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Title: |
Master Repurchase Agreement |
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Entities: |
Capital Trust, Inc.; Citibank, NA; Deutsche Bank Trust Company Americas; iStar Financial Inc.; JPMorgan Chase Bank; Midland Loan Services, Inc.; PNC Bank, NA; Bank of New York; Paul, Hastings, Janofsky & Walker |
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Date: |
2004 |
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Preview shows 82KB of 380KB total |
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Price: |
$84 |
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ID: |
#406420 |
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Master Repurchase
Agreement
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Bond Market Association September 1996 Version
Dated as of: August 17, 2004
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Between: Goldman Sachs Mortgage Company ("Buyer")
-------------------------------------------------
and Capital Trust, Inc. ("Seller")
----------------------------------
1. Applicability
From time to time the parties hereto may enter into transactions in which
one party ("Seller") agrees to transfer to the other ("Buyer") securities
or other assets ("Securities") against the transfer of funds by Buyer, with
a simultaneous agreement by Buyer to transfer to Seller such Securities at
a date certain or on demand, against the transfer of funds by Seller. Each
such transaction shall be referred to herein as a "Transaction" and, unless
otherwise agreed in writing, shall be governed by this Agreement, including
any supplemental terms or conditions contained in Annex I hereto and in any
other annexes identified herein or therein as applicable hereunder.
2. Definitions
(a) "Act of Insolvency", with respect to any party, (i) the commencement by
such party as debtor of any case or proceeding under any bankruptcy,
insolvency, reorganization, liquidation, moratorium, dissolution,
delinquency or similar law, or such party seeking the appointment or
election of a receiver, conservator, trustee, custodian or similar
official for such party or any substantial part of its property, or the
convening of any meeting of creditors for purposes of commencing any
such case or proceeding or seeking such an appointment or election,
(ii) the commencement of any such case or proceeding against such
party, or another seeking such an appointment or election, or the
filing against a party of an application for a protective decree under
the provisions of the Securities Investor Protection Act of 1970, which
(A) is consented to or not timely contested by such party, (B) results
in the entry of an order for relief, such an appointment or election,
the issuance of such a protective decree or the entry of an order
having a similar effect, or (C) is not dismissed within 15 days, (iii)
the making by such party of a general assignment for the benefit of
creditors, or (iv) the admission in writing by such party of such
party's inability to pay such party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided by Seller to
Buyer pursuant to Paragraph 4 (a) hereof,
(c) "Buyer's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of the Buyer's Margin
Percentage to the Repurchase Price for such Transaction as of such
date;
(d) "Buyer's Margin Percentage", with respect to any Transaction as of any
date, a percentage (which may be equal to the Seller's Margin
Percentage) agreed to by Buyer and Seller or, in the absence of any
such agreement, the percentage obtained by
1
{PAGE}
dividing the Market Value of the Purchased Securities on the Purchase
Date by the Purchase Price on the Purchase Date for such Transaction;
(e) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(f) "Income", with respect to any Security at any time, any principal
thereof and all interest, dividends or other distributions thereon;
(g) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
(h) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(i) "Margin Notice Deadline", the time agreed to by the parties in the
relevant Confirmation, Annex I hereto or otherwise as the deadline for
giving notice requiring same-day satisfaction of margin maintenance
obligations as provided in Paragraph 4 hereof (or, in the absence of
any such agreement, the deadline for such purposes established in
accordance with market practice);
(j) "Market Value", with respect to any Securities as of any date, the
price for such Securities on such date obtained from a generally
recognized source agreed to by the parties or the most recent closing
bid quotation from such a source, plus accrued Income to the extent not
included therein (other than any Income credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof)
as of such date (unless contrary to market practice for such
Securities);
(k) "Price Differential", with respect to any Transaction as of any date,
the aggregate amount obtained by daily application of the Pricing Rate
for such Transaction to the Purchase Price for such Transaction on a
360 day per year basis for the actual number of days during the period
commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the date of determination (reduced by any
amount of such Price Differential previously paid by Seller to Buyer
with respect to such Transaction);
(1) "Pricing Rate", the per annum percentage rate for determination of the
Price Differential;
(m) "Prime Rate", the prime rate of U.S. commercial banks as published in
The Wall Street Journal (or, if more than one such rate is published,
the average of such rates);
(n) "Purchase Date", the date on which Purchased Securities are to be
transferred by Seller to Buyer;
(o) "Purchase Price", (i) on the Purchase Date, the price at which
Purchased Securities are transferred by Seller to Buyer, and (ii)
thereafter, except where Buyer and Seller agree otherwise, such price
increased by the amount of any cash transferred by Buyer to Seller
pursuant to Paragraph 4(b) hereof and decreased by the amount of any
cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof
or applied to reduce Seller's obligations under clause (ii) of
Paragraph 5 hereof;
(p) "Purchased Securities", the Securities transferred by Seller to Buyer
in a Transaction hereunder, and any Securities substituted therefor in
accordance with Paragraph 9 hereof. The term "Purchased Securities"
with respect to any Transaction at any time
2
{PAGE}
also shall include Additional Purchased Securities delivered pursuant
to Paragraph 4(a) hereof and shall exclude Securities returned pursuant
to Paragraph 4(b) hereof;
(q) "Repurchase Date", the date on which Seller is to repurchase the
Purchased Securities from Buyer, including any date determined by
application of the provisions of Paragraph 3(c) or 11 hereof;
(r) "Repurchase Price", the price at which Purchased Securities are to be
transferred from Buyer to Seller upon termination of a Transaction,
which will be determined in each case (including Transactions
terminable upon demand) as the sum of the Purchase Price and the Price
Differential as of the date of such determination;
(s) "Seller's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of the Seller's Margin
Percentage to the Repurchase Price for such Transaction as of such
date;
(t) "Seller's Margin Percentage", with respect to any Transaction as of any
date, a percentage (which may be equal to the Buyer's Margin
Percentage) agreed to by Buyer and Seller or, in the absence of any
such agreement, the percentage obtained by dividing the Market Value of
the Purchased Securities on the Purchase Date by the Purchase Price on
the Purchase Date for such Transaction.
3. Initiation; Confirmation; Termination
(a) An agreement to enter into a Transaction may be made orally or in
writing at the initiation of either Buyer or Seller. On the Purchase
Date for the Transaction, the Purchased Securities shall be transferred
to Buyer or its agent against the transfer of the Purchase Price to an
account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller
(or both), as shall be agreed, shall promptly deliver to the other
party a written confirmation of each Transaction (a "Confirmation").
The Confirmation shall describe the Purchased Securities (including
CUSIP number, if any), identify Buyer and Seller and set forth (i) the
Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date,
unless the Transaction is to be terminable on demand, (iv) the Pricing
Rate or Repurchase Price applicable to the Transaction, and (v) any
additional terms or conditions of the Transaction not inconsistent with
this Agreement. The Confirmation, together with this Agreement, shall
constitute conclusive evidence of the terms agreed between Buyer and
Seller with respect to the Transaction to which the Confirmation
relates, unless with respect to the Confirmation specific objection is
made promptly after receipt thereof. In the event of any conflict
between the terms of such Confirmation and this Agreement, this
Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand shall
be made by Buyer or Seller, no later than such time as is customary in
accordance with market practice, by telephone or otherwise on or prior
to the business day on which such termination will be effective. On the
date specified in such demand, or on the date fixed for termination in
the case of Transactions having a fixed term, termination of the
Transaction will be effected by transfer to Seller or its agent of the
Purchased Securities and any Income in respect thereof received by
Buyer (and not previously credited or transferred to, or applied to the
obligations of, Seller pursuant to Paragraph 5 hereof) against the
transfer of the Repurchase Price to an account of Buyer.
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{PAGE}
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is
acting as Buyer is less than the aggregate Buyer's Margin Amount for
all such Transactions (a "Margin Deficit"), then Buyer may by notice to
Seller require Seller in such Transactions, at Seller's option, to
transfer to Buyer cash or additional Securities reasonably acceptable
to Buyer ("Additional Purchased Securities"), so that the cash and
aggregate Market Value of the Purchased Securities, including any such
Additional Purchased Securities, will thereupon equal or exceed such
aggregate Buyer's Margin Amount (decreased by the amount of any Margin
Deficit as of such date arising from any Transactions in which such
Buyer is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is
acting as Seller exceeds the aggregate Seller's Margin Amount for all
such Transactions at such time (a "Margin Excess"), then Seller may by
notice to Buyer require Buyer in such Transactions, at Buyer's option,
to transfer cash or Purchased Securities to Seller, so that the
aggregate Market Value of the Purchased Securities, after deduction of
any such cash or any Purchased Securities so transferred, will
thereupon not exceed such aggregate Seller's Margin Amount (increased
by the amount of any Margin Excess as of such date arising from any
Transactions in which such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a) or (b)
of this Paragraph at or before the Margin Notice Deadline on any
business day, the party receiving such notice shall transfer cash or
Additional Purchased Securities as provided in such subparagraph no
later than the close of business in the relevant market on such day. If
any such notice is given after the Margin Notice Deadline, the party
receiving such notice shall transfer such cash or Securities no later
than the close of business in the relevant market on the next business
day following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be attributed to
such Transactions as shall be agreed upon by Buyer and Seller.
(e) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both)
under subparagraphs (a) and (b) of this Paragraph may be exercised only
where a Margin Deficit or Margin Excess, as the case may be, exceeds a
specified dollar amount or a specified percentage of the Repurchase
Prices for such Transactions (which amount or percentage shall be
agreed to by Buyer and Seller prior to entering into any such
Transactions).
(f) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer and Seller under
subparagraphs (a) and (b) of this Paragraph to require the elimination
of a Margin Deficit or a Margin Excess, as the case may be, may be
exercised whenever such a Margin Deficit or Margin Excess exists with
respect to any single Transaction hereunder (calculated without regard
to any other Transaction outstanding under this Agreement).
5. Income Payments
Seller shall be entitled to receive an amount equal to all Income paid or
distributed on or in respect of the Securities that is not otherwise
received by Seller, to the full extent it would be so entitled if the
Securities had not been sold to Buyer. Buyer shall, as the parties may
agree with respect to any Transaction (or, in the absence of any such
agreement, as Buyer shall reasonably determine in its discretion), on the
date such Income is paid or distributed
4
{PAGE}
either (i) transfer to or credit to the account of Seller such Income with
respect to any Purchased Securities subject to such Transaction or (ii)
with respect to Income paid in cash, apply the Income payment or payments
to reduce the amount, if any, to be transferred to Buyer by Seller upon
termination of such Transaction. Buyer shall not be obligated to take any
action pursuant to the preceding sentence (A) to the extent that such
action would result in the creation of a Margin Deficit, unless prior
thereto or simultaneously therewith Seller transfers to Buyer cash or
Additional Purchased Securities sufficient to eliminate such Margin
Deficit, or (B) if an Event of Default with respect to Seller has occurred
and is then continuing at the time such Income is paid or distributed.
6. Security Interest
Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to
be loans, Seller shall be deemed to have pledged to Buyer as security for
the performance by Seller of its obligations under each such Transaction,
and shall be deemed to have granted to Buyer a security interest in, all of
the Purchased Securities with respect to all Transactions hereunder and all
Income thereon and other proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be
in immediately available funds. All Securities transferred by one party
hereto to the other party (i) shall be in suitable form for transfer or
shall be accompanied by duly executed instruments of transfer or assignment
in blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book-entry system of a
Federal Reserve Bank, or (iii) shall be transferred by any other method
mutually acceptable to Seller and Buyer.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities in its
possession and shall be identified as subject to this Agreement.
Segregation may be accomplished by appropriate identification on the books
and records of the holder, including a financial or securities intermediary
or a clearing corporation. All of Seller's interest in the Purchased
Securities shall pass to Buyer on the Purchase Date and, unless otherwise
agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer
from engaging in repurchase transactions with the Purchased Securities or
otherwise selling, transferring, pledging or hypothecating the Purchased
Securities, but no such transaction shall relieve Buyer of its obligations
to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11
hereof, or of Buyer's obligation to credit or pay Income to, or apply
Income to the obligations of, Seller pursuant to Paragraph 5 hereof.
--------------------------------------------------------------------------------
Required Disclosure for Transactions in Which the Seller Retains Custody of the
Purchased Securities Seller is not permitted to substitute other securities for
those subject to this Agreement and therefore must keep Buyer's securities
segregated at all times unless in this Agreement Buyer grants Seller the right
to substitute other securities. If Buyer grants the right to substitute, this
means that Buyer's securities will likely be commingled with Seller's own
securities during the trading day. Buyer is advised that during any trading day
that Buyer's securities are commingled with Seller's securities, they [will]*
[may]** be subject to liens granted by Seller to [its clearing bank]* [third
parties]" and may be used by Seller for deliveries on other securities
transactions. Whenever the securities are commingled, Seller's ability to
resegregate substitute
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5
{PAGE}
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securities for Buyer will be subject to Seller's ability
to satisfy [the clearing] * [any]** lien or to obtain substitute securities.
--------------------------------------------------------------------------------
* Language to be used under 17 C.F.R, Section 403.4 (e) if Seller is a
government securities broker or dealer other than a financial
institution.
** Language to be used under 17 C.F.R. Section 403.5 (d) if Seller is a
financial institution.
9. Substitution
(a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such
substitution shall be made by transfer to Buyer of such other
Securities and transfer to Seller of such Purchased Securities. After
substitution, the substituted Securities shall be deemed to be
Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased
Securities, the parties expressly agree that Buyer shall be deemed, for
purposes of subparagraph (a) of this Paragraph, to have agreed to and
accepted in this Agreement substitution by Seller of other Securities
for Purchased Securities; provided, however, that such other Securities
shall have a Market Value at least equal to the Market Value of the
Purchased Securities for which they are substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the other that (i) it
is duly authorized to execute and deliver this Agreement, to enter into
Transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) it will engage in such Transactions as
principal (or, if agreed in writing, in the form of an annex hereto or
otherwise, in advance of any Transaction by the other party hereto, as
agent for a disclosed principal), (iii) the person signing this Agreement
on its behalf is duly authorized to do so on its behalf (or on behalf of
any such disclosed principal), (iv) it has obtained all authorizations of
any governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and effect
and (v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, bylaw
or rule applicable to it or any agreement by which it is bound or by which
any of its assets are affected. On the Purchase Date for any Transaction
Buyer and Seller shall each be deemed to repeat all the foregoing
representations made by it.
11. Events of Default
In the event that (i) Seller fails to transfer or Buyer fails to purchase
Purchased Securities upon the applicable Purchase Date, (ii) Seller fails
to repurchase or Buyer fails to transfer Purchased Securities upon the
applicable Repurchase Date, (iii) Seller or Buyer fails to comply with
Paragraph 4 hereof, (iv) Buyer fails, after one business day's notice, to
comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with
respect to Seller or Buyer, (vi) any representation made by Seller or Buyer
shall have been incorrect or untrue in any material respect when made or
repeated or deemed to have been made or repeated, or (vii) Seller or Buyer
shall admit to the other its inability to, or its intention not to, perform
any of its obligations hereunder (each an "Event of Default"):
(a) The nondefaulting party may, at its option (which option shall be
deemed to have been exercised immediately upon the occurrence of an Act
of Insolvency), declare an Event of Default to have occurred hereunder
and, upon the exercise or deemed exercise of
6
{PAGE}
such option, the Repurchase Date for each Transaction hereunder shall,
if it has not already occurred, be deemed immediately to occur (except
that, in the event that the Purchase Date for any Transaction has not
yet occurred as of the date of such exercise or deemed exercise, such
Transaction shall be deemed immediately canceled). The nondefaulting
party shall (except upon the occurrence of an Act of Insolvency) give
notice to the defaulting party of the exercise of such option as
promptly as practicable.
(b) In all Transactions in which the defaulting party is acting as Seller,
if the nondefaulting party exercises or is deemed to have exercised the
option referred to in subparagraph (a) of this Paragraph, (i) the
defaulting party's obligations in such Transactions to repurchase all
Purchased Securities, at the Repurchase Price therefor on the
Repurchase Date determined in accordance with subparagraph (a) of this
Paragraph, shall thereupon become immediately due and payable, (ii) all
Income paid after such exercise or deemed exercise shall be retained by
the nondefaulting party and applied to the aggregate unpaid Repurchase
Prices and any other amounts owing by the defaulting party hereunder,
and (iii) the defaulting party shall immediately deliver to the
nondefaulting party any Purchased Securities subject to such
Transactions then in the defaulting party's possession or control.
(c) In all Transactions in which the defaulting party is acting as Buyer,
upon tender by the nondefaulting party of payment of the aggregate
Repurchase Prices for all such Transactions, all right, title and
interest in and entitlement to all Purchased Securities subject to such
Transactions shall be deemed transferred to the nondefaulting party,
and the defaulting party shall deliver all such Purchased Securities to
the nondefaulting party.
(d) If the nondefaulting party exercises or is deemed to have exercised the
option referred to in subparagraph (a) of this Paragraph, the
nondefaulting party, without prior notice to the defaulting party, may:
(i) as to Transactions in which the defaulting party is acting as
Seller, (A) immediately sell, in a recognized market (or
otherwise in a commercially reasonable manner) at such price or
prices as the nondefaulting party may reasonably deem
satisfactory, any or all Purchased Securities subject to such
Transactions and apply the proceeds thereof to the aggregate
unpaid Repurchase Prices and any other amounts owing by the
defaulting party hereunder or (B) in its sole discretion elect,
in lieu of selling all or a portion of such Purchased Securities,
to give the defaulting party credit for such Purchased Securities
in an amount equal to the price therefor on such date, obtained
from a generally recognized source or the most recent closing bid
quotation from such a source, against the aggregate unpaid
Repurchase Prices and any other amounts owing by the defaulting
party hereunder; and
(ii) as to Transactions in which the defaulting party is acting as
Buyer, (A) immediately purchase, in a recognized market (or
otherwise in a commercially reasonable manner) at such price or
prices as the nondefaulting party may reasonably deem
satisfactory, securities ("Replacement Securities") of the same
class and amount as any Purchased Securities that are not
delivered by the defaulting party to the nondefaulting party as
required hereunder or (B) in its sole discretion elect, in lieu
of purchasing Replacement Securities, to be deemed to have
purchased Replacement Securities at the price therefor on such
date, obtained from a generally recognized source or the most
recent closing offer quotation from such a source.
7
{PAGE}
Unless otherwise provided in Annex 1, the parties acknowledge and
agree that (1) the Securities subject to any Transaction hereunder are
instruments traded in a recognized market, (2) in the absence of a
generally recognized source for prices or bid or offer quotations for
any Security, the nondefaulting party may establish the source
therefor in its sole discretion and (3) all prices, bids and offers
shall be determined together with accrued Income (except to the extent
contrary to market practice with respect to the relevant Securities).
(e) As to Transactions in which the defaulting party is acting as Buyer,
the defaulting party shall be liable to the nondefaulting party for any
excess of the price paid (or deemed paid) by the nondefaulting party
for Replacement Securities over the Repurchase Price for the Purchased
Securities replaced thereby and for any amounts payable by the
defaulting party under Paragraph 5 hereof or otherwise hereunder.
(f) For purposes of this Paragraph 11, the Repurchase Price for each
Transaction hereunder in respect of which the defaulting party is
acting as Buyer shall not increase above the amount of such Repurchase
Price for such Transaction determined as of the date of the exercise or
deemed exercise by the nondefaulting party of the option referred to in
subparagraph (a) of this Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for (i)
the amount of all reasonable legal or other expenses incurred by the
nondefaulting party in connection with or as a result of an Event of
Default, (ii) damages in an amount equal to the cost (including all
fees, expenses and commissions) of entering into replacement
transactions and entering into or terminating hedge transactions in
connection with or as a result of an Event of Default, and (iii) any
other loss, damage, cost or expense directly arising or resulting from
the occurrence of an Event of Default in respect of a Transaction.
(h) To the extent permitted by applicable law, the defaulting party shall
be liable to the nondefaulting party for interest on any amounts owing
by the defaulting party hereunder, from the date the defaulting party
becomes liable for such amounts hereunder until such amounts are (i)
paid in full by the defaulting party or (ii) satisfied in full by the
exercise of the nondefaulting party's rights hereunder. Interest on any
sum payable by the defaulting party to the nondefaulting party under
this Paragraph 11(h) shall be at a rate equal to the greater of the
Pricing Rate for the relevant Transaction or the Prime Rate.
(i) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other
agreement or applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon
the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in
the performance of any such obligations shall constitute a default by it in
respect of all Transactions hereunder, (ii) that each of them shall be
entitled to set off claims and apply property held by them in respect of
any Transaction against obligations owing to them in respect of any other
Transactions hereunder and (iii) that payments, deliveries and other
transfers made by either of them in respect of any Transaction shall be
deemed to have
8
{PAGE}
been made in consideration of payments, deliveries and other transfers in
respect of any other Transactions hereunder, and the obligations to make
any such payments, deliveries and other transfers may be applied against
each other and netted.
13. Notices and Other Communications
Any and all notices, statements, demands or other communications hereunder
may be given by a party to the other by mail, facsimile, telegraph,
messenger or otherwise to the address specified in Annex 11 hereto, or so
sent to such party at any other place specified in a notice of change of
address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by
other communication as specified in the preceding sentence.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or
agreement.
15. Non-assignability; Termination
(a) The rights and obligations of the parties under this Agreement and
under any Transaction shall not be assigned by either party without the
prior written consent of the other party, and any such assignment
without the prior written consent of the other party shall be null and
void. Subject to the foregoing, this Agreement and any Transactions
shall be binding upon and shall inure to the benefit of the parties and
their respective successors and assigns. This Agreement may be
terminated by either party upon giving written notice to the other,
except that this Agreement shall, notwithstanding such notice, remain
applicable to any Transactions then outstanding.
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party from
assigning, charging or otherwise dealing with all or any part of its
interest in any sum payable to it under Paragraph 11 hereof.
16. Governing Law
This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.
17. No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to
exercise any other remedy hereunder. No modification or waiver of any
provision of this Agreement and no consent by any party to a departure
herefrom shall be effective unless and until such shall be in writing and
duly executed by both of the parties hereto. Without limitation on an of
the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or
4(b) hereof will not constitute a waiver of any right to do so at a later
date.
18. Use of Employee Plan Assets
(a) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA) are intended
to be used by either party hereto (the "Plan Party") in a Transaction,
the Plan Party shall so notify the other party prior to the
Transaction. The Plan Party shall represent in writing to the other
party that the Transaction does not constitute a prohibited transaction
under ERISA or
9
{PAGE}
is otherwise exempt therefrom, and the other party may proceed in
reliance thereon but shall not be required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any
such Transaction shall proceed only if Seller furnishes or has
furnished to Buyer its most recent available audited statement of its
financial condition and its most recent subsequent unaudited statement
of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall
be deemed (i) to represent to Buyer that since the date of Seller's
latest such financial statements, there has been no material adverse
change in Seller's financial condition which Seller has not disclosed
to Buyer, and (ii) to agree to provide Buyer with future audited and
unaudited statements of its financial condition as they are issued, so
long as it is a Seller in any outstanding Transaction involving a Plan
Party.
19. Intent
(a) The parties recognize that each Transaction is a "repurchase agreement"
as that term is defined in Section 101 of Title 11 of the United States
Code, as amended (except insofar as the type of Securities subject to
such Transaction or the term of such Transaction would render such
definition inapplicable), and a "securities contract" as that term is
defined in Section 741 of Title 11 of the United States Code, as
amended (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable).
(b) It is understood that either party's right to liquidate Securities
delivered to it in connection with Transactions hereunder or to
exercise any other remedies pursuant to Paragraph 11 hereof is a
contractual right to liquidate such Transaction as described in
Sections 555 and 559 of Title 11 of the United States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an "insured
depository institution," as such term is defined in the Federal Deposit
Insurance Act, as amended ("FDIA"), then each Transaction hereunder is
a "qualified financial contract," as that term is defined in FDIA and
any rules, orders or policy statements thereunder (except insofar as
the type of assets subject to such Transaction would render such
definition inapplicable).
(d) It is understood that this Agreement constitutes a "netting contract"
as defined in and subject to Title IV of the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA") and each payment
entitlement and payment obligation under any Transaction hereunder
shall constitute a "covered contractual payment entitlement" or 11
"covered contractual payment obligation", respectively, as defined in
and subject to FDICIA (except insofar as one or both of the parties is
not a "financial institution" as that term is defined in FDICIA).
20. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission ("SEC")
under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"),
the Securities Investor Protection Corporation has taken the position
that the provisions of the Securities Investor Protection Act of 1970
("SIPA") do not protect the other party with respect to any Transaction
hereunder;
10
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(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the
SEC under Section 15C of the 1934 Act, SIPA will not provide protection
to the other party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a
Transaction hereunder are not a deposit and therefore are not insured
by the Federal Deposit Insurance Corporation or the National Credit
Union Share Insurance Fund, as applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
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CAPITAL TRUST, INC.,
/s/ Brian H. Oswald
---------------------------
Name: Brian H. Oswald
Title: Chief Financial Officer
Date:
GOLDMAN SACHS MORTGAGE COMPANY,
By: Goldman Sachs Real Estate Funding Corp.,
its general partner
By: /s/ Mark Buono
--------------------------
Name: Mark Buono
Title: Vice President
Date:
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Annex I
{PAGE}
ANNEX I to
MASTER REPURCHASE AGREEMENT
{PAGE}
TABLE OF CONTENTS
Page
1. APPLICABILITY; OTHER APPLICABLE ANNEXES....................................1
2. ADDITIONAL AND SUBSTITUTE DEFINITIONS......................................1
3. INITIATION; CONFIRMATION; TERMINATION; FEES...............................19
4. MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS........................29
5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS....................................30
6. SECURITY INTEREST.........................................................32
7. PAYMENT, TRANSFER AND CUSTODY.............................................33
8. CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE PURCHASED LOANS...............41
9. SUBSTITUTION..............................................................41
10. REPRESENTATIONS...........................................................42
11. NEGATIVE COVENANTS OF SELLER..............................................46
12. AFFIRMATIVE COVENANTS OF SELLER...........................................47
13. [INTENTIONALLY OMITTED.]..................................................51
14. EVENTS OF DEFAULT; REMEDIES...............................................51
15. SINGLE AGREEMENT..........................................................55
16. NOTICES AND OTHER COMMUNICATIONS..........................................56
17. NON-ASSIGNABILITY.........................................................56
18. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL..............57
19. NO RELIANCE; DISCLAIMERS..................................................58
20. INDEMNITY AND EXPENSES....................................................59
21. DUE DILIGENCE.............................................................60
22. SERVICING.................................................................61
23. TREATMENT FOR TAX PURPOSES................................................62
24. INTENT....................................................................62
25. INTENTIONALLY OMITTED.....................................................63
26. MISCELLANEOUS.............................................................63
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SCHEDULE 1 Purchase Percentages And Applicable Spreads..................1-1
SCHEDULE 2 Initial Portfolio Loans......................................2-1
SCHEDULE 3 Purchased Loan Information...................................3-1
SCHEDULE 4 Approved Appraisers..........................................4-1
SCHEDULE 5 Approved Engineers...........................................5-1
SCHEDULE 6 Approved Environmental Consultants...........................6-1
SCHEDULE 7-A Form of UCC Financing Statement............................7-A-1
SCHEDULE 7-B Form of UCC Financing Statement Amendment..................7-B-1
EXHIBITS
--------
EXHIBIT I Form of Confirmation
EXHIBIT II Authorized Representatives of Seller
EXHIBIT III Form of Custodial Delivery Certificate
EXHIBIT IV-1 Form of Power of Attorney to Buyer
EXHIBIT IV-2 Form of Power of Attorney to Seller
EXHIBIT V Representations and Warranties Regarding Purchased Loans
EXHIBIT VI Form of Blocked Account Agreement
EXHIBIT VII Form of Direction Letter
EXHIBIT VIII Form of Bailee Agreement
EXHIBIT IX Eligibility Criteria
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Supplemental Terms and Conditions
---------------------------------
This Annex I forms a part of the Master Repurchase Agreement dated as
of August 17, 2004 between Capital Trust, Inc., as seller, and Goldman Sachs
Mortgage Company, as buyer (together with Annex I, the "Agreement"). Capitalized
terms used in this Annex I without definition shall have the respective meanings
assigned to such terms in the Agreement. This Annex I is intended to supplement
the Agreement and shall, wherever possible, be interpreted so as to be
consistent with the Agreement; however, in the event of any conflict or
inconsistency between the provisions of this Annex I, on the one hand, and the
provisions of the Agreement, on the other, the provisions of this Annex I shall
govern and control. All references in the Agreement and in this Annex I to "the
Agreement" shall be deemed to mean and refer to the Agreement, as supplemented
and modified by this Annex I or as otherwise modified after the date hereof.
1. APPLICABILITY; OTHER APPLICABLE ANNEXES
(a) Paragraph 1 of the Agreement ("Applicability") is hereby deleted
and replaced with the following:
From time to time the parties hereto may enter into transactions in
which Seller agrees to transfer to Buyer one or more Eligible Loans against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer
to Seller such Eligible Loans at a date certain (or such earlier date, in
accordance with the terms hereof), against the transfer of funds by Seller. Each
such transaction shall be referred to herein as a "Transaction" and, unless
otherwise agreed in writing, shall be governed by the Agreement, including any
supplemental terms or conditions contained in this Annex I and in any other
annexes identified herein or therein as applicable hereunder.
(b) In addition to this Annex I and the Schedules hereto, the following
Annexes and any Schedules thereto shall form a part of the Agreement and shall
be applicable thereunder:
Annex II - Names and Addresses for Communications Between Parties.
2. ADDITIONAL AND SUBSTITUTE DEFINITIONS
(a) The following capitalized terms in Paragraph 2 of the Agreement
("Definitions") are hereby deleted in their entirety:
(i) "Additional Purchased Securities";
(ii) "Buyer's Margin Amount";
(iii) "Buyer's Margin Percentage";
(iv) "Margin Notice Deadline";
(v) "Prime Rate";
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(vi) "Purchased Securities";
(vii) "Seller's Margin Amount"; and
(viii) "Seller's Margin Percentage".
(b) The following capitalized terms shall have the respective meanings
set forth below, in lieu of the meanings for such terms set forth in Paragraph 2
of the Agreement ("Definitions"):
"Act of Insolvency" shall mean, with respect to any party, (i) the
commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution,
delinquency or similar law, or such party seeking the appointment or election of
a receiver, conservator, trustee, custodian or similar official for such party
or any substantial part of its property, or the convening of any meeting of
creditors for purposes of commencing any such case or proceeding or seeking such
an appointment or election, (ii) the making by such party of a general
assignment for the benefit of creditors, or (iii) the admission in writing by
such party of such party's inability to pay such party's debts as they become
due.
"Confirmation" shall have the meaning specified in Section 3(d) of this
Annex I.
"Income" shall mean, with respect to any Purchased Loan at any time,
any payment or other cash distribution thereon of principal, interest,
dividends, fees, reimbursements or proceeds or other cash distributions thereon
(including casualty or condemnation proceeds).
"Margin Deficit" shall have the meaning specified in Section 4(a) of
this Annex I.
"Margin Excess" shall have the meaning specified in Section 4(c) of
this Annex I.
"Market Value" shall mean, with respect to any Purchased Loan as of any
relevant date, the lesser of (x) market value of such Purchased Loan on such
date, as determined by Buyer in its good faith but sole discretion, and (y) the
par amount of such Purchased Loan.
For purposes of Buyer's determination, (i) the Market Value may be
determined by reference to an Appraisal, discounted cash flow analysis or other
method (which method shall be selected by Buyer in good faith), (ii) any amounts
or claims secured by related Eligible Property or Properties ranking senior to
or pari passu with the lien of the Purchased Loan may be deducted from the
Market Value of the Purchased Loan, (iii) the Market Value of any Defaulted Loan
shall be zero (unless Buyer otherwise specifies), (iv) Buyer may consider the
representations and warranties set forth in Exhibit V (including a breach
thereof), and exceptions thereto in its determination of the Market Value of the
Purchased Loans and (iv) for the avoidance of doubt, Buyer may reduce Market
Value for any actual or potential risks (including risk of delay) posed by any
liens or claims on the related Eligible Property or Properties. Seller shall
cooperate with Buyer in its determination of the Market Value of each item of
underlying collateral (including, without limitation, providing all information
and documentation in the possession of Seller regarding such item of underlying
collateral or otherwise required by Buyer in its commercially reasonable
judgment).
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"Pricing Rate" shall mean, for any Purchased Loan and any Pricing Rate
Period, an annual rate equal to the LIBO Rate for such Pricing Rate Period plus
the Applicable Spread for the applicable Loan Type and shall be subject to
adjustment and/or conversion as provided in Sections 3(j), 3(k) and 3(s) of this
Annex I. The Pricing Rate shall be computed on the basis of a 360-day year and
the actual number of days elapsed.
"Purchase Price" shall mean, with respect to any Purchased Loan the
price at which such Purchased Loan is transferred by Seller to Buyer on the
applicable Purchase Date. The Purchase Price as of any Purchase Date for any
Purchased Loan of a particular Loan Type shall be an amount (expressed in
dollars) equal to the product obtained by multiplying (i) the Market Value of
such Purchased Loan (or the par amount of such Purchased Loan, if lower than the
Market Value) by (ii) the Purchase Percentage for the related Loan Type.
"Purchase Date" shall mean, with respect to any Purchased Loan, the
date on which such Purchased Loan is transferred by Seller to Buyer.
"Repurchase Date" with respect to any Purchased Loan shall mean the
Facility Termination Date or such earlier date specified in the related
Confirmation, or if applicable, the related Early Repurchase Date or Accelerated
Repurchase Date.
"Repurchase Price" shall mean, with respect to any Purchased Loan as of
any date, the price at which such Purchased Loan is to be transferred from Buyer
to Seller upon termination of the related Transaction; in each case, such price
shall equal the sum of the Purchase Price of such Purchased Loan and the accrued
Price Differential with respect to such Purchased Loan as of the date of such
determination, minus all Income and cash actually received by Buyer in respect
of such Transaction and applied towards the Repurchase Price and/or Price
Differential pursuant to this Annex I.
(c) In addition to the terms defined in Paragraph 2 of the Agreement
("Definitions") not otherwise deleted pursuant to Section 2(a) of this Annex I
and the terms defined in Section 2(b) of this Annex I, the following capitalized
terms shall have the respective meanings set forth below:
"Accelerated Repurchase Date" shall have the meaning specified in
Section 14(b)(i) of this Annex I.
"Accepted Servicing Practices" shall mean with respect to any Purchased
Loan, in conformity with those accepted and prudent servicing practices in the
industry for loans of the same type and in a manner at least equal in quality to
the servicing the applicable servicer provides for assets similar to such
Purchased Loans that it owns.
"Affiliate" shall mean, when used with respect to any specified Person,
any other Person directly or indirectly controlling, controlled by, or under
common control with, such Person. Control shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise and "controlling" and "controlled" shall have meanings
correlative thereto.
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"Agreement" shall have the meaning specified in the introductory
paragraph of this Annex I.
"Alternative Rate" shall have the meaning specified in Section 3(k) of
this Annex I.
"Alternative Rate Transaction" shall mean, with respect to any Pricing
Rate Period, any Transaction with respect to which the Pricing Rate for such
Pricing Rate Period is determined with reference to the Alternative Rate.
"Applicable Spread" shall mean, (i)(a) with respect to a Purchased Loan
(other than Extended Loans), so long as no Event of Default shall have occurred
and be continuing, the per annum rate specified in Schedule 1A attached hereto
as being the "Applicable Spread" for the Purchased Loans in such Loan Type and
(b) with respect to an Extended Loan, so long as no Event of Default shall have
occurred and be continuing, a per annum rate specified in Schedule 1B attached
hereto as being the "Applicable Spread" for such Extended Loan (or such other
spread notified in writing by Buyer to Seller as provided in Section 3(s)), and
(ii) in each case, after the occurrence and during the continuance of an Event
of Default, the applicable per annum rate described in clause (i) of this
definition, plus 400 basis points (4.0%).
"Appraisal" shall mean an appraisal of any Eligible Property prepared
by a licensed appraiser listed on Schedule 4 attached hereto, as such schedule
may be amended from time to time by Seller or Buyer upon approval by Buyer in
its reasonable discretion, in accordance with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation, in compliance with
the requirements of Title 11 of the Financial Institution Reform, Recovery and
Enforcement Act and utilizing customary valuation methods such as the income,
sales/market or cost approaches, as any of the same may be updated by
recertification from time to time by the appraiser performing such Appraisal.
"Asset Base" shall mean, as of any date of determination, the aggregate
Asset Base Components of all Purchased Loans transferred by the Seller to the
Buyer hereunder as of such date.
"Asset Base Component" shall mean, as of any date of determination,
with respect to each Purchased Loan, the product of its Market Value multiplied
by the Purchase Percentage applicable to such Purchased Loan as of such date.
"Assignment of Leases" shall mean, with respect to any Purchased Loan
which is a mortgage loan, any assignment of leases, rents and profits or
equivalent instrument, whether contained in the related Mortgage or executed
separately, assigning to the holder or holders of such Mortgage all of the
related Mortgagor's interest in the leases, rents and profits derived from the
ownership, operation, leasing or disposition of all or a portion of the related
Mortgaged Property as security for repayment of such Purchased Loan.
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related property is located to reflect the assignment and pledge of the
Mortgage.
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"Bailee" shall mean Paul, Hastings, Janofsky & Walker LLP or such other
third party as Buyer may approve in its sole discretion.
"Bailee Agreement" shall mean the Bailee Agreement among Seller, Buyer
and Bailee in the form of Exhibit VIII hereto.
"Blocked Account" shall have the meaning specified in Section 5 of this
Annex I.
"Blocked Account Agreement" shall mean the Blocked Account Agreement,
in the form attached hereto as Exhibit VI (or such other form as shall have been
approved by Buyer, such approval not to be unreasonably withheld, delayed or
conditioned), dated as of the date hereof and executed by Buyer, Seller and the
Depository Bank (and any successor thereto or replacement thereof executed by
Buyer, Seller and the Depository Bank).
"Business Day" shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of
New York or the Custodian is authorized or obligated by law or executive order
to be closed.
"Buyer" shall mean Goldman Sachs Mortgage Company, and any successor or
assign.
"Capital Lease Obligations" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of the Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"CDO Indenture" shall mean the Indenture dated as of July 20, 2004,
among Capital Trust RE CDO 2004-1 Ltd. and Capital Trust RE CDO 2004-1 Corp., as
co-issuers, and LaSalle Bank National Association, as trustee.
"Change of Control" shall mean the occurrence of any of the following:
(i) a majority of the members of the board of directors of
Seller changes during any twelve (12) month period after the date
hereof; or
(ii) a merger, consolidation or other transaction in which a
Person which is not an Affiliate acquires in excess of 50% of the
voting common equity of Seller; or
(iii) both of John Klopp and Steven Plavin cease to hold a
senior management position with direct day-to-day responsibility for
the management of Seller and a replacement for John Klopp or Steven
Plavin (whichever is the last to hold a senior management position)
acceptable to Buyer has not been appointed within 45 days.
"Collection Period" shall mean with respect to the Remittance Date in
any month, the period beginning on but excluding the Cut-off Date in the month
preceding the month in which such Remittance Date occurs and continuing to and
including the Cut-off Date immediately preceding such Remittance Date.
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"Costs" shall mean, with respect to any Purchased Loan, all
out-of-pocket obligations, costs, fees, indemnities and expenses in respect of
such Purchased Loan actually incurred by Buyer, that (i) arise out of Seller's
conduct or (ii) (A) are required to be paid by the lender under the applicable
Purchased Loan Documents and (B) do not arise out of the gross negligence or
willful misconduct of the Buyer.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of
the date hereof, by and among Custodian, Seller and Buyer.
"Custodial Delivery Certificate" shall mean the delivery certificate, a
form of which is attached hereto as Exhibit III, executed by Seller in
connection with its delivery of a Purchased Loan File to Buyer or its designee
(including the Custodian) pursuant to Section 7 of this Annex I.
"Custodian" shall mean Deutsche Bank Trust Company Americas or any
successor Custodian appointed by Buyer.
"Cut-off Date" shall mean the last Business Day of the calendar month
preceding each Remittance Date.
"Debt to Equity Ratio" shall mean the ratio of Total Indebtedness to
Tangible Net Worth.
"Default" shall mean any event which, with the giving of notice, the
passage of time, or both, would constitute an Event of Default.
"Defaulted Loan" shall mean any Purchased Loan as to which (A) there is
a breach beyond any applicable cure period of a representation, warranty or
covenant by the related borrower or obligor under the applicable Purchased Loan
Documents or by Seller under Exhibit V, (B) there is a default beyond any
applicable cure period under the related Purchased Loan Documents in the payment
when due of interest, principal or any other amounts which default continues,
(C) any other "Event of Default" under the related Purchased Loan Document, (D)
to the extent that the related Transaction is deemed a loan under federal, state
or local law Buyer ceases to have a first priority perfected security interest
or (E) the related Purchased Loan File or any portion thereof has been released
from the possession of the Custodian under the Custodial Agreement to anyone
other than Buyer or any Affiliate of Buyer except in accordance with the terms
of the Custodial Agreement.
"Depository Bank" shall mean PNC Bank, N.A. or any successor Depository
Bank appointed by Seller with the prior written consent of Buyer (which consent
shall not be unreasonably withheld, delayed or conditioned) which delivers a
deposit account agreement in the form of the Blocked Account Agreement or
another form reasonably acceptable to Buyer.
"Diligence Fee" shall mean fees (not to exceed $35,000 annually)
payable by Seller to Buyer in respect of Buyer's expenses (other than legal
expenses) incurred in connection with its review of the Diligence Materials.
"Diligence Materials" shall mean the Preliminary Due Diligence Package
together with the Supplemental Due Diligence List.
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"Disqualified Transferee" shall mean any one of the following:
(a) iStar Financial and its Affiliates;
(b) Anthracite Carbon Fund, together with any successor funds,
to the extent such funds are in the same business as their predecessor
fund and its Affiliates;
(c) DB Realty Mezzanine Investment Fund I LLC and DB Realty
Mezzanine Investment Fund II LLC, together with any successor funds, to
the extent such funds are in the same business as their predecessor
fund;
(d) Brascan and its Affiliates;
(e) Guggenheim Structured Real Estate Operating Company, LLC
and its Affiliates;
(f) SL Green/Gramercy Capital and their Affiliates;
(g) Arbor Commercial Mortgage LLC and its Affiliates;
(h) CW Capital and its Affiliates;
(i) Fortress/Draw Bridge and its Affiliates; and
(j) Whitehall.
"Draft Appraisal" shall mean a short form appraisal, "letter opinion of
value," or any other form of draft appraisal reasonably acceptable to Buyer.
"Early Repurchase Date" shall have the meaning specified in Section
3(g) of this Annex I.
"Early Repurchase Deposit" shall have the meaning specified in Section
3(j) of this Annex I.
"Early Repurchase Deposit Application Date" shall have the meaning
specified in Section 3(j) of this Annex I.
"Early Repurchase Deposit Funding Date" shall have the meaning
specified in Section 3(j) of this Annex I.
"EBITDA" shall mean, for each fiscal quarter, with respect to Seller
and its consolidated Subsidiaries, an amount equal to (a) Net Income for such
period (excluding the effect of any extraordinary gains or losses resulting from
the sale of property or non-cash gains or losses outside the ordinary course of
business) plus (b), without duplication, an amount which, in the determination
of Net Income for such period, has been deducted for (i) interest expense for
such period, (ii) total federal, state, foreign or other income or franchise
taxes for such period, and (iii) all depreciation and amortization for such
period, all as determined with respect to any consolidated Subsidiary in
accordance with the methodology specified in the definition of Net
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Income, plus (c) any nonrecurring fees and expenses incurred on or prior to the
date of the execution and delivery of the Agreement, less (d) any non-cash
reserve activity.
"Eligible Loans" shall mean any of the following types of loans listed
in (i) through (v) below, (v) acceptable to Buyer in the exercise of its sole
and absolute discretion, (w) secured directly or indirectly by an Eligible
Property, (x) as to which the applicable representations and warranties set
forth in Exhibit V are true and correct as of the applicable Purchase Date, (y)
as to which the eligibility criteria set forth in Exhibit IX are met as of the
applicable Purchase Date and (z) has a maximum LTV of 85%:
(i) performing Mezzanine Loans (or participation interests
therein) which are secured by pledges of the equity ownership interests
in entities that directly or indirectly own Eligible Properties
("Mezzanine Loans").
(ii) performing Mortgage Loans secured by first liens on
Eligible Properties ("First Mortgage Loans") or second liens on
Eligible Properties ("Second Mortgage Loans").
(iii) senior subordinate participation interests (or a senior
subordinate promissory note that is, in effect, similar in nature to a
senior subordinate participation interest) in performing Mortgage Loans
secured by first liens on Eligible Properties that also secures a
senior promissory note (or senior interest) in such loan and may also
secure a junior subordinate promissory note (or junior subordinate
interest) in such loan ("Senior First Mortgage B Notes").
(iv) junior participation interests (or a junior promissory
note that is, in effect, similar in nature to a junior participation
interest) in performing Mortgage Loans secured by first liens on
Eligible Properties that also secure a senior (or senior subordinate)
promissory note (or senior (or senior subordinate) interest) in such
loan ("Junior First Mortgage B Notes").
"Eligible Property" shall mean a property that is a multifamily,
retail, office, industrial, warehouse, condominium or hospitality property or
such other property type acceptable to Buyer in the exercise of its good faith
business judgment; provided, however, that Buyer shall determine in its sole and
absolute discretion, on a case-by-case basis, whether any healthcare related
property, such as assisted living, nursing homes, acute care, rehabilitation
centers, diagnostic centers and psychiatric centers, qualifies as an Eligible
Property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Annex I and,
as of the relevant date, any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or business (whether
or not incorporated) that is a member of any group of organizations described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA of which
Seller is a member at any relevant time.
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"Event of Default" shall have the meaning specified in Section 14(a) of
this Annex I.
"Extended Loan" shall have the meaning specified in Section 3(s) of
this Annex I.
"Facility Amount" shall mean $50,000,000.
"Facility Termination Date" shall mean September 1, 2007 unless
extended pursuant to Section 3(q) of this Annex I.
"Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day, (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (New York
time) on such day or such transactions received by the Buyer from three Federal
funds brokers of recognized standing selected by the Buyer in its sole
discretion.
"Filings" shall have the meaning specified in Section 6(b) of this
Annex I.
"Financing Transaction" shall mean a repurchase transaction or a
financing transaction between Buyer (or an Affiliate of Buyer) and any
counterparty.
"First Mortgage B Note" shall mean any Senior First Mortgage B Note or
Junior First Mortgage B Note.
"Fitch" means Fitch Inc.
"Fixed Charge Ratio" shall mean, with respect to any period, the ratio
of (a) EBITDA for such period to (b) the sum of (i) interest expense and (ii)
preferred dividends (specifically excluding any convertible trust preferred
dividends) paid by Seller during such period.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied as in effect from time to time.
"Governmental Authority" shall mean any national or federal government,
any state, regional, local or other political subdivision thereof with
jurisdiction and any Person with jurisdiction exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee" shall mean, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or
otherwise protecting the holder of such Indebtedness against loss (whether by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise); provided
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee of a
Person shall be deemed to be an amount equal to the maximum reasonably
anticipated liability in respect thereof as determined by such
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Person in good faith in accordance with GAAP. The terms "Guarantee" and
"Guaranteed" used as verbs shall have correlative meanings.
"Hedging Transactions" shall mean, with respect to any or all of the
Purchased Loans, any short sale of U.S. Treasury Securities or mortgage-related
securities, futures contract (including Eurodollar futures) or options contract
or any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, entered into by Seller or the underlying obligor with respect to
any Purchased Loan and pledged to Seller as collateral for such Purchased Loan,
with one or more counterparties whose unsecured debt is rated at least AA (or
its equivalent) by any Rating Agency or, with respect to any Hedging Transaction
pledged to Seller as additional collateral for a Purchased Loan, such other
rating requirement applicable to such Hedging Transaction set forth in the
related Purchased Loan Documents or which is otherwise reasonably acceptable to
Buyer; provided that Seller shall not grant or permit any liens, security
interests, charges, or encumbrances with respect to any such hedging
arrangements for the benefit of any Person other than Buyer.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a lien on the property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
Indebtedness of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; and (i) Indebtedness of general partnerships of which such
Person is a general partner.
"Indemnified Amounts" and "Indemnified Parties" shall have the meaning
specified in Section 20 of this Annex I.
"Insured Closing Letter and Escrow Instructions" shall mean a letter
addressed to Seller and Buyer from the title insurance underwriter (or any agent
thereof) acting as an agent for each Table Funded Purchased Loan and related
escrow instructions, which letter and instructions shall be in form and
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