Exhibit 10.2


 


FIRST AMENDMENT TO REVOLVING WAREHOUSE FINANCING AGREEMENT


 


THIS FIRST AMENDMENT TO REVOLVING WAREHOUSE FINANCING AGREEMENT (this “Agreement”)
is dated as of January 19, 2005 by and among FALCON FINANCIAL INVESTMENT TRUST,
a Maryland real estate investment trust, as Customer (the “Customer”),
THE BANK OF NEW YORK, as Paying Agent and Custodian (the “Paying Agent”
or the “Custodian,” as the context requires), and iSTAR FINANCIAL INC.,
a Maryland corporation, as Buyer (the “Buyer”).


 


RECITALS


 


A.            Customer, Custodian
and Buyer have entered into that certain Revolving Warehouse Financing
Agreement dated as of April 28, 2004 (the “Original Agreement”).


 


B.            Customer and Buyer
desire to modify certain of the terms and provisions of the Original Agreement
to, among other things, increase the Facility Limit (as defined in the Original
Agreement, and extend the Facility Termination Date (as defined in the Original
Agreement), as more specifically set forth hereinbelow.


 


C.            Capitalized terms
used herein shall have the meanings ascribed thereto in the Original Agreement.


 


NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:


 


1.             Section 1.1 of the
Original Agreement is modified as follows:


 


(a)           The definition of “Change
of Control” is hereby amended by adding the following clause at the end of such
definition immediately following the reference to “part (c)”:


 


; provided,
further, that in no event shall the Merger Closing constitute a Change of
Control.


 


(b)           The definition of “Facility
Limit” is hereby deleted in its entirety, and inserted in lieu thereof is the
following:


 


“Facility
Limit” means $250,000,000.


 


(c)           The definition of “Facility
Termination Date” is hereby deleted in its entirety, and inserted in lieu
thereof is the following:


 


“Facility
Termination Date” means the date which is the first to occur of (i) six (6)
months following the termination of the Merger Agreement by (x) Buyer (other
than a termination of the Merger Agreement by virtue of Customer’s default in
accordance with Sections 8.1(b)(iii) or 8.1(b)(iv) of the Merger Agreement) or
(y) Customer by virtue of Buyer’s default in accordance with Sections
8.1(b)(iii) or 8.1(b)(iv) of the Merger Agreement, (ii)  sixty (60)


 





















 


days following
termination of the Merger Agreement by Customer (other than a termination of
the Merger Agreement by virtue of Buyer’s default in accordance with Sections
8.1(b)(iii) or 8.1(b)(iv) of the Merger Agreement), (iii) sixty (60) days
following termination of the Merger Agreement by Buyer by virtue of a default
by Customer in accordance with Sections 8.1(b)(iii) or 8.1(b)(iv) of the Merger
Agreement, or (iv)  the date on which the
Customer shall merge with a Person (other than pursuant to the Merger
Agreement), a Change of Control occurs or any Person, affiliated group of
Persons or Persons acting in concert acquires at least fifty percent (50%) of
the issued voting securities of the Customer (other than pursuant to the Merger
Agreement).


 


(d)           The definition of “Maximum
Advance Rate” is hereby deleted in its entirety, and inserted in lieu thereof
is the following:


 


“Maximum
Advance Rate” means 75%.


 


(e)           The following
definition of “Merger Agreement” is hereby added to Section 1.1 in alphabetical
order:


 


“Merger
Agreement” means that certain Agreement and Plan of Merger, dated as of the
date hereof, by and among Buyer, Falcon Acquisition Company and Customer, as
such agreement may be amended, supplemented or modified from time to time.


 


(f)            The following
definition of “Merger Closing” is hereby added to Section 1.1 in alphabetical
order:


 


“Merger
Closing” means the consummation of the transactions contemplated by the
Merger Agreement in accordance with its terms.


 


2.             Section 5.2 of the Original
Agreement is hereby modified as follows:


 


(a)  The phrase “enter into” in the third line of
clause (i) is deleted and the phrase “consummate” is substituted in lieu
thereof.


 


(b)           The phrase “, it being understood
that the execution of the Merger Agreement shall be deemed to not violate this
Section 5.2(m)” shall be inserted immediately following the phrase “Transaction
Document” in the last line of Section 5.2(m).


 


3.             Section 7.1(r) of
the Original Agreement is hereby amended by inserting the phrase “except in
connection with the Merger Closing,” immediately prior to the term “Customer.”


 


4.             All references in
the any of the Transaction Documents to the Original Agreement are hereby
understood to be the Original Agreement, as modified by this Agreement.


 





















 


5.             Customer hereby
represents and warrants to Buyer that all of the representations and warranties
in the Original Agreement and each of the Transaction Documents, both before
and after giving effect to the amendments and modifications thereto in this
Agreement, are true, correct and complete on the date hereof, with the same
force and effect as if made on such date, except to the extent that such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true and correct on
and as of such earlier date.


 


6.             In the event of any
conflict among the terms of the Transaction Documents and the terms of the
Original Agreement, as modified by this Agreement, the Original Agreement, as
modified by this Agreement, shall control. 
All terms and provisions of each of the Transaction Documents
corresponding to terms and provisions of the Original Agreement prior to the
date of this Agreement shall be deemed modified in accordance with the terms of
this Agreement.


 


7.             Customer hereby
represents and warrants to Buyer that (i) Customer has no defense, offset or
counterclaim with respect to the payment of any sum owed to Buyer, or with
respect to any covenant in the Original Agreement or any of the Transaction
Documents; and (ii) no Termination Event has occurred and is continuing, nor
has any fact, matter or circumstance arisen which would be reasonably expected
to cause a Material Adverse Change.


 


8.             Customer hereby
acknowledges and agreed that (i) Buyer, on and as of the date hereof, has fully
performed all obligations to Customer which it may have had or has on and as of
the date hereof; and (ii) other than as expressly set forth herein, by entering
into this Agreement, Lender does not waive any condition or obligation in the
Original Agreement or the other Transaction Documents.


 


9.             Customer and Paying
Agent hereby agree to execute and deliver promptly to Buyer, at Buyer’s
request, such other documents as Buyer, in its reasonable discretion, shall
deem necessary or appropriate to evidence the transaction contemplated herein.


 


10.           This Agreement may
be executed in any number of counterparts, each of which shall constitute an
original, but all of which, taken together, shall constitute one and the same
instrument.


 


11.           Except as otherwise
expressly set forth herein to the contrary, the Original Agreement and the
other Transaction Documents remain unmodified and continue in full force and
effect.  Customer hereby reaffirms,
confirms and ratifies each and every covenant, condition, obligation and
provision set forth in the Original Agreement and the other Transaction
Documents, each as may be modified hereby.


 





















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
by their duly authorized officers as of the date hereof.


 


	
   

  	
  FALCON FINANCIAL INVESTMENT TRUST, a

  Maryland real estate investment trust, as Customer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Karp

  
	
   

  	
  Name: David A. Karp

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
  iSTAR FINANCIAL INC., a Maryland
  corporation,

  
	
   

  	
  as Buyer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Catherine Rice

  
	
   

  	
  Name: Catherine Rice

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK, as Custodian and

  Paying Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa Minneci

  
	
   

  	
  Name: Melissa Minneci

  
	
   

  	
  Title: Assistant Treasurer