Exhibit 10.4
Bear, Xxxxxxx Funding, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
August 16, 2005
Capital Trust, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pricing Terms for Master Repurchase Agreement,
dated as of August 16, 2005, by and between
Bear, Xxxxxxx Funding, Inc. and Capital Trust, Inc.
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Ladies and Gentlemen:
Reference is made to the Master Repurchase Agreement, dated as of
August 16, 2005 (the "Agreement"), by and between Bear, Xxxxxxx Funding, Inc.
("Buyer") and Capital Trust, Inc. ("Seller"). The purpose of this letter
agreement (the "Letter Agreement") is to set forth certain terms governing the
circumstances under which the Buyer will enter into Transactions pursuant to the
Agreement. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Agreement.
1. Buyer's Margin Ratio: Unless otherwise agreed by the parties (which
agreement shall be documented in the related Confirmation), the Purchase Price
on any Purchase Date prior to the Commitment Expiration Date shall be equal to
the product of the Market Value of the Purchased Loans and the applicable
Buyer's Margin Ratio listed in the chart below.
2. Purchase Fee: The Purchase Fee shall be a one-time, up front amount,
to be paid by Seller on the initial Transaction Date, equal to the product of
(i) the Maximum Aggregate Purchase Price and (ii) [****]%.
3. Pricing Rate: The Pricing Rate with respect to each Transaction
shall be one month LIBOR plus the spread listed in the chart below (unless
otherwise agreed by the parties, which agreement shall be documented in the
related Confirmation):
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**** Material omitted pursuant to a request for confidential treatment under
Rule 24b-2. Material filed separately with the Securities and Exchange
Commission.
Buyer's Margin Ratio and Pricing Rate Spread
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Combined Property/ 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0%
Underlying Assets
Loan to Value Ratio
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Mezzanine Loans, Junior Participations & B Notes
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Buyer's Margin
Ratio [****] [****] [****] [****] [****] [****] [****] [****]
Pricing Rate
Spread (LIBOR
plus number of
basis points) [****] [****] [****] [****] [****]
[****] [****] [****]
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All loan to value ratios are determined by a third-party appraiser
mutually acceptable to Buyer and Seller. If an Eligible Asset is a hotel, the
Buyer's Margin Ratio and the Pricing Rate may change as agreed to by the
parties.
4. Seller must enter into Transactions with respect to at least five
(5) Eligible Loans within six (6) months of the initial Purchase Date (the
"Required Transactions") in order to maintain the Buyer's Margin Ratios set
forth above. If Seller does not enter into the Required Transactions, Buyer
shall have the right in its sole discretion to reduce the Buyer's Margin Ratios
as follows: if Seller enters into Transactions with respect to three (3) or four
(4) Eligible Loans, the applicable Buyer's Margin Ratios shall be reduced by
five percent (5%) and if Seller enters into Transactions with respect to one (1)
or two (2) Eligible Loans, the applicable Buyer's Margin Ratios shall be reduced
by ten percent (10%).
5. If Buyer exercises its right to reduce the Buyer's Margin Ratio as
provided in paragraph 3 above within six (6) months prior to the Commitment
Expiration Date and Seller elects to effect an Early Repurchase Date after Buyer
has exercised such right, then no Exit Fee shall be due or payable with respect
to such Early Repurchase Date.
The terms of this Letter Agreement shall supersede all prior Letter
Agreements between the parties. The terms and provisions set forth in this
Letter Agreement shall terminate upon the termination of the Agreement. Any
agreement by Buyer to extend the term of the Agreement shall not thereby extend
any of the terms and provisions set forth herein with respect to any
Transactions entered into on or after any renewal of the Agreement, unless
expressly agreed to by Buyer.
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**** Material omitted pursuant to a request for confidential treatment under
Rule 24b-2. Material filed separately with the Securities and Exchange
Commission.
This Letter Agreement may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
This Letter Agreement shall be governed by the laws of the State of New
York without giving effect to the conflicts of law principles thereof.
In the event of any inconsistency between the terms and provisions
contained herein and the Agreement, the terms and provisions of this Letter
Agreement shall govern.
BEAR, XXXXXXX FUNDING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
Acknowledged and Agreed:
CAPITAL TRUST, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: Chief Financial Officer
