loan, payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the Default Rate, in each case from the date of such non-payment until such amount is paid in full (after as well as before judgment).  Upon the occurrence, and during the continuance, of any Event of Default hereunder, at the option of the Required Lenders, the principal of and, to the extent permitted by Requirements of Law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate equal to the Default Rate (in each case, after as well as before judgment).

 

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

 

Section 2.7                                   Conversion Options.

 

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

 

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continuing and (ii) partial conversions shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  All or any part of outstanding LIBOR Rate Loans may be converted as provided herein; provided that partial conversions shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.

 

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

 

Section 2.8                                   Computation of Interest and Fees; Usury.

 

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

 

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

 

(c)                                  It is the intent of the Lenders and the Credit Parties to conform to and contract in strict compliance with applicable usury law from time to time in effect.  All agreements between the Lenders and the Credit Parties are hereby limited by the provisions of this subsection which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including, but not limited to, prepayment or acceleration of the maturity of any Obligation), shall the interest taken, reserved, contracted for, charged, or received under this Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible under Requirements of Law.  If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this paragraph and such interest shall be automatically reduced to the maximum nonusurious amount permitted under Requirements of Law, without the necessity

 

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of execution of any amendment or new document.  If any Lender shall ever receive anything of value which is characterized as interest on the Loans under Requirements of Law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans and not to the payment of interest, or refunded to the Borrowers or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans.  The right to demand payment of the Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand.  All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by Requirements of Law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of such Indebtedness does not exceed the maximum nonusurious amount permitted by Requirements of Law.

 

Section 2.9                                   Pro Rata Treatment and Payments.

 

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

 

(i) Each borrowing of Revolving Loans and any reduction of the Revolving Commitments shall be made pro rata according to the respective Revolving Commitment Percentages of the Revolving Lenders.  Each payment on account of any fees pursuant to Section 2.3 shall be made pro rata in accordance with the respective amounts due and owing.  Each optional prepayment on account of principal of the Loans shall be applied in accordance with Sections 2.1(c) and 2.5(a), as applicable.  Each mandatory prepayment on account of principal of the Loans shall be applied in accordance with Section 2.5(b) or the Fee Letter, as applicable.  Unless payments are specifically payable to Revolving Loans, Term Loans or the Reindeer Debt, all payments are shared pari passu and pro rata (based on the amounts of such Loans) between Revolving Loans and Term Loans. All payments (including prepayments) to be made by the Borrowers on account of principal, interest and fees shall be made without defense, set-off or counterclaim and shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s office specified on Section 10.2 in Dollars and in immediately available funds not later than 1:00 p.m. on the date when due.  The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received.  If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.  If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, such payment date shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.

 

(ii)                                  The Administrative Agent as agent for the Secured Parties shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Collateral, which amount shall be deposited by the Borrowers and any Servicer or PSA Servicer under a Pooling and Servicing Agreement into the Collection Account.  The Borrowers hereby agree to instruct each applicable Servicer to transfer within

 

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two (2) Business Days of receipt thereof, and each applicable PSA Servicer under a Pooling and Servicing Agreement to deposit within two (2) Business Days of the date on which such Person is obligated under the applicable Pooling and Servicing Agreement to disburse such funds, all Income with respect to the Collateral directly into the Collection Account.  On each Payment Date, any Cash Collateral and any amounts on deposit in the Collection Account shall be withdrawn by the Administrative Agent and shall be applied as follows:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

provided, however, that if a Default or Event of Default has occurred and is continuing or a mandatory prepayment under Section 2.5 or the Fee Letter is due but not yet payable, such amounts under clause “EIGHTH” shall not be transferred to the Borrowers but shall remain in the Collection Account and applied (i) in the case of a mandatory prepayment under Section 2.5 or the Fee Letter, in reduction of

 

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such mandatory prepayments when due and payable, with the balance being remitted to the Borrowers and (ii) in the case of a Default or Event of Default, in reduction of the Obligations in accordance with Section 2.9(b).

 

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

 

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

 

(b)                                 Allocation of Payments After Exercise of Remedies.  Notwithstanding any other provisions of this Agreement or the other Credit Documents to the contrary, after the exercise of remedies (other than the invocation of default interest pursuant to Section 2.6) by the Administrative Agent or the Lenders pursuant to Section 7.2 (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Credit Documents shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Administrative Agent or any Lender on account of the Obligations or any other amounts outstanding under any of the Credit Documents or in respect of the Collateral and all amounts on deposit in the Collection Account shall be paid over or delivered to the Administrative Agent and applied as follows (irrespective of whether the following costs, expenses, fees, interest, premiums, scheduled periodic payments or Obligations are allowed, permitted or recognized as a claim in any proceeding resulting from the occurrence of a Bankruptcy Event):

 

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

 

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

 

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

 

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

 

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

 

SIXTH, pari passu and pro rata (based on the amounts owed to such Persons under this clause) to all other Obligations and other obligations which shall have become

 

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due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.11                            Inability to Determine Interest Rate.

 

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

 

Section 2.12                            Yield Protection.

 

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

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with

 

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or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.13                            Indemnity; Eurocurrency Liabilities.

 

(a)                                  The Credit Parties hereby agree to indemnify each Lender and to hold such Lender harmless from any actual, out-of-pocket funding loss or expense which each Lender may sustain or incur as a consequence of (a) the failure by the Borrowers to pay the principal amount of or interest on any Loan by any Lender in accordance with the terms hereof, (b) the failure by

 

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

 

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

 

Section 2.14                            Taxes.

 

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

 

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

 

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

 

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the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

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

 

(e)                                  Status of Lenders.  Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which any Credit Party is a resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Credit Document shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by Requirements of Law or reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation prescribed by Requirements of Law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by Requirements of Law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.15                            Illegality.

 

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

 

Section 2.16                            Obligations Absolute.

 

Except as set forth to the contrary in the Credit Documents, all sums payable by the Credit Parties hereunder or under the Credit Documents shall be paid without notice, demand, counterclaim, setoff, deduction or defense (as to any Person or any reason whatsoever) and without abatement, suspension, deferment, diminution or reduction (as to any Person or any reason whatsoever), and the obligations and liabilities of each Credit Party hereunder shall in no way be released, discharged or otherwise affected (except as expressly provided herein) by reason of:  (a) any damage to or destruction of or any taking of any asset, any Property, any Collateral or any portion of the foregoing; (b) any restriction or prevention of or interference with any use of any asset, any Property, any Collateral or any portion of the foregoing; (c) any title defect or encumbrance or any eviction from any Property, by title paramount or otherwise;

 

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(d) any Insolvency Proceeding relating to any Credit Party, any Affiliate or Subsidiary of the foregoing or any Obligor, account debtor or indemnitor under the Collateral, or any action taken with respect to this Agreement or any other Credit Document by any trustee or receiver of any Credit Party, any Affiliate or Subsidiary of the foregoing or any Obligor, account debtor or indemnitor under the Collateral, or by any court, in any such proceeding; (e) any claim that any Credit Party has or might have against the Administrative Agent, any Lender and/or any Indemnitee; (f) any default or failure on the part of the Administrative Agent, any Lender and/or any Indemnitee to perform or comply with any of the terms hereof, the Credit Documents or of any other agreement with any Credit Party, any Subsidiary or Affiliate of the foregoing and/or any other Person; (g) the invalidity or unenforceability of any Collateral or Loan; (h) anything related to or arising out of any Credit-Party-Related Obligation; or (i) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or not any Credit Party or any Affiliate or Subsidiary of the foregoing shall have notice or knowledge of any of the foregoing.

 

Section 2.17                            Replacement of Lenders.

 

(a)                                  Designation of a Different Lending Office.  If any Lender requests compensation under Section 2.12 or Section 2.15, or requires the Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12, Section 2.14 or Section 2.15, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

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

 

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

 

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

 

(iii)                               such assignment does not conflict with Requirements of Law.

 

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

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

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

 

Section 3.1                                   Financial Condition.

 

The audited consolidated balance sheet of NorthStar Corp and its Consolidated Subsidiaries as of the fiscal year ending December 31, 2008, provided to the Administrative Agent and the related audited consolidated statements of income and retained earnings and of cash flows for the year then ended, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification arising out of the scope of the audit conducted by Grant Thornton, copies of which have heretofore been furnished to the Administrative Agent, are complete and correct and present fairly in all material respects the consolidated financial condition of NorthStar Corp and its Consolidated Subsidiaries of the foregoing as of such date, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended.  All such financial statements, including the related schedules and notes thereto (if any), have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as disclosed therein).  Neither NorthStar Corp nor any of its Consolidated Subsidiaries had, as of the date of the most recent balance sheet referred to above, any material contingent liability or liability for taxes, or any long term lease or unusual forward or long term commitment, including, without limitation, any interest rate or foreign currency swap or exchange transaction or other financial derivative, that is not reflected in the foregoing statements or in the notes thereto.  Except as otherwise disclosed publicly, during the period from December 31, 2008, to and including the date hereof, there has been no sale, transfer or other disposition by the Borrowers, the Guarantor or any Consolidated Subsidiaries of the foregoing of any material part of their business or Property and no purchase or other acquisition of any business or Property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Borrowers, the Guarantor or any Consolidated Subsidiaries of the foregoing on the date hereof.

 

Section 3.2                                   No Material Adverse Effect.

 

Since December 31, 2008 (and, in addition, after delivery of annual audited financial statements in accordance with Section 5.1(a), from the date of the most recently delivered annual audited financial statements), there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect.

 

Section 3.3                                   Corporate Existence; Compliance with Law.

 

Each of the Credit Parties (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (b) has the requisite power and authority and the legal right to own, operate and pledge all its Property, to lease the Property it operates as

 

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

 

Section 3.4                                   Corporate Power; Authorization; Enforceable Obligations.

 

Each of the Credit Parties has full power and authority and the legal right to make, deliver and perform the Credit Documents to which it is party and has taken all necessary limited liability company, partnership or corporate action to authorize the execution, delivery and performance by it of the Credit Documents to which it is party.  Each Credit Document to which it is a party has been duly executed and delivered on behalf of each Credit Party.  Each Credit Document to which it is a party constitutes a legal, valid and binding obligation of each Credit Party, enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by applicable Insolvency Laws and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

 

Section 3.5                                   No Legal Bar; No Default.

 

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

 

Section 3.6                                   No Material Litigation.

 

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

 

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

 

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

 

Section 3.8                                   Margin Regulations.

 

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

 

Section 3.9                                   ERISA.

 

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

 

Section 3.10                            Environmental Matters.

 

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

 

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

 

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

 

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

 

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

 

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stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability on behalf of any Credit Party under, any applicable Environmental Law.

 

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

 

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

 

Section 3.11                            Use of Proceeds.

 

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

 

Section 3.12                            Subsidiaries; Joint Ventures; Partnerships.

 

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

 

Section 3.13                            Ownership.

 

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

 

Section 3.14                            Indebtedness.

 

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

 

Section 3.15                            Taxes.

 

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

 

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Section 3.16                            Solvency.

 

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

 

Section 3.17                            [Reserved].

 

Section 3.18                            Location.

 

Each Credit Parties’ location (within the meaning of Article 9 of the UCC) is set forth on Schedule 3.18.  The office where each Credit Party keeps all the records (within the meaning of Article 9 of the UCC) is at the address set forth on Schedule 3.18 to this Agreement (or at such other locations as to which the notice and other requirements specified in Section 10.2 shall have been satisfied).  Each Credit Party’s organizational identification number and tax identification number is as set forth in the Fee Letter.

 

Section 3.19                            No Burdensome Restrictions.

 

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

 

Section 3.20                            Brokers’ Fees.

 

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

 

Section 3.21                            [Reserved].

 

Section 3.22                            Accuracy and Completeness of Information.

 

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

 

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furnished on behalf of each Credit Party to the Administrative Agent were prepared and presented in good faith by or on behalf of each Credit Party.

 

Section 3.23                            [Reserved].

 

Section 3.24                            Insurance.

 

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

 

Section 3.25                            Security Documents.

 

The Security Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby.  Except as set forth in the Security Documents, such security interests and Liens are currently (or will be, upon (a) the filing of appropriate financing statements with the Secretary of State of the state of incorporation or organization for each Credit Party, in each case in favor of the Administrative Agent, on behalf of the Lenders, and (b) the Administrative Agent obtaining control  or possession over those items of Collateral in which a security interest is perfected through control or possession) perfected security interests and Liens, prior to all other Liens other than Permitted Liens.  None of the Credit Parties nor any Person claiming through or under any Credit Party shall have any claim to or interest in the Collection Account or the Security Account Control Agreement, except for the interest of the Borrowers in such property as a debtor for purposes of the UCC.

 

Section 3.26                            Anti-Terrorism Laws.

 

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

 

Section 3.27                            Compliance with OFAC Rules and Regulations.

 

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

 

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

 

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Section 3.28                            Compliance with FCPA.

 

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

 

Section 3.29                            Consent; Governmental Authorizations.

 

No approval, consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with acceptance of Extensions of Credit by the Borrowers or the making of the Guaranty or with the execution, delivery or performance of any Credit Document by the Credit Parties (other than those which have been obtained) or with the validity or enforceability of any Credit Document against the Credit Parties (except such filings as are necessary in connection with the perfection of the Liens created by such Credit Documents).

 

Section 3.30                            Bulk Sales.

 

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

 

Section 3.31                            Income and Required Payments.

 

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

 

Section 3.32                            Full Payment.

 

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

 

Section 3.33                            Irrevocable Instructions.

 

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

 

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Section 3.34                            Compliance with Covenants.

 

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

 

Section 3.35                            Collateral Agreements.

 

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

 

Section 3.36                            No Reliance.

 

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

 

Section 3.37                            Collateral.

 

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

 

Section 3.38                            REIT Status.

 

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

 

Section 3.39                            Insider.

 

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

 

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Section 3.40                            No Defenses.

 

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

 

Section 3.41                            Warrant Agreements, Etc.

 

Northstar Corp hereby represents and warrants that (a) the Warrant Agreements and all of the outstanding shares of common stock under the Warrant Agreements, when issued and paid for upon exercise of the Warrant Agreements in accordance with the terms thereof, will have been duly and validly authorized and issued and will be fully paid and nonassessable and will have been offered, issued, sold and delivered to the holder in compliance with applicable Securities Laws; (b) the offer and sale of the Warrant Agreements and the common stock to be issued to the holder upon exercise of the Warrant Agreements in accordance with the terms thereof, are not required to be registered pursuant to Section 5 of the Securities Act or any other Securities Laws; and (c) neither Northstar Corp nor any agent on its behalf has solicited or will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the Warrant Agreements (or the common stock to be issued upon exercise of the Warrant Agreements) so as to bring the issuance of the Warrant Agreements within the registration provisions of the Securities Act or any other Securities Laws.

 

Section 3.42                            Value Given.

 

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

 

Section 3.43                            Separateness.

 

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

 

Section 3.44                            Qualified Transferees.

 

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

 

Section 3.45                            Eligibility of Mortgage Assets.

 

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

 

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Section 3.46                            Ability to Perform.

 

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

 

Section 3.47                            Certain Tax Matters.

 

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

 

Section 3.48                            Set-Off, etc.

 

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

 

Section 3.49                            Interest Rate Protection Agreements.

 

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

 

Section 3.50                            Representations and Warranties.

 

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

 

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ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1                                   Conditions to Restatement Date.

 

This Agreement shall become effective upon, and the obligation of each Lender to continue the Term Loans and to make the initial Revolving Loans (if any) on the Restatement Date, is subject to, the satisfaction of the following conditions precedent:

 

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

 

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

 

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

 

(ii)                                  Resolutions.  Copies of resolutions of the board of directors or comparable managing body of each Credit Party approving and adopting the Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by a Responsible Officer of such Credit Party (pursuant to the Closing Officer’s Certificate) as of the Restatement Date to be true and correct and in force and effect as of such date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)                                  Existing Indebtedness of the Borrowers.  All of the existing Indebtedness for borrowed money of the Borrowers (other than Indebtedness permitted to exist pursuant to Section 6.1) shall be repaid in full and all security interests related thereto shall be terminated on or prior to the Restatement Date.

 

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

 

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(g)                                 Extensions of Credit.  With respect to the Term Loans and any Revolving Loans to be made on the Restatement Date, the Borrowers shall have satisfied all of the conditions precedent set forth in Section 4.2.

 

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

 

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

 

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

 

(k)                                  Closing Officer’s Certificate.  The Administrative Agent shall have received a Closing Officer’s Certificate executed by a Responsible Officer of each of the Credit Parties as of the Restatement Date, substantially in the form of Exhibit 4.1(n) or such other form as is acceptable to the Administrative Agent.

 

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

 

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

 

(n)                                 [Reserved].

 

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

 

(p)                                 Reindeer Facility.  The Administrative Agent shall have received counterparts of the Second Amendment to Note Purchase Agreement and Repurchase Documents, dated as of the Restatement Date, entered into in connection with the Reindeer Facility, executed by a duly authorized officer of each party thereto and all conditions precedent to such amendment and restatement shall have been satisfied.

 

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

 

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

 

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

 

Section 4.2                                   Conditions to All Extensions of Credit.

 

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

 

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

 

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

 

(c)                                  Compliance with Commitments.  Before and immediately after giving effect to the making of any Revolving Loan (and the application of the proceeds thereof), (i) the sum of the aggregate principal amount of outstanding Revolving Loans shall not exceed the Revolving Committed Amount then in effect, (ii) the Availability shall not be negative and (iii) the aggregate principal amount of outstanding Revolving Loans would not exceed the Available Borrowing Capacity.  Before and immediately after giving effect to the making of any Delayed Draw Term Loan (and the application of the proceeds thereof), the sum of all Term Loans drawn as Delayed Draw Term Loans shall not exceed $22,819,683.60 (i.e. the initial Delayed Draw Term Loan Committed Amount).  Before and immediately after giving effect to the making of any Term Loan (and the application of the proceeds thereof), the sum of the aggregate principal amount of the outstanding Term Loans shall not exceed the Term Loan Committed Amount.

 

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

 

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

 

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

 

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other approvals for such Extension of Credit.  With respect to requirements for additional Revolving Loans on existing Revolving Loan Collateral under Section 2.1(b)(iv), all requirements and conditions of such Section are satisfied.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(x)                                   Conveyance from Affiliate.  In connection with the conveyance of any Mortgage Asset from an Affiliate of a Borrower to a Borrower prior to the time a Mortgage Asset becomes a Pledged Mortgage Asset hereunder, the Administrative Agent shall have received (i) evidence of the filing of UCC financing statements naming the respective Affiliate as debtor and the

 

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applicable Borrower as secured party and identifying the applicable Mortgage Asset as collateral, (ii) evidence of the filing a UCC-3 financing statement assigning the UCC financing statement referenced in clause (i) to the Administrative Agent, and (iii) a true sale opinion with respect to such conveyance from an Affiliate of a Borrower to a Borrower, which opinion shall be acceptable to the Administrative Agent in its discretion.

 

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

 

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

 

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

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

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

 

Section 5.1                                   Financial Statements.

 

Furnish to the Administrative Agent and each of the Lenders:

 

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

 

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Guarantors and their Consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding the foregoing, financial statements and reports required to be delivered pursuant to the foregoing provisions of this Section may be delivered by Electronic Transmission and if so, shall be deemed to have been delivered on the date on which the Administrative Agent receives such reports from

 

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the Borrowers through electronic mail; provided that, upon the Administrative Agent’s request, the Borrowers shall provide paper copies of any documents required hereby to the Administrative Agent.

 

Section 5.2                                   Certificates; Other Information.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(a)                                  [Reserved].

 

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

 

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

 

(d)                                 [Reserved].

 

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

 

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

 

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

 

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

 

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

 

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Section 5.3                                   Payment of Taxes and Other Obligations.

 

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

 

Section 5.4                                   Conduct of Business and Maintenance of Existence.

 

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

 

Section 5.5                                   Maintenance of Property; Insurance.

 

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

 

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

 

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

 

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

 

Section 5.7                                   Notices.

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                    [Reserved];

 

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

 

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

 

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

 

(j)                                     [Reserved];

 

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

 

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

 

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

 

(m)                               promptly (and, in any event, within two (2) Business Days) upon notice or knowledge thereof, provide written notice to the Administrative Agent if any Mortgage Asset becomes the subject of a Collateral Default; and

 

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

 

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

 

Section 5.8                                   Environmental Laws.

 

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

 

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

 

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

 

Section 5.9                                   Financial Covenants.

 

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

 

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

 

(b)                                 Maintenance of Tangible Net Worth.  For each Test Period, NorthStar Corp shall not permit Northstar Corp’s and its Consolidated Subsidiaries’ Tangible Net Worth at any time to be less than $675,000,000.

 

(c)                                  Interest Coverage.  For each Test Period, the Borrowers shall not permit the ratio of (A) the sum of Consolidated Adjusted EBITDA for all Borrowers for such Test Period to (B) Interest Expense for all Borrowers for such Test Period to be less than 1.15 to 1.0.

 

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

 

Section 5.10                            Additional Credit Parties.

 

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

 

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

 

Section 5.11                            Compliance with Law.

 

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

 

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

 

Section 5.12                            Pledged Assets.

 

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

 

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the extent any Collateral is created or comes into existence after the Restatement Date, the Credit Parties shall take such actions as the Administrative Agent shall require to obtain a first priority perfected security interest in such Collateral.

 

Section 5.13                            Interest Rate Protection Agreements.

 

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

 

Section 5.14                            Control Agreements.

 

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

 

Section 5.15                            Further Assurances.

 

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

 

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

 

(c)                                  Visits and Inspections.  The Credit Parties shall permit representatives of the Administrative Agent or any Lender, from time to time upon prior reasonable notice and at such times during normal business hours, to visit and inspect its Properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business prospects.  Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent or any Lender may do any of the foregoing at any time without advance notice.

 

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

 

Section 5.16                            Performance and Compliance with Collateral.

 

The Credit Parties shall, at their expense, timely and fully perform and comply (and shall cause their Consolidated Subsidiaries to timely and fully perform and comply) with all provisions, covenants

 

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and other promises required to be observed by them under the Collateral and all other agreements related to such Collateral.

 

Section 5.17                            Delivery of Income and Required Payments.

 

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

 

Section 5.18                            Exceptions.

 

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

 

Section 5.19                            Distributions in Respect of Collateral.

 

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

 

Section 5.20                            REIT Status.

 

Subject to Section 6.4 hereof, NorthStar Corp shall remain listed on a nationally recognized securities exchange in good standing.  NorthStar Corp may change its status as a REIT provided it remains in compliance with the Financial Covenants in all respects.

 

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Section 5.21                            Issuances.

 

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

 

Section 5.22                            Remittance of Prepayments.

 

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

 

Section 5.23                            Escrow Imbalance.

 

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

 

Section 5.24                            Separateness.

 

Notwithstanding any term contained in this Agreement or the other Credit Documents to the contrary, each Borrower shall (a) own no assets, and shall not engage in any business, other than the assets and transactions specifically contemplated by this Agreement and the Credit Documents; (b) not incur any Indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) pursuant hereto and under the agreements and documents evidencing, securing or in any other way related to the Mortgage Assets and the related Collateral, (ii) customary representations, warranties, indemnities and other agreements in connection with the origination, acquisition, servicing, collection, enforcement, financing, participation, securitization, sale or other disposition of the Mortgage Assets, and (iii) obligations under zoning and other governmental regulations, rules, prohibitions and ordinances and proposed restrictions, covenants, conditions, limitations, easements, rights—of—way and other matters existing of public record or proposed to be recorded or filed in the future governing or affecting mortgaged real Property or that may otherwise require the consent of or joinder by a mortgagee; (c) not make any loans or advances to any Affiliate other than loans to a Guarantor which are disclosed in writing to and approved in writing by the Administrative Agent, and shall not acquire obligations or securities of its Affiliates; (iv) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets; (d) comply with the provisions of its Authority Documents; (vi) do all things necessary to observe organizational formalities and to preserve its existence, and will not amend, modify or otherwise change its Authority Documents without the consent of the Administrative Agent; (e) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates (except that such

 

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financial statements may be consolidated to the extent consolidation is required under the GAAP consistently applied or as a matter of the Requirements of Law) and file its own tax returns (except to the extent consolidation is required or permitted under Requirements of Law); (f) be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other; (g) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (h) not engage in or suffer any change of ownership, dissolution, winding up, liquidation, consolidation or merger in whole or in part; (i) not commingle its funds or other assets with those of any Affiliate or any other Person; (j) maintain its accounts separate from those of any Affiliate or any other Person; (k) shall not hold itself out to be responsible for the debts or obligations of any other Person; (l) shall not, without the vote of its Independent Director, (i) file or consent to the filing of any Insolvency Proceeding with respect to itself, institute any proceedings under any applicable Insolvency Law or otherwise seek any relief under any Requirements of Law relating to the relief from debts or the protection of debtors generally with respect to itself, (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for itself or a substantial portion of its properties, or (iii) make any assignment for the benefit of it’s creditors; (m) shall have at all times at least one (1) Independent Director (or such greater number as required by the Administrative Agent or the Rating Agencies); (n) shall maintain an arm’s length relationship with its Affiliates; (o) maintain a sufficient number of employees in light of contemplated business operations; (p) use separate stationary, invoices and checks; and (q) allocate fairly and reasonably any overhead for shared office space.

 

Section 5.25                            Preferred Equity Interests.

 

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

 

Section 5.26                            Registration of Securities.

 

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

 

Section 5.27                            Termination of Securities Account.

 

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

 

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held until a new securities account is established with an executed control agreement acceptable to the Administrative Agent in its discretion.

 

Section 5.28                            Independent Director.

 

The Borrowers and the Guarantors shall provide the Administrative Agent at least ten (10) Business Days prior written notice of its removal or replacement of any Independent Director appointed with respect to any Borrower.  The Borrowers and the Guarantors shall provide the Administrative Agent a copy of the executed agreement with respect to the appointment of any such Independent Director.  The identity and contact information for such Independent Director is set forth on Schedule 5.28 attached hereto, as such information may be updated from time to time by written notice to the Administrative Agent.

 

Section 5.29                            Main Treasury Bank.

 

No later than ninety (90) days following the Restatement Date, each Guarantor shall establish a deposit account with Wells Fargo Bank, National Association (each such account, a “Main Treasury Account”, which account each Guarantor shall use as its main treasury bank and in which each Guarantor shall maintain on deposit more cash than is maintained in any other bank at which such Guarantor maintains an account.

 

Section 5.30                            Independence of Covenants.

 

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

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

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

 

Section 6.1                                   Indebtedness.

 

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

 

Section 6.2                                   Liens.

 

The Credit Parties and the Subsidiaries and Affiliates shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume, suffer or permit to exist any Lien on all or any portion of the Collateral or the Required Payments, other than Permitted Liens, whether now existing or hereafter transferred hereunder, or any interest therein, and the Credit Parties and the Subsidiaries and Affiliates

 

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shall not sell, pledge, assign or suffer to exist any Lien, or any circumstance which, if adversely determined, would be reasonably likely to give rise to a Lien, on its interest, if any, hereunder or under the other Credit Documents.  Immediately upon notice to any Credit Party of a Lien or any circumstance which, if adversely determined would be reasonably likely to give rise to a Lien (other than in favor of the Administrative Agent or created by or through the Administrative Agent), on all or any portion of the Collateral or the Required Payments, the Borrowers shall notify the Administrative Agent and the Borrowers shall further defend the Collateral and the Required Payments against, and will take such other action as is necessary to remove, any Lien or claim on or to the Collateral or the Required Payments (other than any Permitted Liens created under this Agreement and the Credit Documents), and the Borrowers shall defend the right, title and interest of the Credit Parties and their Subsidiaries and Affiliates in and to any of the Collateral and the Required Payments against the claims and demands of all Persons whomsoever.  Notwithstanding the foregoing, if a Credit Party or any Subsidiary or Affiliate shall grant a Lien on any of the Collateral or Required Payments in violation of this Section, then it shall be deemed to have simultaneously granted an equal and ratable Lien on any such Collateral or Required Payments in favor of the Administrative Agent for the ratable benefit of the Lenders to the extent such Lien has not already been granted to the Administrative Agent.

 

Section 6.3                                   Nature of Business.

 

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

 

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

 

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

 

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

 

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Section 6.5                                   Warrant Agreements.

 

Northstar Corp shall not redeem or cancel any shares of  capital stock or take any other action with respect to its capital stock if such act would cause Wachovia, upon the exercise of the Warrant Agreements, to own in excess of five percent (5.00%) of the capital stock of Northstar Corp.

 

Section 6.6                                   Transactions with Affiliates.

 

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

 

Section 6.7                                   Ownership of Subsidiaries; Restrictions.

 

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

 

Section 6.8                                   Corporate Changes; Material Contracts.

 

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

 

Section 6.9                                   [Reserved].

 

Section 6.10                            Restricted Payments.

 

Except as otherwise required or permitted by the Credit Documents, no Credit Party shall declare or make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any Equity Interest of any Credit Party whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or Property or in obligations of any Credit Party, except that a Credit Party may declare and pay dividends in accordance with its respective Authority Documents and purchase or redeem Equity Interests of any Credit Party, and without restriction as to amount, so long as, in the case of the Credit Party, (a) no Default or Event of Default shall have occurred, (b) no mandatory prepayment obligation is due and payable, (c) no mandatory prepayment obligation required pursuant to Section 2.5(b) with respect to any Revolving Loan is due but not yet payable, and (d) the distribution of

 

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such funds will not violate any Financial Covenant.  Notwithstanding the preceding sentence and irrespective of the occurrence of the events described in clauses (a), (b) or (c) of the immediately preceding sentence, the Guarantors may at all times pay dividends either (i) as required by Requirement of Law to maintain its REIT status and/or (ii) to its preferred equity holders.

 

Section 6.11                            [Reserved].

 

Section 6.12                            No Further Negative Pledges.

 

None of the Borrowers shall grant, allow or enter into any agreement or arrangement with any Person that prohibits or restricts, or purports to prohibit or restrict, the granting of any Lien or other encumbrance on any of the assets or Properties of the Borrowers; provided, however, that the foregoing shall not apply to (i) the negative pledge contained in Section 6.18, (ii) Indebtedness identified on Schedule 6.1(b) or (iii) any other negative pledge or grant of any Lien or other encumbrance approved by the Administrative Agent in its discretion.

 

Section 6.13                            Collateral Not to be Evidenced by Instruments.

 

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

 

Section 6.14                            Deposits.

 

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

 

Section 6.15                            Servicing Agreements.

 

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

 

Section 6.16                            Extension or Amendment of Collateral.

 

Except as provided in Section 9.7, the Borrowers will not extend, amend, waive or otherwise modify, or permit any Servicer or PSA Servicer (except as provided in a Pooling and Servicing Agreement) to extend, amend, waive or otherwise modify the material terms of any Collateral or the Mortgage Loan Documents related thereto or to exercise the material rights of a holder of said Collateral, provided that the foregoing shall not prohibit the Borrowers, a Servicer or a PSA Servicer from permitting, prior to a default thereunder, any Obligor to exercise an extension option contained in any Mortgage Loan Documents.  Unless otherwise agreed to by the Administrative Agent in its discretion, the Borrowers, the Servicers and the PSA Servicers (except as provided in a Pooling and Servicing Agreement) shall have no right to waive, amend, modify or alter the material terms of any Collateral or

 

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the related Mortgage Loan Documents thereto or otherwise exercise any material right of the holder of any Collateral.

 

Section 6.17