GUARANTY
Exhibit 10.1
GUARANTY
dated as of September 12, 2008 between JER Investors Trust Inc., a Maryland
corporation (the "Guarantor") and X.X. Xxxxxx Securities Inc.
("JPMSI").
RECITALS
JERIT
FINANCE CO JPM, LLC (the "Counterparty"), the Guarantor and JPMSI are parties to
a Master Repurchase Agreement dated as of September 12, 2008 (the
"Agreement"). Capitalized terms used herein not otherwise defined
have the meanings assigned to them in the Agreement. As an inducement
to JPMSI to enter into the Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
JPMSI and the Guarantor agree as follows:
1.
Guaranty of
Payment. The Guarantor, as primary obligor and not as surety
only, hereby unconditionally guarantees the due and punctual payment (whether at
stated maturity, upon acceleration, early termination or otherwise) of any
amounts arising out of or in connection with the Agreement, including without
limitation the obligation of the Counterparty to pay any amounts due and owing
pursuant to the Agreement and all expenses of collection, counsel fees and other
expenses incurred by JPMSI in connection with the enforcement of its rights
under the Agreement (collectively, the "Guaranteed
Obligations"). Upon any failure by the Counterparty to pay any of the
Guaranteed Obligations, the Guarantor agrees that it will forthwith on demand
pay, at the place and in the manner specified in the Agreement, such amounts
which the Counterparty has failed to pay. This Guaranty is a guaranty
of payment and not merely a guaranty of collection.
2.
Guaranty Unconditional and
Absolute. The obligations of the Guarantor hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected
by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of the Counterparty
or any other guarantor of any of the Guaranteed Obligations;
(ii) any release, exchange, non-perfection or
invalidity of any direct or
indirect security for any of the Guaranteed Obligations;
(iii) any modification or amendment of or
supplement to the Agreement;
(iv) any change in the corporate existence
(including its constitution, laws, rules, regulations or powers), structure or ownership of the Counterparty
or the Guarantor, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Counterparty or its assets, the
Guarantor or any other guarantor of any of the Guaranteed
Obligations;
(v) the existence of any claim, set-off or other
rights which the Guarantor may have at any time against the Counterparty, JPMSI
or any other corporation or person, whether in connection herewith or in
connection with any unrelated transaction; provided that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability
relating to or against the Counterparty or any other guarantor for any reason of
the Agreement or any other guaranty agreement, or any provision of applicable law
or regulation purporting to prohibit payment by the Counterparty of amounts to
be paid by it under the Agreement or any of the Guaranteed Obligations or under
any such guaranty agreement; or
(vii) any other act or omission to act or delay of any kind by the
Counterparty, any other guarantor, JPMSI or any other corporation or person or
any other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Guarantor's obligations
hereunder.
3. Discharge Only Upon Payment
In Full; Reinstatement in Certain Circumstances. The
Guarantor's obligations hereunder constitute a guarantee of payment and not of
collection merely and shall remain in full force and effect until the Guaranteed
Obligations shall have been paid in full in accordance with the terms hereof and
of the Agreement. If at any time any payment of any of the Guaranteed
Obligations is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Counterparty or otherwise, the
Guarantor's obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had not been made.
4. Waiver by the
Guarantor. The Guarantor irrevocably waives acceptance hereof,
diligence, presentment, demand, protest, notice of dishonor and any notice not
provided for herein, as well as any requirement that at any time any person
exhaust any right or take any action against the Counterparty or its assets or
any other guarantor or person.
5. Subrogation. Upon
making any payment hereunder, the Guarantor shall be subrogated to the rights of
JPMSI against the Counterparty with respect to such payment; provided that the
Guarantor shall not enforce any right or receive any payment by way of
subrogation until all of the Guaranteed Obligations shall have been paid in
full.
6. Stay of Acceleration
Ineffective with respect to Guarantor. In the event that
acceleration of the time for payment of any amount payable by the Counterparty
under the Agreement is stayed upon the insolvency, bankruptcy or reorganization
of the Counterparty, all such amounts otherwise subject to acceleration or
required to be paid upon an early termination pursuant to the terms of the
Agreement shall nonetheless be payable by the Guarantor hereunder forthwith on
demand by JPMSI.
7. Assignment; Successors and
Assigns. The Guaranty shall be binding upon and inure to the
benefit of the Guarantor and its successors and assigns and JPMSI and its
successors and assigns. The Guarantor may not assign its rights and
obligations hereunder
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without
the prior written consent of JPMSI, and any such purported assignment without
the written consent of JPMSI will be void.
8. Amendments and
Waivers. No provision of this Guaranty may be amended,
supplemented or modified, nor any of the terms and conditions hereof or thereof
waived, except by a written instrument executed by the Guarantor and
JPMSI.
9. Representations and
Warranties. Guarantor represents and warrants
that:
(a) Guarantor has the legal capacity and the
legal right to execute and deliver this Guaranty and to perform its obligations
hereunder;
(b) no consent or authorization of, filing
with, or other act by or in respect of, any arbitrator or governmental authority
and no consent of any other
person (including, without limitation, any creditor of Guarantor) is required in
connection with the execution, delivery, performance, validity or enforceability
of this Guaranty;
(c) this Guaranty has been duly executed and
delivered by Guarantor and
constitutes a legal, valid and binding obligation of Guarantor enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally
and by general principles of equity (whether enforcement is sought in
proceedings in equity or at law);
(d) the execution, delivery and performance
of this Guaranty will not violate any law, treaty, rule or regulation
or determination of an
arbitrator, a court or other governmental authority, applicable to or binding
upon Guarantor or any of its property or to which Guarantor or any of its
property is subject ("Requirement of Law"), or any provision of any security
issued by Guarantor or of any agreement,
instrument or other undertaking to which Guarantor is a party or by which it or
any of its property is bound ("Contractual Obligation"), and will not result in
or require the creation or imposition of any lien on any of the properties or revenues of Guarantor
pursuant to any Requirement of Law or Contractual Obligation of
Guarantor;
(e) no litigation, investigation or
proceeding of or before any arbitrator or governmental authority is pending or,
to the knowledge of Guarantor, threatened by or against Guarantor or
against any of the properties or revenues of Guarantor with respect to this
Guaranty or any of the transactions contemplated hereby; and
(f) except as disclosed in writing to JPMSI
prior to the date hereof, Guarantor has filed or caused to be filed all tax
returns which, to the knowledge of Guarantor, are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any assessments
made against Guarantor or any of the property of Guarantor and all other taxes, fees or other
charges imposed on him or any of the property of Guarantor by any Governmental
Authority (other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings); no
tax lien has been filed,
and, to the knowledge of Guarantor, no claim is being asserted, with respect to
any such tax, fee or other charge.
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Guarantor
agrees that the foregoing representations and warranties shall be deemed to have
been made by Guarantor on the date of each Transaction under the Repurchase
Agreement, on and as of such date of the Transaction, as though made hereunder
on and as of such date.
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
4.88:1.00.
(b) permit the combined Tangible Net Worth
of Guarantor to fall below an amount equal to $200,000,000.
(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 the
Guarantor to fall below an amount equal to the greater of: (i) $10,000,000 or
(ii) 10% of total outstanding Recourse Indebtedness.
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 are 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
notes.
"Tangible Net Worth"
shall mean, as of a particular date (a) all amounts which would be included
under capital 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, less (b) intangible assets of such person and its
consolidated subsidiaries, if any.
11. Expenses and
Taxes. Without limiting the generality of the Guarantor's
obligations hereunder, the Guarantor agrees to pay to JPMSI upon its request all
reasonable costs and expenses, including fees and disbursements of counsel and
taxes, incurred by JPMSI in connection with the occurrence of any Event of
Default under the Agreement and collection or other enforcement proceedings
against any person or assets resulting therefrom, all of which shall be
"Guaranteed Obligations" the payment of which is guaranteed
hereunder. The Guarantor agrees that all amounts payable under this
Guaranty shall be paid without set-off or counterclaim and free and clear of,
and without deduction or withholding for or on account of any present or future
taxes, levies, imposts, duties, fees, assessments or other charges
of
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whatever
nature, now or hereafter imposed by any governmental or taxing authority to
which the Guarantor is subject.
12. Transfer. Neither
this Guaranty nor any interest or obligation in or under this Guaranty may be
transferred by the Guarantor without the prior written consent of
JPMSI.
13. Waiver of Jury
Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any suit,
action or proceeding relating to this Guaranty.
14. Governing
Law. This Guaranty shall be governed by and construed in
accordance with the law of the State of New York without reference to its
conflicts of law principles (other than New York General Obligations Law §5-140
1).
15. Jurisdiction. With
respect to any suit, action or proceedings relating to this Guaranty, the
Guarantor irrevocably submits to the non-exclusive jurisdiction of the courts of
the State of New York and the United States District Court located in the
Borough of Manhattan in New York City and hereby waives any objection which it
may have at any time to the laying of venue of any suit, action or proceedings
brought in any such court, waives any claim that such suit,
action or proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such suit, action or proceedings,
that such court does not have any jurisdiction over such party.
IN
WITNESS WHEREOF, the parties hereto have caused this Guaranty to be duly
executed as of the date first above written.
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By:
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/s/ Xxxxxxx X. Xxxxxxxx | ||
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Title:
Authorized Signatory
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X.X.
XXXXXX SECURITIES INC.
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By:
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/s/
Xxxx X. Xxxxxxx
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Title: Executive
Director
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