CREDIT AGREEMENT Dated as of December 16, 2016 among STARWOOD PROPERTY TRUST, INC., as Borrower, and THE SUBSIDIARIES OF STARWOOD PROPERTY TRUST, INC. FROM TIME TO TIME PARTY HERETO, as Guarantors, and JPMORGAN CHASE BANK, N.A., as Administrative...

Exhibit 10.2

 

EXECUTION VERSION

 

 

 

CREDIT AGREEMENT

 

Dated as of December 16, 2016

 

among

 

STARWOOD PROPERTY TRUST, INC.,

as Borrower,

 

and

 

THE SUBSIDIARIES OF

STARWOOD PROPERTY TRUST, INC.

FROM TIME TO TIME PARTY HERETO,

as Guarantors,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

and

 

The Other Lenders Party Hereto,

 

JPMORGAN CHASE BANK, N.A., BARCLAYS BANK PLC, CITIGROUP GLOBAL MARKETS, INC. AND CREDIT SUISSE SECURITIES (USA) LLC,

as Joint Bookrunners and Joint Lead Arrangers

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT is entered into as of December 16, 2016 among STARWOOD PROPERTY TRUST, INC., a Maryland corporation (the “Borrower”), CERTAIN SUBSIDIARIES OF THE BORROWER, as Guarantors, each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

 

In consideration of the mutual covenants and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“A-Note” means either (a) a senior secured loan or promissory note (which is related to a mortgage loan which may or may not have one or more related pari passu promissory notes), that is secured by a first lien mortgage on a single commercial property or group of related commercial properties or a senior participation interest (which may be pari passu with other senior participation interests) in such loan or note or (b) a senior secured loan or promissory note related to a mortgage loan having one or more related B-Notes (provided that any such related B-Notes shall not constitute A-Notes hereunder), that is secured by a first lien mortgage on a single commercial property or group of related commercial properties or a senior or pari passu participation interest in such loan or note.

 

“Adjusted Net Book Value” means, with respect to any Investment Asset, (i) the net book value thereof (or, (x) with respect to any encumbered Commercial Real Estate Ownership Interest, the net equity of the Encumbered Real Property Pledged Subsidiary that directly or indirectly owns all of the Equity Interests in the applicable Encumbered Real Property Borrowing Base Subsidiary and (y) with respect to any CMBS or RMBS, the fair value thereof) determined in accordance with GAAP, plus (ii) solely with respect to any Commercial Real Estate Ownership Investment and solely to the extent deducted in determining net book value, net equity or fair value, real property depreciation and amortization.  For purposes of calculating the Adjusted Net Book Value of a First Priority Commercial Real Estate Debt Investment consisting of (A) a commercial mortgage loan and a related Mezzanine Loan or (B) an A-Note and B-Note in a commercial mortgage loan, the Adjusted Net Book Value of such First Priority Commercial Real Estate Debt Investment shall include both the commercial mortgage loan and related Mezzanine Loan or the A-Note and B-Note in the commercial mortgage loan that, in each case, comprise such First Priority Commercial Real Estate Debt Investment (pursuant to the definition thereof).

 

“Administrative Agent” means JPMorgan, in its capacity as the administrative agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors; it being understood that matters concerning Foreign Currency Revolving Credit Loans will be administered by ▇.▇. ▇▇▇▇▇▇ Europe Limited and therefore all notices concerning such

 

Foreign Currency Revolving Credit Loans will be required to be given at the London Funding Office.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit D-2 or any other form approved by the Administrative Agent.

 

“Affected Foreign Currency” has the meaning specified in Section 3.03.

 

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

 

“Agent Parties” has the meaning specified in Section 11.02(c).

 

“Aggregate Commitments” means, at any time, the sum of the Aggregate Revolving Commitments and the Aggregate Term Loan Commitments.

 

“Aggregate Deficit Amount” has the meaning specified in Section 10.11.

 

“Aggregate Excess Amount” has the meaning specified in Section 10.11.

 

“Aggregate Revolving Commitments” means, at any time, the aggregate amount of the Revolving Commitments of all the Lenders at such time.  As of the Closing Date, the Aggregate Revolving Commitments are $100,000,000.

 

“Aggregate Term Loan Commitments” means, at any time, the aggregate amount of the Term Loan Commitments of all the Lenders at such time.  As of the Closing Date, the Aggregate Term Loan Commitments are $300,000,000.

 

“Agreement” means this Credit Agreement.

 

“Agreement Currency” has the meaning specified in Section 11.21(b).

 

“Anti-Money Laundering Laws” means any and all laws, judgments, orders, executive orders, decrees, ordinances, rules, regulations, statutes, case law or treaties applicable to a Loan Party, its Subsidiaries or Affiliates, related to terrorism financing or money laundering including any applicable provision of Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001 (Title III of Pub. L. 107-56) and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

 

“Applicable Creditor” has the meaning specified in Section 11.21(b).

 

“Applicable Fee Rate” means, with respect to any calendar quarter (or portion thereof, as applicable), a per annum fee rate equal to 0.25%.

 

“Applicable Minimum Amount” means, in the case of Revolving Credit Loans, an amount equal to (x) if such Loans are denominated in Pounds Sterling, £5,000,000 or a whole multiple of £1,000,000 in excess thereof and (y) if such Loans are denominated in Euro, €5,000,000 or a whole multiple of €1,000,000 in excess thereof.

 

“Applicable Percentage” means (a) in respect of the Term Loan Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Loan Facility represented by (i) on or prior to the Closing Date, such Term Lender’s Term Commitment at such time, subject to adjustment as provided in Section 2.14, and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at such time and (b) in respect of the Revolving Credit Facility, with respect to any Revolving Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving Lender’s Revolving Commitment at such time, subject to adjustment as provided in Section 2.14.  If the commitment of each Revolving Lender to make Revolving Credit Loans has been terminated pursuant to Section 8.02 or otherwise, or if the Revolving Commitments have expired, then the Applicable Percentage of each Revolving Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Lender in respect of the Revolving Credit Facility as of the date of such termination or expiration, as applicable, giving effect to any subsequent assignments.

 

“Applicable Rate” means (a) with respect to Term Loans, 1.25% for Base Rate Loans and 2.25% for Eurocurrency Rate Loans and (b) with respect to Revolving Credit Loans, 1.25% for Base Rate Loans and 2.25% for Eurocurrency Rate Loans.

 

“Applicable Revolving Percentage” means, with respect to any Revolving Lender at any time, such Revolving Lender’s Applicable Percentage in respect of the Revolving Credit Facility at such time.

 

“Appraised Value” means, with respect to any Property (including any underlying real property asset relating to a Borrowing Base Asset), the appraised value of such Property as reflected in an Approved Appraisal (or a draft appraisal that, if issued, would constitute an Approved Appraisal) that has been delivered to the Administrative Agent.

 

“Appropriate Lender” means, at any time, (a) with respect to either of the Term Loan Facility or the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or holds a Term Loan or a Revolving Credit Loan, respectively, at such time and (b) with respect to Swing Line Loans, (i) the Swing Line Lenders and (ii) if any Swing Line Loans are outstanding pursuant to Section 2.17, the Revolving Lenders.

 

“Approved Appraisal” means, on any date and with respect to any Property, a FIRREA-compliant appraisal of such Property.  For purposes of this definition, the appraisal of any Property located in Europe shall be deemed to be FIRREA-compliant even if not conducted in accordance with U.S. FIRREA so long as (i) the appraiser of such Property is sufficiently independent to meet all applicable requirements under U.S. FIRREA with respect to appraiser independence and (ii)

 

the Administrative Agent receives an opinion of counsel to the applicable Loan Party, in form and substance satisfactory to the Administrative Agent, stating that the valuation standards used in conducting such appraisal conform to the U.S. FIRREA standards.

 

“Approved Fund” means any Fund that is administered or managed 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.

 

“Approved Jurisdiction” means each of the U.S., Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Japan, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland and United Kingdom.

 

“Arrangers” means JPMorgan, Barclays Bank PLC, Citigroup Global Markets, Inc. and Credit Suisse Securities (USA) LLC, each in its capacity as joint bookrunner and joint lead arranger.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit D-1 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.

 

“Assumed Facility Interest Expense” means actual interest expense on the Facilities for the most recently ended fiscal quarter multiplied by four (4).

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries for the fiscal years ended December 31, 2013, December 31, 2014 and December 31, 2015, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its consolidated Subsidiaries, including the notes thereto.

 

“B-Note” means a loan or promissory note (or a participation interest in such loan or promissory note) that is secured by a first mortgage on a single commercial property or group of related commercial properties and subordinated or junior (whether in lien priority, right of payment or payment waterfall, and whether structurally, contractually or legally) to an A-Note (or other notes or loans) secured by the same first mortgage on the same property or group of properties.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Eurocurrency Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, the Eurocurrency Rate for any day shall be based on the LIBO Rate for Dollars at approximately 11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Eurocurrency Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Eurocurrency Rate, respectively.

 

“Base Rate Loan” means that portion of a Loan or a Borrowing that bears interest based on the Base Rate.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Borrowing” means a Term Loan Borrowing, Revolving Credit Borrowing or a Swing Line Borrowing, as the context may require.

 

“Borrowing Base Account” means (i) each Deposit Account that is subject to a Control Agreement and maintained by a Secured Guarantor, into which all Borrowing Base Asset Proceeds, all Fee-Related Earnings and all Distributions received by such Secured Guarantor shall (unless otherwise provided pursuant to Section 6.21) be deposited (the “Required Borrowing Base Accounts”), (ii) each Specified Borrowing Base Account and (iii) any other Deposit Account or Securities Account containing Borrowing Base Assets that, in each case, is subject to a Control Agreement.

 

“Borrowing Base Amount” means, at any time, an amount that is equal to 100% of the sum of the following clauses (a) through (f) (or, during the period from and after the Initial Maturity Date, the sum of (x) 90% of the sum of the following clauses (a)-(d),  (e)(ii)(y) and (f) plus (y) 100% of the sum of the following clauses (e)(i) and (e)(ii)(x)):

 

(a)         (i) with respect to each First Priority Commercial Real Estate Debt Investment that has a current Loan-to-Value Ratio of less than or equal to 55%, the product of 70% multiplied by the Adjusted Net Book Value of such First Priority Commercial Real Estate Debt Investment, (ii) with respect to any other First Priority Commercial Real Estate Investment, the product of 65% multiplied by the Adjusted Net Book Value of such First Priority Commercial Real Estate Investment and (iii) with respect to any Investment Grade RMBS that is wholly-owned by a Qualifying Loan Party, the product of 65% multiplied by the Adjusted Net Book Value of such Investment Grade RMBS, plus

 

(b)         with respect to each Junior Priority Commercial Real Estate Debt Investment, the product of 45% multiplied by the Adjusted Net Book Value of such Junior Priority Commercial Real Estate Debt Investment, plus

 

(c)         with respect to each Non-Investment Grade RMBS that is wholly-owned by a Qualifying Loan Party, the product of 40% multiplied by the Adjusted Net Book Value of such Non-Investment Grade RMBS, plus

 

 

(d)         with respect to each Other Asset Investment, the product of 30% multiplied by the Adjusted Net Book Value of such Other Asset Investment, plus

 

(e)         (i) with respect to cash in Dollars, the product of 100% multiplied by the amount of such cash of any Qualifying Loan Party held in a Specified Borrowing Base Account and (ii) with respect to cash in any Foreign Currency, the sum of (x) the product of 100% multiplied by the amount of such cash of any Qualifying Loan Party, not to exceed, in the aggregate for all such Qualifying Loan Parties, the applicable Foreign Currency Outstanding Amount with respect to such Foreign Currency, held in a Specified Borrowing Base Account plus (y) the product of 95% multiplied by the amount of such cash of Qualifying Loan Parties in excess of the Foreign Currency Outstanding Amount with respect to such Foreign Currency held in a Specified Borrowing Base Account, plus

 

(f)         the product of 2.0 multiplied by the Servicing Fee EBITDA;

 

provided that notwithstanding the foregoing (it being understood that each percentage limitation set forth in clauses (ii),  (iii),  (iv),  (v),  (vi),  (vii),  (xv) and (xvii) below shall be calculated prior to giving effect to any reductions resulting from the application of such percentage limitation):

 

(i)           in no event shall any Investment Asset contribute, directly or indirectly, to the Borrowing Base Amount pursuant to more than one lettered clause above (however, collection of a servicing fee on an Investment Asset shall not prevent such Investment Asset from contributing to the Borrowing Base Amount);

 

(ii)          construction loans shall not contribute more than 20% in the aggregate of the Borrowing Base Amount;

 

(iii)         in no event shall the Borrowing Base Amount attributable (directly or indirectly) to any single Investment Asset other than cash and Fee-Related Earnings (it being understood that any cross-collateralized assets or cross-guaranteed assets shall be deemed to be a single Investment Asset for such purpose) exceed 10% (or, in the case of (A) the Investment Asset referred to as the MOB Portfolio, 30%, (B) the Investment Asset referred to as the Dublin Office Portfolio, 16% and (C) the Investment Asset referred to as the Hawaii Hospitality Investment, 15%) of the sum of (x) the Adjusted Net Book Value of all Investment Assets included in the Borrowing Base Amount pursuant to clauses (a) through (d) above (without giving effect to any concentration limits set forth herein) plus (y) the aggregate amount of all cash denominated in Dollars or any Foreign Currency included in the Borrowing Base Amount pursuant to clause (e) above plus (z) (I) Servicing Fee EBITDA multiplied by (II) 2.0 (it being understood that in making any such determination, amounts may be included in each of clauses (x) through (z) above solely to the extent the requirements set forth in clause (viii) below shall have been met with respect to the applicable Investment Asset);

 

(iv)         Specified Asset Investments shall not contribute more than 50% in the aggregate of the Borrowing Base Amount;

 

 

(v)          Servicing Fee EBITDA shall not contribute more than 10% in the aggregate of the Borrowing Base Amount;

 

(vi)         Preferred Equity Investments with respect to which any dividends required to be paid in cash are in arrears shall not contribute more than 10% in the aggregate of the Borrowing Base Amount;

 

(vii)        not more than 30% of the Borrowing Base Amount shall be attributable to Investment Assets having an Investment Location in a Non-Qualifying Location;

 

(viii)       no Investment Asset shall contribute, directly or indirectly, to the Borrowing Base Amount unless (w) the Borrowing Base Subsidiary with respect thereto is a Wholly Owned Subsidiary, (x) with respect to any Investment Asset other an encumbered Commercial Real Estate Ownership Investment, each of (A) the Borrowing Base Subsidiary in respect of such Investment Asset and (B) each Direct Parent of such Borrowing Base Subsidiary shall have been made a Secured Guarantor and shall have no Indebtedness outstanding other than Permitted BBCS Indebtedness, (y) with respect to any such Investment Asset constituting an encumbered Commercial Real Estate Ownership Interest, an Encumbered Real Property Holding Company with respect to such Investment Asset shall have been made a Secured Guarantor and (z) each such Secured Guarantor described in clauses (x) and (y) above shall have granted to the Administrative Agent, for the benefit of the Lenders, a first priority perfected security interest in each of its assets that are of the types included in clause (i) and clause (ii) of the definition of “Collateral” (including (and notwithstanding anything to the contrary set forth in the Collateral Documents), (A) 100% of the Equity Interests of any Borrowing Base Subsidiary (other than an Encumbered Real Property Borrowing Base Subsidiary) and (B) 100% of the Equity Interests of any Encumbered Real Property Pledged Subsidiary (or, solely with respect to any Encumbered Real Property Pledged Subsidiary that is an Excluded Foreign Subsidiary, 65% of the voting Equity Interests and 100% of the non-voting Equity Interests of such Excluded Foreign Subsidiary)) and such Collateral shall not directly or indirectly be encumbered by any other Lien other than Permitted Collateral Liens;

 

(ix)         no Investment Asset shall contribute, directly or indirectly, to the Borrowing Base Amount if any Borrowing Base Covenant Subsidiary, Unrestricted Real Property Subsidiary or Starwood Fund (or any related feeder fund) that, in each case, directly or indirectly owns such Investment Asset is in default after notice and the expiration of applicable grace periods with respect to any of its Indebtedness that is material in relation to the value of such Investment Asset, and which default would permit the acceleration of such Indebtedness;

 

(x)          no Investment Asset securing any Warehouse Facility shall contribute, directly or indirectly, to the Borrowing Base Amount for so long as such Investment Asset secures any Warehouse Facility;

 

(xi)         the Adjusted Net Book Value used in the calculations set forth in clauses (a) through (d) above with respect to any Investment Asset that is owned, directly or

indirectly, by any Excluded Foreign Subsidiary shall be limited to 65% of the Adjusted Net Book Value of such Investment Asset;

 

(xii)        with respect to any Investment Asset of the type described in clauses (a) through (d) above held by a Starwood Fund with respect to which a Qualifying Loan Party directly owns a limited partnership, limited liability company membership or other similar equity interest in such Starwood Fund (or a related feeder fund) (such equity interests, the “Starwood Fund Equity Interests”), the Borrowing Base Amount shall include (subject to the other limitations set forth herein) the pro rata share of the individual eligible Starwood Fund Investment Assets instead of such Starwood Fund Equity Interests; provided that (A) such Starwood Fund Equity Interests are owned by a Qualifying Loan Party, (B) the pro rata share of the individual eligible Investment Assets held by such Starwood Fund shall be adjusted to account for any “opt-out” elections of any holders of such equity interests, (C) such pro rata share shall be reduced to the extent that any applicable Investment Asset has been funded with the proceeds of subscription debt in lieu of equity funding from the applicable Qualifying Loan Party, (D) such Qualifying Loan Party shall not be in default under the limited partnership agreement, limited liability company agreement or other similar organizational agreement, as applicable, of such Starwood Fund (or any related feeder fund) or any other Organization Document of such Starwood Fund (or any related feeder fund), (E) such Starwood Fund (and any related feeder fund) shall not be in default under the documents governing any subscription debt thereof, and (F) such Starwood Fund (and any related feeder fund) has no Indebtedness outstanding other than Subscription Line Indebtedness;

 

(xiii)       in no event shall any Investment Asset that does not satisfy the Qualifying Criteria contribute, directly or indirectly, to the Borrowing Base Amount;

 

(xiv)       upon the completion of an Investment Asset Review pursuant to Section 11.20, the reference to the Adjusted Net Book Value of each asset subject to such Investment Asset Review for purposes of calculating the Borrowing Base Amount shall be the lesser of (x) such Adjusted Net Book Value as determined by the Borrower and (y) such value as determined by the Independent Valuation Provider;

 

(xv)        in no event shall the aggregate amount of Investment Assets constituting Commercial Real Estate Ownership Investments in land and Commercial Real Estate Debt Investments secured by land contribute more than 15% in the aggregate of the Borrowing Base Amount;

 

(xvi)       if an Investment Asset consists of a portion of an asset that has previously been subdivided such that only a portion of such original asset is an Investment Asset and a Borrowing Base Asset, then the Adjusted Net Book Value used in the calculations set forth in clauses (a) through (d) above with respect to any such Investment Asset shall be limited solely to the Adjusted Net Book Value of the portion of such asset that is an Investment Asset and a Borrowing Base Asset;

 

(xvii)      in no event shall the Borrowing Base Amount attributable, directly or indirectly, to Non-Foreclosable Assets exceed 15% of the Borrowing Base Amount; and

 

(xviii)     No Investment Asset constituting a Non-Performing Loan shall contribute to the Borrowing Base for so long as such Investment Asset constitutes a Non-Performing Loan.

 

“Borrowing Base Asset Proceeds” means, with respect to any Borrowing Base Asset, all principal, interest and other income, distributions, receipts, payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed on, or in connection with or in respect of such Borrowing Base Asset (including all Fee Related Earnings); provided that any such amounts that have been paid or otherwise Disposed of to a Person that is not a Secured Guarantor in a transaction permitted hereunder (including pursuant to Section 2.06(e) or 2.15, as applicable) shall, immediately upon such payment or Disposition, cease to be Borrowing Base Asset Proceeds.

 

“Borrowing Base Assets” means, at any time, the Investment Assets that are included or purported to be included in the Borrowing Base Amount.

 

“Borrowing Base Certificate” means a certificate executed by a Responsible Officer of the Borrower, substantially in the form of Exhibit J (or another form acceptable to the Administrative Agent) setting forth the calculation of the Borrowing Base Amount.  All calculations of the Borrowing Base Amount in connection with the preparation of any Borrowing Base Certificate shall originally be made by the Borrower and certified to the Administrative Agent; provided that the Administrative Agent shall have the right to review and make reasonable adjustments to any such calculation to the extent the Administrative Agent reasonably determines that such calculation contains errors or is not otherwise in accordance with this Agreement and notifies the Borrower of such adjustment.

 

“Borrowing Base Covenant Subsidiary” means (a) any Borrowing Base Subsidiary, (b) any Direct Parent of a Borrowing Base Subsidiary, (c) any Encumbered Real Property Pledged Subsidiary, (d) any Encumbered Real Property Holding Company and (e) any other Subsidiary of the Borrower that directly owns any Equity Interests in a Borrowing Base Covenant Subsidiary and has become a Secured Guarantor pursuant to Section 6.12(d) (but in each case excluding any Unrestricted Real Property Subsidiary).

 

“Borrowing Base Coverage Ratio” means, as of any date of determination, the ratio as of such date of (a) (x) the Borrowing Base Amount at such time minus (y) the aggregate amount of the Borrowing Base Amount attributable to cash pursuant to clauses (e)(i) and (e)(ii)(x) of the definition thereof to (b) (x) Total Outstandings at such time minus (y) the aggregate amount of the Borrowing Base Amount attributable to cash pursuant to clauses (e)(i) and (e)(ii)(x) of the definition thereof.

 

“Borrowing Base Release Transaction” has the meaning specified in Section 2.15.

 

“Borrowing Base Subsidiary” means each Subsidiary that directly owns any Borrowing Base Asset (or, with respect to any Borrowing Base Asset that is a Starwood Fund Investment Asset, directly owns the applicable Starwood Fund Equity Interests) or receives any Fee-Related Earnings that contribute to Servicing Fee EBITDA.

 

“Borrowing Date” means any Business Day specified by the Borrower as a date on which the Borrower requests the Lenders to make Loans hereunder.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located; provided that (a) when used in connection with a Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in the relevant currency in the interbank eurocurrency market, (b) when used in connection with a Foreign Currency Revolving Credit Loan, the term “Business Day” shall also exclude any day on which commercial banks in London are authorized or required by law to remain closed and (c) when used in connection with Eurocurrency Loans denominated in Euro, the term “Business Day” shall also exclude any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System (which utilizes a single shared platform and which was launched on November 19, 2007 (TARGET2)) (or, if such clearing system ceases to be operative, such other clearing system (if any) determined by the Administrative Agent to be a suitable replacement) is not open for settlement of payment in Euro.

 

“Calculation Date” means, with respect to each Foreign Currency, the last day of each calendar month (or, if such day is not a Business Day, the next succeeding Business Day) and such other days from time to time as the Administrative Agent shall designate as a “Calculation Date”, provided that (i) the second Business Day preceding each Borrowing Date (or in the case of Eurocurrency Loans denominated in Pounds Sterling, the Borrowing Date) with respect to, and each date of any continuation of, any Foreign Currency Revolving Credit Loan which is a Eurocurrency Loan shall also be a “Calculation Date” with respect to such Foreign Currency and (ii) subject to Section 2.03, the Borrowing Date with respect to any other Foreign Currency Revolving Credit Loan shall also be a Calculation Date with respect to such Foreign Currency.

 

“Capital Lease Obligations” means, with respect to any Person, the amount of all obligations of such Person to pay rent or other amounts under a lease of property to the extent and in the amount that such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person.

 

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing, but excluding any debt securities convertible into any of the foregoing.

 

“Cash Equivalents” means:

 

(a)         United States dollars (including such dollars as are held as overnight bank deposits and demand deposits with banks);

 

(b)         marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency or instrumentality thereof and backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition thereof;

(c)         marketable direct obligations issued by any State of the United States of America or any political subdivision of any such State or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-2 from S&P or at least P-2 of Moody’s;

 

(d)         commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-2 from S&P or at least P-2 from Moody’s;

 

(e)         time deposits, demand deposits, certificates of deposit, Eurocurrency time deposits, time deposit accounts, term deposit accounts or bankers’ acceptances maturing within one year from the date of acquisition thereof or overnight bank deposits, in each case, issued by any bank organized under the laws of the United States of America or any State thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500.0 million; and

 

(f)         investments in money market funds which invest substantially all their assets in securities of the types described in clauses (a) through (e) above.

 

“Cash Liquidity” means, at any time with respect to the Borrower and its Subsidiaries, on a consolidated basis, the amount of Unrestricted Cash held by such Persons at such time.

 

“Change in Law” means the occurrence, after the date of this Agreement (or, with respect to any Lender which becomes a party hereto after the date of this Agreement, the date such Lender becomes a party hereto), 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, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means an event or series of events by which:

 

(a)         prior to an internalization of management by the Borrower, neither the Manager nor any Affiliate of the Manager is the manager of the Borrower;

 

(b)         after such time as the Borrower is internally managed, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly or indirectly, of a percentage of the total voting power of all classes of Equity Interests of the Borrower entitled to vote generally in the election of directors, of 20% or more;

 

(c)         a change in Control of the Manager and/or Starwood Capital Group Global, L.P. from the Person or Persons who directly or indirectly Controlled such entities on the Closing Date; or

 

(d)         the Borrower shall cease to own and control, directly or indirectly, 100% of the outstanding Equity Interests of each Borrowing Base Subsidiary.

 

Notwithstanding the foregoing, the Administrative Agent and the Required Lenders shall not be deemed to approve or to have approved any internalization of management by the Borrower as a result of this definition or any other provision herein.

 

“Closing Date” has the meaning specified in Section 4.01.

 

“CMBS” means mortgage pass-through certificates or other securities (other than any derivative security) issued pursuant to a securitization of commercial real estate securities or loans.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means, collectively, (i) all of each Secured Guarantor’s personal property (including, without limitation, Borrowing Base Assets (other than real property) and all payments related to Borrowing Base Assets and voting rights in respect of Borrowing Base Assets, the Borrowing Base Accounts and all other bank accounts, general intangibles, financial assets, investment property, hedge agreements, documents, instruments and cash) and proceeds thereof now owned or hereafter acquired or arising in or upon which a Lien now or hereafter exists in favor of the Administrative Agent for the benefit of the Secured Parties to secure payment or performance of any or all of the Obligations and (ii) all Equity Interests in (x) each Borrowing Base Subsidiary other than any Encumbered Real Property Borrowing Base Subsidiary, (y) each Encumbered Real Property Pledged Subsidiary (or, solely with respect to any Encumbered Real Property Pledged Subsidiary that is an Excluded Foreign Subsidiary, 65% of the voting Equity Interests and 100% of the non-voting Equity Interests of such Excluded Foreign Subsidiary) and (z) any other direct Subsidiary of a Secured Guarantor (or, solely with respect to any such Subsidiary that is an Excluded Foreign Subsidiary, 65% of the voting Equity Interests and 100% of the non-voting Equity Interests of such Excluded Foreign Subsidiary), and, in each case, all proceeds thereof. Notwithstanding the foregoing, in no event shall “Collateral” include (A) any lease, license, contract, property right or agreement to which any Secured Guarantor is a party or any of its rights or interests thereunder if the grant of such security interest shall validly constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of such Secured Guarantor therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, property rights or agreement (in the case of each of clauses (i) and (ii) of the foregoing, other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including any Debtor Relief Laws) or principles of equity), (B) any “intent-to-use” application for registration of a Trademark filed pursuant to Section 1(b) of the ▇▇▇▇▇▇ Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the ▇▇▇▇▇▇ Act of an “Amendment to Allege Use” pursuant to Section 1(c) of the ▇▇▇▇▇▇ Act with respect thereto, solely to the extent, if any, that and solely during the period, if any, in which, the grant of a security interest therein would

 

impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable federal law or (C) any real property.

 

“Collateral Documents” means, collectively, the Security Agreement, any Control Agreement and each of the other agreements, instruments or documents that creates or perfects or purports to create or perfect a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“Commercial Real Estate Debt Investment” means (i) a commercial mortgage loan (or any A-Note and/or B-Note relating to any commercial mortgage loan) or other commercial real estate-related debt investment (including any land loan or construction loan but excluding CMBS) or (ii) a commercial mortgage loan (or any A-Note and/or B-Note relating to any commercial mortgage loan), together with any related Mezzanine Loan, in each case of clauses (i) and (ii) above, held by a Qualifying Loan Party.

 

“Commercial Real Estate Ownership Investment” means a fee simple interest or ground leasehold interest in commercial real property or undeveloped land, in each case in an Approved Jurisdiction.

 

“Commitment” means a Term Loan Commitment or a Revolving Commitment, as the context may require.

 

“Commitment Increase” means a Revolving Commitment Increase and/or a Term Commitment Increase.

 

“Commitment Increase Lenders” has the meaning specified in Section 2.16.

 

“Committed Loan Notice” means a notice of (a) a Term Loan Borrowing, (b) a Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a continuation of Eurocurrency Rate Loans, in each case pursuant to Section 2.02(a), and which, if in writing, shall be substantially in the form of Exhibit A-1 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes. 

 

“Contingent Commitment Termination Notice” has the meaning specified in Section 2.05.

 

“Contingent Liabilities” means, with respect to any Person as of any date of determination, all of the following as of such date:  (a) liabilities and obligations (including any Guarantees) of such Person in respect of “off-balance sheet arrangements” (as defined in the Off-Balance Sheet Rules defined below) and (b) obligations, including Guarantees, whether or not required to be disclosed in the footnotes to such Person’s financial statements, guaranteeing in whole or in part

 

any Non-Recourse Indebtedness, lease, dividend or other obligation, excluding, however, (i) contractual indemnities (including any indemnity or price-adjustment provision relating to the purchase or sale of securities or other assets), and (ii) guarantees of non-monetary obligations which have not yet been called on or quantified, of such Person or any other Person.  The amount of any Contingent Liabilities described in the preceding 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 in the footnotes to the most recent financial statements of such Person.  “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 Nos. 33-8182; 34-47264; FR-67 International Series ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇-▇▇-▇▇, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified of 17 CFR Parts 228, 229 and 249).

 

“Contractual Obligation” means, as to any Person, any provision of any securities issued by such Person or of any indenture, mortgage, deed of trust, deed to secure debt, contract, undertaking, agreement, instrument or other document to which such Person is a party or by which it or any of its property or assets are bound or are subject.

 

“Control” means 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.

 

“Control Agreement” means a deposit account control agreement or securities account control agreement, as applicable, executed by a Secured Guarantor, the Administrative Agent and the applicable depository bank or securities intermediary granting the Administrative Agent control over the applicable deposit account or securities account, which agreement shall be in form and substance satisfactory to the Administrative Agent.

 

“Convertible Debt Securities” means any debt securities of the Borrower, the terms of which provide for conversion into Equity Interests, cash by reference to such Equity Interests or a combination thereof.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate applicable to Base Rate Loans plus (iii) 2% per annum; provided,  however, that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.

 

“Defaulting Lender” means, subject to Section 2.14(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Swing Line Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.14(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, each Swing Line Lender and each other Lender promptly following such determination.

 

“Deposit Account” has the meaning specified in the UCC.

 

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject or target of any Sanction.

 

“Designated Real Property Acquisition” means that certain acquisition designated in writing by the Borrower to the Administrative Agent as the “Designated Real Property Acquisition” on or prior to the Closing Date.

 

“Designated Unsecured Guarantor” means any Subsidiary that shall become a Guarantor pursuant to Section 6.12(e) but that does not become a Grantor and does not own, directly or indirectly, any Borrowing Base Assets.

 

“Direct Parent” means, with respect to any Subsidiary, any Wholly Owned Subsidiary of the Borrower that directly owns any Equity Interests of such Subsidiary.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

“Disqualified Transferees” means, on any date, (a) those Persons identified by the Borrower in writing to the Administrative Agent on December 3, 2016, and (b) any other Person who is clearly identifiable, solely on the basis of similarity of such Person’s name, as an Affiliate of any Person referred to in clause (a) above; provided,  however, Disqualified Transferees shall (x) exclude any Person that the Borrower has designated as no longer being a Disqualified Transferee by written notice delivered to Administrative Agent from time to time and (y) include any Person that is identified as a bona fide competitor of the Borrower (and that is in substantially the same business as those Persons referred to in clause (a) above) pursuant to a written supplement from the Borrower delivered to the Administrative Agent and the Lenders (including by posting such notice to the Platform) not less than 3 Business Days prior to such date. Delivery of the DQ List pursuant to clause (a) above or any supplement thereto pursuant to clause (y) above, in each case, to the Administrative Agent shall only be deemed to be received and effective if the DQ List and each such supplement is delivered to the following email address: ▇▇▇▇▇_▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇.

 

“Distributions” means (a) any and all dividends, distributions or other payments or amounts made, or required to be paid or made, in connection with or related to an Investment Asset, to a Guarantor or any Subsidiary of the Borrower (other than any Encumbered Real Property Pledged Subsidiary that is not a Loan Party or any Subsidiary thereof) by (i) any Direct Parent of an Unrestricted Real Property Subsidiary (or any Subsidiary thereof) or (ii) any Starwood Fund (or any related feeder fund), including, without limitation, any distributions of payments to such Person in respect of principal, interest or other amounts relating to such Investment Asset owned, directly or indirectly, by such Guarantor and (b) any and all amounts owing to a Guarantor or any Subsidiary of the Borrower (other than any Encumbered Real Property Pledged Subsidiary that is not a Loan Party or any Subsidiary thereof) from the disposition, dissolution or liquidation of any direct or indirect holder of a Borrowing Base Asset consisting of an encumbered Commercial Real Estate Ownership Interest or a Starwood Fund Investment Asset.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Dollar Amount” of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) if such currency is a Foreign Currency, the equivalent amount in Dollars as determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of Dollars with such Foreign Currency on the most recent Calculation Date for such Foreign Currency.

 

“Domestic Subsidiary” means any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.

 

“DQ List” has the meaning set forth in Section 11.06(j)(iv).

 

“Dublin Office Portfolio” means that certain portfolio of twelve office properties and one residential property located in Dublin, Ireland which, as of the Closing Date, is held indirectly by SPT Cedar Parent, LLC.

 

“EBITDA” with respect to the Borrower and its Subsidiaries on a consolidated basis for any Test Period, an amount equal to the sum of (a) Net Income (or loss) (before deduction of any dividends on preferred stock), plus the following (but only to the extent actually included in determination of such Net Income (or loss)): (i) depreciation and amortization expense, (ii) Interest Expense, (iii) income tax expense, and (iv) extraordinary or non-recurring losses, minus (b) solely to the extent included in determination of such Net Income (or loss), extraordinary or non-recurring gains plus (c) amounts deducted in accordance with GAAP in respect of other non-cash expenses in determining such Net Income for such Person, all determined in accordance with GAAP.

 

“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.06(b)(ii),  (iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)).  For the avoidance of doubt, any Disqualified Transferee is subject to Section 11.06(j).

 

“EMU” means the Economic and Monetary Union as contemplated in the Treaty.

 

“Encumbered Real Property Borrowing Base Subsidiary” means a Borrowing Base Subsidiary directly holding Borrowing Base Assets constituting encumbered Commercial Real Estate Ownership Interests.

 

“Encumbered Real Property Pledged Subsidiary” means any Wholly Owned Subsidiary, so long as (x) all of the Equity Interests in such Subsidiary are pledged as Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Collateral Documents, (y) such Subsidiary (and any Direct Parent of such Subsidiary) (i) has no Indebtedness outstanding other than Permitted BBCS Indebtedness and (ii) is not an Excluded Subsidiary and (z) such Subsidiary directly or indirectly owns all of the Equity Interests in an Encumbered Real Property Borrowing Base Subsidiary.

 

“Encumbered Real Property Holding Company” means, a Wholly Owned Subsidiary that directly owns all of the Equity Interests of an Encumbered Real Property Pledged Subsidiary so long as (i) all of the Equity Interests of such Encumbered Real Property Pledged Subsidiary are pledged as Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Collateral Document and (ii) such Wholly Owned Subsidiary shall (x) have no Indebtedness outstanding other than Permitted BBCS Indebtedness and (y) not be an Excluded Subsidiary.

 

“Environment” means ambient air, indoor air, surface water, groundwater, drinking water, soil, surface and subsurface strata, and natural resources such as wetlands, flora and fauna or as otherwise defined in any Environmental Law.

 

“Environmental Laws” means any and all Laws relating to pollution or the protection of the Environment or of human health (to the extent related to exposure to harmful or deleterious substances), including those relating to the manufacture, generation, handling, transport, storage, treatment, Release or threat of Release of harmful or deleterious substances.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Environmental Permit” means any permit, approval, identification number, license or other authorization under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, (a) any share, interest, participation and other equivalent (however denominated) of capital stock of (or other ownership, equity or profit interests in) such Person, (b) any warrant, option or other right for the purchase or other acquisition from such Person of any of the foregoing, (c) any security convertible into or exchangeable for any of the foregoing, and (d) any other ownership or profit interest in such Person (including 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.

 

“Equity Investment Asset Issuer” means each issuer of a Preferred Equity Investment.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means as applied to any Person, (x) any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code) or (y) any entity, whether or not incorporated, that is under common control within the meaning of Section 4001(a)(14) of ERISA with such Person.

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan; (d) the filing of a notice of intent to terminate the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; or (i) a failure by the Borrower or any ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, or the failure by the Borrower or any ERISA Affiliate to make any required contribution to a Multiemployer Plan.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

 

“Euro” means the single currency of Participating Member States introduced in accordance with the provisions of Article 109(1)4 of the Treaty and, in respect of all payments to be made under this Agreement in Euro, means immediately available, freely transferable funds.

 

“Euro Reference Rate” means the rate per annum for deposits in Euros for a period corresponding to the duration of the relevant Interest Period which appears on the Reuters Screen which displays the rate of the Banking Federation of the European Union for the Euro (being currently page “EURIBOR01”) at approximately 11:00 a.m., London time, on the date of the commencement of such Interest Period, or, if such page shall cease to be available, such other page or such other service for the purpose of displaying an average rate of the Banking Federation of the European Union as the Administrative Agent shall select; provided that if such rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

 

“Eurocurrency Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that with respect to any Eurocurrency Borrowing denominated in Pounds Sterling or Euro, the Eurocurrency Rate shall mean the LIBO Rate.

 

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the definition of “Eurocurrency Rate.”

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Exchange Rate” means on any day, with respect to any currency, the rate at which such currency may be exchanged into any other currency, as set forth at approximately 11:00 a.m., Local Time, on such date on the Reuters World Currency Page for such currency.  If such rate does not appear on any Reuters World Currency Page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be selected by the Administrative Agent, or, in the event no such service is selected, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 10:00 a.m., Local Time, on such date for the purchase of the relevant currency for delivery two (2) Business Days later; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent, after consultation with the Borrower, may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.

 

“Excluded Foreign Subsidiary” means (1) any Foreign Subsidiary in respect of which either (a) the pledge of all of the Equity Interests of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower, (2) any Domestic Subsidiary substantially all of whose assets consist of Equity Interests in (or Equity Interests in and debt obligations owed or treated as owed by) an Excluded Foreign Subsidiary or (3) any Domestic Subsidiary of an Excluded Foreign Subsidiary.

 

“Excluded Subsidiary” means any Subsidiary that has Indebtedness outstanding that (x) is owed to a Person that is not an Affiliate of the Borrower or any Subsidiary thereof and (y) by its terms does not permit such Subsidiary to guarantee the Obligations of the Borrower.

 

“Excluded Taxes”  means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated, including gross receipts Taxes imposed in lieu of net income Taxes), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Recipient with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) in the case of a Lender, such Lender acquires such interest in the Loan or Commitment (other than

pursuant to an assignment request by the Borrower under Section 11.13) or in the case of any other Recipient, such Recipient becomes a party hereto (or in each case, if such Recipient is an intermediary, partnership or other flow-through entity for U.S. tax purposes, the date on which the relevant beneficiary partner or member of such Recipient becomes a beneficiary, partner or member thereof, if later) or, (ii) in the case of a Lender, such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any Taxes imposed pursuant to FATCA.

 

“Extended Commitments” has the meaning specified in Section 2.13.

 

“Extended Loans” has the meaning specified in Section 2.13.

 

“Extended Maturity Date” has the meaning specified in Section 2.13.

 

“Extension Option” has the meaning specified in Section 2.13.

 

“Extension Date” has the meaning specified in Section 2.13.

 

“Facility” means the Term Loan Facility or the Revolving Credit Facility, as the context may require, and “Facilities” means the Term Loan Facility and the Revolving Credit Facility, collectively.

 

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code.

 

“FCPA” has the meaning specified in Section 5.23(b).

 

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate.

 

“Fee-Related Earnings” means mortgage loan servicing and special servicing fees and other related revenues less (a) mortgage servicing segment direct cash compensation and benefits (excluding non-cash equity-based compensation consisting of Equity Interests in the Borrower or a direct or indirect parent of the Borrower) and (b) mortgage servicing general and administrative expenses (excluding non-cash expenses).  Such Fee-Related Earnings shall be calculated prior to the deduction of any income taxes.

 

“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), as amended.

 

“First Priority Commercial Real Estate Debt Investments” means any Commercial Real Estate Debt Investment secured by a first priority Lien on the underlying asset (which may include (i) any B-Note in a mortgage loan that is accompanied by an A-Note in such mortgage loan so long as a Qualifying Loan Party holds such A-Note but shall not otherwise include any “B-Note” or any other junior interest in such mortgage loan or (ii) any Mezzanine Loan that is related to a mortgage loan that otherwise qualifies (including with respect to any A-Note and B-Note related thereto) as a First Priority Commercial Real Estate Debt Investment, so long as a Qualifying Loan Party holds such mortgage loan (including any A-Note and B-Note related thereto) but shall not otherwise include any Mezzanine Loan or other junior interest related to such mortgage loan (other than any such related B-Note referred to above)) and with respect to which no other Indebtedness has been incurred that is prior in right of payment in any respect; provided,  however, that for purposes of the definition of “Borrowing Base Amount” and the component definitions thereof, (x) such investment shall constitute a First Priority Commercial Real Estate Debt Investment only if such investment (including (A) in the case of any such B-Note, a ratable portion of each related A-Note and (B) in the case of any such Mezzanine Loan, a ratable portion of each related mortgage loan (including any A-Note and B-Note related thereto)) is held by a Qualifying Loan Party and (y) no portion of any B-Note or Mezzanine Loan described above shall constitute a First Priority Commercial Real Estate Debt Investment unless (A) in the case of any such B-Note, at least a ratable portion of the related A-Note and (B) in the case of any Mezzanine Loan, at least a ratable portion of any related mortgage (including any related A-Note and B-Note) are, in each case, held by a Qualifying Loan Party and contribute to the Borrowing Base Amount pursuant to clause (a) thereof.

 

“First Priority Commercial Real Estate Investments” means collectively, (a) any First Priority Commercial Real Estate Debt Investment, (b) any unencumbered Commercial Real Estate Ownership Investment (including land) that is wholly-owned by a Qualifying Loan Party and (c) any Investment Grade CMBS that is wholly-owned by a Qualifying Loan Party.

 

“Fitch” means Fitch Ratings and its successors.

 

“Fixed Charge Coverage Ratio” means, with respect to the Borrower and its Subsidiaries on a consolidated basis for any Test Period the ratio of (i) EBITDA for such Test Period to (ii) Fixed Charges for such Test Period.

 

“Fixed Charges” means, with respect to the Borrower and its Subsidiaries on a consolidated basis for any Test Period, Interest Expense with respect to such Test Period (excluding amortization of debt discount, debt premium and deferred issuance costs).

 

“Foreign Currency” means Euro or Pounds Sterling.

 

“Foreign Currency Outstanding Amount” means, on any date of determination with respect to any Foreign Currency, the aggregate principal amount of all outstanding Foreign Currency Revolving Credit Loans denominated in such Foreign Currency.

 

“Foreign Currency Revolving Credit Loans” has the meaning specified in Section 2.01(b).

 

“Foreign Lender” means any Lender that is not a U.S. Person.

 

“Foreign Subsidiary” means any Subsidiary of the Borrower that is not a Domestic Subsidiary.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to any Swing Line Lender, such Defaulting Lender’s Applicable Revolving Percentage of Swing Line Loans made by such Swing Line Lender other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

 

“Fund” means 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 activities.

 

“Future Guarantee Date” has the meaning specified in Section 6.12(e).

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied; provided that, notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation under any financial covenant and related definitions) contained in this Agreement or the amount of Indebtedness (including, without limitation, for purposes of Section 8.01(e) hereof) or other liabilities, assets, stockholders or (or other) equity, net worth, revenues, expenses or net income of any Person or any of its Subsidiaries or any other amounts appearing in, derived from, or used in compiling or preparing, the financial statements (including notes thereto) of any Person and/or any of its Subsidiaries, or making any financial or accounting computation or determination relevant to any Person or any of its Subsidiaries, (x) the Borrower shall make such adjustments as it determines in good faith are necessary to remove the impact of consolidating any variable interest entities under the requirements of ASC 810 or transfers of financial assets accounted for as secured borrowings under ASC 860, as both of such ASC sections are in effect on the Closing Date and (y) if any Person shall own, directly or indirectly, less than 100% of the outstanding Capital Stock of any Subsidiary of such Person, then only a pro rata portion of the Indebtedness, other liabilities, assets, stockholders (or other) equity, net worth, revenues, expenses or net income of such Subsidiary or any other amounts relevant to such Subsidiary appearing in, derived from or used in compiling or preparing the financial statements (including notes thereto) of such Subsidiary or of such Person and/or any of its Subsidiaries, as applicable, shall be included for purposes of determining compliance with any such covenant or determining any such amount or making any such financial or accounting computation or determination referred to above, such pro rata portion to be proportionate to the percentage of the outstanding Common Stock of such Subsidiary owned, directly or indirectly, by such Person.

 

“Governmental Authority” means the government of the United States 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).

 

“Grantor” means the applicable Secured Guarantor that is party to a Collateral Document.

 

“Guarantee” means, with respect to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including 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, Swap Contract or other obligations or indebtedness (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including 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, that the term “Guarantee” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee of any guaranteeing person shall be deemed to be the maximum stated amount of the primary obligation relating to such Guarantee (or, if less, the maximum stated liability set forth in the instrument embodying such Guarantee); provided, that in the absence of any such stated amount or stated liability, the amount of such Guarantee shall be such guaranteeing person’s maximum anticipated liability in respect thereof as reasonably determined by such Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantors” means, collectively, at any time each Subsidiary of the Borrower party hereto from time to time (including each Subsidiary that becomes a guarantor of the Obligations pursuant to Section 6.12) (which in no event shall be an Excluded Foreign Subsidiary).

 

“Guaranty” means the Guaranty made by the Guarantors under Article X in favor of the Secured Parties.

 

“Hawaii Hospitality Investment” means that certain mortgage loan and mezzanine loan in respect of a hospitality property located in Hawaii designated in writing by the Borrower to the Administrative Agent as the “Hawaii Hospitality Investment” on or prior to the Closing Date.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances or wastes, including petroleum or petroleum distillates, natural gas, natural gas liquids, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, toxic mold, infectious or medical wastes and all other substances, wastes, chemicals,

 

pollutants, contaminants or compounds of any nature in any form regulated pursuant to any Environmental Law.

 

“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements delivered under or referred to herein.

 

“Impacted Interest Period” has the meaning specified in the definition of “LIBO Rate.”

 

“Impacted Loan” has the meaning specified in Section 3.03.

 

“Increase Effective Date” has the meaning specified in Section 2.16(a).

 

“Increased Facility Activation Notice” means an increased facility activation notice, in form and substance reasonably satisfactory to the Administrative Agent, among the Borrower, the Administrative Agent, one or more Commitment Increase Lenders and, in the case of a Revolving Commitment Increase, each Swing Line Lender that has a Swing Line Loan outstanding at such time, establishing a Commitment Increase.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)         obligations in respect of money borrowed (including principal, interest, assumption fees, prepayment fees, yield maintenance charges, penalties, exit fees, contingent interest and other monetary obligations whether ▇▇▇▇▇▇ or inchoate and whether by loan, the issuance and sale of debt securities or the sale of property or assets to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets, or otherwise);

 

(b)         obligations, whether or not for money borrowed (i) represented by notes payable, letters of credit or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or services rendered, or (iv) in connection with the issuance of preferred equity or trust preferred securities;

 

(c)         Capital Lease Obligations;

 

(d)         reimbursement obligations under any letters of credit or acceptances (whether or not the same have been presented for payment);

 

(e)         Off-Balance Sheet Obligations;

 

(f)         obligations 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;

 

(g)         as applicable, all obligations of such Person (but not the obligation of others) in respect of any keep well arrangements, credit enhancements, purchase obligations, repurchase obligations, sale/buy—back agreements, takeout commitments or forward equity commitments, 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 Interests (other than mandatory redeemable stock));

 

(h)         net obligations under any Swap Contract not entered into as a hedge against existing indebtedness, in an amount equal to the Swap Termination Value thereof;

 

(i)          all Non—Recourse Indebtedness, recourse indebtedness and all indebtedness of other Persons which such Person has guaranteed or is otherwise recourse to such Person;

 

(j)          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 Liens permitted hereunder) 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, that 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;

 

(k)         all Contingent Liabilities;

 

(l)          all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person or obligations of such Person to pay the deferred purchase or acquisition price of property or assets, including contracts for the deferred purchase price of property or assets that include the procurement of services;

 

(m)        indebtedness of general partnerships of which such Person is liable as a general partner (whether secondarily or contingently liable or otherwise); and

 

(n)         obligations to fund capital commitments under any articles or certificate of incorporation or formation, by-laws, partnership, limited liability company, operating or trust agreement and/or other organizational, charter or governing documents, subscription agreement or otherwise.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

 

“Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitee” has the meaning specified in Section 11.04(b).

 

“Independent Valuation Provider” has the meaning specified in Section 11.20.

 

“Information” has the meaning specified in Section 11.07.

 

“Initial Maturity Date” means December 16, 2020.

 

“Insolvency Event” means, with respect to any Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises with respect to such Person or any substantial part of its assets or 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 assets or 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 thirty (30) days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, (c) the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law, (d) 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 assets or property, (e) the making by such Person of any general assignment for the benefit of creditors, (f) the admission in a legal proceeding of the inability of such Person to pay its debts generally as they become due, (g) the failure by such Person generally to pay its debts as they become due, or (h) the taking of any action by such Person in furtherance of any of the foregoing.

 

“Insolvency Laws” means Title 11 of the United States Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments and similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

 

“Intangible Assets” means assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs; provided that, “Intangible Assets” shall not include any mortgage loan servicing and/or special servicing rights or lease intangibles of acquired real property.

 

“Interest Coverage Ratio” means the ratio of (i) (x) the portion of EBITDA attributable to investments included in the Borrowing Base Amount pursuant to clauses (a) through (e) thereof (calculated on an annualized basis) (provided that the calculation of such portion of EBITDA (A) shall exclude general corporate-level expense and (B) shall not include any add backs of interest expense other than the interest expense related to the Facilities) plus (y) without duplication of amounts included in clause (x), Servicing Fee EBITDA to (ii) Assumed Facility Interest Expense.

 

“Interest Expense” means, with respect to the Borrower and its Subsidiaries on a consolidated basis for any Test Period, the amount of total interest expense incurred, including capitalized or accruing interest (but excluding interest funded under a construction loan), all with respect to such Test Period, all determined in accordance with GAAP.

 

“Interest Payment Date” means, (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Eurocurrency Rate Loan and the Maturity Date applicable to

 

such Eurocurrency Rate Loan; provided,  however, that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates, (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date of such Base Rate Loan and (c) as to any Loan (other than any Revolving Loan that is an Base Rate Loan), the date of any repayment or prepayment made in respect thereof.

 

“Interest Period” means as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two or three months thereafter (in each case, subject to availability), as selected by the Borrower in a Committed Loan Notice or, if requested by the Borrower and consented to by all Appropriate Lenders, six months thereafter; provided that:

 

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

 

(ii)        any Interest Period 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 calendar month at the end of such Interest Period; and

 

(iii)       no Interest Period shall extend beyond the applicable Maturity Date.

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate for the longest period for which the Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period; and (b) the Screen Rate for the shortest period (for which that Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each case, at such time.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of 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 a business unit.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“Investment Asset” means (i) a Commercial Real Estate Debt Investment, (ii) a Commercial Real Estate Ownership Investment, (iii) a Preferred Equity Investment, (iv) CMBS, (v) RMBS, (vi) cash and (vii) Fee-Related Earnings.  Subject to the limitations set forth in the definition of Borrowing Base Amount, the term Investment Asset shall also include any Investment Asset described in the foregoing clauses (i) through (v) that is held by a Starwood Fund with respect to which a Qualifying Loan Party directly holds any Starwood Fund Equity Interest (such Investment Assets, the “Starwood Fund Investment Assets”).

 

“Investment Asset Review” has the meaning specified in Section 11.20.

 

“Investment Grade CMBS” means any CMBS having a rating of Baa3 or BBB- (or the equivalent with a stable or better outlook) or higher by at least two Rating Agencies (it being acknowledged that such securities may also have a lower rating from, or may not be rated by, one Rating Agency).

 

“Investment Grade RMBS” means any RMBS having a rating of Baa3 or BBB- (or the equivalent with a stable or better outlook) or higher by at least two Rating Agencies (it being acknowledged that such securities may also have a lower rating from, or may not be rated by, one Rating Agency).

 

“Investment Location” means (i) with respect to a Commercial Real Estate Debt Investment, (x) to the extent such Commercial Real Estate Debt Investment is secured, the jurisdiction in which the underlying commercial real property subject to such Commercial Real Estate Debt Investment is located and (y) to the extent such Commercial Real Estate Debt Investment is unsecured, the jurisdiction of the governing law of the contract governing such Commercial Real Estate Debt Investment; (ii) with respect to a Commercial Real Estate Ownership Investment, the jurisdiction in which such Commercial Real Estate Ownership Investment is physically located; (iii) with respect to a Preferred Equity Investment, the jurisdiction in which the issuer of such Preferred Equity Investment is organized; (iv) with respect to any cash, the jurisdiction of the depository with which such cash is deposited for purposes of the UCC or (v) with respect to a CMBS or RMBS, the jurisdiction in which the underlying commercial or residential, as applicable, real property subject to such CMBS or RMBS is located.  Notwithstanding the foregoing, if (a) any Equity Investment Asset Issuer is organized under the laws of a Non-Qualifying Location, (b) any Borrowing Base Covenant Subsidiary that is a direct or indirect owner of any Investment Asset is organized under the laws of a Non-Qualifying Location or (c) any underlying real estate asset relating to an Investment Asset is located in a Non-Qualifying Location, then the Investment Location of each Investment Asset owned directly or indirectly by such Person or to which such underlying real estate asset relates, as applicable, shall be deemed to have an Investment Location in a Non-Qualifying Location.  For purposes of the foregoing sentence, each Person shall be located in the jurisdiction in which it is organized and each underlying real estate asset shall be located in the jurisdiction in which such real estate asset is physically located.

 

“Investment Property” has the meaning specified in the UCC.

 

“IRS” means the United States Internal Revenue Service.

 

“JPMorgan” means JPMorgan Chase Bank, N.A. and its successors.

 

“Judgment Currency” has the meaning specified in Section 11.21(b).

 

“Junior Priority Commercial Real Estate Debt Investments” means all B Notes, Mezzanine Loans and other Commercial Real Estate Debt Investments that, in each case, are not First Priority Commercial Real Estate Debt Investments, to the extent held by a Qualifying Loan Party; provided that, notwithstanding the foregoing, Junior Priority Commercial Real Estate Debt Investments shall not include (x) construction loans or (y) land loans; and provided further that “Junior Priority Commercial Real Estate Debt Investments” shall not include any B Note or Mezzanine Loan that is included as part of a First Priority Commercial Real Estate Debt Investment pursuant to the definition of “First Priority Commercial Real Estate Debt Investments”.

 

“Latest Maturity Date” means December 16, 2021.

 

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes 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.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, unless the context requires otherwise, includes the Swing Line Lenders.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent, which office may include any Affiliate of such Lender or any domestic or foreign branch of such Lender or such Affiliate. Unless the context otherwise requires each reference to a Lender shall include its applicable Lending Office.

 

“Leverage Ratio” means, with respect to the Borrower and its Subsidiaries, on a consolidated basis, as of any date of determination, the ratio as of such date of (i) Total Indebtedness of the Borrower and its Subsidiaries on a consolidated basis, to (ii) Total Assets of the Borrower.

 

“LIBO Rate” means, (a) with respect to any Eurocurrency Borrowing denominated in Dollars or Pounds Sterling for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for Dollars/the relevant currency for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; collectively with the Reuters screen rate set forth in the definition of “Euro Reference Rate,” in each case, the “Screen Rate”) at approximately 11:00 a.m.,

London time, two Business Days prior to the commencement of such Interest Period (or, in the case of any Eurocurrency Loan denominated in Pounds Sterling, on the first day of such Interest Period) and (b) with respect to any Eurocurrency Borrowing denominated in Euro for any Interest Period, the Euro Reference Rate; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”) with respect to the applicable currency then the LIBO Rate shall be the Interpolated Rate; provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, easement, right-of-way or other encumbrance on title to real property, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing but not including any capital call commitment with respect to any Starwood Fund (or related feeder fund)).

 

“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Term Loan, Revolving Credit Loan or a Swing Line Loan.

 

“Loan Documents” means this Agreement, each Note, the Collateral Documents, any Increased Facility Activation Notice, any New Lender Joinder Agreement, and any amendment, waiver, supplement or other modification to any of the foregoing.

 

“Loan Parties” means, collectively, the Borrower and the Guarantors.

 

“Loan-to-Value Ratio” means, at any time with respect to any First Priority Commercial Real Estate Debt Investment, the ratio (expressed as a percentage) (i) the numerator of which is the sum of (x) the aggregate outstanding principal amount of such First Priority Commercial Real Estate Debt Investment at such time and (y) the aggregate outstanding principal amount of all other Indebtedness of the borrower(s) with respect to such First Priority Commercial Real Estate Debt Investment that is, whether by contract, operation of law or otherwise, senior or pari passu in right of payment to or with all or any portion of such First Priority Commercial Real Estate Debt Investment (including senior or pari passu to any B-Note or Mezzanine Loan that is part of such First Priority Commercial Real Estate Debt Investment pursuant to the definition of “First Priority Commercial Real Estate Debt Investments”) and (ii) the denominator of which is the Appraised Value of the underlying real property asset relating to such First Priority Commercial Real Estate Debt Investment.

 

“Local Time” means (i) New York City time in the case of a Loan, Borrowing disbursement denominated in Dollars and (ii) London time in the case of a Loan, Borrowing disbursement denominated in a Foreign Currency (or any such other local time as otherwise notified to or communicated by the Administrative Agent).

 

“London Funding Office” means  the Administrative Agent’s office located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, or such other office in London as may be designated by the Administrative Agent by written notice to the Borrower and the Lenders.

 

“Majority Facility Lenders” means, with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the Total Revolving Credit Outstandings, as the case may be, outstanding under such Facility (or, in the case of the Revolving Credit Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Aggregate Revolving Commitments).  The portion of the Total Outstandings and unused Commitments held by any Defaulting Lender shall be disregarded in determining Majority Facility Lenders at any time; provided that, the amount of any participation in any Swing Line Loan that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by each Lender that is a Swing Line Lender in respect of such Swing Line Loan in making such determination.

 

“Manager” means SPT Management, LLC, a Delaware limited liability company.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower, or the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party; or (d) a material adverse effect upon the Collateral or the validity, enforceability, perfection or priority of the Administrative Agent’s Liens on the Collateral.

 

“Maturity Date” means the Revolving Maturity Date or the Term Loan Maturity Date, as the context may require.

 

“Mezzanine Loan” means a loan (or participation therein) made to a direct or indirect owner of one or more entities which own a single commercial property or group of related commercial properties that is (a) secured by one or more equity pledges of the underlying borrower’s direct or indirect ownership interests in the property-owning entities, and (b) subordinated (whether structurally, contractually or legally) to one or more whole mortgage loans, mezzanine loans, notes or securities, in each case secured by first or second mortgage liens on the related properties.

 

“MOB Portfolio” means that certain portfolio of up to thirty-eight medical office buildings located in fourteen states to be acquired (pursuant to the Designated Real Property Acquisition), indirectly, by SPT ▇▇▇▇ Parent LLC.

 

“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc. and its successors.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

“Near Cash Liquidity” means, with respect to the Borrower and its Subsidiaries on a consolidated basis, as of any date of determination, the sum of (i) the market value of Near Cash Securities held by the Borrower and its Subsidiaries as of such date and (ii) the amount of Undrawn Borrowing Capacity of the Borrower and its direct or indirect Subsidiaries under repurchase and credit facilities to which they are a party as of such date.  “Market Value” of Near Cash Securities shall be determined on a quarterly basis through bids obtained from independent third party broker-dealers reasonably acceptable to the Administrative Agent.

 

“Near Cash Securities” means (i) CMBS having, at all times, a maturity or weighted average life of twelve (12) months or less as determined by the applicable service, (ii) RMBS having a duration of twelve (12) months or less as determined by the Borrower (and, at the Administrative Agent’s request, the assumptions used in such determination shall be provided to the Administrative Agent for the Administrative Agent’s review), in each case, having a rating of Baa1 or BBB (or the equivalent) or higher by at least one Rating Agency (it being acknowledged that such securities may also have a lower rating from one or more Rating Agencies) or (iii) other public or privately placed securities approved by the Administrative Agent.

 

“Net Cash Proceeds” means, with respect to any issuance or sale by the Borrower of any of its Equity Interests, the excess of (i) the sum of the cash and Cash Equivalents received by the Borrower in connection with such issuance or sale, less (ii) the underwriting discounts and commissions, and other out-of-pocket expenses, incurred by the Borrower in connection with such issuance or sale.

 

“Net Income” means, with respect to any Test Period, the net income of the Borrower and its Subsidiaries on a consolidated basis for such Test Period as determined in accordance with GAAP.

 

“New Guarantor Deliverables” means, with respect to any Subsidiary that is required to become (or otherwise becomes) a Guarantor after the Closing Date pursuant to Section 6.12, the following items: (i) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of such Subsidiary as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Subsidiary is a party, (ii) such documents and certifications as the Administrative Agent may reasonably require to evidence that such Subsidiary is duly organized or formed, and that such Subsidiary is validly existing, in good standing and qualified to engage in business in its jurisdiction of organization or formation, (iii) a certificate of a Responsible Officer of such Subsidiary either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Subsidiary and the validity against such Subsidiary of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required and (iv) to the extent requested by the Administrative Agent, a favorable opinion of counsel (which counsel shall be reasonably acceptable to the Administrative

Agent), addressed to the Administrative Agent and each Lender, as to such matters concerning such Subsidiary and the Loan Documents to which such Subsidiary is a party as the Administrative Agent may reasonably request.

 

“New Lender Joinder Agreement” has the meaning specified in Section 2.16(b).

 

“New Lenders” has the meaning specified in Section 2.16(b).

 

“Non-Consenting Lender” has the meaning specified in Section 11.13.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Non-Foreclosable Asset” means any Investment Asset (or any portion thereof) with respect to which the Administrative Agent, for the benefit of the Lenders, has been directly or indirectly granted a Lien, which Investment Asset is not permitted to be transferred without obtaining the prior written consent or approval of any lender or agent for any lender under the terms of any Indebtedness of any direct or indirect owner of such Investment Asset (or any Subsidiary thereof).

 

“Non-Investment Grade CMBS” means any CMBS that is not an Investment Grade CMBS.

 

“Non-Investment Grade RMBS” means any RMBS that is not an Investment Grade RMBS.

 

“Non-Performing Loan” means, as of any date of determination, any Commercial Real Estate Debt Investment that is (x) past due by 90 or more days or (y) on non-accrual status.

 

“Non-Qualifying Location” means each location other than the United States.

 

“Non-Recourse Indebtedness” means (a) as used in the definition of “Subscription Line Indebtedness,” Indebtedness of a Person as to which no Specified Loan Party (a) provides any Guarantee or credit support of any kind (including any undertaking, Guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise), in each case except for (i) customary exceptions for bankruptcy filings, fraud, misrepresentation, misapplication of cash, waste, failure to pay taxes, environmental claims and liabilities, prohibited transfers, violations of single purpose entity covenants, and other circumstances customarily excluded from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse or tax-exempt financings of real estate and (ii) the direct parent company of the primary obligor in respect of the Indebtedness may provide a limited pledge of the equity of such obligor to secure such Indebtedness so long as the lender in respect of such Indebtedness has no other recourse (except as permitted pursuant to the immediately preceding clause (i)) to such direct parent company except for such equity pledge) and (b) as used in any other context, Indebtedness of a Person for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, Insolvency Events, non-approved transfers or other events) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness.

 

“Note” means, as applicable, a Revolving Note or a Term Note.

 

“Notes Guarantor” means a “Guarantor”, as such term is defined in the Senior Notes Indenture, or any other Subsidiary that provides a guarantee of the Senior Notes or any other Indebtedness outstanding under the Senior Notes Indenture.

 

“Notes Reversion Date” means a “Reversion Date” as such term is defined in the Senior Notes Indenture.

 

“Notes Suspension Period” means a “Suspension Period” as such term is defined in the Senior Notes Indenture.

 

“NYFRB” means the Federal Reserve Bank of New York.

 

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m., New York City time, on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided,  further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Obligations” means, collectively, (i) all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding and (ii) all indebtedness, liabilities, duties, indemnities and obligations of any Secured Guarantor owing to JPMorgan, any Lender or any Affiliate of the foregoing in connection with or relating to any Borrowing Base Account maintained by such Secured Guarantor at JPMorgan, any Lender or such Affiliate, including, without limitation, those arising under all instruments, agreements or other documents executed in connection therewith or relating thereto.

 

“OFAC”  means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Off-Balance Sheet Obligations” means, with respect to any Person and any date, to the extent not included as a liability on the balance sheet of such Person, all of the following with respect to such Person as of such date: (a) 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, would be characterized as indebtedness, (b) monetary obligations under any sale and leaseback transaction which does not create a liability on the balance sheet of such Person, 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, or (ii) is the functional equivalent of or takes the place of borrowing but which does not constitute a liability

on the balance sheet of such Person (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).

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Asset Investment” means collectively, (a) any Preferred Equity Investment to the extent held by a Qualifying Loan Party, (b) any Subordinated Land or Construction Loan to the extent held by a Qualifying Loan Party, (c) any Non-Investment Grade CMBS to the extent wholly-owned by a Qualifying Loan Party, (d) any encumbered Commercial Real Estate Ownership Investment (excluding undeveloped land) to the extent held by a Qualifying Encumbered Real Property Subsidiary and (e) any unencumbered Commercial Real Estate Ownership Investment in undeveloped land to the extent held by a Qualifying Loan Party.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

 

“Outstanding Amount” means with respect to Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the aggregate outstanding principal Dollar Amount thereof after giving effect to any borrowings and prepayments or repayments of such Term Loans, Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date.

 

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

 

“Participant” has the meaning specified in Section 11.06(d).

 

“Participant Certification” has the meaning specified in Section 11.06(d).

 

“Participant Register” has the meaning specified in Section 11.06(d).

 

“Participating Member State” means each state so described in any EMU legislation.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

 

“Perfection Certificate” shall mean a certificate in the form of Exhibit E or any other form approved by the Administrative Agent.

 

“Permitted BBCS Indebtedness” means (w) Indebtedness under the Loan Documents, (x) intercompany Indebtedness owed to a Borrowing Base Covenant Subsidiary by its Subsidiary so long as such Indebtedness constitutes a permitted Investment by such Borrowing Base Covenant Subsidiary pursuant to Section 7.02(a), (y) unsecured trade payables in the ordinary course of its business and (z) solely with respect to the holder of a Starwood Fund Equity Interest, Indebtedness of the type described in clause (n) of the definition thereof with respect to such Starwood Fund (or related feeder fund).

 

“Permitted Collateral Liens” means, collectively:

 

(a)         Liens pursuant to any Loan Document;

 

(b)         Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted (which actions or proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien), if adequate reserves with respect thereto are maintained on the books of the Borrower or the applicable Subsidiary thereof in accordance with GAAP;

 

(c)         Liens in favor of a bank or other financial institution arising as a matter of law or under a Control Agreement encumbering deposits (including the right of setoff) and which are within the general parameters customary in the banking industry so long as those deposits are not given in connection with the issuance or incurrence of Indebtedness; and

 

(d)         in the case of a Mezzanine Loan, restrictions on permitted transferees that may be set forth in the documentation governing such Mezzanine Loan (but only to the extent such restrictions on permitted transferees are reasonably standard and customary for loans of the same type as such Mezzanine Loan and in any event would permit the transfer (including by way of foreclosure) of such interest to the Administrative Agent (or a Wholly Owned Subsidiary of one or more Secured Parties) for the benefit of the Secured Parties).

 

“Permitted Equity Encumbrances” means, collectively:

 

(a)         Liens pursuant to any Loan Document; and

 

(b)         Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted (which actions or proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien), if adequate reserves with respect thereto are maintained on the books of the Borrower or the applicable Subsidiary thereof in accordance with GAAP.

 

“Permitted Liens” means, collectively, Permitted Equity Encumbrances, Permitted Property Encumbrances and Permitted Collateral Liens.

 

“Permitted Property Encumbrances” means, collectively:

 

(a)         Liens pursuant to any Loan Document;

 

(b)         Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted (which actions or proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien), if adequate reserves with respect thereto are maintained on the books of the Borrower or the applicable Subsidiary thereof in accordance with GAAP;

 

(c)         easements, rights-of-way, sewers, electric lines, telegraph and telephone lines, restrictions (including zoning restrictions), encroachments, protrusions and other similar encumbrances affecting a Property which could not reasonably be expected to result in a material adverse effect with respect to the use, operations or marketability thereof;

 

(d)         mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period of more than sixty (60) days or are being contested in good faith and by appropriate actions or proceedings diligently conducted (which actions or proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien), if adequate reserves with respect thereto are maintained on the books of the Borrower or the applicable Subsidiary thereof;

 

(e)         any interest or right of a lessee of a Property under leases entered into in the ordinary course of business of the applicable lessor; and

 

(f)         rights of lessors under ground leases.

 

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

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of a Loan Party or any ERISA Affiliate or any such Plan to which a Loan Party or any ERISA Affiliate is required to contribute on behalf of any of its employees.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pounds Sterling” means the lawful currency of the United Kingdom.

 

“Preferred Equity Investment” means a preferred equity investment held by a Qualifying Loan Party in a Person that (x) is not (except by virtue of such investment) an Affiliate of any Loan Party, and (y) owns one or more Commercial Real Estate Debt Investments and/or Commercial Real Estate Ownership Investments, so long as the documents governing the terms of such preferred equity investment include the following provisions:

 

(i)         defined requirements for fixed, periodic cash distributions to be paid to the Qualifying Loan Party that owns such preferred equity investment in order to provide a fixed return to such Qualifying Loan Party on the then unreturned amount of its investment related thereto, with such distributions being required to be paid prior to any distribution, redemption and/or payments being made on or in respect of any other Capital Stock of the issuer of such preferred equity investment, and upon the failure of the issuer of such preferred equity investment to comply with the provisions described above in this clause (i) it shall be a default and such Qualifying Loan Party shall be entitled to exercise any or all of the remedies described in clauses (ii) and (iii) below;

 

(ii)        a defined maturity date or mandatory redemption date for such preferred equity investment (excluding any maturity resulting from an optional redemption by the issuer thereof), upon which it is a default if the then unreturned amount of the investment made by such Qualifying Loan Party in respect thereof (plus the accrued and unpaid return due and payable thereon) is not repaid to the applicable Qualifying Loan Party; and

 

(iii)       default remedies that (A) permit the holders of the preferred equity investment to make customary decisions formerly reserved to (1) holders of the equity interests or Capital Stock (other than such preferred equity investment), or (2) the board of directors or managers (or a similar governing body) of the Equity Investment Asset Issuer, including with respect to the sale of all or any part of the Capital Stock or assets of the Equity Investment Asset Issuer, and (B) provide for the elimination of customary consent, veto or similar decision making rights afforded to (1) any holders of the capital stock or Capital Stock (other than such preferred equity investment), or (2) the board of directors or managers (or a similar governing body), of such Equity Investment Asset Issuer, provided that such decisions (in the case of clause (A) above) and such consent, veto or similar decision making rights (in the case of clause (B) above) could reasonably be expected to restrict the ability of, compromise or delay the holders of the preferred equity investment from realizing upon and paying from the Capital Stock or the assets of the

Equity Investment Asset Issuer all amounts due and payable with respect to the preferred equity investment.

 

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Property” as to any Person means all of the right, title, and interest of such Person in and to land, improvements and fixtures.

 

“Qualifying Criteria” means with respect to any Investment Asset the requirements that:

 

(A)         (x) such Investment Asset (other than any encumbered Commercial Real Estate Ownership Investment or Starwood Fund Investment Asset) is owned directly by a Qualifying Loan Party, (y) in the case of any Starwood Fund Investment Asset, any related Starwood Fund Equity Interests are owned directly by a Qualifying Loan Party and (z) with respect to any encumbered Commercial Real Estate Ownership Investment, such Investment Asset is owned directly by a Qualifying Encumbered Real Property Subsidiary;

 

(B)         the Borrowing Base Subsidiary that directly owns the Investment Asset (or related Starwood Fund Equity Interests) and each Direct Parent of such Borrowing Base Subsidiary shall (1) except as otherwise permitted hereunder with respect to any Starwood Fund (as described in clause (xii) of the definition of Borrowing Base Amount) or with respect to any Unrestricted Real Property Subsidiary, have no Indebtedness (other than Permitted BBCS Indebtedness) outstanding at such time, (2) be Solvent at such time and (3) not be subject to any proceedings under any Debtor Relief Law at such time;

 

(C)         Adjusted Net Book Value (or calculation of Servicing Fee EBITDA, as applicable) with respect to such Investment Asset be included in the calculation of the Borrowing Base Amount only to the extent that (1) there are no contractual or legal prohibitions on the making of dividends, distributions or other payments that, as in effect on any date of determination, are effective to prevent  dividends, distributions or other payments from the applicable Investment Asset to, directly or indirectly, a Specified Loan Party (it being understood that reasonable or customary limitations associated with (i) distributions by any Starwood Fund to its fund investors and (ii) the timing of distributions or requirements associated with the retention of funds by any Wholly Owned Subsidiary for the purpose of maintaining working capital, liquidity, reserves or otherwise satisfying funding needs in respect of an Investment Asset shall in any event not constitute prohibitions on dividends, distributions or other payments hereunder) and (2) the obligations under Section 2.06 hereof with respect to such Investment Asset are satisfied;

 

(D)         except in connection with Indebtedness permitted hereunder with respect to any encumbered Commercial Real Estate Ownership Investment (as described in the definition of Other Asset Investments), such Investment Asset (excluding any underlying real estate to which such Investment Asset that is not a Commercial Real Estate Ownership Investment relates and Liens encumbering the assets of any Equity Investment Asset

Issuer) or related Starwood Fund Equity Interest shall not be, directly or indirectly, encumbered by any Lien (other than a Permitted Collateral Lien) at such time; and

 

(E)         such Investment Asset (or the real estate to which such Investment Asset relates) or the related Starwood Fund Equity Interest is not the subject of any proceedings under any Debtor Relief Law at such time.

 

“Qualifying Loan Party” means any Secured Guarantor, so long as (x) all of the Equity Interests in such Secured Guarantor are pledged as Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Collateral Documents and (y) such Secured Guarantor (and each Direct Parent of such Secured Guarantor) (i) has no Indebtedness outstanding other than Permitted BBCS Indebtedness and (ii) is not an Excluded Subsidiary.

 

“Qualifying Encumbered Real Property Subsidiary” means an Encumbered Real Property Borrowing Base Subsidiary so long as an Encumbered Real Property Holding Company with respect thereto is a Secured Guarantor.

 

“Rating Agency” means each of Fitch, ▇▇▇▇▇’▇ and S&P.

 

“Recipient” means the Administrative Agent or any Lender.

 

“Register” has the meaning specified in Section 11.06(c).

 

“REIT” means a Person satisfying the conditions and limitations set forth in Section 856(b) and 856(c) of the Code which are necessary to qualify such Person as a “real estate investment trust,” as defined in Section 856(a) of the Code.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Release” means any release, spill, emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping, emptying, injection or leaching of any Hazardous Material into the Environment, or into, from or through any building, structure or facility.

 

“Relevant Payment” has the meaning specified in Section 10.11.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice and (b) with respect to a Swing Line Loan, a Swing Line Loan Notice, as applicable.

 

“Required Borrowing Base Accounts” has the meaning specified in the definition of “Borrowing Base Accounts.”

 

“Required Lenders” means, at any time, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in Swing Line Loans being deemed “held” by such Revolving Lender for purposes of this definition) and (b) aggregate unused Commitments.  The portion of the Total Outstandings and unused Commitments held by any Defaulting Lender shall be disregarded in determining Required Lenders at any time; provided that, the amount of any participation in any Swing Line Loan that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by each Lender that is a Swing Line Lender in respect of such Swing Line Loan in making such determination.

 

“Reset Date” has the meaning specified in Section 2.18(a).

 

“Responsible Officer” means the chief executive officer, president, chief financial officer, vice president, general counsel, treasurer, assistant treasurer or controller of a Loan Party and solely for purposes of the delivery of incumbency certificates pursuant to Article IV, the secretary or any assistant secretary of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a written notice to the Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment” means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment and (b) any purchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Borrower or any of its Subsidiaries that is unsecured or that is subordinated in right of payment to the Obligations, other than regularly scheduled amortization payments and payments due upon maturity thereof.  Notwithstanding the foregoing, the conversion of (including any cash payment upon the conversion of), any Convertible Debt Securities and the payment of any interest or customary additional interest (including under any registration rights agreement) with respect to, any Convertible Debt Securities or the Senior Notes shall not constitute a Restricted Payment.

 

“Revolving Availability Period” means the period from and including the Closing Date to the earliest of (a) the Revolving Maturity Date, (b) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.05(b), and (c) the date of termination of the commitment of each Revolving Lender to make Revolving Credit Loans pursuant to Section 8.02.

 

“Revolving Commitment” means, as to each Revolving Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01 and (b) purchase participations

in Swing Line Loans, in an aggregate principal amount (based on, in the case of Foreign Currency Revolving Credit Loans, the Dollar Amount of such Foreign Currency Revolving Credit Loans) at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Commitment”, or with respect to any Revolving Lender that becomes a party to this Agreement after the Closing Date, as set forth in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Revolving Lender becomes a party hereto, as applicable, in each case as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Revolving Commitment Increase” has the meaning specified in Section 2.16(a).

 

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and currency and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

 

“Revolving Credit Exposure” means, as to any Lender at any time, the sum of the aggregate principal amount at such time of the Dollar Amount of its outstanding Revolving Credit Loans and such Lender’s participation in Swing Line Loans at such time.

 

“Revolving Credit Facility” means the Revolving Commitments and the Revolving Credit Loans made thereunder.

 

“Revolving Credit Loan” has the meaning specified in Section 2.01(b).

 

“Revolving Lender” means each Lender that has a Revolving Commitment or if the Revolving Commitments have terminated or expired, each Lender with Revolving Credit Exposure.

 

“Revolving Maturity Date” means, with respect to the Revolving Credit Loans and Revolving Commitment (or portion thereof, as applicable) of any Revolving Lender, the later of (a) the Initial Maturity Date and (b) if the Initial Maturity Date is extended pursuant to Section 2.13, the then-applicable Extended Maturity Date;  provided,  however, that in each case, if such date is not a Business Day, the Revolving Maturity Date shall be the next preceding Business Day.

 

“Revolving Note” means a promissory note made by the Borrower in favor of a Lender evidencing the Revolving Credit Loans made by such Lender, substantially in the form of Exhibit B-1.

 

“RMBS” means mortgage pass-through certificates or other securities (other than any derivative security) issued pursuant to a securitization of residential mortgage loans.

 

“S&P” means Standard & Poor’s Financial Services LLC and its successors.

 

“Sanction(s)” means any international economic or financial sanction administered or enforced by the United States Government (including without limitation, OFAC and the United States Department of State), the United Nations Security Council, the European Union, the United Kingdom or other relevant sanctions authority.

 

“Screen Rate” has the meaning specified in the definition of “LIBO Rate.”

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Secured Guarantor” means each Guarantor other than any Designated Unsecured Guarantor.

 

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

 

“Securities Account” has the meaning specified in the UCC.

 

“Security Agreement” means the Security Agreement dated as of the Closing Date, substantially in the form of Exhibit F, among the Secured Guarantors and the Administrative Agent, as such agreement may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

“Senior Notes” means the Borrower’s 5.000% Senior Notes due 2021, issued under the Senior Notes Indenture from time to time.

 

“Senior Notes Indenture” means the Indenture, dated as of December 16, 2016 between the Borrower and The Bank of New York Mellon, as trustee, as amended or supplemented from time to time.

 

“Servicing Fee EBITDA” means as of any date of determination, Fee-Related Earnings that are earned and received by Qualifying Loan Parties that constitute taxable REIT subsidiaries and that are received directly by such Qualifying Loan Parties from the counterparty to the applicable servicing agreement for the then most recently ended four fiscal-quarter period of the Borrower for which financial statements have been delivered or required to be delivered pursuant to Section 6.01;  provided that Fee-Related Earnings shall be included in Servicing Fee EBITDA only to the extent that (1) the Qualifying Loan Party that receives such Fee-Related Earnings (A) is Solvent at such time and (B) is not subject to any proceedings under any Debtor Relief Law at such time; (2) there are no contractual or legal prohibitions on the making of any such payments from the counterparty to the applicable servicing agreement that, as in effect on any date of determination, are effective to prevent such payments from the counterparty to the applicable servicing agreement directly to the applicable Qualifying Loan Party; (3) the obligations under Section 2.06 hereof with respect to such Fee-Related Earnings are satisfied; (4) such Fee-Related Earnings are not encumbered by any Lien (other than a Permitted Collateral Lien) at such time and (5) the counterparty with respect to such Fee-Related Earnings is not the subject of any proceedings under any Debtor Relief Law at such time.

 

“Significant Subsidiary” means, at any date of determination, each Subsidiary or group of Subsidiaries of the Borrower (a) whose total assets at the last day of the most recent fiscal period for which financial statements have been delivered pursuant to clause (a) or (b) of Section 6.01 (or, for periods prior to the initial delivery of financial statements pursuant to such subsections,

the Audited Financial Statements for the fiscal year ending December 31, 2015) were equal to or greater than 10% of the consolidated total assets of the Borrower and its Subsidiaries at such date or (b) whose gross revenues for the most recently completed period of four fiscal quarters for which financial statements have been delivered pursuant to clause (a) or (b) of Section 6.01 (or, for periods prior to the initial delivery of financial statements pursuant to such subsections, the Audited Financial Statements for the fiscal year ending December 31, 2015) were equal to or greater than 10% of the consolidated gross revenues of the Borrower and its Subsidiaries for such period, in each case, determined in accordance with GAAP (it being understood that such calculations shall be determined in the aggregate for all Subsidiaries of the Borrower subject to any of the events specified in clause (e),  (f),  (g) or (h) of Section 8.01); provided that, in any event, each Borrowing Base Subsidiary, each Encumbered Real Property Pledged Subsidiary and each Secured Guarantor shall be deemed to be a Significant Subsidiary.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets 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 does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Solvency Certificate” means a Solvency Certificate of the chief financial officer of the Borrower, substantially in the form of Exhibit G.

 

“Specified Asset Investments” means collectively, (a) any Preferred Equity Investment, (b) any encumbered Commercial Real Estate Ownership Investment, (c) any unencumbered Commercial Real Estate Ownership Investment in land, (d) any land loan, (e) any construction loan and (f) any Non-Investment Grade CMBS.

 

“Specified Borrowing Base Account” means each Deposit Account that is specified by a Secured Guarantor as a “Specified Borrowing Base Account” and is subject to a Control Agreement and maintained by a Secured Guarantor at JPMorgan or an Affiliate thereof, with respect to which neither the Borrower nor any of its Subsidiaries shall have any right to access or make withdrawals from such Deposit Account unless a Borrowing Base Release Transaction would be permitted pursuant to Section 2.15 with respect to amounts on deposit in such Deposit Account.

 

“Specified Loan Party” means each Loan Party other than any Designated Unsecured Guarantor.

 

“Starwood Fund(s)” means any investment vehicle(s), private equity fund(s) or other similar investment company(ies), including, without limitation, an externally managed real estate investment trust, in each case, that is managed by the Manager or any Affiliate of the Manager.

 

“Starwood Fund Equity Interest” has the meaning assigned to such term in the definition of Borrowing Base Amount herein.

 

“Starwood Fund Investment Assets” has the meaning assigned to such term in the definition of Investment Asset herein.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the FRB to which the Administrative Agent is subject with respect to the Eurocurrency Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the FRB).  Such reserve percentage shall include those imposed pursuant to such Regulation D.  Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Subordinated Land or Construction Loan” means any land loan or construction loan that, in each case, is subordinated to any other Indebtedness (whether in right of payment, payment waterfall or lien priority, and whether structurally, contractually or legally).

 

“Subscription Line Indebtedness” means, with respect to any Starwood Fund, Indebtedness incurred to provide financing to such Starwood Fund (or any related feeder fund) secured by capital call commitments, which Indebtedness would be either (i) Non-Recourse Indebtedness pursuant to clause (a) of the definition thereof or (ii) in the case of such Indebtedness of a Specified Loan Party, limited in recourse to the rights of such Specified Loan Party to provide capital commitments, make capital calls, exercise rights as the general partner or managing member of the subsidiary or affiliate obtaining such subscription line, and ancillary rights related thereto or otherwise granted in connection with such subscription facility, including, without limitation, in relation to any bank accounts into which proceeds of such capital calls are made; provided that the amount of such Subscription Line Indebtedness shall be limited to a borrowing base that cannot exceed the amount of uncalled capital commitments of the borrower of such Subscription Line Indebtedness.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Supermajority Lenders” means, at any time, Lenders holding at least 66-2/3% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in Swing Line Loans being deemed “held” by such Revolving Lender for purposes of this definition) and (b) aggregate unused Commitments.  The portion of the Total Outstandings and unused Commitments held by any Defaulting Lender shall be disregarded in determining Supermajority Lenders at any time; provided that, the amount of any participation in any Swing Line Loan that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by each Lender that is a Swing Line Lender in respect of such Swing Line Loan in making such determination.

 

“Swap Contract” means (a) 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, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap 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 ▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.17.

 

“Swing Line Lenders” means JPMorgan and each other Revolving Lender that agrees in writing to become a Swing Line Lender (subject to the consent of the Borrower and the Administrative Agent), each in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.17(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.17(b), which shall be substantially in the form of Exhibit A-2 or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission

system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

 

“Tangible Net Worth” means, as of any date of determination, with respect to any Person, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person, minus (i)(a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) Intangible Assets and (c) prepaid taxes and/or expenses plus (ii) unamortized debt premium, all on or as of such date.

 

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

 

“Term Commitment Increase” has the meaning specified in Section 2.16(a).

 

“Term Lender” means each Lender that has a Term Loan Commitment or holds a Term Loan.

 

“Term Loan” has the meaning specified in Section 2.01(a).

 

“Term Loan Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01.

 

“Term Loan Commitment” means, as to each Term Lender, its obligation to (a) make Term Loans to the Borrower on the Closing Date pursuant to Section 2.01 in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Term Loan Commitment”, or with respect to any Term Lender that becomes a party to this Agreement after the Closing Date, as set forth in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Term Loan Facility” means the Term Loan Commitments and the Term Loans made thereunder.

 

“Term Loan Maturity Date” means with respect to the Term Loans of any Term Lender, the later of (a) the Initial Maturity Date and (b) if the Initial Maturity Date is extended pursuant to Section 2.13, the then-applicable Extended Maturity Date;  provided,  however, that in each case, if such date is not a Business Day, the Term Loan Maturity Date shall be the next preceding Business Day.

 

“Term Note” means a promissory note made by the Borrower in favor of a Lender evidencing the Term Loans made by such Lender, substantially in the form of Exhibit B-2.

 

“Test Period” means the time period commencing on the first day of each fiscal quarter through and including the last day of such fiscal quarter.

 

“Threshold Amount” means $25,000,000.

 

“Total Assets” shall mean, with respect to any Person on any date, an amount equal to the aggregate book value of all assets owned by such Person and its Subsidiaries on a consolidated basis less (i) amounts owing to such Person or any of its Subsidiaries from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (ii) Intangible Assets and (iii) prepaid taxes and expenses, all on or as of such date and determined in accordance with GAAP.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments, Revolving Credit Exposure and Outstanding Amount of Term Loans in each case of such Lender at such time.

 

“Total Indebtedness” means, with respect to the Borrower and its Subsidiaries on a consolidated basis, as of any date of determination, all Indebtedness (other than (i) Contingent Liabilities not reflected on the Borrower’s consolidated balance sheet and (ii) unamortized debt premium) on or as of such date of determination, all determined in accordance with GAAP.

 

“Total Outstandings” means, at any time, the Dollar Amount of the aggregate Outstanding Amount of all Loans at such time.

 

“Total Revolving Credit Outstandings” means, at any time, the Dollar Amount of the aggregate Outstanding Amount of all Revolving Credit Loans and Swing Line Loans at such time.

 

“Trade Date” has the meaning specified in Section 11.06(j)(i).

 

“Treaty” means the Treaty establishing the European Economic Community, being the Treaty of Rome of March 25, 1957 as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty (which was signed on February 7, 1992 and came into force on November 1, 1993) and as may from time to time be further amended, supplemented or otherwise modified.

 

“Type” means, when used in reference to the Loans or any Borrowing, whether the Loans, or that portion of the Loans comprising such Borrowing, are Base Rate Loans or Eurocurrency Loans.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided,  however, that if by reason of mandatory provisions of applicable Law, any or all of the perfection or priority of the Administrative Agent’s security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

 

“Unaudited Financial Statements” means the unaudited consolidated balance sheets of the Borrower and its Subsidiaries, and the related consolidated statements of income or operations, shareholders’ equity and cash flows, for each fiscal quarter ended after the date of the Audited Financial Statements but prior to the date that is 50 days prior to the Closing Date.

 

“Undrawn Borrowing Capacity” means, with respect to the Borrower and its Subsidiaries as of any date, the total undrawn borrowing capacity available to the Borrower and its direct or indirect consolidated Subsidiaries under any repurchase and credit facilities and similar agreements to which they are a party as of such date, but (i) with respect to any such repurchase

 

or credit facility or similar agreement that is a secured facility, solely to the extent that collateral has been approved by and pledged to the related buyer or lender under such facility, and (ii) with respect to any such credit facility or similar agreement that is an unsecured facility, solely to the extent that such undrawn borrowing capacity is committed by the related lender.

 

“United States” and “U.S.” mean the United States of America.

 

“Unrestricted Cash” means (i) cash and Cash Equivalents (other than prepaid rents and security deposits made under tenant leases) held by the Borrower or any of its Subsidiaries that are not subject to any Lien (excluding statutory liens in favor of any depositary bank where such cash is maintained or any Lien granted to the Administrative Agent for the benefit of the Secured Parties), minus (ii) amounts included in the foregoing clause (i) that are with an entity other than the Borrower or any of its Subsidiaries as deposits or security for Contractual Obligations.

 

“Unrestricted Real Property Subsidiary” means any direct or indirect Subsidiary (including an Encumbered Real Property Borrowing Base Subsidiary) of an Encumbered Real Property Pledged Subsidiary that does not also constitute an Encumbered Real Property Pledged Subsidiary.

 

“Unused Fee” has the meaning specified in Section 2.08(a).

 

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(iii).

 

“Warehouse Facility” means any financing arrangement of any kind, including, but not limited to, financing arrangements in the form of repurchase facilities, loan agreements, note issuance facilities and commercial paper facilities (excluding in all cases, securitizations), with a financial institution or other lender or purchaser exclusively to finance the purchase or origination  of Commercial Real Estate Debt Investments prior to securitization thereof; provided that such purchase or origination is in the ordinary course of business.

 

“Wholly Owned Subsidiary” means, as to any Person and as of any date of determination, any other Person one hundred percent (100%) of the Equity Interests of which (other than directors’ qualifying shares required by law) is owned directly and/or through other Wholly Owned Subsidiaries of such Person.

 

“Withholding Agent” means any Loan Party and the Administrative Agent.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

1.02        Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)          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, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) 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 or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(b)          In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(c)          Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03        Accounting Terms.

 

(a)          Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

(b)          Changes in GAAP; Changes in Accounting Policies or Reporting Practices.  If at any time any change in GAAP (including the adoption of IFRS), or any change in accounting policies or reporting practices of the Borrower or any of its Subsidiaries that are permitted by but not required under, GAAP, would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change(s) (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP and the accounting policies and reporting practices (as the case may be) in effect prior to such change(s) and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change(s).  Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

 

1.04       Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05       Times of Day; Rates.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).  The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of “Eurocurrency Rate” or with respect to any comparable or successor rate thereto or to LIBOR or EURIBOR.

 

ARTICLE II. THE COMMITMENTS AND REVOLVING CREDIT LOANS

 

2.01       The Loans.

 

(a)         Term Loan Borrowing. Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make a term loan denominated in Dollars (a “Term Loan”) to the Borrower on the Closing Date, the amount of which shall equal, for any Term Lender, the amount of such Term Lender’s Term Loan Commitment (or, if less than all of the Term Loan Commitments are drawn, such Term Lender’s Applicable Percentage of the aggregate Term Loan Commitments drawn on the Closing Date); provided that, after giving effect to any Term Loan Borrowing, the Total Outstandings shall not exceed the Borrowing Base Amount at such time.  Such Term Loans (a) may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein, (b) may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid, may not be reborrowed and (c) shall not exceed in the aggregate the total of all Term Loan Commitments. Notwithstanding the foregoing, all the Term Loan Commitments shall automatically terminate at 5:00 p.m., New York City time, on the Closing Date, if the making of

the Term Loans shall not have occurred by such time.  Each Term Lender that is a party to this Agreement on the Closing Date hereby represents and warrants that, on and as of the Closing Date, it is a “qualified purchaser” (within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder) and a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act of 1933, as amended).

 

(b)         Revolving Borrowings.  Subject to the terms and conditions set forth herein, each Revolving Lender severally agrees to make loans to the Borrower from time to time, on any Business Day during the Revolving Availability Period, (each such loan, a “Revolving Credit Loan”) (i) denominated in Dollars or (ii) denominated in one or more Foreign Currencies (“Foreign Currency Revolving Credit Loans”), in an aggregate principal amount (based on, in the case of Foreign Currency Revolving Credit Loans, the Dollar Amount of such Foreign Currency Revolving Credit Loans) at any one time outstanding which does not exceed the amount of such Revolving Lender’s Revolving Commitment; provided,  further, that, after giving effect to any Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the Borrowing Base Amount at such time, (ii) the aggregate Revolving Credit Exposure of all Revolving Lenders shall not exceed the Aggregate Revolving Commitments, and (iii) the Revolving Credit Exposure of any Revolving Lender shall not exceed such Revolving Lender’s Revolving Commitment.  Within the limits of each Revolving Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01(b), prepay under Section 2.03, and reborrow under this Section 2.01(b).  Revolving Credit Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein. All Foreign Currency Revolving Credit Loans shall be Eurocurrency Loans. Each Revolving Lender that is a party to this Agreement on the Closing Date hereby represents and warrants that, on and as of the Closing Date, it is a “qualified purchaser” (within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder) and a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act of 1933, as amended).

 

2.02       Borrowings, Conversions and Continuations of Revolving Credit Loans.

 

(a)         Each Term Loan Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans denominated in Dollars from Eurocurrency Loans to Base Rate Loans (or from Base Rate Loans to Eurocurrency Loans), and each continuation of Eurocurrency Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by (A) telephone, or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Committed Loan Notice.  Each such Committed Loan Notice must be received by the Administrative Agent not later than (i) 11:00 a.m., Local Time, three (3) Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or of any conversion of Eurocurrency Rate Loans to Base Rate Loans and (ii) 11:00 a.m., New York City time, on the requested date of any Borrowing of Base Rate Loans; provided,  however, that if the Borrower wishes to request Eurocurrency Rate Loans having an Interest Period of six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m., Local Time, four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Appropriate Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  Not later than 11:00

a.m., Local Time, three Business Days before the requested date of a Borrowing, conversion or continuation of Eurocurrency Rate Loans having an Interest Period of six months, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Appropriate Lenders.  Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, in the case of Foreign Currency Revolving Credit Loans, the Applicable Minimum Amount).  Each Borrowing of, or conversion to, Base Rate Loans shall be in a principal amount of (x) with respect to Term Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (y) with respect to Revolving Credit Loans, $500,000 or a whole multiple of $100,000 in excess thereof.

 

Each Committed Loan Notice shall specify (i) whether the Borrower is requesting a Term Loan Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, and, in the case of Revolving Credit Loans, whether such Revolving Credit Loans shall be denominated in Dollars, Pounds Sterling, or Euro, (iv) the Type of Loans to be borrowed or to which existing Term Loans or Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto (which shall be one, two, three or six months).  If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans; provided that, notwithstanding the foregoing, if the Borrower shall fail to give notice of continuation of a Foreign Currency Revolving Credit Loan which is a Eurocurrency Loan, such Foreign Currency Revolving Credit Loan shall be automatically continued for an Interest Period of one month.  Any automatic conversion to Base Rate Loans pursuant to this paragraph shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans.  If the Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

 

(b)         Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage under the applicable Facility of the applicable Term Loans or Revolving Credit Loans, as applicable, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a).  In the case of a Term Loan Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than (i) in the case of Loans denominated in Dollars, 1:00 p.m., New York City time (or 4:00 p.m., New York City time, in the case of Base Rate Loans) on the Business Day specified in the applicable Committed Loan Notice and (ii) in the case of Loans denominated in a Foreign Currency, 1:00 p.m., Local Time.  Upon satisfaction of the conditions set forth in Section 4.02, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of JPMorgan with the

amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

 

(c)         Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan.  During the existence of a Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans without the consent of the Majority Facility Lenders in respect of such Facility.

 

(d)         The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in the Prime Rate used in determining the Base Rate promptly following the public announcement of such change.

 

(e)         After giving effect to all Term Loan Borrowings, all conversions of Term Loans from one Type to the other, and all continuations of Term Loans as the same Type, there shall not be more than six (6) Interest Periods in effect in respect of the Term Loan Facility.  After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than six (6) Interest Periods in effect in respect of the Revolving Credit Facility.

 

(f)         Notwithstanding anything to the contrary in this Agreement, any Lender may exchange, continue or rollover all of the portion of its Loans in connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent, and such Lender.

 

2.03       Prepayments of Loans.

 

(a)         Optional Prepayments.  The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (i) such notice must be in a form acceptable to the Administrative Agent and be received by the Administrative Agent not later than (x) with respect to Loans denominated in Dollars, 11:00 a.m., New York City time, (A) three (3) Business Days prior to any date of prepayment of Eurocurrency Rate Loans and (B) on the date of prepayment of Base Rate Loans and (y) with respect to Loans denominated in a Foreign Currency, 11:00 a.m., Local Time, three (3) Business Days prior to any date of prepayment of Eurocurrency Rate Loans; (ii) any prepayment of Eurocurrency Rate Loans shall be in a principal amount of (x) with respect to Term Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (y) with respect to Revolving Credit Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof (or, in the case of Foreign Currency Revolving Credit Loans, 1,000,000 or a whole multiple of 100,000 in excess thereof, in each case in the applicable currency); and (iii) any prepayment of Base Rate Loans shall be in a principal amount of (x) with respect to Term Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (y) with respect to Revolving Credit Loans, $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify

the date and amount of such prepayment, the Facility and the Type(s) of Loans to be prepaid and, if Eurocurrency Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of the relevant Facility).  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided, that if a Contingent Commitment Termination Notice is revoked by the Borrower in accordance with Section 2.05, as result of the refinancing specified therein not having occurred, the Borrower shall not be required to prepay the Loans (and the Loans shall not become due and payable) on the payment date set forth in such revoked Contingent Commitment Termination Notice (it being understood that a notice of prepayment of the Term Loans due to a refinancing of the Term Loans with the proceeds of a refinancing may also be stated to be contingent upon the consummation of such refinancing and may be similarly revoked in the event such refinancing is not consummated, in which case this proviso shall apply to such revocation).  Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.  Subject to Section 2.14, each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages in respect of the relevant Facility.

 

The Borrower may, upon notice to the applicable Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the applicable Swing Line Lender and the Administrative Agent not later than 1:00 p.m., New York City time, on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000.  Each such notice shall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

(b)          Mandatory Prepayments.

 

(i)         If for any reason the Total Revolving Credit Outstandings at any time exceeds the Aggregate Revolving Commitments then in effect, the Borrower shall immediately prepay Revolving Credit Loans in an aggregate amount equal to such excess; provided that to the extent the Total Revolving Credit Outstandings at any time exceed the Aggregate Revolving Commitments then in effect solely as a result of a change in the Exchange Rate for the purchase of Dollars with a Foreign Currency, such prepayment shall not be required unless the Total Revolving Credit Outstandings at such time exceed the Aggregate Revolving Commitments then in effect by 5% or more.

 

(ii)        If for any reason the Total Outstandings at any time exceeds the Borrowing Base Amount at such time, the Borrower shall within two (2) Business Days thereof either (x) pledge additional Borrowing Base Assets under the Collateral Documents or (y) prepay Loans (including Swing Line Loans) such that, after giving effect to such pledge and/or prepayment, the Borrower and its Subsidiaries are in compliance, on a pro forma basis, with Section 7.12(f).  Each prepayment pursuant to the foregoing sentence shall be applied,

first, to the outstanding Swing Line Loans until paid in full, second, ratably to the outstanding Revolving Credit Loans (without any reduction of the Aggregate Revolving Commitments), and third, ratably to the outstanding Term Loans.

 

2.04      Repayment of Loans.

 

(a)         Revolving Credit Loans.  The Borrower shall repay to each Revolving Lender on the Revolving Maturity Date the aggregate principal amount of all Revolving Credit Loans of such Revolving Lender outstanding on the Revolving Maturity Date.

 

(b)         Swing Line Loans.  The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date five Business Days after such Loan is made and (ii) the Revolving Maturity Date; provided that on each date that a Revolving Credit Loan is borrowed, the Borrower shall repay all Swing Line Loans then outstanding and the proceeds of any such Revolving Credit Loans shall be applied by the Administrative Agent to repay any Swing Line Loans outstanding.

 

(c)         Term Loans.  The Borrower shall repay to each Term Lender on the Term Loan Maturity Date the aggregate principal amount of all Term Loans of such Term Lender outstanding on the Term Loan Maturity Date.

 

2.05      Termination or Reduction of Commitments.

 

(a)         The Term Loan Commitments shall automatically and permanently terminate upon funding of the Term Loans on the Closing Date.

 

(b)         The Borrower may, upon written notice to the Administrative Agent, terminate the Revolving Commitments, or from time to time permanently reduce the Revolving Commitments; provided that (i) any such notice shall be in a form acceptable to the Administrative Agent and be received by the Administrative Agent not later than 12:00 noon, New York City time, five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) after giving effect to any partial reduction of the Revolving Commitments, the remaining Revolving Commitments shall be greater than or equal to $25,000,000, (iv) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, (x) the Total Revolving Credit Outstandings would exceed the Aggregate Revolving Commitments then in effect or (y) the Total Outstandings would exceed the Borrowing Base Amount at such time and (v) the Borrower shall pay any amounts required to be paid under Section 3.05 resulting from any prepayment of Revolving Credit Loans made in connection with such termination or reduction of Commitments; provided further, that any such notice delivered in connection with a termination in full of the Revolving Commitments, due to a refinancing of the Loans with the proceeds of such refinancing, may be, if expressly so stated to be, contingent upon the consummation of such refinancing (any such contingent termination notice being referred to herein as a “Contingent Commitment Termination Notice”) and may be revoked by the Borrower in the event such refinancing is not consummated (and the Borrower shall pay any amounts required to be paid under Section 3.05 resulting from any such revocation of such notice).  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Revolving Commitments.  Any reduction of the Revolving Commitments shall be

applied to the Commitment of each Revolving Lender according to its Applicable Revolving Percentage.  All fees in respect of the Revolving Credit Facility accrued until the effective date of any termination of the Revolving Commitments shall be paid on the effective date of such termination.

 

2.06      Borrowing Base Asset Proceeds; Distributions.

 

(a)         Required Borrowing Base Accounts.  The Secured Guarantors have established the Required Borrowing Base Accounts (or, with respect to the Deposit Accounts referred to in Section 6.21, the Secured Guarantors shall have established the Required Borrowing Base Accounts on or prior to the date required pursuant to Section 6.21).  All funds on deposit in the Borrowing Base Accounts shall be collateral security for the Obligations. To the extent that a Borrowing Base Account is an interest-bearing account, all accrued interest earned with respect to such Borrowing Base Account shall become part of the balance in such Borrowing Base Account. Each Secured  Guarantor shall include all interest and earnings on any such balance in its respective Borrowing Base Accounts as its income and shall be the owner of all funds on deposit in its Borrowing Base Accounts for federal and applicable state and local tax purposes. Subject to subsection (e) below, the Secured Guarantors shall have the exclusive right to manage and control all funds in the Borrowing Base Accounts (other than any Specified Borrowing Base Account), but, in any event, the Administrative Agent shall not have any fiduciary duty with respect to such funds or the Borrowing Base Accounts.

 

(b)         Borrowing Base Asset Proceeds.  The Secured Guarantors will, on or prior to the Closing Date (subject, however, to such later deadline as is provided for certain Required Borrowing Base Accounts pursuant to Section 6.21), irrevocably instruct (and after the Closing Date (or such later deadline, as applicable) will continue to irrevocably instruct), the applicable obligors, agents, trustees, servicers, sub-servicers or other applicable payors (as the case may be) with respect to all Borrowing Base Assets (other than with respect to encumbered Commercial Real Estate Ownership Interests and Starwood Fund Investment Assets) to deposit or otherwise transfer into a Required Borrowing Base Account, as applicable, all Borrowing Base Asset Proceeds in respect of such Borrowing Base Assets. Other than a direction to pay any such Borrowing Base Asset Proceeds to a different Required Borrowing Base Account, the Secured Guarantors shall not make any change in the foregoing instructions without the consent of the Administrative Agent. If, despite such instructions, any such Borrowing Base Asset Proceeds are received by the Borrower or its Subsidiaries other than as provided in the preceding sentence (after giving effect to any later deadline described above, if applicable), the Borrower shall hold (or shall cause the applicable Subsidiary to hold) such amount in trust for the benefit of the Administrative Agent, shall segregate (or shall cause the applicable Subsidiary to segregate) such amount from all other funds of the Borrower or such Subsidiary, as applicable, and shall, within two (2) Business Days following receipt thereof, cause such amount to be deposited into a Required Borrowing Base Account.

 

(c)         Distributions.  The Borrower will, on or prior to the Closing Date, irrevocably instruct (and after the Closing Date will continue to irrevocably instruct) each Subsidiary or Starwood Fund (or related feeder fund) that directly or indirectly owns any encumbered Commercial Real Estate Ownership Interest or Starwood Fund Investment Asset to make any and all Distributions that are otherwise payable to any Loan Party or any Subsidiary (other than an

Unrestricted Real Property Subsidiary) to a Secured Guarantor and into a Required Borrowing Base Account.  If, despite such instructions, any such Distributions are received by the Borrower or its Subsidiaries other than as provided in the preceding sentence, the Borrower shall hold (or shall cause the applicable Subsidiary to hold) such amount in trust for the benefit of the Administrative Agent, shall segregate (or shall cause the applicable Subsidiary to segregate) such amount from all other funds of the Borrower or such Subsidiary, as applicable, and shall, within two (2) Business Days following receipt thereof, cause such amount to be deposited into a Required Borrowing Base Account.

 

(d)         [intentionally omitted]

 

(e)         Withdrawals from Borrowing Base Accounts.  Each Secured Guarantor shall have the right (i) to access and make withdrawals from its Borrowing Base Accounts (other than any Specified Borrowing Base Account) unless an Event of Default shall have occurred and be continuing or would result therefrom and the Administrative Agent shall have blocked access to such Borrowing Base Account and (ii) in the case that an Event of Default shall have occurred and be continuing and the Administrative Agent shall have blocked access to such Borrowing Base Account, to access and make withdrawals from its Borrowing Base Accounts (other than any Specified Borrowing Base Account) as necessary to make the distributions contemplated by Section 7.06(f)(i).  In addition, each Secured Guarantor shall have the right to make withdrawals from each Specified Borrowing Base Account if and to the extent that a Borrowing Base Release Transaction would be permitted pursuant to Section 2.15 with respect to amounts on deposit in such Specified Borrowing Base Account.

 

2.07       Interest.

 

(a)         Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate for such Facility and (ii) each Base Rate Loan under a Facility (including each Swing Line Loan) shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for such Facility (which, in the case of a Swing Line Loan, shall be the Applicable Rate for the Revolving Credit Facility).

 

(b)          (i)         While any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)         Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)         Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest

 

hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.08       Fees.  In addition to certain fees described in Section 2.13:

 

(a)         Unused Fee. The Borrower shall pay to the Administrative Agent for the account of each Revolving Lender in accordance with its Applicable Revolving Percentage, an unused line fee (the “Unused Fee”) equal to the Applicable Fee Rate times the actual daily amount by which the Aggregate Revolving Commitments exceeds the Outstanding Amount of Revolving Credit Loans, subject to adjustment as provided in Section 2.14.  The Outstanding Amount of Swing Line Loans shall not be counted towards or considered usage of the Aggregate Revolving Commitments for purposes of determining the Unused Fee. The Unused Fee shall accrue at all times during the Revolving Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Revolving Availability Period.  The Unused Fee shall be calculated quarterly in arrears.

 

(b)         The Borrower shall pay to the Arrangers and the Administrative Agent for their own respective accounts the fees as have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

(c)         The Borrower shall pay to the Administrative Agent for the account of the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

2.09       Computation of Interest and Fees.  All computations of interest for Base Rate Loans the rate of interest on which is calculated on the basis of the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed, and all computations of interest for any Foreign Currency Revolving Credit Loan denominated in Pounds Sterling shall be calculated on the basis of a 365-day year for actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which such Loan is made, and shall not accrue on such Loan, or any portion thereof, for the day on which such Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.11(a), bear interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent demonstrable error.

 

2.10       Evidence of Debt.

 

(a)         The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent demonstrable error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent

in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of demonstrable error.  Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

(b)         In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Swing Line Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

2.11       Payments Generally; Administrative Agent’s Clawback.

 

(a)         General.  All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff, except for any deduction or withholding required by applicable Laws.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m., New York City time, on the date specified herein (or, in the case of principal or interest relating to Foreign Currency Revolving Credit Loans, not later than 2:00 p.m., Local Time, on the due date thereof to the Administrative Agent, for the account of the Revolving Lenders, in the relevant Foreign Currency and in immediately available funds).  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the relevant Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m., Local Time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(i)         Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02)  and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower jointly and severally agree to pay to the Administrative Agent

forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) 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, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower 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 Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

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

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (a) shall be conclusive, absent demonstrable error.

 

(b)         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 Borrower by the Administrative Agent because the conditions to the applicable Loans set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(c)         Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Term Loans and Revolving Credit Loans, to fund participations in Swing Line Loans and to make payments pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(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 Section 11.04(c).

 

(d)         Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for its 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 its Loan in any particular place or manner.

 

2.12       Sharing of Payments by Lenders.  Except to the extent that this Agreement or a court order expressly provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on the Obligations owing to it greater than its pro rata share thereof as provided herein then, in each case, the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Term Loans, Revolving Credit Loans and subparticipations in Swing Line Loans, as applicable, of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the applicable Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Term Loans and Revolving Credit Loans and other amounts owing them, provided that:

 

(i)         if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)        the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender or a Disqualified Transferee), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Term Loans, Revolving Credit Loans or subparticipations in Swing Line Loans to any assignee or participant, other than an assignment to the Borrower or any Affiliate thereof (as to which the provisions of this Section shall apply).

 

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

2.13       Extensions of Maturity Date.  Notwithstanding anything herein to the contrary, the Borrower may, at its election by written notice to the Administrative Agent (which shall promptly notify each of the Lenders) (each such election, an “Extension Option”, the date of such election, the “Extension Date”) extend the Revolving Commitments, the Revolving Credit Loans and the Term Loans (such extended Revolving Commitments, the “Extended Commitments” and such extended Revolving Credit Loans and Term Loans, the “Extended Loans”) for additional

terms of 6 months each (the “Extended Maturity Date”), subject to the following terms and conditions:

 

(a)         there shall be no more than two (2) Extension Options exercised during the term of this Agreement;

 

(b)         no Default or Event of Default shall have occurred or be continuing on the date of such written notice and on the Initial Maturity Date or first Extended Maturity Date, as applicable, or would result from the exercise of any Extension Option;

 

(c)         each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects (or, if such representations and warranties are qualified by materiality, in all respects) on and as of the date of such written notice and on and as of such Extension Date (and after giving effect to such Extension Option) as if made on and as of such dates (except that any representations and warranties which expressly relate to an earlier date shall be true and correct in all material respects (or, if such representations and warranties are qualified by materiality, in all respects) as of such earlier date);

 

(d)         the Borrower shall make the request for such Extension Option not earlier than 90 days and not later than 30 days prior to the Initial Maturity Date, or first Extended Maturity Date, as applicable;

 

(e)         the latest Extended Maturity Date shall be no later than the Latest Maturity Date; and

 

(f)         the Borrower shall pay or cause to be paid to each Lender on each such Extension Date a fee equal to 0.10% of the sum of the amount of the then existing Revolving Commitments of such Lender plus the Outstanding Amount of the Term Loans of such Lender.

 

2.14       Defaulting Lenders.

 

(a)         Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)         Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definitions of “Majority Facility Lenders,” “Required Lenders” and “Supermajority Lenders” and in Section 11.01.

 

(ii)        Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise), or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08, shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Swing Line Lenders

hereunder; third, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fourth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fifth, to the payment of any amounts owing to the Lenders or the Swing Line Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; sixth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and seventh, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans and funded and unfunded participations in Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.14(a)(iv).  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)       Certain Fees.  No Defaulting Lender shall be entitled to receive any Unused Fee payable under Section 2.08(a) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(iv)       Reallocation of Applicable Revolving Percentages to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Revolving Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)        Repayment of Swing Line Loans.  If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, prepay Swing Line Loans in an amount equal to each Swing Line Lender’s Fronting Exposure.

 

(b)         Defaulting Lender Cure. If the Borrower, the Administrative Agent and the Swing Line Lenders agree in writing that a Lender shall no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.14(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided,  further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

2.15       Sales and Releases of Borrowing Base Assets.  The Borrower or any Subsidiary may directly or indirectly, dispose of or distribute (as a Restricted Payment or otherwise, in each case, to the extent otherwise permitted under this Agreement) Borrowing Base Assets (which, solely for purposes of this Section 2.15, shall include any Equity Interests of any Borrowing Base Covenant Subsidiary) (including any Borrowing Base Assets or Borrowing Base Asset Proceeds held in a Specified Borrowing Base Account), whereupon the related Investment Asset shall cease to be a Borrowing Base Asset and the related Borrowing Base Asset Proceeds shall cease to be Borrowing Base Asset Proceeds (each such transaction being referred to herein as a “Borrowing Base Release Transaction”), so long as, immediately prior to and after giving effect thereto and to any transfers of Borrowing Base Asset Proceeds pursuant to Section 2.06(e), other Borrowing Base Release Transactions, designations of Investment Assets as Borrowing Base Assets and borrowings, repayments or prepayments of Loans, in each case, occurring on such date, on a pro forma basis:

 

(i)         no Default or Event of Default has occurred and is continuing;

 

(ii)        the Borrower and its Subsidiaries are in compliance, on a pro forma basis, with the provisions of Section 7.12; and

 

(iii)       either (A) there shall be no reduction in the Borrowing Base Coverage Ratio (after giving effect to any replacement Borrowing Base Assets included in the Borrowing Base Amount on such date; provided that, in connection with any Borrowing Base Release Transaction, the Borrower may designate additional Investment Assets as replacement Borrowing Base Assets up to five (5) Business Days prior to the consummation of such Borrowing Base Release Transaction and such replacement Borrowing Base Assets shall not contribute to the Borrowing Base Amount for purposes of this clause (A) or any other provision of this Agreement until the date on which such Borrowing Base Release Transaction is consummated) or (B) the Borrowing Base Coverage Ratio is not less than 1.10 to 1.00;

 

provided that, solely in the case of the Designated Real Property Acquisition, in the event that the purchase price to be paid by the Borrower and its Subsidiaries in connection therewith is required

to be delivered in escrow to an escrow agent (which escrow agent shall be reasonably acceptable to the Administrative Agent) prior to (but no more than two Business Days prior to) the closing date of the Designated Real Property Acquisition, Borrowing Base Assets consisting of cash in a Specified Borrowing Base Account shall be permitted to be subject to a Borrowing Base Release Transaction so long as (x) the requirements set forth in clauses (i) and (ii) above shall have been met, (y) the escrow agreement related to such escrow arrangement shall require that all such cash be returned directly to the Specified Borrowing Base Account in the event that the Designated Real Property Acquisition is not consummated on or prior to the date that is two Business Days following the delivery thereof (and the Administrative Agent shall be a party thereto or a third party beneficiary with respect to such requirement which may not be changed without its consent) and (z) it shall be a condition subsequent that the Borrower and its Subsidiaries shall be in compliance with this clause (iii) on the date of the closing of the Designated Real Property Acquisition, on a pro forma basis after giving effect to any transfers of Borrowing Base Asset Proceeds pursuant to Section 2.06(e), other Borrowing Base Release Transactions, designations of Investment Assets as Borrowing Base Assets and borrowings, repayments or prepayments of Loans, in each case, occurring on such date;

 

it being understood that each Borrowing Base Release Transaction pursuant to this Section 2.15 shall be deemed to constitute a representation and warranty by the Borrower that the conditions set forth in clauses (i),  (ii) and (iii) of this Section 2.15 shall have been met; provided that the Borrower shall deliver to the Administrative Agent a certificate from a Responsible Officer of the Borrower certifying compliance with the conditions set forth in clauses (i),  (ii) and (iii) of this Section 2.15 (and, in the case of the Designated Real Property Acquisition, an additional certificate upon closing of the Designated Real Property Acquisition). Upon any such transfer of Borrowing Base Assets to a Person other than a Borrowing Base Subsidiary, such transferred assets shall cease to constitute Borrowing Base Assets and upon any such transfer of Borrowing Base Asset Proceeds (or any transfer of such Borrowing Base Asset Proceeds pursuant to Section 2.06(e)) to a Person other than a Secured Guarantor, such amounts shall cease to constitute Borrowing Base Asset Proceeds.

 

2.16       Increase in Commitments.

 

(a)         Request for Increase.  Provided that no Default shall have occurred and is then continuing, upon written notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request (x) an increase in the Aggregate Revolving Commitments (each, a “Revolving Commitment Increase”) and/or (y) the establishment of one or more new term loan commitments which shall be in the form of an increase to the Term Loan Facility (each, a “Term Commitment Increase”) by an aggregate amount (x) with respect to all such Revolving Commitment Increases collectively, not exceeding $50,000,000 and (y) with respect to all such Term Commitment Increases collectively, not exceeding $150,000,000; provided that any such request for an increase shall be in a minimum amount of $25,000,000 (or such lesser amount as the Borrower and the Administrative Agent shall agree) or any whole multiple of $1,000,000 in excess thereof.  Each such notice shall specify (i) the amount of such increase and the Facility or Facilities involved and (ii) the date on which the Borrower proposes that the Commitment Increase shall be effective (each, an “Increase Effective Date”), which shall be a date not less than 10 Business Days after the date on which such notice is delivered to the Administrative Agent.  Any existing Lender approached to provide all or a portion of a