Execution copy
Exhibit 10.2
SCHEDULE
to the
ISDA(R)
International Swaps and Derivatives Association, Inc.
MASTER AGREEMENT
dated as of June 26, 2003
between BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED, a company organized under the laws
of England and Wales ("Party A"), and each of CRIIMI NEWCO, LLC a limited
liability company organized under the laws of the State of Delaware ("Criimi
Newco") and CBO REIT II, Inc., a corporation organized under the laws of the
State of Maryland ("CBO", CBO and Criimi Newco jointly and severally, "Party
B").
Part 1
Termination Provisions
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), Affiliates of Party A Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable Section 5(b)(iv), Not Applicable
And in relation to Party B for the purpose of:
Section 5(a)(v), Affiliates of Party B
Section 5(a)(vi), Affiliates of Party B
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) The "Default under Specified Transactions" provision of
Section 5(a)(v), as modified in Part 5 below, will apply to Party A
and to Party B.
To the extent such provisions apply:
"Specified Transaction" will have the meaning set forth in Part 5
below.
(c) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and to Party B.
To the extent such provisions apply:
"Specified Indebtedness" will have the meaning specified in Section 14
of this Agreement unless otherwise defined herein.
"Threshold Amount" means USD10,000,000 or the equivalent thereof, as
reasonably determined by the other party, if the applicable Specified
Indebtedness is stated in any currency other than USD.
(d) The "Credit Event Upon Merger" provision of Section 5(b)(iv) will apply
to Party A and to Party B.
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(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Party A or to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement the Second Method and Market Quotation will apply.
(g) "Termination Currency" means United States Dollars, unless the parties
otherwise agree.
(h) Section 5(b)(v) Additional Termination Event will apply. Each of the
following shall constitute an Additional Termination Event:
(i) Breach of Constituency Documents; Additional Creditors. If, at any
time, either Criimi Newco or CBO shall violate any terms of their
respective charter or incur any Indebtedness or obligation in
respect of borrowed money, secured or unsecured, direct or
indirect, absolute or contingent (including guaranteeing any
obligation), other than as contemplated by the Repurchase
Documents, then Party B shall be the Affected Party, and Party A,
which shall be the non-Affected Party, shall, at its option,
designate an Early Termination Date, and all Transactions hereunder
will be Affected Transactions.
For the purpose hereof, the terms "Indebtedness" and "Repurchase
Documents" shall have the meaning given to them in the Repurchase
Agreement dated as of January 14, 2003, as amended, between Party A
and Party B.
Part 2
Tax Representations
(a) Payer Tax Representation. For the purpose of Section 3(e) of this
Agreement, Party A and Party B each make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement of the other party contained
in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the
other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement; and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of this Agreement, provided that it shall not
be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) of this Agreement by reason
of material prejudice to its legal or commercial position.
(b) Payee Tax Representation. The following representations will
apply to Party A and Party B:
(1) For the purpose of Section 3(f), the following representations
will apply to Party A :
Party A is a company organized under the laws of England and
Wales.
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Each payment received or to be received by Party A in
connection with this Agreement will not be treated as
effectively connected with the conduct of a trade or business
in the United States of America by Party A.
Party A is (i) a "non-US branch of a foreign person" as that
term is used in Section 1.1441-4(a)(3)(ii) of the United
States Treasury Regulations (or any applicable successor
provision) and (ii) a "foreign person" within the meaning of
Section 1.6041-4(a)(4) of the United States Treasury
Regulations (or any applicable successor provision).
Party A further represents that for purposes of Section
1.1441-7(b)(5) of the Treasury Regulations, Party A has
requested correspondence to be sent to an address in the
United States because that address is an administrative unit
for transactions of this type entered into by the worldwide
Bear ▇▇▇▇▇▇▇ group of companies.
Party A is treated as a corporation for U.S. federal tax
purposes.
Party A is a resident of the United Kingdom within the meaning
of the Specified Treaty; Party A is fully eligible for the
benefits of the "Business Profits" or "Industrial and
Commercial Profits" provision, as the case may be, the
"Interest" provision or the "Other Income" provision (if any)
of the Specified Treaty with respect to any payment described
in such provisions and received or to be received by it in
connection with this Agreement and no such payment will be
treated as attributable to a trade or business carried on by
it through a permanent establishment in the United States of
America.
"Specified Treaty" means the income tax convention between the
United States of America and United Kingdom.
Party A is not a bank that has entered into this Agreement in
the ordinary course of its trade or business of making loans,
as described in Section 881(c)(3)(A) (or any applicable
successor provision) of the U.S. Internal Revenue Code of
1986, as amended.
(2) For the purpose of Section 3(f), the following representations
will apply to Party B:--
CBO is a corporation created or organized in the United States
or under the laws of the United States or of any State or of
the District of Columbia.
CBO's U.S. taxpayer identification number is ▇▇-▇▇▇▇▇▇▇.
Criimi Newco is a limited liability company created or
organized in the United States or under the laws of the United
States or of any State or of the District of Columbia.
Criimi Newco is a wholly-owned entity that is disregarded for
U.S. federal tax purposes under U.S. Treasury Regulation
Section 301.7701-2(c)(2) (or any applicable successor
provision) as an entity separate from its owner and Criimi
Newco's single owner is a "United States person" for U.S.
federal tax purposes as that term is defined in Section
7701(a)(30) (or any applicable successor provision) of the
U.S. Internal Revenue Code of 1986, as amended. In addition,
Criimi Newco's single owner's name is CRIIMI Newco Member,
Inc. and its U.S. taxpayer identification number is
▇▇-▇▇▇▇▇▇▇.
Each payment received or to be received by Criimi Newco in
connection with this Agreement will be treated as effectively
connected with the conduct of a trade or business in the
United States of America by Criimi Newco.
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CBO is "United States person" for U.S. federal tax purposes as
that term is defined in Section 7701(a)(30) (or any applicable
successor provision) of the U.S. Internal Revenue Code of
1986, as amended.
Part 3
Agreement to Deliver Documents
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are: as follows:
Party Form/Document/Certificate Date by which to be
required to delivered
deliver
document
Party A An original properly completed and (i) upon execution of
executed United States Internal Revenue this Agreement, (ii) on
Service Form W-8BEN (or any successor or before the first
thereto) with respect to any payments payment date under this
received or to be received by Party A. Agreement, including any
Credit Support Document,
(iii) before December 31
of each third succeeding
calendar year, (iv)
promptly upon the
reasonable demand by
Party B, (v) prior to
the expiration or
obsolescence of any
previously delivered
form, and (vi) promptly
upon the information on
any such previously
delivered form becoming
inaccurate or incorrect.
Party B An original properly completed and (i) upon execution of
executed United States Internal Revenue this Agreement, (ii) on
Service Form W-9 (or any successor or before the first
thereto) of CBO and CRIIMI Newco Member, payment date under this
Inc. with respect to any payments Agreement, including any
received or to be received by Party B. Credit Support Document,
(iii) promptly upon the
reasonable demand by
Party A, and (iv)
promptly upon the
information on any such
previously delivered
form becoming
inaccurate or incorrect.
(b) Other documents to be delivered are:
PARTY REQUIRED DATE BY WHICH TO BE COVERED BY
TO DELIVER FORM/DOCUMENT/CERTIFICATE DELIVERED SECTION 3(d)
================== =========================================== ========================= ==================
Party A Certified copies of all documents Upon or prior to Yes
and evidencing necessary authorizations and execution of this
Party B approvals, obtained pursuant to the Agreement, any Credit
relevant constitutive documents, with Support Document and
respect to the execution, delivery and promptly at the request
performance by the party and any Credit of the other party upon
Support Provider of this Agreement, any execution of a
Credit Support Document and any Confirmation.
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Confirmation, including, where
applicable, certified copies of the
resolutions of its Board of
Directors or its governing body
authorizing the execution and delivery
of this Agreement, the relevant Credit
Support Document or any Confirmation.
Party A A certificate of an authorized officer Upon or prior to Yes
and of the party and any Credit Support execution of this
Party B Provider as to the incumbency and Agreement, any
authority of the officers of the party Credit Support Document
and any Credit Support Provider signing and promptly at the
this Agreement, any Credit Support request of the other
Document or any Confirmation. party upon execution
of a Confirmation.
Party A Guaranty of The Bear ▇▇▇▇▇▇▇ Companies As soon as practicable, No
Inc. ("BSC") in the form of Exhibit I but no later than upon
attached hereto. execution of this
Agreement.
Party B Guaranty of CRIIMI MAE Inc. in form As soon as practicable, No
and substance reasonably satisfactory to but no later than upon
Party A. execution of this
Agreement.
Party A With respect to Party A, a copy of Promptly after request Yes
and the udited consolidated financial by the other party.
Party B statement of BSC with respect to its
most recent fiscal year, and with
respect to Party B, the audited
consolidated financial statements
of Party B's Credit Support Provider
for the most recent fiscal year, in
all cases prepared in accordance with
generally accepted accounting
principles in the country in which
such party is organized.
Party A With respect to Party A, a copy of Promptly after request Yes
and the unaudited consolidated financial by the other party.
Party B statements of BSC, and with respect
to Party B, a copy of the unaudited
consolidated financial statements of
Party B's Credit Support Provider, in
each case either for each fiscal
quarter or for each six month period,
if not prepared on a quarterly basis,
as applicable, prepared in accordance
with generally accepted accounting
principles in the country in
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which such party is organized.
Party A A copy of each regular financial or Promptly after request Yes
and business reporting document that is by the other party.
Party B (i) distributed or made generally
available by, with respect to Party A,
BSC, and with respect to Party B, its
Credit Support Provider, to its
respective shareholders or investors
or (ii) filed by, with respect to
Party A, BSC, and with respect to
Party B, its Credit Support Provider
in accordance with the disclosure
requirements of any applicable statute,
rule, regulation or judicial decree
and made available for public
inspection.
Party B An opinion of counsel of Party B in Promptly upon execution No
No connection with this Agreement in of this Agreement.
form and substance reasonably
satisfactory to Party A.
Party B An opinion of counsel for the Credit Promptly upon execution No
Support Provider of Party B in of this Agreement.
connection with the Guaranty of the
Credit Support Provider.
Part 4
Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Derivatives Operation - 7th Floor
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Address: One Canada Square, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Attention: Derivatives Middle Office
Facsimile: 011-44-207-516-6805
For purposes of Sections 5 and 6, a copy to:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Derivatives Documentation - 35th Floor
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
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Addresses for notices or communications to Party B:
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇, CFO
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
(b) Process Agent. For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent - Not Applicable. Party B
appoints as its Process Agent - Not Applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document:
The Guaranty of BSC shall be a Credit Support Document with respect to
Party A.
The Guaranty of CRIIMI MAE INC. shall be a Credit Support Document with
respect to Party B.
The Credit Support Annex dated as of even date herewith shall be a
Credit Support Document in relation to Party A and Party B and is
incorporated herein by reference.
(g) Credit Support Provider. "Credit Support Provider" means, in relation
to Party A, BSC and, in relation to Party B, CRIIMI MAE INC.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this
Agreement will not apply to all Transactions from the date hereof,
other than as specified in a Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
Part 5
Other Provisions
(a) Inconsistency. In the event of any inconsistency between the provisions
contained in this Agreement and those contained in any of the definitions
published by ISDA (the "ISDA Definitions"), the provisions contained in this
Agreement will prevail. In the event of any inconsistency between the
provisions contained in a Confirmation and those contained in ISDA
Definitions or the Agreement, the provisions contained in such Confirmation
shall prevail unless otherwise specified in a Confirmation or other writing
signed by the parties.
(b) Modifications to Termination Provisions.
(i) Default under Specified Transactions
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(A) Section 5(a)(v) is hereby amended by (1) deleting the
phrase "for at least three Local Business Days" in the
seventh line thereof and replacing it with the phrase "for
at least one Local Business Day".
(B) "Specified Transaction," as defined in Section 14 of this
Agreement, is hereby amended (a) by inserting between "(b)"
and the word "any" in the ninth line thereof the following
clause: "all financial transactions entered into between
Party A (or any Credit Support Provider of such party or
any applicable Specified Entity of such Party) and Party B
(or any Credit Support Provider of such party or any
applicable Specified Entity of such party), including,
without limitation, futures, stock lending agreements,
repurchase agreements and reverse repurchase agreements,
loans of any kind, purchases and sales of equity and debt
securities of any kind, including mortgages, whether or not
on margin, (c)" and (b) by replacing the words "and (c)" in
the ninth line thereof with "and (d)".
(c) Procedures for Entering into Transaction; Recording.
(i) For each Transaction which Party A and Party B enter into hereunder,
Party A shall transmit to Party B a Confirmation.
(ii) Each party hereto consents to the monitoring or recording, at any
time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any
further notice of such monitoring or recording, and agrees to notify
its officers and employees of such monitoring or recording.
(d) Transfer. Section 7 of this Agreement is hereby amended by inserting the
following at the end thereof:
"Notwithstanding the foregoing, Party A may transfer this
Agreement and all of its interests and obligations in or under
this Agreement to BSC or any of BSC's Affiliates, provided
that (i) if such transfer is to an entity other than BSC,
Party B is furnished with a Guaranty of BSC of such
transferee's obligations and liabilities in substantially the
form of the Guaranty of BSC delivered in connection with this
Agreement, (ii) Party A agrees to only transfer to a
transferee in a jurisdiction which it is aware is a "netting"
jurisdiction, that is in which, either by opinion of counsel
published by ISDA, or by obtaining such an opinion of counsel
on its own in the respective jurisdiction, netting under this
Agreement shall be enforceable (iii) it does not become
unlawful for either party to perform any obligation under this
Agreement as a result of such transfer and (iv) the rights and
obligations of Party A under the Repurchase Agreement are
transferred to the same entity to which Party A transferred
this Agreement. Upon such assignment Party A shall be fully
released from any and all obligations and liabilities related
to the interests and obligations assigned."
(e) Additional Representations. Section 3 is hereby amended by adding the
following subsections (g), (h), (i) and (j) at the end of such Section:
"(g) Non-Reliance. In connection with the negotiation of, the
entering into, and the confirming of the execution of, this
Agreement, any Credit Support Document, each Transaction and
any other documentation relating to this Agreement to which it
is a party or that it is required by this Agreement to
deliver: (1) the other party hereto or thereto is not acting
as a fiduciary or financial or investment advisor for it; (2)
it is not relying (for purposes of making any investment
decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the other party
hereto or thereto other than the representations expressly set
forth in this Agreement, in such Credit Support Document and
in any Confirmation; (3) the other party hereto or
26
thereto has not given to it (directly or indirectly through
any other person) any assurance, guaranty or representation
whatsoever as to the expected or projected success,
profitability, return, performance, result, effect,
consequence, or benefit (legal, regulatory, tax, financial,
accounting or otherwise) of this Agreement, such Credit
Support Document, such Transaction or such other
documentation; (4) it has consulted with its own legal,
regulatory, tax, business, investment, financial and
accounting advisors to the extent it has deemed necessary, and
it has made its own investment, hedging and trading decisions
(including decisions regarding the suitability of any
Transaction) based upon its own judgment and upon any advice
from such advisors as it has deemed necessary and not upon any
view expressed by the other party; (5) it has determined that
the rates, prices or amounts and other terms of each
Transaction and the indicative quotations (if any) provided by
the other party hereto or thereto reflect those in the
relevant market for similar transactions, and all trading
decisions have been the result of arm's length negotiations
between the parties; (6) it is entering into this Agreement
and each Transaction with a full understanding of all the
terms, conditions and risks hereof and thereof (economic and
otherwise) and it is capable of assuming and willing to assume
(financially and otherwise) those risks; and (7) it is a
sophisticated institutional investor.
(h) Line of Business. It has entered into this Agreement
(including each Transaction governed hereby) in conjunction
with its line of business (including financial intermediation
services) or the financing of its business.
(i) No Agency. It is entering into this Agreement, any Credit
Support Document to which it is a party, each Transaction and
any other documentation relating to this Agreement or any
Transaction as principal (and not as agent or in any other
capacity, fiduciary or otherwise) and it has individually
negotiated each Transaction.
(j) Eligible Contract Participant. It constitutes an "eligible
contract participant" as such term is defined in Section
1a(12) of the Commodity Exchange Act, as amended."
(f) Payments.
(i) If the parties are each required to make payments pursuant
to Section 2(a) on the same day in respect of a Transaction
but the payments are to be made in different currencies, the
party that receives the payment due to it first shall hold an
amount equal to the payment it received in trust (with the
right to commingle that amount with its general funds) for the
benefit of the other party until that other party receives the
corresponding payment due to it.
(ii) If by reason of the time difference between the cities in
which payments are to be made, it is not possible for
simultaneous payments to be made on any date on which both
parties are required to make payments hereunder, either party
may at its option and in its sole discretion notify the other
party that payments due from such party on that date are to be
made in escrow and be deposited with an escrow agent
reasonably acceptable to the other party, which shall not be
an Affiliate of a party requesting that payments be made in
escrow. In this case deposit of the payment due on that day
shall be made by 2:00 P.M. (local time at the place for the
earlier payment) on that date with an escrow agent selected by
the party giving the notice, accompanied by irrevocable
payment instructions (A) to release the deposited payment to
the intended recipient upon receipt by the escrow agent of the
required deposit of the corresponding payment from the other
party on the same date accompanied by irrevocable payment
instructions to the same effect or (B) if the required deposit
of the corresponding payment is not made on that same date, to
return
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the payment deposited to the party that paid it into escrow at
such party's request. The party that elects to have payments
made in escrow shall pay the costs of the escrow arrangements
and shall cause those arrangements to provide that the
intended recipient of the payment due to be deposited first
shall be entitled to interest on that deposited payment for
each day in the period of its deposit at the rate offered by
the escrow agent for that day for overnight deposits in the
relevant currency in the office where it holds the deposited
payment (at 11:00 A.M. local time on that day) if that payment
is not released by 5:00 P.M. local time on the date it is
deposited for any reason other than the intended recipient's
failure to make the escrow deposit it is required to make
hereunder in a timely fashion.
(g) Set-off. Section 6 of this Agreement is hereby amended by adding the
following Subsection (f) at the end thereof:
"(f) Set-Off. (i) In addition to any rights of set-off,
combination of accounts, lien or other similar rights to which
a party hereto is at any time otherwise entitled (whether by
operation of law, contract or otherwise), upon the occurrence
of (a) an Event of Default (in which case the Defaulting Party
will be referred to herein as "X"), (b) a Credit Event Upon
Merger or an Illegality (in which case the Affected Party will
be referred to herein as "X") or (c) an Additional Termination
Event (in which case the party with respect to which the
Additional Termination Event has occurred, or been deemed to
have occurred, will be referred to herein as "X"), the party
hereto that is not X and which is not a Defaulting Party or an
Affected Party (such party being referred to herein as "Y")
shall have the right (but not the obligation), without prior
notice to X or any other person, to set-off any obligation of
X owing to Y (and, if Y elects, any Affiliates of Y) (whether
or not arising under the Agreement, whether or not matured,
whether or not contingent and regardless of the currency,
place of payment or booking office of the obligation). The
parties agree and acknowledge that the obligations referred to
by this provision shall be deemed satisfied and discharged to
the extent they are so set-off. Y will give notice to X of any
set-off effected pursuant to this Section 6(f) promptly after
such set-off has been effected.
(ii) In order to set-off obligations that are denominated in
different currencies, Y may convert any obligation denominated
in one currency (the "Original Currency") to another currency
(the "Set-off Currency") at the market rate, determined by Y
in good faith with notice to X, at which Y would be able,
acting in a commercially reasonable manner, to purchase the
Set-off Currency for the relevant amount of the Original
Currency.
(iii) If an obligation is unascertained, Y may in good faith
estimate that obligation and set-off in respect of such
estimate, subject to the relevant party accounting to the
other when such obligation is ascertained.
(iv) Nothing in this Section 6(f) will be deemed to create a
charge or other security interest."
(h) Waiver of Jury Trial. Each party irrevocably waives any and all right
to trial by jury in any legal proceeding in connection with this Agreement.
(i) Multibranch Party. Without limiting the generality of Section 10, each
Multibranch Party represents to the other party and agrees that the
obligations of such Multibranch Party are unconditional, irrespective
of the validity or enforceability of this Agreement against any of its
Offices, whether or not such Office has undergone a change in its
status, function, control or ownership.
28
(j) Party A and Party B hereby acknowledge and agree that CRIIMI Newco, LLC
and CBO REIT II, INC are each jointly and severally liable to Party A
for all of their respective obligations, representations, warranties
and covenants.
(k) Scope. Any transactions that have been entered into between the parties
prior to the date of this Agreement that would otherwise constitute a
"Specified Transaction" (as defined in Section 14 of the Agreement but
without taking into account the amendment specified in Part 5(b) of the
Schedule) for purposes of this Agreement shall be deemed governed by
and construed in accordance with this Agreement, unless any
Confirmation with respect to a Transaction entered into after the
execution of this Agreement expressly provides otherwise
29
IN WITNESS WHEREOF, the parties have executed and delivered this document as of
the date specified on the first page of this document.
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED CBO REIT II, INC.
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory Title: Executive Vice President
and Chief Operating
Officer
CRIIMI NEWCO, LLC
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Operating Officer
30
EXHIBIT I
GUARANTY
GUARANTY, dated as of {}, by THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC., a Delaware
corporation (the "Guarantor"), in favor of each of CRIIMI NEWCO, LLC a limited
liability company organized under the laws of the State of Delaware and CBO REIT
II, Inc., a corporation organized under the laws of the State of Maryland
(together and individually, the "Beneficiary").
(a) Guaranty.
(i) To induce the Beneficiary to enter into an ISDA Master Agreement as of
even date herewith and one or more Transactions as of various dates
(together, the "Agreement"; terms capitalized but not otherwise defined
herein being used herein as therein defined) with BEAR, ▇▇▇▇▇▇▇
INTERNATIONAL LIMITED ("Bear ▇▇▇▇▇▇▇"), subject to the terms and
conditions set forth herein, the Guarantor irrevocably and
unconditionally guarantees to the Beneficiary, its successors and
permitted assigns, the prompt payment on demand, of any and all amounts
due and payable to the Beneficiary under the Agreement, subject to any
applicable grace period thereunder (the "Obligations").
(ii) The Guarantor hereby waives acceptance of this Guaranty, diligence,
promptness, presentment, demand on Bear ▇▇▇▇▇▇▇ for payment, protest
of nonpayment and all notices of any kind. In addition, the
Guarantor's obligations hereunder shall not be affected by the
existence, validity, enforceability, perfection, or extent of any
collateral therefor. The Beneficiary shall not be obligated to
proceed against Bear ▇▇▇▇▇▇▇ before claiming under the Guaranty nor
to file any claim relating to the Obligations in the event that
Bear ▇▇▇▇▇▇▇ becomes subject to a bankruptcy, reorganization or
similar proceeding, and the failure of the Beneficiary so to file
shall not affect the Guarantor's obligations hereunder. The Guarantor
agrees that its obligations under this Guaranty constitute a
guaranty of payment and not of collection.
(b) Consents, Waivers and Renewals. The Guarantor agrees that the
Beneficiary, may at any time and from time to time, either before or
after the maturity thereof, without notice to or further consent of
the Guarantor, extend the time of payment of, exchange or surrender
any collateral for, or renew any of the Obligations, and may also
make any agreement with Bear ▇▇▇▇▇▇▇ or with any other party to or
person liable on any of the Obligations, or interested therein,
for the extension, renewal, payment, compromise, discharge or
release thereof, in whole or in part, or for any modification of the
terms thereof or of any agreement between the Beneficiary and Bear
▇▇▇▇▇▇▇ or any such other party or person, without in any way
impairing or affecting the Guarantor's obligations under this
Guaranty. The Guarantor agrees that the Beneficiary may resort to
the Guarantor for payment of any of the Obligations, whether or not
the Beneficiary shall have resorted to any collateral security,
or shall have proceeded against any other obligor principally or
secondarily obligated with respect to any of the Obligations.
(c) Expenses. The Guarantor agrees to pay on demand all out-of-pocket
expenses (including without limitation the reasonable fees and
disbursements of Beneficiary's counsel) incurred in the enforcement or
protection of the rights of the Beneficiary hereunder; provided that
the Guarantor shall not be liable for any expenses of the Beneficiary
if no payment under this Guaranty is due.
(d) Subrogation. The Guarantor will not exercise any rights that it may
acquire by way of subrogation until all Obligations to the Beneficiary
shall have been paid in full. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, such amount shall be
held in trust for the benefit of the Beneficiary and shall forthwith be
paid to the Beneficiary to be credited and applied to the Obligations,
whether matured or unmatured. Subject to the foregoing, upon payment of
all the Obligations, the Guarantor shall be subrogated to the rights of
the Beneficiary against Bear
CBO REIT II, LLC
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▇▇▇▇▇▇▇ and the Beneficiary agrees to take at the Guarantor's expense
such steps as the Guarantor may reasonably request to implement such
subrogation.
(e) Cumulative Rights. No failure on the part of the Beneficiary to
exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Beneficiary of any right, remedy or power
hereunder preclude any other or future exercise of any right, remedy or
power. Each and every right, remedy and power hereby granted to the
Beneficiary or allowed it by law or other agreement shall be cumulative
and not exclusive of any other, and may be exercised by the Beneficiary
from time to time.
(f) Representations and Warranties.
(i) The Guarantor is a corporation duly existing under the laws of the
State of Delaware.
(ii) The execution, delivery and performance of this Guaranty have been
duly authorized by all necessary corporate action and do not
conflict with any provision of law, any regulation, or the
Guarantor's charter or by-laws, or any agreement binding upon it.
(iii) No consent, approval and authorization of, registration with, or
declaration to any governmental authority are required in
connection with the execution, delivery and performance of this
Guaranty.
(iv) This Guaranty constitutes the legal, valid and binding obligation
of the Guarantor, enforceable against the Guarantor in accordance
with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(g) Continuing Guaranty. The Guaranty shall remain in full force and effect
and be binding upon the Guarantor and its successors and permitted
assigns, and inure to the benefit of the Beneficiary and its successors
and permitted assigns, until all of the Obligations have been satisfied
in full. In the event that any payment by Bear ▇▇▇▇▇▇▇ in respect of
any Obligations is rescinded or must otherwise be returned for any
reason whatsoever, the Guarantor shall remain liable hereunder in
respect of such Obligations as if such payment had not been made.
(h) Notices. All notices in connection with this Guaranty shall be deemed
effective, if in writing and delivered in person or by courier, on the
date delivered to the following address (or such other address that the
Guarantor shall notify the Beneficiary of in writing):
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Derivatives Department, 35th Floor
With a copy to: Legal Department, 10th Floor
(i) Governing Law. The Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York, without reference
to choice of law doctrine.
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the
Guarantor to the Beneficiary as of the date first above written.
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory