TERMINATION AGREEMENT (including Amendments to Letters of Credit Agreements)
(including
Amendments to Letters of Credit Agreements)
This
Termination Agreement (this “Agreement”) dated as
of December 4, 2009, among GRAMERCY WAREHOUSE FUNDING I LLC, a Delaware limited
liability company (together with its successors and permitted assigns, “GWF-I”), as a
borrower, GKK TRADING WAREHOUSE I LLC, a Delaware limited liability company
(together with GWF-I, the “Borrowers”), as a
borrower, GRAMERCY CAPITAL CORP., a Maryland corporation (“Gramercy Capital”),
as a guarantor, GKK CAPITAL LP, a Delaware limited partnership (“GKK Capital”), as a
guarantor, GRAMERCY INVESTMENT TRUST, a Maryland real estate investment trust
(“Gramercy
REIT”), as a guarantor, GKK TRADING CORP., a Delaware corporation
(collectively with Gramercy Capital, GKK Capital and Gramercy REIT, the “Guarantors”), as a
guarantor, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the Lenders hereunder (in such
capacity, the “Administrative
Agent”).
RECITALS:
WHEREAS,
Borrowers, Guarantors, Lenders and Administrative Agent are parties to that
certain Credit Agreement, dated as of July 22, 2008 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the “Credit
Agreement”). Terms used but not otherwise defined herein shall
have the meaning specified therefor in the Credit Agreement;
WHEREAS,
Guarantors have executed that certain Guarantee Agreement, dated as of July 18,
2008, which was amended and restated in its entirety on April 7, 2009 (as
amended, restated, supplemented or otherwise modified and in effect from time to
time, the “Guaranty”), in favor
of Administrative Agent acting on behalf of Lenders; and
WHEREAS,
on November 4, 2009, Borrowers and Guarantors submitted a formal written
proposal to Administrative Agent on behalf of Lenders, asking for the release of
all claims of Lenders otherwise due and owing under the Credit Agreement, the
Guaranty and the other Credit Documents, including a release of all Pledged
Mortgage Assets currently encumbered by the Credit Agreement or any other Credit
Document, in exchange for (i) a one-time payment from Borrowers and Guarantors
to Lenders in an amount equal to $22,500,000 (the “Termination Amount”),
and (ii) the execution and delivery by GWF-1 to Administrative Agent of the
Sub-Participation Agreement by and between GFW-1 and Administrative Agent dated
of each date herewith, in form and substance identical to the attached Exhibit A hereto (the
“Sub-Participation
Agreement”);
NOW
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrowers, Guarantors and Administrative Agent hereby agree as
follows:
1. Accuracy of
Recitals. The
Parties understand, acknowledge and agree that the foregoing Recitals are true
and correct and are part of, and incorporated into, this Agreement.
2. Payment of Termination
Amount. On
the date hereof, Borrowers paid to Administrative Agent on behalf of Lenders the
Termination Amount, and such payment was made via wire transfer to the following
account:
[Reserved]
3. Release Under Credit
Documents. (a) Upon the satisfaction of the
conditions precedent set forth in this Agreement:
(i) all
the security interests and liens in favor of Administrative Agent under the
Credit Agreement, each Security Document and each other Credit Document on
behalf of Lenders which secure the Obligations shall be automatically released
with no further action by any Person;
(ii) Borrowers
and Guarantors are authorized to file termination statements on form UCC-3 for
the UCC-1 financing statements filed by Administrative Agent showing Borrowers
and/or Guarantors as debtor in connection with the Credit Agreement;
and
(iii) the
Credit Agreement, the Guaranty, the Derivatives Guarantee Agreement, and the
other Credit Documents shall automatically be terminated with no further action
by any party, the Obligations under the Credit Documents shall be fully
satisfied and Borrowers, Guarantors, Lenders and Administrative Agent shall have
no further obligations thereunder, except for those Obligations that by their
terms expressly survive termination of the Credit Agreement, the Guaranty and
the other Credit Documents and remain applicable to Borrowers and Guarantors in
light of the payoff occurring hereunder (the “Expressly Surviving
Obligations”).
(b) Concurrent
with the execution and delivery of this Agreement, (I) Administrative Agent
shall execute and deliver to (i) Custodian a letter directing Custodian to
release to Borrowers the Mortgage Asset File for each Mortgage Asset that
Custodian has in its possession without the need for any further notice,
condition or otherwise, and to terminate the Custodial Agreement (the “Custodian Termination
Agreement”), and (ii) to Borrowers, a letter authorizing Borrowers and
Guarantors to file termination statements on form UCC-3 for the UCC-1 financing
statements filed by Administrative Agent showing Borrowers and/or Guarantors as
debtor in connection with the Credit Agreement (the “UCC Authorization
Letter”), and (II) Borrowers and Administrative Agent shall execute a
Termination of Account Control Agreement to terminate the Account Control
Agreement and authorize the remittance of any remaining funds on deposit in the
Collection Account to Borrowers (the “Account Control Termination
Agreement”).
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4. General
Release. For
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, effective on the date hereof each of Guarantors and Borrowers,
for: (i) themselves, (ii) any Affiliate thereof, and (iii) the respective
partners, officers, directors, shareholders, successors and assigns of all of
the foregoing persons and entities, hereby releases and forever discharges
Administrative Agent, each Lender and each of their respective subsidiaries,
affiliates, its past, present and future officers, directors, agents, employees,
partners, managers, shareholders, servants, attorneys and representatives, as
well as their, successors, assigns, their respective heirs, legal
representatives, legatees, predecessors in interest, successors and assigns
(collectively, the “Released Parties”),
of and from any and all actions, claims, demands, damages, debts, suits,
contracts, agreements, losses, liabilities, indebtedness, causes of action
either at law or in equity, obligations of whatever kind or nature, accounts,
defenses, and offsets against liabilities and obligations, whether known or
unknown, direct or indirect, new or existing, by reason of any matter, cause or
thing whatsoever occurring on or prior to the date hereof arising out of or
relating to any matter or thing whatever, including without limitation, such
claims and defenses as fraud, misrepresentation, breach of duty, mistake,
duress, usury, claims pertaining to so called “lender liability,” and claims
pertaining to creditor’s rights, which such party ever had, now has, or might
hereafter have against the other, jointly or severally, for or by reason of any
matter, act, omission, cause or thing whatsoever occurring, on or prior to the
date of this Agreement, that is directly related to, in whole or in part, this
Agreement, the Credit Agreement, the Guaranty and the other Credit
Documents. Notwithstanding the foregoing, in no event shall the
general release provisions of this Section 4 apply to
any actions, claims, demands, damages, debts, suits, contracts, agreements,
losses, liabilities, indebtedness, causes of action either at law or in equity,
obligations of whatever kind or nature, accounts, defenses, and offsets against
liabilities and obligations, whether known or unknown, direct or indirect, new
or existing, by reason of any matter, cause or thing whatsoever occurring on or
prior to the date hereof arising out of or relating to any matter or thing
whatever, against the Released Parties arising as a result of any obligations or
liabilities unrelated to the subject matter of this Agreement of Wachovia Bank,
National Association in any other capacity whatsoever, including without
limitation, for the performance of its obligations as (i) the trustee under the
Indenture governing each of the CDO transactions listed on Exhibit B, or in any
other capacity under any of the listed CDO transactions, (ii) the swap provider
under the swap agreement to which it is a party with respect to each of the CDO
transactions listed on Exhibit B, (iii) a
party under any lease agreement or occupancy/license agreement in which Gramercy
Capital or any of its affiliates is landlord/tenant, (iv) a servicer of any loan
in which Gramercy Capital has an interest, (v) a participant under any loan in
which Gramercy Capital has an interest, (vi) a bank in which Gramercy Capital
maintains an account, or (vii) the issuer of any of the Letters of Credit (as
defined herein).
5. Letters of
Credit. Wachovia Bank, National Association issued each of the
Letters of Credit described on Exhibit C on behalf of Gramercy Capital as
applicant (collectively, the “Letters of
Credit”). In connection with the issuance of each Letter of
Credit, Gramercy Capital executed and delivered to Wachovia Bank, National
Association a separate and individual Application and Agreement for Irrevocable
Standby Letter of Credit, each of which included a separate and individual
Continuing Letter of Credit Agreement (each, a “Letter of Credit
Agreement”). Each Letter of Credit Agreement is hereby amended
as follows:
(i) Section 1(E) is
hereby amended and restated in its entirety to read “(E) “Collateral” means all
cash of Applicant on deposit with Bank in connection with the Credit or any
Draft”;
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(ii) Section 1(G)(iv) is
hereby amended and restated in its entirety to read “(iv) seizure or forfeiture
of Applicant or any material portion of its property;”;
(iii) Sections 1(G)(v) and
1(G)(xi) are
deleted;
(iv) Section 1(K) is
hereby amended and restated in its entirety to read “(K) “Obligations” means all
obligations of any, some or all of the parties comprising the Applicant to Bank
now or hereafter existing under the Agreement;”;
(v) Section 4(C)(x) is
hereby amended and restated in its entirety to read “(x) may retain proceeds of
the Credit based on an apparently applicable attachment order or blocking
regulation”;
(vi) Section 5(C) is
deleted;
(vii) Section 8(B) is
hereby amended and restated in its entirety to read “(B) Bank may set
off and apply the Collateral against any matured or unmatured Obligations,
irrespective of whether or not Bank shall have made any demand under the
Agreement and although such Collateral or Obligations may be unmatured or
contingent”;
(viii) Section 9(H) is
hereby amended and restated in its entirety to read “(H) any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority with respect to any document or
property received under this Agreement or the Credit, or any other cause related
to the credit or this Agreement beyond the control of Bank, except to the extent
such liability, loss, damage, cost or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
directly from such Indemnified Party’s gross negligence or willful
misconduct.”;
(ix) The
following new Section
17 is hereby added to the Letter of Credit Agreement:
“17. Annual Renewal
Fee. Annually, on the anniversary date of the original
issuance of the Credit, Applicant shall pay a letter of credit renewal fee to
Bank in an amount equal to one-quarter of one percent (0.25%) of the
then-current maximum undrawn amount of the Credit. Bank shall
maintain the Collateral in a money market account, and any interest thereon
shall first be applied to pay the Annual Renewal Fee”, and
(x) The
following new Section
18 is hereby added to the Letter of Credit Agreement:
“18. Excess Cash
Collateral. At any time that the then-current aggregate
balance of the Collateral consisting of cash exceeds the then-current undrawn
amount of the Credit, upon the receipt by Bank of a written refund request from
Applicant, Bank shall return to Applicant a portion of such cash Collateral in
an amount not to exceed an amount equal to such excess.”
Except as
expressly amended and modified by this Agreement, each Letter of Credit
Agreement shall continue to be, and shall remain, in full force and effect in
accordance with their respective terms.
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6. Interest Rate Protection
Agreement. The parties hereto agree that on the date hereof,
GKK Capital and the Affiliated Hedge Counterparty shall enter into and execute
an amendment to the ISDA Master Agreement, including the Schedule and Credit
Support Annex thereto, each dated as of August 5, 2004, in the form attached
hereto as Exhibit
D.
7. Conditions
Precedent. This Agreement and its provisions shall become
effective on the first date on which all of the following conditions precedent
shall have been satisfied (the “Agreement Effective
Date”). On or before the Agreement Effective
Date:
(i) Administrative
Agent and the Borrowers and Guarantors shall have received this Agreement,
executed and delivered by a duly authorized officer of each of Borrowers,
Guarantors and Administrative Agent;
(ii) Borrowers
and Guarantors shall have provided to Administrative Agent such opinions of
counsel concerning the enforceability of this Agreement and the
Sub-Participation Agreement, and addressing such other matters as Administrative
Agent requests, in each case in form and substance satisfactory to
Administrative Agent in its sole discretion;
(iii) each of
the representations and warranties of Borrowers and Guarantors and the
Administrative Agent as set forth in this Agreement are true and correct as of
the date hereof;
(iv) the
Sub-Participation Agreement shall have been executed and delivered by the
parties thereto on or prior to the date hereof;
(v) 100
Church Funding LLC (“SLG”) shall have
provided an acknowledgement of the Sub-Participation Agreement in form and
substance satisfactory to Administrative Agent and SLG;
(vi) Borrowers
and Guarantors shall have made payment to Lenders and Administrative Agent for
reasonable out-of-pocket costs and expenses incurred by Lenders and
Administrative Agent in connection with the preparation, execution and delivery
of this Agreement, including, without limitation, reasonable fees and
disbursements of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to Lenders and
Administrative Agent; and
(vii) Administrative
Agent shall have delivered to Borrowers and Guarantors fully executed copies of
the Termination of Custodial Agreement, the Account Control Termination
Agreement and the UCC Authorization Letter, and all remaining amounts in the
Collection Account shall have been remitted to Gramercy Capital.
8. No
Inducement. The Parties warrant that no promise or inducement
has been offered in connection with this Agreement, except as herein set forth,
and that this Agreement is executed without reliance upon any statements or
representations by any Party or any of their respective representatives, except
as set forth herein.
9. Binding
Effect. The rights and obligations set forth in this Agreement
shall inure to the benefit of the Parties and their respective shareholders,
officers, directors, employees, agents, affiliates, successors and assigns, and
bind the Parties and their respective successors and assigns.
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10. Representations and
Warranties. (a) Each party to this Agreement represents and
warrants that:
(i) The
execution, delivery and performance of this Agreement by it have been duly
authorized by all requisite action;
(ii) It is
fully authorized, permitted and legally competent to execute this Agreement, and
this Agreement does not conflict with any provision of any law, rule or
regulation applicable to it; and
(iii) This
Agreement is its valid and binding legal obligation, and enforceable in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to the rights of creditors generally
and general principles of equity.
(b) Each
Borrower, and each Guarantor, jointly and severally, shall indemnify
Administrative Agent, each Lender, and each of their respective present and
former subsidiaries and affiliates, and each of the respective
partners, directors, officers, employees, agents and advisors
of Administrative Agent and each Lender (each such Person being called
an “Indemnitee”) against,
and hold each Indemnitee harmless from and against, any and all claims,
penalties, fines, losses, damages, liabilities, costs, and expenses (including,
without limitation, attorneys’ fees and disbursements), in each case incurred by
any Indemnitee or asserted against any Indemnitee by any third party or
by any Borrower or any Guarantor arising out of, in connection with, or as
a result of the breach of any of the representations and warranties set forth
either in this Agreement or in the Sub-Participation Agreement.
11. Covenants. Upon
execution of this Agreement, each of Guarantors and Borrowers covenants and
agrees not to bring any legal, administrative, legislative or adversary action,
claim, suit or proceeding of any kind or nature against Administrative Agent or
any other Released Party with respect to the matters released by Guarantors and
Borrowers in Section
4 of this Agreement, and each of Guarantors and Borrowers further
covenants and agrees that this Agreement is a bar to any such action, claim,
suit or proceeding, provided that, this provision shall in no way prohibit any
Party from commencing any action(s), suit(s) or other proceeding(s) of any kind
or nature to enforce or interpret any of the covenants, terms or provisions of
this Agreement.
12. Attorneys’ Fees, Costs and
Expenses. Each Borrower and each Guarantor will bear its own
attorneys’ fees, costs and expenses incurred relative to this Agreement and the
Sub-Participation Agreement. Each Borrower and each Guarantor,
jointly and severally, also agrees to pay Administrative Agent and each Lender
any costs or expenses (including, without limitation, attorneys’ fees and
disbursements) associated with the enforcement of this Agreement and/or the
Sub-Participation Agreement against any Borrower or any Guarantor, but only if
Administrative Agent and/or Lender prevail in such enforcement
action.
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13. Miscellaneous.
(a) Entire
Agreement. This Agreement contains the entire understanding of
the Parties in respect of its subject matter and supersedes all prior agreements
and understandings between the Parties with respect to such subject
matter.
(b) Amendment;
Waiver. This Agreement may not be modified, amended or
supplemented except by written instrument that is (1) titled and identified
on its face as an amendment to, or modification of this Agreement, and
(2) executed by all of the Parties. No failure to exercise and
no delay in exercising, any right, power or privilege under this Agreement shall
operate as a waiver, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude the exercise of any other right, power or
privilege. No waiver of any breach of any provision shall be deemed
to be a waiver of any preceding or succeeding breach of the same or any other
provision, nor shall any waiver be implied from any course of dealing between or
among the Parties. No extension of time for performance of any
obligations or other acts hereunder or under any other agreement shall be deemed
to be an extension of the time for performance of any other obligations or any
other acts.
(c) Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page
to this Agreement in Portable Document Format (PDF) or by facsimile transmission
shall be effective as delivery of a manually executed original counterpart
thereof.
(d) Headings. The
headings contained in this Agreement are for convenience of reference only and
are not to be given any legal effect and shall not affect the meaning or
interpretation of this Agreement.
(e) Governing
Law. This Agreement shall be construed in accordance with the
laws and public policy of the State of New York (without giving effect to
the principles of conflict of laws thereof, other than the principles set forth
in Section 5-1401 of the General Obligations Law of the State of New
York).
(f) Severability. If
any provision of this Agreement, or the application of any such provision to any
person or circumstance, is held to be inconsistent with any present or future
law, ruling, rule or regulation of any court or governmental or regulatory
authority having jurisdiction over the subject matter of this Agreement, such
provision shall be deemed to be modified to the minimum extent necessary to
comply with such law, ruling, rule or regulation, and the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held inconsistent, shall be
unaffected. If any provision is determined to be illegal,
unenforceable or void, then such void provision shall be deemed rescinded and
each provision not so affected shall be enforced to the extent permitted by
law.
(g) Terminology. All
personal pronouns used in this Agreement, whether masculine, feminine or neuter
gender is used, shall include all other genders; and the singular shall include
the plural and vice versa. Titles of articles, sections and
subsections are for convenience only, and neither limit nor amplify the
provisions of this Agreement itself. The use herein of the word
“including” when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, but shall be deemed to refer to all other items and matters that could
reasonably fall within the broadest possible scope of such general statement
term or matter.
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(h) Drafting
Ambiguities. Each Party and its counsel have had an
opportunity to review and revise this Agreement and the exhibits attached
hereto. The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or of any amendments or exhibits to this
Agreement.
(i) Confidentiality. The
Parties agree not to disclose, without prior written consent of each other, the
provisions of this Agreement to any person, firm, organization, or entity of any
and every type, public or private, unless required by any subpoena, order, law
(including securities laws), regulation, ruling or request of any judicial,
administrative or legislative body or committee, bank examiner or other
regulatory authority, or any self-regulatory body (including, without
limitation, any securities or commodities exchange or the National Association
of Securities Dealers, Inc.), except that the parties agree that this Agreement
may be used in a subsequent proceeding in order to enforce the terms of this
Agreement in a court of law, in a court of equity by injunction or otherwise, by
way of defense, or in any other appropriate manner. However, this
provision shall not limit the right to share information among affiliate or
subsidiary entities; the respective attorneys, accountants, auditors or tax
preparers of the parties; or the lenders to or investors in each party (but only
if same are obligated to keep the terms of this Agreement
confidential).
[Signature
Pages Follow]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
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BORROWERS:
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GRAMERCY WAREHOUSE FUNDING I
LLC, a Delaware limited liability company
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By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
Chief Operating
Officer
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GKK TRADING WAREHOUSE I
LLC, a
Delaware
limited liability company
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By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
Chief Operating
Officer
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GUARANTORS:
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GRAMERCY CAPITAL CORP.,
a Maryland corporation
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By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
Chief Operating
Officer
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GKK CAPITAL LP, a
Delaware limited partnership
By:Gramercy
Capital Corp., a Maryland corporation, its general
partner
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By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
Chief Operating
Officer
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GRAMERCY INVESTMENT
TRUST, a Maryland real estate investment trust
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By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
Chief Operating
Officer
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GKK TRADING CORP., a
Delaware corporation
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By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Title:
Chief Operating
Officer
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ADMINISTRATIVE
AGENT:
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WACHOVIA BANK, NATIONAL
ASSOCIATION,
as
Administrative Agent on behalf of the Lenders
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By:
/s/ H. ▇▇▇ ▇▇▇▇▇
III
Name: H. ▇▇▇ ▇▇▇▇▇
III
Title:
Director
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