Document:

Exhibit 10.1

 

SHARE OPTION AGREEMENT

 

SHARE
OPTION AGREEMENT (this “Agreement”), dated as of January 19, 2005, by
and among Falcon Financial Investment Trust, a Maryland real estate investment
trust (the “Company”) and Flash Acquisition Company LLC, a Maryland
limited liability company (“Purchaser”) and wholly owned subsidiary of
iStar Financial Inc., a Maryland corporation (“Parent”).  Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Merger Agreement.

 

WHEREAS,
the Company, Parent and Purchaser have contemporaneously with the execution of
this Agreement entered into an Agreement and Plan of Merger, dated as of the
date hereof (the “Merger Agreement”), which provides, among other
things, that upon the terms and subject to the conditions thereof, Purchaser
will commence a tender offer (the “Offer”) for all of the issued and
outstanding common shares of beneficial interest, par value $0.01 per share, of
the Company, including restricted shares (the “Shares”), and after
accepting for payment and paying for the Shares validly tendered and not
withdrawn pursuant to the Offer (the “Tendered Shares”), the Purchaser
shall be merged with and into Company, the separate existence of the Purchaser
shall thereupon cease and Company shall continue as the surviving entity as a
wholly owned subsidiary of Parent; and

 

WHEREAS,
as an essential condition and inducement to Parent and Purchaser entering into
the Merger Agreement and in consideration therefor, the Company has agreed to grant
Purchaser the Option (as defined below).

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein and in the Merger Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereby
agree as follows:

 

1.             Grant
of Option.  The Company hereby grants
to Purchaser an irrevocable option (the “Option”) to purchase from the
Company a number of fully paid and nonassessable Shares (such Shares being
referred to herein as the “Option Shares”) equal to the Applicable
Amount (as defined below) at any time prior to the Expiration Date (as defined
below), at a price per share equal to the Offer Price (the “Exercise Price”),
subject to the terms and conditions set forth herein, including, without
limitation, the conditions to exercise set forth in Section 2(a) of this
Agreement.  If not exercised prior to the
Expiration Date, the Option and all rights granted under the Option shall
expire and lapse.  The “Applicable
Amount” shall be the number of Shares which, when added to the number of
Shares owned (of record or beneficially) by Parent, Purchaser and their
respective subsidiaries immediately prior to the exercise of the Option, would
result in Parent, Purchaser and their respective subsidiaries owning (of record
or beneficially) in the aggregate, immediately after exercise of the Option,
one Share more than ninety percent (90%) of the then issued and outstanding
Shares; provided, however, that the Applicable Amount shall not
exceed 19.9% of the then issued and outstanding Shares and shall not exceed the
number of authorized Shares available for issuance under the Declaration
of Trust.

 

2.             Exercise
of Option.

 

(a)           Conditions
to Exercise of Option.  Purchaser may
exercise the Option if, but only if (i) Purchaser shall have accepted for
payment and paid for all Shares validly tendered and not withdrawn pursuant to
the Offer (the “Accepted Shares”), (ii) the Accepted Shares shall equal
at least eight-five percent (85%) but less than ninety percent (90%) of the
issued and outstanding Shares, and (iii) the Accepted Shares, together with the
Option Shares immediately after exercise of the Option, would result in Parent,
Purchaser and their respective subsidiaries owning (of record or beneficially)
in the

 

 

aggregate, at least ninety percent (90%) of the issued
and outstanding Shares. If
at any time prior to the Expiration Date, the conditions to the exercise of the
Option set forth in this Section 2(a) are satisfied, Parent and Purchaser
hereby agree to exercise the Option and to take all actions required under this
Agreement to consummate the Option Closing.

 

(b)           Expiration
of the Option.  The right to exercise
this Option shall expire upon the earlier of (i) the termination of the Merger
Agreement, (ii) the Effective Time or (iii) at 5:00 p.m., New York City, New
York time, on the 30th Business Day following the consummation of the Offer
(the “Expiration Date”).

 

(c)           Exercise
of the Option.  Subject to the
conditions set forth in Section 2(a) of this Agreement, the Option may be
exercised by Purchaser by surrender and presentment of this Agreement to the
Company, accompanied by a duly executed written notice (such notice being
herein referred to as an “Exercise Notice” and the date of delivery of
an Exercise Notice being herein referred to as the “Notice Date”)
indicating that Purchaser is exercising the Option and specifying (i) the
total number of Option Shares that it will purchase from the Company pursuant
to such exercise, and (ii) the place and date (which shall be between one
business day and five business days from the Notice Date) for the closing of
such purchase (the “Option Closing”), together with the amount of the
aggregate Exercise Price (“Aggregate Exercise Price”) for the number of
Option Shares specified in the Exercise Notice to be paid in the manner
specified in Section 2(d) of this Agreement.

 

(d)           Delivery
of Exercise Price.  At the Option
Closing, the Aggregate Exercise Price shall be paid by Purchaser to the Company
by delivery of a full recourse promissory note in the form attached hereto as Exhibit
A in a principal amount equal to the Aggregate Exercise Price.

 

(e)           Issuance of Option
Shares.  At the Option Closing, simultaneously with
the payment of the Aggregate Exercise Price in the manner provided in Section
2(d) of this Agreement, the Company shall deliver to Purchaser a certificate or
certificates representing the Option Shares purchased upon such exercise.

 

(f)            Record
Holder; Expenses.  Upon the delivery
by Purchaser of the Exercise Notice and payment of the Exercise Price in the
manner specified in Section 2(d) of this Agreement, Purchaser shall be deemed
to be the holder of record of the Option Shares issuable upon such exercise,
notwithstanding that the stock transfer books of the Company may then be closed
or that certificates representing such Option Shares may not then have been
actually delivered to Purchaser.  The
Company shall pay all expenses that may be payable in connection with the
preparation, issuance and delivery of stock certificates.

 

3.             Reservation
of Shares.  Subject to the terms and
conditions hereof, and for so long as the Merger Agreement has not been
terminated pursuant to the provisions thereof, the Company agrees (a) that
it shall at all times maintain, free from preemptive rights, sufficient
authorized but unissued or treasury shares of Shares issuable pursuant to this
Agreement so that the Option may be exercised without additional authorization
of Shares after giving effect to all other options, warrants, convertible
securities and other rights to purchase Shares, (b) that it will not, by
charter amendment or through reorganization, consolidation, merger, dissolution
or sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants to be observed or performed
hereunder by the Company, and (c) promptly to take all action as may from
time to time be required in order to permit Purchaser to exercise the Option
and the Company to duly and effectively issue the Shares  pursuant hereto.

 

2

 

4.             Representations
and Warranties of the Company.  The
Company hereby represents and warrants to Purchaser as follows:

 

(a)           Authority.  The Company has all requisite trust power and
authority to execute and deliver this Agreement and to perform and consummate
the transactions contemplated hereby. 
The execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary trust action on the part of the Company and no
other trust proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate such transactions.  This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights generally and by the application of
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).

 

(b)           Other
Actions.  The Company has taken all
necessary action to (1) authorize and reserve and to permit it to issue, and at
all times from the date hereof through the Expiration Date will have reserved
for issuance upon the exercise of the Option, that number of Shares equal to
the maximum number of Shares at any such time and from time to time issuable
hereunder and (2) to render Section 7.2 of the Declaration of Trust to be
inapplicable to the grant to Purchaser, and the exercise by Purchaser, of the
Option and the purchase of the Shares pursuant to the Option, and all such
Shares, upon issuance pursuant hereto and in accordance with the terms hereof,
will be duly authorized, validly issued, fully paid, nonassessable, and will be
delivered free and clear of all Encumbrances created by the Company and not
subject to any preemptive rights.

 

(c)           Consents
and Approvals; No Violations. The execution, delivery and performance by the Company
of this Agreement and the consummation by the Company of the transactions
contemplated by this Agreement do not and will not (i) conflict with or result
in any breach of any provision of the Declaration of Trust or Bylaws of the
Company or any similar organizational documents of any of its subsidiaries,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default under, or give rise to any right of
termination, amendment, cancellation, acceleration or loss of benefits or the
creation or acceleration of any right or obligation under or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, loan, credit agreement, lease,
license, permit, concession, franchise, purchase order, sales order contract,
agreement or other instrument, understanding or obligation, whether written or
oral, to which the Company or any of its subsidiaries is a party or by which
any of its properties or assets may be bound or (iii) violate any judgment,
order, writ, preliminary or permanent injunction or decree or any statute, law,
ordinance, rule or regulation of any Governmental Authority applicable to the
Company, any of its subsidiaries or any of their properties or assets, except
in the case of clauses (ii) or (iii) for violations, breaches or defaults that
would not have a Material Adverse Effect on the Company.  The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated by this Agreement do not and will not
require any filing or registration with, notification to, or authorization,
permit, consent or approval of, or other action by or in respect of, any
Governmental Authority.

 

5.             Representations
and Warranties of Parent and Purchaser. 
Parent and Purchaser hereby represent and warrant to the Company as
follows:

 

3

 

(a)           Authority.  Purchaser and Parent each have all requisite
corporate and limited liability company, as applicable, power and authority to
execute and deliver this Agreement and to perform and consummate the transactions
contemplated hereby.  The execution,
delivery and performance of this Agreement and the consummation by Parent and
Purchaser of the transactions contemplated hereby have been duly authorized by
all necessary corporate or limited liability company, as applicable, action on
the part of Parent and Purchaser and no other corporate or limited liability
company, as applicable, proceedings on the part of Parent or Purchaser are
necessary to authorize this Agreement or to consummate such transactions.  This Agreement has been duly executed and
delivered by each of Parent and Purchaser and constitutes a valid and binding
obligation of each of Parent and Purchaser, enforceable against each of Parent
and Purchaser in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general applicability relating to or affecting creditors’
rights generally and by the application of general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

 

(b)           Consents
and Approvals; No Violations. The execution, delivery and performance by each of
Parent and Purchaser of this Agreement and the consummation by each of Parent
and Purchaser of the transactions contemplated by this Agreement do not and
will not (i) conflict with or result in any breach of any provision of the
organization documents of Parent and Purchaser or any of each of their
subsidiaries, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, or give rise to
any right of termination, amendment, cancellation, acceleration or loss of
benefits or the creation or acceleration of any right or obligation under or result
in the creation of any Lien upon any of the properties or assets of either
Parent of Purchaser or any of their subsidiaries under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
loan, credit agreement, lease, license, permit, concession, franchise, purchase
order, sales order contract, agreement or other instrument, understanding or
obligation, whether written or oral, to which either Parent or Purchaser or any
of their subsidiaries is a party or by which any of their properties or assets
may be bound or (iii) violate any judgment, order, writ, preliminary or
permanent injunction or decree or any statute, law, ordinance, rule or
regulation of any Governmental Authority applicable to either Parent or Purchaser,
or any of their properties or assets, except in the case of clauses (ii) or
(iii) for violations, breaches or defaults that would not have prevent or delay
the consummation of the Offer or the Merger or the exercise of the Option.  The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
each of Parent and Purchaser of the transactions contemplated by this Agreement
do not and will not require any filing or registration with, notification to,
or authorization, permit, consent or approval of, or other action by or in
respect of, any Governmental Authority.

 

(c)           Investment.  Parent and Purchaser each acknowledge and
agree that the neither the Option Shares nor any other security issued or issuable upon exercise
of the Option have been registered under applicable federal or state
securities laws, and that the Company is under no obligation to register the
Option Shares or
any other security issued or issuable upon exercise of the Option under
any such federal or any state securities laws. 
Purchaser will acquire the Option Shares and any other security issued or issuable upon
exercise of the Option solely for investment purposes and for its own
account and not with a view to the distribution thereof within the meaning of
the Securities Act of 1933, as amended (the “Act”).  Purchaser represents that it is an “Accredited
Investor” as that term is defined in Regulation D promulgated under the Act.

 

6.             No
Transfer; No Assignment.

 

(a)           The
Option may not be offered, sold, assigned, pledged, hypotheticated, or
otherwise transferred (a “Transfer”). 
Further, neither the Option Shares nor any other security issued or

 

4

 

issuable upon exercise of the Option may be Transferred
except in compliance with the Act and any applicable state securities
laws.  The Company may cause a legend to this effect
to be set forth on each certificate representing the Option Shares.

 

(b)           Neither
Purchaser nor the Company may assign any of its rights or obligations under
this Agreement without the prior, express written consent of the other
party.  Any purported assignment in
violation of the foregoing prohibitions shall be void and of no force or effect
whatsoever.

 

7.             Specific
Performance.  Except after the
termination of the Merger Agreement, the parties hereto agree that if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.

 

8.             Invalid
Provisions.  If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (iii) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom and (iv) in
lieu of such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.

 

9.             Notices.  All notices, claims, demands and other
communications hereunder shall be deemed to have been duly given or made when
delivered in accordance with Section 9.2 of the Merger Agreement.

 

10.           Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND,
WITHOUT REGARD FOR THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

11.           Consent
to Jurisdiction and Service of Process. 
EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MARYLAND OR ANY COURT OF THE STATE OF MARYLAND LOCATED IN BALTIMORE, MARYLAND
IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY, AND AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL
BE BROUGHT ONLY IN SUCH COURT (AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN); PROVIDED, HOWEVER, THAT
SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS
SECTION 11 AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE
JURISDICTION OF SAID COURTS OR IN THE STATE OF MARYLAND OTHER THAN FOR SUCH
PURPOSE.  Any and all process
may be served in any action, suit or proceeding arising in connection with this
Agreement by complying with the provisions of Section 9.2 of the Merger
Agreement.  Such service of process shall
have the same effect as if the party being served were a resident in the State
of Maryland and had been lawfully served with such process in such
jurisdiction.  The parties hereby waive
all claims of error by reason of such service. 
Nothing herein shall affect the right of any party to service process in
any other manner permitted by law or to commence

 

5

 

legal proceedings or otherwise proceed against the other
in any other jurisdiction to enforce judgments or rulings of the aforementioned
courts.

 

12.           Counterparts.  This Agreement may be executed in any number
of counterparts, all of which will constitute one and the same instrument.

 

13.           Expenses.  Except as otherwise expressly provided herein
or in the Merger Agreement, each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.

 

14.           Entire
Agreement.  Except as otherwise
expressly provided herein or in the Merger Agreement, this Agreement and the
exhibits hereto supersede all prior and contemporaneous discussions and
agreements, both written and oral, among the parties with respect to the
subject matter of this Agreement and constitute the sole and entire agreement
among the parties to this Agreement with respect to the subject matter of this
Agreement, and supersedes all prior and contemporaneous agreements and
understandings, written or oral, with respect to the subject matter hereof.

 

15.           Amendment.
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each party to this
Agreement. 
This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.

 

16.           Waivers.  Any term or condition of this
Agreement may be waived at any time by the party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a written
instrument duly executed by or on behalf of the party waiving such term or
condition.  No waiver by any party of any
term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.  All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.

 

17.           Further
Assurances.  In the event of any
exercise of the Option by Purchaser, the Company and Purchaser shall execute
and deliver all other documents and instruments and take all other action that
may be reasonably necessary to the fullest extent permitted by law in order to
consummate the transactions provided for by such exercise.  Nothing contained in this Agreement shall be
deemed to authorize the Company or Purchaser to violate, breach or otherwise
fail to perform any provision of the Merger Agreement.

 

18.           Captions.  The captions contained in this Agreement are
for reference purposes only and are not part of this Agreement.

 

[Signature
pages follow.]

 

6

 

IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

 

	
   

  	
  FALCON
  FINANCIAL INVESTMENT

  TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Karp

  
	
   

  	
  Name:
  David A. Karp

  
	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLASH
  ACQUISITION COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Catherine Rice

  
	
   

  	
  Catherine
  Rice

  
	
   

  	
  Vice
  President

  

 

7

 

EXHIBIT
A

 

FORM
OF FULL RECOURSE PROMISSORY NOTE (the “Note”)

 

FOR VALUE RECEIVED, Flash
Acquisition Company LLC, a Maryland limited liability company (the “Maker”),
hereby promises to pay to Falcon Financial Investment Trust, a Maryland real
estate investment trust (the “Payee”), the principal amount of [ ] ($[ ] ),
with interest bearing at five percent (5%), on [ ], 200_ by wire transfer of
immediately available funds to an account designated by the Payee. The amount
due hereunder shall be payable in money of the United States of America lawful
at such time for the payment of public and private debts.

 

The Maker hereby waives
presentment, diligence, protest and demand, notice of protest, demand, dishonor
and nonpayment of this Note, and all other notices of any kind in connection
with the delivery, acceptance, performance, default or enforcement of this
Note.

 

This Note shall be
governed by and construed in accordance with the laws of the State of Maryland
without giving effect to the principles of conflicts of laws thereof.

 

IN WITNESS WHEREOF, the
Maker has caused this Note to be executed as of the day of [ ], 200  .

 

	
   

  	
  FLASH
  ACQUISITION COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

8Exhibit 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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]