AMENDMENT NO. 1 TO MASTER REPURCHASE AGREEMENT
EXHIBIT
10.3
AMENDMENT
NO. 1
TO
AMENDMENT
NO. 1 TO MASTER REPURCHASE AGREEMENT (this “Amendment”),
dated
as of August 16, 2005, by and between:
CAPLEASE,
LP,
a
Delaware limited partnership, for itself and on behalf of certain
special-purpose entity subsidiaries thereof (collectively, “Sellers”);
and
CAPITAL
LEASE FUNDING, INC.,
a
Maryland corporation (“Guarantor”);
and
CAPLEASE
SERVICES CORP.,
a
Delaware corporation (“Services”);
and
WACHOVIA
BANK, NATIONAL ASSOCIATION
(“Buyer”).
PRELIMINARY
STATEMENTS
(A) Sellers
and Guarantor entered into a certain Master Repurchase Agreement, dated as
of
September 22, 2004 with the Buyer (as amended, the “Repurchase
Agreement”);
and
(B) Services,
as a wholly owned subsidiary of Guarantor, desires to be added as a party to
the
Repurchase Agreement as a seller, and Buyer is willing to add Services as a
party thereto, all on the terms and conditions hereinafter set forth;
and
(C) Sellers
and Guarantor have requested that Buyer issue letters of credit to Sellers,
Guarantor, Services or any of their affiliates or subsidiaries under the
Repurchase Agreement; and
(D) Sellers
and Guarantor have also requested that the Buyer amend certain provisions of
the
Repurchase Agreement, and the Buyer is willing to do so, all on the terms and
conditions hereinafter set forth.
NOW,
THEREFORE,
in
consideration of the agreements and provisions contained herein, the parties
hereto hereby agree as follows:
ARTICLE
I.
AMENDMENTS
Section
1.1. Definitions.Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
to
such terms in the Repurchase Agreement.
Section
1.2. Certain
Amendments to Repurchase Agreement.
The
Repurchase Agreement is hereby amended as follows:
(a) The
definition of “Asset Value” appearing in Section 2.01 of the Repurchase
Agreement is hereby amended by adding the following subclause (c)
thereto:
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“(c)
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the
aggregate Asset Value shall be reduced on a dollar-for-dollar basis
by the
amount of LC Exposure as of such date of determination. Such reduction
may
be applied individually against any Eligible Asset or collectively
against
all Eligible Assets in the Buyer’s sole discretion; provided,
that,
the total amount of reduction shall not exceed the amount of LC Exposure
as of such date of determination.”
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(b) The
definition of “Consolidated Tangible Net Worth” appearing in Section 2.01 of the
Repurchase Agreement is hereby amended by adding the following subclause (c)
thereto:
| “(c) |
for
the avoidance of doubt, ‘Consolidated Tangible Net Worth’ shall add back
accumulated depreciation and amortization on real estate
investments.”
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(c) The
definition of “Initial Termination Date “ appearing in Section 2.01 of the
Repurchase Agreement is amended and restated in its entirety as
follows:
“‘Initial
Termination Date’:
Shall
be August 15, 2006.”
(d) The
defined term “LC
Disbursement”
is
hereby added to Section 2.01 of the Repurchase Agreement in alphabetical order
and the definition of such term shall read in its entirety as
follows:
“‘LC
Disbursement’:
A
payment made by the Buyer pursuant to a Letter of Credit. Following such
payment, the Buyer shall increase the Purchase Price and Repurchase Price of
any
Purchased Asset, as selected by Buyer in its sole discretion.”
(e) The
defined term “LC
Documentation”
is
hereby added to Section 2.01 of the Repurchase Agreement in alphabetical order
and the definition of such term shall read in its entirety as
follows:
“‘LC
Documentation’:
All
applications and agreements relating to the issuance by the Buyer (or any Letter
of Credit issuing affiliate) of any Letter of Credit other than the Wachovia
Letter of Credit to either Sellers, Guarantor, Services or any of their
affiliates or subsidiaries (“Applicants”)
and
all accompanying ancillary documentation, including, without limitation, all
Letters of Credit, reimbursement agreements and security agreements executed
and
delivered in connection therewith.”
(f) The
defined term “LC
Exposure”
is
hereby added to Section 2.01 of the Repurchase Agreement in alphabetical order
and the definition of such term shall read in its entirety as
follows:
“‘LC
Exposure’:
At any
time, the sum of (a) the aggregate undrawn and unexpired amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of
all
LC Disbursements that have, or are deemed to have, been funded under this
Agreement, provided,
that,
such LC
Disbursements have not resulted in an increase in the Purchase Price and
Repurchase Price of any Purchased Asset. At no time during the term hereof
shall
the LC Exposure exceed $20 million (not including exposure under the Wachovia
Letter of Credit). Notwithstanding the foregoing, any LC Disbursement that
has
(i) been repaid by the Sellers in cash or Cash Equivalents, or (ii) resulted
in
the increase in the Purchase Price and Repurchase Price of the Purchased Asset,
shall not be calculated as part of LC Exposure.”
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(g) The
defined term “Letter
of Credit”
is
hereby added to Section 2.01 of the Repurchase Agreement in alphabetical order
and the definition of such term shall read in its entirety as
follows:
“‘Letter
of Credit’:
Any
letter of credit issued pursuant to any LC Documentation.”
(h) The
definition of “Maximum
Amount“
appearing in Section 2.01 of the Repurchase Agreement is amended and restated
in
its entirety as follows:
“‘Maximum
Amount’:
$250,000,000 plus
the
amount available under the Wachovia Letter of Credit, or such greater amount
as
Buyer may determine in accordance with Section 3.05(b) hereof, less
the LC
Exposure.”
(i) The
definition of “Mortgage
Asset“
appearing in Section 2.01 of the Repurchase Agreement is amended and restated
in
its entirety as follows:
“‘Mortgage
Asset’:
Any
Whole Loan, B Note, Mezzanine Loan, CMBS, Floater, Letter of Credit Loan or
Construction Loan, or any other asset that Buyer agrees in its sole discretion
to purchase hereunder, which the Custodian has been instructed to hold for
Buyer
pursuant to the Custodial Agreement listed on a Confirmation. In no event shall
“Mortgage Asset” include any asset (i) not entirely owned by Seller and (ii)
unless otherwise approved by Buyer, except in the case of CMBS, not a loan
secured by real property encumbered by a Credit Tenant Lease.”
(j) The
definition of “Sellers”
appearing in Section 2.01 of the Repurchase Agreement is amended and restated
in
its entirety as follows:
“‘Seller(s)’:
Caplease, LP, a Delaware limited partnership, certain special purpose-entity
subsidiaries thereof, and Caplease Services Corp., a Delaware
corporation.”
(k) The
definition of “SPE
Seller”
appearing on Section 2.01 of the Repurchase Agreement is amended and restated
in
its entirety as follows:
“‘SPE
Seller’:
A
Subsidiary of Caplease or Guarantor formed after the date hereof solely for
the
purposes of owning real estate and obtaining credit-tenant lease mortgage loans
from Caplease or Guarantor which will be Mortgage Assets under Direct CTL
Transactions, and which Subsidiary shall have such corporate and capital
structure, and have governing documents having such terms and restrictions,
as
shall be consistent with bankruptcy-remote “special-purpose entities” and
otherwise reasonably satisfactory to the Buyer. Notwithstanding the foregoing,
SPE Sellers shall not be required to have independent directors and
“non-consolidation” opinions in connection with any SPE Seller shall only be
required if requested by Buyer.”
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(l) Section
3.04 of the Repurchase Agreement is hereby amended by adding the following
subclause (c) thereto:
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“(c)
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Mandatory
Repurchases.
In the event that a LC Disbursement results in a Margin Deficit,
Seller
shall, no later than the close of business on the day that Seller
is
provided with either written or telephonic notice of such Margin
Deficit
by Buyer: (i) sell to Buyer for no additional consideration Additional
Purchased Assets; (ii) repurchase Purchased Assets at the Repurchase
Price; (iii) make a payment in reduction of the Repurchase Price;
or (iv)
choose any combination of the foregoing, so that, after giving effect
to
such repurchases and payments, the aggregate Repurchase Price plus
LC
Exposure of all Mortgage Assets subject to Transactions then outstanding
does not exceed (x) the Maximum Amount, and/or (y) the aggregate
Asset
Value. Notwithstanding the foregoing, if the Seller does not designate
the
Purchased Asset it will repurchase in a timely manner, the Buyer
(in its
sole discretion) will be permitted to designate the Purchased Assets
that
are to be repurchased by Seller in order to satisfy the Margin
Deficit.”
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(m) Section
9.01(a)(iii) of the Repurchase Agreement is hereby amended and restated in
its
entirety as follows:
“(iii) with
respect to each Mortgage Asset, as soon as available, but in any event not
later
than two (2) Business Days prior to each Payment Date, copies of the monthly
servicing report (which will include all available information on all
collections with respect to, and current unpaid principal balances of, the
Mortgage Assets);”
(n) Section
9.01(a)(iv) of the Repurchase Agreement is hereby amended and restated in its
entirety as follows:
“(iv) with
respect to each Mortgage Asset, to the extent requested in writing by the Buyer,
as soon as available, any Servicer’s report relating to projections of any
protective advances with respect to such Mortgage Asset, which, if requested
by
Buyer in writing, shall include, in any event, a description of the related
Seller’s internal risk rating (if applicable), tenant ratings, tenant KMV
ratings (if applicable) and/or surveillance of such Mortgage
Asset;”
(o) Section
9.01(a)(v) of the Repurchase Agreement is hereby amended and restated in its
entirety as follows:
“(iv) with
respect to each Mortgage Asset, to the extent received by any Seller from the
obligor under any Mortgage Asset, if requested in writing by the Buyer, as
soon
as available, but in any event not later than thirty (30) days after receipt
thereof, the annual balance sheet with respect to the any tenant to the extent
the Seller has received the same;”
(p) Section
9.01(e) of the Repurchase Agreement is amended by deleting the words “(other
than the Subsidiaries set forth on Schedule 5 hereto)” and substituting in its
place and stead “(other than in the ordinary course of business in connection
with acquiring or financing assets)”.
(q) Section
9.01(l)(i) of the Repurchase Agreement is amended by deleting reference to
“$100,000,000” and substituting in its place and stead
“$180,000,000”.
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(r) Section
9.01 of the Repurchase Agreement is hereby amended by adding the following
subclause (y) thereto:
“(y) Notwithstanding
Section 6.02 of this Agreement, if any LC Exposure exists at the time that
this
Agreement terminates: (i) the Sellers shall provide collateral, in the form
of
cash or Cash Equivalents, equal to the amount of such LC Exposure in order
to
secure the payment obligations under such LC Exposure (“Cash
Collateral”);
and
(ii) following receipt of the Cash Collateral from the Sellers and performance
of all other obligations hereunder, the Buyer shall reconvey the Purchased
Assets to the Sellers and release its security interest therein.”
ARTICLE
II.
REPRESENTATIONS
AND WARRANTIES
In
order
to induce the Buyer to enter into this Amendment, the Sellers and Guarantor
hereby jointly and severally represent and warrant to the Buyer
that:
Section
2.1. No
Default.
After
giving effect to this Amendment, no Default or Event of Default shall have
occurred or be continuing under the Repurchase Agreement, or any other Agreement
between the parties hereto.
Section
2.2. Existing
Representations and Warranties.
As of
the date hereof and after giving effect to this Amendment, each and every one
of
the representations and warranties set forth in the Repurchase Agreement (except
for such representations and warranties that were only required to be true
and
correct as of a prior date) are true and correct in all material
respects.
Section
2.3. Authority;
Enforceability.
(a) The
execution, delivery and performance by the Sellers and Guarantor of this
Amendment are within their respective organizational powers and have been duly
authorized by all necessary action on the part of the Sellers and Guarantor,
(b)
this Amendment is the legal, valid and binding obligation of the Sellers and
Guarantor, enforceable against the Sellers and Guarantor in accordance with
its
respective terms, and (c) this Amendment and the execution, delivery and
performance by the Sellers and Guarantor does not: (i) contravene the terms
of
any of their respective organization documents; (ii) conflict with or result
in
any material breach or contravention of, or the creation of any Lien under,
any
document evidencing any contractual obligation to which it is a party or any
order, injunction, writ or decree to which the Sellers or Guarantor or their
respective assets and properties are subject; or (iii) violate any Requirement
of Law.
ARTICLE
III.
REFERENCE
TO AND EFFECT UPON THE LOAN AGREEMENT
Section
3.1. Effect.
Except
as specifically set forth herein, the Repurchase Agreement and the other
ancillary documents entered into in connection therewith (collectively,
“Transaction
Documents”)
shall
remain in full force and effect in accordance with their terms and are hereby
ratified and confirmed.
Section
3.2. No
Waiver; References.
The
execution, delivery and effectiveness of this Amendment shall not operate as
a
waiver of any right, power or remedy of the Buyer under the Repurchase Agreement
or the Transaction Documents, nor constitute a waiver of any provision of the
Repurchase Agreement or the Transaction Documents, except as specifically set
forth herein. Upon the effectiveness of this Amendment, each reference
in:
(i) the
Repurchase Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or
words of similar import shall mean and be a reference to the Repurchase
Agreement as amended hereby; and
(ii) the
other
Transaction Documents to the “Repurchase Agreement” shall mean and be a
reference to the Repurchase Agreement as amended hereby.
Section
3.3. Waiver.
As of
the date hereof, Sellers and Guarantor hereby waive, release and discharge
Buyer
and its successors, assigns, and past, present and future affiliates, partners,
participants, members, officers, directors, employees, shareholders, attorneys,
and agents from any and all liabilities, duties, responsibilities, obligations,
claims, demands, actions, causes of action, cases, controversies, damages,
costs, losses, and expenses now existing or hereafter arising out of or in
any
way relating to or in connection with, directly or indirectly, the Repurchase
Agreement or the Transaction Documents; provided,
that,
neither
Buyer nor any of its successors, assigns, and past, present and future
affiliates, partners, participants, members, officers, directors, employees,
shareholders, attorneys, and agents has engaged in any act of gross negligence
or willful misconduct in connection with the Repurchase Agreement or the
Transaction Documents.
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ARTICLE
IV.
MISCELLANEOUS.
Section
4.1. Expenses.
The
Sellers and Guarantor agree to pay the Buyer upon demand for all reasonable
expenses, including reasonable attorneys’ fees and expenses of the Buyer,
incurred by the Buyer in connection with the preparation, negotiation and
execution of this Amendment.
Section
4.2. Governing
Law.
THIS
AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section
4.3. Successors.
This
Amendment shall be binding upon the parties hereto and their respective
successors and assigns, and shall inure to the benefit of the parties hereto
and
the successors and assigns of the Buyer.
Section
4.4. Assignment.
Sellers
and Guarantor shall not assign all or any portion of this Amendment, or any
rights or benefits thereof, to any person or entity without the prior written
consent of the Buyer.
Section
4.5. Execution
in Counterparts.
This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute one and the same Amendment.
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IN
WITNESS WHEREOF,
the
parties hereto have caused this Amendment to be executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.
SELLERS:
CAPLEASE,
LP, for itself and on behalf of certain special-purpose entity subsidiaries
thereof
By:
CLF
OP
GENERAL PARTNER LLC, its General Partner
By:
Capital
Lease Funding, Inc., the sole member of CLF OP GENERAL PARTNER LLC
By:
/s/ Xxxx X. XxXxxxxx
Name:
Xxxx X. XxXxxxxx
Title:
Chief Executive Officer
CAPLEASE
SERVICES CORP.
By:
/s/ Xxxx X. XxXxxxxx
Name:
Xxxx X. XxXxxxxx
Title:
Chief Executive Officer
GUARANTOR:
CAPITAL
LEASE FUNDING, INC.
By:
/s/ Xxxx X. XxXxxxxx
Name:
Xxxx X. XxXxxxxx
Title:
Chief Executive Officer
BUYER:
WACHOVIA
BANK, NATIONAL ASSOCIATION
By:
/s/ R. Xxxxxx Xxxx
Name:
R.
Xxxxxx Xxxx
Title:
Director
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