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MASTER ASSIGNMENT AGREEMENT
BETWEEN
CRIIMI MAE INC.
AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
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Dated as of November 25, 1997
Table of Contents
Document Item No.
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Master Assignment Agreement....................................... 1
Specimen Note..................................................... 2
MASTER ASSIGNMENT AGREEMENT
THIS AGREEMENT is made as of the 25th day of November, 1997 by and between
CRIIMI MAE INC. ("Assignor") and ▇▇▇▇▇▇ COMMERCIAL PAPER INC. ("▇▇▇▇▇▇"). By
executing this Agreement, Assignor and ▇▇▇▇▇▇ agree to be bound by the terms of
this Agreement.
W I T N E S S E T H
WHEREAS the parties elect to enter into this Agreement and, at the request
of Assignor, ▇▇▇▇▇▇ may from time to time at its option agree to make one or
more loans (in each instance, a "Loan") to Assignor, which Loans shall be
limited in aggregate outstanding principal amount to $75,000,000, said Loans to
be evidenced by Assignor's promissory note of even date herewith, a form of
which is attached hereto as Exhibit A (the "Note"), maturing on the earlier of
(x) November 25, 1998 unless extended as provided herein or (y) or such earlier
date resulting from Section 10 hereof (the "Maturity Date"); and
WHEREAS, in order to induce ▇▇▇▇▇▇ to make Loans from time to time to it,
Assignor has agreed to assign and pledge to ▇▇▇▇▇▇ and grant to ▇▇▇▇▇▇ a lien
upon and a security interest in the Collateral (as hereinafter defined) for the
purpose of securing its obligations under the Note.
NOW, THEREFORE, in consideration of the foregoing and of the covenants and
agreements hereinafter set forth, Assignor and ▇▇▇▇▇▇ agree as follows:
SECTION 1. GRANT OF SECURITY INTEREST: DELIVERY OF COLLATERAL
(a) Assignor hereby grants, pledges, assigns, transfers and delivers to
▇▇▇▇▇▇ with respect to each Loan on the date of settlement thereof (in each
case, the "Closing Date"), and grants to ▇▇▇▇▇▇ a lien upon and security
interest in (i) the collateral of the type described in Section 6 (the
"Collateral") and more specifically described in the Confirmation Statement (as
hereinafter defined) relating to each Loan, (ii) any additional collateral with
respect to such Loan ("Supplemental Collateral") that may be granted to ▇▇▇▇▇▇
pursuant to Section 4(c) hereof (provided, however, that any representations,
warranties or covenants contained herein, and the grant of a lien and security
interest with respect to any Supplemental Collateral, shall be effective as to
any Supplemental Collateral (or any proceeds, distributions or other amounts
realized in respect of such Supplemental Collateral) only upon the delivery of
such Supplemental Collateral to ▇▇▇▇▇▇ pursuant to such Section 4(c) hereof) and
(iii) all proceeds, distributions and other amounts realized in respect of any
of the foregoing, as security for the due and punctual payment by Assignor of
the Note and any amounts that may become payable thereunder or hereunder (the
foregoing being herein called the "Obligations").
(b) Assignor shall, with respect to each Loan, deliver to ▇▇▇▇▇▇ the
related Collateral registered in the name of ▇▇▇▇▇▇ or its nominee or with
properly endorsed instruments of transfer (including, without limitation, any
necessary assignments, corporate resolutions and opinions of legal counsel)
that will enable ▇▇▇▇▇▇ to cause such Collateral to be so registered without
further action on the part of ▇▇▇▇▇▇ other than delivering such Collateral and
such instruments of transfer to the appropriate transfer agent.
(c) Upon two business days request in writing by Assignor, ▇▇▇▇▇▇ may ,at
its option, agree to make Loans hereunder pursuant to the terms hereof having an
aggregate outstanding principal amount not in excess of $75,000,000, so long as
the Collateral relating to such Loans conforms to the requirements of this
Agreement and all other conditions of this Agreement are satisfied including,
without limitation, that the aggregate Current Margin of all Loans outstanding
would be equal to or exceed the related Margin Requirement. The parties hereto
acknowledge that this Agreement does not constitute a commitment by ▇▇▇▇▇▇ to
make Loans. Any decision by ▇▇▇▇▇▇ to make a Loan hereunder shall be made by
▇▇▇▇▇▇ in its sole discretion.
(d) Each Loan hereunder shall be cross collateralized and cross defaulted
with every other Loan hereunder.
SECTION 2. EARNINGS ON COLLATERAL
All payments and distributions, whether in cash or in kind, made on or with
respect to the Collateral shall, so long as an Event of Default as defined in
Section 9 hereof shall not have occurred and be continuing, be paid to Assignor
directly by the applicable paying agent by wire transfer in immediately
available funds pursuant to wiring instructions delivered in writing by Assignor
to ▇▇▇▇▇▇. ▇▇▇▇▇▇ may, in its sole discretion after the occurrence and during
the continuation of an Event of Default, cause all such payments and
distributions to be paid, delivered or transferred directly to ▇▇▇▇▇▇.
SECTION 3. CONFIRMATION STATEMENT
▇▇▇▇▇▇ shall, with respect to each Loan, deliver a confirmation statement
substantially in the form attached hereto as Exhibit B (in each case, the
"Confirmation Statement") to Assignor confirming the agreement between Assignor
and ▇▇▇▇▇▇ as to the specific terms of such Loan. Each such Confirmation
Statement shall constitute a binding agreement between Assignor and ▇▇▇▇▇▇, and
this Agreement is hereby incorporated in each such Confirmation Statement and
made a part thereof as if it were set out in full in each such Confirmation
Statement. Each such Confirmation Statement will be binding upon the parties
hereto unless written notice of objection is given by the objecting party to the
other party within two (2) business days after the objecting party's receipt of
such Confirmation Statement.
SECTION 4. MARGIN DETERMINATIONS; FINANCING REQUIREMENTS
(a) A margin requirement (the "Margin Requirement") expressed as a
percentage shall be as follows for the indicated type of Collateral:
Rating on Mortgage
Pass-Through Securities Margin
Constituting Collateral Requirement
BB or equivalent 25%
BB- or equivalent 25%
B or equivalent 30%
B- or equivalent 50%
The rating on the Collateral used to determine the Margin Requirement shall be
the lowest rating assigned by any of (i) ▇▇▇▇▇'▇ Investors Service, Inc., (ii)
Standard & Poor's Ratings Services, A Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., (iii) Fitch Investors Service L.P. or (iv) Duff & ▇▇▇▇▇▇ Credit Rating Co.
(each a "Rating Agency" and collectively the "Rating Agencies").
(b) ▇▇▇▇▇▇ may, in its sole reasonable discretion, from time to time calculate
the current margin (the "Current Margin") with respect to any Loan, which
Current Margin shall equal the amount by which (i) 100% exceeds (ii) a fraction
(expressed as a percentage) (A) the numerator of which is the then outstanding
principal amount of such Loan together with accrued and unpaid interest thereon
to the date of determination and (B) the denominator of which shall be the fair
market value (as determined by ▇▇▇▇▇▇ in its reasonable good faith business
judgment) of the related Collateral (including any Supplemental Collateral
delivered pursuant to this Agreement) then held by ▇▇▇▇▇▇.
(c) If ▇▇▇▇▇▇ shall at any time determine with respect to a Loan that the
Current Margin is less than the related Margin Requirement, ▇▇▇▇▇▇ shall notify
Assignor of such fact, and Assignor shall, not later than 11:00 a.m. New York
City time on the second business day next succeeding the date of such notice,
deliver to ▇▇▇▇▇▇ cash or Supplemental Collateral acceptable to ▇▇▇▇▇▇ in its
sole reasonable judgment as Collateral hereunder, which cash shall be applied to
reduce the principal balance of the related Loan and which Supplemental
Collateral shall, in the aggregate, equal an amount such that, after giving
effect to the application of such cash and the delivery of such Supplemental
Collateral, the Current Margin for such Loan will be at least equal to the
related Margin Requirement.
Delivery of Supplemental Collateral pursuant to this Section 4(c) shall be in
such manner as is acceptable to, and under such additional conditions as may be
required by, ▇▇▇▇▇▇ in its sole reasonable judgment.
(d) If at any time the Current Margin for a Loan exceeds the Margin
Requirement for such Loan and provided that Assignor shall not have failed to
satisfy the requirements of Section 4(c) with respect to any notice thereunder
given by ▇▇▇▇▇▇ relating to any Loan, Assignor may, upon notice to ▇▇▇▇▇▇,
demand that ▇▇▇▇▇▇ redeliver all or any portion of the Supplemental Collateral,
provided, however, that after giving effect to such redelivery, the Current
Margin would not be less than the Margin Requirement, and ▇▇▇▇▇▇ shall make good
delivery of such Supplemental Collateral, in a manner equivalent to the manner
in which such Supplemental Collateral was delivered to ▇▇▇▇▇▇, no later than the
business day following receipt by ▇▇▇▇▇▇ of such notice. In such connection,
▇▇▇▇▇▇ shall execute such other documents and take such other actions as the
Assignor may reasonably request in order to evidence and give effect to the
release of such Supplemental Collateral from the security interest granted by
this Agreement.
(e) No Collateral rated lower than "BB-" by any Rating Agency shall be
eligible for financing hereunder unless Assignor also owns the most subordinated
class of the related series.
SECTION 5. SUBSTITUTION OF COLLATERAL
▇▇▇▇▇▇ shall allow Assignor, in Assignor's sole discretion, to provide
collateral acceptable to ▇▇▇▇▇▇, in ▇▇▇▇▇▇'▇ sole reasonable discretion, to be
substituted for existing Collateral of equal market value. All certificates or
instruments representing such substituted collateral shall be accompanied by
duly executed instruments of transfer or assignments in blank, all in form and
substance reasonably satisfactory to ▇▇▇▇▇▇.
SECTION 6. ELIGIBLE COLLATERAL; INTEREST RATE
(a) Assets that are eligible to serve as Collateral or Substitute
Collateral with respect to any Loan must be mortgage pass-through securities
evidencing a fractional, undivided ownership interest in a pool of mortgage
loans which are not rated lower than "B-" or the equivalent by any Rating
Agency.
(b) Any mortgage pass-through security constituting Collateral or
Substitute Collateral for a Loan must at all times that it is subject to this
Agreement be senior in right of payment to at least one other class of
securities evidencing an interest in the same pool of mortgage loans.
(c) The per annum interest rate on Loans hereunder shall be: (i) ___ basis
points in excess of LIBOR for all Loans secured by Collateral where the mortgage
pass-through securities constituting such Collateral are rated "BB" or "BB-" (or
the equivalent) by at least one Rating Agency and not lower than "BB-" by any
Rating Agency; and (ii) ___ basis points in excess of LIBOR for all Loans
secured by Collateral where the mortgage pass-through securities constituting
such Collateral are rated "B" or "B-" (or the equivalent) by at least one Rating
Agency and not lower than "B-" by any Rating Agency. As used herein, "LIBOR"
shall mean the London Interbank Offered Rate for one-month United States dollar
deposits as set forth on page 3750 of Telerate as of 8:00 a.m., New York City
time, on the date of determination. All calculations of interest on Loans shall
be made on the basis of a 360-day year and the actual number of days elapsed.
SECTION 7. REPRESENTATIONS AND WARRANTIES
Assignor hereby represents and warrants to ▇▇▇▇▇▇, and shall on and as of
the Closing Date of each Loan be deemed to represent and warrant to ▇▇▇▇▇▇,
that:
(i) Due Incorporation. Assignor has been duly organized and is validly
existing as a corporation in good standing under the laws of the state of
Maryland.
(ii) Authorization. Assignor has full power and authority to execute and
deliver this Agreement and the Note and to perform its obligations hereunder and
thereunder; this Agreement and the Note have each been duly
authorized by all necessary action and neither requires any additional approval
of any directors or officers other than that which has already been obtained,
each has been duly executed and delivered by Assignor and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization or
similar laws of general applicability relating to or affecting creditors'
rights, to the assumption that enforcement will be undertaken in a commercially
reasonable manner and to general principles of equity and equitable remedies,
regardless of whether enforcement is considered in a proceeding in equity or at
law.
(iii) No Conflict. Neither the execution and delivery nor the
performance by Assignor of this Agreement or the Note will conflict with the
governing instruments of Assignor or conflict with, result in a breach of or
constitute a default (which default could reasonably be expected to result in
any material adverse change in the financial condition, earnings or business
affairs of Assignor or could reasonably be expected to materially and
adversely affect the properties or assets thereof, including but not limited
to the Collateral) or require any consent under any instrument or agreement
to which Assignor is a party or by which Assignor may be bound, or any law,
order or regulation applicable to Assignor of any court, governmental agency,
authority or body having jurisdiction over Assignor and do not and will not
result in or require the creation of any lien, security interest or other
charge or encumbrance (other than pursuant hereto) upon or with respect to
any of Assignor's properties.
(iv) Approvals, etc. Neither the execution and delivery nor the
performance by Assignor of this Agreement requires any authorization, approval,
consent, license, exemption (other than any self-executing exemption), filing,
registration or the taking of any other action in respect of any federal or
state authority except where the failure to comply with such requirement would
not adversely affect the delivery, execution or performance by Assignor of this
Agreement or cause a material adverse change in the business, operations,
properties, prospects or condition (financial or otherwise) of Assignor.
(v) Good Title. Assignor is the owner of the Collateral and such
Collateral is free and clear of all security interests, liens, charges,
encumbrances and rights of others, except for the lien and security interest
created hereby, and on the related Closing Date, ▇▇▇▇▇▇ has a first priority
lien on and security interest in the Collateral (including all proceeds,
distributions and other amounts realized in respect thereof) in favor of ▇▇▇▇▇▇,
subject to no prior security interest, lien, charge, encumbrance or rights of
others, and, ▇▇▇▇▇▇ having taken possession of the Collateral registered in the
name of ▇▇▇▇▇▇ or its nominee or delivered with such instruments of transfer as
provided in Section l(b) hereof, no further action, including any filing or
recordation of any document, is currently required in order to establish and
perfect the liens on and security interests in the Collateral in favor of ▇▇▇▇▇▇
against any third parties in any jurisdiction.
(vi) Tax Liens. There are no delinquent federal, state, city, county or
other taxes relating to Assignor, the Collateral or any arrangement pursuant to
which the Collateral is issued that, in the reasonable judgment of ▇▇▇▇▇▇, are
likely to materially adversely affect any of the Collateral or the business,
operations, properties, prospects or condition (financial or otherwise) of
Assignor, and all such delinquent tax liabilities have been satisfied except
those that are being contested by Assignor in good faith and with respect to
which payment has been stayed by a court of competent jurisdiction.
(vii) Financial Statements. Since the date of the financial statement
reflecting information as of September 30, 1997 delivered by Assignor to ▇▇▇▇▇▇
(which Assignor represents and warrants to be the most recent financial
statement), there has been no material adverse change in Assignor's financial
condition or results of operations. Assignor shall provide ▇▇▇▇▇▇ with audited
fiscal year-end financial statements within ninety-five (95) days after the end
of Assignor's fiscal year, quarterly financial statements within sixty (60) days
after the end of each of Assignor's fiscal quarters and additional publicly
available interim financial statements promptly upon each becoming available.
SECTION 8. COVENANTS
(a) Taxes. Assignor shall pay and discharge all taxes, levies, liens and
other charges on its assets and on the Collateral that, in each case, in any
manner would create any lien or charge upon the Collateral.
(b) Laws. Assignor shall at all times comply in all material respects
with all laws, ordinances, rules and regulations of any federal, state,
municipal or other public authority having jurisdiction over Assignor or any
of its assets.
(c) Name and Locations. Assignor shall immediately advise ▇▇▇▇▇▇ in
writing of the opening of any new chief executive office or the closing of any
such office and of any change in Assignor's name or the places where the books
and records pertaining to the Collateral are kept.
(d) Records. Assignor will maintain records with respect to the
Collateral and the conduct and operation of its business in conformity with
general industry standards and with no less a degree of prudence than if the
Collateral were held by Assignor for its own account and will furnish ▇▇▇▇▇▇,
upon reasonable request by ▇▇▇▇▇▇ or its designated representative, with
reasonable information reasonably obtainable by Assignor with respect to the
Collateral and the conduct and operation of its business. Assignor will permit
▇▇▇▇▇▇ or its designated representative to inspect Assignor's records with
respect to the Collateral and the conduct and operation of its business upon
reasonable notice from ▇▇▇▇▇▇ or its designated representative, at such
reasonable times and with reasonable frequency, and to make copies or extracts
of any and all thereof. ▇▇▇▇▇▇ shall act in a commercially reasonable manner in
requesting and conducting any inspection relating to the conduct and operation
of Assignor's business.
(e) ▇▇▇▇▇▇'▇ Duty of Care. Except as herein provided in this Section
8(e), ▇▇▇▇▇▇'▇ sole duty with respect to the Collateral shall be to use
reasonable care in the custody, use, operation and preservation of the
Collateral in its possession or control. ▇▇▇▇▇▇ shall incur no liability to
Assignor for any act of government, act of God, or other destruction in whole or
in part or negligence or wrongful act of custodians or agents selected by and
supervised by ▇▇▇▇▇▇ with reasonable care, or ▇▇▇▇▇▇'▇ failure to provide
adequate protection or insurance for the Collateral. ▇▇▇▇▇▇ shall have no
obligation to take any action to preserve any rights in any of the Collateral
against prior parties, and Assignor hereby agrees to take such action. Assignor
shall defend the Collateral against all such claims and demands of all persons,
at all times, as are adverse to ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall have no obligation to
realize upon any Collateral, except through proper application of any
distributions with respect to the Collateral made directly to ▇▇▇▇▇▇ or its
agent(s). So long as ▇▇▇▇▇▇ shall act in a commercially reasonable manner,
Assignor hereby waives the defense of impairment of the Collateral.
(f) Use of Proceeds. None of the proceeds of any Loan will be used either
directly or indirectly to acquire any margin security, as that term is defined
in Regulation G of the Board of Governors of the Federal Reserve System, and
Assignor will not take any action that might cause this Agreement or the Note
(and the Loan evidenced hereby and thereby) to violate any regulation of the
Federal Reserve Board.
(g) Further Covenants. Without prior written consent of ▇▇▇▇▇▇,
Assignor will not: (i) assign, sell, transfer, pledge or grant any security
interest in or lien on any of the Collateral to anyone except ▇▇▇▇▇▇, permit
any financing statement (except any financing statements in favor of ▇▇▇▇▇▇)
or assignment (except for any assignments in favor of ▇▇▇▇▇▇) to be on file in
any public office with respect thereto, (ii) permit or suffer to exist any
security interest, lien, charge, encumbrance or right of others to attach to
any of the Collateral, except as contemplated by this Agreement, or (iii)
consent to any amendment or supplement to the documents pursuant to which the
Collateral was issued.
SECTION 9. EVENTS OF DEFAULT
Each of the following, so long as it shall not have been remedied, shall
constitute an "Event of Default" hereunder:
(a) Nonperformance. Any failure to pay, whether on the acceleration
thereof or otherwise, any amounts due under the Note or any failure to pay any
amount due under this Agreement or to perform any material
provision of this Agreement in accordance herewith, or any material breach of
any representation, warranty or covenant set forth herein or in the Note.
(b) Termination of Interest. The lapse or termination of Assignor's
interest in any of the Collateral.
(c) Events Set Forth in the Note. The occurrence of any event described
in the Note which causes the Note to become due and payable.
(d) Act of Insolvency. The filing by Assignor or a controlling entity, of
a petition in bankruptcy, the adjudication of Assignor or a controlling entity
as insolvent or bankrupt, the petition or application by Assignor or a
controlling entity for any receiver or trustee for itself or any substantial
part of its property, the commencement by Assignor or a controlling entity of
any proceeding relating to it under any reorganization, arrangement, dissolution
or liquidation law, or the initiation of any such proceeding against Assignor or
a controlling entity, if Assignor or a controlling entity indicates by any act
its consent thereto or if such proceeding is not dismissed within thirty (30)
days (an "Act of Insolvency").
(e) Material Adverse Change. In the reasonable good faith judgment of
▇▇▇▇▇▇, a material adverse change shall have occurred in the business,
operations, properties, prospects or condition (financial or otherwise) of
Assignor.
(f) Default Under Other Contracts. Assignor shall be in material default
with respect to any normal and customary material covenants under any material
contract or material agreement to which it is a party (which covenants include,
but are not limited to, an Act of Insolvency of Assignor or the failure of
Assignor to make required payments under such contract or agreement as they
become due) which default permits acceleration of the obligations of Assignor
under such contract or agreement by any other party thereto and which default,
in the reasonable good faith judgment of ▇▇▇▇▇▇, is likely to result in a
material adverse change in the business, operations, properties, prospects or
condition (financial or otherwise) of Assignor.
(g) Merger or Consolidation. Assignor shall merge or consolidate into any
entity unless ▇▇▇▇▇▇ shall have expressly consented to such merger or
consolidation in writing.
(h) Anticipated Insolvency. ▇▇▇▇▇▇ shall reasonably determine that
Assignor is or will be unable to meet its commitments hereunder, notifies
Assignor of such determination and Assignor shall not have responded with
appropriate information to the contrary to the satisfaction of ▇▇▇▇▇▇ within 36
hours.
(i) Final Judgment. A final judgment by any competent court in the United
States for the payment of money in an amount of at least $100,000 is rendered
against Assignor, and the same remains undischarged and unpaid for a period of
60 days during which execution of such judgment is not effectively stayed.
(j) Breach of Representation. Any representation or warranty made by
Assignor herein shall have been incorrect or untrue in any material respect when
made or repeated or when deemed to have been made or repeated and which breach
is reasonably likely to result in a material adverse change (i) in the business,
operations, properties, prospects or condition (financial or otherwise) of
Assignor, (ii) in the market value or marketability of any of the Collateral or
(iii) in the ability of Assignor to perform, or the rights and remedies of
▇▇▇▇▇▇, hereunder.
(k) Breach of Covenant. Assignor shall breach in any material respect any
covenant made by it herein and which breach is reasonably likely to result in a
material adverse change (i) in the business, operations, properties, prospects
or condition (financial or otherwise) of Assignor, (ii) in the market value or
marketability of any of the Collateral or (iii) in the ability of Assignor to
perform, or the rights and remedies of ▇▇▇▇▇▇, hereunder.
(1) Indebtedness. The ratio of Assignor's outstanding consolidated
indebtedness (determined in accordance with generally accepted accounting
principles consistently applied (herein referred to as "GAAP")) to all lenders
(including, without limitation, all indebtedness incurred under any loan
agreement, warehouse finance agreement and repurchase agreement) to its equity
(determined in accordance with GAAP and herein referred to as "Shareholders'
Equity") is at any time be more than 5 to 1.
(m) Chances in Financial Condition. Assignor shall experience losses or
changes in its financial condition that cause its Shareholders' Equity for any
two consecutive calendar quarters to be less than or equal to 80% of its
Shareholders' Equity as of the commencement of such period.
(n) Shareholders' Equity. Assignor's Shareholders' Equity shall at
any time be less than $350,000,000.
SECTION 10. REMEDIES
(a) Action Regarding Collateral. If an Event of Default shall occur and
be continuing, ▇▇▇▇▇▇, without demand of performance or other demand or notice
of any kind to Assignor or any other person, all of which are hereby expressly
waived, may forthwith declare the Obligations due and apply the cash, if any,
then held by it as part of the Collateral relating to any Loan to the payment of
any of the Obligations, and, if there shall be no such cash or the cash so
applied shall not be sufficient to pay in full all such Obligations, may
thereafter collect, receive, appropriate, retain and realize upon the
Collateral, or any part thereof, and may forthwith sell, assign, give an option
or options to purchase, contract to sell, or otherwise dispose of and deliver
the Collateral, or any part thereof, in one or more parcels at such public or
private sale or sales, at such place or places, at such price or prices and upon
such other terms and conditions as ▇▇▇▇▇▇ may deem best (provided, however, that
▇▇▇▇▇▇ shall act in a commercially reasonable manner), for cash or on credit or
for future delivery without assumption of any credit risk, with the right of
▇▇▇▇▇▇ upon any such sale or sales to purchase all or any part of the Collateral
so sold. Upon any sale, transfer or other disposition of the Collateral pursuant
hereto ▇▇▇▇▇▇ shall have the right to deliver, assign and transfer to the
transferee thereof the Collateral so sold. Each transferee upon any such
transfer or other disposition shall hold the property thereby acquired by it
absolutely free from any claim or right of any kind, including any equity or
rights of redemption, of Assignor, who hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute whether now existing or hereafter adopted (in the latter case, to the
extent permitted thereby). Assignor agrees that ▇▇▇▇▇▇ need give only such
notice of the time and place of any public or private sale (including any
adjourned private sale) or other intended disposition as may be required by
market conditions and standards of commercial reasonableness and that ▇▇▇▇▇▇
need not in any event give more than two (2) days' notice that such sale or
disposition is to take place. Assignor agrees that the notice provided for in
the preceding sentence is reasonable notification of such matters.
▇▇▇▇▇▇ shall not be obligated to make any sale pursuant to any such notice.
▇▇▇▇▇▇ may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by ▇▇▇▇▇▇ until the selling price is paid by the purchaser thereof, but
▇▇▇▇▇▇ shall not incur any liability in case of the failure of such purchaser to
take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may again be sold upon like notice. ▇▇▇▇▇▇, however, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the lien and security interest created
hereby and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) Deficiency. If the proceeds of sale, collection, foreclosure or other
realization of or upon the Collateral are insufficient to cover the costs and
expenses of such realization and the payment in full of the Obligations,
Assignor shall remain liable for any deficiency.
(c) Private Sale. ▇▇▇▇▇▇ shall incur no liability as a result of the sale
of the Collateral (provided, however, that ▇▇▇▇▇▇ shall act in a commercially
reasonable manner) or any part thereof, at any private sale. Assignor hereby
waives any claims against ▇▇▇▇▇▇ or any holder or holders of the Note arising by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Obligations, even if
▇▇▇▇▇▇ accepts the first offer received and does not offer the Collateral to
more than one offeree (provided, however, that ▇▇▇▇▇▇ shall act in a
commercially reasonable manner).
(d) Application of Proceeds. The proceeds of any sale or other
realization of all or any part of the Collateral, and any other cash at the time
held by ▇▇▇▇▇▇ under this Agreement, shall be applied by ▇▇▇▇▇▇ in the following
order of priority:
First, to the payment of the costs and expenses of such sale and all expenses
(including the reasonable fees and expenses of counsel), liabilities and
advances made or incurred by ▇▇▇▇▇▇ in connection therewith.
Second, to the payment of all accrued interest under the Note due or past due.
Third, to the payment of principal upon the Note due or past due.
Fourth, to the payment of all other amounts owing under this Agreement.
Fifth, to the payment to Assignor, or to such other person as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds and other cash.
As used in this Agreement, "proceeds" of the Collateral shall mean cash and
other property received or otherwise realized in respect of the Collateral.
(e) Default Rate of Interest. After written demand is made with respect
to the Note or upon acceleration thereof, until the balance thereof shall be
paid, the Loan amounts due thereunder, shall bear interest at a per annum rate
(based on a year of 360 days and actual days elapsed) equal to the greater of
(i) two hundred (200) basis points in excess of the interest rate for such Loan
and (ii) two hundred (200) basis points in excess of the prime rate for short
term bank commercial loans as published in The Wall Street Journal, changing as
such published rate changes, but in no event higher than the maximum rate
permitted by law.
(f) Attorney-in-Fact. Effective upon the occurrence and continuation of
an Event of Default hereunder, ▇▇▇▇▇▇ is hereby appointed the attorney-in-fact
of Assignor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which ▇▇▇▇▇▇ may reasonably deem
necessary or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, after an Event of Default has occurred, ▇▇▇▇▇▇
shall have the right and power to receive, endorse and collect all checks made
payable to the order of Assignor representing any distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
(g) Payments on Collateral to Assignor.
(i) All rights of Assignor to receive any payments from the
related Collateral which it would otherwise be authorized to receive shall
cease, and all such rights shall thereupon become vested in ▇▇▇▇▇▇, which
shall thereupon have the sole right to receive and hold as Collateral such
payments.
(ii) All payments which are received by Assignor contrary to the
provisions of the preceding subsection (i) shall be received in trust for
the benefit of ▇▇▇▇▇▇, shall be segregated from other funds of Assignor and
shall be promptly paid to ▇▇▇▇▇▇.
SECTION 11. MATURITY DATE: INTEREST PAYMENT DATES: REPAYMENT OF PRINCIPAL
(a) Assignor and ▇▇▇▇▇▇ hereby agree that the Obligations of Assignor
hereunder and under the Note are payable on the Maturity Date unless earlier
payment thereof is required pursuant to the terms of this Agreement.
(b) Assignor may, not later than 30 business days' prior to the
Maturity Date, request in writing that ▇▇▇▇▇▇ extend such Maturity Date for
an additional one year period. ▇▇▇▇▇▇ will use its best efforts to respond
within ten business days of receiving such written request; provided that any
failure or refusal to respond on the part of ▇▇▇▇▇▇ shall not be deemed to be
a positive response. Any response will include whether or not ▇▇▇▇▇▇ would be
willing to so extend the Maturity Date and the terms of any such extension.
Nothing contained herein shall be deemed to limit the right of ▇▇▇▇▇▇, in its
sole discretion, to provide no response or to decline to enter into such
extension or to agree to such extension on terms different from those set
forth herein. Any such extension shall be evidenced only by a written
agreement among the parties amending this Agreement and the Note.
(c) Interest on each Loan shall be payable on the dates described in the
related Confirmation Statement.
(d) The principal portion of each Loan may be repaid in whole or in part
at the discretion of Assignor on any date on which a payment of interest is to
be made thereon by Assignor pursuant to the terms of this Agreement and the
related Confirmation Statement provided that (i) Assignor shall have provided
▇▇▇▇▇▇ with not less than two (2) business days' written notice of Assignor's
intention to effect such repayment and the amount thereof, (ii) all payments of
interest then due and owing on the Loan are paid in full, (iii) Assignor shall
have paid any termination fee or other penalty payable by ▇▇▇▇▇▇ to a third
party under a financing arrangement for the Loan between ▇▇▇▇▇▇ and such third
party and (iv) Assignor shall have paid to ▇▇▇▇▇▇ all other amounts payable to
▇▇▇▇▇▇ hereunder with respect to such Loan.
(e) Nothing in this Section 11 shall be deemed to limit the right of
▇▇▇▇▇▇ to require, so long as an Event of Default shall have occurred and is
continuing, the payment by Assignor of all Obligations arising hereunder and
under the Note.
SECTION 12. GENERAL PROVISIONS
(a) No Waiver. No waiver or amendment of or forbearance in enforcing any
provision of this Agreement nor consent to any departure by either party
herefrom shall be effective unless expressly granted in writing and shall be
limited to the extent expressed therein.
(b) Governing Law: Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and entirely performed therein. Unless otherwise defined herein,
terms defined in the Uniform Commercial Code in the State of New York are used
herein as defined therein. Each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or be invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(c) Construction. The captions in this Agreement are for convenience of
reference only and shall not affect the construction or interpretation of any of
the provisions hereof.
(d) Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each of the parties hereto and their respective successors and
assigns; provided, however, that neither this Agreement nor any rights or other
obligations hereunder may be assigned by Assignor without prior written consent
of ▇▇▇▇▇▇ and any attempted or purported assignment hereof or thereof shall be
void. ▇▇▇▇▇▇ may assign any or all of its rights hereunder without consent.
▇▇▇▇▇▇ shall notify Assignor in writing of any assignment of this Agreement by
▇▇▇▇▇▇ other than as contemplated by Section 12(i); provided, however, that such
notice need not be prior notice and neither Assignor nor any other person or
entity shall be entitled to object to such assignment.
(e) Notices, Payments. Deliveries. Unless otherwise provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic facsimile or telex communication), and such notices and
other communications shall, when mailed, telegraphed, communicated by facsimile
transmission or telexed, be effective when received at the address for notices
for the party to whom such notice or communications is to be given as follows:
If to ▇▇▇▇▇▇:
▇▇▇▇▇▇ Commercial Paper Inc.
Three World Financial Center
New York, New York 10285
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Assignor:
CRIIMI MAE Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided, however, that a facsimile transmission shall be deemed to be received
when transmitted so long as the transmitting machine has provided an electronic
confirmation of such transmission, and provided further, however, that all
financial statements delivered shall be hand-delivered or sent by first-class
mail to ▇▇▇▇▇▇ at such address. All payments on and deliveries of Collateral
hereunder shall be made to the address or account for payments and deliveries of
such Collateral for the party to whom such payment or delivery is to be made as
set forth above. Either party may revise any information relating to it by
notice in writing to the other party, which notice shall be effective on the
third business day following receipt thereof.
(f) Termination. When all Obligations shall have been paid in full and
upon the written request of Assignor, this Agreement shall terminate and ▇▇▇▇▇▇
shall release its lien and security interest hereunder and assign, transfer and
deliver, against receipt, any remaining Collateral and money received in respect
thereof to or on the order of Assignor. Upon the request of Assignor, ▇▇▇▇▇▇
will then execute termination statements and such other documents as Assignor
may reasonably request as are necessary to make clear upon the public record the
termination of the lien and security interests created hereby with respect to
such assignment. The obligations of Assignor under Section 12(h) below shall,
with respect to each transaction entered into hereunder, survive any termination
hereof.
(g) Aggregate Amount of Loans: Disbursement of Funds.
(i) The aggregate outstanding principal amount of the Loans made by
▇▇▇▇▇▇ hereunder shall be limited to the excess of $75,000,000 over all
outstanding indebtedness (without regard to the form or nature of such
indebtedness and including any amounts that are to be paid by Assignor to
▇▇▇▇▇▇ under any repurchase arrangement).
(ii) Assignor may request disbursement of amounts borrowed hereunder
upon not less than two (2) business days' written notice to ▇▇▇▇▇▇.
(h) Expenses. Assignor agrees to pay to ▇▇▇▇▇▇ on demand all reasonable
fees and expenses for legal services of outside counsel incurred by ▇▇▇▇▇▇, if
any, in connection with the preparation, execution and delivery of this
Agreement and the Note. Assignor agrees to pay to ▇▇▇▇▇▇ on demand all
reasonable costs and expenses (including reasonable expenses for legal services
of every kind) of any subsequent enforcement of any of the provisions hereof, or
of the performance by ▇▇▇▇▇▇ of any Obligations of Assignor in respect of the
Collateral which Assignor has failed or refused to perform, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Collateral and for the custody, care or
preservation of the Collateral (including insurance costs) and defending or
asserting rights and claims of ▇▇▇▇▇▇ in respect thereof, by litigation or
otherwise, including expenses of insurance. In addition, Assignor agrees to pay
to ▇▇▇▇▇▇ on
demand all reasonable costs and expenses (including expenses for legal services)
incurred in connection with the preparation and delivery of this Agreement and
the Note and the costs of registering the Collateral in the name of ▇▇▇▇▇▇ or
its nominee. All such expenses shall be Obligations to ▇▇▇▇▇▇ secured under this
Agreement.
(i) ▇▇▇▇▇▇ 's Right to Pledge. Nothing in this Agreement shall preclude
▇▇▇▇▇▇ from engaging in transactions with third parties involving the selling
pursuant to a repurchase arrangement, pledging or hypothecating of the
Collateral, but no such transaction shall relieve ▇▇▇▇▇▇ of its obligations
hereunder.
(j) Indemnification. Assignor agrees to indemnify and hold harmless
▇▇▇▇▇▇ against all liabilities and expenses to which ▇▇▇▇▇▇ may become subject
relating to any fees, taxes or liability to any third party resulting from any
action taken or omitted by or upon instructions of Assignor with respect to the
Collateral.
(k) Further Assurances. Assignor agrees that, from time to time upon the
prior written request of ▇▇▇▇▇▇, it will (i) execute and deliver such further
documents and do such other acts and things as ▇▇▇▇▇▇ may reasonably request in
order to fully effectuate the purposes of this Agreement and (ii) provide such
opinions of counsel concerning matters relating to this Agreement as ▇▇▇▇▇▇ may
reasonably request.
(1) Remedies Cumulative. All rights, remedies and powers of ▇▇▇▇▇▇
hereunder and in connection herewith are irrevocable and cumulative, and not
alternative or exclusive, and shall be in addition to all other rights, remedies
and powers of ▇▇▇▇▇▇ whether under law, equity or agreement. In addition to the
rights and remedies granted to it in this Agreement or under the Note, ▇▇▇▇▇▇
shall have all the rights and remedies of a secured party under the Uniform
Commercial Code.
(m) Litigation. Notwithstanding any termination hereof, Assignor hereby
agrees that any legal action or proceeding against it in connection herewith may
be brought in the courts of the State of New York or of the United States of
America located in the City and State of New York, Borough of Manhattan, as
Lehman may elect, and Assignor hereby irrevocably submits to the jurisdiction of
each of said courts, and waives any objection on the grounds of venue, forum non
conveniens or similar ground.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
CRIIMI MAE INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
EXHIBIT A
THIS NOTE IS NOT A NEGOTIABLE INSTRUMENT. NO TRANSFER OR SALE OF THIS NOTE
SHALL BE MADE UNLESS SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH SAID ACT AND LAWS.
NOTE
$75,000,000
New York, New York November 25, 1997
FOR VALUE RECEIVED, CRIIMI MAE INC. (the "Assignor") promises to pay to
▇▇▇▇▇▇ COMMERCIAL PAPER INC. (the "Payee") the principal sum of Seventy Five
Million Dollars ($75,000,000) (or so much thereof as shall have been advanced
here against and shall be outstanding), in lawful money of the United States of
America, in immediately available funds, with interest on each principal sum
advanced here against or the unpaid balance thereof with such frequency and to
such location as is specified in the related confirmation statement (in each
case, the "Confirmation Statement") for such advance (or on such other day and
with such other frequency and to such other location as may be mutually agreed
upon by the Assignor and the Payee) at said office and in said money and funds
from the date of the related advance until the Maturity Date at the rate per
annum (based on a year of 360 days and actual days elapsed) indicated on the
related Confirmation Statement attached hereto, but in no event higher than the
maximum rate permitted by law, and after such Maturity Date, or upon
acceleration as hereinafter provided, until said balanced shall be paid, at the
rate per annum (based on a year of 360 days and actual days elapsed) equal to
the greater of (i) two hundred (200) basis points in excess of the interest rate
for such advance and (ii) two hundred (200) basis points in excess of the prime
rate for short term bank commercial loans as published in The Wall Street
Journal, changing as such published rate changes, but in no event higher than
the maximum rate permitted by law. The Maturity Date of this Note shall be the
earlier of (x) November 25, 1998 unless extended as provided herein or (y) or
such earlier date resulting from Section 10 of the Master Assignment Agreement.
Advances here against shall be in minimum amounts of $1,000,000. The
Assignor may request disbursement of amounts borrowed hereunder upon not less
than two (2) business days' written notice to the Payee. The Payee shall make
advances hereunder with respect to Collateral conforming to the requirements up
to the Commitment. The Payee may, but is not obligated to, make any advances
hereunder in excess of the Commitment. The Payee is hereby authorized by the
Assignor to endorse on the Loan Schedule amounts advanced here against, the rate
of interest relating thereto and any principal prepayments hereunder (as
permitted by the Assignment defined below), it being understood, however, that
failure to make any such endorsement shall not affect the obligations of the
Assignor hereunder in respect of the amounts advanced hereagainst.
This Note is the Note referred to in the Master Assignment Agreement (the
"Master Assignment Agreement"), dated as of November 25, 1997, between the
Assignor and the Payee, granting to the Payee a first priority perfected
security interest in the Collateral, as described therein. The holder is
entitled to the benefits of the Master Assignment Agreement and may enforce the
agreements of the Assignor contained therein and exercise the remedies provided
for thereby or otherwise available in respect thereof. All capitalized terms
used in this Note and not otherwise defined shall have the respective meanings
set forth in the Master Assignment Agreement except where the context clearly
indicates otherwise.
This Note and all other present and future obligations of any and all kinds
of the Assignor in favor of the holder hereof, whether created directly or
acquired by assignment, whether absolute or contingent, shall, unless the holder
shall otherwise elect, forthwith be due and payable without notice or demand of
any kind (except as expressly provided in the Master Assignment Agreement), all
of which are expressly waived upon the occurrence of any Event of Default.
The Assignor hereby agrees that any legal action or proceeding against it
for enforcement of this Note or of any judgment with respect to this Note may be
brought in the courts of the State of New York of the United States of America
located in the City and State of New York, Borough of Manhattan, as the holder
may elect, and the
Assignor hereby irrevocably submits to the jurisdiction of each said courts, and
waives any objection on the grounds of venue, forum non conveniens or similar
ground. The Assignor irrevocably consents that service of process in any such
action or proceeding may be made upon the Assignor by the mailing thereof by the
holder by United States registered or certified mail, postage prepaid, to the
Assignor at the address set forth herein below the signature of the Assignor,
and the Assignor hereby further agrees that service of process in such manner
shall be full and sufficient notice of any such action or proceeding.
The Assignor waives diligence, presentment of any instrument, protest and
notice of non-payment or protest and any and all other notices and demands
whatsoever in connection with the delivery, acceptance, performance default or
enforcement of this Note. The Assignor will pay on demand all costs of
collection (including reasonable attorneys' fees) paid or incurred by the holder
in enforcing this Note on default. As used herein, the world "holder" shall
mean the Payee or any endorsee of this Note who is in possession thereof, if
this Note is at the time payable to the bearer.
This Note shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and entirely performed
therein.
CRIIMI MAE INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LOAN SCHEDULE
This Note evidence Loans made by the Payee to the Assignor and the repayment of
principal by the Assignor to the Payee, in the principal amounts and on the
dates and with the related interest rates set forth below as well as the total
amount advanced here against as of each such date:
PRINCIPAL LOAN INTEREST PRINCIPAL TOTAL
DATE AMOUNT RATE AMOUNT REPAID OUTSTANDING
------------ -------------- ---------- ------------- -----------
EXHIBIT B
CONFIRMATION STATEMENT
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
Date: ________________________________________
Borrower: CRIIMI MAE Inc.
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Re: LOAN PURSUANT TO MASTER ASSIGNMENT AGREEMENT
Gentlemen:
▇▇▇▇▇▇ Commercial Paper Inc. ("▇▇▇▇▇▇") is pleased to confirm our Loan to
you (the "Assignor") pursuant to the Master Assignment Agreement (the "Master
Assignment Agreement"), dated as of November 25, 1997, between you and ▇▇▇▇▇▇
under the following terms and conditions:
1. Collateral Description: ________________________________
A.____________________________________Security Issue Date:
B.____________________________________Percentage Ownership: %
C._________________________________________Face Amount: $
D.________________________________Current Market Value: $
E.____________________________________Margin Requirement: %
2. Loan: ______ New Funds ______ Roll
A. Amount: $____________
B. Closing Date: _______________________
C. Interest Payment Date: The last business day of each month.
D: Interest Rate: __________ (______) basis points over
the prevailing London Interbank Offered
Rate for one-month United States dollar
deposits as set forth on page 3750 of
Telerate as of 8:00 a.m. New York City
time on the date of determination.
▇▇▇▇▇▇'▇ Wiring Instructions Assignor's Wiring Instructions
---------------------------- -------------------------------
[Bank] Signet Bank/VA
For the Account of _________. For the Account of
Account Number: CRIIMI MAE Inc.
ABA Number: Account Number: [6520172757]
ABA Number: [▇▇▇▇▇▇▇▇▇]
The Note, dated November 25, 1997, which evidences advances under the
Master Assignment Agreement will be annotated on the schedule attached thereto
to reflect the date, amount and interest rate relating to this advance.
The Master Assignment Agreement is incorporated by reference into this
Confirmation Statement and made a part hereof as if it were fully set forth
herein. All capitalized terms used herein but not otherwise defined shall have
the meanings specified in the Master Assignment Agreement.
Very truly yours,
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
AGREED AND ACKNOWLEDGED:
▇▇▇▇▇ ▇▇▇ INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________