EXHIBIT 10.5
EXHIBIT D
FORM OF NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT dated as of ________ __, 200_ (this "AGREEMENT"),
between CRIIMI MAE INC., a Maryland corporation (the "COMPANY"), and BRASCAN
REAL ESTATE FINANCIAL INVESTMENTS LLC, a Delaware limited liability company (the
"INVESTOR").
WITNESSETH:
WHEREAS the Investor and the Company are parties to an Investment Agreement
dated as of November [14], 2002 (the "INVESTMENT AGREEMENT"; certain terms used
but not defined herein shall have the meanings assigned thereto in the
Investment Agreement); and
WHEREAS the Investment Agreement provides that the Investor and the Company
shall enter into this Agreement at the Closing.
NOW, THEREFORE, in consideration of the premises, covenants and agreements
set forth herein and in the Investment Agreement, the parties hereto agree as
follows:
SECTION 1. NON-COMPETITION. Until the third anniversary of the
Closing, the Investor (and its controlled affiliates) shall not, directly or
indirectly, compete with the Company, subject to Section 2, in the following
areas of business ("COMPANY BUSINESS"):
(i) acquiring non-investment grade securities that represent
interests in or debt secured by portfolios of commercial and/or multifamily
mortgage loans (with each such portfolio containing 20 or more loans)
originated in anticipation of rated "conduit" securitizations and that, at
the time of acquisition, afford the holder thereof the right to appoint the
special servicer for such portfolios,
(ii) originating or purchasing commercial and/or multifamily
mortgage loans in anticipation of including such loans in portfolios of 20
or more loans for rated "conduit" securitization transactions, and
originating or purchasing mezzanine loans in connection with such mortgage
loans so long as such mezzanine loans are not in excess of $5,000,000 per
loan,
(iii) servicing (as master servicer, primary servicer or special
servicer) commercial and/or multifamily loans and
(iv) providing commercial and/or multifamily mortgage loan due
diligence services to third parties.
SECTION 2. PERMITTED ACTIVITIES. Notwithstanding Section 1, the
Investor or a controlled affiliate of the Investor may (i) sponsor collateral
bond or loan obligations ("CBOS"), (ii) include non-investment grade commercial
mortgage backed securities in such CBOs (and may purchase or otherwise acquire
them for such inclusion), (iii) own less than an aggregate of 10% of the any
class of stock of a public company engaged, directly or indirectly, in Company
Business, (iv) own less than 10% in value of any instrument of indebtedness of a
public company
engaged, directly or indirectly, in Company Business and (v) own a Person that
engages, directly or indirectly, in Company Business if such Company Business
accounts for less than 10% of such Person's consolidated annual revenues.
SECTION 3. COMPANY COVENANT. At any time after the maturity of the
Subordinated Debt, the Company shall not engage in any business activity other
than Company Business, except to the extent otherwise approved by resolution of
a majority of members of the Company Board who are not Approved Nominees or the
Investor Nominee.
SECTION 4. NOTICE. Whenever any notice is required to be given
hereunder, such notice shall be deemed given only when such notice is in writing
and is delivered by messenger or courier or, if sent by fax, when received. All
notices, requests and other communications hereunder shall be delivered by
courier or messenger or shall be sent by facsimile to the following addresses:
(i) If to the Investor, at the following address:
Brascan Real Estate Financial Investments LLC
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
with a copy by facsimile or messenger or courier to:
Sidley Xxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
(ii) If to the Company, at the following address:
CRIIMI MAE Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
with a copy by facsimile or messenger or courier to:
Venable, Baetjer, Xxxxxx & Civiletti, LLP
0000 Xxx Xxxx Xxx., X.X.
Xxxxx 0000
Xxxxxxxxxx D. C. 20005
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
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or to such other respective addresses as may be designated by notice given in
accordance with this Section 4.
SECTION 5. COMPLETE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, the other Ancillary Agreements, the Investment Agreement, the
Confidentiality Agreement and the Company Letter constitute the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements and understandings of the parties in connection therewith. This
Agreement is not intended to confer upon any Person other than the Company and
the Investor any rights or remedies hereunder.
SECTION 6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS. THE INVESTOR AND THE COMPANY
HEREBY CONSENT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN WITH RESPECT TO ANY
ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR
TO DETERMINE THE RIGHTS OF ANY PARTY HERETO.
SECTION 7. NO ASSIGNMENT. This agreement may be assigned by the
Investor without the consent of the Company to Brascan Real Estate Financial
Partners LLC or a controlled affiliate thereof. Subject to the foregoing,
neither this Agreement nor any rights or obligations under it are assignable by
either party without the written consent of the other party.
SECTION 8. HEADINGS. The descriptive headings of the sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
SECTION 9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties in separate counterparts. All such
counterparts shall constitute one and the same agreement and shall become
effective when one or more counterparts have been signed by each party and
delivered to the other party.
SECTION 10. INTERPRETATION. The word "including", when used herein,
shall be deemed to mean "including, without limiting the generality of the
foregoing". When a reference is made in this Agreement to a Section, such
reference shall be to a section of this Agreement, unless otherwise indicated.
SECTION 11. REMEDIES; WAIVER. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available. Notwithstanding any other provision of this Agreement, it
is understood and agreed that remedies at law would be inadequate in the case of
any breach of the covenants contained in this Agreement. The Company and the
Investor shall be entitled to equitable relief, including the remedy of specific
performance with respect to any breach or attempted breach of such covenants by
the other party. No failure on the part of any party to exercise or delay in
exercising any right hereunder shall be deemed a waiver thereof, nor shall any
single or partial exercise preclude any further or other exercise of such or any
other right.
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SECTION 12. SEVERABILITY. Any invalidity, illegality or
unenforceability of any provision of this Agreement in any jurisdiction shall
not invalidate or render illegal or unenforceable the remaining provisions
hereof in such jurisdiction and shall not invalidate or render illegal or
unenforceable such provisions in any other jurisdiction. The Company and the
Investor shall endeavor in good faith negotiations to replace any invalid,
illegal or unenforceable provision with a valid, legal and enforceable
provision, the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provision. If at any time the provisions
of this Agreement shall be determined to be invalid or unenforceable by reason
of being vague or unreasonable as to area, duration or scope of activity, this
Agreement shall be considered divisible and shall become and be immediately
amended to only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter, and the Company and the Investor agree that this Agreement as
so amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
SECTION 13. AMENDMENT; WAIVER. This Agreement may be amended only by
agreement in writing of both parties. No waiver of any provision nor consent to
any exception to the terms of this Agreement shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
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IN WITNESS WHEREOF, the Investor and the Company have caused this
Agreement to be signed by their respective offers thereunto duly authorized all
as of the date first written above.
BRASCAN REAL ESTATE FINANCIAL
INVESTMENTS LLC
By: BRASCAN REAL ESTATE
FINANCIAL PARTNERS LLC,
its Managing Member
By:
--------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
CRIIMI MAE INC.
By:
--------------------------------
Name:
Title:
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