Exhibit 10.2
FORECLOSURE/TRANSFER AGREEMENT
This Foreclosure/Transfer Agreement ("Agreement"), dated as of April 17,
2001 is among CRIIMI MAE INC. ("CMI"), XXXXXXX XXXXX INTERNATIONAL, ACTING
THROUGH ITS AGENT, XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, in its
capacity as "Buyer" (in such capacity the "Repo Purchaser") under the Repo
Agreement (as hereinafter defined), XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION in its capacity as Trustee (in such capacity, the "Note A Indenture
Trustee") under that certain Indenture dated as of April 17, 2001, between CMI
and the Note A Indenture Trustee for the benefit of the holders of the 11.75%
Series A Senior Secured Notes due 2006 (the "Series A Notes"), and XXXXX FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION in its capacity as Trustee (in such
capacity, the "Note B Indenture Trustee", and together with the Note A Indenture
Trustee, the "Indenture Trustees") under that certain Indenture dated as of
April 17, 2001 between CMI and the Note B Indenture Trustee for the benefit of
the holders of the 20% Series B Senior Secured Notes due 2007 (the "Series B
Notes", and together with the Series A Notes, the "Notes").
RECITALS
WHEREAS, on October 5, 1998, CRIIMI MAE Inc. ("CMI"), CRIIMI MAE
Management, Inc. ("CMM") and CRIIMI MAE Holdings II, L.P. ("Holdings" and,
together with CMI and CMM, the "Debtors") filed voluntary petitions for relief
under Chapter 11 of title 11 of the United States Code (the "Bankruptcy Code").
WHEREAS, the Debtors filed Debtors' Third Amended Joint Plan of
Reorganization dated July 21, 2000 (the "July 21st Plan") and Debtors' Second
Amended Joint Disclosure Statement dated August 24, 2000 (the "Disclosure
Statement") with the United States Bankruptcy Court, District of Maryland,
Greenbelt Division (the "Bankruptcy Court"). The Bankruptcy Court approved the
adequacy of the Disclosure Statement, and thereafter the July 21st Plan and the
Disclosure Statement were distributed, with the requisite ballots, to the
holders of all claims and interests impaired and entitled to vote under the
Plan, in order to solicit their acceptance of the Plan.
WHEREAS, a hearing (the "Confirmation Hearing") was held before the
Bankruptcy Court on November 15, 2000 (the "Confirmation Date").
WHEREAS, the July 21st Plan was amended at the Confirmation Hearing, and
the July 21st Plan as so amended (the "Plan") was confirmed by the Bankruptcy
Court pursuant to its Order dated November 22, 2000 (the "Confirmation Order").
WHEREAS, the Plan, as confirmed by the Confirmation Order, provides that
Xxxxxxx Xxxxx Mortgage Capital Inc. ("MLMCI") and German American Capital
Corporation ("GACC") are to receive, on the effective date of the Plan (the
"Effective Date") (i) in immediately available funds (a) $100 million on account
of the principal amount of their aggregate claims against CMI, and (b) any
accrued and unpaid interest (calculated at the contract non-default rate) owing
to MLMCI and GACC in respect of
such claims as of the date immediately preceding the Effective Date (the
aggregate of all such principal claims of MLMCI and GACC against CMI and all
such accrued and unpaid interest owing in respect of such principal claims as of
the date immediately preceding the Effective Date is hereinafter referred to as
the "MLMCI/GACC Claim"), (ii) any reasonable legal fees and expenses (not to
exceed $500,000) incurred by MLMCI and GACC in connection with the drafting,
negotiating and finalizing of the Repo Documents (as hereinafter defined) and
(iii) new obligations under the Repo Documents in an original amount equal to
the amount by which (a) the aggregate outstanding principal amount of the
indebtedness owed by CMI to MLMCI and GACC, as of the Effective Date, exceeds
(b) $100 million.
WHEREAS, the Plan, as confirmed by the Confirmation Order, provides that
the Class A9 and Class A10 (as defined in the Plan) unsecured creditors of CMI
("Unsecured Creditors"), on account of both old senior note claims and general
Class A10 unsecured claims, are to receive on the Effective Date $75 million in
immediately available funds on account of all allowed claims in the Class A10
Convenience Class (as provided in the Plan) and in reduction, pari passu, of the
allowed claims of the remaining Unsecured Creditors against CMI, which allowed
claims shall include prepetition and postpetition interest as set forth in the
Plan. The remaining balance owing to the Unsecured Creditors is referred to as
"New Debt". The New Debt is represented by the Series A Notes, in the aggregate
amount of $105 million, and the Series B Notes, in the aggregate amount of the
balance of the New Debt. The principal amount of the New Debt represented by the
Notes may change from time to time as provided for in the Notes and the Note A
Indenture and the Note B Indenture.
WHEREAS, pursuant to the Repo Agreement, and in consideration of the
MLMCI/GACC Claim (to the extent not previously paid by CMI to MLMCI and GACC)
CMI has sold the CBO REIT Stock Collateral (as hereinafter defined) to the Repo
Purchaser subject to the entitlement and obligation of CMI to repurchase the CBO
REIT Stock Collateral from the Repo Purchaser at the Repurchase Price (as
hereinafter defined).
WHEREAS, the Repo Purchaser and CMI have entered into the Repo Agreement,
the Security Agreement (as hereinafter defined) and the other RP Security
Instruments (as hereinafter defined) to secure the Repo Obligations.
WHEREAS, the Note A Indenture Trustee and the Note B Indenture Trustee have
entered into the Note A Indenture and the Note B Indenture, respectively, and
the IT Security Instruments (as hereinafter defined).
WHEREAS, the Repo Purchaser, the Note A Indenture Trustee, the Note B
Indenture Trustee and CMI have agreed herein on a manner, method and procedures
to be followed for the purpose of determining any deficiency claim that the Repo
Purchaser, the Note A Indenture Trustee or the Note B Indenture Trustee may have
against CMI on account of the Repo Obligations and the outstanding obligations
on account of the Series A Notes and the Series B Notes, respectively, in the
event of a Disposition Default (as
hereinafter defined) and a foreclosure on the liens and security interests
in and on the Combined Collateral or the CBO REIT Stock Collateral, as the case
may be.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
The parties agree that the following capitalized terms used in this
Agreement without definition shall have the respective meanings assigned to such
terms below:
(a) Arm's-Length Sale: Any sale of the CBO-2 Collateral, the Combined
Collateral or the CBO REIT Stock Collateral, as applicable, in a bona fide,
arm's-length transaction to a third party buyer not affiliated with the Debtors,
or the Repo Purchaser or an entity which is a Beneficial Purchaser, as defined
in the Repo Agreement, at the time of such sale.
(b) Business Day: Any day other than a Saturday, a Sunday, or a day when
the New York Stock Exchange is closed.
(c) CBO-1/Nomura Collateral: Collectively, the Nomura Bond and the QRS 1
Stock.
(d) CBO REIT: A limited purpose, bankruptcy remote captive REIT subsidiary
of CMI.
(e) CBO REIT Stock Collateral: All of the outstanding capital stock of CBO
REIT.
(f) CBO-2 Collateral: Collectively, the Current CBO-2 Collateral and the
CMBS Corp. Stock.
(g) CMBS Corp.: CRIIMI MAE CMBS Corp., the Delaware corporation that owns
the Incremental CBO-2 Equity.
(h) Collateral Agent: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
as collateral agent for the benefit of the Repo Purchaser, the Note A Indenture
Trustee and the Note B Indenture Trustee under the Security Documents.
(i) Combined Collateral: Collectively, the CBO-2 Collateral and the
CBO-1/Nomura Collateral.
(j) Current CBO-2 Collateral: Collectively, CMM 1998-C1, Bond Classes X0,
X0, X, X, X, X0, X0 and J.
(k) Deemed Sale: Any sale of the CBO-2 Collateral, the Combined Collateral
or the CBO REIT Stock Collateral, as applicable, to the Repo Purchaser, any
entity which is a Beneficial Purchaser at the time of such sale, the Indenture
Trustees (except to the extent either or both of the Indenture Trustees elect
not to participate in the Deemed Sale of the CBO-2 Collateral pursuant to
Article VII, Section (b)(ii)(A) of the Intercreditor Agreement) or any of their
respective affiliates, as acquirors thereof, by and through a Deemed Sale
Entity.
(l) Deemed Sale Entity: Either (x) a securities account with the Collateral
Agent held for the benefit of the Repo Purchaser, the Note A Indenture Trustee
and the Note B Indenture Trustee, or (y) at the election of the Repo Purchaser,
a real estate investment trust, limited liability company, partnership,
corporation or other legal entity formed by the Repo Purchaser and reasonably
satisfactory to the Note A Indenture Trustee and the Note B Indenture Trustee in
which each of the Repo Purchaser, the Note A Indenture Trustee and the Note B
Indenture Trustee holds a beneficial interest (in either case subject to the
election of either or both of the Indenture Trustees not to participate in the
Deemed Sale of the CBO-2 Collateral pursuant to Article VII, Section (b)(ii)(A)
of the Intercreditor Agreement) to take title to and possession of the CBO-2
Collateral, the Combined Collateral or the CBO REIT Stock Collateral, as
applicable, in connection with any Deemed Sale of any of such assets, in any
such case in a manner consistent with the respective rights and obligations of
such parties relative to such assets as set forth in this Agreement.
(m) Disposition Default: The occurrence of any default beyond the
expiration of any applicable notice and cure period under the Plan, the Repo
Agreement, the Security Agreement, the RP Security Instruments or otherwise
which gives rise to a right in the Repo Purchaser to foreclose on or otherwise
dispose of any or all of the CBO-2 Collateral, the Combined Collateral or the
CBO REIT Stock Collateral.
(n) CBO-2 Equity: Collectively, CMM 1998-C1, Owner Trust Certificate and
Classes A and R.
(o) Intercreditor Agreement: That certain Agreement dated as of the date
hereof among Xxxxxxx Xxxxx International, acting through its agent Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as buyer under the Repo Agreement,
the Note A Indenture Trustee and the Note B Indenture Trustee, and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as Collateral Agent.
(p) IT Security Instruments: Collectively, the pledges and other
instruments pursuant to which CMI and CBO REIT grant and reaffirm the respective
security interests of the Note A Indenture Trustee and the Note B Indenture
Trustee in the Combined Collateral and the CBO REIT Stock Collateral, as
collateral security for the Series A Notes and the Series B Notes.
(q) New CBO-1 Equity: Collectively, CMM 1996-C1, Bond Class F and Owner
Trust Certificate Classes P, R and XS.
(r) Note A Indenture: That certain Indenture dated as of April 17, 2001,
by and between CMI and the Note A Indenture Trustee for the benefit of the
holders of the Series A Notes.
(s) Note B Indenture: That certain Indenture dated as of April 17, 2001, by
and between CMI and the Note B Indenture Trustee for the benefit of the holders
of the Series B Notes.
(t) Note A Indenture Trustee: Xxxxx Fargo Bank Minnesota, National
Association, or any successor thereto, in its capacity as Trustee for the
holders of the Series A Notes under the Note A Indenture.
(u) Note B Indenture Trustee: Xxxxx Fargo Bank Minnesota, National
Association, or any successor thereto, in its capacity as Trustee for the
holders of the Series B Notes under the Note B Indenture.
(v) Noteholders: Collectively, the holders of the Series A Notes and the
holders of the Series B Notes.
(w) Notes: Collectively, the Series A Notes and the Series B Notes.
(x) Proceeds: As defined in the Security Agreement.
(y) QRS 1: CRIIMI MAE QRS 1, Inc., the Delaware corporation that owns the
CBO-1 Equity.
(z) Qualified CMBS Institution: Any of the five (5) institutions qualified
to value the Combined Collateral and the CBO REIT Stock Collateral, and listed
on Exhibit A attached to this Agreement.
(aa) Repo Agreement: The "master repurchase agreement" (together with all
applicable annexes thereto) dated as of the date hereof, between CMI, as seller,
and the Repo Purchaser, as buyer. Repo Documents: Collectively, the Repo
Agreement and the RP Security Instruments.
(bb) Repo Obligations: Collectively, (i) the obligation of CMI under the
Repo Agreement to pay the Repurchase Price in the amount and at the time or
times specified under the Repo Agreement, (ii) all other obligations to be paid
or performed by CMI under the Repo Agreement, and (iii) all obligations required
to be paid or performed by the pledgor(s) under the RP Security Agreements.
(cc) Repurchase Price: As defined in the Repo Agreement.
(dd) RP Security Instruments: Collectively, the pledge agreements and other
instruments pursuant to which CMI and CBO REIT grant and reaffirm the security
interests of the Repo Purchaser in the Combined Collateral, as collateral
security for the Repo Obligations.
(ee) Sale Collateral: As defined in the first paragraph of Article II.
(ff) Security Agreement: That certain Security and Pledge Agreement dated
as of the date hereof, by CMI in favor of the Collateral Agent for the benefit
of the Repo Purchaser, the Note A Indenture Trustee for the benefit of the
holders of the Series A Notes and the Note B Indenture Trustee for the benefit
of the holders of the Series B Notes, as their respective interests may appear.
For purposes of this Agreement, the Security Agreement shall constitute both an
"IT Security Instrument" and an "RP Security Instrument".
(gg) Security Documents: Collectively, the IT Security Instruments and the
RP Security Instruments.
(hh) Series A Notes: The 11.75% Series A Senior Secured Notes due 2006
issued under the Note A Indenture.
(ii) Series B Notes: The 20% Series B Senior Secured Notes due 2007 issued
under the Note B Indenture.
(jj) Surplus: As defined in Article III, Section (c).
(kk) Total Secured Obligations: The total of the amount of any remaining
balance owing on account of the Repurchase Price and any other amounts owing on
account of the Repo Obligations (including the reasonable costs and expenses
incurred by the Collateral Agent in connection with any Disposition Default and
attendant disposition of the Sale Collateral), the then outstanding obligations
evidenced by the Series A Notes and the outstanding obligations evidenced by the
Series B Notes.
ARTICLE II
DETERMINATION OF VALUE
Subject to Article III hereinafter, in connection with any disposition of
the Combined Collateral or, to the extent disposed of by foreclosure on the
respective liens and security interests thereon (but not by means of a remedy
exercised pursuant to Section 14(a) of Annex I of the Repo Agreement), the CBO
REIT Stock Collateral (as applicable, the "Sale Collateral") incident to a
Disposition Default, whether such disposition is effectuated by means of an
Arm's Length Sale or a Deemed Sale, the Repo Purchaser, the Note A Indenture
Trustee, the Note B Indenture Trustee and CMI hereby (subject to the optional
election set forth in Article III herein) agree to the following procedures in
order to determine the value of their respective interests in the Sale
Collateral solely for the purpose of determining (i) any deficiency claim that
the Repo Purchaser, the Note A Indenture Trustee or the Note B Indenture
Trustee, as the case may be, shall then and thereafter have against CMI on
account of the Repurchase Price and any other amounts owing on account of the
Repo Obligations, the then outstanding obligations evidenced by the Series A
Notes and the then outstanding obligations evidenced by the Series B Notes or
(ii) any surplus amounts owing to CMI.
(a) Arm's Length Sale. In the event that the Sale Collateral is foreclosed
on and disposed of by means of an Arm's Length Sale upon the occurrence of a
Disposition Default, an amount of the proceeds of such sale not to exceed the
Total Secured Obligations shall be allocated among the Repo Purchaser, the Note
A Indenture Trustee and the Note B Indenture Trustee as provided for in Article
VI, Section (b)(i) or Section (c)(i) of the Intercreditor Agreement, with any
remaining proceeds to be paid to CMI as Surplus, as provided for in Article II,
Section (c) herein. The value of the respective interests of each of the Repo
Purchaser, the Note A Indenture Trustee and the Note B Indenture Trustee in the
Sale Collateral for the purpose of determining any deficiency claim that any of
the Repo Purchaser, the Note A Indenture Trustee or the Note B Indenture Trustee
shall then and thereafter have against CMI shall be equal to the actual cash
proceeds received by each of the Repo Purchaser, the Note A Indenture Trustee
and the Note B Indenture Trustee resulting from such sale.
(b) Deemed Sale. In the event that the Sale Collateral is foreclosed on by
means of a Deemed Sale upon the occurrence of a Disposition Default, the value
of the respective interests of each of the Repo Purchaser, the Note A Indenture
Trustee and the Note B Indenture Trustee in such Sale Collateral for the purpose
of determining the deficiency claim that any of the Repo Purchaser, the Note A
Indenture Trustee or the Note B Indenture Trustee shall then and thereafter have
against CMI or surplus amounts owing to CMI shall be determined as follows:
(i) Within five (5) Business Days after the date of the applicable Deemed
Sale of the Sale Collateral, the Repo Purchaser shall deliver to the Note A
Indenture Trustee and the Note B Indenture Trustee a written statement (the
"Repo Purchaser's Deficiency Statement") setting forth the Repo Purchaser's
proposed valuation of the Sale Collateral, and the valuation of the respective
interests of each of the
Repo Purchaser, the Note A Indenture Trustee and the Note B Indenture
Trustee therein, disposed of by such Deemed Sale, as if the Sale Collateral was,
in fact, disposed of by means of an Arm's Length Sale on the date of such Deemed
Sale with the proceeds thereof allocated among the Repo Purchaser, the Note A
Indenture Trustee and the Note B Indenture Trustee pursuant to Article VI,
Sections (b)(ii) and (c)(ii) of the Intercreditor Agreement, as applicable.
Within fifteen (15) Business Days after receipt of the Repo Purchaser's
Deficiency Statement, the Note A Indenture Trustee and the Note B Indenture
Trustee shall jointly deliver to the Repo Purchaser a written statement (the
"Indenture Trustees' Deficiency Statement") notifying the Repo Purchaser whether
the Indenture Trustees accept or dispute the Repo Purchaser's Deficiency
Statement. If the Indenture Trustees fail to deliver the Indenture Trustees'
Deficiency Statement within such fifteen (15) Business Day period, the Indenture
Trustees shall be deemed to have accepted the Repo Purchaser's Deficiency
Statement. If the Indenture Trustees timely dispute the Repo Purchaser's
Deficiency Statement, the Repo Purchaser, the Note A Indenture Trustee and the
Note B Indenture Trustee shall, in good faith, proceed to negotiate a mutually
acceptable valuation of the Sale Collateral, and the valuation of their
respective interests therein (provided that if such dispute shall not be
resolved by the Repo Purchaser, the Note A Indenture Trustee and the Note B
Indenture Trustee within twenty-five (25) Business Days after the delivery of
the Purchaser's Deficiency Statement, such dispute shall not be resolved by said
parties and the valuation of the Sale Collateral shall be resolved by the
Qualified CMBS Institution pursuant to the provisions of this Article II), for
the purpose of determining any deficiency claim that any of such parties shall
then and thereafter have against CMI or surplus amounts owing to CMI.
(ii) At such time as the Repo Purchaser, the Note A Indenture Trustee, and
the Note B Indenture Trustee have agreed on the value of the Sale Collateral,
and the valuation of their respective interests therein, for the purpose of
determining any deficiency claim that any of such parties shall then and
thereafter have against CMI or any surplus amounts owing to CMI (the "Agreed
Upon Collateral Values"), said parties shall jointly deliver to CMI a written
statement setting forth the Agreed Upon Collateral Values and such back-up
information as determined by said parties to be reasonably necessary for CMI to
evaluate said parties' determination of the Agreed Upon Collateral Values. CMI
shall advise each of the Repo Purchaser, the Note A Indenture Trustee and the
Note B Indenture Trustee, in writing, within fifteen (15) Business Days of its
receipt of the written statement setting forth the Agreed Upon Collateral Values
and proffered back-up information whether CMI accepts or disputes the Agreed
Upon Collateral Values. If CMI fails to deliver its written response within said
fifteen (15) Business Day period, CMI shall be deemed to have accepted the
Agreed Upon Collateral Values. If CMI accepts or is deemed to have accepted the
Agreed Upon Collateral Values relative to the value of the Sale Collateral, and
the valuation of the respective interests of each of the Repo Purchaser, the
Note A Indenture
Trustee and the Note B Indenture Trustee therein, such Agreed Upon
Collateral Values shall be dispositive for the purpose of determining any
deficiency claim that any of the Repo Purchasers, the Note A Indenture Trustee
or the Note B Indenture Trustee shall then and thereafter have against CMI or
any surplus amounts owing to CMI. If CMI shall fail to accept or be deemed to
have accepted the Agreed Upon Collateral Values relative to the value of the
Sale Collateral, and the valuation of the respective interests of each of the
Repo Purchaser, the Note A Indenture Trustee, and the Note B Indenture Trustee
therein, or if the Repo Purchaser and the Indenture Trustees are unable to agree
upon a mutually acceptable valuation of the Sale Collateral pursuant to Article
II, Section (b)(i) above, the Repo Purchaser and the Indenture Trustees,
jointly, shall, within five (5) Business Days thereafter select and advise CMI
in writing of their selection of three (3) then designated Qualified CMBS
Institutions acceptable to arbitrate the dispute as to the valuation of the Sale
Collateral, and the valuation of the respective interests of the Repo Purchaser,
the Note A Indenture Trustee and the Note B Indenture Trustee therein; provided,
however, that in the event the Repo Purchaser, the Note A Indenture Trustee and
the Note B Indenture Trustee are unable to reach agreement on such three (3)
Qualified CMBS Institutions within three (3) Business Days of CMI's failure to
accept or deemed failure to accept the Agreed Upon Collateral Values relative to
the value of the Sale Collateral, or in the event the Repo Purchaser, the Note A
Indenture Trustee and the Note B Indenture Trustee are unable to agree upon the
Agreed Upon Collateral Values, the Repo Purchaser, the Note A Indenture Trustee
and the Note B Indenture Trustee hereby agree that the Repo Purchaser shall
designate two (2) Qualified CMBS Institutions and the Note A Indenture Trustee
and the Note B Indenture Trustee, jointly, shall designated one (1) Qualified
CMBS Institutions, and the resulting list of three (3) Qualified CMBS
Institutions shall be submitted to CMI. Within five (5) Business Days after
receipt of such notification of the designation of the three (3) Qualified CMBS
Institutions deemed acceptable by the Repo Purchaser and the Indenture Trustees,
CMI shall advise the Repo Purchaser and the Indenture Trustees, in writing, of
its selection of one (1) of such three (3) designated Qualified CMBS
Institutions (the "Valuation Arbitrator") that will arbitrate the dispute
regarding the valuation of the Sale Collateral, and the valuation of the
respective interests of the Repo Purchaser, the Note A Indenture Trustee and the
Note B Indenture Trustee in such collateral, for the purpose of determining the
parties respective deficiency claims against CMI or any surplus amounts owing to
CMI.
(iii) The Valuation Arbitrator shall promptly conduct such due diligence
and investigations as such Valuation Arbitrator may deem appropriate, and may
consider such factors as such Valuation Arbitrator may deem appropriate
(provided such Valuation Arbitrator shall consider the number and dollar value
of the loans underlying the Combined Collateral and the CBO REIT Stock
Collateral), and any changes over time to such loans, including, without
limitation, the dollar amount and number of "watch list" loans, special
servicing loans, defaulted loans and loan losses underlying the Combined
Collateral and the CBO REIT Stock Collateral, and shall, within thirty (30) days
after the date of designation of the Valuation Arbitrator advise the Repo
Purchaser, the Note A Indenture Trustee, the Note B Indenture Trustee and CMI of
the Valuation Arbitrator's determination of the valuation of the Sale Collateral
as a whole, and the allocations of such valuation of the Sale Collateral among
the respective interests of the Repo Purchaser, the Note A Indenture Trustee and
the Note B Indenture Trustee therein, for the purpose of determining the
parties' respective deficiency claims against CMI or any surplus owing to CMI,
which determination shall be binding on all the parties to this Agreement. In
this regard, the Valuation Arbitrator shall determine the market value of the
Sale Collateral as a whole and shall then ascribe a value to each rated class
and all unrated classes of securities constituting the Combined Collateral and
the CBO REIT Stock Collateral. To the extent that the market value of the Sale
Collateral exceeds the
Total Secured Obligations, CMI shall be paid an amount equal to any
Surplus, as provided for in this Article II, Section (c).
(iv) Each of the Repo Purchaser, the Note A Indenture Trustee, the Note B
Indenture Trustee and CMI shall pay its own costs and fees, if any, in
connection with any arbitration hereunder, with the costs and expenses of the
Valuation Arbitrator to be shared equally by all of said parties.
(c) Surplus. In the event of either (x) any Arm's Length Sale occurring
upon a Disposition Default, as provided for in this Article II, Section (a) or
(y) any Deemed Sale occurring upon a Disposition Default, as provided for in
this Article II, Section (b), in which the proceeds received (in the case of an
Arm's Length Sale) or the market value of the Sale Collateral (in the case of a
Deemed Sale) results in cash or market value, as the case may be, in excess of
the Total Secured Obligations (the amount of such excess being the "Surplus"),
such Surplus shall be paid to CMI by the Repo Purchaser within five (5) Business
Days after the completion of the applicable Arm's Length Sale or Deemed Sale.
ARTICLE III
RATIFICATION AND AGREEMENT
Upon the occurrence of a Disposition Default, and prior to the
implementation of the procedures set forth in Article II above the Repo
Purchaser, the Note A Indenture Trustee, or the Note B Indenture Trustee may
give prompt written notice to the other parties of their election to utilize the
procedures set forth herein for determining the deficiency claims (or surplus
amounts); provided, however, that such valuation procedures shall be utilized
only if all parties hereto provide written consent to the use of such procedures
to all parties to this Agreement within ten (10) Business Days of receipt of
such election. To do so, each party hereto must execute and deliver an
agreement, acknowledgement, consent, confirmation and waiver (the "Consent and
Waiver") as may be reasonably requested jointly by the Repo Purchaser, the Note
A Indenture Trustee and the Note B Indenture Trustee, and CMI and as otherwise
may be necessary or required, to both ratify and affirm their collective
agreement to determine such deficiency claims (or surplus) pursuant to the
terms, conditions and procedures of said Article II and to waive any and all
rights to otherwise determine such deficiency claims of the Repo Purchaser, the
Note A Indenture Trustee and the Note B Indenture Trustee, or any surplus
amounts owing to CMI whether under the applicable provisions of the Uniform
Commercial Code or in any manner other than as set forth in said Article II. Any
party's failure to execute and deliver the Consent and Waiver within ten (10)
Business Days after receipt thereof following the occurrence of a Disposition
Default shall constitute a waiver and termination of the rights and benefits
provided for under this Agreement and the Repo Purchaser, the Note A Indenture
Trustee the Note B Indenture Trustee, and CMI shall be released from any
obligations hereunder and shall thereupon be free to pursue the determination of
their respective deficiency claims against or right to any surplus amounts
without regard to this Agreement. This Agreement and all terms and conditions
hereof are intended to be an optional method of determining and resolving any
disputes among the parties hereto regarding valuation of the Sale Collateral and
the respective interests of the Repo Purchaser, the Note A Indenture Trustee and
the Note B Indenture Trustee therein and the determination of (i) any deficiency
claims that the Repo Purchaser, the Note A Indenture Trustee or the Note B
Indenture Trustee, as the case may be, shall then and thereafter have against
CMI on account of the Repurchase Price and any other amounts owing on account of
the Repo Obligations, the then outstanding obligations evidenced by the Series A
Notes and the then outstanding obligations evidenced by the Series B Notes or
(ii) any surplus owing to CMI upon any disposition of the Combined Collateral
or, to the extent applicable, the CBO REIT Stock Collateral, incident to a
Disposition Default. If any party hereto shall fail to execute the requisite
Consent and Waiver, as set forth above, this Agreement shall be null and void
and shall not be admissible or used for any purpose in any proceeding and shall
not be interpreted as an admission by any party regarding the valuation
methodology set forth herein or the qualification of any Qualified CMBS
Institution.
ARTICLE IV
MISCELLANEOUS
(a) This Agreement contains the entire agreement between with respect to
this subject, and may be modified only by an instrument in writing signed by all
parties hereto.
(b) Any parties failure to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any other time and from time to time thereafter, and such rights shall be
cumulative and not exclusive.
(c) The knowledge by any party of any breach or other non-observance by any
other party of the terms of this Agreement shall not constitute a waiver thereof
or of any obligations to be performed by any other party hereunder.
(d) Section headings used herein are for convenience only, and shall not
affect the meaning of any provision of this Agreement.
(e) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Wherever possible, 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
invalid under applicable 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.
(f) All notices, requests and other communications pursuant to this
Agreement shall be in writing, by letter (delivered by hand or commercial
messenger service or sent by certified or registered mail, return receipt
requested), addressed to each party hereto as follows, or to such other person
and at such other place as each such party may from time to time designate in a
notice given in accordance with the provisions of this Subsection (i):
(i) If to the Repo Purchaser
Xxxxxxx Xxxxx International (Acting through its
Agent, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated)
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Global Asset Lending & Finance
with copies to:
Deutsche Bank AG, New York Branch
c/o Deutsche Banc Alex. Xxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Messrs. Xxx X. Xxxxxxx and Xxxx X.
Xxxxxxxx
and to
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
and to
Xxxxx & Xxxx, L.L.P.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
(ii) If to the Note A Indenture Trustee:
Xxxxx Fargo Bank Minnesota, National Association
Sixth and Marquette; MAC X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
with copies to:
Pillsbury Winthrop LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
(iii) If to the Note B Indenture Trustee:
Xxxxx Fargo Bank Minnesota, National Association
Sixth and Marquette; MAC X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
with copies to:
Pillsbury Winthrop LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
(i) If to Criimi Mae Inc.:
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Azzarra
with copies to:
Criimi Mae Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department
and to
Xxxxxxx, Xxxxxxx & Xxxxxx, LLP
1800 Mercantile Bank and Trust Building
0 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
(g) This Agreement shall be binding upon and inure to the benefit of
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
XXXXXXX XXXXX INTERNATIONAL
By XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED As Agent for
Xxxxxxx Xxxxx International
By____________________________
Name:
Title:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee under the Note A Indenture
dated as of April 17, 2001
By_____________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee under the Note B Indenture
dated as of April 17, 2001
By______________________________
Name:
Title:
CRIIMI MAE INC.
By______________________________
Name:
Title:
EXHIBIT A
QUALIFIED CMBS INSTITUTIONS
Xxxxxx Brothers
Xxxxxx Xxxxxxx
X.X. First Boston
X.X. Xxxxxx Chase
Bear Xxxxxxx