Exhibit 10.2
Master Repurchase
Agreement
----------------------------------------------------------------------------
Bond Market Association September 1996 Version
Dated as of: May 28, 2003
-----------
Between: Xxxxxxx Xxxxx 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
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
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.
3
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
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
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
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
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
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
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
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
(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]
11
CAPITAL TRUST, INC.,
/s/ Xxxxx X. Xxxxxx
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
Date: May 28, 2003
XXXXXXX XXXXX MORTGAGE COMPANY,
By: Xxxxxxx Sachs Real Estate Funding Corp.,
its general partner
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Date: May 28, 2003
ANNEX I to
MASTER REPURCHASE AGREEMENT
1. APPLICABILITY .........................................................1
2. DEFINITIONS............................................................1
3. INITIATION; CONFIRMATION; TERMINATION; FEES...........................18
4. MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS ...................25
5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS................................26
6. SECURITY INTEREST.....................................................27
7. PAYMENT, TRANSFER AND CUSTODY.........................................28
8. CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE LOANS.....................35
9. SUBSTITUTION..........................................................36
10. REPRESENTATIONS.......................................................36
11. NEGATIVE COVENANTS OF SELLER..........................................40
12. AFFIRMATIVE COVENANTS OF SELLER.......................................41
13. [NTENTIONALLY OMITTED]................................................44
14. EVENTS OF DEFAULT; REMEDIES...........................................46
15. [INTENTIONALLY OMITTED.]..............................................51
16. NOTICES AND OTHER COMMUNICATIONS......................................51
17. NON-ASSIGNABILITY.....................................................52
18. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.........................52
19. NO RELIANCE; DISCLAIMERS..............................................53
20. INDEMNITY AND EXPENSES................................................53
21. DUE DILIGENCE.........................................................54
22. SERVICING.............................................................55
23. TREATMENT FOR TAX PURPOSES............................................56
24. INTENT................................................................56
25. SINGLE AGREEMENT......................................................56
26. MISCELLANEOUS.........................................................56
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
i
SCHEDULE 7-B Form of UCC Financing Statement Amendment.................7-B-1
ii
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
iii
Supplemental Terms and Conditions
---------------------------------
This Annex I forms a part of the Master Repurchase Agreement dated as of
May 28, 2003 between Capital Trust, Inc., as seller, and Xxxxxxx Xxxxx 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 Mezzanine Loans, Second
Mortgage Loans, First Mortgage B-Notes or Other Mezzanine Investments against
the transfer of funds by Buyer, with a simultaneous agreement by Buyer to
transfer to Seller such loans or investments 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";
(vi) "Purchased Securities";
(vii) "Seller's Margin Amount"; and
1
(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).
"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)
and 3(k) of this Annex I.
2
"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; such price will be determined in each case as 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 Sections 3(i), 3(j), 4(a),
4(c),5(b), 5(c), 5(d) and 5(e) of 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(c)(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 which 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.
"Agreement" shall have the meaning specified in the introductory
paragraph of this Annex I.
"Alternative Rate" shall have the meaning specified in Section
3(m) 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.
3
"Applicable Spread" shall mean, with respect to a Purchased Loan,
(i) so long as no Event of Default shall have occurred and be
continuing, the per annum rate specified in Schedule 1 attached hereto
as being the "Applicable Spread" for the Purchased Loans in such Loan
Type, and (ii) 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.
"Asset Base Component" shall mean, with respect to each Purchased
Loan, the product of its Market Value multiplied by the Purchase
Percentage applicable to such Purchased Loan.
"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.
"Bailee" shall mean Paul, Hastings, Xxxxxxxx & Xxxxxx 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.
4
"Buyer" shall mean Xxxxxxx 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.
"Change of Control" shall mean either of the following events
have occurred:
(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 Xxxx Xxxxx and Xxxxxx Xxxxxx cease to hold a senior
management position with direct day-to-day responsibility for the
management of Seller and a replacement for Xxxx Xxxxx or Xxxxxx Xxxxxx
(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.
"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, with respect to Transactions
involving Purchased Loans, the Custodial Agreement, dated as of the date
hereof, by and among Custodian, Seller and Buyer.
"Custodial Delivery" 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.
5
"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 legal and other
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.
"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) Fortress/Draw Bridge and its Affiliates; and
(f) 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.
6
"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.
"Eligible Loans" shall mean any of the following types of loans
listed in (i) through (iv) below, (v) acceptable to Buyer in the
exercise of its sole and absolute discretion, (w) secured directly or
indirectly by an Eligible Property, (x) having a remaining term (after
giving effect to the exercise of any extension options) not to exceed
seven (7) years, (y) as to which the applicable representations and
warranties set forth in Exhibit V are true and correct as of the
applicable Purchase Date and (z) has a maximum LTV of 85% (or 90%, in
the case of a loan secured by one or more multifamily properties):
(i) performing Mezzanine Loans which are secured by pledges of
the equity ownership interests in entities that directly or indirectly
own Eligible Properties (referred to on Schedule 1 as the "Mezzanine
Loans").
(ii) performing Mortgage Loans secured by second liens on
Eligible Properties (referred to on Schedule 1 as "Second Mortgage
Loans").
(iii) 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 promissory note (or senior
interest) in such loan (referred to on Schedule 1 as "First Mortgage B
Notes").
(iv) any other performing loan, participation interest, preferred
equity investment or other junior mezzanine or subordinate investment
which does not conform to the criteria set forth in clauses (i) and
(iii) above that Buyer elects in its sole discretion to purchase
(referred to on Schedule 1 as "Other Mezzanine Investments").
"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.
"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
Income, plus (c) any nonrecurring fees and expenses incurred on or prior
to the date of the execution and delivery of the Agreement, excluding
(d) any non-cash reserve activity.
"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
7
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.
"Event of Default" shall have the meaning specified in Section
14(a) of this Annex I.
"Extended Repurchase Period" means the period from the Facility
Termination Date to and including the Remittance Date occurring in the
ninth month following the Facility Termination Date.
"Extended Repurchase Period Monthly Payment Amount" means the
quotient of (i) the aggregate Repurchase Price of the Portfolio Loans as
of the Facility Termination Date, divided by (ii) 9; provided, that to
the extent Seller pays the aggregate Repurchase Price in an amount in
excess of the Extended Repurchase Period Monthly Payment Amount in any
month, Seller shall receive a credit against the next month's required
payment amount (and any subsequent months' payments, if applicable) in
an aggregate amount equal to such excess.
"Facility Amount" shall mean $50,000,000.
"Facility Termination Date" shall mean June 1, 2004 unless
extended pursuant to Section 3(r) 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.
"Fee Letter" shall mean that certain letter agreement, dated the
date hereof, between Buyer and Seller, as the same may be amended,
supplemented or otherwise modified from time to time.
"Filings" shall have the meaning specified in Section 6(e) of
this Annex I.
"Financing Transaction" shall mean a repurchase transaction or a
financing transaction between Buyer (or an Affiliate of Buyer) and a
counterparty.
"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.
8
"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.
"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 substance reasonably acceptable to
Buyer and Seller.
"LIBO Rate" shall mean, with respect to any Pricing Rate Period
pertaining to a Transaction, a rate per annum determined for such
Pricing Rate Period in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
LIBOR
---------------------------
1 - Reserve Requirement
9
"LIBOR" shall mean the rate per annum calculated as set forth
below:
(i) On each Pricing Rate Determination Date, LIBOR for the next
Pricing Rate Period will be the rate for deposits in United States
dollars for a one-month period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on such date; or
(ii) On any Pricing Rate Determination Date on which no such rate
appears on Telerate Page 3750 as described above, LIBOR for the next
Pricing Rate Period will be determined on the basis of the arithmetic
mean of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on such
date to prime banks in the London interbank market for a one-month
period.
All percentages resulting from any calculations or determinations
referred to in this definition will be rounded upwards, if necessary, to
the nearest multiple of 1/100th of 1% and all U.S. dollar amounts used
in or resulting from such calculations will be rounded to the nearest
cent (with one-half cent or more being rounded upwards).
"LIBOR 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 LIBO Rate.
"Loan Type" shall mean, with respect to any Purchased Loan, each
of the loan types listed in Schedule 1 attached hereto with respect to
Purchased Loans.
"LTV" shall mean, with respect to any Eligible Property or
Properties, the ratio of the aggregate outstanding debt (which shall
include the related Eligible Loan and all debt senior to or pari passu
with such Eligible Loan) secured, directly or indirectly, by such
Eligible Property or Properties to the aggregate value of such Eligible
Property or Properties as determined by Buyer in its sole and absolute
discretion. For purposes of Buyer's determination, (i) the value may be
determined by reference to an Appraisal, discounted cash flow analysis
or other commercially reasonable method and (ii) for the avoidance of
doubt, Buyer may reduce value for any actual or potential risks
(including risk of delay) posed by any liens or claims on the related
Eligible Property or Properties.
"Margin Excess Advance" shall have the meaning specified in
Section 4(c) of this Annex I.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the property, business, operations, financial condition or prospects
of Seller, (b) the ability of Seller to perform its obligations under
any of the Transaction Documents to which it is a party, (c) the
validity or enforceability of any of the Transaction Documents, (d) the
rights and remedies of Buyer under any of the Transaction Documents, (e)
the timely payment of the Repurchase Price of or accrued Price
Differential in respect of the Purchased Loans or other amounts payable
in connection therewith, or (f) the aggregate value of the Purchased
Loans.
"Mezzanine Loan" shall mean any loan secured by a pledge of the
direct or indirect equity ownership interests in a Person that owns a
Mortgaged Property that also secures a Mortgage Note.
10
"Mezzanine Note" shall mean a note or other evidence of
indebtedness of the owner or owners of direct or indirect equity
ownership interests in an underlying real property owner secured by a
pledge of such ownership interests.
"Monthly Statement" shall mean, for each calendar month during
which the Agreement shall be in effect, Seller's or Servicer's, as
applicable reconciliation in arrears of beginning balances, interest,
principal, paid-to-date and ending balances for each Purchased Loan,
together with (a) an Officer's Certificate with respect to all Purchased
Loans sold to Buyer as at the end of such month, (b) a written report of
any developments or events that are reasonably likely to have a Material
Adverse Effect, (c) a written report of any and all written
modifications to any Purchased Loan Documents, (d) a written report of
any delinquency and loss experience with respect to any Purchased Loan
and (e) such other internally prepared reports as mutually agreed by
Seller and Buyer which reconciliation, Officer's Certificate and reports
shall be delivered to Buyer for each calendar month during the term of
the Agreement within ten (10) days following the end of each such
calendar month.
"Moody's" shall mean Xxxxx'x Investor Service, Inc.
"Mortgage" shall mean the mortgage, deed of trust, deed to secure
debt or other instruments, creating a valid and enforceable first or
second lien, as applicable, on or a first or second priority ownership
interest in a Mortgaged Property.
"Mortgage Loan" shall mean a commercial mortgage loan secured by
a lien on real property.
"Mortgage Note" shall mean a note or other evidence of
indebtedness of a Mortgagor secured by a Mortgage.
"Mortgaged Property" shall mean the real property or properties
securing repayment of the debt evidenced by a Mortgage Note, or, in the
case of any Mezzanine Loan or Other Mezzanine Investment, owned
indirectly by the related obligor.
"Mortgagor" shall mean the obligor on a Mortgage Note, the
grantor of the related Mortgage and the owner of the related Mortgaged
Property.
"Net Income" shall mean, for any period, the consolidated net
income for such period of Seller as reported in Seller's public
financial statements prepared in accordance with GAAP.
"New Loan" shall mean an Eligible Loan that Seller proposes to be
included as a Purchased Loan.
"Officer's Certificate" shall mean, as to any Person, a
certificate of the chief executive officer, any vice chairman and the
chief financial officer of such Person or, for the purpose of executing
certificates, the president, the vice president and counsel responsible
therefor.
"Originated Loan" shall mean any loan that is an Eligible Loan
and whose related loan documents were prepared by Seller or an Affiliate
controlled by Seller.
11
"Permitted Transferee" shall mean any of the following which is
not a Disqualified Transferee:
(x) any Affiliate of Buyer; or
(y) any Person that is an insurance company, bank, savings and
loan association, trust company, commercial credit corporation, pension
plan, pension fund or pension fund advisory firm, mutual fund or other
investment company, governmental entity or plan, or a financial
institution substantially similar to any of the foregoing and being
experienced in making commercial loans and which holds at least
$600,000,000 of real estate or other assets (including, without
limitation, loans secured directly or indirectly by real estate assets)
located in the United States (or any entity wholly-owned by any one or
more institutions meeting the foregoing criteria).
"Person" shall mean an individual, corporation, limited liability
company, business trust, partnership, joint tenant or tenant-in-common,
trust, unincorporated organization, or other entity, or a federal, state
or local government or any agency or political subdivision thereof.
"Plan" shall mean an employee benefit or other plan established
or maintained during the five year period ended prior to the date of the
Agreement or to which Seller or any ERISA Affiliate makes, is obligated
to make or has, within the five year period ended prior to the date of
the Agreement, been required to make contributions and that is covered
by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
"Plan Assets" shall mean assets of any (i) employee benefit plan
(as defined in Section 3(3) of ERISA) subject to Title I of ERISA, (ii)
plan (as defined in Section 4975(e)(l) of the Code) subject to Section
4975 of the Code, or (iii) governmental plan (as defined in Section
3(32) of ERISA) subject to any other federal, state or local laws, rules
or regulations substantially similar to Title I of ERISA or Section 4975
of the Code.
"Portfolio Loans" shall mean all of the Purchased Loans. As of
the date of the Agreement, the Eligible Loans identified on Schedule 2
hereto have been approved by Buyer as suitable for inclusion as
Portfolio Loans, subject to completion of the deliveries and actions
described in Section 7.
"Pre-Existing Loans" shall mean any loan that is an Eligible Loan
and is not an Originated Loan.
"Preliminary Due Diligence Package" shall mean with respect to
any New Loan, the following due diligence information relating to such
New Loan to be provided by Seller to Buyer pursuant to this Annex I:
(i) a summary memorandum outlining the proposed transaction,
including potential transaction benefits and all material underwriting
risks, all Underwriting Issues and all other characteristics of the
proposed transaction that a prudent buyer would consider material;
(ii) current rent roll, if applicable;
(iii) cash flow pro-forma, plus historical information, if
available;
(iv) indicative debt service coverage ratios;
12
(v) indicative loan-to-value ratio;
(vi) Seller's or any Affiliate's relationship with its potential
underlying borrower or any affiliate;
(vii) if applicable, Phase I environmental report (including
asbestos and lead paint report);
(viii) if applicable, engineering and structural reports;
(ix) third party reports, to the extent available and applicable,
including:
(a) current Appraisal;
(b) Phase II or other follow-up environmental report
if recommended in Phase I;
(c) seismic reports; and
(d) operations and maintenance plan with respect to
asbestos containing materials;
(xi) analyses and reports with respect to such other matters
concerning the New Loan as Buyer may in its sole discretion require;
(xii) documents evidencing such New Loan, or current drafts
thereof, including, without limitation, underlying debt and security
documents, guaranties, underlying borrower's organizational documents,
warrant agreements, loan and collateral pledge agreements, and
intercreditor agreements, as applicable;
(xiii) a list that specifically and expressly identifies any
Purchased Loan Documents that relate to such Purchased Loan but are not
in Seller's possession;
(xiv) in the case of a participation interest, all information
described in this definition which would otherwise be provided for the
underlying Mortgage Loan if it constituted an Eligible Loan except that,
as to items set forth in subparagraphs (ix) and (x), to the extent
Seller possesses such information or has access to such information
because it was provided to the related lead lender and made available to
Seller, and in addition, all documentation evidencing the participation
interest; and
(xv) insurance documentation as shall be satisfactory to Buyer in
its sole discretion.
"Pricing Rate Determination Date" shall mean with respect to any
Pricing Rate Period, the second (2nd) Business Day preceding the first
day of the Pricing Rate Period.
"Pricing Rate Period" shall mean (a) in the case of the first
Pricing Rate Period with respect to any Transaction, the period
commencing on and including the Purchase Date for such Transaction and
ending on and including the last day of the calendar month in which the
Purchase Date occurs, and (b) in the case of any subsequent Pricing Rate
Period, the period commencing on and including the first day of a
calendar month and ending on and including the last day of such calendar
month; provided, however, that in no event shall any Pricing Rate Period
end subsequent to the Repurchase Date.
13
"Principal Payment" shall mean, with respect to any Purchased
Loans, any payment or prepayment of principal received in respect
thereof (including casualty or condemnation proceeds to the extent such
proceeds are not required under the underlying loan documents to be
reserved, escrowed, readvanced or applied for the benefit of the obligor
or the underlying real property). For purposes of clarification,
prepayment premiums or penalties shall not be deemed principal.
"Purchase Percentage" shall mean, with respect to any Purchased
Loan, the "Purchase Percentage" specified in Schedule 1 for the related
Loan Type (or as otherwise specified in the applicable Confirmation).
"Purchased Loan Documents" shall mean, with respect to a
Purchased Loan, the documents comprising the Purchased Loan File for
such Purchased Loan.
"Purchased Loan File" shall mean the documents specified as the
"Purchased Loan File" in Section 7(b) of this Annex I, together with any
additional documents and information required to be delivered to Buyer
or its designee (including the Custodian) pursuant to this Annex I.
"Purchased Loan Information" shall mean, with respect to each
Purchased Loan, the information set forth in Schedule 3 attached hereto.
"Purchased Loan Schedule" shall mean a schedule of Purchased
Loans attached to each Trust Receipt and Custodial Delivery Certificate
containing information substantially similar to the Purchased Loan
Information.
"Purchased Loans" shall mean (i) with respect to any Transaction,
the Eligible Loans sold by Seller to Buyer in such Transaction and (ii)
with respect to the Transactions in general, all Eligible Loans sold by
Seller to Buyer and any additional cash and/or other assets delivered by
Seller to Buyer pursuant to Section 4(a) of this Annex I.
"Rating Agency" shall mean any of Fitch, Moody's and Standard &
Poor's.
"Reference Banks" shall mean banks each of which shall (i) be a
leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market and (ii) have an established place of
business in London. Initially, the Reference Bank shall be JPMorgan
Chase Bank. If any such Reference Bank should be unwilling or unable to
act as such or if Buyer shall terminate the appointment of any such
Reference Bank or if any of the Reference Banks should be removed from
the Reuters Monitor Money Rates Service or in any other way fail to meet
the qualifications of a Reference Bank, Buyer in the exercise of its
good faith business judgment may designate alternative banks meeting the
criteria specified in clauses (i) and (ii) above.
"Regulations T, U and X" shall mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as
the same may be modified and supplemented and in effect from time to
time.
"Remittance Date" shall mean the first (1st) calendar day of each
month, or the next succeeding Business Day, if such calendar day shall
not be a Business Day.
"Requirement of Law" shall mean any law, treaty, rule,
regulation, code, directive, policy, order or requirement or
determination of an arbitrator or a court or other governmental
authority whether now or hereafter enacted or in effect.
14
"Reserve Requirement" shall mean, with respect to any Pricing
Rate Period, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect during such
Pricing Rate Period (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other governmental authority
having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board of
Governors) maintained by Buyer.
"Reset Date" shall mean, with respect to any Pricing Rate Period,
the second Business Day preceding the first day of such Pricing Rate
Period with respect to any Transaction.
"Scheduled Purchase Date" shall mean the date agreed between the
parties or specified in the applicable Confirmation as the "Purchase
Date" or the "Scheduled Purchase Date".
"Seller" shall mean Capital Trust, Inc., a Maryland corporation
and its permitted successors and assigns.
"Servicing Agreement" has the meaning specified in Section 22(b)
of this Annex I.
"Servicing Fee" shall mean the "Servicing Fees" as defined in the
Servicing Agreement payable to the Servicer thereunder.
"Servicing Records" has the meaning specified in Section 22(b) of
this Annex I.
"Significant Modification" shall mean (a) any modification or
amendment of a Purchased Loan which:
(i) reduces the principal amount of the Purchased Loan in
question other than (1) with respect to a dollar-for-dollar principal
payment or (2) reductions of principal to the extent of deferred,
accrued or capitalized interest added to principal which additional
amount was not taken into account by Buyer in determining the related
Purchase Price;
(ii) increases the principal amount of a Purchased Loan other
than increases which are derived from accrual or capitalization of
deferred interest which is added to principal or protective advances;
(iii) modifies the payments of principal and interest when due of
the Purchased Loan in question;
(iv) changes the frequency of scheduled payments of principal and
interest in respect of a Purchased Loan;
(v) subordinates the lien priority of the Purchased Loan or the
payment priority of the Purchased Loan other than subordinations
expressly required under the then existing terms and conditions of the
Purchased Loan (provided, however, the foregoing shall not preclude the
execution and delivery of subordination, nondisturbance and attornment
agreements with tenants, subordination to tenant leases, easements,
plats of subdivision and condominium declarations and similar
instruments which in the commercially reasonable judgment of Seller do
not materially adversely affect the rights and interest of the holder of
the Purchased Loan in question);
15
(vi) releases any collateral for the Purchased Loan other than
releases required under the then existing Purchased Loan documents or
releases in connection with eminent domain or under threat of eminent
domain;
(vii) waives, amends or modifies any cash management or reserve
account requirements of the Purchased Loan other than changes required
under the then existing Purchased Loan documentation;
(viii) waives any due-on-sale or due-on-encumbrance provisions of
the Purchased Loan other than waivers required to be given under the
then existing Purchased Loan documents; and
(b) any modification, amendment or other material action with respect to
a Purchased Loan (or the related mortgage loan, if such Purchased Loan is
Mezzanine Loan or Other Mezzanine Investment) which under the terms of the
related intercreditor agreement or participation agreement, as the case may be,
requires the consent of Seller or its "operating advisor" or the agent (as
distinct from consultation rights).
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, Inc., a division of the McGraw Hill Companies Inc.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of
the securities or other ownership interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation,
partnership or other entity (irrespective of whether or not at the time
securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or
more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person.
"Supplemental Due Diligence List" shall mean, with respect to any
New Loan, information or deliveries concerning such New Loan that Buyer
shall request in addition to the Preliminary Due Diligence Package,
including, without limitation, a credit approval memorandum representing
the final terms of the underlying transaction, a loan-to-value ratio
computation and a final debt service coverage ratio computation for such
proposed New Loan.
"Survey" shall mean a certified ALTA/ACSM (or applicable state
standards for the state in which a Mortgaged Property is located) survey
of a Mortgaged Property prepared by a registered independent surveyor
and in form and content reasonably satisfactory to Buyer and the company
issuing the Title Policy for such Mortgaged Property.
"Table Funded Purchased Loan" shall mean a Purchased Loan which
is sold to Buyer simultaneously with the origination or acquisition
thereof, which origination or acquisition is financed with the Purchase
Price, pursuant to Seller's request, paid directly to a title company or
other settlement agent, in each case, approved by Buyer, for
disbursement in connection with such origination or acquisition. A
Purchased Loan shall cease to be a Table Funded Purchased Loan after the
Custodian has delivered a Trust Receipt to Buyer certifying its receipt
of the Purchased Loan File therefor.
16
"Tangible Net Worth" shall mean, as of any date of determination,
(a) all amounts which would be included under capital (it being agreed
that any convertible trust preferred securities and any unfunded
commitments or capital which can be drawn will be included as capital)
on the balance sheet of Seller at such date, determined in accordance
with GAAP as of such date, less (b)(i) amounts owing to Seller from
Affiliates and (ii) intangible assets of the Seller as of such date.
"Table Funded Trust Receipt" shall have the meaning given to such
term in the Custodial Agreement.
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Xxxxx Telerate Service (or such other page as may
replace that page on that service for the purpose of displaying
comparable rates or prices).
"Title Policy" shall have the meaning specified in paragraph 2(d)
of Exhibit V.
"Total Indebtedness" shall mean, as of any date of determination,
the aggregate Indebtedness of Seller as of such date less the amount of
any nonspecific balance sheet reserves maintained in accordance with
GAAP as of such date.
"Transaction" shall have the meaning specified in Section 1(a) of
this Annex I.
"Transaction Conditions Precedent" shall have the meaning
specified in Section 3(e) of this Annex I.
"Transaction Costs" shall mean, with respect to any Purchased
Loan, all actual out-of-pocket reasonable costs and expenses paid or
incurred by Buyer and payable by Seller relating to the purchase of such
Purchased Loan (including legal fees and other fees described in Section
20(b) of this Annex I). Transaction Costs shall not include costs
incurred by Buyer for overhead and general administrative expenses.
"Transaction Documents" shall mean, collectively, the Agreement
(including this Annex I and any other annexes and schedules attached to
the Agreement), the Fee Letter, the Blocked Account Agreement, the
Custodial Agreement, the Servicing Agreement, the Transfer Documents,
all Confirmations executed pursuant to this Annex I in connection with
specific Transactions and all other documents executed in connection
herewith and therewith.
"Transfer Documents" shall mean, with respect to any Purchased
Loan, all applicable documents described in Section 7(b) of this Annex I
necessary to transfer all of Seller's right, title and interest in such
Purchased Loan to Buyer in accordance with the terms of this Annex I.
"Trust Receipt" shall mean a trust receipt issued by the
Custodian, or the Bailee, as applicable, to Buyer confirming the
Bailee's or the Custodian's, as applicable, possession of certain
Purchased Loan Files which are the property of and held by the Bailee or
the Custodian, as applicable, on behalf of Buyer (or any other holder of
such trust receipt) in the form required under the Custodial Agreement
or the Bailee Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection
or non-perfection of any security interest is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial
17
Code" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions of this Annex I relating to
such perfection or effect of perfection or non-perfection.
"Underwriting Issues" shall mean, with respect to any Eligible
Loan as to which Seller intends to request a Transaction, all material
information that has come to Seller's attention that, based on the
making of reasonable inquiries and the exercise of reasonable care and
diligence under the circumstances, would, in the context of the totality
of the Transaction in question, be considered a materially "negative"
factor (either separately or in the aggregate with other information),
(including, but not limited to, whether any of the Eligible Loans were
repurchased from any warehouse loan facility or a repurchase transaction
due to the breach of a representation and warranty or a material defect
in loan documentation or closing deliveries (such as any absence of any
material Purchased Loan Document(s)), to a reasonable institutional
mortgage or mezzanine loan buyer in determining whether to originate or
acquire the Eligible Loan in question.
3. INITIATION; CONFIRMATION; TERMINATION; FEES
The provisions of Paragraph 3 of the Agreement ("Initiation;
Confirmation; Termination") are hereby deleted and replaced in their respective
entireties by the following provisions of this Section 3:
(a) Seller may, from time to time, prior to the Facility Termination
Date, request that Buyer enter into a Transaction with respect to one or more
New Loans. Seller shall initiate each request by submitting a Preliminary Due
Diligence Package for Buyer's review and approval. Notwithstanding anything to
the contrary herein, Buyer shall have no obligation to consider for purchase any
proposed Transaction which has an aggregate Repurchase Price (excluding the
Price Differential with respect to the Purchased Loans as of the date of
determination) that when combined with all Purchased Loans which have not been
repurchased by Seller exceeds the Facility Amount. Buyer shall determine, in its
sole and absolute discretion, whether a New Loan qualifies as an Eligible Loan.
Buyer shall have the right to review all New Loans proposed to be sold to Buyer
in any Transaction and to conduct its own due diligence investigation of such
New Loans as Buyer determines is reasonably necessary. Seller agrees to promptly
reimburse Buyer for its Diligence Fees (subject to a cap of $35,000 per annum)
upon request for payment or reimbursement thereof. Notwithstanding any provision
to the contrary herein or any other Transaction Document, Buyer shall be
entitled to make a determination, in its sole and absolute discretion, that it
shall not purchase any or all of the New Loans proposed to be sold to Buyer by
Seller.
(b) Upon Buyer's receipt of a complete Preliminary Due Diligence Package
with respect to a proposed Transaction, Buyer shall have the right within two
(2) Business Days, to request in a Supplemental Due Diligence List such
additional Diligence Materials and deliveries that Buyer deems necessary to
properly evaluate the New Loans. Upon Buyer's receipt of such Diligence
Materials or Buyer's waiver thereof, Buyer shall within five (5) Business Days
either (i) notify Seller of Buyer's intent to proceed with the Transaction and
of its determination with respect to the Purchase Price and the Market Value for
the related New Loans (such notice, a "Preliminary Approval") or (ii) deny, in
Buyer's sole and absolute discretion, Seller's request for a Transaction.
Buyer's failure to respond to Seller within five (5) Business Days, as
applicable, shall be deemed to be a denial of Seller's request to enter into the
proposed Transaction, unless Buyer and Seller have agreed otherwise in writing.
(c) Upon Seller's receipt of Buyer's Preliminary Approval with respect
to a Transaction, Seller shall, if Seller desires to enter into such Transaction
with respect to the related New Loans upon the terms set forth by Buyer in its
preliminary Approval, satisfy the conditions set forth below with respect to
18
each New Loan as a condition precedent to Buyer's Final Approval (as defined
below), all in a manner reasonably satisfactory to Buyer and pursuant to
documentation reasonably satisfactory to Buyer:
(i) Delivery of Purchased Loan Documents. Seller shall deliver to
Buyer: (x) with respect to any New Loan that is a Pre-Existing Loan,
copies of the Purchased Loan Documents, except for such Purchased Loan
Documents that Seller expressly and specifically disclosed in Seller's
Preliminary Due Diligence Package were not in Seller's possession; and
(y) with respect to any New Loan that is an Originated Loan, drafts of
the Purchased Loan Documents.
(ii) Environmental and Engineering. Buyer shall have received a
"Phase 1" (and, if necessary, "Phase 2") environmental report, an
asbestos survey, if applicable, and an engineering report, each in form
reasonably satisfactory to Buyer, by an engineer and an environmental
consultant, each as listed on Schedules 5 and 6, respectively, as such
schedules may be amended from time to time by Seller or Buyer upon
approval by Buyer in its reasonable discretion.
(iii) Appraisal. If obtained by Seller, Buyer shall have received
either an Appraisal or a Draft Appraisal of the related Eligible
Property or Properties. If Buyer receives only a Draft Appraisal prior
to entering into a Transaction, Seller shall deliver an Appraisal on or
before thirty (30) days after the Purchase Date.
(iv) Insurance. Buyer shall have received certificates or other
evidence of insurance detailing insurance coverage in respect of the
related Eligible Property or Properties of types (including but not
limited to casualty, general liability and terrorism insurance
coverage), in amounts, with insurers and otherwise in compliance with
the terms, provisions and conditions set forth in the Purchased Loan
Documents and otherwise reasonably satisfactory to Buyer. Such
certificates or other evidence shall indicate that Seller (or as to a
New Loan that is a participation interest, the lead lender on the
related whole loan in which Seller is a participant) will be named as an
additional insured as its interest may appear and shall contain a loss
payee endorsement in favor of such additional insured with respect to
the policies required to be maintained under the Purchased Loan
Documents.
(v) Survey. Buyer shall have received all surveys of the related
Eligible Property or Properties that are in Seller's possession.
(vi) Lien Search Reports. Buyer or Buyer's counsel shall have
received, as reasonably requested by Buyer, satisfactory reports of UCC,
tax lien, judgment and litigation searches and any existing Title
Policies relating to the New Loan, Eligible Property or Properties,
Seller and related underlying obligor, such searches to be conducted in
each location Buyer shall reasonably designate.
(vii) Opinions of Counsel. Buyer shall have received copies of
all legal opinions with respect to the New Loan which shall be in form
and substance reasonably satisfactory to Buyer.
(viii) Title Policy.
(a) With respect to any New Loan that is a Mortgage
Loan, Seller shall have delivered to Buyer (1) an unconditional
commitment to issue a Title
19
Policy or Policies in favor of Seller and Seller's successors
and/or assigns with respect to Seller's interest in the related
real property with an amount of insurance that shall be not less
than the related Repurchase Price or such other amount as Buyer
shall require in its reasonable discretion or (2) an endorsement
or confirmatory letter from the existing title company to an
existing Title Policy (in an amount not less than the related
Repurchase Price or such other amount as Buyer shall require in
its reasonable discretion) in favor of Seller and Seller's
successors and/or assigns that adds such parties as an additional
insured.
(b) With respect to any New Loan that is a First
Mortgage B-Note, Seller shall have delivered to Buyer a copy of
an unconditional commitment to issue a Title Policy or endorse an
existing Title Policy in favor of the lead lender to whom the
related obligor issued the related Mortgage Note, in an amount
not less than the amount of such Mortgage Note and, if the First
Mortgage B-Note is evidenced by a separate promissory note rather
than a participation certificate, in an amount not less than the
amount of all Mortgage Notes secured by the Mortgage that secures
the related promissory notes.
(c) With respect to a Mezzanine Loan or Other
Mezzanine Investment, (i) Seller shall have delivered to Buyer
such evidence as Buyer on a case-by-case basis, in its sole
discretion, shall require of the ownership of the real property
underlying New Loan including, without limitation, (i) a copy of
a Title Policy, issued by a title insurer and with such
endorsements (including, without limitation, a "Mezzanine
Lender's Endorsement", if obtained by Seller), in each case
acceptable to Buyer in its sole discretion, showing that title is
vested in the related obligor or in an entity in whom such
obligor holds an equity interest and (ii) if obtained by Seller,
Seller shall have delivered to Buyer an Eagle 9 UCC Title Policy
which policy shall (x) provide an amount of insurance that shall
be not less than the related Repurchase Price or such other
amount as Buyer shall require in its sole discretion, (y) shall
insure Seller's security interest in the equity interests pledged
and (z) be assignable by its terms with a transfer of the
Mezzanine Loan or Other Mezzanine Investment, as applicable.
(ix) Additional Real Estate Matters. To the extent obtained by
Seller, Seller shall have delivered to Buyer such other real estate
related certificates and documentation as may have been requested by
Buyer, such as: (y) certificates of occupancy issued by the appropriate
Governmental Authority and either letters certifying that the related
Eligible Property or Properties is in compliance with all applicable
zoning laws issued by the appropriate Governmental Authority or evidence
that the related Title Policy includes a zoning endorsement and (z)
abstracts of all leases in effect at the Mortgaged Property delivered in
connection with the New Loan.
(x) First Mortgage B-Notes. In the case of a First Mortgage
B-Note, in addition to the delivery of the items in clauses (vi), (vii)
and (viii), Buyer shall have received all documentation specified in
clauses (i) through (v) and (ix) as if the underlying Mortgage Loan were
the direct collateral to the extent Seller possesses such documentation
or has access to such documentation because it was provided to the
related lead lender and made available to Seller and, to the extent
applicable, all documents evidencing a participation interest,
including, but not limited to, an original participation certificate, if
applicable, and the related participation agreement and/or the related
intercreditor agreement.
20
(xi) Other Documents. Buyer shall have received such other
documents as Buyer or its counsel shall reasonably deem necessary.
Within five (5) Business Days of Seller's satisfaction of all of the
conditions enumerated in clauses (i) through (xi) above, Buyer shall either (A)
if the Purchased Loan Documents with respect to the New Loan are not reasonably
satisfactory in form and substance to Buyer, notify Seller that Buyer has not
approved the New Loan or (B) notify Seller that Buyer agrees to purchase the New
Loan, subject to satisfaction (or waiver by Buyer) of the Transaction Conditions
Precedent (such notice, a "Final Approval"). Buyer's failure to respond to
Seller within five (5) Business Days shall be deemed to be a denial of Seller's
request that Buyer purchase the New Loan, unless Buyer and Seller have agreed
otherwise in writing.
(d) Upon issuing a Final Approval with respect to a proposed
Transaction, Buyer shall promptly deliver to Seller a written confirmation in
the form of Exhibit I attached hereto of each proposed Transaction (a
"Confirmation"); provided, that unless otherwise agreed by Seller, Buyer shall
deliver a separate Confirmation with respect to each New Loan (and, in this
connection, shall set forth (a) the name of the borrower with respect to the New
Loan, (b) the loan agreement (including the date) or other document or
instrument pursuant to which the related New Loan is made or governed, and (c)
the initial or then outstanding principal amount of the related New Loan), shall
identify Buyer and Seller, and shall set forth (i) the Purchase Date, (ii) the
Purchase Price for such New Loan (which based on Buyer's diligence may be
different than the Purchase Price set forth in the Preliminary Approval
delivered to Seller), (iii) the Repurchase Date, (iv) the Pricing Rate
applicable to such New Loan (including the Applicable Spread) and (v) any
additional terms or conditions not inconsistent with the Agreement reasonably
and in good faith requested by Buyer which do not have the effect of materially
changing the terms and conditions of the Agreement. Each Confirmation shall be
deemed incorporated herein by reference with the same effect as if set forth
herein at length. With respect to any Transaction, the Pricing Rate shall be
determined initially on the Pricing Rate Determination Date applicable to the
first Pricing Rate Period for such Transaction, and shall be reset on each Reset
Date for the next succeeding Pricing Rate Period for such Transaction. Buyer or
its agent shall determine in accordance with the terms of the Agreement the
Pricing Rate on each Pricing Rate Determination Date for the related Pricing
Rate Period and notify Seller of such rate for such period on the Reset Date.
(e) Provided each of the Transaction Conditions Precedent set forth in
this Section 3(e) shall have been satisfied (or waived by Buyer), and subject to
Seller's rights under Section 3(f), Buyer shall transfer the Purchase Price to
Seller with respect to each New Loan for which it has issued a Confirmation on
the Purchase Date specified in such Confirmation (provided Seller has not
objected to such Confirmation within the time frame permitted under Section
3(f)), which shall be not more than three (3) Business Days following the
issuance of such Confirmation of a Transaction by Buyer in accordance with this
Section 3, and the related Purchased Loan shall be concurrently transferred by
Seller to Buyer or its nominee. For purposes of this Section 3(e), the
"Transaction Conditions Precedent" shall be satisfied with respect to any
proposed Transaction if:
(1) No (x) monetary or material non-monetary Default or (y) Event
of Default under the Agreement shall have occurred and be continuing as
of the Purchase Date for such proposed Transaction;
(2) Seller shall have a Fixed Charge Ratio of less than 1:2 and a
Debt to Equity Ratio greater than 5:1 for the fiscal quarter most
recently ended;
(3) The Seller shall have delivered to the Buyer an Officer's
Certificate of the Seller certifying that (A) the representations and
warranties made by Seller in any of the
21
Transaction Documents are true and correct in all material respects as
of the Purchase Date for such Transaction and unless waived by Buyer
(except (i) such representations which by their terms speak as of a
specified date and (ii) to the extent such representations and
warranties have been previously qualified and such qualifications have
been accepted by Buyer), (B) Seller is in compliance with all
governmental licenses and authorizations, (C) Seller is qualified to do
business, validly existing and, to the extent determinable, in good
standing, in all required jurisdictions, (D) the facts set forth in the
Diligence Materials related to the collateral for the Purchased Loan
are, to the best knowledge of Seller after diligent inquiry, true and
correct (or shall fully explain all adverse changes from the information
previously supplied to Buyer), (E) there has been no change in the
organizational and authority documents provided to Buyer pursuant to
Section 7(d)(ii) of this Annex I since the date of the most recent
certification thereof to Buyer, and (F) there has been no Material
Adverse Effect since the last Purchase Date. If requested by Buyer,
Seller shall also receive an Officer's Certificate covering such matters
as Buyer may request;
(4) Buyer shall have (A) determined, in accordance with the
applicable provisions of Section 3(a) of this Annex I that the New Loan
proposed to be sold to Buyer by Seller in such Transaction is an
Eligible Loan and (B) obtained internal credit approval for the
inclusion of such New Loan as a Purchased Loan in a Transaction;
(5) The applicable Purchased Loan File described in Section 7(b)
shall have been delivered to Custodian or Bailee and Buyer shall have
received a Trust Receipt from Custodian or Bailee with respect to such
Purchased Loan File;
(6) Seller shall have delivered to each Mortgagor or obligor
under any Purchased Loan a direction letter in accordance with Section
5(a) of this Annex I unless such Mortgagor or obligor or related
servicer or senior lender is already remitting payments to the Servicer
whereupon Seller shall direct the Servicer to remit all such amounts
into the Blocked Account in accordance with Section 5(a) and to service
such payments in accordance with the Servicing Agreement and the
provisions of this Annex I;
(7) Seller shall have paid to Buyer any unpaid Diligence Fees in
respect of such Purchased Loan;
(8) Buyer shall have determined that after giving effect to the
proposed Transaction, (i) the Repurchase Price (exclusive of accrued and
unpaid Pricing Differential) of no single Purchased Loan exceeds 40% of
the Facility Amount and (ii) the aggregate Repurchase Price (exclusive
of accrued and unpaid Pricing Differential) of Purchased Loans secured
directly or indirectly by Eligible Properties which are hospitality
assets does not exceed 30% of the Facility Amount;
(9) No Purchased Loan shall be a Defaulted Loan;
(10) Buyer shall have received an opinion of counsel of Seller,
in form and substance reasonably satisfactory to Buyer, covering the
enforceability, authority, execution, delivery and perfection of the
assignment of the Purchased Loan and all Transfer Documents, and such
other matters as Buyer may reasonably require;
(11) No event shall have occurred or circumstance shall exist
which has a Material Adverse Effect;
22
(12) There shall not have occurred (i) a material change in
financial markets, an outbreak or escalation of hostilities or a
material change in national or international political, financial or
economic conditions, (ii) a general suspension of trading on major stock
exchanges or suspension of trading in Seller's stock and (iii) a
disruption in or moratorium on commercial banking activities or
securities settlement services.
(f) Each Confirmation, together with the Agreement, shall be conclusive
evidence of the terms of the Transaction covered thereby unless objected to in
writing by Seller no more than two (2) Business Days after the date such
Confirmation is received by Seller. An objection sent by Seller with respect to
any Confirmation must state specifically that the writing is an objection, must
specify the provision(s) of such Confirmation being objected to by Seller, must
set forth such provision(s) in the manner that Seller believes such provisions
should be stated, and must be received by Buyer no more than two (2) Business
Days after such Confirmation is received by Seller. Buyer, in its sole
discretion, may issue another Confirmation addressing Seller's objections or may
elect not to proceed with the proposed Transaction.
(g) Seller shall be entitled to terminate a Transaction on demand, and
repurchase the related Purchased Loan on any Business Day prior to the
Repurchase Date (an "Early Repurchase Date"); provided, however, that:
(i) No Event of Default shall be continuing or would occur or
result from such early repurchase,
(ii) Seller notifies Buyer in writing of its intent to terminate
such Transaction and repurchase the related Purchased Loan no later than
five (5) Business Days prior to the Early Repurchase Date, and
(iii) Other than as set forth below in subsection (iv) below, on
the Early Repurchase Date, Seller shall pay to Buyer an amount equal to
the sum of the Repurchase Price for such Transaction, all Costs and any
other amounts payable by Seller and outstanding under the Agreement
(including, without limitation, Section 3(n) of this Annex I) with
respect to such Transaction against transfer to Seller or its agent of
the related Purchased Loan.
(h) On the Repurchase Date (or the Early Repurchase Date, as
applicable), termination of the applicable Transactions will be effected by
transfer to Seller or, if requested by Seller, its designee of the related
Purchased Loans, 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 Section 4(a) or Section 5) against the simultaneous transfer of the
Repurchase Price, all Costs and any other amounts payable and outstanding under
the Agreement (including without limitation, Sections 3(l) and 3(n) of this
Annex I, if any) to an account of Buyer.
(i) So long as no Default or Event of Default has occurred and is then
continuing, the Repurchase Price with respect to one or more Purchased Loans may
be paid in part at any time upon two (2) Business Days prior written notice;
provided, however, that any such payment shall be accompanied by an amount
representing accrued Price Differential with respect to such Purchased Loan(s)
on the amount of such payment and all other amounts then due under the
Transaction Documents. Each partial payment of the Repurchase Price that is
voluntary (as opposed to mandatory under the terms of the Agreement) shall be in
an amount of not less than One Hundred Thousand Dollars ($100,000).
(j) In lieu of repaying the Repurchase Price, in whole or in part, with
respect to the Transactions when and as otherwise required or permitted by the
Agreement, Seller may elect to deposit
23
any such amount (the "Early Repurchase Deposit") with Buyer (the date of such
deposit, the "Early Repurchase Deposit Funding Date") until such date as the
application of the Early Repurchase Deposit towards the Repurchase Price would
not cause Buyer to incur such costs (the "Early Repurchase Deposit Application
Date"). The Early Repurchase Deposit shall be held in an interest-bearing
account controlled by Buyer and, at Buyer's option, shall be accompanied by a
payment (as estimated by Buyer) equal to the difference between the interest
earned on the Early Repurchase Deposit and the Price Differential that will
accrue on a portion of the relevant Transaction equal to the Early Repurchase
Deposit during the period from the Early Repurchase Deposit Funding Date to the
Early Repurchase Deposit Application Date.
(k) Concurrently with its execution and delivery of the Agreement and on
such other dates specified in the Fee Letter, Seller shall pay Buyer the amounts
specified in the Fee Letter.
(l) If prior to the first day of any Pricing Rate Period with respect to
any Transaction, (i) Buyer shall have reasonably determined (which determination
shall be conclusive and binding upon Seller absent manifest error) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the LIBO Rate for such Pricing Rate Period,
or (ii) the LIBO Rate determined or to be determined for such Pricing Rate
Period will not adequately and fairly reflect the cost to Buyer (as reasonably
determined and certified to Seller by Buyer) of making or maintaining
Transactions during such Pricing Rate Period, Buyer shall give telecopy or
telephonic notice thereof to Seller as soon as practicable thereafter. If such
notice is given, the Pricing Rate with respect to such Transaction for such
Pricing Rate Period, and for any subsequent Pricing Rate Periods until such
notice has been withdrawn by Buyer, shall be a per annum rate equal to the sum
of (i) the Federal Funds Rate, (ii) 0.25% and (iii) the Applicable Spread (the
"Alternative Rate").
(m) Notwithstanding any other provision herein, if after the date of the
Agreement, the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for Buyer to effect
LIBOR Transactions as contemplated by the Transaction Documents, (a) the
commitment of Buyer hereunder to enter into new LIBOR Transactions and to
continue LIBOR Transactions as such shall forthwith be canceled, and (b) the
LIBOR Transactions then outstanding shall be converted automatically to
Alternative Rate Transactions on the last day of the then current Pricing Rate
Period or within such earlier period as may be required by law. If any such
conversion of a LIBOR Transaction occurs on a day which is not the last day of
the then current Pricing Rate Period with respect to such LIBOR Transaction,
Seller shall pay to Buyer such amounts, if any, as may be required pursuant to
Section 3(n).
(n) Upon demand by Buyer, Seller shall indemnify Buyer and hold Buyer
harmless from any net loss or expense (not to include any lost profit or
opportunity) (including, without limitation, reasonable attorneys' fees and
disbursements) which Buyer actually sustains or incurs as a consequence of (i)
default by Seller in terminating any Transaction after Seller has given a notice
in accordance with Section 3(g) of a termination of a Transaction, (ii) any
payment of all or any portion of the Repurchase Price, as the case may be, on
any day other than a Remittance Date (including, without limitation, any such
loss or expense arising from the reemployment of funds obtained by Buyer to
maintain Transactions hereunder or from fees payable to terminate the deposits
from which such funds were obtained, provided Seller shall not be obligated to
reimburse Buyer for the incremental cost of reemploying funds or terminating
deposits which arise solely as a result of Buyer depositing funds or employing
funds at a rate calculated other than by reference to LIBOR (as defined herein))
or (iii) default by Seller in selling Eligible Loans after Seller has notified
Buyer of a proposed Transaction and Buyer has agreed to purchase such Eligible
Loans in accordance with the provisions of the Agreement. A certificate as to
such costs, losses, damages and expenses, setting forth the calculations
therefor shall be submitted promptly by Buyer to Seller and shall be conclusive
and binding on Seller in the absence of manifest error.
24
(o) If (A) the Transactions are characterized by a U.S. Federal, state
or local taxing authority in a manner other than as described in Section 23 of
this Annex I, or (B) after the date of the Agreement, the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
by any Governmental Authority or compliance by Buyer with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority having jurisdiction over Buyer made subsequent to
the date hereof:
(i) shall subject Buyer to any tax of any kind whatsoever with
respect to the Transaction Documents, any Purchased Loan or any
Transaction, or change the basis of taxation of payments to Buyer in
respect thereof (except for changes in the rate of tax on Buyer's
overall net income);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of Buyer which is not otherwise included in the determination
of the LIBO Rate hereunder; or
(iii) shall impose on Buyer any other condition due to the
Agreement or the Transactions;
and the result of any of the foregoing is to increase the cost to Buyer of
entering into, continuing or maintaining Transactions or to reduce any amount
receivable under the Transaction Documents in respect thereof; then, in any such
case, Seller shall pay Buyer, within ten (10) Business Days after written demand
therefor is received by Seller, any additional amounts necessary to compensate
Buyer for such increased cost payable or reduced amount receivable. If Buyer
becomes aware that it is entitled to claim any additional amounts pursuant to
this Section 3(o), it shall notify Seller in writing of the event by reason of
which it has become so entitled. A certificate as to the calculation of any
additional amounts payable pursuant to this subsection shall be submitted by
Buyer to Seller and shall be conclusive and binding upon Seller in the absence
of manifest error. This covenant shall survive the termination of the Agreement
and the repurchase by Seller of any or all of the Purchased Loans.
(p) If Buyer shall have reasonably determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by Buyer or any corporation
controlling Buyer with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof does have the effect of reducing the rate of
return on Buyer's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which Buyer or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration Buyer's or such corporation's policies with respect to capital
adequacy) by an amount deemed by Buyer to be material, then from time to time,
after submission by Buyer to Seller of a written request therefor, Seller shall
pay to Buyer such additional amount or amounts as will compensate Buyer for such
reduction. A certificate as to the calculation of any additional amounts payable
pursuant to this subsection shall be submitted by Buyer to Seller and shall be
conclusive and binding upon Seller in the absence of manifest error. This
covenant shall survive the termination of the Agreement and the repurchase by
Seller of any or all of the Purchased Loans.
(q) If any of the events described in Section 3(k), Section 3(l),
Section 3(n) or Section 3(o) result in Buyer's election to use the Alternative
Rate or Buyer's request for additional amounts, then Seller shall have the
option to notify Buyer in writing of its intent to terminate the Transactions
and repurchase the Purchased Loans no later than one (1) Business Day after
notice is given to Buyer in
25
accordance with Section 3(g). The election by Seller to terminate the
Transactions in accordance with this Section 3(q) shall not relieve Seller for
liability with respect to any additional amounts or increased costs actually
incurred by Buyer prior to the actual repurchase of the Purchased Loans.
(r) The facility under the Agreement shall terminate on June 1, 2004;
provided that Seller may make a written request not later than 45 days prior to
such Facility Termination Date for extension of the term thereof for a period to
be agreed by Buyer and Seller, which extension request shall be subject to
Buyer's approval in its sole and absolute discretion. Buyer's failure to respond
to Seller's written request within 15 days of such request shall be deemed an
automatic denial to Seller's request to extend the term of the facility
hereunder.
(s) From and after the Facility Termination Date, Buyer shall have no
further obligation to purchase any New Loans. On the Facility Termination Date,
Seller shall be obligated to repurchase all of the Purchased Loans and transfer
payment of the aggregate Repurchase Price for each such Purchased Loan, together
with the accrued and unpaid Price Differential and all Costs and other amounts
due and payable to Buyer hereunder. However, so long as no Event of Default is
continuing on the Facility Termination Date (other than failure to pay the
aggregate Repurchase Price in full), Seller shall be entitled, upon written
notice to Buyer not less than 30 days prior to the Facility Termination Date, to
repurchase the Purchased Loans over the Extended Repurchase Period by
transferring to the Buyer on each Remittance Date during the Extended Repurchase
Period, in addition to accrued Price Differential with respect to the
Transactions, the Extended Repurchase Period Monthly Payment. Buyer shall apply
the Extended Repurchase Monthly Payment to reduce the Repurchase Price of each
Purchased Loan pro rata. During the Extended Repurchase Period, for purposes of
calculating the Price Differential for the Transactions, the Applicable Spread
shall be increased by 25 basis points. Following the Facility Termination Date,
Buyer shall not be obligated to transfer any Purchased Loans to Seller until
payment in full to Buyer of all amounts due hereunder; provided, however, upon
Seller's request, Buyer shall transfer to Seller the Purchased Loans with
respect to which Buyer shall have received the full Repurchase Price and such
other amounts payable to Buyer in respect of such Purchased Loans in accordance
with the requirements of this Annex I, provided an Event of Default is not then
continuing and the transfer of such Purchased Loans would not result in a Margin
Deficit.
4. MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS
Paragraphs 4 (e) and (f) of the Agreement ("Margin Maintenance") shall
be deleted in their entirety and Paragraphs 4(a), (b), (c) and (d) of the
Agreement are hereby deleted and replaced in their entirety with the following
provisions of this Section 4:
(a) Buyer may determine and re-determine the Asset Base on any Business
Day and on as many Business Days as it may elect. If at any such time the
aggregate Repurchase Price of the Portfolio Loans is greater than the aggregate
Asset Base as determined by Buyer in its sole discretion and notified to Seller
on any Business Day (a "Margin Deficit"), then Seller shall, no later than one
(1) Business Day after receipt of such notice, either deliver to Buyer (A) cash
(which shall be applied to reduce the Repurchase Price of each Purchased Loan
pro rata) or (B) additional assets acceptable to Buyer in its sole and absolute
discretion in such amounts that after giving effect to such delivery of cash or
other assets, the aggregate Repurchase Price of the Portfolio Loans does not
exceed the Asset Base as re-determined by Buyer after giving effect to the
delivery of cash (or other assets) by Seller to Buyer pursuant to this Section
4(a).
(b) If at any time a Purchased Loan becomes a Defaulted Loan, Buyer may,
in its sole discretion and without regard to any determination of the Market
Value of such Defaulted Loan, notify Seller that such Purchased Loan has become
a Defaulted Loan and require that the related Xxxxxxxxxx
00
Price be paid in whole or in part, in the sole discretion of Buyer. Not later
than one (1) Business Day after the receipt of such notice, Seller shall prepay
in whole or in part, as applicable, the related Repurchase Price of such
Defaulted Loan. Buyer may, in its sole discretion, determine and re-determine
the amount to be prepaid irrespective of whether or not any statement of fact
contained in any Officer's Certificate delivered pursuant to Section 3(e)(3) or
(ii) any representation of Seller set forth in Section 10(a)(xix) was true to
Seller's actual knowledge.
(c) If at any time the aggregate Repurchase Price of the Portfolio Loans
is less than the aggregate Asset Base as determined by Buyer in its sole
discretion and notified to Seller on any Business Day Seller requests such
notification (a "Margin Excess"), then Seller may, upon providing written notice
to Buyer by 3 p.m. on the Business Day prior to the date funds are requested,
request that Buyer advance additional funds (not to exceed such Margin Excess)
(a "Margin Excess Advance") to Seller in respect of the Purchased Loans. On the
date set forth in such request, Buyer shall transfer cash to Seller in the
amount of such Margin Excess Advance. Each Margin Excess Advance by Buyer to
Seller shall increase the Repurchase Price of one or more Purchased Loans (such
aggregate increase not to exceed such Margin Excess Advance) as Buyer shall
determine in its sole discretion.
(d) To the extent Seller has an obligation to advance additional funds
under one or more Purchased Loans, provided a Margin Deficit does not then
exist, Buyer agrees to transfer to Seller cash in an amount equal to the product
of (i) the amount being advanced by Seller and (ii) the Purchase Percentage for
the related Purchased Loan or such lesser amount determined by Buyer, such that
after giving effect to the cash transfer, a Margin Deficit would not result. The
transfer of cash under this Section 4(d) shall be accounted for as a Margin
Excess Advance.
5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS
Paragraph 5 of the Agreement ("Income Payments") is hereby deleted and
replaced in its entirety by the following provisions of this Section 5:
(a) On or before the date hereof, Seller and Buyer shall establish and
maintain with the Depository Bank a deposit account owned by, in the name of and
under the sole control of Buyer with respect to which the Blocked Account
Agreement shall have been executed (such account, together with any replacement
or successor thereof, the "Blocked Account") and deliver to Buyer a Blocked
Account Agreement. Seller shall cause all Income with respect to the Purchased
Loans or other assets (if cash) delivered under Section 4(a) to be deposited in
the Blocked Account no later than the next Business Day following its collection
and receipt thereof. Simultaneously with the transfer of any Purchased Loan
under Section 3, Seller shall deliver to each Mortgagor or obligor (or the
related collection account bank, as applicable), or the related lead lender or
servicer under a Purchased Loan an irrevocable direction letter in the form
attached as Exhibit VII to this Annex I instructing such Person to remit to the
Blocked Account all amounts payable to Seller under the related Purchased Loan
(unless such Mortgagor or obligor or related servicer or lender is already
remitting payments to the Servicer, whereupon Seller shall direct Servicer to
remit all such amounts into the Blocked Account and service such payments in
accordance with the Servicing Agreement and the provisions hereof) and shall
provide to Buyer written proof of such delivery. If a Mortgagor or obligor (or
the related collection account bank) or the related lead lender or servicer
under a Purchased Loan forwards any Income with respect to such Purchased Loan
to Seller rather than directly to the Blocked Account, Seller shall (i) deliver
an additional irrevocable direction letter to the applicable Person and make
other commercially reasonable efforts to cause such Person to forward such
amounts directly to the Blocked Account and (ii) hold such amounts in trust for
Buyer and immediately deposit in the Blocked Account any such amounts. All
Income in respect of the Portfolio Loans, which may include payments in respect
of associated Hedging Transactions entered into by an underlying obligor with
respect to a Purchased Loan and pledged to Seller as collateral for a
27
Purchased Loan, shall be deposited directly into, or, if applicable, remitted
directly from the applicable underlying collection account to, the Blocked
Account. So long as no Event of Default shall have occurred and be continuing,
all Income on deposit in the Blocked Account in respect of the Portfolio Loans
and the associated Hedging Transactions during each Collection Period shall be
remitted to Seller on a daily basis. Upon the occurrence of an Event of Default,
Buyer may terminate such remittances and amounts on deposit in the Blocked
Account will be applied in accordance with Section 5(c).
(b) Seller shall pay to Buyer on each Remittance Date, an amount equal
to the aggregate Price Differential which has accrued and is outstanding in
respect of the Transactions as of each such Remittance Date and shall pay to
Servicer its Servicing Fees and any "Servicing Expenses", "Additional Servicing
Compensation" and "Servicing Advances" (as such terms are defined in the
Servicing Agreement) in accordance with the terms of the Servicing Agreement.
(c) If Seller shall receive a Principal Payment in respect of any
Purchased Loan, not later than one (1) Business Day after receipt of such
Principal Payment, Seller shall (subject to the provisions of Section 3(j)) pay
the Repurchase Price in respect of such Purchased Loan in an amount equal to the
greater of (i) the product of the amount of such Principal Payment multiplied by
the Purchase Percentage applicable to the related Purchased Loan and (ii) such
greater amount, such that after giving effect to such payment of the applicable
Repurchase Price, the aggregate Repurchase Price of the Portfolio Loans does not
exceed the Asset Base, as determined by Buyer after giving effect to such
payment. Seller shall pay to Buyer on the Remittance Date, the full Repurchase
Price of any Purchased Loan in respect of which a Principal Payment has been
received, or, if the Principal Payment is less than the Repurchase Price, an
amount equal to such Principal Payment.
(d) If an Event of Default shall have occurred and be continuing, all
Income on deposit in the Blocked Account in respect of the Purchased Loans and
the associated Hedging Transactions shall be applied on the Business Day next
following the Business Day on which such funds are deposited in the Blocked
Account as follows:
(i) first, to make payment in respect of any outstanding
Servicing Fees and "Servicing Expenses", "Additional Servicing
Compensation" (other than "Termination Fees") and "Servicing Advances"
(as such terms are defined in the Servicing Agreement);
(ii) second, to remit to Buyer an amount equal to the Price
Differential which has accrued and is outstanding in respect of the
Transactions as of such Business Day;
(iii) third, to make payment to Buyer in respect of Costs and all
other amounts payable by Seller and outstanding hereunder;
(iv) fourth, to make a payment to Buyer on account of the
aggregate Repurchase Price of the Purchased Loans until the aggregate
Repurchase Price for all of the Purchased Loans has been reduced to
zero; and
(v) fifth, to remit to Seller the remainder.
(e) If at any time during the term of any Transaction any Income is
distributed to Seller or Seller has otherwise received such Income or Buyer has
made a payment in respect of such Income pursuant to this Section 5, and for any
reason (other than a breach by Buyer of the Purchased Loan Documents) such
amount is required to be returned to an obligor under such Purchased Loan
(either before or after the Repurchase Date), Buyer may provide Seller with
notice of such required return, and
28
Seller shall pay the amount of such required return to Buyer by 11:00 a.m., New
York time, on the Business Day following Seller's receipt of such notice.
(f) Subject to the other provisions hereof, Seller shall be responsible
for all Costs in respect of any Purchased Loans to the extent it would be so
obligated if the Purchased Loans had not been sold to Buyer. Buyer shall provide
Seller with notice of any Costs promptly upon receiving such notice, and Seller
shall pay the amount of any Costs to Buyer by 11:00 a.m., New York time, on the
later of (i) five (5) Business Days after Buyer has informed Seller that such
amount is due under the Purchased Loan Documents and (ii) three (3) Business
Days following Seller's receipt of such notice.
6. SECURITY INTEREST
Paragraph 6 of the Agreement ("Security Interest") is hereby deleted and
replaced in its entirety by the following provisions of this Section 6:
(a) Buyer and Seller intend that all Transactions hereunder be sales to
Buyer of the Purchased Loans for all purposes (other than for U.S. Federal,
state and local income or franchise tax purposes) and not loans from Buyer to
Seller secured by the Purchased Loans. However, in the event any Transaction is
deemed to be a loan, Seller shall be deemed to have pledged to Buyer as security
for the performance by Seller of its obligations under such Transaction and
shall be deemed to have granted to Buyer a security interest in (i) the Blocked
Account, (ii) all of the Purchased Loans (including those identified in
Confirmations, (iii) all Income from the Purchased Loans and (iv) all proceeds
of all of the foregoing.
(b) To the extent Buyer is deemed to have a security interest with
respect to the Purchased Loans, and with respect to the security interests
granted in subsection (c) of this Section 6, Buyer shall have all of the rights
and may exercise all of the remedies of a secured creditor under the UCC and any
other applicable law. In furtherance of the foregoing, (1) Seller, at its sole
cost and expense, shall cause to be filed as a protective filing with respect to
the Purchased Loans and as a UCC filing with respect to the security interests
granted in subsection (c)) of this Section 6 (i) a UCC financing statement in
the form of Schedule 7-A attached hereto (to be filed in the filing office
indicated therein), (ii) amendments to such UCC financing statement in the form
of Schedule 7-B attached hereto and having attached to each such UCC financing
statement amendment a description of the Purchased Loans which identifies the
Purchased Loans by setting forth (a) the name of the borrower with respect to
each Purchased Loan, (b) the loan agreement (including the date) or other
document, agreement or instrument pursuant to which each Purchased Loan was made
or is governed, and (c) the initial or then outstanding principal amount of each
Purchased Loan, and (iii) such other UCC filings, in such locations as may be
necessary to perfect and maintain perfection and priority of the outright
transfer and the security interest granted hereby (including under Section 22 of
this Annex I) and, in each case, continuation statements and any amendments
thereto (collectively, the "Filings"), and shall forward copies of such Filings
to Buyer upon completion thereof, and (b) Seller shall from time to time, at its
own expense, deliver and cause to be duly filed all such further filings,
instruments and documents and take all such further actions as may be necessary
or desirable or as may be requested by Buyer with respect to the perfection and
priority of the outright transfer of the Purchased Loans and the security
interest deemed granted hereunder and in the Purchased Loans and the rights and
remedies of the Buyer with respect to the Purchased Loans (including under
Section 22 of this Annex I) (including the payments of any fees and taxes
required in connection with the execution and delivery of the Agreement).
(c) Seller hereby pledges to Buyer, as security for the performance by
Seller of its obligations under all Transactions, all Hedging Transactions
relating to Purchased Loans entered into by Seller and all proceeds thereof.
Seller shall take all action as is necessary or desirable to obtain consent to
29
assignment of any such Hedging Transaction to Buyer and shall cause the
counterparty under each such Hedging Transaction to enter into such document or
instrument satisfactory to Buyer, Seller and such counterparty, pursuant to
which such counterparty will covenant and agree to accept notice from Buyer to
redirect payments under such Hedging Transaction as Buyer may direct. So long as
no Event of Default shall be continuing, Buyer agrees that it will not redirect
payments under any Hedging Transaction pledged to Buyer pursuant to the terms of
this Section 6(c).
7. PAYMENT, TRANSFER AND CUSTODY
Paragraph 7 of the Agreement ("Payment and Transfer") is hereby deleted
and replaced in its entirety by the following provisions of this Section 7:
(a) Subject to the terms and conditions of the Agreement, on the
Purchase Date for each Transaction, ownership of the Purchased Loans and all
rights thereunder shall be transferred to Buyer or its designee (including the
Custodian) against the simultaneous transfer of the Purchase Price to an account
of Seller specified in the Confirmation relating to such Transaction. On the
Purchase Date for the first Transaction, Buyer will provide Seller with a power
of attorney, substantially in the form attached as Exhibit IV-2 hereto, in
recordable form, allowing Seller to administer, operate and service such
Purchased Loans. The power of attorney shall be binding upon Buyer and Buyer's
successors and assigns.
(b) With respect to each Table Funded Purchased Loan, Seller shall cause
the Bailee to deliver to the Custodian (with a copy to Buyer) by no later than
1:00 p.m. (New York time), on the Purchase Date, by facsimile the related
promissory note (or the participation certificate, as applicable), the Insured
Closing Letter and Escrow Instructions, if any, the Bailee Agreement and a Trust
Receipt issued by the Bailee thereunder on or before the related Purchase Date.
In connection with the sale of each Purchased Loan, not later than 1:00 p.m.,
two (2) Business Days prior to the related Purchase Date (or on the related
Purchase Date, as may be agreed by Buyer and Seller on a case by case basis) (or
with respect to a Table Funded Purchased Loan not later than 1:00 p.m. (New York
time) on the third Business Day following the applicable Purchase Date), Seller
shall deliver or cause Bailee to deliver (with a copy to Buyer) and release to
the Custodian (together with the Custodial Delivery in the form attached hereto
as Exhibit III), and shall cause the Custodian to deliver a Trust Receipt on the
Purchase Date (or in the case of a Table Funded Purchased Loan, not later than
two (2) Business Days following the receipt by the Custodian) confirming the
receipt of the following original documents (collectively, the "Purchased Loan
File"), pertaining to each of the Purchased Loans identified in the Custodial
Delivery delivered therewith:
(i) With respect to each Purchased Loan that is a Mortgage Loan
(including a First Mortgage B Note), the following documents, as
applicable:
(A) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________ without
recourse" and signed in the name of the last endorsee (the "Last
Endorsee") by an authorized Person (in the event that the
Purchased Loan was acquired by the Last Endorsee in a merger, the
signature must be in the following form: "[Last Endorsee],
successor by merger to [name of predecessor]"; in the event that
the Purchased Loan was acquired or originated by the Last
Endorsee while doing business under another name, the signature
must be in the following form: "[Last Endorsee], formerly known
as [previous name]") or a lost note affidavit in a form
reasonably approved by Buyer, with a copy of the applicable
Mortgage Note attached thereto.
(B) The original or a copy of the loan agreement and
the guarantee, if any, executed in connection with the Purchased
Loan.
30
(C) The original Mortgage with evidence of recording
thereon, or a copy thereof together with an officer's certificate
of Seller certifying that such represents a true and correct copy
of the original and that such original has been submitted for
recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.
(D) The originals of all assumption, modification,
consolidation or extension agreements with evidence of recording
thereon, or copies thereof together with an officer's certificate
of Seller certifying that such represent true and correct copies
of the originals and that such originals have each been submitted
for recordation in the appropriate governmental recording office
of the jurisdiction where the Mortgaged Property is located.
(E) The original Assignment of Mortgage to Buyer for
each Purchased Loan, in form and substance acceptable for
recording and signed in the name of the Last Endorsee (in the
event that the Purchased Loan was acquired by the Last Endorsee
in a merger, the signature must be in the following form: "[Last
Endorsee], successor by merger to [name of predecessor]"; in the
event that the Purchased Loan was acquired or originated while
doing business under another name, the signature must be in the
following form: "[Last Endorsee], formerly known as [previous
name]").
(F) The originals of all intervening assignments of
mortgage with evidence of recording thereon, or copies thereof
together with an officer's certificate of Seller certifying that
such represent true and correct copies of the originals and that
such originals have each been submitted for recordation in the
appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.
(G) The original attorney's opinion of title and
abstract of title or the original mortgagee title insurance
policy, or if the original mortgagee title insurance policy has
not been issued, the irrevocable marked commitment to issue the
same.
(H) The original of any security agreement, chattel
mortgage or equivalent document executed in connection with the
Purchased Loan.
(I) The original Assignment of Leases, if any, with
evidence of recording thereon, or a copy thereof together with an
officer's certificate of Seller, certifying that such copy
represents a true and correct copy of the original that has been
submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property
is located.
(J) The originals of all intervening assignments of
assignment of leases and rents, if any, or copies thereof, with
evidence of recording thereon, or copies thereof together with an
officer's certificate of Seller certifying that such represent
true and correct copies of the originals and that such originals
have each been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the
Mortgaged Property is located.
(K) A copy of the UCC financing statements, certified
as true and correct by Seller, and all necessary UCC continuation
statements with evidence of filing thereon or copies thereof
certified by Seller to have been sent for filing, and UCC
assignments to
31
Buyer, which UCC assignments shall be in form and substance
acceptable for filing in the applicable jurisdictions.
(L) An environmental indemnity agreement or similar
guaranty or indemnity, whether stand-alone or incorporated into
the applicable loan documents (if any).
(M) An omnibus assignment to Buyer or other documents
necessary and sufficient to transfer to Buyer all of Seller's
right, title and interest in and to the Purchased Loan (if any).
(N) A disbursement letter from the Mortgagor to the
original mortgagee or other evidence that the Purchased Loan has
been fully disbursed (if applicable).
(O) Mortgagor's certificate or title affidavit (if
any).
(P) A survey of the Mortgaged Property (if any) as
accepted by the title company for issuance of the Title Policy.
(Q) The original of any participation agreement,
intercreditor agreement and/or servicing agreement executed in
connection with such Purchased Loan.
(R) A copy of all servicing agreements and Servicing
Records related to such Purchased Loan, which Seller shall
deliver to Servicer (with a copy to Buyer).
(S) A copy of the Mortgagor's opinions of counsel.
(T) An assignment of any management agreements,
permits, contracts and other material agreements (if any).
(U) Reports of UCC, tax lien, judgment and litigation
searches as requested by Buyer, conducted by search firms
reasonably acceptable to Buyer with respect to the Purchased
Loan, Seller and the related underlying obligor, such searches to
be conducted in each location Buyer shall reasonably designate
and such reports reasonably satisfactory to Buyer.
(V) If the Mortgagor is an Affiliate of Seller, pledge
agreement and any UCC financing statements, executed by the
owner(s) of all the equity interests of the Mortgagor as debtor
in favor of Seller as secured party (which pledge agreement and
UCC financing statements shall be assigned by Seller to Buyer),
covering all equity interests in the Mortgagor, if not previously
delivered to Buyer, together with any related original
certificates of equity ownership and blank assignments thereof,
all to give Buyer a security interest in such equity as
additional collateral for Seller's obligations.
(W) The original or a copy of the intercreditor or
loan coordination agreement (if any) executed in connection with
the Purchased Loan to the extent the subject borrower, or an
affiliate thereof, has encumbered its assets with senior, junior
or similar financing, whether mortgage financing or mezzanine
loan financing.
(X) Copies of all documents relating to the formation
and organization of the related obligor under such Purchased
Loan, together with all consents and resolutions delivered in
connection with such obligor's obtaining such Purchased Loan.
32
(Y) All other material documents and instruments
evidencing, guaranteeing, insuring or otherwise constituting or
modifying or otherwise affecting such Purchased Loan, or
otherwise executed or delivered in connection with, or otherwise
relating to, such Purchased Loan, including all documents
establishing or implementing any lockbox pursuant to which Seller
is entitled to receive any payments from cash flow of the
underlying real property.
If Seller cannot deliver, or cause to be delivered, any of the documents
and/or instruments required above to be delivered as originals, Seller shall
deliver a photocopy thereof and, unless waived by Buyer, an Officer's
Certificate of Seller certifying that such copy represents a true and correct
copy of the original. Seller shall then, in the event that Seller has a
legitimate and reasonable opportunity to obtain the original documents in
question if the document in question exists in original form (1) use reasonable
efforts to obtain and deliver the original document within 180 days after the
related Purchase Date (or such longer period after the related Purchase Date as
Buyer may consent to, which consent shall not be unreasonably withheld so long
as Seller is, as certified in writing to Buyer no less often than monthly, in
good faith attempting to obtain the original) and (2) after the expiration of
such reasonable efforts period, deliver to Buyer a certification that states,
despite Seller's reasonable efforts, Seller was unable to obtain such original
document.
(ii) With respect to each Purchased Loan which is a Mezzanine
Loan secured by a pledge of the equity ownership interests in an entity
that owns Eligible Property, the following, as applicable:
(A) The original Mezzanine Note signed in connection
with the Purchased Loan bearing all intervening endorsements,
endorsed "Pay to the order of __________ without recourse" and
signed in the name of the Last Endorsee by an authorized Person
(in the event that the Mezzanine Note was acquired by the Last
Endorsee in a merger, the signature must be in the following
form: "[Last Endorsee], successor by merger to [name of
predecessor]"; in the event that the Purchased Loan was acquired
or originated by the Last Endorsee while doing business under
another name, the signature must be in the following form: "[Last
Endorsee], formerly known as [previous name]") or a lost note
affidavit in a form reasonably approved by Buyer with a copy of
the applicable Mezzanine Note attached thereto.
(B) The original or a copy of the loan agreement and
the guarantee, if any, executed in connection with the Purchased
Loan.
(C) The original or a copy of the intercreditor or
loan coordination agreement executed in connection with the
Purchased Loan to the extent the subject borrower, or an
affiliate thereof, has encumbered its assets with senior, junior
or similar financing, whether mortgage financing or mezzanine
loan financing.
(D) The original security agreement executed in
connection with the Purchased Loan.
(E) Copies of all documents relating to the formation
and organization of the borrower under such Purchased Loan,
together with all consents and resolutions delivered in
connection with such borrower's obtaining the Purchased Loan.
(F) All other material documents and instruments
evidencing, guaranteeing, insuring or otherwise constituting or
modifying or otherwise affecting such Purchased
33
Loan, or otherwise executed or delivered in connection with, or
otherwise relating to, such Purchased Loan, including all
documents establishing or implementing any lockbox pursuant to
which Seller is entitled to receive any payments from cash flow
of the underlying real property.
(G) An omnibus assignment to Buyer or other documents
necessary and sufficient to transfer to Buyer all of Seller's
right, title and interest in and to the Purchased Loan.
(H) The original of any participation agreement,
intercreditor agreement and/or servicing agreement executed in
connection with such Purchased Loan.
(I) A copy of all servicing agreements and Servicing
Records related to such Purchased Loan, which Seller shall
deliver to Servicer (with a copy to Buyer).
(J) A copy of the borrower's opinions of counsel.
(K) A copy of the UCC financing statements, certified
as true and correct by Seller, and all necessary UCC continuation
statements with evidence of filing thereon or copies thereof
certified by Seller to have been sent for filing, and UCC
assignments to Buyer, which UCC assignments shall be in form and
substance acceptable for filing in the applicable jurisdictions.
(L) The original certificates representing the pledged
equity interests to the extent applicable.
(M) Stock or similar powers relating to each pledged
equity interest, executed in blank, if such equity interests are
in certificated form.
(N) Assignment of any management agreements,
agreements among equity interest holders or other material
contracts.
(O) If the pledged equity interests are not
certificated, evidence (which may be an Officer's Certificate
confirming such circumstances or in the form of an executed
instruction to register such pledge by the mezzanine borrower and
acknowledgment by the entity in which such pledged equity
interests are held) that the pledged equity interests have been
transferred to, or otherwise made subject to a first priority
security interest in favor of, Seller.
(P) Copies of all material documents evidencing or
securing the related mortgage loan and any other documents
affecting the related mortgaged property to the extent in
possession of Seller.
(Q) If the mezzanine borrower is an Affiliate of
Seller, a pledge agreement and any UCC financing statements,
executed by the owner(s) of all the equity interests of the
mezzanine borrower as debtor in favor of Seller as secured party
(which pledge agreement and UCC financing statements shall be
transferred by Seller to Buyer), covering all equity interests in
the mezzanine borrower, if not previously delivered to Buyer,
together with any related original certificates of equity
ownership and blank assignments thereof, all to give Buyer a
security interest in such equity as additional collateral for
Seller's obligations.
34
(R) Evidence that the Purchased Loan has been fully
disbursed (if applicable).
If Seller cannot deliver, or cause to be delivered, any of the documents
and/or instruments referred to above, required to be delivered as originals,
Seller shall deliver a photocopy thereof and, unless waived by Buyer, an
Officer's Certificate of Seller certifying that such copy represents a true and
correct copy of the original. Seller shall then, in the event that Seller has a
legitimate and reasonable opportunity to obtain the original documents in
question if the document in question exists in original form (1) use reasonable
efforts to obtain and deliver the original document within 180 days after the
related Purchase Date (or such longer period after the related Purchase Date as
Buyer may consent to, which consent shall not be unreasonably withheld so long
as Seller is, as certified in writing to Buyer no less often than monthly, in
good faith attempting to obtain the original) and (2) after the expiration of
such reasonable efforts period, deliver to Buyer a certification that states,
despite Seller's reasonable efforts, Seller was unable to obtain such original
document.
(iii) With respect to each Purchased Loan which is of the type
described in clause (iv) of the definition of Eligible Loan, any of the
documentation referred to above in Section 7(b)(i) and (ii) which is
reasonably determined by the Buyer to be necessary to effectuate the
sale, transfer, conveyance and assignment of such Purchased Loan.
(c) From time to time, Seller shall forward to the Custodian additional
original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Purchased Loan approved in
accordance with the terms of the Agreement, and upon receipt of any such other
documents, the Custodian shall hold such other documents on behalf of Buyer and
as Buyer shall request from time to time. With respect to any documents which
have been delivered or are being delivered to recording offices for recording
and have not been returned to Seller in time to permit their delivery hereunder
at the time required, in lieu of delivering such original documents, Seller
shall deliver to Buyer a true copy thereof with an officer's certificate
certifying that such copy is a true, correct and complete copy of the original,
which has been transmitted for recordation. Seller shall deliver such original
documents to the Custodian promptly when they are received. With respect to all
of the Purchased Loans delivered by Seller to Buyer or its designee (including
the Custodian), Seller shall execute an omnibus power of attorney substantially
in the form of Exhibit IV-1 attached hereto irrevocably appointing Buyer its
attorney-in-fact with full power to (i) complete and record any Assignment of
Mortgage, (ii) complete the endorsement of any Mortgage Note or Mezzanine Note
and (iii) take such other steps as may be necessary or desirable to enforce
Buyer's rights against any Purchased Loans and the related Purchased Loan Files
and the Servicing Records. Buyer shall deposit the Purchased Loan Files
representing the Purchased Loans, or cause the Purchased Loan Files to be
deposited directly, with the Custodian to be held by the Custodian on behalf of
Buyer. The Purchased Loan Files shall be maintained in accordance with the
Custodial Agreement. Any Purchased Loan Files not delivered to Buyer or its
designee (including the Custodian) are and shall be held in trust by Seller or
its designee for the benefit of Buyer as the owner thereof. Seller or its
designee shall maintain a copy of the Purchased Loan File and the originals of
the Purchased Loan File not delivered to Buyer or its designee. The possession
of the Purchased Loan File by Seller or its designee is at the will of Buyer for
the sole purpose of servicing the related Purchased Loan, and such retention and
possession by Seller or its designee is in a custodial capacity only. The books
and records (including, without limitation, any computer records or tapes) of
Seller or its designee shall be marked appropriately to reflect clearly the
transfer, subject to the terms and conditions of the Agreement, of the related
Purchased Loan to Buyer. Seller or its designee (including the Custodian) shall
release its custody of the Purchased Loan File only in accordance with written
instructions from Buyer, unless such release is required as incidental to the
servicing of the Purchased Loans or is in connection with a repurchase of any
Purchased Loan by Seller or is pursuant to the order of a court of competent
jurisdiction.
35
(d) In addition to any documents or instruments that are required to be
delivered by Seller to Buyer hereunder in connection with the transfer of
Purchased Loans by Seller to Buyer, on the date of the Agreement, Buyer shall
have received all of the following items and documents, each of which shall be
satisfactory to Buyer in form and substance:
(i) Transaction Documents.
(A) The Agreement (including this Annex I), duly
executed and delivered by Seller and Buyer;
(B) The Custodial Agreement, duly executed and
delivered by Seller, Buyer and Custodian;
(C) The Fee Letter, duly executed and delivered by
Seller and Buyer;
(D) The Blocked Account Agreement, duly executed and
delivered by Seller, Buyer and Depository Bank; and
(E) The Servicing Agreement, duly executed and
delivered by Seller, Buyer and Servicer.
(ii) Organizational Documents. Certified copies of the Seller's
organizational documents and resolutions or other documents evidencing
the authority of Seller with respect to the execution, delivery and
performance of the Transaction Documents to which it is a party and each
other document to be delivered by Seller from time to time in connection
with the Transaction Documents (and Buyer may conclusively rely on such
certifications until it receives notice in writing from Seller to the
contrary);
(iii) Legal Opinion. An opinion of counsel to the Seller as to
the enforceability of the Agreement (including this Annex I) and the
other documents executed and delivered in connection herewith; and
(iv) Other Documents. Such other documents as Buyer may
reasonably request.
8. CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE PURCHASED LOANS
Paragraph 8 of the Agreement ("Segregation of Purchased Securities") is
hereby deleted and replaced in its entirety by the following provisions of this
Section 8:
(a) Subject to the terms and conditions of the Agreement, title to all
Purchased Loans shall pass to Buyer on the applicable Purchase Date, and Buyer
shall have free and unrestricted use of its interest in the Purchased Loans in
accordance with the terms and conditions of the Purchased Loans. Nothing in the
Agreement or any other Transaction Document shall preclude Buyer from engaging
in repurchase transactions with the Purchased Loans with Persons in conformity
with the terms and conditions of the Purchased Loans or otherwise selling,
transferring, pledging, repledging, hypothecating, or rehypothecating all or a
portion of its interest in the Purchased Loans to Persons in conformity with the
terms and conditions to the Purchased Loans, but no such transaction shall
relieve Buyer of its obligations to transfer the Purchased Loans to Seller
pursuant to Section 3 of this Annex I or of Buyer's obligation to credit or pay
Income to, or apply Income to the obligations of, Seller pursuant to Section 5
of this Annex I or otherwise affect the rights, obligations and remedies of any
party to the Agreement. Any such repurchase transaction and any pledge,
repledge, hypothecation or rehypothecation in connection with a
36
Financing Transaction may be to any Person other than a Disqualified Transferee;
provided that Buyer, other than in connection with a Financing Transaction, may
assign or participate its rights' under the Transaction Documents or any
Transaction only in accordance with Section 17 of this Annex I, unless an Event
of Default shall have occurred and be continuing or the prior written consent of
Seller has been obtained by Buyer.
(b) Subject to the terms and conditions of the Agreement, any documents
delivered to the Custodian pursuant to Section 7(b) and 7(c) of this Annex I
shall only be released in accordance with the terms and conditions of the
Custodial Agreement.
9. SUBSTITUTION
Paragraph 9 of the Agreement ("Substitution") is hereby deleted and
replaced in its entirety by the following provisions of this Section 9:
(a) In the case of any Transaction for which the Repurchase Date is
other than the Business Day immediately following the Purchase Date, Seller
shall have the right, subject to the proviso to this sentence, upon notice to
Buyer, which notice shall be given at or prior to 10:00 a.m. (New York time) on
such Business Day, to substitute substantially the same Eligible Loans for any
Purchased Loans, provided, however, that Buyer may elect, by the close of
business on the Business Day notice is received, or by the close of the next
Business Day if notice is given after 10:00 a.m. (New York time) on such day,
not to accept such substitution in its sole and absolute discretion. In the
event such substitution is accepted by Buyer, such substitution shall be made by
Seller's transfer to Buyer of such other Eligible Loans and Buyer's transfer to
Seller of such Purchased Loans, and after substitution, the substituted Eligible
Loans shall be deemed to be Purchased Loans subject to the terms of the
Agreement (including but not limited to the margin provisions of Section 4 of
this Annex I). Each such substitution shall be deemed to be a representation and
warranty by Seller that each substitute loan is an Eligible Loan and that after
giving effect to such substitution, the aggregate Repurchase Price of the
Portfolio Loans shall not exceed the aggregate Asset Base. In the event Buyer
elects not to accept such substitution, Buyer shall offer Seller the right to
terminate the Transaction.
(b) In the event Seller exercises its right to substitute or terminate
under sub-paragraph (a), Seller shall be obligated to pay to Buyer, by the close
of the Business Day of such substitution or termination, as the case may be, an
amount equal to (A) Buyer's actual out-of-pocket cost (including all fees
(including reasonable attorneys fees), expenses and commissions) of (i) entering
into replacement transactions; (ii) entering into or terminating hedge
transactions; and/or (iii) terminating transactions or substituting mortgage
loans in like transactions with third parties in connection with or as a result
of such substitution or termination, and (B) to the extent Buyer determines not
to enter replacement transactions, the loss incurred by Buyer directly arising
or resulting from such substitution or termination. The foregoing amounts shall
be solely determined and calculated by Buyer in good faith.
10. REPRESENTATIONS
Paragraph 10 of the Agreement ("Representations") is hereby supplemented
by the following:
(a) Seller represents and warrants to Buyer that as of the Purchase Date
for the purchase of any Purchased Loan by Buyer from Seller and any Transaction
thereunder and as of the date of the Agreement and at all times while the
Agreement and any Transaction thereunder is in full force and effect:
37
(i) Organization. Seller is duly organized, validly existing and
in good standing under the laws and regulations of the state of Seller's
organization and is duly licensed, qualified, and in good standing in
every state where such licensing or qualification is necessary for the
transaction of Seller's business, except where lack of such licenses or
qualifications would not be reasonably likely to result in a Material
Adverse Effect. Seller has the power to own and hold the assets it
purports to own and hold, and to carry on its business as now being
conducted and proposed to be conducted, and has the power to execute,
deliver, and perform its obligations under the Agreement and the other
Transaction Documents.
(ii) Due Execution; Enforceability. The Transaction Documents
have been duly executed and delivered by Seller, for good and valuable
consideration. The Transaction Documents constitute the legal, valid and
binding obligations of Seller, enforceable against Seller in accordance
with their respective terms subject to bankruptcy, insolvency, and other
limitations on creditors' rights generally and to equitable principles.
(iii) Non-Contravention; Consents. Neither the execution and
delivery of the Transaction Documents, nor consummation by Seller of the
transactions contemplated by the Transaction Documents (or any of them),
nor compliance by Seller with the terms, conditions and provisions of
the Transaction Documents (or any of them) will (x) conflict with or
result in a breach or violation of any of the terms, conditions or
provisions of any judgment or order, writ, injunction, decree or demand
of any court applicable to Seller, or (y) result in the creation or
imposition of any lien or any other encumbrance upon any of the assets
of Seller, other than pursuant to the Transaction Documents. Seller has
all necessary licenses, permits and other consents from Governmental
Authorities necessary to acquire, own and sell the Portfolio Loans and
for the performance of its obligations under the Transaction Documents
except where the failure to have any such license, permit or consent
would not be reasonably likely to result in a Material Adverse Effect.
(iv) Litigation; Requirements of Law. There is no action, suit,
proceeding, investigation, or arbitration pending or, to the best
knowledge of Seller, threatened against Seller, or any of its assets
which may result in any Material Adverse Effect, or which may have an
adverse effect on the validity of the Transaction Documents or any
action taken or to be taken in connection with the obligations of Seller
under any of the Transaction Documents. Seller is in compliance in all
material respects with all Requirements of Law. Seller is not in default
in any material respect with respect to any judgment, order, writ,
injunction, decree, rule or regulation of any arbitrator or Governmental
Authority.
(v) No Broker. Seller has not dealt with any broker, investment
banker, agent or other Person (other than Buyer or an Affiliate of
Buyer) who may be entitled to any commission or compensation in
connection with the sale of the Purchased Loans pursuant to any
Transaction Documents.
(vi) Good Title to Purchased Loans. Immediately prior to the
purchase of any Purchased Loans by Buyer from Seller, such Purchased
Loans are free and clear of any lien, security interest, claim, option,
charge, encumbrance or impediment to transfer (including any "adverse
claim" as defined in Section 8-102(a)(1) of the UCC), and are not
subject to any rights of setoff, any prior sale, transfer, assignment,
or participation by Seller or any agreement by Seller to assign, convey,
transfer or participate, in whole or in part, and Seller is the sole
legal record and beneficial owner of and owns and has the right to sell
and transfer such Purchased Loans to Buyer and, upon transfer of such
Purchased Loans to Buyer, Buyer shall be the owner of such Purchased
Loans (other than for U.S. Federal, state and local income and franchise
tax
38
purposes) free of any adverse claim, subject to Seller's rights pursuant
to the Agreement. In the event the related Transaction is
recharacterized as a secured financing of the Purchased Loans and with
respect to the security interests granted in Sections 6(c) and 6(d), the
provisions of the Agreement are effective to create in favor of Buyer a
valid security interest in all rights, title and interest of Seller in,
to and under the Purchased Loans and the collateral specified in
Sections 6(c) and 6(d), Buyer shall have a valid, perfected and
enforceable first priority security interest in the Purchased Loans and
such other collateral, subject to no lien or rights of others other than
as granted herein.
(vii) No Default. No Default or Event of Default exists under or
with respect to the Transaction Documents.
(viii) Representations and Warranties Regarding Purchased Loans;
Delivery of Purchased Loan File. Seller represents and warrants to Buyer
that each Purchased Loan sold hereunder and each pool of Purchased Loans
sold in a Transaction hereunder, as of the applicable Purchase Date for
the Transaction in question conforms to the applicable representations
and warranties set forth in Exhibit V attached hereto, except shall have
been disclosed to Buyer in writing prior to Buyer's issuance of a
Confirmation with respect to the related Purchased Loan. It is
understood and agreed that the representations and warranties set forth
in Exhibit V hereto, if any, shall survive delivery of the respective
Purchased Loan File to Buyer or its designee (including the Custodian).
With respect to each Purchased Loan, the Mortgage Note or Mezzanine
Note, the Mortgage (if any), the Assignment of Mortgage (if any) and any
other documents required to be delivered under the Agreement and the
Custodial Agreement for such Purchased Loan have been delivered (or with
respect to Table Funded Loans shall be delivered in accordance with
Section 7(b)) to Buyer or the Custodian on its behalf or such
requirement will have been expressly waived in writing by Buyer. Seller
or its designee is in possession of a complete, true and accurate
Purchased Loan File with respect to each Purchased Loan, except for such
documents the originals of which have been delivered to the Custodian.
(ix) Adequate Capitalization; No Fraudulent Transfer. Seller has,
as of such Purchase Date, adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in
light of its contemplated business operations. Seller is generally able
to pay, and as of the date hereof is paying, its debts as they come due.
Seller has not become, or is presently, financially insolvent nor will
Seller be made insolvent by virtue of Seller's execution of or
performance under any of the Transaction Documents within the meaning of
the bankruptcy laws or the insolvency laws of any jurisdiction. Seller
has not entered into any Transaction Document or any Transaction
pursuant thereto in contemplation of insolvency or with intent to
hinder, delay or defraud any creditor. Seller has not received any
written notice that any payment or other transfer made to or on account
of Seller from or on account of any Mortgagor or any other person
obligated under any Purchased Loan Documents is or may be void or
voidable as an actual or constructive fraudulent transfer or as a
preferential transfer.
(x) Organizational Documents. Seller has delivered to Buyer
certified copies of its organizational documents, together with all
amendments thereto.
(xi) No Encumbrances. There are (i) no outstanding rights,
options, warrants or agreements on the part of Seller for a purchase,
sale or issuance, in connection with the Purchased Loans and (ii) no
agreements on the part of Seller to issue, sell or distribute the
Purchased Loan.
(xii) Federal Regulations. Seller is not (A) an "investment
company," or a company "controlled by an investment company," within the
meaning of the Investment Company Act of
39
1940, as amended, or (B) a "holding company," or a "subsidiary company
of a holding company," or an "affiliate" of either a "holding company"
or a "subsidiary company of a holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
(xiii) Taxes. Seller has filed or caused to be filed all tax
returns which would be delinquent if they had not been filed on or
before the date hereof and has paid all taxes due and payable on or
before the date hereof and all other taxes, fees or other charges
imposed on it and any of its assets by any Governmental Authority; no
tax liens have been filed against any of Seller's assets and, to
Seller's knowledge, no claims are being asserted with respect to any
such taxes, fees or other charges.
(xiv) ERISA. Neither Seller nor any ERISA Affiliate (a) sponsors
or maintains any Plans or (b) makes any contributions to or has any
liabilities or obligations (direct or contingent) with respect to any
Plans. Seller does not, and would not be deemed to, hold Plan Assets and
the consummation of the transactions contemplated by the Agreement will
not constitute or result in any non-exempt prohibited transaction under
Section 406 of ERISA, Section 4975 of the Code or substantially similar
provisions under any other federal, state or local laws, rules or
regulations.
(xv) Judgments/Bankruptcy. Except as disclosed in writing to
Buyer, there are no judgments against Seller or unsatisfied of record or
docketed in any court located in the United States of America and no Act
of Insolvency has ever occurred with respect to Seller.
(xvi) Full and Accurate Disclosure. No information contained in
the Transaction Documents, or any written statement furnished by or on
behalf of Seller pursuant to the terms of the Transaction Documents,
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they
were made when such statements and omissions are considered in the
totality of the circumstances in question.
(xvii) Financial Information. All financial data concerning
Seller and to Seller's knowledge after due inquiry, the Purchased Loans
that has been delivered by or on behalf of Seller to Buyer is true,
complete and correct in all material respects and has been prepared in
accordance with GAAP. Since the delivery of such data, except as
otherwise disclosed in writing to Buyer, there has been no change in the
financial position of Seller or the Purchased Loans, or in the results
of operations of Seller, which change is reasonably likely to have in a
Material Adverse Effect on Seller.
(xviii) Jurisdiction of Organization. The Seller's jurisdiction
of organization is the State of Maryland.
(xix) Regulation T, U and X. Neither the entering into or
consummation of any Transaction hereunder, nor the use of the proceeds
thereof, will violate any provisions of Regulation T, U or X. If
requested by Buyer, Seller, any applicable Affiliate of Seller and the
recipient of any portion of the proceeds of, or any portion of, any
Transaction shall furnish to Buyer a statement on Federal Reserve Form
G-3 referred to in Regulation U.
(b) On the Purchase Date for any Transaction, Seller shall be deemed to
have made all of the representations set forth in Paragraph 10 of the Agreement
and Section 10(a) of this Annex I as of such Purchase Date.
40
11. NEGATIVE COVENANTS OF SELLER
On and as of the date hereof and each Purchase Date and until the
Agreement is no longer in force with respect to any Transaction, Seller shall
not without the prior written consent of Buyer:
(a) subject to Seller's right to repurchase, take any action which would
directly or indirectly impair or adversely affect Buyer's title to the Purchased
Loans;
(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or
otherwise dispose of, or pledge or hypothecate, directly or indirectly, any
interest in the Purchased Loans (or any of them) to any Person other than Buyer,
or engage in repurchase transactions or similar transactions with respect to the
Purchased Loans (or any of them) with any Person other than Buyer, except where
the Purchased Loans in question are simultaneously repurchased from Buyer;
(c) create, incur or permit to exist any lien, encumbrance or security
interest in or on the Purchased Loans, except as described in Section 6 of this
Annex I;
(d) create, incur or permit to exist any lien, encumbrance or security
interest in or on any of the other collateral subject to the security interest
granted by Seller pursuant to Section 6 of this Annex I;
(e) create, incur or permit any lien, security interest, charges, or
encumbrances with respect to any Hedging Transaction for the benefit of any
Person other than Buyer;
(f) terminate any of the organizational documents of Seller;
(g) consent or assent to a Significant Modification or any extension or
or termination of any note, loan agreement, mortgage, pledge agreement or
guaranty relating to the Purchased Loans or other material agreement or
instrument relating to the Purchased Loans without the prior written consent of
Buyer;
(h) take any action or permit such action to be taken which would result
in a Change in Control;
(i) after the occurrence and during the continuation of any Event of
Default or monetary Default, make any distribution, payment on account of, or
set apart assets for, a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of any equity or
ownership interest of Seller, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of Seller; or
(j) sponsor or maintain any Plans or make any contributions to, or have
any liability or obligation (direct or contingent) with respect to any Plan and
shall not permit any ERISA Affiliate to sponsor or maintain any Plans or make
any contributions to, or have any liability or obligation (direct or contingent)
with respect to any Plan;
(k) engage in any transaction that would cause any obligation or action
taken or to be taken hereunder (or the exercise by Buyer of any of its rights
under the Agreement, the Purchased Loans or any Transaction Document) to be a
non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code or substantially similar provisions under any other federal, state or
local laws, rules or regulations; or
(l) make any future advances under any Purchased Loan to any underlying
obligor which are not permitted by the related Purchased Loan Documents.
41
12. AFFIRMATIVE COVENANTS OF SELLER
(a) Seller shall promptly notify Buyer of any event and/or condition
which is likely to have a Material Adverse Effect.
(b) Seller shall give notice to Buyer of the following (accompanied by
an Officer's Certificate setting forth details of the occurrence referred to
therein and stating what actions Seller has taken or proposes to take with
respect thereto):
(i) promptly upon receipt of notice or knowledge of the
occurrence of any Default or Event of Default;
(ii) with respect to any Purchased Loan sold to Buyer hereunder,
immediately upon receipt of any Principal Payment (in full or in part);
(iii) with respect to any Purchased Loan sold to Buyer hereunder,
immediately upon receipt of notice or knowledge that the related
Mortgaged Property has been damaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty, or otherwise
damaged so as to affect adversely the value of such Mortgaged Property;
(iv) promptly upon receipt of notice or knowledge of (i) any
Purchased Loan which becomes a Defaulted Loan, (ii) any lien or security
interest (other than security interests created hereby) on, or claim
asserted against, any Purchased Loan or, to Seller's knowledge, the
underlying collateral therefor or (iii) any event or change in
circumstances that has or could reasonably be expected to have an
adverse affect on the Market Value of a Purchased Loan; and
(v) promptly, and in any event within 10 days after service of
process on any of the following, give to Buyer notice of all litigation,
actions, suits, arbitrations, investigations (including, without
limitation, any of the foregoing which are pending or threatened) or
other legal or arbitrable proceedings affecting Seller or affecting any
of the assets of Seller before any Governmental Authority that (i)
questions or challenges the validity or enforceability of any of the
Transaction Documents or any action to be taken in connection with the
transactions contemplated hereby, (ii) makes a claim or claims in an
aggregate amount greater than $5,000,000, or (iii) which, individually
or in the aggregate, if adversely determined could reasonably be likely
to have a Material Adverse Effect.
(c) Seller shall provide Buyer with copies of such documents as Buyer
may reasonably request evidencing the truthfulness of the representations set
forth in Section 10.
(d) Seller shall defend the right, title and interest of Buyer in and to
the Purchased Loans against, and take such other action as is necessary to
remove, the liens, security interests, claims, encumbrances, charges and demands
of all Persons (other than security interests granted to Buyer hereunder).
(e) Seller will permit Buyer or its designated representative to inspect
any of Seller's records with respect to all or any portion of the Purchased
Loans and the conduct and operation of its business related thereto, at such
reasonable times and with reasonable frequency requested by Buyer or its
designated representative, and to make copies of extracts of any and all
thereof.
(f) If any amount payable under or in connection with any of the
Purchased Loans shall be or become evidenced by any promissory note, other
instrument or chattel paper (as each of the foregoing is defined under the UCC),
such note, instrument or chattel paper shall be immediately delivered to Buyer
or its designee, duly endorsed in a manner satisfactory to Buyer or if any
collateral or other security shall subsequently be delivered to Seller in
connection with any Purchased Loan, Seller shall immediately
42
deliver or forward such item of collateral or other security to Buyer or its
designee, together with such instruments of assignment as Buyer may request.
(g) Seller shall provide (or cause to be provided to) Buyer with the
following financial and reporting information:
(i) the Monthly Statement;
(ii) within the later of 30 days after the end of each calendar
quarter or 10 days of Seller's receipt, all operating statements and
occupancy information that Seller or Servicer has received for the
previous quarter relating to the Portfolio Loans and within the later of
45 days after the last day of each calendar quarter or 10 days of
Seller's receipt, the remainder of the operating statements and
occupancy information for the previous quarter relating to the Portfolio
Loans;
(iii) as soon as available and in any event within forty-five
(45) days after the end of each of the first three quarterly fiscal
periods of each fiscal year of Seller, the unaudited, consolidated
balance sheets of Seller, which shall incorporate its consolidated
subsidiaries, as at the end of such period and the related unaudited,
consolidated statements of income and retained earnings and of cash
flows for Seller, which shall incorporate its consolidated Subsidiaries,
for such period and the portion of the fiscal year through the end of
such period, accompanied by an Officer's Certificate of Seller, which
certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations Seller and its consolidated Subsidiaries in accordance with
GAAP, consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(iv) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of Seller, the consolidated
balance sheets of Seller, which shall incorporate its consolidated
Subsidiaries, as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash
flows for Seller, which shall incorporate its consolidated Subsidiaries,
for such year, accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall not be qualified as to scope of audit or going concern and
shall state that said consolidated financial statements fairly present
the consolidated financial condition and results of operations of Seller
and its consolidated Subsidiaries as at the end of, and for, such fiscal
year in accordance with GAAP;
(v) within forty-five (45) days following the end of each
quarter, or within ninety (90) days following the end of each fiscal
year, as the case may be, an Officer's Certificate of Seller in form and
substance reasonably satisfactory to Buyer that Seller during such
fiscal period or year has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in the
Agreement and the other Transaction Documents to be observed, performed
or satisfied by it, and that there has been no Event of Default and no
event or circumstance has occurred that is reasonably likely to result
in a Material Adverse Effect;
(vi) within fifteen (15) Business Days after Buyer's request,
such further information with respect to the operation of any Mortgaged
Property, Purchased Loan, the financial affairs of the Seller and any
Plan and Multiemployer Plan as may be requested by Buyer, including all
business plans prepared by or for Seller; provided, however, that with
respect to information not previously known to, or in the possession of,
Seller relating to any Multiemployer Plan, Seller shall only be required
to provide such information as may be obtained through good faith
efforts;
43
(vii) within sixty (60) Business Days after the end of each
calendar year, such information as may be requested by Buyer, its
successors and assigns, and transferees, in connection with the
Portfolio Loans, and that are necessary for the party requesting such
information in preparing its tax return and paying taxes in any country
or jurisdiction where such tax return or taxes are due; and
(viii) such other reports as Buyer shall reasonably require.
(h) Seller shall at all times comply in all material respects with all
laws, ordinances, rules and regulations of any federal, state, municipal or
other public authority having jurisdiction over Seller or any of its assets and
Seller shall do or cause to be done all things reasonably necessary to preserve
and maintain in full force and effect its legal existence, and all licenses
material to its business.
(i) Seller shall at all times keep proper books of records and accounts
in which full, true and correct entries shall be made of its transactions in
accordance with GAAP and set aside on its books from its earnings for each
fiscal year all such proper reserves in accordance with GAAP.
(j) Seller shall observe, perform and satisfy all the terms, provisions,
covenants and conditions required to be observed, performed or satisfied by it,
and shall pay when due all costs, fees and expenses required to be paid by it,
under the Transaction Documents. Seller shall pay and discharge all taxes,
levies, liens and other charges, if any, on its assets and on the Purchased
Loans that, in each case, in any manner would create any lien or charge upon the
Purchased Loans, except for any such taxes as are being appropriately contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided in accordance with GAAP.
(k) Seller shall maintain its existence as corporation, organized solely
and in good standing under the law of the State of Maryland and shall not
dissolve, liquidate, merge with or into any other Person or otherwise change its
organizational structure or identity or incorporate in any other jurisdiction
unless Seller shall have notified Buyer in writing at least 30 days prior to any
intent not to so maintain its existence and, in connection with a merger, (i)
the surviving or resulting entity shall be a corporation or partnership
organized under the laws of the United States or any state thereof; (ii) such
entity shall expressly assume by written agreement, in form and substance
satisfactory to Buyer in Buyer's sole discretion, the performance of all of
Seller's duties and obligations hereunder and the Transaction Documents and
(iii) such entity shall be at least as creditworthy as Seller, as determined by
Buyer in Buyer's sole and absolute discretion; and provided, further, that after
giving effect thereto, no Default or Event of Default would exist hereunder.
(l) Seller shall maintain all records with respect to the Purchased
Loans and the conduct and operation of its business with no less a degree of
prudence than if the Purchased Loans were held by Seller for its own account and
will furnish Buyer, upon request by Buyer or its designated representative, with
information reasonably obtainable by Seller with respect to the Purchased Loans
and the conduct and operation of its business.
(m) Seller shall provide Buyer with notice of each modification of any
Purchased Loan Documents consented to by Seller (including such modifications
which do not constitute a Significant Modification).
(n) Seller shall provide Buyer with notice of the occurrence of any
"appraisal reduction event", "control appraisal period" or similar event under
any participation agreement related to any Purchased Loan.
44
(o) Seller shall provide Buyer with reasonable access to operating
statements, the occupancy status and other property level information, with
respect to the Mortgaged Properties, plus any such additional reports as Buyer
may reasonably request.
(p) Seller may propose, and Buyer will consider but shall be under no
obligation to approve, strategies for the foreclosure or other realization upon
the security for any Purchased Loan that has become a Defaulted Loan.
(q) Seller shall (or shall cause Servicer to) provide to Buyer on the
fifteenth calendar day of each month, or if such day is not a Business Day then
on the first Business Day immediately following such day, a computer readable
file containing servicing information, including without limitation those fields
specified by Buyer from time to time, on a loan-by-loan basis and in the
aggregate, with respect to the Purchased Loans serviced hereunder by Seller or
any Servicer. Seller shall not cause any Purchased Loan to be serviced by any
servicer other than a servicer expressly approved in writing by Buyer.
(r) Seller shall not engage in any transaction that would cause any
obligation or action taken or to be taken hereunder (or the exercise by Buyer of
any of its rights under the Agreement, the Purchased Loans or any Transaction
Document) to be a non-exempt prohibited transaction under Section 406 of ERISA,
Section 4975 of the Code or substantially similar provisions under any other
federal, state or local laws, rules or regulations.
13. [INTENTIONALLY OMITTED.]
14. EVENTS OF DEFAULT; REMEDIES
Paragraph 11 ("Events of Default") of the Agreement is hereby amended by
the deletion of clauses (i), (ii) and (vi) in the first paragraph thereof, by
the deletion in their entirety of Paragraphs 11(a) through (g) thereof and by
the addition of the provisions (a) through (c) of this Section 14 set forth
below; the words "Prime Rate" in Paragraph 11 (h) of the Agreement are hereby
deleted and replaced with the words "Alternative Rate":
(a) The following, together with clauses (iii) through (v) and clause
(vii) of the first paragraph of Paragraph 11 of the Agreement, shall constitute
an event of default hereunder (each an "Event of Default"):
(i) failure of Seller to repurchase or the failure of Buyer to
transfer the Purchased Loan on the applicable Repurchase Date (except
when such failure to transfer is a result of Buyer's inability to obtain
necessary consents to, or fulfill restrictions on, such transfer);
(ii) failure of Seller to apply any Income received by Seller in
accordance with the provisions hereof;
(iii) (A) the Transaction Documents shall for any reason not
cause, or shall cease to cause, Buyer to be the owner or, if
recharacterized as a secured financing, a secured party with respect to
any of the Purchased Loans or the collateral specified in Sections 6(c)
and 6(d) free of any adverse claim, liens and other rights of others
(other than as granted herein) or (B) if a Transaction is
recharacterized as a secured financing, the Transaction Documents with
respect to any Transaction shall for any reason cease to create a valid
first priority security interest in favor of Buyer in any of the
Purchased Loans or the collateral specified in Sections 6(c) and 6(d) or
(C) if the Transaction Documents shall cease to be in full force and
effect or if their enforceability is challenged by Seller;
45
(iv) failure of Seller to make the payments required under
Section 5(b) on any Remittance Date which failure is not remedied within
one (1) Business Day;
(v) failure of Seller to make any other payment owing to Buyer
which has become due, whether by acceleration or otherwise, under the
terms of the Agreement which failure is not remedied within the
applicable period (in the case of a failure pursuant to Section 4) or
five Business Days after notice thereof to Seller; provided, however,
that Buyer shall not be required to provide notice in the event of a
failure by Seller to repurchase on the Repurchase Date;
(vi) failure by Seller in the due performance or observance of
any term, covenant or agreement contained in Section 11(j) or Section
12(p) of this Annex I;
(vii) Change of Control shall have occurred with respect to the
Seller;
(viii) any representation made by Seller or Buyer (other than the
representations and warranties set forth in Exhibit V hereto, which
shall be considered, except as set forth below, solely for the purpose
of determining the Market Value of the Purchased Loans) shall have been
incorrect or untrue in any material respect when made or repeated or
deemed to have been made or repeated (and, if susceptible to cure, the
breach of such representation shall not have been cured within 10
Business Days of written notice of breach thereof); provided that the
representations and warranties set forth in Section 10(a) (vi) or (viii)
(in the case of (vi), with respect to the affected or Purchased Loans
only) made by Seller shall not be considered an Event of Default if
incorrect or untrue in any material respect, if Buyer terminates the
related Transaction and Seller repurchases the related Purchased Loans
on an Early Repurchase Date no later than ten (10) Business Days after
receiving written notice of such incorrect or untrue representation (or
if the breach of such representations and warranties is susceptible to
cure, Seller effects a cure within such 10-Business Day period);
provided, however, that if Seller shall have made any such
representation (including the representations set forth in Exhibit V)
with knowledge that it was materially incorrect or untrue at the time
made, such misrepresentation shall constitute an Event of Default;
(ix) a final judgment by any competent court in the United States
of America for the payment of money in an amount greater than $5,000,000
shall have been rendered against Seller, and remained undischarged or
unpaid for a period of thirty (30) days, during which period execution
of such judgment is not effectively stayed;
(x) Seller shall have defaulted or failed to perform under any
note, indenture, loan agreement, guaranty, swap agreement or any other
contract, agreement or transaction to which it is a party, which default
(A) involves the failure to pay a matured obligation in excess of
$10,000,000, or (B) involving an obligation of at least $10,000,000 is a
monetary default or a material non-monetary default and results in
acceleration or permits the acceleration of the obligation by any other
party to or beneficiary of such note, indenture, loan agreement,
guaranty, swap agreement or other contract agreement or transaction;
provided, however, that any such default, failure to perform or breach
shall not constitute an Event of Default if Seller cures such default,
failure to perform or breach, as the case may be, within the grace
period, if any, provided under the applicable agreement; or
(xi) Seller fails to maintain a Fixed Charge Ratio of less than
1:2 and a Debt to Equity Ratio greater than 5:1 as of the end of any
fiscal quarter;
46
(xii) if Seller or Buyer shall breach or fail to perform any of
the terms, covenants, obligations or conditions of the Agreement, other
than as specifically otherwise referred to in this definition of "Event
of Default", and such breach or failure to perform is not remedied
within ten (10) Business Days, or if such breach is not curable by the
payment of a sum of money, thirty (30) days after notice thereof to
Seller or Buyer from the applicable party or its successors or assigns.
(b) If an Event of Default shall occur and be continuing with respect to
Seller, the following rights and remedies shall be available to Buyer:
(i) At the option of Buyer, exercised by written notice to Seller
(which option shall be deemed to have been exercised, even if no notice
is given, immediately upon the occurrence of an Act of Insolvency), the
Repurchase Date for each Transaction hereunder shall, if it has not
already occurred, be deemed immediately to occur (the date on which such
option is exercised or deemed to have been exercised being referred to
hereinafter as the "Accelerated Repurchase Date") (and any Transaction
for which the related Purchase Date has not yet occurred shall be
canceled).
(ii) If Buyer exercises or is deemed to have exercised the option
referred to in Section 14(b)(i):
(A) Seller's obligations hereunder to repurchase
all Purchased Loans shall become immediately
due and payable on and as of the Accelerated
Repurchase Date and all Income deposited in the
Blocked Account shall be retained by Buyer and
applied to the aggregate unpaid Repurchase
Price and any other amounts owing by Seller
hereunder; and
(B) to the extent permitted by applicable law, the
Repurchase Price with respect to each
Transaction (determined as of the Accelerated
Repurchase Date) shall be increased by the
aggregate amount obtained by daily application
of, on a 360 day per year basis for the actual
number of days during the period from and
including the Accelerated Repurchase Date to
but excluding the date of payment of the
Repurchase Price (as so increased), (x) the
Pricing Rate applicable upon an Event of
Default for such Transaction multiplied by (y)
the Repurchase Price for such Transaction
(decreased by (I) any amounts actually remitted
to Buyer by Seller from time to time pursuant
to Section 5 and applied to such Repurchase
Price to the extent such amounts are not
already included in the computation of the
Repurchase Price and (II) any amounts applied
to the Repurchase Price pursuant Section
14(b)(iii) of this Annex I); and
(C) the Custodian shall, upon the request of Buyer
(with simultaneous copy of such request to
Seller), deliver to Buyer all instruments,
certificates and other documents then held by
the Custodian relating to the Purchased Loans.
(iii) Buyer may, after ten (10) days notice to Seller of Buyer's
intent to take such action (which notice may be the notice given under
subsection (b)(i) of this Section 14), (A) immediately sell, at a public
or private sale in a commercially reasonable manner and at such price or
prices as Buyer may reasonably deem satisfactory any or all of the
Purchased Loans or (B) in its sole discretion elect, in lieu of selling
all or a portion of such Purchased Loans, to give
47
Seller credit for such Purchased Loans in an amount equal to the Market
Value of such Purchased Loans against the aggregate unpaid Repurchase
Price for such Purchased Loans and any other amounts owing by Seller
under the Transaction Documents. The proceeds of any disposition of
Purchased Loans effected pursuant to this Section 14(b)(iii) shall be
applied, (v) first, to the costs and expenses incurred by Buyer in
connection with Seller's default; (w) second, to costs of cover and/or
Hedging Transactions, if any; (x) third, to the Repurchase Price; (y)
fourth, to any other outstanding obligation of Seller to Buyer or its
Affiliates pursuant to the Transaction Documents, and (z) the balance,
if any, to Seller.
(iv) The parties recognize that it may not be possible to
purchase or sell all of the Purchased Loans on a particular Business
Day, or in a transaction with the same purchaser, or in the same manner
because the market for such Purchased Loans may not be liquid. In view
of the nature of the Purchased Loans, the parties agree that, to the
extent permitted by applicable law, liquidation of a Transaction or the
Purchased Loans shall not require a public purchase or sale and that a
good faith private purchase or sale shall be deemed to have been made in
a commercially reasonable manner. Accordingly, Buyer may elect, in its
sole discretion, the time and manner of liquidating any Purchased Loans,
and nothing contained herein shall (A) obligate Buyer to liquidate any
Purchased Loans on the occurrence and during the continuance of an Event
of Default or to liquidate all of the Purchased Loans in the same manner
or on the same Business Day or (B) constitute a waiver of any right or
remedy of Buyer.
(v) Seller shall be liable to Buyer for the amount of all
reasonable expenses, including reasonable legal fees and expenses,
actually incurred by Buyer in connection with or as a consequence of an
Event of Default with respect to Seller, (B) all costs incurred in
connection with covering transactions or Hedging Transactions (including
short sales) or entering into replacement transactions (C) all damages,
losses, judgment costs and expenses of any kind which may be imposed on,
incurred by or asserted against Buyer relating to or arising out of such
Hedging Transactions or covering transactions and (D) any other loss,
damage, cost or expense directly arising or resulting from the
occurrence of an Event of Default with respect to Seller.
(vi) Buyer may exercise any or all of the remedies available to
Buyer immediately upon the occurrence of an Event of Default and at any
time during the continuance thereof. All rights and remedies arising
under the Transaction Documents, as amended from time to time, are
cumulative and not exclusive of any other rights or remedies which Buyer
may have.
(vii) Buyer may enforce its rights and remedies hereunder without
prior judicial process or hearing, and Seller hereby expressly waives
any defenses Seller might otherwise have to require Buyer to enforce its
rights by judicial process. Seller also waives any defense Seller might
otherwise have arising from the use of nonjudicial process, disposition
of any or all of the Purchased Loans, or from any other election of
remedies. Seller recognizes that nonjudicial remedies are consistent
with the usages of the trade, are responsive to commercial necessity and
are the result of a bargain at arm's length.
(viii) Without limiting any other rights or remedies of Buyer,
Buyer shall have the right to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time
held by or for account of Buyer or Buyer's Affiliates on behalf of
Seller to any obligations of Seller hereunder to Buyer to the credit or
for the account of Seller against any and all of such obligations,
irrespective of whether Buyer shall have made any demand under the
Agreement or the other Transaction Documents.
48
Notwithstanding anything to the contrary in the Agreement, Buyer shall
not be required, prior to exercising any remedy in respect of any Event of
Default by Seller, to give notice otherwise required hereunder, if Buyer
reasonably believes that (A) the Purchased Loans then held by Buyer threaten to
decline speedily in value or are of a type customarily sold in a recognized
market or (B) any delay occasioned by the giving of such notice will jeopardize
Buyer's ability to recover, by sale or otherwise, all or part of the
then-outstanding amount of the Repurchase Price or of any other amounts owed to
Buyer in connection therewith.
(c) If an Event of Default occurs and is continuing with respect to
Buyer, the following rights and remedies shall be available to Seller:
(i) Upon tender by Seller of payment of the aggregate Repurchase
Price for all Purchased Loans, together with all other amounts due
hereunder to Buyer, Buyer's right, title and interest in such Purchased
Loans shall be deemed transferred to Seller, and Buyer shall
simultaneously deliver such Purchased Loans to Seller.
(ii) Seller shall have all the rights and remedies provided
herein or provided by applicable federal, state, foreign, local and any
other applicable laws, in equity, and under any other agreement between
Buyer and Seller (including the right to offset any debt or claim).
15. SINGLE AGREEMENT
Clause (ii) of Paragraph 12 of the Agreement ("Single Agreement") is
hereby deleted.
16. NOTICES AND OTHER COMMUNICATIONS
Paragraph 13 of the Agreement ("Notices and Other Communications") is
hereby deleted and replaced in its entirety by the following provisions of this
Section 16:
All notices, consents, approvals and requests required or permitted
hereunder shall be given in writing and shall be effective for all purposes if
hand delivered or sent by (a) hand delivery, with proof of attempted delivery,
(b) certified or registered United States mail, postage prepaid, (c) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, or (d) by telecopier (with answerback
acknowledged); provided that such telecopied notice must also be delivered by
one of the means set forth in (a), (b) or (c) above, to the addresses specified
in Annex II hereto or at such other address and person as shall be designated
from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this Section 16. A
notice shall be deemed to have been given: (a) in the case of hand delivery, at
the time of delivery, (b) in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day, (c) in the case of
expedited prepaid delivery upon the first attempted delivery on a Business Day;
or (d) in the case telecopier, upon receipt of answerback confirmation, provided
that such telecopied notice was also delivered as required in this Section. A
party receiving a notice which does not comply with the technical requirements
for notice under this Section may elect to waive any deficiencies and treat the
notice as having been properly given.
17. NON-ASSIGNABILITY
The provisions of Paragraph 15 of the Agreement ("Nonassignability;
Termination") are hereby deleted and replaced in their respective entireties by
the following provisions of this Section 17:
49
(a) The rights and obligations of Seller under the Transaction
Documents, the Hedging Transactions and under any Transaction shall not be
assigned by Seller without the prior written consent of Buyer. Buyer may assign
or participate (other than pursuant to a Financing Transaction) its rights and
obligations under the Transaction Documents and under any Transaction without
the prior written consent of Seller only to a Permitted Transferee. Buyer may
assign its rights and interests in any Hedging Transaction without the prior
written consent of Seller.
Notwithstanding anything to the contrary contained herein, with respect
to Seller, (A) Buyer shall remain responsible for reviewing and determining the
eligibility of any New Loan for purposes of any Transaction and (B) Seller shall
continue to deal solely and directly with Buyer in connection with any
Transaction.
As long as an Event of Default on the part of Seller shall have occurred
and be continuing, Buyer may assign or participate its rights and obligations
under the Transaction Documents and/or any Transaction (including in connection
with any Financing Transaction) to any Person.
(b) The Buyer shall maintain a record of ownership identifying all
assignees. If any assignee is a non-U.S. Person, such assignee shall timely
provide Seller with such forms as may be required to establish the assignee's
status for U.S. withholding tax purposes.
(c) With respect to any issuance by Buyer of a participation in any
Transaction, (i) Buyer shall act as exclusive agent for all participants in any
dealings with Seller in connection with such Transactions and will maintain, on
behalf of Seller, a record of ownership that identifies all participants, and
(ii) Seller shall not be obligated to deal directly with any party other than
Buyer in connection with such Transactions, or to pay or reimburse Buyer for any
costs that would not have been incurred by Buyer had no participation interests
in such Transactions been issued.
(d) Subject to the foregoing, the Transaction Documents and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and permitted assigns. Nothing in the
Transaction Documents, express or implied, shall give to any Person, other than
the parties to the Transaction Documents and their respective successors, any
benefit or any legal or equitable right, power, remedy or claim under the
Transaction Documents.
18. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
The language in Paragraph 16 of the Agreement ("Governing Law") which
reads "without giving effect to the conflict of law principals thereof" is
hereby deleted. Paragraph 18 of the Agreement ("Use of Employee Plan Assets") is
hereby deleted in its entirety. Paragraph 17 ("No Waivers, Etc.") is hereby
deleted and replaced in its entirety by the following provisions of this Section
18:
(a) Each party irrevocably and unconditionally submits to the
non-exclusive jurisdiction of any United States Federal or New York State court
sitting in Manhattan, and any appellate court from any such court, solely for
the purpose of any suit, action or proceeding brought to enforce its obligations
under the Agreement or relating in any way to the Agreement or any Transaction
under the Agreement.
(b) To the extent that either party has or hereafter may acquire any
immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from set off or any legal process (whether
service or notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) with respect to itself or any
of its property, such party hereby irrevocably waives and agrees not to plead or
claim such immunity in respect of any action
50
brought to enforce its obligations under the Agreement or relating in any way to
the Agreement or any Transaction under the Agreement.
(c) Each party hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court and any right of jurisdiction on
account of its place of residence or domicile and irrevocably consents to the
service of any summons and complaint and any other process by the mailing of
copies of such process to them at their respective address specified herein.
Each party hereby agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Section 18
shall affect the right of Buyer to serve legal process in any other manner
permitted by law or affect the right of Buyer to bring any action or proceeding
against Seller or its property in the courts of other jurisdictions.
(d) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
19. NO RELIANCE; DISCLAIMERS
(a) Each of Buyer and Seller hereby acknowledges, represents and
warrants to the other that, in connection with the negotiation of, the entering
into, and the performance under, the Transaction Documents and each Transaction
thereunder:
(i) It is not relying (for purposes of making any investment
decision or otherwise) upon any advice, counsel or representations
(whether written or oral) of the other party to the Transaction
Documents, other than the representations expressly set forth in the
Transaction Documents;
(ii) It has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the extent
that it has deemed necessary, and it has made its own investment,
hedging and trading decisions (including decisions regarding the
suitability of any Transaction) based upon its own judgment and upon any
advice from such advisors as it has deemed necessary and not upon any
view expressed by the other party;
(iii) It is a sophisticated and informed Person that has a full
understanding of all the terms, conditions and risks (economic and
otherwise) of the Transaction Documents and each Transaction thereunder
and is capable of assuming and willing to assume (financially and
otherwise) those risks;
(iv) It is entering into the Transaction Documents and each
Transaction thereunder for the purposes of managing its borrowings or
investments or hedging its underlying assets or liabilities and not for
purposes of speculation;
(v) It is not acting as a fiduciary or financial, investment or
commodity trading advisor for the other party and has not given the
other party (directly or indirectly through any other Person) any
assurance, guaranty or representation whatsoever as to the merits
(either legal, regulatory, tax, business, investment, financial
accounting or otherwise) of the Transaction Documents or any Transaction
thereunder;
51
(b) Each determination by Buyer of the Market Value with respect to each
New Loan or Purchased Loan or the communication to Seller of any information
pertaining to Market Value under the Agreement shall be subject to the following
disclaimers:
(i) Buyer has assumed and relied upon, with Seller's consent and
without independent verification, the accuracy and completeness of the
information provided by Seller and reviewed by Buyer. Buyer has not made
any independent inquiry of any aspect of the New Loans or Purchased
Loans or the underlying collateral. Buyer's view is based on economic,
market and other conditions as in effect on, and the information made
available to Buyer as of, the date of any such determination or
communication of information, and such view may change at any time
without prior notice to Seller.
(ii) Market Value determinations and other information provided
to Seller constitute a statement of Buyer's view of the value of one or
more loans or other assets at a particular point in time and neither (x)
constitute a bid for a particular trade, (y) indicate a willingness on
the part of Buyer or any Affiliate thereof to make such a bid, nor (z)
reflect a valuation for substantially similar assets at the same or
another point in time, or for the same assets at another point in time.
(iii) Market Value determinations and other information provided
to Seller may vary significantly from valuation determinations and other
information which may be obtained from other sources.
(iv) Market Value determinations and other information provided
to Seller are communicated to Seller solely for its use and may not be
relied upon by any other person and may not be disclosed or referred to
publicly or to any third party without the prior written consent of
Buyer, which consent Buyer may withhold or delay in its sole and
absolute discretion.
(v) Buyer makes no representations or warranties with respect to
any Market Value determinations or other information provided to Seller.
Buyer shall not be liable for any incidental or consequential damages
arising out of any inaccuracy in such valuation determinations and other
information provided to Seller, including as a result of any act of
gross negligence or breach of any warranty.
(vi) Market Value indications and other information provided to
Seller in connection with Section 3(b) are only indicative of the
initial Market Value of the New Loan submitted to Buyer for
consideration thereunder, and may change without notice to Seller prior
to, or subsequent to, the transfer by Seller of the New Loan pursuant to
Section 3(e). No indication is provided as to Buyer's expectation of the
future value of such Purchased Loan or the underlying collateral.
(vii) Initial Market Value indications and other information
provided to Seller in connection with Section 3(b) are to be used by
Seller for the sole purpose of determining whether to proceed in
accordance with Section 3 and for no other purpose.
20. INDEMNITY AND EXPENSES
(a) Seller hereby agrees to hold Buyer and its Affiliates and each of
their respective officers, directors, employees and agents ("Indemnified
Parties") harmless from and indemnify the Indemnified Parties against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, taxes (including stamp, excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Purchased Loans or in
connection with any of the transactions contemplated by
52
the Agreement (or the recharacterization of any Transaction) and the documents
delivered in connection herewith and therewith, other than net income taxes of
Buyer), fees, costs, expenses (including reasonable attorneys fees and
disbursements and any and all servicing and enforcement costs with respect to
the Purchased Loans) or disbursements (all of the foregoing, collectively
"Indemnified Amounts") which may at any time (including, without limitation,
such time as the Agreement shall no longer be in effect and the Transactions
shall have been repaid in full) be imposed on or asserted against any
Indemnified Party in any way whatsoever arising out of or in connection with, or
relating to, the Agreement or any Transactions thereunder or any action taken or
omitted to be taken by any Indemnified Party under or in connection with any of
the foregoing; provided, that Seller shall not be liable for Indemnified Amounts
resulting from the gross negligence or willful misconduct of any Indemnified
Party. Without limiting the generality of the foregoing, Seller agrees to hold
Buyer harmless from and indemnify Buyer against all Indemnified Amounts with
respect to all Purchased Loans relating to or arising out of any violation or
alleged violation of any environmental law, rule or regulation or any consumer
credit laws, including without limitation ERISA, that, in each case, results
from anything other than Buyer's gross negligence or willful misconduct. In any
suit, proceeding or action brought by Buyer in connection with any Purchased
Loan for any sum owing thereunder, or to enforce any provisions of any Purchased
Loan Documents, Seller will save, indemnify and hold Buyer harmless from and
against all expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction or liability whatsoever of the account
debtor or obligor thereunder, arising out of a breach by Seller of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from Seller. Seller also agrees to reimburse an Indemnified Party
as and when billed by such Indemnified Party for all such Indemnified Party's
costs and expenses incurred in connection with the enforcement or the
preservation of such Indemnified Party's rights under the Agreement and any
other Transaction Document or any transaction contemplated hereby or thereby,
including without limitation the reasonable fees and disbursements of its
counsel. Seller hereby acknowledges its obligations hereunder are recourse
obligations of Seller.
(b) Seller agrees to pay as and when billed by Buyer all of the
out-of-pocket costs and expenses incurred by Buyer in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, the Agreement and the other Transaction Documents or any other
documents prepared in connection herewith or therewith. Seller agrees to pay as
and when billed by Buyer all of the out-of-pocket costs and expenses incurred in
connection with the consummation and administration of the transactions
contemplated hereby and thereby including without limitation (i) all the
reasonable fees, disbursements and expenses of counsel to Buyer and (ii) all the
Due Diligence Fees, testing and review costs and expenses incurred by Buyer in
connection with the evaluation of any New Loan and with respect to any
Transaction.
21. DUE DILIGENCE
Seller acknowledges that Buyer has the right to perform continuing due
diligence reviews with respect to the Purchased Loans, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or determining or re-determining the Asset Base for purposes of
Section 4(a) of this Annex I, or otherwise, and Seller agrees that Buyer, at its
option, has the right at any time to conduct a partial or complete due diligence
review on any or all of the Purchased Loans, including, without limitation,
ordering new credit reports and Appraisals on the applicable collateral and
otherwise regenerating the information used to originate such Purchased Loans.
Upon reasonable (but no less than one (1) Business Day) prior notice to Seller,
Buyer or its authorized representatives will be permitted during normal business
hours to examine, inspect, and make copies and extracts of, the Purchased Loan
Files and any and all documents, records, agreements, instruments or information
relating to any Purchased Loan in the possession or under the control of Seller,
any servicer or sub-servicer and/or Custodian. Seller also shall make available
to Buyer a knowledgeable financial or accounting officer for
53
the purpose of answering questions respecting the Purchased Loan Files and the
Purchased Loans. Seller agrees to cooperate with Buyer and any third party
underwriter designated by Buyer in connection with such underwriting, including,
but not limited to, providing Buyer and any third party underwriter with access
to any and all documents, records, agreements, instruments or information
relating to such Purchased Loans in the possession, or under the control, of
such Seller.
22. SERVICING
(a) Notwithstanding the purchase and sale of the Purchased Loans by
Seller to Buyer hereunder, Midland Loan Services, Inc. or, with the consent of
Buyer (which consent shall not unreasonably be withheld), an Affiliate of Seller
("Servicer") shall continue to service the Purchased Loans at Seller's sole cost
and for the benefit of Buyer and, if Buyer shall exercise its rights to pledge
or hypothecate the Purchased Loans prior to the Repurchase Date pursuant to
Section 8 or 17 of this Annex I, Buyer's assigns; provided, however, that the
obligations of Seller to service any of the Purchased Loans shall cease
automatically upon the earliest of (i) an Event of Default, (ii) the date on
which the aggregate Repurchase Price for the Portfolio Loans together with all
accrued and unpaid Price Differential, unpaid Costs and other amounts payable by
Seller to Buyer hereunder have been paid in full or (iii) the transfer of
servicing approved by Seller and Buyer, which Buyer's consent shall not be
unreasonably withheld. Seller shall service and shall cause the Servicer to
service the Purchased Loans in accordance with Accepted Servicing Practices.
(b) Seller agrees that Buyer is the owner of all servicing records,
including but not limited to any and all servicing agreements (the "Servicing
Agreements"), files, documents, records, data bases, computer tapes, copies of
computer tapes, proof of insurance coverage, insurance policies, appraisals,
other closing documentation, payment history records, and any other records
relating to or evidencing the servicing of Purchased Loans (the "Servicing
Records") so long as the Purchased Loans are subject to the Agreement. Seller
covenants to safeguard such Servicing Records and to deliver them promptly to
Buyer or its designee (including the Custodian) at Buyer's request.
(c) Upon the occurrence and continuance of an Event of Default, Buyer
may, in its sole discretion, (i) sell its right to the Purchased Loans on a
servicing released basis or (ii) terminate Servicer or any sub-servicer of the
Purchased Loans with or without cause, in each case without payment of any
termination fee or such other costs or expenses to Buyer, it being agreed that
Seller will pay any and all fees, costs and expenses required to terminate the
Servicing Agreement and to effectuate a transfer of servicing to a designee of
the Buyer; provided, however, that Buyer shall cause any successor servicer to
deliver to Seller reports generated for Buyer relating to the Purchased Loans.
(d) Seller shall not, and shall not permit Servicer to, employ
sub-servicers to service the Purchased Loans without the prior written approval
of Buyer which shall not be unreasonably withheld. If the Purchased Loans are
serviced by a sub-servicer, Seller shall irrevocably assign all rights, title
and interest in the Servicing Agreements with such sub-servicer to Buyer.
(e) Seller shall cause Servicer and any sub-servicers engaged by Seller
to execute a letter agreement with Buyer acknowledging Buyer's security interest
in the Purchased Loans and the Servicing Agreements and agreeing that each such
sub-servicer shall deposit all Income with respect to the Purchased Loans in the
Blocked Account, all in such manner as shall be reasonably acceptable to Buyer.
(f) In the event Seller or its Affiliate is servicing any Purchased
Loan, Seller shall permit Buyer to inspect Seller's or its Affiliate's servicing
facilities, as the case may be, for the purpose of satisfying Buyer that Seller
or its Affiliate, as the case may be, has the ability to service such Purchased
Loans as provided in the Agreement.
54
(g) Seller shall cause the Servicer to provide a copy of each report and
notice sent to Seller to be sent to Buyer concurrently therewith.
23. TREATMENT FOR TAX PURPOSES
It is the intention of the parties that, for U.S. Federal, state and
local income and franchise tax purposes, the Transactions constitute a
financing, and that the Seller is, and, so long as no Event of Default shall
have occurred and be continuing, will continue to be, treated as the owner of
the Purchased Loans for such purposes. Unless prohibited by applicable law,
Seller and Buyer agree to treat the Transactions as described in the preceding
sentence on any and all filings with any U.S. Federal, state or local taxing
authority.
24. INTENT
The provisions of Paragraph 19 of the Agreement ("Intent") are hereby
deleted and replaced in their respective entireties by the following provisions
of this Section 24:
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 in so far as the type of asset subject to the Transaction or the
term of that Transaction would render such definition inapplicable). The parties
recognize that each Transaction is a "securities contract" as that term is
defined in Section 741 of Title 11 of the United States Code, as amended.
25. INTENTIONALLY OMITTED
26. MISCELLANEOUS
The provisions of Paragraph 20 of the Agreement ("Disclosure Relating to
Certain Federal Protections") are hereby deleted in their entirety and replaced
by the following provisions of this Section 26:
(a) Time is of the essence under the Transaction Documents and all
Transactions thereunder and all references to a time shall mean New York time in
effect on the date of the action unless otherwise expressly stated in the
Transaction Documents.
(b) All rights, remedies and powers of Buyer hereunder and in connection
herewith are irrevocable and cumulative, and not alternative or exclusive, and
shall be in addition to all other rights, remedies and powers of Buyer whether
under law, equity or agreement. In addition to the rights and remedies granted
to it in the Agreement to the extent applicable, Buyer shall have all rights and
remedies of a secured party under the UCC and any other applicable law.
(c) The Transaction Documents may be executed in counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
(d) The headings in the Transaction Documents are for convenience of
reference only and shall not affect the interpretation or construction of the
Transaction Documents.
(e) Each provision of the Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of the
Agreement shall be prohibited by or be invalid
55
under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of the Agreement.
(f) This Annex I, together with the Agreement contain a final and
complete integration of all prior expressions by the parties with respect to the
subject matter hereof and thereof and shall constitute the entire agreement
among the parties with respect to such subject matter, superseding all prior
oral or written understandings.
(g) The parties understand that the Agreement is a legally binding
agreement that may affect such party's rights. Each party represents to the
other that it has received legal advice from counsel of its choice regarding the
meaning and legal significance of the Agreement and that it is satisfied with
its legal counsel and the advice received from it.
(h) Should any provision of the Agreement require judicial
interpretation, it is agreed that a court interpreting or construing the same
shall not apply a presumption that the terms hereof shall be more strictly
construed against any Person by reason of the rule of construction that a
document is to be construed more strictly against the Person who itself or
through its agent prepared the same, it being agreed that all parties have
participated in the preparation of the Agreement.
(i) Buyer agrees not to seek before any court or governmental agency to
have any director or officer of the Seller held personally liable for any action
or inactions of the Seller or any obligations of the Seller under the Agreement
or the related Transaction Documents, except if such actions or inactions are
the result of the gross negligence, fraud or willful misconduct of such director
or officer.
[SIGNATURES COMMENCE ON NEXT PAGE]
56
IN WITNESS WHEREOF, the parties have executed this Annex I as of the
28th day of May 2003.
BUYER:
------
XXXXXXX XXXXX MORTGAGE COMPANY,
a New York limited partnership
By: Xxxxxxx Sachs Real Estate Funding Corp.,
its general partner
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
SELLER:
-------
CAPITAL TRUST, INC., a Maryland corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
1
SCHEDULE 1
Purchase Percentages and Applicable Spreads
-------------------------------------------
LTV greater than 70% and less than or equal to 85% (or 90% with respect to loans
secured
by multifamily properties)
Applicable
Purchase Spread
Loan Type Percentage* (basis points)*
---------
--------------------------------------------------------------------------------
Mezzanine Loans 70% 225
--------------------------------------------------------------------------------
Second Mortgage Loans 70% 225
--------------------------------------------------------------------------------
First Mortgages--B Notes 70% 225
--------------------------------------------------------------------------------
Other Mezzanine Investments 70%* 225*
LTV less than or equal to 70% Applicable
Purchase Spread
Loan Type Percentage* (basis points)*
---------
--------------------------------------------------------------------------------
Mezzanine Loans 80% 185
--------------------------------------------------------------------------------
Second Mortgage Loans 80% 185
--------------------------------------------------------------------------------
First Mortgages--B Notes 80% 185
--------------------------------------------------------------------------------
Other Mezzanine Investments 80%* 185*
---------
* Or as otherwise determined by Buyer in its sole discretion on a case-by-case
basis and set forth in a Confirmation.
Schedule 1-1
SCHEDULE 2
Initial Portfolio Loans
-----------------------
1. B Participation Interest dated May 16, 2003 (in the amount of $13,000,000) in
that certain Mortgage Loan originated by Wachovia Bank National Association on
March 26, 2003 and made to Matana, LLC and secured by that certain property
located at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
Schedule 2-1
SCHEDULE 3
Purchased Loan Information
--------------------------
(a) Loan Number/Loan Type
(b) Obligor Name
(c) Property Address
(d) Original Balance
(e) Original Coupon
(f) Outstanding Balance
(g) Maturity Date
(h) Table Funding (Yes/No)
(i) If Participation, the name of the lead lender under the Purchased Loan
(j) Such information as Buyer and Custodian shall agree and that the Buyer shall
set forth in writing, on a case-by-case basis.
Schedule 3-1
SCHEDULE 4
APPROVED APPRAISERS
-------------------
1. KTR Appraisal Services
2. Xxxxxxx & Xxxxxxxxx, Inc.
3. Xxxxx & Xxxxx
4. CB Xxxxxxx Xxxxx
5. The Weitzman Group
6. Greenwich Group
7. Xxxxxx Xxxxx
8. HVS International
9. PWC
Schedule 4-1
SCHEDULE 5
APPROVED ENGINEERS
------------------
1. KTR Realty Services
2. Xxxxxxx & Xxxxxx, Inc.
3. C.A. Rich, Inc.
4. IVI
5. Dames & Xxxxx
6. Law Environmental
7. Xxxxxxx
8. EM&CA
9. Aqua Terra
10. ATC (BCM Engineers)
11. Horn Chandler & Xxxxxx
12. National Assessment Corporation
13. EMG
14. Property Solutions Inc.
15. Xxxxx & Xxxxxx
16. PSI
Schedule 5-1
SCHEDULE 6
APPROVED ENVIRONMENTAL CONSULTANTS
----------------------------------
1. Acqua Terra
2. Law Environmental
3. KTR Realty Services
4. EMG
5. Xxxxxxx
6. Dames & Xxxxx
7. Xxxxx & Root
8. C.A. Rich, Inc.
9. Xxxxxxx
10. EM&CA
11. ATC (BCM Engineers)
12. IVI
13. Xxxxx & Xxxxxx
14. Certified Environmental Inc.
15. Environ Business, Inc.
16. Property Solutions, Inc.
17. National Assessment Corporation
18. Xxxxxxx Environmental Group
19. Front Royal
20. PSI
Schedule 6-1
SCHEDULE 7-A
Form of UCC Financing Statement
-------------------------------
Debtor: Secured Party:
------- --------------
Capital Trust, Inc. Xxxxxxx Xxxxx Mortgage Company
000 Xxxx Xxxxxx, 00xx Xxxxx 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 0000 Xxx Xxxx, Xxx Xxxx 00000
ATTACHMENT A TO UCC FINANCING STATEMENT
This filing is for protective purposes only with respect to the
Purchased Loans and the Blocked Account in case the sale of any Purchased Loan
under the Repurchase Agreement is re-characterized as a grant of a security
interest in any such Purchased Loan.
The collateral covered by this financing statement is all of the
Debtor's right, title and interest in, to and under the following property,
whether now owned or existing, hereafter acquired or arising, or in which the
Debtor now or hereafter has any rights, and wheresoever located (the
"Collateral"):
(a) the Blocked Account, all of the Purchased Loans including those
identified in Schedule I hereto, all Income from such Purchased Loans and all
proceeds of all of the foregoing, and
(b) all Hedging Transactions relating to Purchased Loans entered into by
Seller and all proceeds thereof.
The following terms shall have the following meanings. Such definition
shall be equally applicable to the singular and plural forms of the terms
defined.
"Blocked Account" means that certain Account No. _____ established and
maintained by Debtor at PNC Bank pursuant to Section 5(a) of the Repurchase
Agreement (and any successor thereto or replacement thereof established and
maintained pursuant to Section 5(a) of the Repurchase Agreement and a Blocked
Account Agreement).
"Blocked Account Agreement" means the Blocked Account Agreement, dated
as of the date hereof and executed by Buyer, Seller and the Depository Bank (and
any successor thereot or replacement thereof extended by Buyer, Seller and the
Depository Bank).
"Buyer" means Secured Party.
"Custodian" means Deutsche Bank Trust Company Americas or any successor
Custodian appointed by Buyer.
"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.
"Eligible Loans" means any of the following types of loans listed in (i)
through (v) below:
Schedule 7-A-1
(i) performing mezzanine loans which are secured by pledges of
the equity ownership interests in entities that directly or indirectly
own Eligible Properties;
(ii) performing mortgage loans secured by second liens on
Eligible Properties;
(iii) 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 promissory note (or senior
interest) evidencing such loan; and
(iv) any other performing loan, participation interest,
preferred equity investment or other junior mezzanine or subordinate
investment which does not conform to the criteria set forth in clauses
(i) and (iii) above that Buyer elects in its sole discretion to
purchase.
"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.
"Hedging Transactions" means, 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.
"Income" means, 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).
"Person" means an individual, corporation, limited liability company,
business trust, partnership, joint tenant or tenant-in-common, trust,
unincorporated organization, or other entity, or a federal, state or local
government or any agency or political subdivision thereof.
"Purchased Loan Documents" shall mean, with respect to a Purchased Loan,
the documents comprising the Purchased Loan File for such Purchased Loan.
"Purchased Loan File" shall mean the documents specified as the
"Purchased Loan File" in Section 7(b) of the Repurchase Agreement, together with
any additional documents and
Schedule 7-A-2
information required to be delivered to Buyer or its designee (including the
Custodian) pursuant to the Repurchase Agreement.
"Purchased Loans" means all Eligible Loans sold by Seller to Buyer and
any additional cash and/or other assets delivered by Seller to Buyer pursuant to
Section 4(a) of the Repurchase Agreement, including, without limitation, all
Purchased Loans, the Purchased Loan File of which is held by the Custodian.
Additional information with respect to the Purchased Loans may be obtained from
the Secured Party.
"Rating Agency" means any of Fitch Inc., Xxxxx'x Investor Service, Inc.
and Standard & Poor's Rating Services, Inc., a division of McGraw Hill Companies
Inc.
"Repurchase Agreement" means that certain Master Repurchase Agreement
dated as of May 28, 2003, between Xxxxxxx Xxxxx Mortgage Company and Capital
Trust, Inc., (together with Annex I and such other annexes and schedules
attached thereto) as the same may be amended, restated or otherwise modified
from time to time.
"Seller" means Debtor.
SCHEDULE 1
1. [B] Participation Interest, dated _____ issued to __________. in the
amount of $__________, in that certain Mortgage Loan [(in the original
principal amount of $__________)], dated as of _______, made by
___________. to _________ under and pursuant to that certain Loan
Agreement dated as of ________ between _________ and _________ and
secured by that certain property located in _________, [as such B
Participation Interest was assigned by _________ to CTMP III GS Finance
Sub, LLC pursuant to that certain Assignment and Assumption Agreement
(Participation B) dated as of _________].
2. [$__________ [Senior/Junior] Mezzanine Loan, dated as of _________ made
by _________ to _________, under and pursuant to that certain [Loan
Agreement] dated as of _________ between _________ and _________, [as
assigned (together with such loan agreement and all of the other loan
documents evidencing and securing such senior mezzanine loan) by
_________ to CTMP III GS Finance Sub, LLC pursuant to that certain
Omnibus Assignment dated as of ---------].
Schedule 7-A-3
SCHEDULE 7-B
Form of UCC Financing Statement
-------------------------------
Debtor: Secured Party:
------- --------------
Capital Trust, Inc. Xxxxxxx Sachs Mortgage Company
000 Xxxx Xxxxxx, 00xx Xxxxx 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 0000 Xxx Xxxx, Xxx Xxxx 00000
ATTACHMENT A TO UCC FINANCING STATEMENT AMENDMENT
This filing is for protective purposes only with respect to the
Purchased Loans and the Blocked Account in case the sale of any Purchased Loan
under the Repurchase Agreement is re-characterized as a grant of a security
interest in any such Purchased Loan.
The collateral covered by this financing statement is all of the
Debtor's right, title and interest in, to and under the following property,
whether now owned or existing, hereafter acquired or arising, or in which the
Debtor now or hereafter has any rights, and wheresoever located (the
"Collateral"):
(a) the Blocked Account, all of the Purchased Loans including those
identified in Schedule I hereto, all Income from such Purchased Loans and all
proceeds of all of the foregoing, and
(b) all Hedging Transactions relating to Purchased Loans entered into by
Seller and all proceeds thereof.
The following terms shall have the following meanings. Such definition
shall be equally applicable to the singular and plural forms of the terms
defined.
"Blocked Account" means that certain Account No. _____ established and
maintained by Debtor at PNC Bank pursuant to Section 5(a) of the Repurchase
Agreement (and any successor thereto or replacement thereof established and
maintained pursuant to Section 5(a) of the Repurchase Agreement and a Blocked
Account Agreement).
"Blocked Account Agreement" means the Blocked Account Agreement, dated
as of the date hereof and executed by Buyer, Seller and the Depository Bank (and
any successor thereot or replacement thereof extended by Buyer, Seller and the
Depository Bank).
"Buyer" means Secured Party.
"Custodian" means Deutsche Bank Trust Company Americas or any successor
Custodian appointed by Buyer.
"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.
"Eligible Loans" means any of the following types of loans listed in (i)
through (v) below:
Schedule 7-B-1
(v) performing mezzanine loans which are secured by pledges of
the equity ownership interests in entities that directly or indirectly
own Eligible Properties;
(vi) performing mortgage loans secured by second liens on
Eligible Properties;
(vii) 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 promissory note (or senior
interest) evidencing such loan; and
(viii) any other performing loan, participation interest,
preferred equity investment or other junior mezzanine or subordinate
investment which does not conform to the criteria set forth in clauses
(i) and (iii) above that Buyer elects in its sole discretion to
purchase.
"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.
"Hedging Transactions" means, 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.
"Income" means, 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).
"Person" means an individual, corporation, limited liability company,
business trust, partnership, joint tenant or tenant-in-common, trust,
unincorporated organization, or other entity, or a federal, state or local
government or any agency or political subdivision thereof.
"Purchased Loan Documents" shall mean, with respect to a Purchased Loan,
the documents comprising the Purchased Loan File for such Purchased Loan.
"Purchased Loan File" shall mean the documents specified as the
"Purchased Loan File" in Section 7(b) of the Repurchase Agreement, together with
any additional documents and
Schedule 7-B-2
information required to be delivered to Buyer or its designee (including the
Custodian) pursuant to the Repurchase Agreement.
"Purchased Loans" means all Eligible Loans sold by Seller to Buyer and
any additional cash and/or other assets delivered by Seller to Buyer pursuant to
Section 4(a) of the Repurchase Agreement, including, without limitation, all
Purchased Loans, the Purchased Loan File of which is held by the Custodian.
Additional information with respect to the Purchased Loans may be obtained from
the Secured Party.
"Rating Agency" means any of Fitch Inc., Xxxxx'x Investor Service, Inc.
and Standard & Poor's Rating Services, Inc., a division of McGraw Hill Companies
Inc.
"Repurchase Agreement" means that certain Master Repurchase Agreement
dated as of May 28, 2003, between Xxxxxxx Xxxxx Mortgage Company and Capital
Trust, Inc., (together with Annex I and such other annexes and schedules
attached thereto) as the same may be amended, restated or otherwise modified
from time to time.
"Seller" means Debtor.
SCHEDULE 1
1. [B] Participation Interest, dated _____ issued to __________. in the
amount of $__________, in that certain Mortgage Loan [(in the original
principal amount of $__________)], dated as of _______, made by
___________. to _________ under and pursuant to that certain Loan
Agreement dated as of ________ between _________ and _________ and
secured by that certain property located in _________, [as such B
Participation Interest was assigned by _________ to CTMP III GS Finance
Sub, LLC pursuant to that certain Assignment and Assumption Agreement
(Participation B) dated as of _________].
2. [$__________ [Senior/Junior] Mezzanine Loan, dated as of _________ made
by _________ to _________, under and pursuant to that certain [Loan
Agreement] dated as of _________ between _________ and _________, [as
assigned (together with such loan agreement and all of the other loan
documents evidencing and securing such senior mezzanine loan) by
_________ to CTMP III GS Finance Sub, LLC pursuant to that certain
Omnibus Assignment dated as of _________].
Schedule 7-B-3
EXHIBIT I
CONFIRMATION STATEMENT
XXXXXXX SACHS MORTGAGE COMPANY
Ladies and Gentlemen:
Xxxxxxx Xxxxx Mortgage Company is pleased to deliver our written
CONFIRMATION of our agreement (subject to satisfaction of the Transaction
Conditions Precedent) to enter into the Transaction pursuant to which Xxxxxxx
Sachs Mortgage Company shall purchase from you the Purchased Loans identified in
Schedule I attached hereto, pursuant to the Master Repurchase Agreement between
Xxxxxxx Xxxxx Mortgage Company (the "Buyer") and Capital Trust, Inc. ("Seller"),
dated as of May , 2003 (as amended from time to time the "Agreement";
capitalized terms used herein without definition have the meanings given in the
Agreement), as follows below and on the attached Schedule 1:
Purchase Date: __________, 200_
Purchased Loans: As identified on attached Schedule 1
Aggregate Principal Amount of As identified on attached Schedule 1
Purchased Loans:
Repurchase Date: __________, 200_
Purchase Price: $
Pricing Rate: One-month LIBOR plus ______%
Purchase Percentage:
Applicable Spread:
Governing Agreements: As identified on attached Schedule 1
Name and address for Buyer: Xxxxxxx Sachs Mortgage Company
communications: 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx Blacklow
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Seller:
-------
Exhibit I-1
Capital Trust, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to
Xxxx Xxxxxxxx Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopy: 212-230-7830
XXXXXXX XXXXX MORTGAGE COMPANY,
a New York limited partnership
By: Xxxxxxx Sachs Real Estate Funding Corp.,
its general partner
By:
-------------------------------
Name:
Title:
AGREED AND ACKNOWLEDGED:
CAPITAL TRUST, INC.,
a Maryland corporation
By: __________________________________
Name:
Title:
Exhibit I-2
Schedule 1 to Confirmation Statement
Purchased Loans: [Mezzanine Loan/ Participation Interest] dated
as of [______] in the original principal
amount of $[___], made by [____] to [____]
under and pursuant to that certain [loan
agreement/participation agreement/ applicable
document].
Aggregate Principal Amount:
Purchase Price:
Exhibit I-3
EXHIBIT II
AUTHORIZED REPRESENTATIVES OF SELLER
------------------------------------
Name Specimen Signature
---- ------------------
Xxxx X. Xxxxx _____________________________
Xxxxxxx X. Xxxxxx _____________________________
Xxxxx X. Xxxxxx _____________________________
Exhibit II-1
EXHIBIT III
FORM OF CUSTODIAL DELIVERY CERTIFICATE
On this _____ day of _____________ 2003, CAPITAL TRUST, INC. ("Seller"),
under that certain Custodial Agreement, dated as of May __, 2003 (the "Custodial
Agreement"), among Seller, DEUTSCHE BANK TRUST COMPANY AMERICAS, as Custodian,
and XXXXXXX SACHS MORTGAGE COMPANY, as Buyer, does hereby deliver to, and
instruct, the Custodian to hold, in its capacity as Custodian for the benefit of
Buyer, the documents comprising the Purchased Loan File and listed on Attachment
A hereto with respect to each Purchased Loan to be purchased by Buyer, which
Purchased Loans are listed on the Purchased Loan Schedule attached hereto as
Attachment B and which Purchased Loans shall be subject to the terms of the
Custodial Agreement as of the date hereof.
With respect to the Purchased Loan Files delivered herewith, for
purposes of issuing the Trust Receipt, the Custodian shall review the Purchased
Loan Files to confirm receipt of each of the documents identified on Attachment
A.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Custodial Agreement.
IN WITNESS WHEREOF, Seller has caused this Custodial Delivery
Certificate to be executed and delivered by its duly authorized officer as of
the day and year first above written.
CAPITAL TRUST, INC.
By:
--------------------
Name:
Title:
Exhibit III-1
Attachment B
Purchased Loan Schedule
-----------------------
(a) Loan Number/Loan Type
(b) Obligor Name
(c) Property Address
(d) Original Balance
(e) Original Coupon
(f) Outstanding Balance
(g) Maturity Date
(h) Table Funding (Yes/No)
(i) If Participation, the name of the lead lender under the Purchased Loan
(j) Such information as Buyer and Custodian shall agree and that the Buyer shall
set forth in writing, on a case-by-case basis.
Exhibit III-2
EXHIBIT IV-1
FORM OF POWER OF ATTORNEY TO BUYER
----------------------------------
"Know All Men by These Presents, that Capital Trust, Inc. ("Seller"),
does hereby appoint Xxxxxxx Xxxxx Mortgage Company ("Buyer"), in connection with
the Repurchase Agreement (defined below) its attorney-in-fact to act in Seller's
name, place and stead in any way which Seller could do with respect to (i) the
completion of the endorsements of the Mortgage Notes and the Assignments of
Mortgages and the Mezzanine Notes, (ii) the recordation of the Assignments of
Mortgages and (iii) the enforcement of Seller's rights under the Purchased Loans
purchased by Buyer pursuant to the Master Repurchase Agreement dated as of May
28, 2003 , as amended from time to time, between Seller and Buyer (the
"Repurchase Agreement") and to take such other steps as may be necessary or
desirable to enforce Buyer's rights against such Purchased Loans, the related
Purchased Loan Files, the Servicing Records and the Hedging Transactions to the
extent that Seller is permitted by law to act through an agent. Capitalized
terms used herein and not otherwise defined shall have the meanings given such
terms in the Repurchase Agreement.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT
ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OF FACSIMILE OF THIS INSTRUMENT
MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE
INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE
OR SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY,
AND SELLER ON ITS OWN BEHALF AND ON BEHALF OF SELLER'S ASSIGNS, HEREBY AGREES TO
INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL
CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY
HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be
executed and the Seller's seal to be affixed this _____ day of May __, 2003.
CAPITAL TRUST, INC.
By:
---------------------------
Name:
Title:
Exhibit XX-0-0
XXXXX XX XXX XXXX )
XXXXXX XX XXX XXXX )
On this _____ of ____________, before me, the undersigned, a Notary
Public in and for said state, personally appeared
_______________________________, personally known to me or proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the person,
or the entity upon behalf of which the person acted, executed the instrument.
------------------------
Notary Public
(Seal)
Exhibit III-2
EXHIBIT IV-2
FORM OF POWER OF ATTORNEY TO SELLER
-----------------------------------
Know All Men by These Presents, that Xxxxxxx Xxxxx Mortgage Company
("Buyer") does hereby appoint Capital Trust, Inc. ("Seller"), its
attorney-in-fact to act in Buyer's name, place and stead in any way which Buyer
could with respect to modifications described below, to mortgage loan documents
with respect to Purchased Loans sold by Seller to Buyer under that certain
Master Repurchase Agreement, dated as of May 28, 2003 (as amended from time to
time, the "Repurchase Agreement"). Capitalized terms used herein and not
otherwise defined shall have the meaning given such terms in the Repurchase
Agreement.
Seller is permitted to administer and service the Purchased Loans
without the consent of Buyer, any assignee or any other Person, pursuant to this
power of attorney delivered by Buyer, which power of attorney shall not be
revoked by Buyer unless an Event of Default under the Repurchase Agreement has
occurred and is then continuing. Notwithstanding the foregoing, Seller shall not
consent or assent to a Significant Modification to or any extension or
termination of any note, loan agreement, mortgage, pledge agreement or guaranty
relating to the Purchased Loans or other material agreement or instrument
relating to the Purchased Loans without the prior written consent of Buyer. All
waivers or material actions entered into or taken in respect of the Purchased
Loans pursuant to this power of attorney shall be in writing. Seller shall
notify Buyer and the Custodian, in writing, of any waiver or other action
entered into or taken thereby in respect of any such Purchased Loan pursuant to
this power of attorney, and shall deliver to Custodian (with a copy to Buyer)
for deposit in the related Purchased Loan File, an original counterpart of the
agreement, if any, relating to such waiver or other action, within three (3)
Business Days following the execution thereof. Actions taken under the foregoing
power of attorney shall be binding upon each holder of the Purchased Loans.
"Purchased Loan" shall mean any loan or other mezzanine
investment sold by Seller to Buyer and any additional assets delivered
by Seller to Buyer pursuant to the Repurchase Agreement.
"Significant Modification" shall mean any modification or
amendment of a Purchased Loan which:
(ix) reduces the principal amount of the Purchased Loan in
question other than (1) with respect to a dollar-for-dollar
principal payment or (2) reductions of principal to the extent
of deferred, accrued or capitalized interest added to principal
which additional amount was not taken into account by Buyer in
determining the related Purchase Price,
(x) increases the principal amount of a Purchased Loan other
than increases which are derived from accrual or capitalization
of deferred interest which is added to principal or protective
advances,
(xi) modifies the payments of principal and interest when due of
the Purchased Loan in question,
(xii) changes the frequency of scheduled payments of principal
and interest in respect of a Purchased Loan,
Exhibit IV-2-1
(xiii) subordinates the lien priority of the Purchased Loan or
the payment priority of the Purchased Loan other than
subordinations expressly required under the then existing terms
and conditions of the Purchased Loan (provided, however, the
foregoing shall not preclude the execution and delivery of
subordination, nondisturbance and attornment agreements with
tenants, subordination to tenant leases, easements, plats of
subdivision and condominium declarations and similar instruments
which in the commercially reasonable judgment of Seller do not
materially adversely affect the rights and interest of the
holder of the Purchased Loan in question),
(xiv) releases any collateral for the Purchased Loan other than
releases required under the then existing Purchased Loan
documents or releases in connection with eminent domain or under
threat of eminent domain,
(xv) waives, amends or modifies any cash management or reserve
account requirements of the Purchased Loan other than changes
required under the then existing Purchased Loan documentation,
or
(xvi) waives any due-on-sale or due-on-encumbrance provisions of
the Purchased Loan other than waivers required to be given under
the then existing Purchased Loan documents.
Exhibit IV-2-2
THIS POWER OF ATTORNEY MAY BE REVOKED BY BUYER BY DELIVERY OF WRITTEN
NOTICE TO SELLER DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT UNDER THE
REPURCHASE AGREEMENT. IF THIS POWER OF ATTORNEY HAS NOT BEEN REVOKED AND IF
REQUESTED BY Seller, Buyer will promptly confirm in writing to Seller, and any
other Person or entity reasonably designated by Seller, that this Power of
Attorney has not been revoked and is in full force and effect.
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be
executed and the Buyer's seal to be affixed this __ day of May __, 2003.
XXXXXXX XXXXX MORTGAGE COMPANY,
a New York limited partnership
By: Xxxxxxx Sachs Real Estate Funding Corp.,
its general partner
By:
---------------------------------
Name:
Title:
Exhibit IV-2-3
EXHIBIT V
REPRESENTATIONS AND WARRANTIES
REGARDING THE PURCHASED LOANS
-----------------------------
With respect to each Purchased Loan, Seller represents and warrants on
each Purchase Date as follows, other than as set forth on the exception report
provided to Buyer in accordance with the Agreement:
1. Ownership of Purchased Loans. Immediately prior to the transfer to
Buyer of the Purchased Loan, Seller had good title to, and was the sole owner
of, the Purchased Loan. Seller has full right, power and authority to transfer
and assign the Purchased Loans to or at the direction of Buyer and has validly
and effectively conveyed (or caused to be conveyed) to Buyer or its designee all
of Seller's legal and beneficial interest in and to the Purchased Loan free and
clear of any and all pledges, liens, charges, security interests and/or other
encumbrances. The sale of the Purchased Loan to Buyer or its designee does not
require Seller to obtain any approval or consent that has not been obtained. No
Purchased loan sold to Buyer hereunder was acquired by Seller from an Affiliate
of Seller unless otherwise approved by Buyer in writing.
2. Additional Representations: As to each Purchased Loan that is a
Mortgage Loan or a First Mortgage B-Note and to the extent applicable, each
Mezzanine Loan and Other Mezzanine Investment and the related Mortgaged
Properties on a Purchase Date and each date on which Market Value is determined,
Seller shall be deemed to make the following representations and warranties to
Buyer as of such date:
(a) Purchased Loan Schedule and Purchased Loan Information. The
information set forth in the Purchased Loan Schedule and the Purchased Loan
Information is complete, true and correct in all material respects.
(b) Payment Record. The Purchased Loan has not been since the date of
origination, and currently is not, thirty (30) or more days delinquent, and the
underlying obligor is not in default thereunder beyond any applicable grace
period for the payment of any obligation to pay principal and interest, taxes,
insurance premiums and required reserves.
(c) Purchased Loan Document Status. (i) The Purchased Loan Documents
have been, to the extent necessary, duly and properly executed, and the
Purchased Loan Documents, to the extent applicable, are legal, valid and binding
obligations of the underlying obligor, and their terms are enforceable against
the underlying obligor, subject only to bankruptcy, insolvency, moratorium,
fraudulent transfer, fraudulent conveyance and similar laws affecting rights of
creditors generally and to the application of general principles of equity; (ii)
the Purchased Loan Documents contain customary and enforceable provisions such
as to render the rights and remedies of the holder thereof adequate for the
realization against each related Mortgaged Property of the material benefits of
the security, including realization by judicial or, if applicable, non-judicial
foreclosure, and there is no exemption available to the underlying obligor which
would materially interfere with such right to foreclosure; and (iii) there is no
valid defense, counterclaim or right of offset or rescission available to the
related underlying obligor with respect to any Purchased Loan Document.
(d) Title Insurance. Each Mortgaged Property is covered by an American
Land Title Association (or an equivalent form thereof as adopted in the
applicable jurisdiction) owner's and lender's title
Exhibit V-1
insurance policy (the "Title Policy") in the original principal amount of the
related Purchased Loan after all advances of principal. Each lender's Title
Policy insures that the related Mortgage is a valid first or second, as
applicable, priority lien on such Mortgaged Property, subject only to (i) the
lien of current real property taxes, ground rents, water charges, sewer rents
and assessments not yet due and payable; (ii) covenants, conditions and
restrictions, rights of way, easements and other matters of public record, none
of which, individually or in the aggregate, in the reasonable judgment of
Seller, materially interferes with the current use of the related Mortgaged
Property or the security intended to be provided by such Mortgage or with the
underlying obligor's ability to pay its obligations when they become due or the
value of the related Mortgaged Property; (iii) the exceptions (general and
specific) set forth in such policy, none of which, individually or in the
aggregate, in the reasonable judgment of Seller, materially interferes with the
current use of the related Mortgaged Property or security intended to be
provided by such Mortgage, with the underlying obligor's ability to pay its
obligations when they become due or the value of the related Mortgaged Property;
and (iv) in the event such Title Policy has yet to be issued, an escrow letter
or a marked up title insurance commitment on which the required premium has been
paid exists which evidences that such Title Policy will be issued. Each Title
Policy (or, if it has yet to be issued, the coverage to be provided thereby) is
in full force and effect, all premiums thereon have been paid and, to Seller's
knowledge, no material claims have been made thereunder and no claims have been
paid thereunder. No holder of the related Mortgage has done, by act or omission,
anything that would materially impair the coverage under such Title Policy.
Immediately following the transfer and assignment of the related Purchased Loan
to Buyer, such Title Policy (or, if it has yet to be issued, the coverage to be
provided thereby) will inure to the benefit of Buyer as its interest may appear
without the consent of or notice to the insurer. In the case of a Mezzanine
Loan, if obtained, an Eagle 9 UCC Title Policy ("UCC Policy") insures Seller's
security interest in the equity interest pledged thereunder. Each UCC Policy
insures that Seller has a first priority perfected security interest in the
pledged equity interests and provides coverage in an amount equal to the
original principal amount of the related Purchased Loan and immediately
following the transfer and assignment of the related Purchased Loan to Buyer,
such UCC Policy (or, if it has yet to be issued, the coverage to be provided
thereby) will inure to the benefit of Buyer as its interest may appear without
the consent of or notice to the insurer.
(e) No Mechanics' Liens. There are no mechanics', materialman's or other
similar liens or claims which have been filed for work, labor or materials
affecting the Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the Mortgage, unless such lien is insured against
under the related title insurance policy.
(f) Insurance. Each Mortgaged Property, including any buildings or other
improvements thereon, is, and is required pursuant to the related Mortgage to
be, insured by (a) a fire and extended perils insurance policy issued by an
insurer meeting the requirements of such Purchased Loan providing coverage
against loss or damage sustained by reason of fire, lightning, windstorm, hail,
explosion, riot, riot attending a strike, civil commotion, terrorism, aircraft,
vehicles and smoke, and, to the extent required as of the date of origination by
the originator of such Purchased Loan consistent with its normal commercial
mortgage lending practices, against other risks, insured against by persons
operating like properties in the locality of the Mortgaged Property in an amount
not less than the replacement cost of the Mortgaged Property; (b) a business
interruption or rental loss insurance policy, in an amounts generally required
by institutional lenders for similar properties (including coverage for
terrorism); (c) a flood insurance policy (if any portion of the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency as having special flood hazards) and (d) a comprehensive general
liability insurance policy in amounts as are generally required by commercial
mortgage lenders. Such insurance policy contains a standard mortgagee clause
that names Seller as an additional insured and that requires at least thirty
days' (in the case of termination or cancellation other than for nonpayment of
premiums) and at least ten days' (in the case of termination or cancellation for
nonpayment of premiums) prior notice to the holder of the Mortgage, and no such
notice has been received, including any notice of
Exhibit VI-2
nonpayment of premiums, that has not been cured. The Purchased Loan Documents
obligate the underlying obligor to maintain or cause to be maintained all such
insurance and, at the underlying obligor's failure to do so, authorize the
holder of the Mortgage to maintain such insurance at the underlying obligor's
cost and expense and to seek reimbursement therefor from such underlying
obligor.
(g) Condition of the Property; Condemnation. No building or other
improvement on any Mortgaged Property has been affected in any material manner
or suffered any material loss as a result of any fire, wind, explosion,
accident, riot, war, or act of God or the public enemy, and each Mortgaged
Property is free of any material damage that would affect materially and
adversely the value of the Mortgaged Property as security for the Purchased Loan
and is in good repair. Seller has neither received notice, nor is otherwise
aware, of any proceedings pending for the total condemnation of any Mortgaged
Property or a partial condemnation of any portion material to the related
underlying obligor's ability to perform its obligations under the related
Purchased Loan.
(h) Encroachments; Zoning. None of the improvements located on any
Mortgaged Property lies outside of the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
materially encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy (including endorsements thereto) issued in
connection with the Purchased Loan and all improvements on the Mortgaged
Property comply with the applicable zoning laws and/or set-back ordinances in
force when improvements were added.
(i) Compliance with Usury Laws. The Purchased Loan, and all parties
involved in the origination and servicing of the Purchased Loan, complied as of
the date of origination with, or is exempt from, applicable state or federal
laws, regulations and other requirements pertaining to usury. Any and all other
requirements of any federal, state or local laws, including, without limitation,
truth-in-lending, real estate settlement procedures, equal credit opportunity or
disclosure laws, applicable to the Purchased Loan have been complied with.
(j) Mortgage Status; Waivers and Modifications. Since the date of
origination of the Purchased Loan, the terms of the Purchased Loan have not been
impaired, waived, altered, satisfied, canceled, subordinated or modified in any
respect (except with respect to modifications the economic terms of which are
reflected in the Purchased Loan Schedule and which are evidenced by documents in
the Purchased Loan File delivered to the Custodian) and no portion of the
Mortgaged Property has been released from the lien of the Mortgage or other
Purchased Loan Document in any manner.
(k) Mortgage Recording Taxes. All applicable Mortgage recording taxes
and other filing fees have been paid in full or deposited with the issuer of the
title insurance policy issued in connection with the Mortgage Loan for payment
upon recordation of the relevant documents.
(l) Assignment of Leases. Each Assignment of Leases, if any, creates a
valid assignment of, or a valid first or second priority, as applicable,
security interest in the related underlying obligor's interest in all leases,
sub-leases, licenses or other agreements pursuant to which any Person is entitle
to occupy, use or possess all of any portion of the related Mortgage, subject
only to a license granted to the relevant underlying obligor to exercise certain
rights and to perform certain obligations of the lessor under such leases,
including the right to operate the related Mortgage Property, subject only to
those exceptions described in clause (e) above. No person other than the
relevant underlying obligor owns any interest in any payments due under such
leases that is superior to or of equal priority with the mortgagee's interest
therein, subject only to those exceptions described in clause (d) above.
(m) Underlying Representations and Warranties. Seller has taken no
action, nor has the underlying obligor taken any action, that would cause the
representations and warranties made by the underlying obligor in any of the
Purchased Loan Documents not to be true.
Exhibit VI-3
(n) No Holdbacks. The proceeds of the Purchased Loan have been fully
disbursed and there is no obligation for future advances with respect thereto.
With respect to each Purchased Loan, any and all requirements as to completion
of any on-site or off-site improvement and as to disbursements of any funds
escrowed for such purpose that were to have been complied with on or before the
Purchase Date have been complied with, or any such funds so escrowed have not
been released.
(o) Inspections. Seller or its representative has inspected or caused to
be inspected each Mortgaged Property within six (6) months preceding the related
Purchase Date. The Purchased Loan File for Mortgaged Property constituting real
property includes a property survey, certified to the Seller, its successors and
assigns, and the title insurance company, reciting that it is in accordance with
most recent minimum standards for title surveys as determined by the ALTA, with
the signature and seal of a licensed engineer or surveyor affixed thereto.
(p) Contingent Interest; Convertible Notes. The Purchased Loan does not
have a shared appreciation feature, other contingent interest feature or
negative amortization. The indebtedness evidenced by the Mortgage Note is not
convertible to an ownership interest in the Mortgaged Property or the Mortgage,
and Seller has not financed, nor does it own, directly or indirectly, any equity
of any form in the Mortgaged Property or the underlying obligor. The Mortgage
Note or Mezzanine Note, as applicable, does not by its terms provide for the
capitalization or forbearance of interest.
(q) Cross-Collateralization; Cross-Default. The Purchased Loan is not
cross-collateralized or cross-defaulted with any other loan other than another
Purchased Loan, is a whole loan and contains no equity participation by the
lender.
(r) Fraud. No fraudulent acts were committed by Seller in connection
with the origination process of the Purchased Loan.
(s) Taxes and Assessments. All taxes, water charges, sewer rates,
governmental assessments, insurance premiums, leasehold payments and any other
outstanding fees or charges that prior to the date of origination of the
Purchased Loan became due and owing in respect of the related Mortgaged Property
have been paid, or an escrow of funds in an amount sufficient to cover such
payments has been established or are insured against by the title insurance
policy issued in connection with the origination of the Purchased Loan.
(t) No Material Default. No loan is a Defaulted Loan and there is no
material default, breach, violation or event of acceleration existing under any
of the Purchased Loan Documents and Seller has not received actual notice of any
event (other than payments due but not yet delinquent) which, with the passage
of time or with notice and the expiration of any grace or cure period, would and
does constitute a default, breach, violation or event of acceleration; no waiver
of the foregoing exists and no person other than the holder of the Mortgage Note
or Mezzanine Note, as the case may be, may declare any of the foregoing.
(u) Environmental Conditions. With respect to each Mortgaged Property, a
environmental site assessment conducted by a licensed qualified engineer. Seller
has reviewed each such report and update. Where such environmental report
disclosed the existence of a material and adverse environmental condition or
circumstance affecting any Mortgaged Property, (i) a party not related to the
underlying obligor was identified as the responsible party for such condition or
circumstance, (ii) the related underlying obligor was required either to provide
additional security and/or to obtain an operations and maintenance plan or (iii)
the related underlying obligor provided evidence that applicable federal, state
or local governmental authorities would not take any action, or require the
taking of any action, in respect of such condition or circumstance. The related
Purchased Loan Documents contain provisions pursuant to which the related
underlying obligor or a principal of such underlying obligor has agreed to
indemnify the mortgagee for damages resulting from violations of any applicable
environmental laws. Seller, having
Exhibit VI-4
made no independent inquiry other than reviewing the environmental reports and
updates referenced herein and without other investigation or inquiry, has no
knowledge of any material and adverse environmental condition or circumstance
affecting any Mortgaged Property that was not disclosed in the related report
and/or update. Each Mortgage requires the related Mortgagor to comply with all
applicable federal, state and local environmental laws and regulations in all
material respects. Seller has not received any actual notice of a material
violation of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or any applicable federal, state or local
environmental law with respect to any Mortgaged Property that was not disclosed
in the related report and/or update. Seller has not taken any actions which
would cause any Mortgaged Property not to be in compliance with all federal,
state and local laws pertaining to environmental hazards.
(v) Acceleration. The Purchased Loan Documents contain provisions for
the acceleration of the payment of the unpaid principal balance of the Purchased
Loan if (A) the underlying obligor voluntarily transfers or encumbers all or any
portion of any related Mortgaged Property; or (B) any direct or indirect
interest in underlying obligor is voluntarily transferred or assigned, other
than, in each case, as permitted under the terms and conditions of the Purchased
Loan Documents.
(w) Actions Concerning Purchased Loans. There is no pending action, suit
or proceeding, arbitration or governmental investigation against the underlying
obligor or any Mortgaged Property an adverse outcome of which is reasonably
likely to result in a Material Adverse Effect.
(x) Servicing. The servicing and collection practices used by Seller,
and the origination practices of Seller, to the extent applicable, have been in
all respects legal, proper and prudent and have met customary industry
standards.
(y) Assignability. In connection with the assignment, transfer or
conveyance of any individual Mortgage, the Mortgage Note and Mortgage contain no
provision limiting the right or ability of Seller to assign, transfer and convey
the Mortgage to any person or entity.
(z) Buyer under a Deed of Trust. If a Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the deed of trust, and no
fees or expenses are or will become payable to the trustee under the deed of
trust, except in connection with the sale or release of the Mortgaged Property
following default or payment of the Purchased Loan.
(aa) Insurance Proceeds. The Mortgage provides that any insurance
proceeds in respect of a casualty loss or taking will be applied either to the
repair or restoration of all or part of the related Mortgaged Property, with the
mortgagee or a trustee appointed by it having the right to hold and disburse
such proceeds (provided that such proceeds exceed the threshold amount described
in the loan documents) as the repair or restoration progresses, or to the
payment of the outstanding principal balance of the Purchased Loan together with
any accrued interest thereon, except to the extent of any excess proceeds after
restoration.
(bb) Flood Zone. No Mortgaged Property is located in a special flood
hazard area as defined by the Federal Emergency Management Agency or if it is,
flood insurance is required and has been received under the Mortgage.
(cc) Ground Lease. No Mortgage is secured in whole or in part by the
interest of a borrower as a lessee under a ground lease.
(dd) Certificate of Occupancy. Certificates of occupancy and building
permits, as applicable, have been issued with respect to Mortgaged Property.
Exhibit VI-5
(ee) Escrow Deposits. Any escrow accounts for taxes or other reserves
required to be funded on the date of origination of the Purchased Loan pursuant
to the Purchased Loan Documents have been funded and all such escrow accounts
required to have been funded as of the Purchase Date (taking into account any
applicable notice and grace period) have been funded.
(ff) Valid Assignment of Mortgage. The related Assignment of Mortgage
constitutes a legal, valid and binding assignment of such Mortgage to Buyer, and
the related reassignment of Assignment of Leases, rents and profits, if any,
constitutes a legal, valid and binding assignment thereof to Buyer.
(gg) Related Collateral. The related Mortgage Note, Mezzanine Note or
B-Note, as applicable, is not, and has not been since the date of origination of
the Purchased Loan, secured by any collateral except the lien of the related
Mortgage, any related Assignment of Leases, any related security agreement and
escrow agreement or other applicable Purchased Loan Document; and the related
Mortgaged Property or Properties or other securities, as applicable, do not
secure any loan other than the Purchased Loan being sold to Buyer hereunder
(except for Purchased Loans, if any, which are cross-collateralized with other
Purchased Loans being conveyed to Buyer hereunder and identified on the
Purchased Loan Schedule).
(hh) Licenses and Permits. As of the date of origination of the
Purchased Loan, the related underlying obligor was in possession of all material
licenses, permits and franchises required by applicable law for the ownership
and operation of the related Mortgaged Property as it was then operated.
(ii) Improvements; Origination. The Purchased Loan is directly (or in
the case of an participation interest, indirectly) secured by a first or second
lien on one or more parcels of real estate upon which is located one or more
multifamily or commercial structures; and the Purchased Loan was originated by a
savings and loan association, savings bank, commercial bank, credit union,
insurance company, or similar institution which is supervised and examined by a
Federal or State authority, or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act.
(jj) Tenants. As to each Purchased Loan secured by Mortgaged Property
which is leased to tenants:
(i) the Mortgaged Property is not subject to any leases other
than the leases described in the rent roll contained in the Purchased
Loan Documents (hereinafter referred to as the "Leases"), and such rent
roll is accurate and complete in all material respects, including
description of the rent and term and any extraordinary rights of tenants
(such as option, rights of first refusal and rights of termination). No
Person has any possessory interest in the Mortgaged Property or right to
occupy the same except under and pursuant to the provisions of the
Leases. Each Lease of all or any portion of the Mortgaged Property is
subordinate to the Mortgage, unless otherwise approved by the Buyer;
(ii) each such commercial tenant is conducting business, and
each such residential tenant is residing, only in that portion of the
Mortgaged Property covered by its lease; (B) no leases contain any
option to purchase, any right of first refusal to lease or purchase, any
right to terminate the lease or vacate the premises prior to expiration
of the lease term, or any other similar provisions which adversely
affect the Mortgaged Property or which might adversely affect the rights
of any holder of the Purchased Loan;
(iii) no Lease contains a non-disturbance or similar recognition
agreement;
(iv) (A) except as otherwise disclosed to Buyer in writing,
there are no prior recorded assignments of the Leases or of any portion
of the rents, additional rents, charges, issues or profits due and
payable or to become due and payable thereunder (hereinafter
collectively referred to as the "Rents") which are now outstanding and
have priority over the assignment of
Exhibit VI-6
leases contained in the Purchased Loan Documents and given in connection
with the Purchased Loan; (B) except as may be disclosed in the rent roll
contained in the Purchased Documents, no tenant is more than twenty-nine
(29) days delinquent in the payment of rent nor in default under any
material provision of its Lease, all material conditions and obligations
on the underlying obligor's part to be fulfilled under the terms of any
Lease of the Mortgaged Property have been satisfied or fully performed,
and all Leases are in full force and effect; and (C) each Lease provides
for payment of rent by check on a monthly basis; no tenant has advanced
more than one (1) month's payment under any Lease; and no Person
affiliated with the underlying obligor is a tenant under any Lease; and
(v) the underlying obligor is the owner and holder of the
landlord's interest under any leases, and the related Mortgage and
assignment of leases, rents and profits, if any, provides for the
appointment of a receiver for rents or allows the mortgagee to enter
into possession to collect rent or provide for rents to be paid directly
to mortgagee in the event of a default, subject to the exceptions
described in clause (e) of this Exhibit V.
(kk) Bankruptcy. Seller has not been served with notice that any
underlying obligor is a debtor in any state or federal bankruptcy or insolvency
proceeding.
(ll) Access; Separate Tax Parcels. At the time of origination, (i) all
amenities, access routes or other items crucial to the related appraised value
of the Mortgaged Property were under the direct control of the underlying
obligor or, subject to easements for the benefit of the underlying obligor, are
public property; and (ii) the Mortgaged Property was contiguous to a physically
open, dedicated all-weather public street, had all necessary permits and
approvals for ingress and egress, was adequately serviced by public water, sewer
systems and utilities and was on a separate Tax parcel, separate and apart from
any other property owned by the underlying obligor or any other person. The
Mortgaged Property has all necessary access by public roads or by easements
which in each case are not terminable and are not subordinated to any mortgage
other the related Mortgage.
(mm) Appraisal. The Purchased Loan File contains an Appraisal that is
signed by a qualified appraiser, duly appointed by Seller, who, to Seller's
knowledge, had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Purchased Loan, and the Appraisal and
appraiser both satisfy the requirements of Title XI of the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Purchased Loan was originated.
(nn) Junior Liens. The Purchased Loan does not permit the related
Mortgaged Property to be encumbered by any lien junior to or of equal priority
with the lien of the related Mortgage without the prior written consent of the
holder thereof or the satisfaction of debt service coverage or similar criteria
specified therein. To Seller's knowledge, except as disclosed, the related
Mortgaged Property is not encumbered by any lien junior to the lien of the
related Mortgage. The Purchased Loan contains a "due on sale" clause that
provides for the acceleration of the payment of the unpaid principal balance of
the Purchased Loan if, without the prior written consent of the holder of the
Purchased Loan, the related Mortgaged Property is transferred or sold.
(oo) Defeasance. Any Purchased Loan containing provisions for defeasance
of mortgage collateral either (i) requires the prior written consent of, and
compliance with the conditions set by, the holder of the Purchased Loan, or (ii)
requires that (A) defeasance may not occur prior to the time permitted by
applicable "real estate mortgage investment conduit" rules and regulations (if
applicable), (B) the replacement collateral consist of U.S. governmental
securities in an amount sufficient to make all scheduled payments under the
Mortgage Note when due, (C) independent public accountants certify that the
collateral is sufficient to make such payments, (D) counsel provide an opinion
that Buyer has a
Exhibit VI-7
perfected security interest in such collateral prior to any other claim or
interest, and (E) all costs and expenses arising from the defeasance of the
mortgage collateral shall be borne by the borrower.
(pp) Operating or Financial Statement. The related Purchased Loan
Documents require the related borrower to furnish to the mortgagee at least
annually an operating statement with respect to the related Mortgaged Property.
(qq) No Advances of Funds. No party to the Purchased Loan Documents has
advanced funds on account of any default under the Purchased Loan or under the
underlying real property mortgage documents.
(rr) Perfection of Security Interests. A Uniform Commercial Code
financing statement has been filed and/or recorded in all places necessary to
perfect a valid security interest in such personal property, and such security
interest is a first or second priority security interest, subject to any prior
purchase money security interest in such personal property and any personal
property leases applicable to such personal property. The pledge of ownership
interests securing any Purchased Loan that is a Mezzanine Loan relates to direct
or indirect equity or ownership interests in the underlying real property owner
and has been fully perfected in favor of Seller as mezzanine lender. To the
extent the pledged ownership interests have not been certificated pursuant to
the terms of any Purchased Loan that is a Mezzanine Loan, the terms of such
Mezzanine Loan and the related organizational documents of the underlying real
property owner prohibit the subsequent certification thereof.
(ss) Lockbox. The lockbox administrator with respect to the related
Purchased Loan, if any, is not an Affiliate of Seller.
(tt) No Plan Assets. The borrower under the Purchased Loan does not, and
would not be deemed to, hold Plan Assets at any time.
Exhibit VI-8
EXHIBIT VI
FORM OF BLOCKED ACCOUNT AGREEMENT
Blocked Account Agreement
-------------------------
May 28, 2003
PNC Bank, National Association
Treasury Management
Two PNC Plaza, 31st Floor
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxxxx Xxxxx
Re: Blocked Account established by Capital Trust, Inc. ("Seller")
and Midland Loan Services, Inc. ("Servicer") pursuant to the
Master Repurchase Agreement dated as of May 28, 2003 (as
amended, supplemented or otherwise modified from time to time,
the "Repurchase Agreement") among the Seller and Xxxxxxx Sachs
Mortgage Company ("Buyer")
Ladies and Gentlemen:
We refer to the collection account established by the Seller and the
Buyer, pursuant to the Repurchase Agreement, at PNC Bank, National Association
("Depository Bank"), entitled "Xxxxxxx Xxxxx Mortgage Company, as Buyer under
that certain Master Repurchase Agreement, dated May 28, 2003" Account No.
1015527379, ABA # 000000000, PNC Bank, Pittsburgh, PA, (the "Collection Account"
or the "Blocked Account"). Capitalized terms used but not defined herein have
the meanings ascribed to such terms in the Repurchase Agreement. In the event of
a conflict between the terms of the Repurchase Agreement or any Transaction
entered into thereunder and this Blocked Account Agreement, the Repurchase
Agreement shall prevail. Notwithstanding the previous sentence, this Blocked
Account Agreement will govern and control the performance of Depository Bank.
1. Seller shall, and shall cause the Servicer, from time to time, to
deposit or cause to be deposited directly into, or if applicable, remitted
directly from the applicable underlying collection account to, the Collection
Account all Income (including Principal Payments) with respect to the Portfolio
Loans, which may include payments in respect of associated Hedging Transactions
pledged to Buyer and related to the Portfolio Loans. The Buyer has established a
repurchase arrangement with the Seller. By its execution of this letter, the
Seller acknowledges that it has transferred all of the Seller's right, title and
interest in and to the Blocked Account and any funds from time to time on
deposit therein, that such funds are received by Depository Bank for Buyer and
are for application against the Seller's liabilities to the Buyer under the
Repurchase Agreement.
2. Funds in the Blocked Account shall be remitted in accordance with the
most recent instructions originated by the Buyer without the further consent of
the Seller (the "Distribution
Exhibit VI-1
Instructions"), which the Buyer agrees, for the benefit of the Seller only,
shall be in compliance with the provisions of the Repurchase Agreement. Until
Depository Bank shall receive contrary instructions from Buyer, on each Business
Day, the Depository Bank shall remit funds on deposit in the Blocked Account to
the account of Seller as set forth in Schedule A hereto.
3. Buyer shall deliver the Distribution Instructions to the Depository
Bank, Seller and Servicer by facsimile by no later than 12:00 p.m. (New York
City time) on the Business Day prior to each Remittance Date.
4. Depository Bank may rely upon any Distribution Instructions
originated by Buyer, and Depository Bank shall not have any liability to Buyer
for actions taken in reliance on such Distribution Instructions. All
distributions made by the Servicer pursuant to this Section shall be (subject to
any decree of any court of competent jurisdiction) final, and the Servicer shall
have no duty to inquire as to the application by Buyer of any amounts
distributed to it.
5. The Blocked Account shall be an interest bearing account. All income
and gains from the investment of funds in the Blocked Account shall be retained
in the Blocked Account until disbursed in accordance with Section 2 hereof. As
between Seller and Buyer, Seller shall treat all income, gains and losses from
the investment of amounts in the Blocked Account as its income or loss for
federal, state and local income tax purposes.
6. The Blocked Account shall be subject to the sole control of the Buyer
and, neither Seller nor Servicer shall have any right of withdrawal from the
Blocked Account nor any right to deliver instructions to Depository Bank in
respect of the Blocked Account. The Depositary Bank shall accept Distribution
Instructions only from the Buyer at all times and shall comply with all
instructions of Buyer without any further consent of Seller or Servicer being
required.
7. The undersigned parties agree: (a) that Depository Bank will not
exercise any right of set off, banker's lien or any similar right in connection
with such funds, provided that Depository Bank may set off against the Blocked
Account for fees and expenses payable hereunder, for returned deposit items and
for adjustments and corrections in respect of transactions in the Blocked
Account, including, without limitation, returned checks and other deposits with
respect to which Depository Bank fails to receive final payment or settlement;
(b) that Depository Bank shall not withdraw, transfer or otherwise dispose of
funds from the Blocked Account or permit any other person or entity to withdraw,
transfer or otherwise dispose of funds in the Blocked Account except in
accordance with the terms of Section 2 hereof, the Distribution Instructions
originated by Buyer, and the terms of this Section 7; (c) that for the purposes
of the Uniform Commercial Code as in effect from time to time in the State of
New York (the "UCC"), the Blocked Account is a "deposit account", as defined in
Article 9 of the UCC; and (d) upon receipt of written notice of any lien,
encumbrance or adverse claim against the Blocked Account or any funds credited
thereto, Depository Bank will make reasonable efforts promptly to notify Seller,
Buyer and Servicer thereof. The undersigned further agree that if there are
insufficient collected funds in the Blocked Account to cover the amount of any
returned check or other adjustment or correction to be debited thereto, Seller
shall repay Depository Bank the amount of such debit immediately upon demand. If
Seller fails to so repay Depository Bank, then, only after the occurrence and
continuance of an Event of Default under the Repurchase Agreement, Buyer shall
repay Depository Bank for such debit immediately upon demand to the extent that
Buyer received the proceeds of the check or other deposit or credit to which the
debit relates.
Exhibit VI-2
8. In the event of a conflict between this Blocked Account Agreement and
any other agreement between Depository Bank and Seller, the terms of this
Blocked Account Agreement will prevail.
9. This Blocked Account Agreement shall continue in effect until Buyer
has notified Depository Bank in writing that this Blocked Account Agreement is
terminated. Notwithstanding the foregoing, Depository Bank may terminate this
Agreement upon thirty (30) days written notice to the other parties ; provided
that it may terminate this Agreement immediately upon prior written notice to
the Buyer and Seller, in the event Depository Bank has a reasonable basis to
suspect fraud or other illegal activity in connection with the Blocked Account
or this Agreement. In the event of immediate termination by Depository Bank,
Depository Bank shall transfer all funds in the Blocked Account to Buyer or to
its designee, as directed in writing by Buyer.
10. This Blocked Account Agreement and the instructions and notices
required or permitted to be executed and delivered hereunder set forth the
entire agreement of the parties with respect to the subject matter hereof and
supersede any prior agreement and contemporaneous oral agreements of the parties
concerning its subject matter.
11. No amendment, modification or (except as otherwise specified in
Section 9 above) termination of this Blocked Account Agreement, nor any
assignment of any rights hereunder (except to the extent contemplated under
Section 13 below), shall be binding on any party hereto unless it is in writing
and is signed by each of the parties hereto, and any attempt to so amend,
modify, terminate or assign except pursuant to such a writing shall be null and
void. No waiver of any rights hereunder shall be binding on any party hereto
unless such waiver is in writing and signed by the party against whom
enforcement is sought.
12. If any term or provision set forth in this Blocked Account Agreement
shall be invalid or unenforceable, the remainder of this Blocked Account
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid of unenforceable term or provision
were omitted.
13. The terms of this Blocked Account Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
corporate successors. This Blocked Account Agreement may be assigned by Buyer,
Seller and Servicer to any assignee of Buyer, Seller or Servicer, respectively,
permitted under the Repurchase Agreement, provided that written notice thereof
is given by the applicable assignor to Depository Bank.
14. This Blocked Account Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instruments, and
any party hereto may execute this Blocked Account Agreement by signing and
delivering one or more counterparts.
15. This Blocked Account Agreement shall be governed by and construed in
accordance with the law of the State of New York. The parties agree that New
York is the "bank's jurisdiction" for purposes of the UCC.
16. Depository Bank may rely, and Depository Bank shall be protected in
acting, or refraining from acting, upon any notice (including but not limited to
electronically confirmed facsimiles of such notice) believed by Depository Bank
to be genuine and to have been given by the proper party or parties.
Exhibit VI-3
17. Depository Bank's duties and obligations shall be determined solely
by the provisions of this Agreement and Depository Bank shall not be liable
except for the performance of its duties and obligations as are set forth
herein. Depository Bank shall have no obligation to review, or confirm that any
actions taken pursuant to this Agreement comply with, any other agreement or
document. Depository Bank shall have no liability to any party to this Agreement
or to any other party arising out of or in connection with this Agreement other
than for its gross negligence or willful misconduct. Substantial compliance by
Depository Bank with its standard procedures for the services Depository Bank is
providing hereunder shall be deemed to be the exercise by it of ordinary care.
In no event shall Depository Bank be liable for any lost profits or for any
indirect, special, consequential or punitive damages even if advised of the
possibility or likelihood of such damages.
18. Seller agrees to indemnify, defend and hold harmless Depository Bank
and its affiliates and parent(s) and its and their respective officers,
directors, employees, representatives and agents (each an "Indemnified Party")
from and against all liabilities, losses, claims, damages, demands, costs and
expenses of every kind ("Losses") including, without limitation, Losses incurred
as a result of items being deposited in the Blocked Account and being unpaid for
any reason, reasonable attorney's fees and the reasonable charges of Depository
Bank's in-house counsel, incurred or sustained by any Indemnified Party arising
out of Depository Bank's performance of the services contemplated by this
Agreement, except to the extent such Losses are the direct result of the gross
negligence or willful misconduct of Depository Bank.
19. If at any time Depository Bank is served with legal process which it
in good faith believes prohibits the disbursement of the funds deposited in the
Blocked Account, then Depository Bank shall have the right (i) to place a hold
on the funds in the Blocked Account until such time as it receives an
appropriate court order or other assurance satisfactory to it as to the
disposition of the funds in the Blocked Account, or (ii) to commence, at
Seller's expense, an interpleader action in any competent Federal or State Court
located in the Commonwealth of Pennsylvania, and otherwise to take no further
action except in accordance with joint written instructions from Seller and
Buyer or in accordance with the final order of a competent court, served on
Depository Bank.
20. All bank statements in respect to the Blocked Account shall be sent
to Buyer and Seller as follows:
Seller:
-------
Capital Trust, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxxxx Xxxxxx, Vice President
Buyer:
------
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
All notices to Depository Bank are to be sent to:
PNC Bank, National Association
Treasury Management
Exhibit VI-4
Two PNC Plaza, 31st Floor
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Risk Manager and Xxxxxxxxxx Xxxxx
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit VI-5
Kindly acknowledge your agreement with the terms of this agreement by
signing the enclosed copy of this letter and returning it to the undersigned.
Very truly yours,
XXXXXXX XXXXX MORTGAGE
COMPANY, a New York limited partnership
By: Xxxxxxx Sachs Real Estate Funding
Corp., its general partner
By:
------------------------------
Title:
Agreed and acknowledged:
PNC BANK, NATIONAL ASSOCIATION,
a national banking association,
as Depository Bank
By:__________________________
Title:
CAPITAL TRUST, INC., a Maryland
corporation, as Seller
By:___________________________
Title:
MIDLAND LOAN SERVICES, INC., a
Delaware corporation, as
Servicer
By:____________________________
Title:
Exhibit VI-6
SCHEDULE A
----------
(Seller's Account Information)
XX Xxxxxx Xxxxx Bank
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
ABA#: 021-000021
Account # 230254632
Account Name: Capital Trust, Inc.
Attention: Xxxxx X. Xxxxxx (000) 000-0000
Exhibit VI-7
EXHIBIT VII
FORM OF DIRECTION LETTER
Exhibit VII-1
EXHIBIT VIII
FORM OF BAILEE AGREEENT
[CAPITAL TRUST, INC.
NAME AND ADDRESS]
_______________ __, 20__
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bailee Agreement (the "Bailee Agreement") in connection with the
sale of ______________ by Capital Trust, Inc. (the "Seller") to
Xxxxxxx Sachs Mortgage Company (the "Buyer")
Gentlemen and Mesdames:
In consideration of the mutual promises set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Seller, the Buyer and Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
(the "Bailee") hereby agree as follows:
1. The Seller shall deliver to the Bailee in connection with any
Purchased Loans delivered to the Bailee hereunder an Identification Certificate
in the form of Attachment 1 attached hereto to which shall be attached a
Purchased Loan Schedule identifying which Purchased Loans are being delivered to
the Bailee hereunder. Such Purchased Loan Schedule shall contain the following
fields of information: (a) the loan identifying number; (b) the obligor's name;
(c) the xxxxxx xxxxxxx, xxxx, xxxxx and zip code for the applicable real
property; (d) the original balance; and (e) the current principal balance if
different from the original balance and such other information as the Seller and
Buyer shall require.
2. On or prior to the date indicated on the Custodial Delivery
Certificate delivered by the Seller (the "Funding Date"), the Seller shall have
delivered to the Bailee, as bailee for hire, the original documents set forth on
Schedule A attached hereto (collectively, the "Purchased Loan File") for each of
the Purchased Loans (each a "Purchased Loan" and collectively, the "Purchased
Loans") listed in Exhibit A to Attachment 1 attached hereto (the "Purchased Loan
Schedule").
3. The Bailee shall issue and deliver to the Buyer and the Custodian on
or prior to the Funding Date by facsimile (a) in the name of the Buyer, an
initial trust receipt and certification in the form of Attachment 2 attached
hereto (the "Trust Receipt ") which Trust Receipt shall state that the Bailee
has received the documents comprising the Purchased Loan File as set forth in
the Custodial Delivery Certificate (as defined in that certain Custodial
Agreement dated as of May 28, 2003, among Seller, Buyer and Custodian (as
defined in Section 5 below), in addition to such other documents required to be
delivered to Buyer and/or Custodian pursuant to the Master Repurchase Agreement
dated as of May 28, 2003, between Seller and Buyer (the "Repurchase Agreement").
4. On the applicable Funding Date, in the event that the Buyer fails to
purchase any New Loan from the Seller that is identified in the related
Custodial Delivery Certificate, the Buyer shall deliver by facsimile to the
Bailee at (000) 000-0000 to the attention of Xxxxxx Xxxxxx, Esq., an
authorization (the
Exhibit VIII-2
"Facsimile Authorization") to release the Purchased Loan Files with respect to
the Purchased Loans identified therein to the Seller. Upon receipt of such
Facsimile Authorization, the Bailee shall release the Purchased Loan Files to
the Seller in accordance with the Seller's instructions.
5. Following the Funding Date, the Bailee shall forward the Purchased
Loan Files to Deutsche Bank Trust Company Americas, 0000 Xx. Xxxxxx Xxxxx, Xxxxx
Xxx, Xxxxxxxxxx 00000, Attention: Mortgage Custody-QT020C (the "Custodian") by
insured overnight courier for receipt by the Custodian no later than 1:00 p.m.
on the third Business Day following the applicable Funding Date (the "Delivery
Date").
6. From and after the applicable Funding Date until the time of receipt
of the Facsimile Authorization or the applicable Delivery Date, as applicable,
the Bailee (a) shall maintain continuous custody and control of the related
Purchased Loan Files as bailee for the Buyer and (b) is holding the related
Purchased Loan Loans as sole and exclusive bailee for the Buyer unless and until
otherwise instructed in writing by the Buyer.
7. The Seller agrees to indemnify and hold the Bailee and its partners,
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Bailee
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than special, indirect, punitive or
consequential damages, which shall in no event be paid by the Bailee) were
imposed on, incurred by or asserted against the Bailee because of the breach by
the Bailee of its obligations hereunder, which breach was caused by negligence,
lack of good faith or willful misconduct on the part of the Bailee or any of its
partners, directors, officers, agents or employees. The foregoing
indemnification shall survive any resignation or removal of the Bailee or the
termination or assignment of this Bailee Agreement.
8. (a) In the event that the Bailee fails to produce a Mortgage Note,
Mezzanine Note, assignment of Purchased Loan or any other document related to a
Purchased Loan that was in its possession within ten (10) business days after
required or requested by the Seller or Buyer (a "Delivery Failure"), the Bailee
shall indemnify the Seller or Buyer in accordance with the succeeding paragraph
of this Section 8.
(b) The Bailee agrees to indemnify and hold the Buyer and Seller, and
their respective affiliates and designees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of a Custodial Delivery
Failure or the Bailee's negligence, lack of good faith or willful misconduct.
The foregoing indemnification shall survive any termination or assignment of
this Bailee Agreement.
9. The Seller hereby represents, warrants and covenants that the Bailee
is not an affiliate of or otherwise controlled by the Seller. Notwithstanding
the foregoing, the parties hereby acknowledge that the Bailee hereunder may act
as Counsel to the Seller in connection with a proposed loan and Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, if acting as Bailee, has represented the Seller in
connection with negotiation, execution and delivery of the Repurchase Agreement.
10. In connection with a pledge of the Purchased Loans as collateral for
an obligation of the Buyer, the Buyer may pledge its interest in the
corresponding Purchased Loan Files held by the Bailee for the
Exhibit VIII-3
benefit of the Buyer from time to time by delivering written notice to the
Bailee that the Buyer has pledged its interest in the identified Purchased Loans
and Purchased Loan Files, together with the identity of the party to whom the
Purchased Loans have been pledged (such party, the "Pledgee"). Upon receipt of
such notice from the Buyer, the Bailee shall xxxx its records to reflect the
pledge of the Purchased Loans by the Buyer to the Pledgee. The Bailee's records
shall reflect the pledge of the Purchased Loans by the Buyer to the Pledgee
until such time as the Bailee receives written instructions from the Buyer that
the Purchased Loans are no longer pledged by the Buyer to the Pledgee, at which
time the Bailee shall change its records to reflect the release of the pledge of
the Purchased Loans and that the Bailee is holding the Purchased Loans as
custodian for, and for the benefit of, the Buyer.
11. From time to time, subject to the acceptance and approval of Buyer,
Seller may request pursuant to a request substantially in the form of Annex 6 to
the Custodial Agreement the delivery by the Custodian to the Bailee of some or
all of the Purchased Loan File for the purposes set forth in such request. Upon
receipt of the Purchased Loan File or such portions thereof, Bailee shall hold
the same as sole and exclusive bailee for the Buyer until such time as the
Purchased Loan File, or such portions thereof, are redelivered to Custodian or
to such other Persons, as otherwise directed by Buyer, subject in either case to
the provisions set forth herein governing standards of care and indemnification
and except as otherwise provided by any document specifically amending,
supplementing or modifying the terms hereof which is executed and delivered by
all parties hereto in connection with such delivery of the Purchased Loan File,
or such portions thereof, to Bailee. Notwithstanding anything to the contrary
contained in this Section 11, Bailee shall have the right to deliver such
Purchased Loan File, or portions thereof, to Buyer upon five (5) days written
notice to Buyer.
12. The agreement set forth in this Bailee Agreement may not be
modified, amended or altered, except by written instrument, executed by all of
the parties hereto.
13. This Bailee Agreement may not be assigned by the Seller or the
Bailee without the prior written consent of the Buyer.
14. For the purpose of facilitating the execution of this Bailee
Agreement as herein provided and for other purposes, this Bailee Agreement may
be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
15. This Bailee Agreement shall be construed in accordance with the laws
of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
16. Capitalized terms used herein and defined herein shall have the
meanings ascribed to them in the Repurchase Agreement.
[signatures begin on next page]
Exhibit VIII-4
Very truly yours,
CAPITAL TRUST, INC., a Maryland
corporation
By:___________________________
Name:
Title:
ACCEPTED AND AGREED:
PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP,
Bailee
By:__________________________
Name:
Title:
ACCEPTED AND AGREED:
XXXXXXX SACHS MORTGAGE COMPANY,
Buyer
By: Xxxxxxx Xxxxx Real Estate Funding Corp.,
its general partner
By:__________________________
Name:
Title:
Exhibit VIII-5
Attachment 1 to Bailee Agreement
IDENTIFICATION CERTIFICATE
--------------------------
Exhibit VIII-6
Attachment 2 to Bailee Agreement
TRUST RECEIPT
-------------
Exhibit VIII-7
ANNEX II
1. Names and Addresses for Communications Between Parties:
BUYER
-----
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx- 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier:(000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
SELLER
------
Capital Trust, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxx Xxxxxxxx Xxxxxxxx & Xxxxxx, LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
2. Payments to Buyer: Payments to Buyer under the Agreement shall be made by
transfer, via wire transfer, to the following account of the Buyer:
Citibank, N.A., ABA #: 000000000, Account #: 00000000, Account Name:
Xxxxxxx Xxxxx Mortgage Company, Ref: Capital Trust, Inc.,
Exhibit VIII-1
Attention: Xxxx Xxxxxxxx and Xxxx Xxxxxx. Buyer may consider on a
case-by-case-basis in its sole and absolute discretion alternative funding
arrangements.
3. Payments to Seller: Payments to Seller under the Agreement shall be made
by transfer, via wire transfer, to the following account of the Seller: XX
Xxxxxx Chase Bank, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000-0000, ABA #: 021-000021, Account #:230254632, Account Name: Capital
Trust, Inc., Attention: Xxxxx X. Xxxxxx, (000) 000-0000
Exhibit VIII-2
