Document:

ex10-1.htm

    Exhibit
      10.1

     

     

    SECOND
      AMENDMENT AND WAIVER

     

     

    SECOND
      AMENDMENT AND WAIVER (this
“Amendment”), dated as of August 15, 2007, by and
      among CRYSTAL RIVER CAPITAL, INC., a corporation organized under the laws of
      the
      State of Maryland (“Borrower”), BANK HAPOALIM B.M. (“BHBM”) and
      SIGNATURE BANK (“Signature”; each of BHBM and Signature, a
“Lender” and, collectively, the “Lenders”), and Signature as
      administrative agent for Lenders (in such capacity, the
“Agent”).  Terms which are capitalized in this Amendment and
      not otherwise defined herein shall have the meanings ascribed to such terms
      in
      the Credit Agreement (as defined below).

     

    WHEREAS,
      Borrower, Agent and Lenders are parties to that certain Revolving Credit
      Agreement, dated as of March 1, 2006, as amended by that
      certain First Amendment, dated as of April 10, 2006, (as further amended,
      modified or supplemented from time to time, the “Credit
      Agreement”);

     

    WHEREAS,
      Borrower, Agent and Lenders are parties to that certain letter
      agreement dated August 9, 2007 (the “Waiver Letter”) among Borrower,
      Agent and Lender;

     

    WHEREAS,
      Borrower has requested a reduction of the Maximum Advance Amount in the amount
      of $10,000,000;

     

    WHEREAS,
      in connection with such reduction, Borrower desires to release BHBM from its
      obligations under the Credit Agreement;

     

    WHEREAS,
      Borrower has requested that Agent and Signature waive certain covenants under
      the Credit Agreement;

     

    WHEREAS,
      Borrower has requested that Agent and Signature extend the Waiver
      Period (as such term is defined in the Waiver Letter); and

     

    WHEREAS,
      subject to the terms and conditions contained in this Amendment, the Credit
      Agreement shall be amended, and such waiver shall be consented to, as set forth
      herein;

     

    NOW,
      THEREFORE, in consideration of the foregoing, and for other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    Section
      1.  Amendment to Credit
      Agreement.  On the Effective Date (as
      defined in Section 3 hereof), the Credit Agreement is hereby amended as
      follows:

     

    (a)           Section
      1.2 of the Credit Agreement is hereby amended by deleting the definition
“Maximum Advance Amount” in its entirety and substituting the following in lieu
      thereof:

     

    “Maximum
      Advance Amount” shall mean $21,000,000, which such amount may be increased
      in accordance with Section 2.4(b) hereof.

     

    Section
      2.  Commitment
      Percentages.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                   (a)            On
      the Effective Date, and after giving effect to the reduction of the Maximum
      Advance Amount as described herein, the Commitment Percentage of Signature
      shall
      be 100%.  Each of Borrower, Agent and Lenders expressly consents to
      the reallocation set forth above and hereby waives compliance with all notice
      requirements set forth in the Credit Agreement.  The parties hereto
      further agree that any noncompliance with the provisions of the Credit Agreement
      by virtue of the reallocation set forth above shall not constitute a Default
      or
      Event of Default by Borrower and that such reallocation shall be deemed to
      be
      permissible and effective in all respects and for all purposes under the Credit
      Agreement.

     

    (b)           Notwithstanding
      Section 2.5(b) of the Credit Agreement to the contrary, Lenders hereby agree
      that Borrower shall, on the Effective Date, pay to BHBM an amount equal to
      $10,000,000 plus accrued and unpaid interest on such amount through but
      excluding the Effective Date, provided that such payment is made in accordance
      with Section 2.5(c) of the Credit Agreement.  BHBM shall, promptly
      following receipt of such payment, deliver to Borrower that certain Revolving
      Credit Note dated as of April 10, 2006 in the principal amount of $10,000,000
      for cancellation by Borrower.  The parties hereto agree that any
      noncompliance with the provisions of the Credit Agreement by virtue of the
      payment set forth above shall not constitute a Default or Event of Default
      by
      Borrower and that such payment shall be deemed to be permissible and effective
      in all respects and for all purposes under the Credit Agreement.

     

    (c)           On
      the Effective Date and after giving effect to the reduction of the Maximum
      Advance Amount and payment to BHBM described herein, BHBM shall be released
      from
      all of its obligations under the Credit Agreement and shall relinquish all
      of
      its rights thereunder (other than such rights that expressly survive the
      termination of BHBM’s obligations under the Credit Agreement).  The
      parties hereto consent to such release of BHBM and agree that any noncompliance
      with the provisions of the Credit Agreement by virtue of such release shall
      not
      constitute a Default or Event of Default by Borrower and that such release
      shall
      be deemed to be permissible and effective in all respects and for all purposes
      under the Credit Agreement.

     

    Section
      3.  Conditions
      Precedent.  This Amendment, and the
      waivers set forth in Section 4 of this Amendment, shall be effective upon the
      date on which the following conditions precedent are satisfied (such date,
      the
“Effective Date”):

     

    (a)           Agent
      and Lenders shall have received a duly executed counterpart of this Amendment
      from Borrower;

     

    (b)           BHBM
      shall have received the payment contemplated by Section 2(b) of this
      Amendment;

     

    (c)           Agent
      shall have received a closing certificate signed by the Chief Financial Officer
      of Borrower dated as of the date hereof, stating that other than the Events
      of
      Default described in the Waiver Letter (i) all representations and warranties
      set forth in this Amendment, the Credit Agreement, as amended by this Amendment
      (except for such representations and warranties that were only required to
      be
      true and correct as of a specified prior date) and the Other Documents are
      true
      and correct in all material respects on and as of such date, (ii) Borrower
      is on
      such date in compliance with all the material terms and provisions

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    set
      forth
      in this Amendment, the Credit Agreement and the Other Documents and (iii) on
      such date no Default or Event of Default has occurred or is
      continuing;

     

    (d)           All
      representations and warranties set forth in the Credit Agreement, as amended
      by
      this Amendment (except for such representations and warranties that were only
      required to be true and correct as of a specified prior date) shall be true
      and
      correct in all material respects on and as of the Effective Date (other than
      the
      Events of Default described in the Waiver Letter);

     

    (e)           No
      Default or Event of Default shall have occurred and be continuing on the date
      hereof (other than the Events of Default described in the Waiver
      Letter);

     

    (f)           No
      event, condition or state of facts shall have occurred since the Closing Date,
      which such event, condition or state of facts has had or is reasonably likely
      to
      have a Material Adverse Effect;

     

    (g)           Agent
      shall have received and reviewed to its satisfaction full, complete final and
      signed copies of all further agreements, consents, instruments and documents
      as
      may be necessary or proper, in its reasonable opinion, and in the reasonable
      opinion of its counsel, to carry out the provisions and purposes of this
      Amendment; and

     

    (h)           Borrower
      shall have paid any and all reasonable fees and expenses incurred by Agent
      and
      Lenders in connection with the preparation and execution of this
      Amendment.

     

    Section
      4.  Representations and
      Warranties.  Borrower represents and
      warrants to Agent and Lenders that:

     

    (a)           Borrower
      has the corporate power, authority and legal right to execute, deliver and
      perform this Amendment and the other instruments, agreements, documents and
      transactions contemplated hereby to which it is a party, and has taken all
      actions necessary to authorize the execution, delivery and performance of this
      Amendment and the other instruments, agreements, and documents to which it
      is a
      party and the transactions contemplated hereby and thereby;

     

    (b)           No
      consent of any Person (including, without limitation, stockholders or creditors
      of Borrower) other than Agent and Lenders, and no consent, permit, approval
      or
      authorization of, exemption by, notice or report to, or registration, filing
      or
      declaration with, any governmental authority is required in connection with
      the
      execution, delivery and performance by Borrower, or the validity or
      enforceability against Borrower, of this Amendment and the other instruments,
      agreements, documents and transactions contemplated hereby to which it is a
      party;

     

    (c)           This
      Amendment has been duly executed and delivered on behalf of Borrower by its
      duly
      authorized officer, and constitutes the legal, valid and binding obligation
      of
      Borrower, enforceable in accordance with its terms, except to the extent that
      such enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium and similar laws affecting the rights of creditors
      generally or equitable remedies (whether arising in a proceeding at law or
      in
      equity);

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (d)           No
      Default or Event of Default has occurred and is continuing on the date hereof
      (other than the Events of Default described in the Waiver Letter);

     

    (e)           Borrower
      is duly incorporated and in good standing under the laws of its state of
      incorporation and each other state in which qualification and good standing
      are
      necessary for Borrower to conduct its business and own its property and where
      the failure to so qualify could reasonably be expected to have a Material
      Adverse Effect; and

     

    (f)           Upon
      the Effective Date, Borrower is not in default under any indenture, mortgage,
      deed of trust, agreement or other instrument to which it is a party or by which
      it may be bound.  Neither the execution and delivery of this
      Amendment, nor the consummation of the transactions herein contemplated, nor
      compliance with the provisions hereof will (i) violate any law or regulation,
      or
      (ii) result in or cause a violation by Borrower of any order or decree of
      any court or government instrumentality, or (iii) conflict with, or result
      in the breach of, or constitute a default under, any indenture, mortgage, deed
      of trust, material agreement or other material instrument to which Borrower
      is a
      party or by which it may be bound, or (iv) result in the creation or
      imposition of any lien, charge, or encumbrance upon any of the property of
      Borrower, except in favor of Agent, for the benefit of Lenders, to secure the
      Obligations, or (v) violate any provision of the Certificate of
      Incorporation, By-Laws or any capital stock or similar equity instrument of
      Borrower.

     

    Section
      5.  Waivers.

     

    (a)           Agent
      and Signature hereby agree that, notwithstanding Section 6.5 of the Credit
      Agreement and the Waiver Letter, Borrower shall be permitted to apply any of
      its
      funds, property or assets, in one or more transactions, to the purchase,
      redemption or other retirement of Equity Interests of Borrower, provided,
      however, that such purchase(s), redemption(s) or other retirement(s) shall
      occur
      on or prior to September 30, 2007 and shall not exceed $5,000,000 in
      total.

     

    (b)           Agent
      and Signature hereby agree that the Waiver Period (as such term is defined
      in
      the Waiver Letter) shall be extended to September 28, 2007.

     

    (c)           Except
      for the waiver expressly set forth above in Section 5(a) (the “Waiver”)
      and in the Waiver Letter, Agent and Signature reserve each and every right
      and
      remedy they may have under the Credit Agreement, any Other Documents, the Waiver
      Letter and under applicable law with respect to any Default or Event of Default
      thereunder.  Nothing in this Amendment shall be deemed to constitute a
      waiver by Agent or Signature of any other Default or Event of Default, whether
      now existing or hereafter arising, or of any right or remedy Agent or Signature
      may have under the Credit Agreement, any of the Other Documents, the Waiver
      Letter or applicable law, except to the extent expressly set forth in Section
      5(a) and in the Waiver Letter.

     

    (d)           Without
      limiting the generality of the provisions of Sections 14.2(a) and 14.2(b) of
      the
      Credit Agreement, the waiver forth above in Section 5(a) (the “Waiver”)
      shall be limited precisely as written and relate solely to the waiver of the
      provisions of the Credit Agreement in the manner and to the extent described
      above, and except as expressly set forth in

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Section
      5(a), nothing in the Waiver shall be deemed to (a) constitute a waiver of (i)
      any Default or Event of Default under the Credit Agreement, the Waiver Letter
      or
      the other documents and instruments and agreements referred to therein or
      executed pursuant to or in connection therewith (the “Documentation”), or
      (ii) compliance by the Borrower with respect to any other term, provision
      or condition of the Credit Agreement, the Waiver Letter or any of the other
      Documentation; or (b) prejudice any right or remedy that Agent or Signature
      may
      now have or may have in the future under, pursuant to or in connection with
      the
      Credit Agreement, the Waiver Letter or any of the other
      Documentation.

     

    Section
      6.  General Provisions.

     

    (a)           Except
      as herein expressly amended, the Credit Agreement, the Waiver Letter and all
      other agreements, documents, instruments and certificates executed in connection
      therewith, are ratified and confirmed in all respects and shall remain in full
      force and effect in accordance with their respective terms.

     

    (b)           This
      Amendment may be executed by the parties hereto individually or in combination,
      in one or more counterparts, each of which shall be an original and all which
      shall constitute one and the same agreement.  Signatures by facsimile
      shall bind the parties hereto.

     

    (c)           All
      references in the Other Documents and the Waiver Letter to the Credit Agreement
      shall mean the Credit Agreement as amended hereby and as hereafter amended,
      supplemented or modified from time to time.  From and after the date
      hereof, all references in the Credit Agreement to “this Agreement,” “hereof,”
“herein,” or similar terms, shall mean and refer to the Credit Agreement as
      amended by this Amendment.

     

    (d)           Borrower
      hereby fully releases, remises, acquits, irrevocably waives and forever
      discharges Agent and Lenders, together with their respective predecessors,
      successors, assigns, subsidiaries, affiliates and agents and all of their
      respective past, present and future officers, directors, shareholders,
      employees, contractors and attorneys and their respective predecessors, heirs,
      successors and assigns, from and with respect to any and all past, present
      or
      future actions and causes of action, suits, disputes, controversies, claims,
      debts, sums of money, offset rights, defenses to payment, agreements, promises,
      notes, bonds, bills, covenants, losses, damages, judgments, executions and
      demands of whatever nature, known or unknown, fixed or contingent, direct,
      indirect, or derivative, asserted or unasserted, foreseen or unforeseen,
      suspected or unsuspected, liquidated or unliquidated, matured or unmatured,
      whether in contract, in tort or otherwise, at law or in equity, arising on
      or
      prior to the date hereof, for money damages or dues, recovery of property,
      or
      specific performance, in respect of the Credit Agreement, the Waiver Letter
      or
      any of the other Documentation and the transactions contemplated hereby and
      thereby, all the foregoing being with full knowledge and understanding of the
      circumstances and effect thereof and after having consulted legal counsel with
      respect thereto.

     

    (e)           This
      Amendment shall be governed by and construed in accordance with the laws of
      the
      State of New York applied to contracts to be performed wholly within the State
      of New York.

     

    [Remainder
      of page intentionally left blank]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF, each of Agent, Lenders and Borrower have caused this
      Amendment to be duly executed and delivered by their respective proper and
      duly
      authorized officers as of the day and year first above written.

     

    
      	 	
              CRYSTAL RIVER
                CAPITAL,
                INC.,

              as Borrower

            	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Clifford
              Lai	 
	 	 	Name: 
Clifford
              Lai	 
	 	 	Title: 
President	 
	 	 	 	 

    

     

    
      	
            	
              SIGNATURE
                BANK,

              as Lender and as Administrative Agent

            	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Robert A.
              Bloch	 
	 	 	Name: 
Robert
              A.
              Bloch	 
	 	 	Title: 
Senior
              Vice
              President	 
	 	 	 	 

    

     

    
      	
            	
              BANK HAPOALIM
                B.M.,

              as Lender

            	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Frederic S.
              Becker	 
	 	 	Name: 
Frederic
              S.
              Becker	 
	 	 	Title: 
Senior
              Vice
              President	 
	 	 	 	 

    

    

    
      	
               

            	
              By:
                

            	/s/
              Laura Anne
              Raffa	 
	 	 	Name: 
Laura
              Anne
              Raffa	 
	 	 	Title: 
Executive
              Vice
              President & Corporate Managerex10-2.htm

    Exhibit
      10.2

     

    Execution
      Version

     

    AMENDMENT
      NO. 2 TO

     

    MASTER
      REPURCHASE AGREEMENT

     

    

     

    AMENDMENT
      NO. 2 TO MASTER REPURCHASE AGREEMENT, dated as of August 15, 2007 (this
“Amendment”), by and among WACHOVIA BANK, NATIONAL ASSOCIATION. (the
“Buyer”) and CRYSTAL RIVER CAPITAL, INC. and CRYSTAL
      RIVER CAPITAL TRS HOLDINGS, INC. (each a “Seller” and
      collectively, the “Sellers”).  Capitalized terms used but not
      otherwise defined herein shall have the meanings given to them in the Existing
      Agreement (as defined below).

     

    RECITALS

     

    Buyer
      and
      Sellers are parties to that certain Master Repurchase Agreement, dated August
      15, 2005 (the “Master Repurchase Agreement”, and collectively with Annex
      I thereto (“Annex I”), the “Existing Agreement”).

     

    Buyer
      and
      Sellers have agreed to amend certain definitions and certain provisions of
      the
      Existing Agreement.

     

    Therefore,
      in consideration of the premises and for other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, Buyer and Sellers
      hereby agree as follows:

     

    SECTION
      1.  Amendments.

     

    (a)        Section
      1 of Annex I to the Existing Agreement is hereby modified by deleting the
      defined term “Maximum Amount” in its entirety and inserting the following
      defined term in lieu thereof:

     

    ““Maximum
      Amount” shall mean
      $100,000,000.”

     

    (b)       Section
      5(d)(i) of Annex I to the Existing Agreement is hereby modified by deleting
      that
      paragraph in its entirety and inserting the following paragraph in lieu
      thereof:

     

    “Interest
      Coverage.  Crystal River Capital, Inc. shall not permit, during
      any Test Period, the ratio of (i) the sum of Operating Income at any time during
      such Test Period to (ii) Interest Expense at any time during such Test Period
      to
      be less than 1.25 to 1.00.  For purposes of this Section 5(d)(i) only,
“Operating Income” shall be defined as (x) Adjusted EBITDA excluding (y) the sum
      of (i) realized gains and losses on sales of assets, (ii) realized and
      unrealized gains and losses on derivatives, (iii) foreign currency exchange
      gains and losses and (iv) gains or losses on impairment of assets.”

     

    SECTION
      2.  Other Agreements.

     

    (a)        Buyer
      and Sellers agree that, pursuant to Section 3(f) of the Existing Agreement,
      the
      Facility Termination Date is hereby extended to November 14,
      2007.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      anything to the contrary in the Existing Agreement, the extension described
      in
      the preceding sentence is deemed be the exercise of the one-time option
      described in Section 3(f) of the Existing Agreement.

     

    (b)         Sellers
      agree that, from the date of this Amendment until the Commitment Expiration
      Date, no Mortgage Asset that represents an interest in residential real estate
      shall be an Eligible Asset as defined in the Master Repurchase Agreement;
provided, however, that the foregoing shall not apply to any Purchased
      Security currently subject to the Existing Agreement.

     

    (c)        Upon
      execution of this Amendment, Sellers agree that a fee of $982,620 (which amount
      is equal to two percent (2%) of the aggregate outstanding Repurchase Price
      for
      all Purchased Securities as of the date of this Amendment) is deemed to be
      earned by Buyer, and such fee shall be payable to Buyer by Sellers on the new
      Facility Termination Date described above.

     

    SECTION
      3.  Representations and
      Warranties.  Seller hereby represents and warrants to Buyer, as of
      the date hereof, that (i) each of the representations and warranties made by
      the
      Sellers pursuant to the Master Repurchase Agreement is true and correct in
      all
      material respects as if made on and as of the date of this Amendment; (ii)
      the
      Seller has performed in all material respects all agreements and satisfied
      all
      conditions that the Master Repurchase Agreement provides shall be performed
      or
      satisfied by the Seller; (iii) other than as described in the paragraph above,
      no Event of Default has occurred and is continuing; and (iv) the Seller has
      no,
      and hereby waives all, defenses, rights of setoff, claims, counterclaims or
      causes of action of any kind or description against the Buyer arising under
      or
      in respect of the Existing Agreement or any other related document.

     

    SECTION
      4.  Limited Effect.  Except as expressly
      amended and modified by this Amendment, the Existing Agreement and each of
      the
      other related documents shall continue to be, and shall remain, in full force
      and effect in accordance with their respective terms; provided,
however, that each reference to the “Master Repurchase Agreement” or
“Repurchase Agreement” in any of the related documents shall be deemed to be a
      reference to the Existing Agreement as amended hereby.

     

    SECTION
      5.  Counterparts.  This Amendment may be
      executed by each of the parties hereto on any number of separate counterparts,
      each of which shall be an original and all of which taken together shall
      constitute one and the same instrument.  Delivery of an executed
      counterpart of a signature page to this Amendment in Portable Document Format
      (PDF) or by facsimile transmission shall be effective as delivery of a manually
      executed original counterpart thereof.

     

    SECTION
      6.  Expenses.  Seller agrees to pay and
      reimburse Buyer for all of the reasonable out-of-pocket costs and expenses
      incurred by Buyer in connection with the preparation, execution and delivery
      of
      this Amendment, including, without limitation, the fees and disbursements of
      Cadwalader, Wickersham & Taft LLP, counsel to Buyer.

     

    
 

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    SECTION
      7.  GOVERNING LAW.  THIS AMENDMENT SHALL BE
      GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
      THE
      STATE OF NEW YORK.

    

     

    [SIGNATURES
      FOLLOW]

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed and delivered as of the day and year first above written.

     

    
      	
            	
              
                WACHOVIA
                  BANK, NATIONAL ASSOCIATION

              

            	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              John
              Nelson	 
	 	 	Name: 
John
              Nelson	 
	 	 	Title: 
Director	 
	 	 	 	 

       

      
        	
              	
                
                  CRYSTAL
                    RIVER CAPITAL, INC.

                

              	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/
                Clifford
                Lai	 
	 	 	Name: 
Clifford
                Lai	 
	 	 	Title: 
President	 
	 	 	 	 

      

       

      
        	
              	
                
                  CRYSTAL
                    RIVER CAPITAL TRS HOLDINGS,
                    INC.

                

              	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/
                Clifford
                Lai	 
	 	 	Name: 
Clifford
                Lai	 
	 	 	Title: 
President

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