SECOND AMENDMENT TO GUARANTY
Exhibit
10.2
SECOND
AMENDMENT TO GUARANTY
This
Second Amendment to Guaranty, dated as of December 17, 2008 (this “Second
Amendment”) is by and between JER Investors Trust Inc., a Maryland
corporation (the “Guarantor”)
and X.X. Xxxxxx Securities Inc. (“JPMSI”).
WHEREAS,
the parties hereto have entered into that certain Guaranty dated as of September
12, 2008 (the “Original
Guaranty”), which Original Guaranty was amended pursuant to that certain
Amendment to Guaranty dated as of September 26, 2008 by and between Guarantor
and JPMSI (the “First
Amendment; the Original Guaranty and the First Amendment, collectively,
the “Guaranty”);
and
WHEREAS,
the parties hereto acknowledge and agree that they wish to further amend the
Guaranty as more particularly set forth herein;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Guarantor and JPMSI hereby agree as
follows:
1. Section
10 of the Guaranty is hereby deleted in its entirety, and the following is
hereby substituted therefor:
“10. Covenants. On
and as of the date hereof and each Purchase Date and until the Repurchase
Agreement is no longer in force with respect to any Transaction, the Guarantor
covenants that Counterparty and Guarantor will not, without the prior written
consent of JPMSI:
(a) permit
the combined ratio of total indebtedness to Tangible Net Worth of Guarantor and
its consolidated subsidiaries to be greater than 5.00:1.00, it being understood
and agreed that for purposes of this Section 10(a), total indebtedness shall not
include any indebtedness related to any trust, common and preferred securities
and/or junior subordinated debentures.
(b) permit
the combined Tangible Net Worth of Guarantor to fall below an amount equal to
$75,000,000, provided however, that at any time and for so long as Guarantor’s
combined Tangible Net Worth is less than $100,000,000, Guarantor shall not pay
any dividends to Guarantor’s shareholders except to the extent necessary for
Guarantor to continue to qualify as a real estate investment trust under the
Internal Revenue Code of 1986, as amended.
(c) permit
at any time the sum on a consolidated basis of cash and cash equivalents held
free and clear of any liens or encumbrances by Guarantor to fall below an amount
equal to 10% of total outstanding Senior Secured Recourse
Indebtedness.
(d) incur
any new and/or additional Recourse Indebtedness, it being understood and agreed
that for purposes of this Section 10(d), Recourse Indebtedness
shall
not include trade payables, any accrued liabilities and/or liabilities under any
interest rate swaps or other interest rate protection
agreements.
Guarantor’s
compliance with the covenants set forth in this paragraph 10 must be evidenced
by financial statements and by a Covenant Compliance Certificate in the form of
Exhibit I to the Repurchase Agreement furnished together therewith, as provided
by Counterparty to JPMSI pursuant to paragraph 10 of the Repurchase Agreement,
and compliance with all such covenants is subject to continuing verification by
JPMSI.
For
purposes of this paragraph 10, the following definitions shall
apply:
“Recourse
Indebtedness” shall mean total outstanding indebtedness, excluding (i)
any non-recourse financing facilities and (ii) any indebtedness related to any
trust, common and preferred securities and/or junior subordinated
debentures.
“Senior Secured Recourse
Indebtedness” shall mean total outstanding secured
indebtedness, ranking senior in priority, excluding (i) any non-recourse
financing facilities and (ii) trade payables, dividends payable, any accrued
liabilities and/or liabilities under any interest rate swaps or other interest
rate protection agreements.
“Tangible Net Worth”
shall mean, as of a particular date, the sum of (a) all amounts which would be
included under stockholders’ equity of such person and its consolidated
subsidiaries, if any, on a balance sheet of such person and its consolidated
subsidiaries at such date, determined in accordance with GAAP, together with any
capital contributions committed to such person and its consolidated
subsidiaries, if any, that are available to be called, plus (b) any indebtedness
related to any trust, common and preferred securities and/or junior subordinated
debentures less (c)
intangible assets of such person and its consolidated subsidiaries, if
any.”
Except
as otherwise set forth herein, the Guaranty shall remain unchanged and in full
force and effect. From and after the date hereof, any reference to
the Guaranty shall be a reference to the Guaranty as amended
hereby.
THIS
SECOND AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PRINCIPLES THAT
WOULD DESIGNATE THE LAWS OF ANOTHER JURISDICTION.
IN
WITNESS WHEREOF, the undersigned have caused this Second Amendment to be duly
executed and delivered as of the day and year first written above.
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X.X.
XXXXXX SECURITIES INC.
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| By: | /s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxx X. Xxxxx |
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| Name: | Xxxxx X. Xxxxxx | Name: | Xxxx X. Xxxxx | ||
| Title: | Executive Director | Title: | President | ||
