UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of Earliest Event Reported): | September 28, 2015 |
RAIT Financial Trust
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(Exact name of registrant as specified in its charter)
| Maryland | 1-14760 | 23-2919819 |
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_____________________ (State or other jurisdiction |
_____________ (Commission |
______________ (I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
| 2929 Arch St., 17th Floor, Philadelphia, Pennsylvania | 19104 | |
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_________________________________ (Address of principal executive offices) |
___________ (Zip Code) |
| Registrant’s telephone number, including area code: | (215) 243-9000 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On September 30, 2015 effective September 28, 2015, RAIT Financial Trust (“RAIT”), RAIT Partnership, L.P. (the “Operating Partnership”), Taberna Realty Finance Trust (“TRFT”), and RAIT Asset Holdings IV, LLC (“RAIT IV”) and together with RAIT, the Operating Partnership and TRFT, the “Issuer Parties”) and ARS VI Investor I, LP, (formerly known as ARS VI Investor I, LLC (the “Investor”) entered into an amendment (the “SPA Amendment”), to the Securities Purchase Agreement, dated as of October 1, 2012 by and among the Issuer Parties and the Investor (the “Securities Purchase Agreement”). The Amendment increases the defined loan to value cap applicable to defined bridge loans and the net worth requirement applicable to RAIT IV in the Securities Purchase Agreement.
Andrew M. Silberstein serves as a Trustee on RAIT’s Board of Trustees as the Investor Board Designee (as defined in the Securities Purchase Agreement). Mr. Silberstein is an equity owner of Almanac Realty Investors, LLC (“Almanac”), an affiliate of the Investor and holds indirect equity interests in the Investor. Pursuant to the Securities Purchase Agreement, RAIT sold to the Investor on a private placement basis in four sales between October 2012 and March 2014 for an aggregate purchase price of $100.0 million, or the total commitment, the following securities, in the aggregate: (i) 4,000,000 Series D Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share, of RAIT, (ii) common share purchase warrants exercisable for RAIT common shares (the “Common Shares”) and (iii) common share appreciation rights with respect to Common Shares, all described in RAIT’s most recent quarterly report on Form 10-Q. The Amendment provides that the Issuer Parties shall pay a fee of $450,000 to Almanac.
On September 28, 2015, RAIT CRE Conduit II, LLC (“Seller II”), RAIT (as guarantor under the UBS MRA (defined below)) and UBS Real Estates Securities Inc. (“UBS”) entered into Amendment No. 3 (the “UBS Amendment”) to the Master Repurchase Agreement dated as of January 24, 2014 (as previously amended, the “UBS MRA”). The UBS Amendment modifies the following provisions of the UBS MRA: applicability, definitions, initiation, termination, collections, income payments and requirements of law.
On September 28, 2015, RAIT CMBS Conduit I, LLC (“Seller I”) and RAIT CRE Conduit III, LLC (“Seller III”), RAIT (to reaffirm its guaranty of the Citi MRA (defined below)) and Citibank, N.A. (“Citibank”) entered into the First Amendment (the “Citi Amendment”) to the Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014 among Seller I, Seller III and Citibank (the “Citi MRA”). The Citi Amendment modifies the following defined terms in the Citi MRA: applicable spread, margin percentage and purchase percentage.
The summaries in this report of any of the documents referenced in Item 9.01(d) below and filed as exhibits hereto do not purport to be complete and are qualified in their entirety by reference to the full text of such documents which are incorporated herein by reference. All of the exhibits hereto have been filed solely to provide information regarding their respective terms. Such exhibits may contain representations and warranties that the parties thereto made solely for the benefit of the other parties. In addition, such representations and warranties (i) may have been qualified by confidential disclosures made to the other party in connection with such document, (ii) may be subject to a materiality standard which may differ from what may be viewed as material by investors, (iii) were made only as of the date of such documents or such other date as is specified therein and (iv) may have been included in such documents for the purpose of allocating risk between or among the parties thereto rather than establishing matters as facts.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this report is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The exhibits filed as part of this Current Report on Form 8-K are identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RAIT Financial Trust | ||||
| October 2, 2015 | By: |
/s/ James J. Sebra
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| Name: James J. Sebra | ||||
| Title: Chief Financial Officer and Treasurer | ||||
Exhibit Index
| Exhibit No. | Description | |
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10.1
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Amendment dated September 30, 2015 effective September 28, 2015 among RAIT Financial Trust (“RAIT”), RAIT Partnership, L.P. (the “Operating Partnership”), Taberna Realty Finance Trust (“TRFT”), and RAIT Asset Holdings IV, LLC (“RAIT IV”) and together with RAIT, the Operating Partnership and TRFT, the “Issuer Parties”) and ARS VI Investor I, LP, (formerly known as ARS VI Investor I, LLC (the “Investor”) to the Securities Purchase Agreement dated as of October 1, 2012 by and among the Issuer Parties and the Investor. | |
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10.2
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Amendment No. 3, dated as of September 28, 2015 among RAIT CRE Conduit II, LLC (“Seller II”), RAIT (as guarantor under the UBS MRA (defined below)) and UBS Real Estates Securities Inc. (“UBS”) to the Master Repurchase Agreement dated as of January 24, 2014 among Seller II, RAIT and UBS (the “UBS MRA”). | |
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10.3
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First Amendment dated as of September 28, 2015 among RAIT CMBS Conduit I, LLC (“Seller I”) and RAIT CRE Conduit III, LLC (“Seller III”), RAIT (to reaffirm its guaranty of the Citi MRA (defined below)) and Citibank, N.A. (“Citibank”) to the Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014 among Seller I, Seller III and Citibank (the “Citi MRA”). |
AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This AMENDMENT TO SECURITIES PURCHASE AGREEMENT, made and entered into on this 30th day of September 2015 (this “Amendment”), by and among ARS VI INVESTOR I, LP, a limited partnership formed and existing under the laws of the State of Delaware formerly known as ARS VI Investor I, LLC (the “Investor”), RAIT FINANCIAL TRUST, a real estate investment trust formed and existing under the laws of the State of Maryland (the “Company”), RAIT PARTNERSHIP, L.P., a limited partnership formed and existing under the laws of the State of Delaware (the “Operating Partnership”), TABERNA REALTY FINANCE TRUST, a real estate investment trust formed and existing under the laws of the State of Maryland (“Taberna”), and RAIT ASSET HOLDINGS IV, LLC, a limited liability company formed and existing under the laws of the State of Delaware (“NewSub” and together with the Company, the Operating Partnership and Taberna, the “Issuer Parties”) amends the Securities Purchase Agreement, dated as of October 1, 2012 by and among the Issuer Parties and the Investor (the “Securities Purchase Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Securities Purchase Agreement.
RECITALS
WHEREAS, the parties desire to amend the Securities Purchase Agreement; and
WHEREAS, the Securities Purchase Agreement provides that it can be amended by a written instrument signed by all parties to the Securities Purchase Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree to amend the Securities Purchase Agreement as follows:
ARTICLE I
AMENDMENTS
Section 1.1. From and after September 28, 2015, the reference in Section 5.10(c)(i) of the Securities Purchase Agreement to “fifty percent (50%)” is hereby replaced with “seventy-five percent (75%)”.
Section 1.2. From and after September 28, 2015, the reference in Section 5.10(e) of the Securities Purchase Agreement to “110%” is hereby replaced with “120%”.
ARTICLE II
MISCELLANEOUS
Section 2.1. Fee. Simultaneously with the execution and delivery of this Amendment, and as a condition to the effectiveness thereof, the Issuer Parties shall pay to Almanac Realty Investors, LLC, an Affiliate of the Investor, a fee in the amount of $450,000 in cash in immediately available funds to the account designated by Almanac Realty Investors, LLC. Section 2.2. Representations and Warranties. In order to induce the Investor to execute this Amendment, the Issuer Parties hereby represent and warrant to the Investor as follows:
a) The execution, delivery and performance by the Issuer Parties of this Amendment have been duly authorized by all necessary organizational action, on the part of each such Issuer Party and do not require any consent or approval of, or notice to or action by, any other Person (including any Governmental Authority).
b) This Amendment has been duly executed and delivered by each of the Issuer Parties and constitutes a valid and binding obligation of each Issuer Party enforceable against it in accordance with its terms.
c) Except as expressly disclosed in the Company’s public company filings filed with the Commission pursuant to the requirements of the Securities Act or the Exchange Act filed by the Company following the Effective Date and prior to the date hereof (the “Public Filings”), each of the representations and warranties made by an Issuer Party in or pursuant to the Securities Purchase Agreement or any Related Document (i) that is qualified by materiality or “material adverse effect” or similar language is true and correct, and (ii) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as of the date hereof, as if made on and as of the date hereof, except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date.
d) Except as expressly disclosed in the Public Filings, each Issuer Party has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Securities Purchase Agreement and the Related Documents to be performed, satisfied or complied with by it at or prior to the date hereof.
e) No Draw Down Termination Event (except as expressly disclosed in the Public Filings) or Mandatory Redemption Triggering Event (except with respect to the commitment dated August 4, 2015 entered into between the Company and the Commission and the Order of the Commission (administrative proceeding file no. 3-16776) entered on September 2, 2015, and the wells notices delivered to certain executive officers of the Issuer Parties in connection with the underlying investigation related thereto, in each case as expressly disclosed in the Public Filings), or an event which, with notice or lapse of time or both, would become such a Draw Down Termination Event or Mandatory Redemption Event, has occurred or is continuing.
Section 2.3. Reaffirmation. Each Issuer Party hereby: (a) reaffirms, ratifies, confirms, and acknowledges its obligations under the Securities Purchase Agreement and each Related Document to which it is a party, and agrees that is continues to be bound thereby and shall perform thereunder; (b) agrees and acknowledges that the Securities Purchase Agreement and each Related Document and all of such party’s obligations thereunder are and remain in full force and effect and, except as expressly provided herein or as otherwise agreed upon by the parties hereto with respect to the RAIT FL1 through RAIT FL4 floating rate securitizations sponsored by Operating Partnership, have not been modified; (c) acknowledges and agrees that it has no defenses, offsets or counterclaims of any kind or nature whatsoever to its obligations under the Securities Purchase Agreement and each Related Document and (d) acknowledges and agrees that nothing contained in this Amendment shall be deemed to constitute a waiver of any rights or claims by the Investor in respect of any events that may hereafter occur or heretofore have occurred.
Section 2.4. Release. Each Issuer Party hereby releases, acquits, and forever discharges the Investor, each Affiliate of the Investor, each member, manager, partner, shareholder or equity owner of the Investor or such Affiliate, and each officer, director, trustee, employee, representative, agent and advisor of and to any of the foregoing, and each person, if any, who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act (collectively, the “Released Parties”), from any and all claims, causes of action, suits, debts, liens, obligations, liabilities, demands, losses, costs and expenses (including reasonable attorneys’ fees) of any kind, character, or nature whatsoever, known or unknown, fixed or contingent, which such Issuer Party may have or claim to have now or which may hereafter arise out of or connected with any act of commission or omission of the Released Parties existing or occurring prior to the date of this Amendment or any instrument executed prior to the date of this Amendment. The provisions of this paragraph shall be binding upon each Issuer Party and shall inure to the benefit of each of the Released Parties, and their respective heirs, executors, administrators, successors and assigns.
Section 2.5. No Further Amendment. Except as otherwise amended in this Amendment, all provisions of the Securities Purchase Agreement shall remain in full force and effect.
Section 2.6. Headings. The article, section and subsection headings in this Amendment are for convenience only and shall not constitute a part of this Amendment for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.
Section 2.7. Governing Law. This Amendment shall be governed by and construed in accordance with the internal procedural and substantive laws of the State of New York, without giving effect to the choice of law provisions of such state that would cause the application of the laws of any other jurisdiction.
Section 2.8. Counterparts. This Amendment may be executed in one or more counterparts (including by facsimile or other electronic transmission), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties (including by facsimile or other electronic transmission).
Section 2.9. Related Documents. This Amendment shall constitute a Related Document.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officer as of the date first above written.
COMPANY:
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| RAIT FINANCIAL TRUST |
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| By: /s/ James Sebra |
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| Name: James Sebra |
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Title: CFO
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| OPERATING PARTNERSHIP: |
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| RAIT PARTNERSHIP, L.P. |
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By:
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RAIT General, Inc., its sole general partner |
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| By: /s/ James Sebra Name: James Sebra Title: CFO |
TABERNA:
TABERNA REALTY FINANCE TRUST
By: /s/ James Sebra
Name: James Sebra
Title: CFO
NEWSUB:
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| RAIT ASSET HOLDINGS IV, LLC |
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| By: RAIT PARTNERSHIP, L.P. |
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| its Managing Member |
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By:
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RAIT General, Inc., its sole general partner |
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By: /s/ James Sebra
Name: James Sebra
Title: CFO
INVESTOR:
ARS VI INVESTOR I, LP
By: ARS VI Investor I GP, LLC,
its General Partner
By: Almanac Realty Securities VI, L.P.,
its Sole Member
By: Almanac Realty Partners VI, LLC,
its General Partner
By: /s/ Andrew M. Silberstein
Name: Andrew M. Silberstein
Title: Authorized Person51989786v4
AMENDMENT NO. 3 TO MASTER REPURCHASE AGREEMENT
Amendment No. 3, dated as of September 28, 2015 (this “Amendment”), among UBS Real Estates Securities Inc. (the “Buyer”), RAIT CRE Conduit II, LLC (the “Seller”) and RAIT Financial Trust (“Guarantor”).
RECITALS
The Buyer, Seller and Guarantor are parties to (a) that certain Master Repurchase Agreement, dated as of January 24, 2014 (as amended by Amendment No. 1, dated as of March 17, 2014 and Amendment No. 2, dated as of March 27, 2014, the “Existing Repurchase Agreement”; as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of January 24, 2014 (as amended from time to time, the “Pricing Letter”). The Guarantor is a party to that certain Guaranty (as amended from time to time, the “Program Guaranty”), dated as of January 24, 2014, made by Guarantor in favor of the Buyer. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and the Program Guaranty, as applicable.
The Buyer, Seller and Guarantor 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, Buyer has required Guarantor to ratify and affirm the Program Guaranty on the date hereof.
Accordingly, the Buyer, Seller and Guarantor hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Applicability. Section 1 of the Existing Repurchase Agreement is hereby amended by deleting the first paragraph of such section in its entirety and replacing it with the following:
From time to time the parties hereto may enter into transactions in which (a) Seller agrees to transfer to Buyer Purchased Assets against the transfer of funds by Buyer, and (b) Buyer simultaneously agrees to transfer to Seller each of such Purchased Assets on the applicable Repurchase Date, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and shall be governed by this Agreement (including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder), unless otherwise agreed in writing. This Agreement is not a commitment by Buyer to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller. Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. Any commitment to enter into Transactions shall be set forth in the Pricing Letter, and shall be subject to satisfaction of all terms and conditions of this Agreement.
SECTION 2. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by:
2.1 deleting the definitions of “Maximum Aggregate Purchase Price” and “Price Differential Shortfall” in their entirety and replacing them with the following:
“Maximum Aggregate Purchase Price” shall mean $75,000,000, which amount may be increased as mutually agreed by Buyer and Seller prior to the Termination Date.
“Price Differential Shortfall” shall mean the amount, if any, by which the sum of (x) the actual aggregate Price Differential paid to Buyer up to the Termination Date plus (y) Securitization Fees is less than the Minimum Price Differential.
2.2 adding the following definition in its proper alphabetical order:
“Up-Front Fee” shall have the meaning set forth in the Pricing Letter.
2.3 deleting the definitions of “Commitment Fee” and “Maximum Committed Purchase Price” in their entirety and all references thereto.
SECTION 3. Initiation; Termination. Section 3 of the Existing Repurchase Agreement is hereby amended by:
3.1 deleting the first paragraph of clause (b) in its entirety and replacing it with the following:
Upon satisfaction of the conditions set forth in this Section 3(b), Buyer may enter into a Transaction with Seller up to the Maximum Aggregate Purchase Price. Buyer may enter into a Transaction in Buyer’s sole discretion. Buyer’s entering into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof:
3.2 deleting clause (b)(iv) in its entirety and replacing it with the following:
(iv) After giving effect to the requested Transaction, the aggregate outstanding Purchase Price attributable to all Purchased Assets subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price.
3.3 deleting clause (c)(iii) in its entirety and replacing it with the following:
(iii) Upon satisfaction of the applicable conditions precedent set forth in Sections 3(a) and 3(b) hereof, and subject to due diligence review and approval of the proposed Purchased Assets in accordance with Section 17, Buyer may agree to enter into such requested Transaction so long as the conditions set forth herein are satisfied and after giving effect to the requested Transaction the aggregate outstanding Purchase Price does not exceed the Maximum Aggregate Purchase Price, in which case Buyer shall fund the Purchase Price in accordance with this Agreement. Buyer’s funding the Purchase Price of the Transaction and Seller’s acceptance thereof, will constitute the parties agreement to enter into such Transaction. Upon remittance of the Purchase Price to Seller, Seller hereby grants, assigns, conveys and transfers all rights, and a first priority security interest in and to the Purchased Assets evidenced on the related Asset Schedule.
SECTION 4. Collections; Income Payments. Section 5 of the Existing Repurchase Agreement is hereby amended by deleting clause (b)(i) in its entirety and replacing it with the following:
(i) first, to the extent not paid by Seller, to the Custodian in payment of the Custodial Fee and any accrued and unpaid fees (including, without limitation, any Up-Front Fee) and expenses;
SECTION 5. Requirement of Law. Section 6 of the Existing Repurchase Agreement is hereby amended by deleting clause (d) in its entirety and replacing it with the following:
(d) After payment of any Requirement of Law Premium, Seller will be entitled to notify Buyer of its intention to repay all Obligations hereunder and terminate this Agreement, and (i) Buyer will rebate to Seller the most recently paid installment of the Up-Front Fee, pro-rated for the portion of such three month period from the date Seller terminated the Agreement, and no further installments of the Up-Front Fee, if any, shall be due or payable (notwithstanding anything set forth in the Program Documents), (ii) Seller shall pay the Exit Fee, pro-rated based on the period the Agreement was in effect, and (iii) Seller shall pay the Price Differential Shortfall, if any, pro-rated based on the period the Agreement was in effect.
SECTION 6. Conditions Precedent. This Amendment shall become effective as of the date hereof (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 duly authorized officers of the Buyer, Seller and Guarantor;
(b) Amendment No. 3 to Pricing Letter, dated as of the date hereof, executed and delivered by duly authorized officers of the Buyer, Seller and Guarantor;
(c) Amendment No. 3 to Custodial Agreement, dated as of the date hereof, executed and delivered by duly authorized officers of the Buyer, Seller and Custodian; and
(d) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 7. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 8. Representations and Warranties. Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 11 of the Repurchase Agreement.
SECTION 9. 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 10. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 11. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 12. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER PARTY SHALL BE GOVERNED BY E-SIGN.
SECTION 13. Reaffirmation of Program Guaranty. The Guarantor hereby (i) agrees that the liability of Guarantor or rights of Buyer under the Program Guaranty shall not be affected as a result of this Amendment, (ii) ratifies and affirms all of the terms, covenants, conditions and obligations of the Program Guaranty and (iii) acknowledges and agrees that such Program Guaranty is and shall continue to be in full force and effect.
[SIGNATURE PAGE FOLLOWS]
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.
| UBS REAL ESTATE SECURITIES INC., as Buyer |
| By: /s/ David Schell |
| Name: David Schell Title: Executive Director |
| By: /s/ Nicholas Galeone |
| Name: Nicholas Galeone Title: Executive Director |
| RAIT CRE CONDUIT II, LLC, as Seller |
| By: RAIT Partnership, L.P., its sole member and manager |
| By: RAIT General, Inc., its sole general partner |
| By: /s/ James Sebra |
| Name: James Sebra Title: Chief Financial Officer |
| RAIT FINANCIAL TRUST, as Guarantor |
| By: /s/ James Sebra |
| Name: James Sebra Title: Chief Financial Officer |
FIRST AMENDMENT TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Amendment”), dated as of September 28, 2015 (the “Effective Date”), is made by and among CITIBANK, N.A. (together with its successors and/or assigns, “Buyer”), RAIT CMBS CONDUIT I, LLC, a Delaware limited liability company (“Seller I”) and RAIT CRE CONDUIT III, LLC, a Delaware limited liability company (“Seller III”; together with Seller I, collectively, “Seller”), for the purpose of acknowledging and agreeing to the provision set forth in Section 3 hereof, RAIT FINANCIAL TRUST., a Maryland real estate investment trust (“Guarantor”).
W I T N E S S E T H:
WHEREAS, Seller and Buyer have entered into that certain Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014 (as the same may be amended, supplemented, extended, restated, replaced or otherwise modified from time to time, the “Repurchase Agreement”);
WHEREAS, all capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Repurchase Agreement;
WHEREAS, Seller and Buyer desire to modify certain terms and provisions of the Repurchase Agreement as set forth herein.
NOW, THEREFORE, in consideration of ten dollars ($10) and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Seller and Buyer covenant and agree as follows as of the Effective Date, and Guarantor acknowledges and agrees as to the provision set forth in Section 3 as of the Effective Date:
1. Modification of Repurchase Agreement. The Repurchase Agreement is hereby modified as of the Effective Date as follows:
(a) The following definitions in Section 2 of the Repurchase Agreement are hereby deleted in their entirety and the following corresponding definitions are substituted therefor:
“Applicable Spread” shall mean, with respect to each Transaction:
(i) so long as no Event of Default shall have occurred and be continuing, two hundred fifty basis points (i.e., 2.50%),
(ii) after the occurrence and during the continuance of an Event of Default, the applicable incremental per annum rate described in clause (i) of this definition, as applicable, plus 400 basis points (4.0%).
“Margin Percentage” shall mean 133.33%.
“Purchase Percentage” shall mean 75.00%; provided, however, that with respect to any individual Transaction for a Floating Rate Purchased Loan, Buyer shall have the right to reduce the Purchase Percentage applicable to such Transaction to the extent necessary to cause the Debt Yield (Purchased Loans) for all Floating Rate Purchased Loans (on a weighted average basis based upon the outstanding Purchase Price for all Floating Rate Purchased Loans determined as of the applicable Purchase Date) to not be less than 9.00%.
2. Seller’s Representations. Seller has taken all necessary action to authorize the execution, delivery and performance of this Amendment. This Amendment has been duly executed and delivered by or on behalf of Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles. No Event of Default has occurred and is continuing, and no Event of Default will occur as a result of the execution, delivery and performance by Seller of this Amendment. Any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Seller of this Amendment has been obtained and is in full force and effect (other than consents, approvals, authorizations, orders, registrations or qualifications that if not obtained, are not reasonably likely to have a Material Adverse Effect).
3. Reaffirmation of Guaranty. Guarantor has executed this Amendment for the purpose of acknowledging and agreeing that, notwithstanding the execution and delivery of this Amendment and the amendment of the Repurchase Agreement hereunder, all of Guarantor’s obligations under the Guaranty remain in full force and effect and the same are hereby irrevocably and unconditionally ratified and confirmed by Guarantor in all respects.
4. Conditions Precedent. This Amendment and its provision shall become effective upon the execution and delivery of this Amendment by a duly authorized officer of each of Seller, Buyer and Guarantor.
5. Agreement Regarding Expenses. Seller agrees to pay Buyer’s reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with the preparation and negotiation of this Amendment promptly (and after Buyer or Buyer’s counsel gives Seller an invoice for such expenses).
6. Full Force and Effect. Except as expressly modified hereby, all of the terms, covenants and conditions of the Repurchase Agreement and the other Transaction Documents remain unmodified and in full force and effect and are hereby ratified and confirmed by Seller. Any inconsistency between this Amendment and the Repurchase Agreement (as it existed before this Amendment) shall be resolved in favor of this Amendment, whether or not this Amendment specifically modifies the particular provision(s) in the Repurchase Agreement inconsistent with this Amendment. All references to the “Agreement” in the Repurchase Agreement or to the “Repurchase Agreement” in any of the other Transaction Documents shall mean and refer to the Repurchase Agreement as modified and amended hereby.
7. No Waiver. 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, the Guaranty, any of the other Transaction Documents or any other document, instrument or agreement executed and/or delivered in connection therewith.
8. Headings. Each of the captions contained in this Amendment are for the convenience of reference only and shall not define or limit the provisions hereof.
9. Counterparts. This Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures.
10. Governing Law. This Amendment shall be governed in accordance with the terms and provisions of Section 20 of the Repurchase Agreement.
[No Further Text on this Page; Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized representatives as of the day and year first above written and effective as of the Effective Date.
SELLER:
RAIT CMBS CONDUIT I, LLC, a Delaware limited liability company By: RAIT Funding, LLC, a Delaware limited liability company, its sole Member By: Taberna Realty Finance Trust, a Maryland real estate investment trust, its sole Member By: /s/ James Sebra |
Name: James Sebra Title: Chief Financial Officer |
| RAIT CRE CONDUIT III, LLC, | ||
| a Delaware limited liability company | ||
| By: | RAIT Partnership, L.P., a Delaware limited partnership, its sole Member | |
| By: | RAIT General, Inc., a Maryland corporation, its general partner | |
| By: | /s/ James Sebra | |
| Name: James Sebra | ||
| Title: Chief Financial Officer | ||
| [SIGNATURES PAGES CONTINUE ON NEXT PAGE] | ||
GUARANTOR:
RAIT FINANCIAL TRUST
a Maryland real estate investment trust
By: /s/ James Sebra
Name: James Sebra
Title: Chief Financial Officer
[SIGNATURES PAGES CONTINUE ON NEXT PAGE]
BUYER:
CITIBANK, N.A.
By: /s/ Richard B. Schlenger
Name: Richard B. Schlenger
Title: Authorized Signatory