SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
5, 2013 (January 30, 2013)
Date of report (Date of earliest event reported)
(Exact Name of Registrant as Specified in Charter)
|(State or Other Jurisdiction
|420 Lexington Avenue
|New York, New York
|(Address of Principal Executive Offices)
(Registrant's telephone number, including area code)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing of obligation of the registrant under any of the following
|¨||Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
|¨||Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
|¨||Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
|¨||Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
1.01. Entry into a Material Definitive Agreement.
On January 30, 2013, Gramercy Investment
Trust, a Maryland real estate investment trust ("GIT"), Gramercy Investment Trust II, a Maryland real estate investment
trust ("GIT II"), GKK Manager LLC, a Delaware limited liability company ("GKKM"), Gramercy Loan
Services LLC, a Delaware limited liability company ("GLS"), GKK Liquidity LLC, a Delaware limited liability company
("GKKL"; and together with GIT, GIT II, GKKM and GLS, the "Sellers"), CWCapital Investments LLC,
a Massachusetts limited liability company (the "Purchaser"), and, in each case solely for the purposes of Articles
IX and X thereof, Gramercy Capital Corp., a Maryland corporation (the "Company"), and CW Financial Services LLC,
a Massachusetts limited liability company ("CWFS"), entered into a Sale and Purchase Agreement (the "Sale
and Purchase Agreement").
Pursuant to the terms and conditions of
the Sale and Purchase Agreement and in exchange for $9.9 million in cash, less certain adjustments described below, the Sellers
will sell to the Purchaser (i) all of GKKM's rights as the collateral manager pursuant to each of the collateral management agreements,
indentures, preferred shares paying agency agreements, securities account control agreements and certain servicing agreements (collectively,
the "CDO Agreements") for Gramercy Real Estate CDO 2005-1, Ltd., a Cayman Islands company ("CDO Issuer
2005"), Gramercy Real Estate CDO 2006-1, Ltd., a Cayman Islands company ("CDO Issuer 2006"), and Gramercy
Real Estate CDO 2007-1, Ltd., a Cayman Islands company ("CDO Issuer 2007"; and together with CDO Issuer 2005 and
CDO Issuer 2006, the "CDOs"), including all of its rights to receive collateral management fees and other amounts
payable to GKKM under such agreements and to remove and appoint special servicers; and (ii) all of GLS' rights to receive accrued
and unpaid servicing fees and other compensation pursuant to the CDO Agreements and all other servicing, liquidation and workout
fees payable to GLS relating to such agreements. The Sellers are not selling pursuant to the Sale and Purchase Agreement any rights
to receive any amounts advanced by them as servicing advances. The Purchaser will assume the liabilities arising from the collateral
management and servicing of the assets transferred to the Purchaser under the Sale and Purchase Agreement to the extent such liabilities
arise on or following the date that the transfer under the Sale and Purchase Agreement is completed (the “Closing Date”),
with the Sellers retaining liability for the collateral management and servicing of such assets on and prior to the Closing Date.
In addition, on the Closing Date, GKKL will resign as advancing agent under the indentures for the CDOs and the Sellers will use
all reasonable efforts to cause the appointment of the Purchaser as GKKL’s successor. The purchase price will be reduced
by the amount of any accrued servicing fees paid to GLS between November 19, 2012 and the Closing Date.
The Sellers are retaining certain equity
interests in the CDOs, including common shares, preferred shares and Class J and K notes issued by the CDOs (“Retained
CDO Equity”). Following the Closing Date and until the CDOs are liquidated, each Seller has agreed not to sell any Retained
CDO Equity without the prior written consent of the Purchaser; provided, however, that, each Seller may sell any Retained CDO Equity
(A) if, in the case of any transfer that is effective during the period between the date that is 18 months following the Closing
Date and the three year anniversary of the Closing Date, the Sellers pay to the Purchaser cash in the amount of $500,000 and (B)
from time to time following the date that is the three year anniversary of the Closing Date, without any payment to the Purchaser.
In addition, following the Closing Date, the Sellers have agreed to not seek to remove CWCapital Asset Management LLC or its affiliates
as collateral manager, advancing agent or special servicer for the CDOs other than, in the case of removal of the collateral manager
or advancing agent, for events constituting fraud, gross negligence or bankruptcy.
The Sale and Purchase Agreement contains
other covenants including (i) agreements by the Sellers to conduct business relating to the assets to be sold to the Purchaser
consistent with the Sellers' current practice and to provide the Purchaser with access to all information relating to such assets;
(ii) a mutual confidentiality provision; (iii) an agreement by the parties to use their reasonable efforts to cause the closing
to be promptly completed; and (iv) an agreement by the parties to cooperate for a 90-day period following the Closing Date.
The Sale and Purchase Agreement includes
customary representations and warranties by each Seller and the Purchaser.
Obligations of each party under the Sale
and Purchase Agreement to consummate the transactions described therein are subject to certain customary conditions, including
that all approval and notices have been obtained or sent by each party, no injunctions are preventing either party from completing
such transactions, the CDOs and the majority controlling class of each CDO consent to certain of such transactions, and applicable
rating agency confirmations have been obtained. In addition, the obligations of the Purchaser to consummate the transactions under
the Sale and Purchase Agreement will be subject to the accuracy of the Sellers’ representations, the performance of the Sellers’
obligations, the receipt of a legal opinion from counsel for the Sellers and certain specified waiver letters, and the absence
of any material changes to the transferred assets.
The Sellers' post-closing obligations under
the Sale and Purchase Agreement include certain indemnity obligations that are guaranteed by the Company. From and after the Closing
Date, the Sellers and the Company, jointly and severally, will be liable for any liability suffered or incurred by the Purchaser
to the extent arising out of (i) any breach of any Seller representation; (ii) any breach of any Seller covenant; or (iii) any
retained liabilities. Additionally, the Purchaser's post-closing obligations under the Sale and Purchase Agreement include certain
indemnity obligations that are guaranteed by CWFS. From and after the Closing Date, the Purchaser and CWFS, jointly and severally,
will be liable for any liability suffered or incurred by the Sellers to the extent arising out of (i) any breach of any Purchaser
representation; (ii) any breach of any Purchaser covenant; or (iii) any assumed liabilities. The indemnification obligations of
each party under the Sale and Purchase Agreement are subject to certain customary limitations as forth in the Sale and Purchase
Concurrently with the execution of
the Sale and Purchase Agreement, the Purchaser delivered a cash deposit to an escrow agent in the amount of $990,000. The
Sale and Purchase Agreement may be terminated by one party if there has been a material breach by the other party of any of
its representations, warranties, covenants or agreements. If conditions precedent are not satisfied, the Sale and
Purchase Agreement may also be terminated by either party if the transaction is not completed by March 15, 2013. The sole
and exclusive remedy for terminations due to material breach is either retention of the deposit (for termination by the
Sellers due to breach by the Purchaser) or return of the deposit plus payment of $1,000,000 (for termination by Purchaser due
to breach by a Seller).
The foregoing description of the Sale and
Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Sale and Purchase Agreement,
which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
7.01. Regulation FD Disclosure.
On January 31, 2013, the Company issued
a press release announcing the execution of the Sale and Purchase Agreement. A copy of the Company’s press release is furnished
as Exhibit 99.1 and is incorporated herein by reference.
The information disclosed under this Item
7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing under the Securities
Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
||Sale and Purchase Agreement, dated January 30, 2013, by and among Gramercy Investment Trust, Gramercy Investment Trust II, GKK Manager LLC, Gramercy Loan Services LLC, GKK Liquidity LLC, Gramercy Capital Corp., CWCapital Investments LLC and CW Financial Services LLC.|
||Press Release of Gramercy Capital Corp., dated January 31, 2013.
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 5, 2013
||GRAMERCY CAPITAL CORP.|
||/s/ Jon W. Clark|
||Name: Jon W. Clark|
||Title: Chief Financial Officer|