EXECUTION VERSION
Exhibit 10.5
AMENDMENT NO. 1
TO REPURCHASE AGREEMENT
Amendment No. 1, dated as of June 26, 2003 (this "Amendment"), between
BEAR, XXXXXXX INTERNATIONAL LIMITED (the "Buyer"), CRIIMI NEWCO, LLC (a
"Seller") and CBO REIT II, INC. (a "Seller").
RECITALS
The Buyer and the Sellers are parties to that certain Repurchase Agreement,
dated as of January 14, 2003 (the "Existing Repurchase Agreement"; as amended by
this Amendment, the "Repurchase Agreement"). CRIIMI MAE Inc. is party to that
certain Guarantee, dated as of January 14, 2003, as amended by Amendment No. 1,
dated as of the date hereof (the "Guarantee") in favor of Buyer. Capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Existing Repurchase Agreement or the Guarantee, as applicable.
The Buyer and the Sellers have agreed, subject to the terms and conditions
of this Amendment, that the Existing Repurchase Agreement be amended to reflect
certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
As a condition precedent to amending the Existing Repurchase Agreement, the
Buyer has required the Guarantor to ratify and affirm the Guarantee on the date
hereof.
Accordingly, the Buyer and the Sellers hereby agree, in consideration of
the mutual premises and mutual obligations set forth herein, that the Existing
Repurchase Agreement is hereby amended, as follows:
Section 1. Definitions.
(a) Section 2 of the Existing Repurchase Agreement is hereby amended by
inserting the following definitions in their proper alphabetical order:
"Acceptable Hedge Agreement" shall mean any hedge or swap transaction
entered into, whether in writing or orally, by a Seller or Sellers with an
Acceptable Hedge Counterparty approved by the Buyer in its sole discretion and
guaranteed by the Bear Xxxxxxx Companies Inc.
"Acceptable Hedge Counterparty" shall mean the Buyer or any Affiliate of
Buyer.
"Netting and Security Agreement" shall mean any Netting and Security
Agreement between Buyer and a Seller or Sellers , if and when entered into.
(b) Section 2 of the Existing Repurchase Agreement is hereby amended by
deleting the definition of "Market Value" in its entirety and replacing it with
the following:
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"Market Value" shall mean with respect to any Purchased Asset as of any
date, the market value of such Purchased Asset on such date as determined by
Buyer (or an Affiliate thereof) in its sole good faith discretion (provided
that, with respect to any Purchased Asset related to an Equity Interest, the
Market Value of the Subject Securities owned by the issuer of the Equity
Interest shall be taken into account in making such determination), in each
case, without giving effect to any value of any Acceptable Hedge Agreement. The
Buyer's determination of Market Value shall be conclusive absent manifest error;
provided, that there shall be no discount applied to Purchased Assets consisting
of cash. Without limiting the generality of the foregoing, the Market Value
shall be deemed zero for (a) each Subject Security which fails to comply with
the representations and warranties set forth on Schedule 1 hereto (other than
clauses (h), (i), (j), (l), (n) and (k) thereof) or (b) any Purchased Asset
which fails to comply with the representations and warranties set forth in
Section 11(h).
Section 2. Margin Amount Maintenance. Notwithstanding anything to the
contrary set forth in Section 4 of the Existing Repurchase Agreement, so long as
an Acceptable Hedge Agreement and Netting and Security Agreement have been
entered into and are in full force and effect, notices to Sellers to transfer or
pay Additional Assets deliverable pursuant to Section 4 of the Existing
Repurchase Agreement, shall be deemed given to Sellers to the extent Sellers'
obligation to transfer Additional Assets can be satisfied through application of
the applicable provisions of the Netting and Security Agreement.
Section 3. Covenants. Subclauses (a) and (b) to Section 12(t) of the
Existing Repurchase Agreement are hereby amended by deleting them in their
entirety and replacing them with the following:
"(a) not own any assets, or engage in any business, other than the assets
and business specifically contemplated by this Repurchase Agreement or an
Acceptable Hedge Agreement; (b) not incur any Indebtedness or obligation,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than pursuant to the Repurchase Documents or
any Acceptable Hedge Agreement or the Netting and Security Agreement;"
Section 4. Events of Default. Section 13.01 of the Existing Repurchase
Agreement is hereby amended by deleting subclause (h) in its entirety and
replacing it with the following:
"(h) Cross-Default. Any "event of default" or any other default which
permits a demand for (without regard to any stay of such demand), or requires,
(i) the early repayment of all obligations due by either Seller under an
Acceptable Hedge Agreement (after any applicable notice and the expiration of
any applicable grace period under any such Acceptable Hedge Agreement), or (ii)
the early repayment of all obligations due by the Guarantor under any agreement
(after any applicable notice and the expiration of any applicable grace period
under any such agreement) relating to any Indebtedness of the Guarantor
(including the Brascan Loan Documents, but subject to the Intercreditor
Agreement)
Section 5. Assignment. Section 17 of the Existing Repurchase Agreement is
hereby amended by adding the following language to the end of the first
paragraph thereof:
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"Notwithstanding anything to the contrary set forth herein, absent an Event
of Default, the Buyer shall not assign the Repurchase Agreement to any other
Person unless the Buyer also assigns any related Acceptable Hedge Agreement and
the Netting and Security Agreement to such Person."
Section 6. Conditions Precedent. This Amendment shall become effective on
June 26, 2003 (the "Amendment Effective Date"), subject to the satisfaction of
the following conditions precedent:
6.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall
have received the following documents, each of which shall be satisfactory to
the Buyer in form and substance:
(a) This Amendment, executed and delivered by a duly authorized officer of
the Buyer and each Seller.
(b) Amendment No. 1 to the Guarantee, executed and delivered by a duly
authorized officer of the Guarantor.
(c) Amendments to the organizational documents of each Seller, in form and
substance acceptable to the Buyer in its sole discretion.
(d) An acknowledgement and waiver by Brascan Lender under the Intercreditor
Agreement and Brascan Loan Documents.
(e) An opinion or opinions of outside counsel to the Sellers relating to
corporate matters and enforceability of this Amendment against the Sellers
acceptable to the Buyer in its sole discretion.
(f) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
Section 7. Representations and Warranties. Each Seller hereby represents
and warrants to the Buyer that it is in compliance with all the terms and
provisions set forth in the Existing Repurchase Agreement on its part to be
observed or performed, and that no Event of Default under the Existing
Repurchase Agreement has occurred or is continuing, and hereby confirms and
reaffirms the representations and warranties contained in Section 11 of the
Existing Repurchase Agreement.
Section 8. Limited Effect. Except as expressly amended and modified by this
Amendment, the Existing Repurchase Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.
Section 9. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
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Section 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
Section 11. Acknowledgment. By execution of this Amendment, the Buyer
hereby acknowledges and consents to the Sellers entering in to an Acceptable
Hedge Agreement and/or a related Netting and Security Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
Buyer: BEAR, XXXXXXX INTERNATIONAL
LIMITED,
as Buyer
/s/Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Authorized Signatory
Seller: CBO REIT II, INC.,
as Seller
/s/Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President
and Chief Operating Officer
Seller: CRIIMI NEWCO LLC,
as Seller
/s/Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President
and Chief Operating Officer
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