<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 4, 1994.
REGISTRATION NO. 33-50679
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT
NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CRIIMI MAE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
MARYLAND 52-1622022
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852
TELEPHONE NUMBER (301) 468-9200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
WILLIAM B. DOCKSER
CHAIRMAN OF THE BOARD
11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852
(301) 468-9200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
MORRIS F. DEFEO, JR., ESQ. GERALD S. BACKMAN, P.C.
ARENT FOX KINTNER PLOTKIN & KAHN WEIL, GOTSHAL & MANGES
1050 CONNECTICUT AVENUE, N.W. 767 FIFTH AVENUE
WASHINGTON, DC 20036-5339 NEW YORK, NY 10153
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses set forth below, except the SEC registration fee, are
estimated.
<TABLE>
<S> <C>
SEC registration fee............................................ $ 32,344
NASD filing fee................................................. 10,850
NYSE listing fee................................................ 26,250
Printing and engraving expenses................................. 240,000
Accounting fees and expenses.................................... 150,000
Legal fees and expenses......................................... 150,000
Blue Sky fees and expenses (including legal fees)............... 5,000
Miscellaneous................................................... 85,556
--------
Total....................................................... $700,000
========
</TABLE>
- --------
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Maryland law, a corporation formed under Maryland law is permitted to
limit, by provisions in its articles of incorporation, the liability of its
directors and officers to the corporation or its stockholders for money damages
except for (i) actual receipt of an improper benefit or profit in money,
property or services or (ii) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. CRIIMI MAE's Articles
of Incorporation include such a provision which limits such liability to the
fullest extent permitted by Maryland law.
CRIIMI MAE's Bylaws provide that CRIIMI MAE shall indemnify its directors,
officers and adviser, and may indemnify other persons who may be indemnified,
to the fullest extent permitted by Maryland law against any liability and
related expenses (including attorneys' fees) incurred in conjunction with any
proceeding or threatened proceeding in which any of them may be involved, or
threatened to be involved, as a party or otherwise, arising out of or
incidental to CRIIMI MAE's business. CRIIMI MAE has purchased and maintains
liability insurance against liabilities that may be asserted against such
persons in connection with CRIIMI MAE, whether or not indemnification against
such liabilities would be permitted under the provisions of CRIIMI MAE's
Articles of Incorporation.
Section 2-418 of the General Corporation Law of the State of Maryland
provides, together with the Bylaws described above, for the indemnification of
directors, officers and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursements of expenses incurred) arising under the Securities Act.
The Underwriters will also agree to indemnify the directors and officers of
CRIIMI MAE against certain liabilities as set forth in the Underwriting
Agreement (see Exhibit 1).
ITEM 16. EXHIBITS
(a) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
1 --Form of Underwriting Agreement between CRIIMI MAE and the Underwriters.
5 --Opinion of Arent Fox Kintner Plotkin & Kahn regarding validity of
securities being registered.
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
10.1 --Promissory Note from CRIIMI MAE payable to CIBC, Inc.
10.2 --Promissory Note from CRIIMI MAE payable to National Australia Bank
Limited.
10.3 --Promissory Note from CRIIMI MAE payable to Signet Bank/Virginia
10.4 --Revolving Credit Agreement between CRIIMI MAE and Canadian Imperial Bank
of Commerce.
10.5 --Security Agreement between CRIIMI MAE, Canadian Imperial Bank of
Commerce, and Chemical Bank, as agent.
**23.1 --Consent of Arthur Andersen & Co.
23.2 --Consent of Arent Fox Kintner Plotkin & Kahn (included in Exhibit 5).
*24 --Power of Attorney (included on Signature Page).
</TABLE>
- --------
* Previously filed with the initial filing on October 19, 1993 of CRIIMI
MAE's Registration Statement on Form S-3 (File No. 33-50679).
** Previously filed with Amendment No. 1 to CRIMI MAE's Registration
Statement on Form S-3 (File No. 33-50679) filed on February 16, 1994.
ITEM 17. UNDERTAKINGS
The undersigned registrant undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned registrant also hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF ROCKVILLE, STATE OF MARYLAND, ON THE 4TH DAY OF
MARCH, 1994.
Criimi Mae Inc.
By: /s/ William B. Dockser
---------------------------------
William B. Dockser
Chairman of the Board
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William B. Dockser Chairman of the Board March 4, 1994
- ------------------------------------ (Principal Executive
William B. Dockser Officer and Director)
/s/ H. William Willoughby* Director, President and March 4, 1994
- ------------------------------------ Secretary
H. William Willoughby
Director
- ------------------------------------
Garrett G. Carlson
/s/ G. Richard Dunnells* Director March 4, 1994
- ------------------------------------
G. Richard Dunnells
Director
- ------------------------------------
Robert F. Tardio
/s/ Elizabeth O. Flanagan* Chief Financial Officer March 4, 1994
- ------------------------------------ (Principal Financial and
Elizabeth O. Flanagan Accounting Officer)
</TABLE>
- --------
* William B. Dockser, by signing his name hereto does sign this document on
behalf of each of the persons indicated above pursuant to power of attorney
duly executed by such persons and filed with the Securities and Exchange
Commission.
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- ----------
<C> <S> <C>
1 -- Form of Underwriting Agreement between CRIIMI MAE
and the Underwriters
5 -- Opinion of Arent Fox Kintner & Kahn regarding
validity of securities being registered
10.1 -- Promissory Note from CRIIMI MAE payable to CIBC,
Inc.
10.2 -- Promissory Note from CRIIMI MAE payable to
National Australia Bank Limited
10.3 -- Promissory Note from CRIIMI MAE payable to Signet
Bank/Virginia
10.4 -- Revolving Credit Agreement between CRIIMI MAE and
Canadian Imperial Bank of Commerce
10.5 -- Security Agreement between CRIIMI MAE, and
Canadian Imperial Bank of Commerce,
and Chemical Bank, as agent.
**23.1 -- Consent of Arthur Andersen & Co.
23.2 -- Consent of Arent Fox Kintner Plotkin & Kahn
(included in Exhibit 5)
*24 -- Power of Attorney (included in Signature Page.)
</TABLE>
- --------
* Previously filed with the initial filing on October 19, 1993 of CRIIMI
MAE's Registration Statement on Form S-3 (File No. 33-50679).
** Previously filed with Amendment No. 1 to CRIIMI MAE's Registration
Statement on Form S-3 (File No. 33-50679).
<PAGE>
__________ Shares
CRIIMI MAE INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
March __, 1994
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CS FIRST BOSTON CORPORATION
OPPENHEIMER & CO., INC.
ADVEST, INC.
LEGG MASON WOOD WALKER, INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Dear Sirs:
CRIIMI MAE Inc., a Maryland corporation (the "Company") proposes to
issue and sell to the several Underwriters (as defined below) an aggregate of
_______ shares (the "Firm Shares") of its common stock, par value $.01 per share
("Common Stock"). The Company also proposes to issue and sell to the several
Underwriters not more than an additional _______ shares of its Common Stock (the
"Additional Shares"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are herein collectively
called the Shares.
1. Registration Statement and Prospectus. The Company has prepared
-------------------------------------
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on
<PAGE>
Form S-3 including a prospectus relating to the Shares, which has been and may
be amended. The registration statement as amended at the time when it becomes
effective, including (i) information deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the Act and
(ii) the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, is hereinafter referred to as the Registration Statement; and
the prospectus (including the documents incorporated by reference therein) in
the form first used to confirm sales of Shares is hereinafter referred to as the
"Prospectus".
2. Agreements to Sell and Purchase. Upon the basis of the
-------------------------------
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company hereby agrees to issue and sell the Firm
Shares to the several Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at a price per share of
$__________ (the "Purchase Price"), the respective number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the Underwriters the Additional Shares and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to ______
Additional Shares from the Company at the Purchase Price. Additional Shares may
be purchased solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. The Underwriters may exercise
their right to purchase any Additional Shares by giving written notice thereof
to the Company at any time within 30 days after the date of this Agreement. The
Representatives shall give such notice on behalf of the Underwriters and the
notice shall specify the aggregate number of Additional Shares to be purchased
and the date for payment and delivery thereof. The date specified in the notice
shall be a business day (i) no earlier than the Closing Date (as hereinafter
defined), (ii) no later than ten business days after such notice has been given
and (iii) no earlier than two business days after such notice has been given.
If any Additional Shares are to be purchased, each Underwriter, severally and
not jointly, agrees to purchase from the Company the number of Additional
2
<PAGE>
Shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) which bears the same proportion to the total
number of Additional Shares to be purchased from the Company as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I bears
to the total number of Firm Shares.
The Company hereby agrees, and the Company shall, concurrently with
the execution of this Agreement, deliver an agreement executed by each of the
principal executive officers of the Company listed on Annex 1 pursuant to which
each such person agrees, not to offer, sell, contract to sell, grant any option
to purchase, or otherwise dispose of any common stock of the Company or any
securities convertible into or exercisable or exchangeable for such common
stock for a period of 180 days after the date of the Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plan and (ii) the
Company may issue shares of its common stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof.
3. Terms of Public Offering. The Company is advised by you that the
------------------------
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
--------------------
payment for the Firm Shares shall be made at 10:00 A.M., New York City time, on
the fifth business day (the "Closing Date") following the date of the initial
public offering, at such place as you shall designate. The Closing Date and the
location of delivery of and the form of payment for the Firm Shares may be
varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as the
Representatives shall designate at 10:00 A.M., New York City time, on the date
specified in the exercise notice given by you pursuant to Section 2 (the "Option
Closing Date"). The Option Closing Date and the location of delivery of and the
form of payment
3
<PAGE>
for the Additional Shares may be varied by agreement between the Representatives
and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or the Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or the Option Closing Date, as the case may be. Certificates
in definitive form evidencing the Shares shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, with any transfer
taxes thereon duly paid by the Company, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by
certified or official bank checks payable in New York Clearing House funds to
the order of the Company.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, and (iv) of the
happening of any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain
4
<PAGE>
the withdrawal or lifting of such order at the earliest possible time.
(c) To furnish to you, without charge, two signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which the Prospectus, as then amended or supplemented,
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus which will correct such statement or
omission or effect such compliance.
5
<PAGE>
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification, except that in no
event shall the Company be obligated in connection therewith to qualify as
a foreign corporation, or to execute a general consent to service of
process.
(h) To mail and make generally available to its stockholders as soon
as reasonably practicable an earnings statement covering a period of at
least twelve months after the effective date of the Registration Statement
(but in no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal
year to the record holders of its Common Stock a financial report of the
Company and its subsidiaries on a consolidated basis (and a similar
financial report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and for
such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by independent certified public
accountants, and (ii) to mail and make generally available as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all uncon-
solidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such
quarterly period,
6
<PAGE>
together with comparable information for the corresponding periods of the
preceding year.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed
with the Commission and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes (other than, except as
provided in clauses (iii) and (iv) of this paragraph (k), the fees, costs
and expenses of counsel for the Underwriters) incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), (ii) the printing
and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e), (iii) the printing and
delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Shares (including in each case any reasonable disbursements of counsel for
the Underwriters relating to such printing and delivery), (iv) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states (including in each case
the reasonable fees and disbursements of counsel for the Underwriters
relating to such registration or qualification and memoranda relating
thereto), (v) filings and clearance with the National Association of
Securities Dealers, Inc. in connection with the offering, (vi) the listing
of the Shares on the New York Stock Exchange (the "NYSE"), (vii) furnishing
such copies of the Registration Statement, the Prospectus and all amend-
ments and supplements thereto as may be reasonably requested for use in
connection with the offering or sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold and (viii) the performance by the
Company of its other obligations under the Agreement.
7
<PAGE>
(l) To use its best efforts to cause the Shares to be listed on the
NYSE and maintain the listing of the Common Stock on the NYSE for a period
of five years after the effective date of the Registration Statement.
(m) To apply the proceeds from the sale of the Shares as set forth
under "Use of Proceeds" in the Prospectus.
(n) To use its best efforts to continue to meet the requirements to
qualify as a real estate investment trust under the Internal Revenue Code
of 1986, as amended (the "Code").
(o) To use its best efforts to (i) do and perform all things required
or necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or the Option Closing Date, as the case may be,
and (ii) satisfy all conditions precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Underwriter that:
(a) (i) on the effective date and at all times subsequent thereto to
and including the Closing Date, the Registration Statement and any
amendments thereto complied or will comply in all material respects with
the provisions of the Act and did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; (ii) on the date the Prospectus is first used and at all times
subsequent thereto to and including the Closing Date, the Prospectus and
any supplements thereto did not or will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements or
omissions in the Registration Statement or the Prospectus (or any
supplement or amendment to them) based upon information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein;
8
<PAGE>
and (iii) the documents incorporated by reference into the Prospectus
pursuant to Item 12 of Form S-3 under the Act, at the time they were filed
with the Commission or as subsequently amended, complied in all material
respects with the requirements of the Securities Exchange Act of 1934 (the
"1934 Act") and the rules and regulations of the Commission thereunder (the
"1934 Act Regulations"), and, when read together with the other information
in the Prospectus, at the time the Registration Statement becomes effective
and on the Closing Date or Option Closing Date, as the case may be, will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(b) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the provisions of the Act.
(c) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect").
(d) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and, except as set forth in the Prospectus,
are owned by the Company. The capital stock of each such subsidiary owned
by the Company is owned by it free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature.
9
<PAGE>
(e) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-
assessable and not subject to any preemptive or similar rights; and the
Shares to be issued and sold by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(f) The authorized capital stock of the Company, including the Common
Stock, conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus. The Company has the
authorized, issued and outstanding capitalization as set forth in the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(g) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note, indenture or any other evidence of indebtedness or in any
other agreement or instrument material to the conduct of the business of
the Company and its subsidiaries, taken as a whole, to which the Company or
any of its Subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound.
(h) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the Act, the 1934 Act and the securities or Blue Sky laws
of the various states) and will not conflict with or violate, or constitute
a breach of any of the terms or provisions of, or a default under, (i) the
charter or by-laws of the Company or any of its subsidiaries, (ii) any
bond, debenture, note, indenture or any other evidence of indebtedness or
any other agreement or instrument material to the conduct of the business
of
10
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the Company and its subsidiaries, taken as a whole, to which it or any of
its subsidiaries is a party or by which it or any of its subsidiaries or
their respective property is bound, or (iii) any laws, administrative
regulations or rulings or court decrees applicable to the Company, any of
its subsidiaries or their respective property, except, in the case of
clauses (ii) and (iii) of this paragraph (h), where such conflicts,
breaches, defaults or violations would not result in a Material Adverse
Effect.
(i) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any of their respective
property is the subject, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated. No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(j) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in
each case would result in any Material Adverse Effect.
(k) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business; the Company and each
of its subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in
11
<PAGE>
any other material impairment of the rights of the holder of any such
permit; and, except as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any of its
subsidiaries.
(l) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it uses its best efforts to identify and evaluate
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities would
not, singly or in the aggregate, have a Material Adverse Effect.
(m) Except as otherwise set forth in the Prospectus or such as would
not result in a Material Adverse Effect, the Company and each of its
subsidiaries has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions except liens for taxes not yet due
and payable and other statutory liens, to all property and assets described
in the Registration Statement as being owned by it. All leases to which
the Company or any of its subsidiaries is a party are valid and binding and
no default has occurred or is continuing thereunder, which would result in
any Material Adverse Effect and the Company and its subsidiaries enjoy
peaceful and undisturbed possession under all such leases to which any of
them is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company or such subsidiary.
(n) The Company and each of its subsidiaries maintains reasonably
adequate insurance.
(o) Arthur Andersen & Co. currently are independent public
accountants with respect to the Company as required by the Act. Arthur
Andersen & Co. were independent public accountants with respect to the
12
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Company as required by the Act for the 1991, 1992 and 1993 fiscal years of
the Company.
(p) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial position
of the Company and its subsidiaries on the basis stated in the Registra-
tion Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) is, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the
books and records of the Company.
(q) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(r) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the
Company.
(s) Since November 28, 1989, the Company's form of organization,
share ownership and method of operation have satisfied, and the Company
intends to continue to satisfy, for the taxable year ending December 31,
1994, the requirements of the Code for qualification of the Company as a
"real estate investment trust"; and the Company's management believes that
the nature and value of the Company's assets and the anticipated income of
the Company for the taxable year ending December 31, 1994 will enable the
Company to qualify as a real estate investment trust for that taxable year
(subject to the continuing qualification of the Company's share ownership
and the Company's filing of its federal income tax return for that taxable
year and electing to be treated as a real estate investment trust).
13
<PAGE>
(t) Annex 3 hereto contains a complete and accurate list, as of the
date hereof, of all material agreements and instruments of the Company.
7. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the 1934 Act, from
and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or sup-
plemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein; provided,
--------
however, that as to any Preliminary Prospectus this indemnity agreement shall
- -------
not inure to the benefit of any Underwriter or any person controlling such
Underwriter on account of any loss, claim, damage, liability, judgment or action
arising from the sale of Shares to any person by that Underwriter if that
Underwriter failed to deliver a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the Act, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages, liabilities or judgments.
(b) In case any action shall be brought against any Underwriter or
any person controlling such Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company,
such Underwriter shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reason-
ably satisfactory to such indemnified party, and payment of all fees and
expenses of such counsel. Any Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel
14
<PAGE>
shall be at the expense of such Underwriter or such controlling person unless
(i) the employment of such counsel shall have been specifically authorized in
writing by the Company, (ii) the Company shall have failed to assume the defense
and employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company and such Underwriter or such controlling person shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the Company
(in which case the Company shall not have the right to assume the defense of
such action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation and that all such fees and expenses shall be
reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such controlling
person from and against any loss or liability by reason of such settlement,
subject to Section 7(a). Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 business days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
15
<PAGE>
liability on claims that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the 1934 Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter but only
with reference to information relating to such Underwriter furnished in writing
by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company based on the Registration
Statement, the Prospectus or any preliminary prospectus and in respect of which
indemnity may be sought against any Underwriter, the Underwriter shall have the
rights and duties given to the Company (except that if the Company shall have
assumed the defense thereof, such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officers and any person
controlling the Company shall have the rights and duties given to the
Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Under-
16
<PAGE>
writers shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company, and the
total underwriting discounts and commissions received by the Underwriters, bear
to the total price to the public of the Shares, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company
and the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
17
<PAGE>
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M., New York City time, on the date of this Agreement or at
such later date and time as you may approve in writing, and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending before or contemplated by the
Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or
in the long-term debt of the Company from that set forth in the
Registration Statement and Prospectus, (iii) the Company and its
subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole,
other than those reflected in the Registration Statement and the Prospectus
and (iv) on the Closing Date you shall have received a certificate dated
the Closing Date, signed by H. William Willoughby and Elizabeth Flanagan,
in their capacities as the President and Chief Financial Officer of the
Company, respectively, confirming the matters set forth in paragraphs (a),
(b) and (c) of this Section 8.
(d) You shall have received on the Closing Date a certificate, dated
the Closing Date, signed by H. William Willoughby and Elizabeth Flanagan,
in their capacities as the President and Chief Financial Officer of the
Company, respectively, to the effect that, to the best of their knowledge,
after due inquiry:
18
<PAGE>
(i) neither the Company nor any of its subsidiaries has
violated any Environmental Laws, nor any federal or state law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions
of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which in each case might result in
any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries,
taken as a whole;
(ii) the Company and each of its subsidiaries has such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits"), including, without limitation,
under any Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business in the
manner described in the Prospectus, except where the failure to have
such permits would not have a Material Adverse Effect; the Company and
each of its subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject in
each case to such qualification as may be set forth in the Prospectus;
and, except as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any of
its subsidiaries; and
(iii) Annex 3 hereto contains a complete and accurate list, as
of such date, of all material agreements and instruments of the
Company.
(e) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and to counsel for the Underwriters), dated
the Closing Date, of Arent Fox Kintner Plotkin & Kahn, counsel for the
Company to the effect that:
(i) the Company and each of the subsidiaries identified
on Annex 2 hereto (the
19
<PAGE>
"Subsidiaries) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority required to
carry on its business as described in the Prospectus and to own, lease
and operate its properties as described in the Prospectus;
(ii) the Company and each of the Subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction identified opposite the name of
such company on Annex 2 hereto in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect;
(iii) all of the outstanding shares of capital stock of
each of the Subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable, and, to the knowledge of
such counsel, except as set forth in the Prospectus, are owned by the
Company free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature;
(iv) all the outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights pursuant to the
Company's charter or by-laws or pursuant to any statutory rights or,
to the knowledge of such counsel, otherwise;
(v) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when issued and delivered to
the Underwriters against payment therefor as provided by this
Agreement, will have been validly issued and will be fully paid and
non-assessable, and the issuance of such Shares is not subject to any
preemptive or similar rights pursuant to the Company's charter or by-
laws or pursuant to any statutory rights or, to the knowledge of such
counsel, otherwise;
20
<PAGE>
(vi) this Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of
the Company enforceable in accordance with its terms (except as rights
to indemnity and contribution hereunder may be limited by applicable
law);
(vii) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained in the Prospectus;
(viii) such counsel has been advised by the Commission
that the Registration Statement has become effective under the Act,
and, to such counsel's knowledge, no stop order suspending its
effectiveness has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission;
(ix) the statements under the captions "Taxation" in the
Prospectus and Item 15 of Part II of the Registration Statement
insofar as such statements constitute a summary of legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings;
(x) to such counsel's knowledge, neither the Company nor
any of the Subsidiaries is in violation of its respective charter or
by-laws or in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, notes,
indenture or any other evidence of indebtedness or in any other
agreement or instrument identified on Annex 3 hereto, to which the
Company or any of its subsidiaries is a party or by which it or any of
its subsidiaries or their respective property is bound, except for
such violations or defaults which would not result in a Material
Adverse Effect;
(xi) the execution, delivery and performance of this
Agreement by the Company, and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regula-
21
<PAGE>
tory body, administrative agency or other governmental body of the
United States of America or the State of Maryland (except as such may
be required under the Act, the 1934 Act or other securities or Blue
Sky laws) and will not violate or constitute a breach of any of the
terms or provisions of, or a default under, (A) the charter or by-laws
of the Company or any of the Subsidiaries (B) any agreement,
indenture or other instrument identified on Annex 3 hereto to which
the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or their respective properties are
bound, or, (C) any United States or State of Maryland laws, or any
administrative regulations or rulings or court decrees known to such
counsel and applicable to the Company or any of the Subsidiaries or
their respective properties, except, in the case of clauses (B) and
(C) of this paragraph (xi), for such violations, breaches or defaults
which would not result in a Material Adverse Effect;
(xii) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of the Subsidiaries is a party or to which any of their respective
property is subject which are required to be described in the
Registration Statement or the Prospectus and are not so described, or
any contracts or other documents which are required to be described in
the Registration Statement or the Prospectus or are required to be
filed as an exhibit to the Registration Statement which are not
described or filed as required;
(xiii) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(xiv) to such counsel's knowledge, no holder of any
security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company;
(xv) (1) as of the effective date of the Registration
Statement, the date the Prospectus is first used and at all times
subsequent thereto to
22
<PAGE>
and including the Closing Date, the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for
financial statements, including any report of auditors and other
financial or statistical data and information contained or
incorporated by reference therein, as to which no opinion need be
expressed) appeared on their faces to have complied or comply as to
form in all material respects with the Act;
(xvi) each document filed pursuant to the 1934 Act (other
than the financial statements, including any report of auditors and
other financial or statistical data and information contained or
incorporated by reference therein, included therein, as to which no
opinion need be rendered) and incorporated by reference in the
Prospectus appeared on their faces to have complied when so filed as
to form in all material respects with the 1934 Act and the 1934 Act
Regulations; and
(xvii) based upon review of such documents, certificates
and records as counsel has deemed necessary to express its opinion,
upon its discussions with management of the Company, independent
accountants for the Company and with certain shareholders of the
Company and based upon the facts set forth in the Registration
Statement, certain assumptions and certain representations made to it
by the Company's management and by certain of its shareholders,
counsel is of the view that, as of the date of its opinion the
Company's form of organization and its share ownership is such as to
enable the Company to meet the requirements of the Code for
qualifications as a real estate investment trust thereunder and that
the Company's income, assets and method of operations have allowed it
to qualify as a real estate investment trust for its taxable year
ended December 31, 1989 and all years thereafter, and its currently
contemplated future assets, income and method of operations should put
it in a position to qualify to be treated as a real estate investment
trust for the calendar year 1994.
Such opinion shall additionally state that such counsel have
participated in conferences with directors,
23
<PAGE>
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the
Underwriters and representatives of counsel for the Underwriters, at which
conferences the contents of the Registration Statement and the Prospectus were
discussed, and, although such counsel have not undertaken to investigate or
verify independently, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, no facts have come to the attention of such counsel
which lead them to believe that either the Registration Statement, on the
effective date thereof, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading or that the Prospectus, on
the date thereof or on the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading, it being understood that such counsel need express no view with
respect to the financial statements, including the auditors' reports thereon, or
other financial or statistical data included or incorporated by reference in the
Registration Statement or Prospectus.
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Weil, Gotshal & Manges, counsel for the Underwriters, as
to the matters referred to in clauses (v), (vi), and (viii), and in the
last paragraph of paragraph (e) of this Section 8. In giving such opinion
with respect to the matters covered by clauses (v) and (vi) such counsel
may rely on local counsel. In giving such opinion with respect to the
matters covered by the last paragraph of paragraph (e) of this Section 8
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
The opinions of Arent Fox Kintner Plotkin & Kahn and Weil, Gotshal &
Manges described in paragraphs (e) and (f) above shall be rendered to you at
the request of the Company and shall so state therein.
24
<PAGE>
(g) You shall have received a letter on and as of the Closing Date,
in form and substance satisfactory to you, from Arthur Andersen & Co. and
Coopers & Lybrand, independent public accountants, with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in the form
and substance of the letter delivered to you by Arthur Andersen & Co. and
Coopers & Lybrand on the date of this Agreement.
(h) The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to the
Closing Date.
(i) The Common Stock currently outstanding is listed on the NYSE, and
the Shares are duly authorized for listing on the NYSE, subject to official
notice of issuance.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to the Representatives on the Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
9. Effective Date of Agreement and Termination. This Agreement shall
-------------------------------------------
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company or any of the Subsidiaries or the
earnings, affairs, or business prospects of the Company or any of the
Subsidiaries, whether or not arising in the ordinary course of business, which
would, in your judgment, make it impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus, (ii) any outbreak or
25
<PAGE>
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the NYSE, the American Stock Exchange or
the NASDAQ National Market System or limitation on prices for securities on any
such exchange or National Market System, (iv) the enactment, publication, decree
or other promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business or
operations of the Company or any Subsidiary, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
--------
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written
26
<PAGE>
consent of such Underwriter. If on the Closing Date or on the Option Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Firm Shares, or Additional Shares, as the case may be, and the
aggregate number of Firm Shares or Additional Shares, as the case may be, with
respect to which such default occurs is more than one-tenth of the aggregate
number of Shares to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter and the Company;
provided, however, that if such default occurs with respect to the Additional
- -------- -------
Shares on the Option Closing Date, this Agreement will not terminate as to the
Firm Shares. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date or the Option Closing Date, as the case may be, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
10. Information Supplied by Underwriters. The statements set forth
------------------------------------
in the last paragraph on the front cover page and under the heading
"Underwriting" in any preliminary prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by the Underwriters to the Company for the purposes of Sections 6(a)
and 7 hereof. The Underwriters confirm that such statements (to such extent)
are correct in all material respects.
11. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows:
(a) if to the Company, to CRIIMI MAE Inc., 11200 Rockville Pike,
Rockville, Maryland 20852, Attention: Jay R. Cohen, with a copy to the Office
of the General Counsel, and (b) if to any Underwriter or to you, to you c/o
Donaldson, Lufkin & Jenrette Securities Corporation, 140 Broadway, New York,
New York 10005, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
27
<PAGE>
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Shares, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter or by or on
behalf of the Company, the officers or directors of the Company or any
controlling person of the Company, (ii) acceptance of the Shares and payment for
them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement (excluding any termination
pursuant to clauses (ii), (iii), (iv), (v) or (vi) of Section 9), the Company
agrees to reimburse the several Underwriters for all out-of-pocket expenses
(including the reasonable fees and disbursements of counsel) reasonably incurred
by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons and indemnified parties referred to herein
and their respective successors and assigns, all as and to the extent provided
in this Agreement, and no other person shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" shall not
include a purchaser of any of the Shares from any of the several Underwriters
merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
28
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
CRIIMI MAE Inc.
By:
---------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CS FIRST BOSTON CORPORATION
OPPENHEIMER & CO., INC.
ADVEST, INC.
LEGG MASON WOOD WALKER, INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:_________________________
Name:
Title:
29
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation
CS First Boston Corporation
Oppenheimer & Co., Inc.
Advest, Inc.
Legg Mason Wood Walker, Incorporated
<S> <C>
--------------
Total
==============
</TABLE>
30
<PAGE>
ANNEX 1
REQUIRED STOCKHOLDER LOCK-UPS
-----------------------------
William B. Dockser
H. William Willoughby
Frederick J. Burchill
Jay R. Cohen
Elizabeth O. Flanagan
31
<PAGE>
ANNEX 2
SUBSIDIARIES
------------
CRI Liquidating REIT, Inc.
CRIIMI, Inc.
32
<PAGE>
ANNEX 3
MATERIAL AGREEMENTS, BONDS, NOTES OR INDENTURES
-----------------------------------------------
1) Amended and Restated Credit Agreement dated December 22, 1992 in the amount
of $100,000,000 among CRI Insured Mortgage Association, Inc. ("CRIIMI MAE"),
Signet Bank/VA and certain listed banks.
2) Amended and Restated Collateral Pledge Agreement dated December 31, 1991
and restated as of December 29, 1992 between CRIIMI MAE, Signet Bank/VA, and
certain listed banks.
3) First Amendment to Amended and Restated Credit Agreement dated April 29,
1993 between CRIIMI MAE, Signet Bank/VA and Westpac Banking Corporation.
4) Second Amendment to Amended and Restated Credit Agreement dated June 30,
1993 among CRIIMI MAE, Signet Bank/VA and Westpac Banking Corporation.
5) Third Amendment to Amended and Restated Credit Agreement dated September
14, 1993, among CRIIMI MAE, Signet Bank/VA and Westpac Banking Corporation.
6) Committed Master Repurchase Agreement dated April 30, 1993, between CRIIMI
MAE and Nomura Securities International, Inc.
7) Committed Master Repurchase Agreement Governing Purchases and Sales of
Participation Certificates dated April 30, 1993 between CRIIMI MAE and Nomura
Capital Asset Corp.
8) Committed Master Repurchase Agreement Governing Purchases and Sales of
Participation Certificates dated November 30, 1993, between CRIIMI MAE and
Nomura Capital Asset Corp.
9) Committed Master Repurchase Agreement dated November 30, 1993 between
CRIIMI MAE and Nomura Securities International, Inc.
10) CRI Insured Mortgage Association, Inc. Advisory Agreement dated November
21, 1989 between CRIIMI MAE and CRI Insured Mortgage Association Advisor Limited
Partnership.
33
<PAGE>
11) First Amendment to CRI Insured Mortgage Association, Inc. Advisory
Agreement dated June 1, 1993, between CRIIMI MAE and CRI Insured Mortgage
Association Advisor Limited Partnership.
12) Revolving Credit Agreement dated February 28, 1994 among CRIIMI MAE,
Canadian Imperial Bank of Commerce, CIBC Inc., National Australia Bank, Limited,
Signet Bank/VA and Chemical Bank, as Collateral Agent.
13) Security Agreement dated February 28, 1994 among CRIIMI MAE, Canadian
Imperial Bank of Commerce, CIBC Inc., National Australia Bank, Limited, Signet
Bank/VA and Chemical Bank, as Collateral Agent.
- ----------
34
<PAGE>
March 3, 1994
The Board of Directors
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland
RE: REGISTRATION STATEMENT ON FORM S-3 (REGISTRATION NO. 33-50679)
Gentlemen:
We have acted as counsel to CRIIMI MAE Inc., a Maryland corporation (the
"Company"), with respect to the Company's Registration Statement on Form S-3,
Registration No. 33-50679 (the "Registration Statement"), filed with the
Securities and Exchange Commission, in connection with the registration under
the Securities Act of 1933, as amended, of 6,900,000 shares of the Company's
Common Stock, par value $.01 per share (the "Shares").
As counsel to the Company, we have examined the Company's Articles of
Incorporation and such Company records, certificates and other documents and
such questions of law as we considered necessary or appropriate for the purpose
of this opinion letter.
When issued and sold in accordance with the terms of the Underwriting
Agreement among the Company and the Underwriters (as defined in the
Registration Statement), the Shares will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement.
Very truly yours,
Arent Fox Kintner Plotkin & Kahn
<PAGE>
PROMISSORY NOTE
$50,000,000 February 28, 1994
New York, New York
FOR VALUE RECEIVED, CRIIMI MAE Inc., a Maryland corporation (the
"Company"), hereby promises to pay to CIBC Inc. (the "Lender"), for account of
its respective Applicable Lending Offices provided for by the Credit Agreement
referred to below, at the office of Canadian Imperial Bank of Commerce, New
York Agency, 425 Lexington Avenue, New York, NY 10017, the principal sum of
Fifty Million Dollars (or such lesser amount as shall equal the aggregate
unpaid principal amount of the Loans made by the Lender to the Company under
the Credit Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount of each such Loan, at such office, in like money and funds, for the
period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate, and duration of Interest Period
(if applicable) of each Loan made by the Lender to the Company, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof.
This Note is one of the Notes referred to in the Revolving Credit
Agreement (as amended, modified and supplemented and in effect from time to
time, the "Credit Agreement") dated as of February 28, 1994, between the
Company, the Lenders named therein and Canadian Imperial Bank of Commerce, New
York Agency, as Administrative Agent, and evidences Loans made by the Lender
thereunder. Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement.
<PAGE>
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the law
of the State of New York.
CRIIMA MAE Inc.
By [Signature appears here]
--------------------------------
Title: Executive Vice President
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted under the
within-described Credit Agreement to the Company, on the dates, in the
principal amounts, of the Types, bearing interest at the rates, and having
Interest Periods (if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of principal set
forth below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ------ ---- -------- -------- --------- ------ --------
<PAGE>
PROMISSORY NOTE
$40,000,000 February 28, 1994
New York, New York
FOR VALUE RECEIVED, CRIIMI MAE Inc., a Maryland corporation (the
"Company"), hereby promises to pay to National Australia Bank Limited, New
York Branch (the "Lender"), for account of its respective Applicable Lending
Offices provided for by the Credit Agreement referred to below, at the office
of Canadian Imperial Bank of Commerce, New York Agency, 425 Lexington Avenue,
New York, NY 10017, the principal sum of Forty Million Dollars (or such
lesser amount as shall equal the aggregate unpaid principal amount of the
Loans made by the Lender to the Company under the Credit Agreement), in lawful
money of the United States of America and in immediately available funds, on
the dates and in the principal amounts provided in the Credit Agreement, and
to pay interest on the unpaid principal amount of each such Loan, at such
office, in like money and funds, for the period commencing on the date of such
Loan until such Loan shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
The date, amount, Type, interest rate, and duration of Interest Period
(if applicable) of each Loan made by the Lender to the Company, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof.
This Note is one of the Notes referred to in the Revolving Credit
Agreement (as amended, modified and supplemented and in effect from time to
time, the "Credit Agreement") dated as of February 28, 1994, between the
Company, the Lenders named therein and Canadian Imperial Bank of Commerce, New
York Agency, as Administrative Agent, and evidences Loans made by the Lender
thereunder. Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement.
<PAGE>
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the law
of the State of New York.
CRIMMI MAE Inc.
By_____________________
Title: President
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted under the
within-described Credit Agreement to the Company, on the dates, in the
principal amounts, of the Types, bearing interest at the rates, and having
Interest Periods (if applicable) of the durations set forth below, subject
to the payments, Continuations, Conversions and prepayments of principal set
forth below:
<TABLE>
<CAPTION>
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ------ ---- -------- -------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
-3-
<PAGE>
PROMISSORY NOTE
$20,000,000 February 28, 1994
New York, New York
FOR VALUE RECEIVED, CRIIMI MAE Inc., a Maryland corporation (the
"Company"), hereby promises to pay to Signet Bank/Virginia (the "Lender"), for
account of its respective Applicable Lending Offices provided for by the
Credit Agreement referred to below, at the office of Canadian Imperial Bank of
Commerce, New York Agency, 425 Lexington Avenue, New York, NY 10017, the
principal sum of Twenty Million Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Loans made by the Lender to the
Company under the Credit Agreement), in lawful money of the United States of
America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds,
for the period commencing on the date of such Loan until such Loan shall be
paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate, and duration of Interest Period
(if applicable) of each Loan made by the Lender to the Company, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof.
This Note is one of the Notes referred to in the Revolving Credit
Agreement (as amended, modified and supplemented and in effect from time to
time, the "Credit Agreement") dated as of February 28, 1994, between the
Company, the Lenders named therein and Canadian Imperial Bank of Commerce, New
York Agency, as Administrative Agent, and evidences Loans made by the Lender
thereunder. Capitalized terms used in the Note have the respective meanings
assigned to them in the Credit Agreement.
<PAGE>
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the law
of the State of New York.
CRIIMI MAE Inc.
By XXXXXXXXXXXX
-------------------------
Title: President
-2-
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted under the
within-described Credit Agreement to the Company, on the dates, in the
principal amounts, of the Types, bearing interest at the rates, and having
Interest Periods (if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of principal set
forth below:
<TABLE>
<CAPTION>
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ------ ---- -------- --------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
-3-
<PAGE>
- --------------------------------------------------------------------------------
CRIIMI MAE INC.
-----------------------------------
REVOLVING CREDIT AGREEMENT
Dated as of February 28, 1994
-----------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
as Administrative Agent
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached
but is inserted for convenience only.
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 1. Definitions and Accounting Matters............................ 1
1.01 Certain Defined Terms.......................................... 1
1.02 Accounting Terms and Determinations and Other Definitional
Provisions.................................................... 17
1.03 Types of Loans................................................. 18
Section 2. Commitments of Loans.......................................... 18
2.01 Loans.......................................................... 18
2.02 Borrowings..................................................... 19
2.03 Changes of Commitments......................................... 19
2.04 Fees........................................................... 19
2.05 Lending Offices................................................ 20
2.06 Several Obligations; Remedies Independent...................... 20
2.07 Notes.......................................................... 20
2.08 Prepayments and Conversions or Continuations of Loans.......... 21
2.09 Extension of Credit Termination Date........................... 21
Section 3. Payments of Principal and Interest............................ 22
3.01 Repayment of Loans............................................. 22
3.02 Interest....................................................... 22
Section 4. Payments; Pro Rata Treatment; Computations; Etc............... 23
4.01 Payments....................................................... 23
4.02 Pro Rata Treatment............................................. 24
4.03 Computations................................................... 25
4.04 Minimum Amounts................................................ 25
4.05 Certain Notices................................................ 25
4.06 Non-Receipt of Funds by the Administrative Agent............... 26
4.07 Sharing of Payments, Etc....................................... 26
Section 5. Yield Protection, Etc......................................... 28
5.01 Additional Costs............................................... 28
5.02 Limitation on Types of Loans................................... 30
5.03 Illegality..................................................... 30
5.04 Treatment of Affected Loans.................................... 30
5.05 Compensation................................................... 31
5.06 Taxes.......................................................... 32
5.07 Additional Action in Certain Events............................ 34
Section 6. Conditions Precedent.......................................... 35
6.01 Initial Loan................................................... 35
6.02 Initial and Subsequent Extensions of Credit.................... 37
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 7. Representations and Warranties................................ 37
7.01 Corporate Existence............................................ 37
7.02 Financial Condition............................................ 37
7.03 Litigation..................................................... 38
7.04 No Breach...................................................... 38
7.05 Action......................................................... 38
7.06 Approvals...................................................... 39
7.07 Use of Loans................................................... 39
7.08 ERISA.......................................................... 39
7.09 Tax Returns.................................................... 39
7.10 Investment Company Act......................................... 39
7.11 Public Utility Holding Company Act............................. 39
7.12 Indebtedness................................................... 40
7.13 Environmental Matters.......................................... 40
7.14 Subsidiaries, Etc.............................................. 40
7.15 Accuracy of Information........................................ 40
7.16 Accuracy of Representations and Warranties..................... 40
7.17 Full Disclosure................................................ 41
7.18 Pari Passu..................................................... 41
7.19 Title to Assets................................................ 41
7.20 REIT Advisor................................................... 41
7.21 Compliance With Applicable Laws, Etc........................... 41
Section 8. Covenants of the Company...................................... 41
8.01 Financial Statements; Other Information........................ 41
8.02 Litigation..................................................... 44
8.03 Existence, Etc................................................. 44
8.04 Insurance...................................................... 45
8.05 Prohibition of Fundamental Changes............................. 45
8.06 Certain Notices................................................ 46
8.07 Limitation on Liens............................................ 46
8.08 Limitation on Indebtedness..................................... 47
8.09 Borrowing Base................................................. 47
8.10 Minimum Consolidated Shareholders' Equity...................... 47
8.11 Maximum Total Liabilities...................................... 47
8.12 Fixed Charge Coverage.......................................... 47
8.13 Interest Rate Hedge Parameters................................. 47
8.14 Investment Policy.............................................. 48
8.15 Environmental Matters.......................................... 48
8.16 Indemnification................................................ 48
8.17 Lines of Business.............................................. 49
8.18 Transactions with Affiliates................................... 49
8.19 Use of Proceeds; Unencumbered Assets........................... 50
8.20 Mortgage Investments........................................... 50
8.21 Servicers and Mortgagees of Record............................. 50
8.22 Books and Records.............................................. 50
8.23 Further Assurance.............................................. 50
Section 9. Events of Default............................................. 51
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 10. The Administrative Agent..................................... 54
10.01 Appointment, Powers and Immunities............................ 54
10.02 Reliance by Administrative Agent.............................. 55
10.03 Defaults...................................................... 55
10.04 Rights as a Lender............................................ 56
10.05 Indemnification............................................... 56
10.06 Non-Reliance on Administrative Agent and Other Lenders........ 57
10.07 Failure to Act................................................ 57
10.08 Resignation or Removal of Administrative Agent................ 57
Section 11. Miscellaneous................................................ 58
11.01 Waiver........................................................ 58
11.02 Notices....................................................... 58
11.03 Expenses, Etc................................................. 59
11.04 Amendments, Etc............................................... 60
11.05 Successors and Assigns........................................ 60
11.06 Assignments and Participations................................ 60
11.07 Survival...................................................... 62
11.08 Captions...................................................... 62
11.09 Counterparts.................................................. 62
11.10 Governing Law; Submission to Jurisdiction..................... 62
11.11 Waiver of Jury Trial.......................................... 63
11.12 Entire Agreement.............................................. 63
</TABLE>
<TABLE>
<S> <C>
SCHEDULE I - Commitments, Applicable Lending Offices and
Addresses for Notices
SCHEDULE II - Existing Interest Rate Hedge Agreements
SCHEDULE III - Subsidiaries
EXHIBIT A - Form of Note
EXHIBIT B - Form of Notice of Borrowing
EXHIBIT C - Form of Notice of Conversion or Continuation
EXHIBIT D - Form of Officer's Certificate
EXHIBIT E - Form of Opinion of Counsel to the Company
EXHIBIT F - Collateral Valuation Certificate
ANNEX 1 - Eligible Participation Schedule
ANNEX 2 - Mortgage-Backed Security Schedule
ANNEX 3 - Deposited Funds Schedule
EXHIBIT G - Unencumbered Asset Valuation Certificate
EXHIBIT H - Security Agreement
EXHIBIT I - Form of Lender Assignment Agreement
</TABLE>
-iii-
<PAGE>
REVOLVING CREDIT AGREEMENT dated as of February 28, 1994 among: CRIIMI
MAE INC., a corporation duly organized and validly existing under the laws of
the State of Maryland (together with its successors and permitted assigns, the
"Company"); each of the financial institutions that is a signatory hereto
(together with its successors and permitted assigns, individually, a "Lender"
and, collectively, the "Lenders"); and CANADIAN IMPERIAL BANK OF COMMERCE, NEW
YORK AGENCY, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
The Company has requested that the Lenders make revolving credit loans
to it on a secured basis. The Lenders are willing to make such loans on the
terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
----------------------------------
1.01 Certain Defined Terms. As used herein, the following terms
---------------------
shall have the following meanings:
"Affiliate" shall mean any Person which directly or indirectly
----------
controls, or is under common control with, or is controlled by, the Company. As
used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event, any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.
"Ancillary Rights" shall mean, with respect to an Eligible Mortgage
----------------
Investment, all rights of the Company, including without limitation, rights
against the Servicer and the mortgagee of record thereof in respect of the
following:
(i) the promissory notes, or other instruments or agreements
evidencing or securing the indebtedness of obligors thereon, including,
without limitation, all mortgages, deeds to secure debt, trust deeds and
security agreements related thereto, all rights to payment thereunder,
including all Proceeds of Mortgage Dispositions thereunder, all rights in
the Complexes securing payment of the indebtedness of the obligors
thereunder, or which are the subject of such Eligible Mortgage Investments,
all rights under documents related thereto, such as guaranties
<PAGE>
and insurance policies (issued by governmental agencies or otherwise),
including, without limitation, mortgage and title insurance policies, and
fire and extended coverage insurance policies (including the right to any
return premiums), and all rights in cash deposits consisting of impounds,
security deposits, insurance premiums or other funds held on account
thereof;
(ii) all rights to service, administer and/or collect the
Eligible Mortgage Investments specified in clause (i) above at any date,
all rights to the payment of money on account of such servicing,
administration or collection activities and all rights under any
Participation Agreements and Servicing Agreements with respect to the
Eligible Mortgage Investments;
(iii) all accounts, contract rights and general intangibles
constituting or relating to any of the items referred to in clauses (i) and
(ii) above; and
(iv) all files, documents, instruments, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs, cards,
accounting records and other books, records, information and data relating
to the items referred to in clauses (i) through (iii) above (including all
information, records, data, programs, tapes, discs and cards necessary or
helpful in the administration or servicing of the Eligible Mortgage
Investments).
"Applicable Laws" shall mean all applicable laws and treaties,
---------------
judgments, decrees, injunctions, writs and orders of any court, arbitrator or
governmental agency or authority and rules, regulations, orders, licenses and
permits of any governmental body, instrumentality, agency or authority (and
"Applicable Law" means any of the foregoing).
"Applicable Lending Office" shall mean, for each Lender and for each
-------------------------
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on Schedule I or such other office of
such Lender (or of an affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Company as the office by which
its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, at any time, with respect to each Type
-----------------
of Loan, the rate per annum set forth below opposite the ratio (expressed as a
percentage) of the aggregate Loan Value of U.S. Mortgage-Backed Securities (as
set forth in, and as of the date of, the most recent Collateral Valuation
Certificate delivered pursuant to Section 6 or Section 8 or under the Security
Agreement) to the aggregate Loan Value of Qualified Investments (as set forth in
the most recent Collateral Valuation
-2-
<PAGE>
Certificate delivered pursuant to Section 6 or Section 8 or under the Security
Agreement):
<TABLE>
<CAPTION>
Ratio of U.S. Mortgage-
Backed Securities Applicable Applicable
to Qualified Margin for Margin for
Investments LIBOR Loans Base Rate Loans
-------------------- ----------- ---------------
<S> <C> <C>
60% or more .5% per annum 0% per annum
50% or more, but .5625% per annum .0625% per annum
less than 60%
less than 50% .625% per annum .125% per annum
</TABLE>
; provided, that nothing set forth above shall be deemed to limit the
--------
requirement in Section 8.09 that the Loan Value of U.S. Mortgage-Backed
Securities constitute at least 40% of the aggregate Loan Value of all Qualified
Investments.
"Assigned Collateral" shall have the meaning assigned to that term in
-------------------
Section 4.1 of the Security Agreement.
"Available Commitment" shall mean, with respect to each Lender, the
--------------------
lesser of (i) such Lender's Commitment and (ii) such Lender's Commitment
Percentage of the Borrowing Base as set forth in the most recent Collateral
Valuation Certificate delivered pursuant to Section 6 or Section 8 or under the
Security Agreement.
"Base Rate" shall mean, for any day, the higher of (a) the Federal
---------
Funds Rate for such day plus 1/2 of 1% per annum and (b) the Prime Rate for such
day. Each change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the time of
such change in the Base Rate.
"Base Rate Loans" shall mean Loans which bear interest at rates based
---------------
upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement, the
---------------
Security Agreement, the Notes and all other documents executed and delivered by
the Company in connection herewith or therewith, including all amendments,
modifications and supplements of or to all such documents.
"Borrowing Base" shall mean, at any time, the amount equal to the
--------------
quotient of (i) the aggregate Loan Value of the Assigned Collateral in the
possession of the Collateral Agent as set forth in the most recent Collateral
Valuation Certificate delivered pursuant to Section 6 or Section 8 or under the
Security Agreement and (ii) 1.10; provided, that in determining the aggregate
--------
Loan Value of the Assigned Collateral, Qualified
-3-
<PAGE>
Investments other than U.S. Mortgage-Backed Securities, shall be included in
clause (i) above only to the extent that the Loan Value thereof does not
constitute more than 60% of the aggregate Loan Value of all such Qualified
Investments so included; provided, further, that in determining the aggregate
-------- -------
Loan Value of the Assigned Collateral, those Eligible Participations that
relate to mortgage loans insured by the FHA shall be included in clause (i)
above only to the extent that the Loan Value thereof does not exceed 60% of
the aggregate Loan Value of all Qualified Investments included.
"Business Day" shall mean any day on which commercial banks are not
------------
authorized or required to close in New York City and, if such day relates to a
borrowing of, a payment or prepayment of principal of or interest on, or a
Conversion of or into, or an Interest Period for, a LIBOR Loan or a notice by
the Company with respect to any such borrowing, payment, prepayment, Conversion
or Interest Period, which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Lease Obligations" shall mean, for any Person, the
-------------------------
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal Property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Cash Collateral Account" shall have the meaning set forth in Section
-----------------------
5.1 of the Security Agreement.
"Certificate of Participation" shall mean a certificate issued by the
----------------------------
Servicer or mortgagee of record of an underlying Eligible Mortgage Investment
evidencing the Company's undivided beneficial ownership in the Eligible Mortgage
Investment and the Company's Ancillary Rights with respect thereto.
"CIBC" shall mean Canadian Imperial Bank of Commerce, New York Agency.
----
"Closing Date" shall mean the date upon which the conditions precedent
------------
to the initial Loan hereunder set forth in Section 6 have been satisfied and the
initial extension of credit hereunder made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
----
time to time.
-4-
<PAGE>
"Collateral Agent" shall mean Chemical Bank, together with any
----------------
successor or assignee, as collateral agent pursuant to the Security Agreement.
"Collateral Valuation Certificate" shall mean a certificate in the
--------------------------------
form of Exhibit F by which the Company reports the Loan Value of the Assigned
Collateral in the possession of the Collateral Agent.
"Commitment" shall mean, for each Lender, the amount set opposite the
----------
name of such Lender on Schedule I under the caption "Commitment" or, in the case
of a Lender that becomes a Lender pursuant to an assignment, the amount of the
portion of the assignor's Commitment assigned to such Lender (as the same may be
reduced from time to time pursuant to Section 2.03). The aggregate amount of
the Commitments on the date hereof is $110,000,000.
"Commitment Percentage" shall mean, for each Lender, the percentage
---------------------
that such Lender's Commitment represents of the aggregate amount of all
Commitments at such time.
"Complex" shall mean a multifamily, residential, rental apartment or
-------
townhouse development which has been constructed, renovated or rehabilitated
pursuant to various government assistance programs directed by HUD under
authority of the National Housing Act, which are encumbered pursuant to a
Mortgage Investment.
"Consolidated Subsidiary" shall mean, for any Person, each Subsidiary
-----------------------
of such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated with
the financial statements of such Person in accordance with GAAP.
"Consolidated Shareholders' Equity" shall mean, at any time, all
---------------------------------
amounts which would be included under shareholders' equity on a consolidated
balance sheet of the Company and its Subsidiaries prepared in accordance with
GAAP and, including in any event, any preferred stock issued by the Company.
"Continue", "Continuation" and "Continued" shall refer to the
-------- ------------ ---------
continuation pursuant to Section 2.08 or 5.04 of a LIBOR Loan from one Interest
Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 2.08 or 5.04 of Base Rate Loans into LIBOR Loans or of LIBOR
Loans into Base Rate Loans, which may be accompanied by the transfer by a Lender
(at its sole discretion) of a Loan from one Applicable Lending Office to
another.
-5-
<PAGE>
"Credit Termination Date" shall mean, for any Lender, August 28, 1996,
-----------------------
as the same may be (i) extended for such Lender pursuant to Section 2.09 or (ii)
shortened pursuant to Sections 2.03, 5.07(b) or 9; provided that, if the Credit
Termination Date would otherwise fall on a day that is not a Business Day, the
Credit Termination Date shall instead fall on the next preceding Business Day.
"Default" shall mean an Event of Default or an event which with notice
-------
or lapse of time or both would become an Event of Default.
"Deposited Funds" shall mean any funds deposited in the Cash
---------------
Collateral Account, as such funds may be invested from time to time, in
accordance with the terms of the Security Agreement.
"Discount Mortgage" shall mean a Federally Insured Mortgage which is
-----------------
purchased at a price which is less than the outstanding principal balance of the
Federally Insured Mortgage and which is not a NPP Mortgage Investment.
"Dividend Payment" shall mean dividends (in cash, Property or
----------------
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company, but excluding dividends payable solely in shares
of common stock of the Company.
"Dollars" and "$" shall mean lawful money of the United States of
------- -
America.
"Electing Lender" shall have the meaning assigned to such term in
---------------
Section 9.
"Eligible Mortgage Investment" shall mean a Mortgage Investment with
----------------------------
respect to which each of the following statements shall be accurate and complete
in all respects:
(a) Said Mortgage Investment has a mortgagee of record approved by
HUD and is serviced by a Servicer pursuant to a Servicing Agreement.
(b) The obligations under said Mortgage Investment are either wholly
insured pursuant to a HUD Mortgage Insurance Program or wholly insured or
fully guaranteed by FNMA or FHLMC, such insurance or guarantee being in
full force and effect, and irrevocable as to the Company and its assigns
and there being no state of facts which could adversely affect the
availability or enforceability of said insurance or the collectibility
thereof by the Collateral Agent or the Lenders.
-6-
<PAGE>
(c) Said Mortgage Investment is not secured by properties owned by
CRI Insured Mortgage Associates Adviser Limited Partnership or its
affiliates.
"Eligible Participation" shall mean the majority undivided beneficial
----------------------
ownership interest of the Company in an Eligible Mortgage Investment and the
Company's Ancillary Rights with respect thereto and with respect to which each
of the following statements is true:
(a) Said ownership interest is evidenced by a Certificate of
Participation issued by the Servicer or mortgagee of record of the
underlying Eligible Mortgage Investment.
(b) Said ownership interest has not been assigned, pledged or
encumbered in any manner whatsoever, except as contemplated by the Security
Agreement.
(c) The Company effectively has the exclusive right to direct (i) the
Servicer to act in accordance with the terms of the related Servicing
Agreement and (ii) the mortgagee of record to act in accordance with the
terms of the related Participation Agreement.
(d) Said ownership interest may be assigned, pledged and transferred
to the Collateral Agent or the Lenders without the consent or approval of
any Person or any other restriction.
(e) Said ownership interest includes all of the benefits of insurance
or a guaranty provided by a HUD Mortgage Insurance Program.
"Environmental Laws" shall mean any and all Federal, state, local and
------------------
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
---------------
which is a member of the same controlled group of
-7-
<PAGE>
corporations (within the meaning of Section 414(b) of the Code) as the Company
or is under common control (within the meaning of Section 414(c), (m) or (o)
of the Code) with the Company.
"Event of Default" shall have the meaning assigned to such term in
----------------
Section 9.
"Existing Interest Rate Hedge Agreement" shall mean each Interest Rate
--------------------------------------
Hedge Agreement listed on Schedule II, as amended, restated and supplemented
from time to time.
"Federal Funds Rate" shall mean, for any day, the rate per annum
------------------
(rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to CIBC on such day on such transactions as determined by the
Administrative Agent.
"Federally Insured Mortgage" shall mean a first or second mortgage
--------------------------
lien on a property insured in whole or in part by HUD under Sections 207, 220,
221(d)(3), 221(d)(4), 223(f), 232, 236, 241, Title X or other similar sections
of the National Housing Act.
"FHA" shall mean the Federal Housing Administration, together with its
---
successors and assigns.
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation, a
-----
federally chartered corporation, together with its successors and assigns.
"Fixed Charge Coverage Ratio" shall mean, for any fiscal quarter, the
---------------------------
ratio of (i) net income of the Company and its Subsidiaries (calculated before
extraordinary items, taxes and the interest expenses specified in clause (ii)
hereof) for such fiscal quarter to (ii) the aggregate amount of interest accrued
on all Indebtedness of the Company and its Subsidiaries for such fiscal quarter.
"FNMA" shall mean the Federal National Mortgage Association, a
----
federally chartered corporation, together with its successors and assigns.
"GAAP" shall mean generally accepted accounting principles applied on
----
a basis consistent with those which, in
-8-
<PAGE>
accordance with the last sentence of Section 1.02(a), are to be used in making
the calculations for purposes of determining compliance with the terms of this
Agreement.
"GNMA" shall mean the Government National Mortgage Association, a
----
federally chartered corporation, together with its successors and assigns.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
---------
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of his,
her or its obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"HUD" shall mean the United States Department of Housing and Urban
---
Development, together with its successors and assigns, acting through any
authorized representative.
"HUD Mortgage Insurance Program" shall mean any federal mortgage
------------------------------
insurance program pursuant to which Federally Insured Mortgages are issued.
"Indebtedness" shall mean, for any Person: (a) indebtedness created,
------------
issued or incurred by such Person for borrowed money (whether by loan or the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such
-9-
<PAGE>
Person; (f) Indebtedness of others Guaranteed by such Person; and (g) any
obligations under any Interest Rate Hedge Agreement.
"Interest Period" shall mean, with respect to any LIBOR Loan, each
---------------
period commencing on the date such LIBOR Loan is made or Converted from a Loan
of another Type or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Company may select as
provided in Section 4.05, except that each Interest Period which commences on
the last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (i) if any Interest Period for any LIBOR
Loan would otherwise end after the Credit Termination Date, such Interest
Period shall end on the Credit Termination Date; (ii) each Interest Period
which would otherwise end on a day which is not a Business Day shall end on
the next succeeding Business Day (or if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day); and (iii) notwithstanding clause (i) above, no Interest Period shall
have a duration of less than one month and, if the Interest Period for any
LIBOR Loan would otherwise be a shorter period, such Loan shall not be
available hereunder.
"Interest Rate Hedge Agreement" shall mean an interest rate hedge
-----------------------------
agreement which is a rate swap agreement, forward rate agreement, interest rate
option, rate cap agreement, rate floor agreement, rate collar agreement,
accreting collar agreement, or any other similar agreement (including any option
to enter into, any combination of, or any master agreement for, any of the
foregoing) between the Company and one or more other parties providing for the
exchange of nominal interest obligations between the Company and such financial
institutions, as said agreement or arrangement shall be modified and
supplemented and in effect from time to time.
"Letter of Credit and Reimbursement Agreement" shall mean the Amended
--------------------------------------------
and Restated Letter of Credit and Reimbursement Agreement dated as of February
9, 1993, as amended by the Extension and Amendment Agreement dated as of January
25, 1994, between CRI Funding Corporation and the Banks named therein and CIBC,
as agent.
"LIBO Rate" shall mean, with respect to any LIBOR Loan for any
---------
Interest Period therefor, the rate per annum determined by the Administrative
Agent to be equal to the quotient of (y) the arithmetic mean (rounded upwards,
if necessary, to the nearest 1/16 of 1%) of the offered rates for deposits in
Dollars having a term comparable to such Interest Period and in an amount
comparable to the principal amount of such LIBOR Loan for such Interest Period,
which appear on the Screen Page as of 11:00 a.m.
-10-
<PAGE>
London time (or as soon thereafter as practicable) commencing on the date two
Business Days prior to the first day of such Interest Period, divided by (z) a
number equal to 1 minus the Reserve Requirement (rounded upwards, if
necessary, to the next higher 1/16 of 1%). If fewer than two offered rates
appear on all of the displays referred to as the Screen Page, the rate for
purposes of clause (y) above for that Interest Period will be determined on
the basis of the rates at which deposits in Dollars are offered by CIBC at
approximately 10:00 a.m. New York City time (or as soon thereafter as
practicable) on the date two Business Days prior to the first day of such
Interest Period.
"LIBOR Loans" shall mean Loans the interest rates on which are
-----------
determined on the basis of rates referred to in the definition of "LIBO Rate" in
this Section 1.01.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
----
pledge, charge, security interest or encumbrance of any kind in respect of such
Property (including an agreement to give any of the foregoing). For purposes of
this Agreement, the Company or any of its Subsidiaries shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement (other than an operating lease)
relating to such Property.
"Loan Value" shall mean on the date any determination thereof is to be
----------
made, as follows:
(i) with respect to an Eligible Participation, the market value
of such Eligible Participation, as determined by a written quotation made
by a nationally recognized investment banking firm or mortgage appraisal
firm with expertise in valuing interests in mortgages of the type
represented by Eligible Mortgage Investments on the date of such
determination (any such dealer certified by the Company to and approved
by the Administrative Agent); provided, however, that, in any period of
-------- -------
four consecutive weeks, no two such weekly quotations
shall be obtained from the same firm, unless the Company shall notify the
Administrative Agent that such quotations are not available from another
dealer and the Administrative Agent consents to a waiver thereof;
provided, further, that, notwithstanding anything to the contrary
-------- -------
contained herein and provided no Default or Event of Default shall have
occurred and be continuing and no Termination Notice shall have been
delivered or deemed delivered hereunder, in any such period of four
consecutive weeks, one such quotation may be prepared by the Company.
(ii) with respect to a Mortgage-Backed Security, the market
value of such Mortgage-Backed Security as determined by the closing daily
bid quotation made by a recognized
-11-
<PAGE>
dealer in such Mortgage-Backed Securities on the date of such
determination (any such dealer certified by the Company to and approved
by the Administrative Agent); provided, however, that, in any
-------- -------
period of four consecutive weeks, no two such weekly quotations shall be
obtained from the same dealer, unless the Company shall notify the
Administrative Agent that such quotations are not available from another
dealer and the Administrative Agent consents to a waiver thereof;
provided, further, that, notwithstanding anything to the contrary
-------- -------
contained herein and provided no Default or Event of Default shall have
occurred and be continuing and no Termination Notice shall have been
delivered hereunder, one such quotation may be prepared by the Company;
provided, further, that (a) no amortizing Mortgage-Backed Security with
-------- -------
respect to which notice of prepayment has been received shall be assigned
a Loan Value higher than par value and (b) no Mortgage-Backed Security
with respect to which notice of redemption or call has been received
shall be assigned a Loan Value higher than the lowest redemption or call
price applicable to such Mortgage-Backed Security during the 21 days next
succeeding the date of determination; and
(iii) with respect to the Deposited Funds, the sum of (a) the
aggregate amount of cash funds on deposit in the Cash Collateral Account at
such date and (b) ninety-six percent (96%) of the par value of Permitted
Investments thereof.
"Loans" shall mean the loans provided pursuant to Section 2.01.
-----
"Major Default" shall mean an Event of Default described in Section
-------------
9(a), 9(d)(i), 9(d)(ii) (to the extent such Event of Default arises from the
failure of the Company to perform or observe the covenants contained in Sections
8.09, 8.10, 8.11 or 8.12), 9(f), 9(g), 9(i), 9(j) or 9(k).
"Margin Stock" shall mean margin stock within the meaning of
------------
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on (a)
-----------------------
the Property, business, operations, financial condition, liabilities or
capitalization of the Company individually or the Company and its Subsidiaries
taken as a whole, (b) the ability of the Company to perform its obligations
under any of the Basic Documents, (c) the validity or enforceability of any of
the Basic Documents, (d) the rights and remedies of the Lenders, the
Administrative Agent or the Collateral Agent under any of the Basic Documents,
(e) the timely payment of the principal of or interest on the Loans or other
amounts payable in connection therewith or (f) the Assigned Collateral or the
validity, perfection or priority of the security interest of the Collateral
Agent therein.
-12-
<PAGE>
"Mortgage-Backed Security" shall mean any mortgage-backed security
------------------------
backed by United States government agencies or United States government-
sponsored agencies issued by an entity other than the Company or an affiliate of
the Company.
"Mortgage Dispositions" shall mean prepayments (in whole or in part),
---------------------
sales, exchanges, foreclosures, condemnations or any other dispositions of
Mortgage Investments.
"Mortgage Investments" shall mean NPP Mortgage Investments, Discount
--------------------
Mortgages and other mortgage investments invested in by the Company.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
------------------
in Section 3(37) of ERISA to which the Company or any ERISA Affiliate is
obligated to make, or has been obligated to make within the preceding six years,
contributions and which is covered by Title IV of ERISA.
"National Housing Act" shall mean the National Housing Act of 1934, as
--------------------
amended.
"Nomura Facilities" shall mean each Committed Master Repurchase
-----------------
Agreement and Committed Master Repurchase Agreement Governing Purchases and
Sales of Participation Certificates between Nomura Securities International,
Inc. and the Company and between Nomura Asset Capital Corporation and the
Company, respectively, each set of which is dated as of April 30, 1993 and
November 30, 1993.
"Non-U.S. Lender" shall mean any Lender which is not organized under
---------------
the laws of the United States of America or any State thereof or the District of
Columbia.
"Notes" shall mean the promissory notes provided pursuant to Section
-----
2.07.
"NPP Mortgage Investment" or "Near Par" or "Premium Mortgage
----------------------- -------- ----------------
Investment" shall mean a Federally Insured Mortgage which is purchased at a
- ----------
price which is near to, equal to or greater than the outstanding principal
balance of the Federally Insured Mortgage.
"Obligations" shall have the meaning assigned to that term in Section
-----------
2.1 of the Security Agreement.
"Outstanding" shall mean all Loans made by a Lender pursuant to this
-----------
Agreement less the principal amount of Loans which have been paid in full.
"Participant" shall have the meaning set forth in Section 11.06.
-----------
-13-
<PAGE>
"Participation Agreement" shall mean with respect to an Eligible
-----------------------
Participation, a participation agreement between the Company and the mortgagee
of record with respect to the related Eligible Mortgage Investment, as the same
from time to time may be extended, amended, supplemented, waived or modified
and in effect.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
----
entity Succeeding to any or all of its functions under ERISA.
"Permitted Investments" shall have the meaning assigned to that term
---------------------
in Section 5.4 of the Security Agreement.
"Person" shall mean any individual, corporation, company, voluntary
------
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
----
maintained by the Company or any ERISA Affiliate and which is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any
-----------------
Loan or any other amount under this Agreement or any Note that is not paid when
due (whether at stated maturity, by acceleration or otherwise), a rate per annum
during the period from and including the due date to but excluding the date on
which such amount is paid in full equal to 1% above the sum of (i) the Base Rate
and (ii) the Applicable Margin for Base Rate Loans, in each case as in effect
from time to time (provided that, if the amount so in default is principal of a
LIBOR Loan and the due date thereof is a day other than the last day of an
Interest Period therefor, the "Post-Default Rate" for such principal shall be,
for the period from and including such due date to but excluding the last day of
such Interest Period, 1% above the interest rate for such Loan as provided in
Section 3.02(b) and, thereafter, the rate provided for above in this
definition).
"Prime Rate" shall mean the rate of interest from time to time
----------
announced by CIBC as its prime commercial lending rate.
"Proceeds of Mortgage Dispositions" shall mean receipts of the Company
---------------------------------
arising from Mortgage Dispositions (including without limitation receipts of
insurance proceeds in connection with Mortgage Dispositions), reduced by the
following:
(i) amounts paid or to be paid in connection with, or as an
expense of, such Mortgage Disposition; and
(ii) any amount set aside for reserves.
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<PAGE>
"Property" shall mean any right or interest in or to property of any
--------
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Qualified Investments" shall mean Eligible Participations and
---------------------
Mortgage-Backed Securities.
"Quarterly Dates" shall mean the last day of March, June, September
---------------
and December in each year, the first of which shall be the first such day after
the date of this Agreement; provided that if any such day is not a Business Day,
then such Quarterly Date shall be the preceding Business Day.
"Regulations D, U and X" shall mean, respectively, Regulations D, U
-----------------------
and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
-----------------
after the date of this Agreement in United States Federal, state or foreign law
or regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretation, directive or request applying to a
class of banks including such Lender of or under any United States Federal,
state or foreign law or regulations (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"REIT" shall mean a real estate investment trust as defined in
----
Sections 856 to 860, inclusive, of the Code.
"Required Lenders" shall mean Lenders holding at least 66% of the
----------------
aggregate principal amount of the Loans or if no Loans shall be outstanding, at
least 66% of the aggregate amount of the Commitments, provided that for such
purpose there shall be excluded any Commitments or Loans directly or indirectly
held by the Company or any of its Affiliates following an assignment or
participation as contemplated by Section 11.06.
"Reserve Requirement" shall mean, for any Interest Period for any
-------------------
LIBOR Loan, the average maximum rate (expressed as a decimal) at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the
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<PAGE>
LIBO Rate is to be determined as provided in the definition of "LIBO Rate" in
this Section 1.01 or (ii) any category of extensions of credit or other assets
which includes LIBOR Loans.
"Screen Page" shall mean (i) the display designated as page "LIBO" on
-----------
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purposes of displaying London interbank
offered rates of major banks) or (ii) if fewer than two offered rates appear on
the display page in clause (i) above, the display designated as page "3750" on
the Dow Jones Telerate Service (or such other page as may replace page 3750 on
that service for the purpose of displaying London interbank offered rates of
major banks).
"Security Agreement" shall mean the Security Agreement among the
------------------
Collateral Agent, the Company and the Administrative Agent, in substantially the
form attached as Exhibit H, as the same from time to time may be extended,
amended, supplemented, waived or modified and in effect.
"Servicer" shall mean a HUD approved servicer of a Mortgage
--------
Investment.
"Servicing Agreement" shall mean with respect to an Eligible
-------------------
Participation or an Eligible Mortgage Investment, a servicing agreement between
a Servicer and the mortgagee of record, as the same from time to time may be
extended, amended, supplemented, waived or modified and in effect.
"Signet Credit Agreement" shall mean the Amended and Restated Credit
-----------------------
Agreement dated as of December 22, 1992 among Signet Bank/Virginia, Westpac
Banking Corporation and the Company.
"Subsidiary" shall mean, for any Person, any corporation, partnership
----------
or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, partnership or other entity (irrespective of whether or not
at the time securities or other ownership interests of any other class or
classes of such corporation, partnership or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Termination Notice" shall have the meaning assigned to that term in
------------------
Section 9.
"Total Liabilities" shall mean at any time all Indebtedness of the
-----------------
Company and its Consolidated Subsidiaries and
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<PAGE>
all other liabilities of the Company and its Subsidiaries which should be
classified as liabilities on a balance sheet of the Company and its
Consolidated Subsidiaries prepared in accordance with GAAP, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered.
"Type" shall have the meaning assigned that term in Section 1.03.
----
"Unencumbered Assets" shall mean the Company's cash, Qualified
-------------------
Investments, investments of the type permitted in Section 5.4 of the Security
Agreement and stock of CRI Liquidating REIT, Inc. which, in each case, are not
Assigned Collateral or subject to any other Lien whatsoever.
"Unencumbered Asset Valuation Certificate" shall mean a certificate in
----------------------------------------
the form of Exhibit G by which the Company reports the Value of Unencumbered
Assets.
"U.S. Mortgage-Backed Security" shall mean a Mortgage-Backed Security
-----------------------------
guaranteed by (i) GNMA pursuant to Section 306(g) of Title III of the National
Housing Act, (ii) an agency of the United States government entitled to the full
faith and credit of the United States government, or (iii) the United States
government.
"Value" shall mean, with respect to Unencumbered Assets, on the date
-----
any determination thereof is to be made, the value determined as set forth in
the definition of the term "Loan Value" for Assigned Collateral of a similar
type, and, in the case of the stock of CRI Liquidating REIT, the market value
thereof as published in The Wall Street Journal (or any successor or, if there
is no successor, The New York Times) on such date.
"Wholly-Owned Subsidiary" shall mean any such Subsidiary of which all
-----------------------
of such securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are so owned or controlled.
1.02 Accounting Terms and Determinations and Other Definitional
----------------------------------------------------------
Provisions.
- ----------
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, all calculations made for determining
compliance with the terms of this Agreement shall be made, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with that
used in the preparation of the
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<PAGE>
latest financial statements furnished to the Lenders hereunder (which, prior
to the first financial statements delivered under Section 8.01 shall mean the
financial statements referred to in Section 7.02).
(b) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 8, the Company will not change the last
day of its fiscal year from December 31, or the last days of the first three
fiscal quarters in each of its fiscal years from March 31, June 30, and
September 30 of each year, respectively.
(c) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(d) The words "hereof", "hereto", "herein", and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
1.03 Types of Loans. Loans hereunder are distinguished by "Type".
--------------
The "Type" of a Loan refers to whether such Loan is a Base Rate Loan or a LIBOR
Loan, each of which constitutes a Type.
Section 2. Commitments of Loans.
--------------------
2.01 Loans. Each Lender severally agrees, on the terms of this
-----
Agreement, to make Loans to the Company in Dollars during the period from and
including the date hereof to but not including the Credit Termination Date in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount of the Available Commitment of such Lender as in effect from time to
time; provided that, at no time shall the aggregate amount of Loans Outstanding
--------
exceed the Borrowing Base. Subject to the terms of this Agreement, during such
period the Company may borrow, repay and reborrow the amount of the Commitments
by means of Base Rate Loans and LIBOR Loans and may Convert Loans of one Type
into Loans of another Type (as provided in Section 2.08); provided, however,
-------- -------
that the Company shall not be entitled to borrow, or Convert into, LIBOR Loans,
where such Loans, if made, would result in an aggregate of more than five
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<PAGE>
separate LIBOR Loans of any Lender being Outstanding hereunder at any one time.
For purposes of the foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Loans.
2.02 Borrowings. The Company shall give the Administrative Agent
----------
(which shall promptly notify the Lenders) notice of each borrowing hereunder as
provided in Section 4.05. Not later than 12:00 noon New York time on the date
specified for each borrowing hereunder, each Lender shall make available the
amount of the Loan to be made by it on such date to the Administrative Agent in
immediately available funds, for account of the Company. The amount so received
by the Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company by depositing the same, in
immediately available funds, in an account designated by the Company.
2.03 Changes of Commitments.
----------------------
(a) The aggregate amount of the Commitments shall be automatically
reduced to zero on the Credit Termination Date.
(b) The Company shall have the right at any time or from time to time
(i) so long as no Loans are Outstanding, to terminate the Commitments and (ii)
to reduce the aggregate unused amount of the Commitments; provided that (x) the
Company shall give notice of each such termination or reduction as provided in
Section 4.05 and (y) each partial reduction shall be in an aggregate amount at
least equal to $10,000,000 and in multiples of $10,000,000 in excess thereof.
(c) The Commitments once terminated or reduced may not be reinstated
and, if terminated, no Lender shall have any further obligation to make any
Loans hereunder.
2.04 Fees.
----
(a) The Company shall pay to the Administrative Agent for account of
each Lender a commitment fee on the daily average unused amount of such Lender's
Commitments for the period from and including the date of this Agreement to but
not including the earlier of the date the Commitment of such Lender is
terminated or the Credit Termination Date, at a rate of 1/4 of 1% per annum.
Accrued commitment fee shall be payable in arrears on each Quarterly Date, on
the earlier of the date the Commitment of such Lender is terminated or the
Credit Termination Date and on the date of any reduction of such Commitment (to
the extent accrued and unpaid on the amount of the reduction).
(b) The Company shall pay to the Administrative Agent for account of
each Lender on the date hereof an up-front fee as set forth in the Commitment
Letter dated November 24, 1993 from
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<PAGE>
the Administrative Agent to the Company, and the Administrative Agent shall
apply such fee for the account of each Lender according to the offering
memorandum from the Administrative Agent to the Lenders.
(c) The Company shall pay to the Administrative Agent, for its own
account, such fees as may be separately agreed between the Company and the
Administrative Agent, including the arrangement and administrative fees set
forth in the Commitment Letter dated November 24, 1993 from the Administrative
Agent to the Company.
2.05 Lending Offices. The Loans of each Type made by each Lender
---------------
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.06 Several Obligations; Remedies Independent. The failure of any
-----------------------------------------
Lender to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan on such date,
but neither any Lender nor the Administrative Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such other Lender. The
amounts payable by the Company at any time hereunder and under the Notes to each
Lender shall be a separate and independent debt and each Lender shall be
entitled to protect and enforce its rights arising out of this Agreement and the
Notes, and it shall not be necessary for any other Lender or the Administrative
Agent to consent to, or be joined as an additional party in, any proceedings for
such purposes.
2.07 Notes.
-----
(a) The Loans made by each Lender shall be evidenced by a single
promissory note of the Company substantially in the form of Exhibit A, dated the
date hereof, payable to such Lender in a principal amount equal to the amount of
its Commitment as originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate, and duration of Interest
Period (if applicable) of each Loan made by each Lender to the Company, and each
payment made on account of the principal thereof, shall be recorded by such
Lender on its books and, prior to any transfer of the Note evidencing the Loans
held by it, endorsed by such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of such Lender to make any such
recordation or endorsement shall not affect the obligations of the Company to
make a payment when due of any amount owing under such Note.
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<PAGE>
2.08 Prepayments and Conversions or Continuations of Loans.
-----------------------------------------------------
(a) Subject to Section 4.04, the Company shall have the right to
prepay Loans, or to Convert Loans of one Type into Loans of another Type or
Continue Loans of one Type as Loans of the same Type, at any time or from time
to time; provided, that (i) the Company shall give the Administrative Agent
--------
notice of each such prepayment, Conversion or Continuation as provided in
Section 4.05, (ii) LIBOR Loans may be prepaid or Converted only on the last day
of an Interest Period for such Loans and (iii) Conversions of Base Rate Loans
into LIBOR Loans shall be subject to the proviso in the second sentence of
Section 2.01. Notwithstanding the foregoing, and without limiting the rights
and remedies of the Lenders under Section 9, in the event that any Default shall
have occurred and be continuing, the Administrative Agent may (and at the
request of the Required Lenders shall) suspend the right of the Company to
Convert any Loan into a LIBOR Loan, or to Continue any Loan as a LIBOR Loan, in
which event all Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) or Continued, as the case may be, as Base Rate Loans.
(b) If at any time the sum of the aggregate principal amount of
Outstanding Loans shall exceed the Borrowing Base, the Company shall, subject to
any applicable cure period permitted by Section 7.2(c) of the Security
Agreement, immediately prepay the Loans, together with accrued interest, in an
amount necessary to eliminate such excess.
2.09 Extension of Credit Termination Date.
------------------------------------
(a) The Company may by notice to the Administrative Agent (which
shall promptly deliver a copy thereof to each of the Lenders) not less than 90
days and not more than 120 days prior to the Credit Termination Date then in
effect, request that the Lenders extend for an additional twelve-month period
(i) the initial Credit Termination Date in effect hereunder and (ii) if such
initial Credit Termination Date is extended, the Credit Termination Date in
effect as a result of such extension. If the Required Lenders acting in their
sole discretion, by notice to the Administrative Agent on the date (the "Consent
Date") falling 30 days prior to the Credit Termination Date then in effect (or
if such day is not a Business Day, on the next succeeding Business Day), agree
to such request, then, effective as of the Consent Date, the Credit Termination
Date for such Lenders only shall be extended and become the date twelve months
subsequent to the Credit Termination Date then in effect; provided that such
--------
extension shall not be effective unless (i) no Default or Event of Default shall
have occurred and be continuing on each of the date of the notice requesting
such extension and on the Consent Date (both prior to and after giving effect to
such extension); (ii) each of the representations and warranties of the Company
in
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<PAGE>
Section 7 and in Section 3.1 of the Security Agreement shall be true and
complete on and as of each of the date of such notice and the Consent Date
(prior to giving effect to such extension) with the same force and effect as if
made on and as of each such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date); and (iii) any extension or similar fee and any other condition to which
such extension is subject shall have been paid or complied with by the Company.
(b) Written notice setting forth the Lenders which have agreed to
extend the Credit Termination Date shall be delivered by the Administrative
Agent to the Company on the Business day after the Consent Date. Each Lender
that determines not to extend the Credit Termination Date (together with any
Lender which fails to notify the Administrative Agent by the Consent Date, each
a "Non-Extending Lender") shall notify the Administrative Agent (which shall
promptly notify the Company) of such fact promptly after such determination. No
extension of the Credit Termination Date shall be effective unless each Non-
Extending Lender shall have been paid in full by the Company all amounts owing
to such Lender hereunder on or before the Credit Termination Date as then in
effect with respect to such Non-Extending Lender. The Commitment of such Non-
Extending Lender shall terminate on the Credit Termination Date as then in
effect with respect to such Non-Extending Lender.
(c) If the Required Lenders consent to the extension of the Credit
Termination Date for such Lenders, not later than the Credit Termination Date as
then in effect with respect to such Non-Extending Lender, the Company may
replace each Non-Extending Lender with another financial institution (which may
be a Lender) with the approval of the Administrative Agent, which financial
institution shall have entered into an agreement in form and substance
satisfactory to the Company and the Administrative Agent pursuant to which such
financial institution shall, effective as of such Credit Termination Date,
undertake a Commitment not to exceed the aggregate Commitments of the Non-
Extending Lenders hereunder expiring on such date. If such financial
institution is a Lender, such Commitment shall be in addition to such Lender's
Commitment hereunder on such date.
Section 3. Payments of Principal and Interest.
----------------------------------
3.01 Repayment of Loans. The Company hereby promises to pay to the
------------------
Administrative Agent for account of each Lender the entire outstanding principal
amount of such Lender's Loans, and each Loan shall mature, on the Credit
Termination Date.
3.02 Interest. The Company hereby promises to pay to the
--------
Administrative Agent for account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from and including the
date of such Loan to but
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<PAGE>
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(a) during such periods as such Loan is a Base Rate Loan, the Base
Rate (as in effect from time to time) plus the Applicable Margin (as in
effect from time to time); and
(b) during such periods as such Loan is a LIBOR Loan, the LIBO Rate
plus the Applicable Margin (as in effect from time to time).
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Lender interest at the applicable Post-
Default Rate on any principal of any Loan made by such Lender and on any other
amount payable by the Company hereunder or under the Notes held by such Lender
to or for account of such Lender, which shall not be paid in full when due
(whether at stated maturity, by acceleration or otherwise), for the period from
and including the due date thereof to but excluding the date the same is paid in
full. Accrued interest on each Loan shall be payable (i) in the case of a Base
Rate Loan, quarterly on the Quarterly Dates, (ii) in the case of a LIBOR Loan,
on the last day of each Interest Period therefor and, if such Interest Period is
six months, on the date which is three months after commencement thereof and
(iii) in the case of any Loan, upon the payment or prepayment thereof or the
Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, prepaid or Converted), except that interest payable at the Post-
Default Rate shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Administrative Agent shall give notice thereof to the Lenders to which such
interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
-----------------------------------------------
4.01 Payments.
--------
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Company under this
Agreement and the Notes, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Administrative Agent
at account number 630-00-480 (for the account of "CIBC, New York Agency" and for
further credit to "Agented Loans" at account number 07-09611, Attn:
Syndications, Reference: "CRIIMI MAE") maintained by the Administrative Agent at
Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York
10260 (ABA # 021-000-480), not later than 1:00 p.m. New York time on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day).
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<PAGE>
(b) Any Lender for whose account any such payment is to be made, may
(but shall not be obligated to) debit the amount of any such payment which is
not made by such time to any ordinary deposit account of the Company with such
Lender (with notice to the Company).
(c) The Company shall, at the time of making each payment under this
Agreement or any Note, specify to the Administrative Agent (which shall so
notify the intended recipient(s) thereof) the Loans or other amounts payable by
the Company hereunder to which such payment is to be applied (and in the event
that it fails to so specify, or if an Event of Default has occurred and is
continuing, such Lender may apply the amount of such payment received by it
from the Administrative Agent in such manner as such Lender may determine to
be appropriate).
(d) Each payment received by the Administrative Agent under this
Agreement or any Note for account of any Lender shall be paid by the
Administrative Agent promptly to such Lender, in immediately available funds,
for account of such Lender's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.
(e) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day which is not a Business Day, such date shall be
extended to the next succeeding Business Day and interest shall be payable for
any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein: (a) each borrowing under Section 2.01 shall be made from the Lenders,
each payment of fees under Section 2.04(b) shall be made for account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.03(b) shall be applied to the respective relevant Commitments of
the Lenders, pro rata according to the amounts of their respective Commitments;
(b) the making, Conversion and Continuation of Loans of a particular Type (other
than Conversions provided for by Section 5.04) shall be made pro rata among the
Lenders according to the amounts of their respective relevant Commitments (in
the case of making of Loans) or Loans (in the case of Conversions and
Continuations of Loans) and the then current Interest Period for each Loan of
such Type shall be coterminous; (c) each payment or optional or mandatory
prepayment of principal of Loans by the Company (except as otherwise provided in
Section 2.09(b), 5.07(b) or the last paragraph of Section 9) shall be made for
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loans held by them; and (d) each payment of interest on
Loans by the Company shall be made for account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders.
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<PAGE>
4.03 Computations. Interest on LIBOR Loans and Base Rate Loans with
------------
an interest rate calculated with reference to the Federal Funds Rate shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
payable. The commitment fee and interest on Base Rate Loans with an interest
rate calculated with reference to the Prime Rate shall be computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed
(including the first day but excluding the last day) occurring in the period
for which payable.
4.04 Minimum Amounts. Except for prepayments made pursuant to
---------------
Section 2.08(b) or Conversions made pursuant to Section 5.04, each borrowing,
Conversion and prepayment of principal of Loans shall be in an amount at least
equal to $5,000,000 or in any integral multiple of $1,000,000 in excess thereof
(borrowings, Conversions or prepayments of or into Loans of different Types or,
in the case of LIBOR Loans, having different Interest Periods at the same time
hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period). Anything in
this Agreement to the contrary notwithstanding, the aggregate principal amount
of LIBOR Loans having the same Interest Period shall be in an amount at least
equal to $5,000,000 or any integral multiple of $1,000,000 in excess thereof
and, if any LIBOR Loans would otherwise be in a lesser principal amount for any
period, such Loans shall be Base Rate Loans during such period.
4.05 Certain Notices.
---------------
(a) Notices by the Company to the Administrative Agent of
terminations or reductions of the Commitments, of borrowings, Conversions,
Continuations and optional prepayments of Loans shall be irrevocable and shall
be effective only if received by the Administrative Agent not later than 10:00
a.m. New York time (i) two (2) Business Days prior to any termination or
reduction of Commitments, (ii) on the same day as any borrowing or optional
prepayment of or Conversion into a Base Rate Loan and (iii) three (3) Business
Days prior to any borrowing or optional prepayment of, Conversion into or
Continuation as a LIBOR Loan. Each such notice of borrowing shall be
substantially in the form as set forth in Exhibit B and each such notice of
Conversion or Continuation shall be substantially in the form of Exhibit C.
(b) Each such notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or optional prepayment shall specify the
Type of each Loan to be borrowed, Converted, Continued or prepaid and the amount
(subject to Section 4.04) of each Loan to be borrowed, Converted, Continued or
prepaid (and, in the case of a Conversion, the Type
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<PAGE>
of Loan to result from such Conversion) and the Interest Period of each Loan
to be borrowed, Converted into or Continued as a LIBOR Loan and the date of
borrowing, Conversion, Continuation or optional prepayment (which shall be a
Business Day). The Administrative Agent shall promptly notify the Lenders of
the contents of each such notice. In the event that the Company fails to
select the Type of Loan, or the duration of any Interest Period, for any LIBOR
Loan within the time period and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a LIBOR Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
------------------------------------------------
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by it hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such day and, if such recipient(s)
shall fail promptly to make such payment, the Administrative Agent shall be
entitled to recover such amount, on demand, from the Payor, together with
interest as aforesaid.
4.07 Sharing of Payments, Etc.
------------------------
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim a Lender may otherwise
have, each Lender shall be entitled, at its option, to offset balances held by
it for account of the Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans or
any other amount payable to such Lender hereunder, that is not paid when due
(regardless of whether such balances are then due to the Company), in which case
it shall promptly notify the Company and the Administrative Agent thereof,
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provided that such Lender's failure to give such notice shall not affect the
validity thereof.
(b) If any Lender shall obtain from the Company payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement or any Note held by it through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or otherwise (other than
from the Administrative Agent as provided herein), and, as a result of such
payment, such Lender shall have received a greater percentage of the principal
of or interest on the Loans or such other amounts then due hereunder by the
Company to such Lender than the percentage received by any other Lenders of
the principal of or interest on the Loans or such other amounts then due by
the Company to such other Lenders, it shall promptly purchase from such other
Lenders participations in (or, if and to the extent specified by such Lender,
direct interests in) the Loans or such other amounts, respectively, owing to
such other Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participation
sold or otherwise) if such payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Company. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.07 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.
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Section 5. Yield Protection, Etc.
---------------------
5.01 Additional Costs.
----------------
(a) The Company shall pay directly to each Lender from time to time
such amounts as such Lender may determine to be necessary to compensate it or
any Applicable Lending Office for any costs incurred by such Lender or
Applicable Lending Office, or any reduction of the rate of return on assets or
equity of such Lender or Applicable Lending Office to a level below that which
such Lender or Applicable Lending Office could have achieved, which such Lender
determines are attributable to its making or maintaining of any LIBOR Loans or
its Commitment to make any LIBOR Loans hereunder, or any reduction in any amount
receivable by such Lender hereunder in respect of any of such Loans or such
Commitment (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Notes in respect of any of such Loans
(other than taxes imposed on or measured by the overall net income of such
Lender or of its Applicable Lending Office for any of such Loans by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit, capital
adequacy, capital maintenance or similar requirements (other than the
Reserve Requirement utilized in the determination of the LIBO Rate for such
Loan) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender (including any of such
Loans or any deposits referred to in the definition of "LIBO Rate" in
Section 1.01), or any commitment of such Lender (including the Commitments
of such Lender hereunder); or
(iii) imposes any other condition affecting this Agreement or such
Lender's Notes (or any of such extensions of credit or liabilities) or such
Lender's Commitments.
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on LIBOR Loans is determined as provided in this Agreement or a
category of extensions of credit or commitments or other assets of such Lender
which includes LIBOR Loans or such Lender's Commitments or (ii) becomes subject
to restrictions on the amount of such a category of liabilities or assets which
it
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<PAGE>
may hold, then, if such Lender so elects by notice to the Company (with a
copy to the Administrative Agent), the obligation of such Lender to make or
Continue, or to Convert Loans of any other Type into, Loans of such Type
hereunder shall be suspended until such Regulatory Change ceases to be in effect
(in which case the provisions of Section 5.04 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to each
Lender from time to time on request such amounts as such Lender may determine to
be necessary to compensate such Lender (or, without duplication, any Applicable
Lending Office or the bank holding company of which such Lender is a subsidiary)
for any costs which it determines are attributable to the maintenance by such
Lender (or such Applicable Lending Office or such bank holding company),
pursuant to any law or regulation or any interpretation, directive or request
(whether or not having the force of law) of any court or governmental or
monetary authority (i) following any Regulatory Change or (ii) implementing
any risk-based capital guideline or requirement (whether or not having the
force of law and whether or not the failure to comply therewith would be
unlawful) heretofore or hereafter issued by any government or governmental or
supervisory authority implementing at the national level the Basle Accord
(including, without limitation, the Final Risk-Based Capital Guidelines of the
Board of Governors of the Federal Reserve System (12 CFR Part 208, Appendix A;
12 CFR Part 225, Appendix A) and the Final Risk-Based Capital Guidelines of
the Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A)), of
capital in respect of its Commitments or Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Lender (or any Applicable Lending Office or such bank
holding company) to a level below that which such Lender (or any Applicable
Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request). For purposes of this
Section 5.01(c), "Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basle Committee on Lending Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended,
modified and supplemented and in effect from time to time or any replacement
thereof.
(d) Each Lender shall notify the Company of any event occurring after
the date of this Agreement that will entitle such Lender to compensation under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable after such
Lender obtains actual knowledge thereof. Each Lender will furnish to the
Company a certificate setting forth the basis and amount of each request by such
Lender for compensation under paragraph (a) or (c) of this Section 5.01.
Determinations and allocations by any Lender for purposes of this Section 5.01
of the effect of any Regulatory
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Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect
of capital maintained pursuant to paragraph (c) of this Section 5.01, on its
costs or rate of return of maintaining Loans or its obligation to make Loans,
or on amounts receivable by it in respect of Loans, and of the amounts
required to compensate such Lender under this Section 5.01, shall be
conclusive, absent manifest error.
5.02 Limitation on Types of Loans. Anything herein to the contrary
----------------------------
notwithstanding, if, on or prior to the determination of any LIBO Rate for any
Interest Period:
(a) the Administrative Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "LIBO Rate" in Section 1.01 are not
being provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for LIBOR Loans as provided
herein; or
(b) the Required Lenders determine, which determination shall be
conclusive, and notify the Administrative Agent that the relevant rates of
interest referred to in the definition of "LIBO Rate" in Section 1.01 upon
the basis of which the rate of interest for LIBOR Loans for such Interest
Period is to be determined are not likely adequately to cover the cost to
such Lenders of making or maintaining such Type of Loans for such Interest
Period;
then the Administrative Agent shall give the Company and each Lender prompt
notice thereof, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Loans of such Type, to Continue
Loans of such Type or to Convert Loans of any other Type into Loans of such Type
and the Company shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Loans of such Type, either prepay such Loans or Convert such
Loans into another Type of Loan in accordance with Section 2.08.
5.03 Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain LIBOR
Loans hereunder, then such Lender shall promptly notify the Company thereof
(with a copy to the Administrative Agent) and such Lender's obligation to make
or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be
suspended until such time as such Lender may again make and maintain LIBOR Loans
(in which case the provisions of Section 5.04 shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any Lender to
---------------------------
make LIBOR Loans or Continue, or to Convert Loans of any other Type into, Loans
of a particular Type shall be
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suspended pursuant to Section 5.01(b) or 5.03 (Loans of such Type being herein
called "Affected Loans" and such Type being herein called the "Affected
Type"), such Lender's Affected Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or on such earlier date as such Lender may specify to the
Company with a copy to the Administrative Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 5.01(b) or 5.03 which gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal which would otherwise
be applied to such Lender's Affected Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans which would otherwise be made or Continued by such
Lender as Loans of the Affected Type shall be made or Continued instead as
Base Rate Loans and all Loans of such Lender which would otherwise be
Converted into Loans of the Affected Type shall be Converted instead into
(or shall remain as) Base Rate Loans.
If such Lender gives notice to the Company with a copy to the Administrative
Agent that the circumstances specified in Section 5.01(b) or 5.03 which gave
rise to the Conversion of such Lender's Affected Loans pursuant to this Section
5.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Loans of the Affected Type are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the Affected Type, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Loans of the Affected Type and by
such Lender are held pro rata (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.
5.05 Compensation. The Company shall pay to the Administrative Agent
------------
for account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense which such Lender determines is attributable to:
(a) any payment, prepayment or Conversion of a LIBOR Loan made by
such Lender for any reason (including, without limitation, the prepayment
of any Loans pursuant to Section 2.08(b) or 5.07 and the acceleration of
the Loans pursuant to Section 9) on a date other than the last day of the
Interest Period for such Loan; or
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<PAGE>
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 6 to be satisfied) to borrow a LIBOR Loan from such Lender on the
date for such borrowing specified in the relevant notice of borrowing given
pursuant to Section 2.02.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest which otherwise would have accrued
on such principal amount at a rate per annum equal to the interest component
of the amount such Lender would have bid in the London interbank market for
Dollar deposits of leading banks in amounts comparable to such principal
amount and with maturities comparable to such period (as reasonably determined
by such Lender).
5.06 Taxes.
-----
(a) Any and all payments by the Company hereunder or under the Notes
shall be made, in accordance with Section 4, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings imposed by the United States of America (or any
political subdivision or tax authority of or in such jurisdiction) and all
liabilities with respect thereto, excluding, in the case of each Lender and the
---------
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Lender or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof (all such non-
excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 506) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions and
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(iii) the Company shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with Applicable Laws.
(b) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 506) paid by such Lender or the Administrative
Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be made within 30 days from the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Company will furnish to the Administrative Agent, at its address referred to in
Section 11.02, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 506 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(f) Each Non-U.S. Lender agrees that it shall deliver to the Company
and the Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (B) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each Non-U.S. Lender which delivers a Form 1001
or 4224 and Form W-8 and W-9 pursuant to the next preceding sentence further
undertakes to deliver to the Company and the Administrative Agent, two further
copies of Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms,
or other manner of certification, as the case may be, on or before the date that
any form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it, and such
extensions or renewals thereof as may
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<PAGE>
reasonably be requested by the Company, certifying in the case of a Form 1001
or 4224 that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
unless in any such cases an event (including, without limitation, any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent a Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Company that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9, establishing
an exemption from United States backup withholding tax.
5.07 Additional Action in Certain Events.
-----------------------------------
(a) If an event or condition described in Sections 5.01(a) or (c),
5.03 or 5.06(a) has occurred or exists, or, in the case of subsection (i) below,
will occur or exist, but without prejudice to the obligations of the Company
under Sections 5.01 or 5.06, the Lender or Lenders so affected by such event or
condition will, if so requested by the Company, (i) consult with the Company and
the Administrative Agent for up to 30 days from the date of such request with a
view to agreeing to a mutually acceptable alternative arrangement which will
avoid or minimize the payment of such additional amount or avoid such illegality
in the future and which is not prejudicial to that Lender or (ii) make a good
faith effort (which shall not require the Lender to incur any loss) to make
within 30 days, subject to the consent of the Company, an assignment, in
accordance with Section 11.06, of all its rights and delegation of its
obligations under this Agreement, including the Commitments and the Outstanding
Loans to one of its subsidiaries or affiliates or to another Lender or to a
financial institution pursuant to such Section, for the purpose of causing such
event or condition to cease to exist or to reduce the liability of the Company,
so long as such assignment and delegation will not create another such event or
condition specified above under Sections 5.01(a) or (c), 5.03 or 5.06(a), or
cause a condition or event in the subsections specified above which results in
no reduction in the liability of the Company under such Sections.
(b) Subject to (a) above, the Company shall have the right to prepay,
if an event or condition described in Sections 5.01(a) or (c), 5.03 or 5.06(a)
has occurred or exists, the Outstanding Loans, if any, and terminate the
Commitments, of the Lender or Lenders so affected by such event or condition,
upon giving the Administrative Agent and such Lender or Lenders at least five
Business Days' prior irrevocable notice thereof specifying the date of
prepayment, if any, and termination. Any such prepayment hereunder shall be
made by the Company, together with interest thereon and any other amounts
payable hereunder
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<PAGE>
(including any amounts payable under Section 5.05 as a result of such
prepayment), on the date specified in such notice.
Section 6. Conditions Precedent.
--------------------
6.01 Initial Loan. The obligation of any Lender to make its initial
------------
Loan hereunder is subject to the receipt by the Administrative Agent with a
copy for each Lender of the following items, each of which shall be
satisfactory to the Administrative Agent in form and substance:
(a) This Agreement executed by the Company, the Administrative Agent
and the Lenders.
(b) The following documents, each certified as indicated below:
(i) a copy of the charter, as amended, of the Company certified
by the Secretary of State of Maryland, and a certificate as to the
good standing of and charter documents filed by the Company from such
Secretary of State, dated as of a recent date;
(ii) a certificate of the Secretary or an Assistant Secretary of
the Company substantially in the form attached as Exhibit D certifying
(A) that attached thereto is a true and complete copy of the by-laws
of the Company as in effect on the date of such certificate, (B) that
attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors of the Company authorizing the
execution, delivery and performance of the Basic Documents and the
extensions of credit hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the charter of the Company has not been amended since the
date of the certification thereto furnished pursuant to clause (i)
above, and (D) as to the incumbency and specimen signature of each
officer of the Company executing the Basic Documents and each other
document to be delivered by the Company from time to time in
connection therewith (and the Administrative Agent and each Lender may
conclusively rely on such certificate until it receives notice in
writing from such Person); and
(iii) a certificate of another officer of the Company as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary, as the case may be, of the Company.
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<PAGE>
(c) A certificate of a senior officer of the Company to the effect
set forth in the first sentence of Section 6.02.
(d) An opinion of Arent Fox Kintner Plotkin & Kahn, counsel to the
Company, substantially in the form of Exhibit E.
(e) The Notes, duly completed and executed.
(f) Evidence of the termination of the Letter of Credit and
Reimbursement Agreement, the payment of all amounts owed thereunder and the
release of all collateral securing the obligations of CRI Funding
Corporation thereunder.
(g) Evidence of the payment by the Company of (i) fees payable under
Section 2.04 and (ii) amounts owing under Section 11.03 to the extent it
has received invoices therefor on or before the date of the initial
borrowing hereunder.
(h) Evidence of such filings of financing statements and assignments
or notices of assignments of the Eligible Participations and such other
action in such jurisdictions as the Administrative Agent may deem necessary
or appropriate in order to create a first priority perfected security
interest in favor of the Collateral Agent in the Eligible Participations,
the Mortgage-Backed Securities and the other Assigned Collateral.
(i) An executed Security Agreement, in form and substance
satisfactory to the Lenders.
(j) A Collateral Valuation Certificate and an Unencumbered Asset
Valuation Certificate showing the Loan Value or Value, as applicable, of
the Assigned Collateral or the Unencumbered Assets, as applicable, as of a
date not more than five Business Days prior to the date of the initial Loan
hereunder.
(k) Evidence of the transfer and delivery of Mortgage-Backed
Securities and Certificates of Participation listed on such Collateral
Valuation Certificate to the Collateral Agent pursuant to Article VII of
the Security Agreement.
(l) A copy of any required consent referred to in Section 7.04.
(m) Such other documents as the Administrative Agent or any Lender or
special New York counsel to the Lenders may reasonably request.
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<PAGE>
6.02 Initial and Subsequent Extensions of Credit. The obligation of
-------------------------------------------
the Lenders to make any Loan to the Company upon the occasion of each borrowing
hereunder (including the initial borrowing) is subject to the further conditions
precedent that, both immediately prior to the making of such Loan and also after
giving effect thereto: (i) no Default shall have occurred and be continuing;
(ii) the representations and warranties made by the Company in Section 7 and in
Section 3.1 of the Security Agreement shall be true and complete on and as of
the date of the making of such Loan with the same force and effect as if made on
and as of such date; and (iii) there shall not have occurred any change, or
development or event involving a prospective change, which in the opinion of the
Required Lenders could have a Material Adverse Effect. Each notice of borrowing
by the Company hereunder shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date of such notice
and, unless the Company otherwise notifies the Administrative Agent prior to the
date of such borrowing, as of the date of such borrowing).
Section 7. Representations and Warranties. The Company represents
------------------------------
and warrants to the Administrative Agent and the Lenders that:
7.01 Corporate Existence.
-------------------
(a) Each of the Company and its Subsidiaries: (i) is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (ii) has all
requisite corporate or other power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is qualified
to do business and in good standing in all jurisdictions in which the nature of
the business conducted by it makes such qualification necessary and where
failure so to qualify would have a Material Adverse Effect.
(b) The Company is qualified as a REIT under Sections 856 to 860,
inclusive, of the Code.
7.02 Financial Condition. The consolidated balance sheets of the
-------------------
Company and its Consolidated Subsidiaries as of December 31, 1992 and the
related consolidated statements of income, retained earnings and changes in
financial position (or of cash flow, as the case may be) of the Company and its
Consolidated Subsidiaries for the fiscal year ended on said date, with the
opinion thereon (in the case of said consolidated balance sheet and statements)
of Arthur Andersen & Co., and the unaudited consolidated balance sheets of the
Company and its Consolidated Subsidiaries as of September 30, 1993 and the
related consolidated statements of income, retained earnings and changes in
financial position (or of cash flow, as the case may
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be) of the Company and its Consolidated Subsidiaries for the three-month
period ended on such date, heretofore furnished and delivered to each of the
Lenders, are complete and correct and fairly present the consolidated
financial condition of the Company and its Consolidated Subsidiaries as at
said dates and the consolidated results of their operations for the fiscal
year and three-month period ended on said dates (subject, in the case of such
financial statements as of December 31, 1992, to normal year-end audit
adjustments), all in accordance with GAAP. Neither the Company nor any of its
Subsidiaries had on said dates any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments, except as referred to
or reflected or provided for in said balance sheets as at said dates. Since
December 31, 1992, there has been no material adverse change in the
consolidated financial condition, operations, business or prospects of the
Company individually or the Company and its Consolidated Subsidiaries taken as
a whole from that set forth in said financial statements as at said date.
7.03 Litigation. There are no legal or arbitral proceedings, or any
----------
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened against the Company or
any of its Subsidiaries in which there is a reasonable possibility of an adverse
determination that could have a Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this
---------
Agreement, the Notes or any other Basic Document, the consummation of the
transactions herein and therein contemplated and compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent (except consents under the Nomura Facilities, which consents
have been obtained) under, the charter or by-laws of the Company, or any
Applicable Law, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
or to which any of them is subject, or constitute a default under any such
agreement or instrument.
7.05 Action. The Company has all necessary corporate power and
------
authority to execute, deliver and perform its obligations under this Agreement,
the Notes and the other Basic Documents; the execution, delivery and performance
by the Company of this Agreement, the Notes and the other Basic Documents have
been duly authorized by all necessary corporate action on its part; and this
Agreement and each other Basic Document has been duly and validly executed and
delivered by the Company and constitutes, and each of the Notes when executed
and delivered for value will constitute, its legal, valid and binding
obligation, enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency,
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reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
7.06 Approvals. No authorizations, approvals or consents of, and no
---------
filings or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance by the Company
of this Agreement, the Notes or the other Basic Documents or for the validity or
enforceability thereof.
7.07 Use of Loans. Neither the Company nor any of its Subsidiaries
------------
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying Margin Stock and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin
Stock.
7.08 ERISA. As of the date on which the initial Loan is made
-----
hereunder and except as disclosed to the Lenders through the Agent in writing
prior to the date on which the initial Loan is made hereunder, the Company and
the ERISA Affiliates have fulfilled their respective obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or any Plan or Multiemployer Plan (other than to make contributions in the
ordinary course of business).
7.09 Tax Returns. Each of the Company and its Subsidiaries has filed
-----------
all tax returns required to be filed by it and has paid all taxes and
assessments payable by it as shown on such returns to have become due other than
taxes, the payment of which is being contested pursuant to Section 8.07.
7.10 Investment Company Act. The Company is not an "investment
----------------------
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
7.11 Public Utility Holding Company Act. The Company is not a
----------------------------------
"holding company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
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<PAGE>
7.12 Indebtedness. There exists no credit agreement, loan agreement,
------------
indenture, purchase agreement, guarantee or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Company or any of its
Subsidiaries the aggregate principal or face amount of which equals or exceeds
(or may equal or exceed) $1,000,000, other than Indebtedness pursuant to this
Agreement, the Existing Interest Rate Hedge Agreements, the Signet Credit
Agreement, the Nomura Facilities and certain intercompany debt of a Subsidiary
to the Company that will be eliminated upon consolidation.
7.13 Environmental Matters. The Company and each of its Subsidiaries
---------------------
have obtained all permits, licenses and other authorizations which are required
under all Environmental Laws, except to the extent failure to have any such
permit, license or authorization would not have a Material Adverse Effect. The
Company and each of its Subsidiaries are in compliance with the terms and
conditions of all such permits, licenses and authorizations, and are also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
would not have a Material Adverse Effect.
7.14 Subsidiaries, Etc. Set forth in Schedule III is a complete and
------------------
correct list, as of the date of this Agreement, of all Subsidiaries of the
Company (and the respective jurisdiction of incorporation of each such
Subsidiary, if incorporated) and of all investments held by the Company or any
of its Subsidiaries in any joint venture. Except as disclosed in Schedule III
the Company owns, free and clear of Liens, all outstanding shares of such
Subsidiaries (and each such Subsidiary owns, free and clear of Liens, all
outstanding shares of its Subsidiaries) and all such shares are validly issued,
fully paid and non-assessable and the Company (or the respective Subsidiary)
also owns, free and clear of Liens, all such investments.
7.15 Accuracy of Information. All information, financial or
-----------------------
otherwise, written or verbal, supplied by the Company to the Administrative
Agent or any Lender is true, complete and accurate in all material respects.
7.16 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of the Company contained in each Basic Document delivered in
connection with this Agreement are, or when each such document is delivered will
be, true and correct in all material respects.
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<PAGE>
7.17 Full Disclosure. No certificate, opinion, or any other
---------------
statement made or furnished in writing to the Lender by or on behalf of the
Company in connection with any of the Basic Documents or the transactions
contemplated herein, contains any untrue statement of a material fact, or omits
to state a material fact necessary in order to make any statement contained
therein or herein not misleading, as of the date such statement was made. There
is no fact concerning the Company, any of its Subsidiaries, or the Assigned
Collateral known to the Company which has, or will in the reasonable judgment of
the Company have, a Material Adverse Effect, which fact has not been set forth
herein, in the financial statements delivered pursuant to Section 8.01, or in a
certificate, opinion, or other written statement so made or furnished to the
Lender prior to the date as of which this representation is deemed made.
7.18 Pari Passu. The obligations of the Company to each Lender
----------
hereunder rank and will at all times rank at least pari passu in right of
----------
payment with all other unsecured and unsubordinated debt of the Company.
7.19 Title to Assets. The Company has legal title to or a legal and
---------------
valid leasehold interest in all Property and assets owned by it on the date
hereof, and will have legal title to all Property and assets acquired by it at
any time subsequent to the date hereof, free and clear of all Liens, except to
the extent that the failure to have such title or interest would not have a
Material Adverse Effect.
7.20 REIT Advisor. Neither the Company nor CRI Insured Mortgage
------------
Associates Advisor Limited Partnership has given notice of its intention to
terminate or not renew the advisory agreement between such parties and such
agreement remains in full force and effect.
7.21 Compliance With Applicable Laws, Etc. The Company and each of
-------------------------------------
its Subsidiaries is in compliance with all Applicable Laws in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as would not, in the aggregate, have a Material Adverse Effect.
Section 8. Covenants of the Company. The Company covenants and
------------------------
agrees with the Lenders and the Administrative Agent that, so long as any
Commitment or Loan is outstanding and until payment in full of all amounts
payable by the Company hereunder:
8.01 Financial Statements; Other Information. The Company shall
---------------------------------------
deliver to the Administrative Agent (with a copy for each of the Lenders):
(a) as soon as available and in any event within 105 days after the
end of each fiscal year of the Company,
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consolidated statements of income, retained earnings and cash flow of the
Company and its Consolidated Subsidiaries for such year and the related
consolidated balance sheets as at the end of such year, setting forth in
each case in comparative form the corresponding consolidated figures for
the preceding fiscal year, and accompanied by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Consolidated Subsidiaries as at the end
of, and for, such fiscal year in accordance with GAAP;
(b) as soon as available and in any event within 60 days after the
end of the first three quarterly fiscal periods of each fiscal year of the
Company, consolidated statements of income, retained earnings and cash
flow of the Company and its Consolidated Subsidiaries for such period and
for the period from the beginning of the respective fiscal year to the end
of such period, and the related consolidated balance sheets as at the end
of such period, setting forth in each case in comparative form the
corresponding consolidated figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a senior financial
officer of the Company, which certificate shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Company and its Consolidated Subsidiaries,
in accordance with GAAP as at the end of, and for, such period (subject
to normal year-end audit adjustments);
(c) promptly after their becoming available:
(i) copies of all financial statements, reports and proxy
statements that the Company shall have sent to its stockholders
generally;
(ii) copies of all registration statements that the Company shall
file, other than employee benefit plans, and copies of all regular and
periodic reports, if any, that the Company shall file with the
Securities and Exchange Commission, or any governmental agency or
agencies substituted therefor, or with any national securities
exchange, or shall furnish to its shareholders;
(d) if requested by the Administrative Agent, within five (5)
Business Days after the same are received by the Company, copies of any
notices filed with HUD with respect to defaults by obligors under Mortgage
Investments;
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(e) on the first Tuesday of each month (or, if such Tuesday is not a
Business Day, on the next succeeding Business Day), an Unencumbered Asset
Valuation Certificate showing the Value of the Unencumbered Assets as of
the last Tuesday of the immediately preceding month (or, if such Tuesday is
not a Business Day as of the next succeeding Business Day);
(f) within 48 hours after becoming aware that the Value of
Unencumbered Assets is less than an amount equal to 5% of the Loans
Outstanding at such time, telephone advice thereof confirmed in writing as
soon as possible thereafter (such telephone advice and confirmation to be
provided to the Administrative Agent at the same times they are
respectively provided to the Lender);
(g) on the dates specified in the Security Agreement, a Collateral
Valuation Certificate, which shall designate any Eligible Participations
listed therein for which an event of default of which the Company has or
should have knowledge of has occurred, or with the giving of notice or the
passage of time, an event of default will have occurred;
(h) as soon as possible, and in any event within ten days after the
Company knows or has reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan have
occurred or exist, a statement signed by a treasurer or chief financial
officer of the Company setting forth details respecting such event or
condition and the action, if any, which the Company or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report
or notice required to be filed with or given to PBGC by the Company or an
ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in section 4043(b) of
ERISA, with respect to a Plan, as to which PBGC has not by regulation
waived the requirement of section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event;
(ii) the filing under section 4041 of ERISA of a notice of intent
to terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
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<PAGE>
(iv) the complete or partial withdrawal by the Company or any
ERISA Affiliate under section 4201 or 4204 of ERISA from a
Multiemployer Plan, or the receipt by the Company or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under section 4041A
of ERISA; and
(v) the institution of a proceeding by a "fiduciary" (within the
meaning of Section 3(21) of ERISA) of any Multiemployer Plan against
the Company or any ERISA Affiliate to enforce section 515 of ERISA,
which proceeding is not dismissed within 30 days;
(i) from time to time such other information regarding the financial
condition, operations, business or prospects of the Company or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA) as
any Lender or the Administrative Agent may reasonably request.
The Company will furnish to the Administrative Agent (with a copy for each
Lender), at the time it furnishes each set of financial statements pursuant to
paragraph (a) or (b) above, a certificate of a senior financial officer of the
Company (i) to the effect that no Default has occurred and is continuing (or, if
any Default has occurred and is continuing, describing the same in reasonable
detail and describing the action that the Company has taken and proposes to take
with respect thereto) and (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
each of Sections 8.10, 8.11, 8.12 and, as applicable, 8.13 as of the end of the
respective quarterly fiscal period or fiscal year.
8.02 Litigation. The Company will promptly give to the
----------
Administrative Agent (with a copy for each Lender) notice of all legal or
arbitral proceedings, and of all proceedings by or before any governmental or
regulatory authority or agency, and any material development in respect of such
legal or other proceedings, affecting the Company or any of its Subsidiaries,
except proceedings in which there is no reasonable possibility of an adverse
determination that could have a Material Adverse Effect.
8.03 Existence, Etc.
--------------
(a) The Company will, and will cause each of its Subsidiaries to:
preserve and maintain its legal existence and all of its material rights,
privileges, licenses and franchises (provided that nothing in this Section 8.03
shall prohibit any transaction expressly permitted under Section 8.05); comply
with the requirements of all Applicable Laws (including without limitation, all
Environmental Laws), if failure to comply with
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<PAGE>
such requirements would have a Material Adverse Effect; pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained; maintain
all of its Properties used or useful in its business in good working order and
condition, ordinary wear and tear excepted; and permit representatives of any
Lender or the Administrative Agent, during normal business hours, to examine,
copy and make extracts from its books and records, to inspect its Properties,
and to discuss its business and affairs with its officers, all to the extent
reasonably requested by such Lender or the Administrative Agent (as the case
may be).
(b) The Company shall maintain its status as a REIT or maintain its
status as a pass-through entity which is not subject to taxation at the entity
level.
8.04 Insurance. The Company shall, and shall cause each of its
---------
Subsidiaries to, maintain worker's compensation insurance, liability insurance
and insurance on its properties, assets and business, now owned or hereafter
acquired, against such casualties, risks and contingencies, and in such types
and amounts, as are consistent with customary practices and standards of
companies engaged in similar businesses.
8.05 Prohibition of Fundamental Changes. The Company will not, nor
----------------------------------
will it permit any of its Subsidiaries to, enter into any transaction of merger
or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution). The Company will not, and will not
permit any of its Subsidiaries to, convey, sell, lease transfer or otherwise
dispose of, in one transaction or a series of transactions, all or a substantial
part of its business or assets, whether now owned or hereafter acquired
(including, without limitation, shares of stock and indebtedness of
Subsidiaries, receivables and leasehold interests) if such conveyance, sale,
lease, transfer or other disposition would have a Material Adverse Effect (and
any conveyance, sale, lease, transfer or other disposition permitted by this
sentence shall be for cash consideration at fair market value). Notwithstanding
the foregoing provisions of this Section 8.05, if no Default exists or would
result therefrom:
(i) any Subsidiary of the Company may be merged or
consolidated with or into: (i) the Company if the Company shall be the
continuing or surviving corporation or (ii) any other such Subsidiary;
provided that if any such transaction shall be between a Subsidiary and a
Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the
continuing or surviving corporation;
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<PAGE>
(ii) any such Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Company or a Wholly-Owned Subsidiary of the Company;
(iii) the Company or any Subsidiary, may transfer assets to or
merge or consolidate with any other Person if the Company or such
Subsidiary is the surviving corporation; and
(iv) any Subsidiary of the Company may change its domicile from
one state in the United States of America to another state in the United
States of America.
8.06 Certain Notices. The Company will promptly give the following
---------------
notices to the Administrative Agent (with a copy for each of the Lenders):
(a) after the Company knows or has reason to believe that any Default
has occurred, a notice of such Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken and proposes to take
with respect thereto; and
(b) a notice with respect to any (i) event of default which the
Company has or should have knowledge under any Eligible Participation or
(ii) litigation, investigation or proceeding which may exist at any time
between the obligor of any Eligible Mortgage Investment and any Person,
which in either case, if not cured or if adversely determined, as the case
may be, would have a material adverse effect on the insurance or guarantee
on such Eligible Mortgage Investment.
8.07 Limitation on Liens. The Company will not, nor will it permit
-------------------
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any of its assets (including, without limitation, the
Assigned Collateral), whether now owned or hereafter acquired, or assign or
otherwise convey any right to receive income (including, without limitation,
from the Assigned Collateral), except (i) as provided in the Security Agreement;
(ii) Liens securing any Interest Rate Hedge Agreements permitted hereunder;
provided, that the aggregate market value of the collateral subject to such
- --------
Liens does not exceed $12,000,000 at any time; (iii) Liens imposed by any
governmental authority for taxes, assessments or charges not yet due or which
are being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Company or any
of its Subsidiaries, as the case may be, in accordance with GAAP; (iv) Liens
securing the Nomura Facilities, as in effect on the date hereof; and (v) Liens
pursuant to the Amended and Restated Collateral Pledge Agreement dated December
29, 1992 securing the Signet Credit Agreement as in effect on the date hereof,
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including Liens securing additional loans to be made under such agreement, as
amended; provided, that the aggregate amount of all loans secured under such
--------
agreement does not exceed $85,000,000.
8.08 Limitation on Indebtedness. The Company will not, nor will it
--------------------------
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, whether current or funded, or any other liability, except (i)
Indebted-ness on account of the Loans; (ii) other Indebtedness to the
Administrative Agent or the Lenders arising hereunder; (iii) Indebtedness under
any Interest Rate Hedge Agreement entered into pursuant to Section 8.13 or under
any other Interest Rate Hedge Agreement with one or more other parties which is
a rate cap or similar agreement; (iv) existing Indebtedness on the date hereof
described in Section 7.12; (v) Indebtedness pursuant to the Signet Credit
Agreement, as amended, up to a maximum aggregate amount of Indebtedness under
such agreement of $85,000,000; and (vi) any other Indebtedness expressly
approved by the Required Lenders.
8.09 Borrowing Base. The Company will not permit (i) the aggregate
--------------
principal amount of Outstanding Loans by any Lender to exceed such Lender's
Available Commitment or (ii) the aggregate Loan Value of U.S. Mortgage-Backed
Securities included in the Assigned Collateral to represent less than 40% of the
aggregate Loan Value of all Qualified Investments included in the Assigned
Collateral.
8.10 Minimum Consolidated Shareholders' Equity. The Company will not
-----------------------------------------
permit at any time Consolidated Shareholders' Equity to be less than (i)
$125,000,000 or (ii) at any time after the Company's proposed equity offering,
should it occur, the lesser of (a) $150,000,000 and (b) $125,000,000 plus the
aggregate proceeds (less fees and expenses) of such equity offering.
8.11 Maximum Total Liabilities. The Company will not permit at any
-------------------------
time the ratio of Total Liabilities to Consolidated Shareholders' Equity to
exceed 2.5 to 1.0.
8.12 Fixed Charge Coverage. The Company will not, as at the end of
---------------------
any fiscal quarter, permit the Fixed Charge Coverage Ratio to be less than 1.5
to 1.0.
8.13 Interest Rate Hedge Parameters. If the Fixed Charge Coverage
------------------------------
Ratio at the end of any fiscal quarter is less than 1.75 to 1.0, the Company
shall, upon the request of the Administrative Agent, enter into additional
Interest Rate Hedge Agreements with one or more financial institutions such that
the notional aggregate principal amount is at least equal to 75% of Total
Liabilities, at fixed or maximum interest rates and upon terms and conditions
(including, without limitation, measures of
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<PAGE>
damages for early termination and security provided) reasonably acceptable to
the Administrative Agent.
8.14 Investment Policy. The Company shall invest its assets in
-----------------
accordance with its investment policies and objectives and will use its best
efforts to comply with the requirements applicable to real estate investment
trusts or pass-through entities which are not subject to taxation at the entity
level under the Code.
8.15 Environmental Matters. The Company will, and will cause each of
---------------------
its Subsidiaries to (i) comply with all Environmental Laws and obtain and comply
in all material respects with and maintain any and all licenses, approvals,
registrations or permits required by Environmental Laws, except to the extent
that failure to do so would not be reasonably likely to have a Material Adverse
Effect; and (ii) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all governmental authorities respecting Environmental
Laws, except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings would not be
reasonably likely to have a Material Adverse Effect.
8.16 Indemnification. The Company will pay, protect, defend,
---------------
indemnify and save harmless the Administrative Agent and each Lender, in their
capacity as such, and each of its officers, directors, shareholders, controlling
persons, employees, counsel and agents from and against all liabilities, losses,
claims, obligations, damages, penalties, causes of action, suits, disbursements,
costs and expenses (including, without limitation, reasonable attorneys' fees
and expenses) or judgments of any kind or nature arising from the transactions
contemplated by the Basic Documents (and including those arising out of, or in
anyway relating to, the violation or noncompliance with any Environmental Laws);
provided that the Company will not be liable to the Administrative Agent or a
- --------
Lender, in their capacity as such, each of its officers, directors,
shareholders, controlling persons, employees, counsel and agents for such
liabilities, losses, claims, damages, penalties, causes of action, suits, costs
and expenses (including, without limitation, attorneys' fees) or judgments
arising from its gross negligence or wilful misconduct or the gross negligence
or wilful misconduct of any of its officers, directors, shareholders,
controlling persons, employees or agents. If any action, suit or proceeding
arising from any of the foregoing is brought against the Administrative Agent, a
Lender, or any other person indemnified pursuant to this Section 8.16, the
Company will, if within a reasonable time requested in writing to do so and may,
at its option and at its expense, resist and defend such action, suit or
proceeding and employ counsel therefor (which counsel shall be satisfactory to
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the party requesting indemnification hereunder). The Company shall not agree to
the settlement of any such action, suit or proceeding without the consent of the
party requesting indemnification hereunder, which consent shall not be
unreasonably withheld or delayed. Each Lender or any other person indemnified
pursuant to this Section 8.16 shall have the right to employ separate counsel in
any such action, suit or proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (a) the Company has agreed to pay such fees and
expenses, or (b) the Company shall have failed to assume the defense of such
action, suit or proceeding and employ counsel reasonably satisfactory to such
indemnified party, in any such action, suit or proceeding or (c) the named
parties to any such action, suit or proceeding (including any impleaded parties)
include the Company and any indemnified party related to the Administrative
Agent or a Lender and any such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company or the unrelated
indemnified party (in which case, if such indemnified party notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, the Company shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such indemnified party).
8.17 Lines of Business. The Company will continue, and cause each of
-----------------
its Subsidiaries to continue, to engage in a business of the same general type
as conducted by it on the date of this Agreement; provided, that the Company may
--------
establish a Subsidiary, or fund or guaranty affiliates or special purpose
corporations, to engage in other related lines of business if such engagement
would not have a Material Adverse Effect and provided that the Company does not
make contributions (whether by means of equity investments, transfer of assets
or otherwise) of more than 5 percent of total assets of the Company (which
assets should be classified as such on a balance sheet of the Company prepared
in accordance with GAAP) to such entities.
8.18 Transactions with Affiliates. Except as expressly permitted by
----------------------------
this Agreement, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) transfer, sell, lease, assign or otherwise
dispose of any Property to an Affiliate; (b) merge into or consolidate with or
purchase or acquire Property from an Affiliate; or (c) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, guarantees and assumptions of obligations of an
Affiliate); provided that (x) any Affiliate who is an individual may serve as a
director, officer or employee of the Company or any of its Subsidiaries and
receive reasonable compensation for his or her services in such capacity and (y)
the Company and its Subsidiaries may enter into transactions (other
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than extensions of credit by the Company or any of its Subsidiaries to an
Affiliate) providing for the leasing of Property, the rendering or receipt of
services or the purchase or sale of inventory and other Property in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Company and its
Subsidiaries as the monetary or business consideration which would obtain in a
comparable transaction with a Person not an Affiliate.
8.19 Use of Proceeds; Unencumbered Assets. The Company will use the
------------------------------------
proceeds (i) to replace the Letter of Credit facilities previously provided to
CRI Funding Corporation under the Letter of Credit and Reimbursement Agreement,
(ii) to finance the purchase and maintenance of Eligible Participations and
Mortgage-Backed Securities, (iii) to fund the Interest Rate Hedge Agreements
permitted hereunder and (iv) to pay the expenses incurred by the Company in
connection with the execution and delivery of this Agreement. Notwithstanding
the foregoing, the Company shall not permit at any time the Value of
Unencumbered Assets to be less than an amount equal to 5% of the Loans
Outstanding at such time.
8.20 Mortgage Investments. The Company shall enforce or cause to be
--------------------
enforced all provisions of any Eligible Participation, if the failure to enforce
any such provision or provisions (in the aggregate) would have a materially
adverse effect on the value of the Assigned Collateral or permit the mortgagor
under the related Eligible Mortgage Investment to interrupt, suspend or affect
the payments thereunder.
8.21 Servicers and Mortgagees of Record. The Company shall use
----------------------------------
reasonable efforts to cause each Servicer and each mortgagee of record to comply
with the requirements of all Applicable Laws and the terms and provisions of the
relevant Servicing Agreement or Participation Agreement, as the case may be.
8.22 Books and Records. The Company will keep, or cause to be kept,
-----------------
adequate records and books of account, in which complete entries are to be made
reflecting its business and financial transactions, such entries to be made in
accordance with GAAP consistently applied in the case of financial transactions
or as otherwise required by applicable rules and regulations of any governmental
agency or regulatory authority (federal, state or local) having jurisdiction
over the Company or the transactions contemplated by this Agreement.
8.23 Further Assurance. As from time to time reasonably requested by
-----------------
the Administrative Agent or a Lender, at the cost and expense of the Company,
execute and deliver to the Administrative Agent and the Lenders all such
documents and instruments and do all such other acts and things as may be
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reasonably required to enable the Administrative Agent and the Lenders to
exercise and enforce their respective rights under the Basic Documents and
record and file and rerecord and refile all such documents and instruments, at
such time or times, in such manner and at such place or places, all as may be
necessary to validate, preserve and protect the position of the Administrative
Agent and the Lenders under the Basic Documents. The Administrative Agent may,
and at the request of the Required Lenders shall, upon any extension of this
Agreement, request an opinion of counsel selected by the Company and approved by
the Administrative Agent, which approval shall not be unreasonably withheld or
delayed, with respect to action required to be taken for the protection of the
rights of the Administrative Agent and the Lenders under the Basic Documents.
Section 9. Events of Default. In case of the happening of any of the
-----------------
following events (herein called "Events of Default"):
(a) The Company shall default in the payment (or prepayment) when due
of any principal of or interest on any Loan, any fee or any other amount
payable by it hereunder or under any Note; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any amount of principal of or interest on any of its
other Indebtedness the aggregate amount of which other Indebtedness is
$5,000,000 or more; or any event specified in any note, agreement,
indenture or other document evidencing or relating to any such Indebtedness
shall occur if the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be prepaid in
full (whether by redemption, purchase, offer to purchase or otherwise),
prior to its stated maturity or to have the interest rate thereon reset to
a level so that securities evidencing such Indebtedness trade at the level
specified in relation to the par value thereof; or
(c) Any representation or warranty made or deemed made herein, in the
Security Agreement or in any other Basic Document (or in any modification
or supplement hereto or thereto) by the Company, or in any certificate,
agreement, instrument or written statement made or delivered pursuant to
the provisions hereof (or thereof), shall have been incorrect or misleading
as of the time made or furnished in any material respect; or
(d) The Company shall fail (i) to perform or observe any term,
covenant or agreement contained in Sections 8.01(h), the first clause of
8.03(a), 8.03(b), 8.07, 8.17
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and 8.19 of this Agreement or any term, covenant or agreement contained
in the Security Agreement, or (ii) to perform or observe any other term,
covenant or agreement contained in this Agreement or any other Basic
Document, and any such failure referred to in this clause (ii) shall
remain unremedied for five days after the Company has become aware of
such default or has received notice thereof;
(e) The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part
of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code (as
now or hereafter in effect), (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under
the Bankruptcy Code, or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the Company or any of its Subsidiaries, in any court of
competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of the Company or such Subsidiary or of all or any substantial part of
its assets, or (iii) similar relief in respect of the Company or such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days; or an
order for relief against the Company or such Subsidiary shall be entered in
an involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess
of $100,000 in the aggregate shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against the
Company and/or any of its Subsidiaries and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 60
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days from the date of entry thereof and the Company or the relevant
Subsidiary shall not, within said period of 60 days, or such longer
period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such
appeal; or
(i) Any of the Basic Documents shall, at any time after its execution
and delivery, for any reason cease to be in full force and effect in any
material respect (unless such occurrence is in accordance with its terms or
after payment thereof) or shall be declared to be null and void or the
validity or enforceability thereof shall be contested by the Company or the
Company shall deny that it has any or further liability or obligation
thereunder; or
(j) Any judgment, writ, warrant of attachment or execution or similar
process shall be issued or levied in respect of the Cash Collateral Account
and such judgment, writ, or similar process shall not be released, vacated,
stayed or fully-bonded within forty-five days after its issue or levy; or
(k) The Lien of the Security Agreement in favor of the Collateral
Agent shall cease to be a valid assignment of, and valid and perfected
first priority Lien upon and security interest in, the Assigned Collateral,
as security for the repayment of the Obligations, or such Lien shall cease
to be valid as against creditors of the Company; or
(l) The Company shall lose its status as a REIT (or a pass-through
entity which is not subject to taxation at the entity level), or CRI
Insured Mortgage Associates Advisor Limited Partnership shall give notice
of its intention to terminate or not renew its advisory agreement with the
Company or shall otherwise no longer act as advisor to the Company (unless
the REIT becomes self-administered); or
(m) An event or condition specified in Section 8.01(f) shall occur or
exist with respect to any Plan or Multiemployer Plan and, as a result of
such event or condition, together with all other such events or conditions,
the Company or any ERISA Affiliate shall incur or in the reasonable opinion
of the Required Lenders shall be likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) which
could, in the reasonable determination of the Required Lenders, have a
Material Adverse Effect; or
(n) The Company shall incur net losses for three (3) consecutive
fiscal quarters on either a GAAP or tax basis;
THEREUPON, at any time during the continuance of such event, the
Administrative Agent shall, upon the direction of the
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Required Lenders or, in the case of a Major Default, upon the direction of an
Electing Lender as provided (and as defined) below, by notice to the Company
(a "Termination Notice") (provided, that if an Event of Default specified in
--------
Section 9(f) or 9(g) shall occur with respect to the Company, such notice
shall be deemed delivered and the results specified in clauses (i) and (ii)
below shall occur automatically without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company) terminate the Commitments and/or declare the principal amount then
Outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Company hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05) to be forthwith due and
payable, whereupon (i) the Commitments shall terminate and/or (ii) all such
amounts shall be immediately due and payable, without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company; provided, that, if such event constitutes a
--------
Major Default and the Required Lenders shall fail to give such direction
within ten Business Days after the occurrence thereof, the Administrative
Agent shall, upon the direction of any Lender (an "Electing Lender"), at the
same or different times, by notice to the Company and all the Lenders,
terminate such Electing Lender's Commitment and/or declare the principal
amount then Outstanding of, and accrued interest on, the Loans of such
Electing Lender and all other amounts payable to such Electing Lender by the
Company hereunder and under the Notes held by such Electing Lender (including,
without limitation, any amounts payable under Section 5.05 to such Electing
Lender) to be forthwith due and payable, whereupon (x) the Commitment of such
Electing Lender shall terminate and/or (y) all such amounts shall be
immediately due and payable, without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company; provided, further, that if the Administrative Agent has, upon
-------- -------
the direction of such Electing Lender, by notice to the Company taken
the action with the result specified in clause (y) and such Electing Lender
has not received full payment of all such amounts within ten Business Days
after delivery of such notice, such Electing Lender may direct the
Administrative Agent to give a Termination Notice.
Section 10. The Administrative Agent.
------------------------
10.01 Appointment, Powers and Immunities. Each Lender hereby
----------------------------------
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder with such powers as are specifically delegated to the Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 10.05 and the first sentence of Section 10.06 shall
include reference to its affiliates and its own and its affiliates' officers,
directors, employees and agents): (a) shall have no duties or
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responsibilities except those expressly set forth in this Agreement, and shall
not by reason of this Agreement be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other
document referred to or provided for in, or received by any of them under,
this Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other
document referred to or provided for herein or for any failure by the Company
or any other Person to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder; and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection herewith,
except for its own gross negligence or willful misconduct. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it in good faith. The Administrative Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until a
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent, together with the consent of the Company to such
assignment or transfer.
10.02 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Administrative Agent.
For purposes of providing a certificate or statement as to amounts owing to a
Lender as provided in Section 4.3(c) of the Security Agreement, each Lender
shall provide a certificate or other statement to the Administrative Agent
setting forth such amounts and the Administrative Agent may exclusively rely on
such certificate or statement. As to any matters not expressly provided for by
this Agreement, the Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Required Lenders, and such instructions of such
Lenders and any action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.
10.03 Defaults. The Administrative Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of a Default (other than the non-payment
of principal of or interest on Loans or of commitment fees) unless the
Administrative Agent has received notice from a Lender or the Company specifying
such Default and stating that such notice is a "Notice of Default". In the
event that the Administrative Agent receives such a notice
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of the occurrence of a Default, the Administrative Agent shall give prompt
notice thereof to the Lenders (and shall give each Lender prompt notice of
each such non-payment). The Administrative Agent shall (subject to Section
10.07 of this Agreement and Section 6.1(e) of the Security Agreement) take
such action with respect to such Default as shall be directed by the Required
Lenders, provided, that, unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders, or all of the Lenders.
10.04 Rights as a Lender. CIBC, (and any successor acting as
------------------
Administrative Agent) and its affiliates may (without having to account therefor
to any Lender) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with the Company (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and CIBC, and its affiliates may accept fees and other consideration
from the Company for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to defend, indemnify and
---------------
hold harmless the Administrative Agent (to the extent not reimbursed under
Section 11.03, but without limiting the obligations of the Company under Section
11.03) ratably in accordance with the aggregate principal amount of the Loans
held by the Lenders (or, if no Loans are at the time outstanding, ratably in
accordance with their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent (including
by any Lender) arising out of or by reason of any investigation or any way
relating to or arising out of this Agreement or any other documents contemplated
by or referred to herein or the transactions contemplated hereby (including,
without limitation, the costs and expenses which the Company is obligated to pay
under Section 11.03 but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
of any such other documents, provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
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10.06 Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by the Company of this Agreement or any other document referred to or
provided for herein or to inspect the Properties or books of the Company or any
of its Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Company or any
of its Subsidiaries (or any of their affiliates) which may come into the
possession of the Administrative Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly required of the
--------------
Administrative Agent hereunder, the Administrative Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall receive
further assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 10.05 against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
10.08 Resignation or Removal of Administrative Agent. Subject to the
----------------------------------------------
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Administrative Agent may be removed at
any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a bank
which has an office in New York, New York with a combined capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers,
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privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 10 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Administrative Agent.
Section 11. Miscellaneous.
-------------
11.01 Waiver. No failure on the part of the Administrative Agent or
------
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
11.02 Notices. Except where telephonic (which shall be confirmed in
-------
writing promptly) instructions or notices are authorized herein to be given, all
notices, demands, instructions and other communications required or permitted to
be given under this Agreement shall be in writing and shall be personally
delivered or sent by registered, certified or express mail, postage prepaid,
return receipt requested, or by prepaid telex, facsimile, TWX or telegram (with
messenger delivery specified in the case of a telegram), and shall be deemed to
be given for purposes of this Agreement on the date on which such writing is
delivered or sent to the intended recipient thereof in accordance with the
provisions of this Section 11.02 (except that any notice sent by registered or
certified mail shall be deemed to have been given on the fifth Business Day
after such notice is deposited for delivery in the United States mail). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 11.02, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective facsimile,
telex or TWX numbers) indicated below, in the case of the Company or the
Administrative Agent, and at the Address for Notices specified for each such
Lender in Schedule I in the case of any Lender, and, in the case of telephonic
instructions or notices, by calling the telephone number or numbers indicated
for such party below or in Schedule I, as the case may be:
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(a) with respect to the Company:
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852
Attention: Mr. William B. Dockser
Mr. Jay R. Cohen
Office of General Counsel
Telephone: (301) 468-9200
Facsimile: (301) 231-0396
(b) with respect to the Administrative Agent:
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Attention: Ms. Arlene Tellerman
Telephone: (212) 856-3695
Facsimile: (212) 856-3763
Any party may designate a different or additional address for the delivery of
notices by providing notice thereof to the other parties. Except as provided to
the contrary above, all notices, demands, and other communications shall be
effective upon personal delivery or upon the date of receipt by the addressee as
shown on the return receipt. Rejection or other refusal to accept notices,
demands, or other communications shall be of no effect, and all notices,
demands, and other communications which are rejected or acceptance of which is
refused shall be deemed to be effective upon the date on which the same were
rejected or refused.
11.03 Expenses, Etc. The Company agrees to pay or reimburse each of
-------------
the Lenders and the Administrative Agent for paying: (a) all reasonable out-of-
pocket costs and expenses of the Administrative Agent, including the reasonable
fees and expenses of LeBoeuf, Lamb, Greene & MacRae, special New York counsel to
the Administrative Agent, in connection with (i) the negotiation, preparation,
execution and delivery of this Agreement, the Notes and the other Basic
Documents (whether or not any Loans are made hereunder, but subject to the terms
set forth in the Commitment Letter dated November 24, 1993 from the
Administrative Agent to the Company) and the making of the Loans hereunder and
(ii) any amendment, modification or waiver of any of the terms of this Agreement
or any of the Notes; (b) all reasonable fees and expenses of Debevoise &
Plimpton, special New York counsel to National Australia Bank Limited, New York
Branch, in connection with the negotiation, preparation, execution and delivery
of this Agreement, the Notes and the other Basic Documents; (c) all reasonable
fees and expenses of Shaw, Pittman, Potts & Trowbridge, counsel to Signet
Bank/Virginia, in connection with the negotiation, preparation, execution and
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delivery of this Agreement, the Notes and the other Basic Documents; (d) all
reasonable costs and expenses of the Lenders and the Administrative Agent
(including reasonable fees and expenses of counsel) in connection with (i) any
Default and any enforcement or collection proceedings resulting therefrom and
(ii) the enforcement of this Section 11.03; and (e) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
Notes or any other document referred to herein.
11.04 Amendments, Etc. Except as otherwise expressly provided in
---------------
this Agreement, any provision of this Agreement or the Security Agreement may be
amended, waived or modified only by an instrument in writing signed by the
Company, the Administrative Agent and the Required Lenders, or by the Company
and the Administrative Agent acting with the consent of the Required Lenders,
and any provision of this Agreement or the Security Agreement may be waived by
the Required Lenders or by the Administrative Agent acting with the consent of
the Required Lenders; provided, that no amendment, modification or waiver shall,
--------
unless by an instrument signed by all of the Lenders or by the Administrative
Agent acting with the consent of all of the Lenders: (i) increase or extend
the term (except as provided in Section 2.09), or extend the time or waive any
requirement for the reduction or termination, of any of the Commitments, (ii)
waive, or extend the date fixed for, the payment of principal of or interest
on any Loan or any fee hereunder, (iii) reduce the amount of any such payment
of principal, (iv) reduce the rate at which interest is payable thereon or any
fee is payable hereunder, (v) release any Assigned Collateral other than as
may be provided in the Security Agreement, (vi) alter the terms of this
Section 11.04, (vii) amend the definition of the term "Required Lenders" or
amend or waive any requirement that all Lenders consent to any action, (viii)
waive any of the conditions precedent set forth in Section 6, (ix) amend or
waive the requirements set forth in the definitions of "Assigned Collateral",
"Borrowing Base", "Eligible Mortgage Investment", "Eligible Participation",
"Loan Value", "Qualified Investments" or "U.S. Mortgage-Backed Security" or
(x) amend or waive the covenants set forth in Sections 8.09, 8.10, 8.11 or
8.12; and provided, further, that any amendment of Section 10 shall require
--------
the consent of the Administrative Agent.
11.05 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.06 Assignments and Participations.
------------------------------
(a) The Company may not assign its rights or obligations hereunder or
under the Notes or under any other Basic Document without the prior consent of
all of the Lenders and the Administrative Agent.
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(b) Each Lender may assign in whole or in part any
of its Commitments (but only with the consent of the Company and the
Administrative Agent, which consent of the Company will not be unreasonably
withheld), its Loans and its Notes; provided that, (i) no such consent by the
Company or the Administrative Agent shall be required in the case of any
assignment by a Lender to any of its affiliates or to another Lender; (ii) any
such partial assignment shall be in an amount at least equal to $10,000,000;
(iii) each such assignment by a Lender of its Loans, Note, or Commitment shall
be made in such manner so that the same portion of its Loans, Note, and
Commitment is assigned to the respective assignee. Upon execution and delivery
by the assignor and the assignee to the Company and the Administrative Agent of
a Lender Assignment Agreement substantially in the form of Exhibit I pursuant to
which such assignee agrees to become a "Lender" hereunder (if not already a
Lender) having the Commitment(s) and Loans specified in such instrument, and
upon consent thereto by the Company and the Administrative Agent to the extent
required above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of the Company
and the Administrative Agent), the obligations, rights and benefits of a
Lender hereunder holding the Commitment(s) and Loans (or portions thereof)
assigned to it (in addition to the Commitment(s) and Loans, if any,
theretofore held by such assignee) and the assigning Lender shall, to the
extent of such assignment, be released from the Commitment(s) (or portion(s)
thereof) so assigned. Upon each such assignment the assigning Lender shall pay
the Administrative Agent an assignment fee of $2,500.
(c) A Lender may sell or agree to sell to one or more other Persons a
participation in all or any part of any Loans held by it, or in its Commitments,
in which event each purchaser of a participation (a "Participant"), except as
otherwise provided in Section 4.07(c), shall not have any rights or benefits
under this Agreement or any Note (the Participant's rights against such Lender
in respect of such participation to be those set forth in the agreements
executed by such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 in respect of Loans held by it, and
its Commitments, shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans and Commitments, and as if such Lender
were funding each of such Loan and Commitments in the same way that it is
funding the portion of such Loan and Commitments in which no participations have
been sold. In no event shall a Lender that sells a participation agree with the
Participant to take or refrain from taking any action hereunder except that such
Lender may agree with the Participant that it will not, without the consent of
the Participant, agree to (i) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the
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related Loan or Loans or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of principal, (iv)
reduce the rate at which interest is payable thereon, or any fee hereunder
payable to the Participant, to a level below the rate at which the Participant
is entitled to receive such interest or fee, or (v) release Assigned
Collateral.
(d) Anything in this Section 11.06 to the contrary notwithstanding,
any Lender may assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Lender as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Lender. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) A Lender may furnish any information concerning the Company or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
11.07 Survival. The obligations of the Company under Sections 5.01,
--------
5.05, 5.06 and 11.03 and the obligations of the Lenders under Section 10.05
shall survive the repayment of the Loans and the termination of the Commitments.
In addition, each representation and warranty made, or deemed to be made by a
notice of any extension of credit, herein or pursuant hereto shall survive the
making of such representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any extension of credit hereunder, any Default
which may arise by reason of such representation or warranty proving to have
been false or misleading, notwithstanding that such Lender or the Administrative
Agent may have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time such extension of
credit was made.
11.08 Captions. The table of contents and captions and section
--------
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement and
-----------------------------------------
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. The Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York state court sitting in New York City for the
-62-
<PAGE>
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE ADMINISTRATIVE
--------------------
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.12 Entire Agreement. This Agreement, the Notes and the other
----------------
Basic Documents embody the entire agreement among the Company, the
Administrative Agent and the Lenders relating to the subject matter hereof and
supersede all prior agreements, representations and understandings, if any,
relating to the subject matter hereof, including the Commitment Letter dated
November 24, 1993 from the Administrative Agent to the Company, except as
provided in Sections 2.04 and 11.03.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-63-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CRIIMI MAE Inc.
By /s/ H. William Willoughby
--------------------------------
Name: H. William Willoughby
Title: President
Canadian Imperial Bank of Commerce,
New York Agency, as Administrative
Agent
By /s/ Daniel J. Conlon
----------------------------------
Name: Daniel J. Conlon
Title: Authorized Signatory
CIBC Inc., as Lender
By /s/ Gail M. Golightly
----------------------------------
Name: Gail M. Golightly
Title: Vice President
CIBC Inc.
National Australia Bank Limited,
New York Branch, as Lender
By /s/ T. W. Hunersen
----------------------------------
Name: T. W. Hunersen
Title: Senior Vice President
Signet Bank/Virginia, as Lender
By /s/ B. E. Cooke
----------------------------------
Name: B. E. Cooke
Title: Vice President
-64-
<PAGE>
SCHEDULE I
Commitments, Lenders' Applicable Lending Offices
------------------------------------------------
and Addresses for Notices
-------------------------
<TABLE>
<CAPTION>
Lenders, Lenders' Applicable Lending Offices
and Addresses for Notices Commitment
- -------------------------------------------- ----------
<S> <C>
CIBC, Inc. $50,000,000
a) Base Rate Loans Office:
425 Lexington Avenue
New York, New York 10017
b) LIBOR Loans Office:
425 Lexington Avenue
New York, New York 10017
c) Address for Notices:
CIBC, Inc.
425 Lexington Avenue
New York, New York 10017
Attention: Ms. Arlene Tellerman
Telephone: (212) 856-3695
Facsimile: (212) 856-3763
National Australia Bank Limited,
New York Branch $40,000,000
a) Base Rate Loans Office:
200 Park Avenue - 34th Floor
New York, New York 10166
b) LIBOR Loans Office:
200 Park Avenue - 34th Floor
New York, New York 10166
c) Address for Notices:
National Australia Bank Limited,
New York Branch
200 Park Avenue - 34th Floor
New York, New York 10166
Attention: Mr. Thomas Kilfoyle
Telephone: (212) 916-9510
Facsimile: (212) 983-1969
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lenders, Lenders' Applicable Lending Offices
and Addresses for Notices Commitment
- -------------------------------------------- ----------
<S> <C>
Signet Bank/Virginia $20,000,000
a) Base Rate Loans Office:
8330 Boone Boulevard
Vienna, Virginia 22182-2632
b) LIBOR Loans Office:
8330 Boone Boulevard
Vienna, Virginia 22182-2632
c) Address for Notices:
Signet Bank/Virginia
8300 Boone Boulevard
Vienna, Virginia 22182-2632
Attention: Mr. David H. Olson
Telephone: (301) 961-0066
Facsimile: (301 652-1174
</TABLE>
-2-
<PAGE>
SCHEDULE II
Existing Interest Rate Hedge Agreements
---------------------------------------
<TABLE>
<CAPTION>
Hedging Notional
Instrument Amount Effective Date Maturity Date Floor Cap
- ---------- ------ --------------- ------------- ------ -------
<S> <C> <C> <C> <C> <C>
Collar $ 30,000,000 March 7, 1990 March 7, 1995 8.375% 10.125%
Collar 20,000,000 March 30, 1990 March 30, 1995 8.375% 10.125%
Collar 30,000,000 July 8, 1990 February 8, 1995 8.625% 10.625%
Accreting Collar 35,000,000 July 9, 1990 July 9, 1995 8.750% 10.500%
through
December 9, 1990
Cap 25,000,000 May 24, 1991 May 24, 1996 N/A 9.000%
Cap 25,000,000 June 17, 1991 June 17, 1996 N/A 8.450%
Cap 50,000,000 June 25, 1993 June 25, 1998 N/A 6.500%
Cap 50,000,000 July 1, 1993 June 3, 1996 N/A 6.500%
Cap 50,000,000 July 20, 1993 July 20, 1998 N/A 6.250%
Cap 50,000,000 August 10, 1993 August 10, 1997 N/A 6.000%
Cap 50,000,000 August 27, 1993 August 27, 1997 N/A 6.125%
Cap 50,000,000 November 10, 1993 November 10, 1997 N/A 6.000%
Cap 35,000,000 February 2, 1994 February 2, 1999 N/A 6.125%
------------
$500,000,000
</TABLE>
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Subsidiary State of Incorporation % Ownership
- ----------------- ---------------------- ------------
<S> <C> <C>
CRI Liquidating Maryland Approx. 57%
REIT, Inc.
CRIIMI, Inc. Maryland 100%
</TABLE>
The Company owns the stock of CRIIMI, Inc. free and clear of any
liens. The Company holds a total of 17,199,307 shares of CRI Liquidating REIT,
Inc. ("CRI Liquidating"), 15,374,000 of which were pledged as security for a
reducing term loan facility as of December 31, 1993.
CRIIMI, Inc. is the general partner of four publicly held limited
partnerships known as the American Insured Mortgage Investors Funds (the "AIM
Funds"), which general partner interests range from 2.9% to 4.9%. The Company,
through its 50% limited partnership interest in CRI/AIM Investment Limited
Partnership (CRI/AIM), owns a limited partnership interest in the Adviser to the
AIM Funds. (CRI/AIM owned a total limited partnership interest of 20% in AIM
Acquisition Partners, L.P., the Adviser.)
CRI Liquidating also owns equity interests in three limited
partnership ("Participations"), each of which owns property underlying a
Mortgage-Backed Security previously held by CRI Liquidating. Such
Participations represent less than 1% of CRI Liquidating's total assets.
<PAGE>
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$________________ ____________, 199_
New York, New York
FOR VALUE RECEIVED, CRIIMI MAE Inc., a Maryland corporation (the
"Company"), hereby promises to pay to_____________________________________ (the
"Lender"), for account of its respective Applicable Lending Offices provided for
by the Credit Agreement referred to below, at the office of Canadian Imperial
Bank of Commerce, New York Agency, 425 Lexington Avenue, New York, NY 10017, the
principal sum of ___________________________ Dollars (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Loans made by the
Lender to the Company under the Credit Agreement), in lawful money of the United
States of America and in immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate, and duration of Interest Period
(if applicable) of each Loan made by the Lender to the Company, and each payment
made on account of the principal thereof, shall be recorded by the Lender on its
books and, prior to any transfer of this Note, endorsed by the Lender on the
schedule attached hereto or any continuation thereof.
This Note is one of the Notes referred to in the Revolving Credit
Agreement (as amended, modified and supplemented and in effect from time to
time, the "Credit Agreement") dated as of February 28, 1994, between the
Company, the Lenders named therein and Canadian Imperial Bank of Commerce, New
York Agency, as Administrative Agent, and evidences Loans made by the Lender
thereunder. Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement.
-1-
<PAGE>
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.
CRIIMI MAE Inc.
By______________________
Title:
-2-
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted under the
within-described Credit Agreement to the Company, on the dates, in the principal
amounts, of the Types, bearing interest at the rates, and having Interest
Periods (if applicable) of the durations set forth below, subject to the
payments, Continuations, Conversions and prepayments of principal set forth
below:
<TABLE>
<CAPTION>
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- ----------- ------ ---- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Attention: [Name]
[Title]
Pursuant to Sections 2.02 and 4.05 of that certain Revolving Credit
Agreement dated as of February 28, 1994 (as it may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement) among CRIIMI MAE Inc., a Maryland corporation
(the "Company"), the Lenders listed on the signature pages thereof and Canadian
Imperial Bank of Commerce, New York Agency, as Administrative Agent, this
represents the Company's request to borrow on ______________ , 19__ from the
Lenders on a pro rata basis $__________ as [Base Rate/LIBOR Loans]. [The
initial Interest Period for such LIBOR Loans is requested to be a _____________
period.] The Company certifies that the sum of the amount of the proposed Loan
and the aggregate amount of Loans Outstanding immediately prior to such Loan,
will not exceed the lesser of (i) the aggregate amount of the Commitments then
in effect or (ii) the Borrowing Base then in effect. The Company requests that
the proceeds of such Loans be deposited in the Company's account, Account No.
__________, at____________.
The Company certifies that: i) no Default has occurred and is
continuing under the Basic Documents; ii) the representations and warranties
made by the Company in Section 7 of the Credit Agreement and in Section 3.1 of
the Security Agreement are true and complete on and as of the date hereof with
the same force and effect as if made on and as of the date hereof; and iii)
there has not occurred any change, or development or event involving a
prospective change, which could have a Material Adverse Effect. The Company
agrees that if, prior to the time of the borrowing requested hereby, any matter
certified to herein by the Company will not be true and correct at such time as
if then made, it will immediately notify the Administrative Agent. Except to
the extent, if any, that, prior to the time of the borrowing requested hereby
the Administrative Agent shall receive written notice to the contrary from the
Company, each matter certified to herein shall be deemed once again to be
certified as true and correct at the date of such borrowing as if then made.
DATED:________________________
CRIIMI MAE Inc.
By:______________________
<PAGE>
EXHIBIT C
[FORM OF NOTICE OF CONVERSION OR CONTINUATION]
NOTICE OF CONVERSION OR CONTINUATION
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Attention: [Name]
[Title]
Pursuant to Sections 2.08 and 4.05 of that certain Revolving Credit
Agreement dated as of February 28, 1994 (as it may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement) among CRIIMI MAE Inc., a Maryland corporation
(the "Company"), the Lenders listed on the signature pages thereof, and Canadian
Imperial Bank of Commerce, New York Agency, as Administrative Agent for the
Lenders, this represents the Company's request to [convert $_________ in
principal amount of Outstanding Loans which accrue interest based on the Base
Rate to LIBOR Loans on _____________, 199__. The Interest Period for such LIBOR
Loans is requested to be a ___________ period.] [continue as LIBOR Loans
$__________ in principal amount of Outstanding Loans which accrue interest based
on the LIBO Rate with an Interest Period ending on ____________, 199___. The
Interest Period for such LIBOR Loans commencing on the last day of the Interest
Period referenced above is requested to be a __________ period.] [convert
$__________ in principal amount of Outstanding Loans which accrue interest based
on the LIBO Rate with an Interest Period ending on _______________, 19__ to Base
Rate Loans at the end of such Interest Period.]
The Company certifies that no Default has occurred and is continuing
under the Basic Documents or would result from the proposed [conversion]
[continuation] set forth above. The Company agrees that if, prior to the time
of the proposed [conversion] [continuation] set forth above, any matter
certified to herein by the Company will not be true and correct as of such time
as if then made, it will immediately notify the Administrative Agent.
Except to the extent, if any, that, prior to the time of the
continuation or conversion requested hereby, the Administrative Agent shall
receive written notice to the contrary from the Company, each matter certified
to herein shall be deemed once again to be certified as true and correct at the
date of such continuation or conversion as if then made.
DATED:________________________
CRIIMI MAE Inc.
By:______________________
<PAGE>
EXHIBIT D
CRIIMI MAE Inc.
Certificate
I, the undersigned, Secretary of CRIIMI MAE Inc., a Maryland
corporation (the "Company"), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Sections 6.01(b) and (c)
of that certain Revolving Credit Agreement dated as of February 28, 1994
among the Company, Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent, and CIBC, Inc., National Australia Bank Limited, New
York Branch, and Signet Bank/Virginia (collectively referred to herein as
the "Lenders") (said Revolving Credit Agreement, as in effect on the date
of this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate have
the meanings assigned to those terms in the Credit Agreement.
2. Attached hereto as Exhibit A is a copy of the Certificate of
Incorporation of the Company, certified by the Secretary of State of the
State of Maryland.
3. There have been no amendments to the Certificate of Incorporation
of the Company since ___________ ,19__./1/
4. Attached hereto as Exhibit B is a true and complete copy of the
by-laws of the Company as in effect on the date hereof.
5. Attached hereto as Exhibit C is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
______________, 199_, authorizing the execution, delivery and performance of
the Basic Documents and the extensions of credit thereunder, which resolutions
have not been revoked, modified, amended or rescinded and are still in full
force and effect.
6. The below-named persons have been duly elected, have been duly
qualified as of and at all times since
- --------------------
/1/ Insert the date of the Secretary of State's Certificate furnished pursuant
to paragraph 2.
<PAGE>
___________, 199_/2/ (to and including the date hereof) have been officers
of the Company, holding the respective offices below set opposite their
names, and the signatures below set opposite their names are their genuine
signatures.
<TABLE>
<CAPTION>
Name Office Signatures
---- ------ ----------
<S> <C> <C>
- ------------------------- [Title] -----------------------
- ------------------------- [Title] -----------------------
- ------------------------- [Title] -----------------------
</TABLE>
7. I know of no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
WITNESS my hand and the seal of the Company this ___day of
________________ 199_.
CRIIMI MAE Inc.
By
--------------------------------
Secretary or Assistant Secretary
- ---------------------
/2/ Insert the date next preceding the effective date of adoption of the
resolutions referred to in paragraph 4 above.
-2-
<PAGE>
I, the undersigned, [Senior Officer] of the Company, DO HEREBY CERTIFY
that:
1. [Name of Secretary] is the duly elected and qualified Secretary
of the Company and the signature above is [his/her] genuine signature.
2. To the best of my knowledge, no Event of Default or Default has
occurred and is continuing, or would result from the consummation of the initial
extension of credit this date.
3. The representations and warranties made by the Company in Section
7 of the Credit Agreement and in Section 3.1 of the Security Agreement are true
and complete at and as of the date hereof with the same force and effect as if
made on and as of the date hereof.
4. To the best of my knowledge, there has not occurred any change,
or development or event involving a prospective change, which could have a
Material Adverse Effect.
WITNESS my hand on this ______ day of _____________ 199_.
CRIIMI MAE Inc.
By
---------------------------
[Senior Officer]
-3-
<PAGE>
EXHIBIT E
[Form of Opinion of Counsel to the Company]
[See Attached Draft]
-1-
<PAGE>
EXHIBIT F
COLLATERAL VALUATION CERTIFICATE
TO: Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
[_______________________
_______________________]
New York, New York _____
[Name and Address of Other Lenders]
Reference is made to the Revolving Credit Agreement dated as of
February 28, 1994 (as amended, supplemented or modified from time to time, the
"Agreement"), among CRIIMI MAE Inc., the Lenders parties thereto and you. All
capitalized terms which are not defined herein shall have the same meanings
herein as in the Agreement.
1. Loans Outstanding. As of the date hereof, the aggregate
-----------------
principal balance of all Loans Outstanding is $______________.
2. Eligible Participation Schedule. Attached as Annex 1 is a
-------------------------------
[revised] Eligible Participation Schedule, indicating thereon those Eligible
Participations for which CRIIMI MAE Inc. has pledged to the Collateral Agent
under the Security Agreement its undivided participation interest therein, all
of which are free and clear of all Liens, except as may be permitted by the
Agreement, which Schedule designates any Eligible Participations listed therein
for which an event of default of which CRIIMI MAE Inc. has or should have
knowledge of has occurred, or with the giving of notice or the passage of time,
will have occurred.
3. Mortgage-Backed Securities. Attached as Annex 2 is a [revised]
--------------------------
Mortgage-Backed Securities Schedule, indicating thereon Mortgage-Backed
Securities pledged to the Collateral Agent under the Security Agreement, all of
which are free and clear of all Liens, except as may be permitted by the
Agreement.
4. Cash Collateral Account. Attached as Annex 3 is a [revised]
-----------------------
Deposited Funds Schedule indicating, as of the date hereof, that the Loan Value
of the Deposited Funds is $______________.
<PAGE>
5. Loan Value. As of the date hereof, the Loan Value of the
----------
Eligible Participations described on the attached Eligible Participation
Schedule is $___________, the Loan Value of the Mortgage-Backed Securities
described on the attached Mortgage-Backed Securities Schedule is $___________
and the Loan Value of the Deposited Funds described on the attached Deposited
Funds Schedule is $__________, for an aggregate Loan Value of $__________.
6. Borrowing Base. As of the date hereof, the Borrowing Base is
--------------
$___________.
7. U.S. Mortgage-Backed Securities. As of the date hereof, the Loan
-------------------------------
Value of U.S. Mortgage-Backed Securities is $___________.
IN WITNESS WHEREOF, CRIIMI MAE Inc. has caused this certificate to be
executed and delivered by its duly authorized officer this ____ day of
____________, 19__.
CRIIMI MAE Inc.
By
------------------------------
Authorized Signatory
-2-
<PAGE>
Annex 1
-------
ELIGIBLE PARTICIPATION SCHEDULE
-------------------------------
<TABLE>
<CAPTION>
Mortgage Investment Income Earned
Guarantee
and
Effective Final Market Project
Purchase Coupon Interest Maturity Value of No. (if
Complex Name Location Price Rate Rate 1990 1991 1992 1993 Date Mortgages FHA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
An asterisk designates the Eligible Participations for which an event of default
has occurred, or with the giving of notice or passage of time an event of
default will have occurred.
<PAGE>
Annex 2
-------
MORTGAGE-BACKED SECURITIES SCHEDULE
<TABLE> AMOUNT
<CAPTION> OF UNPAID CURRENT
NAME OF COUPON PRINCIPAL BID VAL VALUE TYPE AND
PROPERTY RATE MATURITY BALANCES PRICE REF/1/ (MARKET) POOL NO.
-------- ------ -------- ---------- ----- ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
- ------------------------
/1/ Represents the last day for which quotations were available as of the date
hereof.
<PAGE>
Annex 3
-------
DEPOSITED FUNDS SCHEDULE
<PAGE>
EXHIBIT G
UNENCUMBERED ASSET VALUATION CERTIFICATE
To: Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Reference is made to the Revolving Credit Agreement dated as of
February 28, 1994 (as amended, supplemented or modified from time to time, the
"Agreement"), between us and you. All capitalized terms which are not defined
herein shall have the same meanings herein as in the Agreement.
1. Unencumbered Assets. As of the date hereof, the Value of the
-------------------
Unencumbered Assets is $_______________________.
2. Eligible Participation Schedule. Attached as Annex 1 is an
-------------------------------
Eligible Participation Schedule, indicating thereon those Eligible
Participations which are part of the Unencumbered Assets.
3. Mortgage-Backed Securities. Attached as Annex 2 is a Mortgage-
--------------------------
Backed Securities Schedule, indicating thereon Mortgage-Backed Securities which
are part of the Unencumbered Assets.
4. Miscellaneous Assets. Attached as Annex 3 is a Miscellaneous
--------------------
Asset Schedule, indicating thereon those assets of the Company consisting of
cash, investments of the type permitted in Section 5.4 of the Security Agreement
and stock of CRI Liquidating REIT, Inc. which, in each case, are part of the
Unencumbered Assets.
IN WITNESS WHEREOF, CRIIMI MAE Inc. has caused this certificate to be
executed and delivered by its duly authorized officer this ___ day of
______________, 199_.
CRIIMI MAE Inc.
BY:
----------------------------------
AUTHORIZED SIGNATORY
<PAGE>
EXHIBIT H
Security Agreement
[To be inserted]
<PAGE>
EXHIBIT I
[FORM OF LENDER ASSIGNMENT AGREEMENT]
LENDER ASSIGNMENT AGREEMENT
To: CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852
Canadian Imperial Bank of Commerce,
New York Agency, as Administrative Agent
425 Lexington Avenue
New York, New York 10017
Reference is made to Section 11.06(b) of that certain Revolving Credit
Agreement dated as of February 28, 1994 (as it may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement) among CRIIMI MAE Inc., a Maryland corporation
(the "Company"), the various financial institutions (the "Lenders") as are, or
shall from time to time become, parties thereto, and Canadian Imperial Bank of
Commerce, New York Agency, as administrative agent (in such capacity, the
"Administrative Agent").
This agreement is delivered to you pursuant to Section 11.06(b) of the
Credit Agreement and also constitutes notice to each of you, pursuant to such
Section, of the assignment and delegation to _________________ (the "Assignee")
of $_______ of the Loans Outstanding and Commitment of _______________ (the
"Assignor") under the Credit Agreement on the date hereof, and of a like
interest of all of the Assignor's rights and obligations under the Basic
Documents. After giving effect to the foregoing assignment and delegation, the
Assignor's and the Assignee's Commitment for the purposes of the Credit
Agreement are set forth opposite such Person's name on the signature pages
hereof.
[Add paragraph dealing with accrued interest and fees with respect to
Loans assigned.]
The Assignee hereby acknowledges and confirms that it has received a
copy of the Credit Agreement and the exhibits related thereto, together with
copies of the documents which were required to be delivered under the Credit
Agreement as a
<PAGE>
condition to the making of the Loans thereunder. The Assignee further confirms
and agrees that in becoming a Lender and in making its Commitment and Loans
under the Credit Agreement, such actions have and will be made without recourse
to, or representation or warranty by, the Administrative Agent or the Assignor.
Except as otherwise provided in the Credit Agreement, effective as of
the date of acceptance hereof by the Company and the Administrative Agent
(a) the Assignee
(i) shall be deemed automatically to have become a party to the
Credit Agreement, have all the rights and obligations of a "Lender"
under the Credit Agreement and the other Basic Documents as if it were
an original signatory thereto the extent specified in the second
paragraph hereof, and expressly confirms and ratifies the provisions
of Section 10 of the Credit Agreement;
(ii) agrees to be bound by the terms and conditions set forth in
the Credit Agreement and the other Basic Documents as if it were an
original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Credit Agreement and the other Basic Documents to the extent specified in
the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor]
[Assignee] will pay to the Administrative Agent the assignment fee referred to
in Section 11.06(b) of the Credit Agreement upon the delivery hereof.
The Assignee, if a Non-U.S. Lender, agrees to furnish the tax forms
required by Section 5.06(f) of the Credit Agreement no later than the date of
acceptance hereof by the Administrative Agent.
The Assignee hereby advises each of you of the following
administrative details with respect to the assigned Loans and Commitment and
requests the Administrative Agent to acknowledge receipt of this document:
-2-
<PAGE>
(A) Address for Notices:
Institution Name:
Attention:
Domestic Office:
Telephone:
Facsimile:
Telex (Answerback):
LIBOR Office:
Telephone:
Facsimile:
Telex (Answerback):
(B) Payment Instructions:
This Agreement shall be governed by, and construed in accordance with,
the law of the State of New York.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.
Commitment [ASSIGNOR]
- ----------
$ By:
-------------------- ---------------------------
Title:
[ASSIGNEE]
$ By:
-------------------- ---------------------------
Title:
-3-
<PAGE>
Accepted and Acknowledged
this ____ day of __________, 19__
CANADIAN IMPERIAL BANK OF COMMERCE,
New York Agency, as Administrative Agent
By:
-------------------------------
Title:
CRIIMI MAE Inc.
By:
-------------------------------
Title:
<PAGE>
================================================================================
SECURITY AGREEMENT
Dated as of February 28, 1994
among
CRIIMI MAE INC.,
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, AS ADMINISTRATIVE AGENT,
and
CHEMICAL BANK,
AS COLLATERAL AGENT
================================================================================
<PAGE>
SECURITY AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I Definitions................................................. 1
Section 1.1 Definitions............................................ 1
Section 1.2 Other Definitional Provisions.......................... 2
ARTICLE II Obligations Secured......................................... 2
Section 2.1 Obligations Secured Hereby............................. 2
ARTICLE III Representations and Warranties;
Covenants; Indemnity; Company
Officers.................................................... 4
Section 3.1 Representations and Warranties of
CRIIMI MAE........................................... 4
Section 3.2 Covenants of CRIIMI MAE................................ 7
Section 3.3 Indemnity.............................................. 11
Section 3.4 Company Officers....................................... 11
ARTICLE IV Assigned Collateral......................................... 11
Section 4.1 Assignment of Assigned Collateral
and Agreements....................................... 11
Section 4.2 Delivery of the Assigned Collateral.................... 13
Section 4.3 Liquidation of Assigned Collateral..................... 13
Section 4.4 Notice of Default...................................... 14
Section 4.5 Location of Records.................................... 15
Section 4.6 Obligations Absolute; Enforceability
by the Lenders or the Collateral Agent............... 15
Section 4.7 Release of Collateral.................................. 15
Section 4.8 Substitution of Collateral............................. 17
ARTICLE V Cash Collateral Account..................................... 18
Section 5.1 Establishment of Cash Collateral
Account.............................................. 18
Section 5.2 Application of Funds in Cash
Collateral Account; Statements
of Account........................................... 18
Section 5.3 Application of Deposited Funds......................... 18
Section 5.4 Permitted Investments.................................. 19
ARTICLE VI Default..................................................... 20
Section 6.1 Rights and Obligations of the Collateral
Agent upon a Default................................. 20
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE VII Mortgage-Backed Securities; Certificates
of Participation; Collateral Valuation
Certificate................................................. 22
Section 7.1 Possession of Qualified Investments.................... 22
Section 7.2 Collateral Valuation Certificate....................... 24
Section 7.3 Interest and Principal Payable on
Qualified Investments................................ 27
ARTICLE VIII The Collateral Agent........................................ 28
Section 8.1 Appointment and Powers of the
Collateral Agent..................................... 28
Section 8.2 Successor Collateral Agent............................. 30
Section 8.3 Qualifications of Collateral Agent..................... 31
Section 8.4 Instructions of the Administrative
Agent................................................ 31
ARTICLE IX Amendments, Modifications, Waivers and
Consents.................................................... 32
Section 9.1 Execution of Amendments, etc........................... 32
ARTICLE X Miscellaneous............................................... 32
Section 10.1 Further Assurances..................................... 32
Section 10.2 No Waiver; Cumulative Remedies......................... 33
Section 10.3 Notices, etc........................................... 33
Section 10.4 Fee; Costs and Expenses, etc........................... 34
Section 10.5 Collateral Agent Appointed
Attorney-in-Fact..................................... 35
Section 10.6 Termination............................................ 35
Section 10.7 Governing Law; Binding Character;
Assignment........................................... 35
Section 10.8 Severability of Provisions............................. 36
Section 10.9 Headings............................................... 36
Section 10.10 Execution in Counterparts.............................. 36
Section 10.11 Reinstatement.......................................... 36
Exhibit A Receipt and Confirmation
</TABLE>
-ii-
<PAGE>
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of February 28, 1994 among CRIIMI MAE
INC., a Maryland corporation ("CRIIMI MAE"), CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY (the "Administrative Agent") and CHEMICAL BANK, as collateral
agent for the Lenders (as defined in the Credit Agreement referred to below)
(hereinafter, together with any successor thereto, called the "Collateral
Agent").
WITNESSETH:
WHEREAS, CRIIMI MAE, the Lenders named therein and Canadian Imperial
Bank of Commerce, New York Agency, as administrative agent for the Lenders, have
entered into a Revolving Credit Agreement dated as of February 28, 1994 (as the
same from time to time may be extended, amended, supplemented, waived or
modified and in effect, the "Credit Agreement"), providing, among other things,
for the commitment of each Lender to make Loans (as defined in the Credit
Agreement), all on the terms and conditions set forth in the Credit Agreement;
and
WHEREAS, CRIIMI MAE may borrow Loans for the purpose of, among other
things, acquiring new Eligible Participations and Mortgage-Backed Securities
(each as defined in the Credit Agreement); and
WHEREAS, the obligations of the Lenders under the Credit Agreement are
subject to the condition precedent, among other things, that the Assigned
Collateral (as defined below) be pledged to the Collateral Agent as collateral
security and that CRIIMI MAE execute and deliver this Agreement to the
Administrative Agent and the Collateral Agent;
NOW, THEREFORE, in consideration of the premises and in order to
induce each Lender to make Loans to CRIIMI MAE as provided in the Credit
Agreement, CRIIMI MAE agrees with the Administrative Agent and the Collateral
Agent as follows:
ARTICLE I
Definitions
-----------
Section 1.1 Definitions. As used in this Agreement and unless the
-----------
context requires a different meaning, capitalized terms used herein and not
otherwise defined have the meanings assigned to such terms in the Credit
Agreement, and the following terms shall have the following meanings:
"Assigned Collateral" shall have the meaning assigned to that term in
-------------------
Section 4.1.
<PAGE>
"Mortgage Note" shall mean a note or other evidence of indebtedness of
-------------
a mortgagor secured by a mortgage relating to a Mortgage Investment.
"Mortgaged Property" shall mean the real property securing repayment
------------------
of the debt evidenced by a Mortgage Note.
"Obligations" shall have the meaning assigned to that term in Section
-----------
2.1.
"Permitted Investments" shall have the meaning assigned to that term
---------------------
in Section 5.4(a).
"Secured Parties" shall mean the Collateral Agent, the Administrative
---------------
Agent, each Lender and any other financial institution which is the holder of
Obligations.
"Uniform Commercial Code" shall have the meaning assigned to that term
-----------------------
in Section 3.2(c), unless otherwise indicated.
Section 1.2 Other Definitional Provisions. (a) All terms defined in
-----------------------------
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) The words "hereof", "hereto", "herein", and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation."
(c) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
Obligations Secured
-------------------
Section 2.1 Obligations Secured Hereby. This Agreement is made to
--------------------------
provide for and secure repayment of the following indebtedness and liabilities
of CRIIMI MAE (such indebtedness and liabilities being herein called the
"Obligations") in the order of priority indicated (in accordance with, except as
otherwise set forth below, the Administrative Agent's or each Lender's pro rata
share thereof):
-2-
<PAGE>
First, the repayment of all amounts advanced or expended by the
-----
Collateral Agent, in its capacity as Collateral Agent, for the account
of CRIIMI MAE hereunder, the payment of all costs and expenses at any
time and from time to time incurred by the Collateral Agent, in its
capacity as Collateral Agent, in connection with the administration or
enforcement of this Agreement (including, without limitation, the
reasonable fees and expenses of counsel employed by the Collateral
Agent in connection therewith), and the payment of all indemnities and
other amounts at any time and from time to time payable hereunder to
the Collateral Agent, in its capacity as Collateral Agent, by CRIIMI
MAE, and
Second, the repayment of all amounts advanced or expended by the
------
Administrative Agent, in its capacity as Administrative Agent, for the
account of CRIIMI MAE under any Basic Document, the payment of all
fees, costs and expenses at any time and from time to time incurred by
the Administrative Agent, in its capacity as Administrative Agent, in
connection with the administration or enforcement of any Basic
Document (including, without limitation, the reasonable fees and
expenses of counsel employed by the Administrative Agent in connection
therewith), and the payment of all indemnities and other amounts at
any time and from time to time payable hereunder to the Administrative
Agent, in its capacity as Administrative Agent, by CRIIMI MAE, and
Third, the payment of all amounts at any time and from time to
-----
time owing by CRIIMI MAE to each Lender under or in connection with
the Credit Agreement, the Notes and the other Basic Documents
(including, without limitation, principal of and interest on the Loans
and the Notes and fees but excluding amounts referred to in clauses
Fourth and Fifth below), and
Fourth, the repayment of all amounts advanced or expended by each
------
Lender for the account of CRIIMI MAE hereunder or under the Credit
Agreement or under any other Basic Document, and the payment of all
costs and expenses at any time and from time to time incurred by each
Lender in connection with the administration and enforcement of or
preservation of any right under this Agreement, the Credit Agreement
or any other Basic Document (including, without limitation, the
reasonable fees and expenses of counsel employed by each Lender in
connection herewith or therewith) and any other costs and expenses
payable by CRIIMI MAE hereunder or under the Credit Agreement or any
other Basic Document, and
-3-
<PAGE>
Fifth, the payment of all indemnities and other amounts at any
-----
time and from time to time payable hereunder or under or in connection
with the Credit Agreement or any other Basic Document to the
Administrative Agent and each Lender by CRIIMI MAE.
ARTICLE III
Representations and Warranties; Covenants;
Indemnity; Company Officers
------------------------------------------
Section 3.1 Representations and Warranties of CRIIMI MAE. (a) Upon
--------------------------------------------
the filing of financing statements under the Uniform Commercial Code of the
State of Maryland with the Department of Assessments and Taxation of the State
of Maryland and the Clerk of the Circuit Court in Montgomery County, Maryland,
naming CRIIMI MAE as debtor, the Collateral Agent as secured party and covering
the Assigned Collateral referred to in Section 4.1(ii) and upon delivery of the
Qualified Investments to the Collateral Agent in the manner set forth in Section
7.1, respectively, this Agreement will grant the Collateral Agent a valid
assignment of, and a valid and perfected security interest in, the Assigned
Collateral, as security for the repayment of the Obligations, prior to all other
Liens thereon and security interests therein. When the Cash Collateral Account
has been established by the Collateral Agent, CRIIMI MAE will have validly and
effectively assigned to the Collateral Agent all interest of CRIIMI MAE in the
Cash Collateral Account, all Deposited Funds and all claims of CRIIMI MAE in and
to such Deposited Funds, and the Collateral Agent will have obtained a valid and
effective pledge of the Cash Collateral Account, all Deposited Funds and all
claims of CRIIMI MAE in and to such Deposited Funds as security for the
repayment of the Obligations, prior to all other Liens thereon and security
interests therein.
(b) (i) No financing statement listing CRIIMI MAE (under its current
or any former name) as debtor (other than any which may have been filed for the
benefit of the Collateral Agent) covering any of the Assigned Collateral is on
file in any public office; (ii) at the date of each deposit of Deposited Funds
to the Cash Collateral Account, CRIIMI MAE was, is or will then be the lawful
owner of, and had, has or will then have good title to, such Deposited Funds,
free and clear of all Liens, except the Lien and security interest granted
pursuant hereto in favor of the Collateral Agent; and (iii) CRIIMI MAE is and
will be the lawful owner of, and has and will have good marketable title to and
full power and authority to pledge to the Collateral Agent, all Assigned
Collateral, free and clear of all Liens, except for the Lien and security
interest granted pursuant hereto in favor of the Collateral Agent.
-4-
<PAGE>
(c) CRIIMI MAE has not previously created any security interest in
the Assigned Collateral (except security interests created pursuant to the
Letter of Credit and Reimbursement Agreement, which security interests have been
terminated) or any part thereof and will keep the Assigned Collateral and every
part thereof free and clear of all Liens except the Lien and security interest
granted pursuant hereto in favor of the Collateral Agent, in a manner
satisfactory to the Administrative Agent. CRIIMI MAE has assumed all
obligations of CRI Insured Mortgage Association, Inc. and has succeeded to all
right, title and interest in assets of CRI Insured Mortgage Association, Inc.,
including all such right, title and interest in and to the Assigned Collateral.
CRIIMI MAE does not use, nor has it used in the past, any trade name other than
"CRIIMI MAE." CRIIMI MAE has not, within the past four months, changed its (i)
name, identity or corporate structure, (ii) chief executive office, or (iii)
office where it keeps its records concerning the Assigned Collateral.
(d) No further action other than the execution of this Agreement is
necessary to establish the Collateral Agent's security interest in the Cash
Collateral Account and the Deposited Funds.
(e) This Agreement has been duly authorized, executed and delivered
by CRIIMI MAE and constitutes a valid and binding obligation of CRIIMI MAE,
enforceable against CRIIMI MAE in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(f) Except for the Uniform Commercial Code financing statements
referred to in paragraph (a) above and registration of transfer to the
Collateral Agent of certain Mortgage-Backed Securities with the relevant Federal
Reserve Bank as provided in Section 7.1, no authorization, consent, approval,
license or formal exemption from, nor any filing, declaration or registration
with, any court, governmental agency or regulatory authority (Federal, state or
local), including, without limitation, the Securities and Exchange Commission,
or with any securities exchange, and no consent of any other Person, is required
in connection with (i) the execution, delivery and performance by CRIIMI MAE of
this Agreement or the grant of the security interests hereunder, or (ii) the
perfection and maintenance of the first priority security interests hereunder,
or (iii) the exercise by the Collateral Agent of its rights and remedies
hereunder.
(g) The execution, delivery and performance of this Agreement by
CRIIMI MAE and enforcement of this Agreement against CRIIMI MAE do not and will
not contravene, or constitute a default under, any provision of Applicable Law
with respect to
-5-
<PAGE>
CRIIMI MAE or the Assigned Collateral or any material judgment,
injunction, order, decree, direction or any material agreement or instrument
binding upon CRIIMI MAE or the Assigned Collateral or result in the creation
or imposition of any Lien, charge, mortgage, deed of trust, security interest,
pledge, assignment or right or encumbrance of any kind (other than the
security interest created hereby) upon any material asset of CRIIMI MAE.
(h) As a result of the pledge by CRIIMI MAE of the Assigned
Collateral comprised of Eligible Participations, the Collateral Agent shall be
entitled to all of the rights of CRIIMI MAE in respect of the insurance and
guaranty provided by the HUD Mortgage Insurance Program (including the proceeds
thereof) with respect to the related Eligible Mortgage Investments and there
shall exist no impediments to the enforcement of such insurance and guaranty by
the Collateral Agent for the benefit of the Secured Parties, subject to the
Collateral Agent's compliance with Applicable Law relating to the HUD Mortgage
Insurance Program.
(i) At the time each Qualified Investment is pledged hereunder, such
Qualified Investment shall be free of any event of default or any event which,
with passage of time or notice or both, may become an event of default.
(j) CRIIMI MAE further represents and warrants with respect to each
Eligible Participation pledged hereunder as of the date hereof and of each such
pledge that:
(i) The statements set forth in the definitions of "Eligible
Participation" and "Eligible Mortgage Investments" are true and
correct with respect to each Eligible Participation pledged hereunder;
(ii) The terms of each Participation Agreement and Servicing
Agreement have not been impaired, waived, altered, amended or modified
in any respect;
(iii) A valid and enforceable policy of title insurance has been
issued in connection with each Eligible Mortgage Investment in an
amount not less than the original principal amount of the underlying
mortgage and, to the best of its knowledge, such policy is presently
in full force and effect, with no material changes or modifications
made therein subsequent to the final endorsement of each Mortgage Note
by the FHA, except as may be approved in writing by HUD;
(iv) To the best of its knowledge, each building or other
improvement located on each Mortgaged Property is insured under
customary property insurance policies against insurance risks and
hazards as required by HUD and such insurance is in amounts which are
not less
-6-
<PAGE>
than the amount necessary to meet FHA requirements and comply with any
co-insurance provision of the policies, with all premiums for such
policies having been continuously paid as required by the policies or,
in the event of a lapse in payment, such lapse and any lapse in
insurance coverage relating thereto shall not prevent recovery in full
or in part against HUD;
(v) To the best of its knowledge, none of the buildings or other
improvements on each Mortgaged Property have been materially damaged
as a result of any fire, explosion, accident, riot, war, or act of God
or the public enemy;
(vi) To the best of its knowledge, the escrows for taxes,
insurance, mortgage insurance premiums and replacement reserves
required with respect to each Eligible Mortgage Investment have been
and throughout the term of this Agreement shall be maintained in
accordance with FHA requirements;
(vii) To the best of its knowledge, the terms of each Eligible
Mortgage Investment have not been impaired, waived, altered or
modified in any respect and no portion of any such Mortgaged Property
has been released, except by written instructions approved by FHA; and
(viii) No assignment or notice of assignment, other than the
assignment hereunder, has been filed in any local land records with
respect to such Eligible Participation, except assignments which will
be released pursuant to Section 3.2(m).
In addition to the foregoing representations and warranties, CRIIMI
MAE assigns, conveys and transfers to the Secured Parties all of the
representations and warranties that it received with respect to each such
Eligible Participation under the related Servicing Agreement and Participation
Agreement.
Section 3.2 Covenants of CRIIMI MAE. (a) CRIIMI MAE shall comply,
-----------------------
in all material respects, with all acts, statutes, laws, codes, ordinances,
rules, regulations, judgments, injunctions, orders, decrees and directions of
any governmental authority applicable to the Assigned Collateral or any part
thereof.
(b) CRIIMI MAE will not create, permit or suffer to exist, and will
defend the Assigned Collateral against, and take such other actions as are
necessary to remove, any Lien, claim, charge, mortgage, deed of trust, security
interest, pledge, assignment, encumbrance or right in, to or on the Assigned
Collateral and will defend the right, title and interest of the
-7-
<PAGE>
Collateral Agent in and to the Assigned Collateral against the claims and
demands of all Persons whomsoever, other than the Liens created hereby.
Notwithstanding the immediately preceding sentence, CRIIMI MAE shall not be
considered in default in respect of the covenant contained therein with respect
to involuntary statutory Liens if (i) CRIIMI MAE is diligently contesting the
Lien in good faith by appropriate proceedings, (ii) CRIIMI MAE has either bonded
such Lien in the full amount thereof or set aside adequate reserves with respect
thereto, and (iii) such proceedings are adequate to suspend the enforcement of
the Lien and the collection of the sums secured thereby.
(c) CRIIMI MAE will (i) take such further action as the Collateral
Agent or the Administrative Agent may deem necessary or appropriate from time to
time to protect, perfect and maintain the Collateral Agent's security interest
in the Assigned Collateral and the priority thereof, (ii) deliver, upon the
request of the Collateral Agent, the Administrative Agent or the Required
Lenders, a legal opinion as to the perfection and/or priority of the security
interest in any Assigned Collateral, including, if so requested, prior to any
substitution of Assigned Collateral under Section 4.8 and (iii) deliver promptly
to the Collateral Agent all originals of Assigned Collateral or proceeds thereof
consisting of chattel paper, instruments or certificated securities. Without
limiting the foregoing, CRIIMI MAE (x) agrees to cause the recordation of any
necessary assignments in the appropriate recording office of each relevant
jurisdiction, (y) agrees that in the event the Assigned Collateral is ever
evidenced by an "instrument" or "certificated security" as such terms are
defined in Article 9 and Article 8, respectively, of the Uniform Commercial Code
as in effect in the States of Maryland and New York and any other applicable
jurisdiction (the "Uniform Commercial Code"), CRIIMI MAE shall forthwith
deliver, or will cause to be delivered such instrument or certificated security,
bearing all necessary endorsements to the Collateral Agent, in a manner
satisfactory to the Administrative Agent and (z) agrees that in the event that
any Assigned Collateral is maintained in book-entry form, CRIIMI MAE will effect
or cause to be effected any recordation and take or cause to be taken any other
action as the Collateral Agent or the Administrative Agent may reasonably deem
necessary or appropriate.
(d) CRIIMI MAE shall keep and maintain at its own cost and expense
satisfactory and complete records of the Assigned Collateral and provide the
Collateral Agent and the Administrative Agent with such records and such reports
and information relating to the Assigned Collateral as the Collateral Agent or
the Administrative Agent may request from time to time.
(e) CRIIMI MAE shall not surrender or lose possession of (other than
to the Collateral Agent), sell, encumber or otherwise dispose of or transfer,
any Assigned Collateral or
-8-
<PAGE>
right or interest therein other than as permitted under Sections 4.7 or 4.8.
(f) CRIIMI MAE shall, at all times, upon the request of the
Collateral Agent or the Administrative Agent, account fully for and promptly
deliver to the Collateral Agent, in the form received, all Assigned Collateral
or proceeds thereof received by CRIIMI MAE, endorsed to the Collateral Agent as
appropriate and accompanied by such assignments and powers, duly executed, as
the Collateral Agent or the Administrative Agent shall request, and until so
delivered, shall keep all Assigned Collateral separate from all other property
of CRIIMI MAE and identified on the records of CRIIMI MAE as the property
pledged to the Collateral Agent for the benefit of the Secured Parties under
this Agreement.
(g) CRIIMI MAE will, at any reasonable time, upon not less than one
Business Day's prior notice by the Collateral Agent or the Administrative Agent,
exhibit to and allow inspection by the Collateral Agent or the Administrative
Agent (or Persons designated by the Collateral Agent or the Administrative
Agent) of the Assigned Collateral (to the extent not in the possession of the
Collateral Agent) and the records concerning the Assigned Collateral.
(h) CRIIMI MAE will keep the records concerning the Assigned
Collateral at the location set forth in Section 4.5 and not remove the records
from such location without the prior written consent of the Collateral Agent and
the Administrative Agent.
(i) CRIIMI MAE will, at the request of the Collateral Agent or the
Administrative Agent place on each of its records pertaining to the Assigned
Collateral a legend, in form and content satisfactory to the Administrative
Agent, indicating that such Assigned Collateral has been assigned to the
Collateral Agent.
(j) CRIIMI MAE will manage or cause to be managed its assets
constituting the Assigned Collateral pledged under this Agreement in the same
manner as other similar institutions of recognized standing would do for their
own account. Neither CRIIMI MAE nor any agent of CRIIMI MAE may, unless (i)
CRIIMI MAE shall have given the Collateral Agent and the Administrative Agent
five (5) days prior written notice thereof, (ii) no Default shall have occurred
and be continuing or would result therefrom, (iii) the Borrowing Base will be at
least equal to the principal amount of all Loans Outstanding after giving effect
thereto and (iv) such modification would not have a Material Adverse Effect,
modify or permit to be modified the terms of any Eligible Mortgage Investment
relating to Assigned Collateral consisting of Eligible Participations in any of
the following ways or take any of the following actions with respect thereto:
-9-
<PAGE>
(i) reduce the stated rate of interest;
(ii) forgive the payment of principal or interest;
(iii) extend the due date for payment of principal;
(iv) extend the due date for the payment of interest if the
effect would be to reduce or adversely affect the availability of the HUD
insurance with respect to such Eligible Mortgage Investment;
(v) release any collateral for such Eligible Mortgage
Investment unless approved by HUD;
(vi) modify, compromise, extend, rescind or cancel the HUD
insurance with respect to such Eligible Mortgage Investment; or
(vii) make any other modification or take any other action that
could have a material adverse effect on such Eligible Mortgage Investment.
CRIIMI MAE shall, upon the request of the Collateral Agent or the
Administrative Agent after receiving notice of any proposed modification,
deliver prior to making or permitting such modification a new Collateral
Valuation Certificate with respect to such Eligible Mortgage Investment giving
effect to such modification.
(k) CRIIMI MAE will pay (or require to be paid), prior to their
becoming delinquent, all taxes, assessments, insurance premiums, charges,
encumbrances and Liens now or hereafter imposed upon or affecting any Assigned
Collateral. Notwithstanding the immediately preceding sentence, CRIIMI MAE
shall not be required to pay any such amounts if (i) CRIIMI MAE is diligently
contesting such amounts in good faith by appropriate proceedings, (ii) CRIIMI
MAE has either bonded such amounts in the full amount thereof or set aside
adequate reserves with respect thereto, and (iii) such proceedings are adequate
to suspend the collection of such amounts.
(l) CRIIMI MAE shall give written notice to the Collateral Agent at
least two Business Days (or such lesser notice as the Collateral Agent may
agree) prior to any delivery to the Collateral Agent of Assigned Collateral
(other than Assigned Collateral listed on the initial Collateral Valuation
Certificate).
(m) CRIIMI MAE shall, within sixty (60) days after the date of the
initial Loans under the Credit Agreement, record in the land records where the
related Eligible Mortgage Investment is recorded (i) the release of any
recording of any assignment under the Letter of Credit and Reimbursement
Agreement and
-10-
<PAGE>
(ii) the assignments hereunder of the Eligible Participations listed on the
initial Collateral Valuation Certificate.
Section 3.3 Indemnity. CRIIMI MAE hereby agrees to indemnify the
---------
Secured Parties and hold the Secured Parties harmless with respect to any and
all losses, costs, claims, damages, penalties, causes of action, suits,
judgments, liabilities and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred or suffered by any Secured Party arising
out of or resulting from (i) the failure to be true or to continue to be true
any of the representations or warranties, or the failure of CRIIMI MAE to comply
with any of the covenants, in this Article III or elsewhere in this Agreement
and (ii) the assignment and security interest granted hereby by virtue of any
act or omission on the part of CRIIMI MAE (other than an act or omission on the
part of CRIIMI MAE pursuant to or in accordance with an express direction from
the Collateral Agent, the Administrative Agent or a Lender authorized
hereunder), including the reasonable costs, expenses and disbursements
(including reasonable attorneys' fees and expenses) incurred or suffered by any
Secured Party in enforcing, preserving or collecting under the security interest
granted hereby. The obligations of CRIIMI MAE under this Section 3.3 shall
survive the termination of this Agreement and the discharge of the other
Obligations hereunder and shall also survive the termination of the Credit
Agreement.
Section 3.4 Company Officers. With the delivery of this Agreement,
----------------
CRIIMI MAE is furnishing to the Collateral Agent, and from time to time
thereafter may furnish to the Collateral Agent, a certificate (hereinafter
called a "Company Incumbency Certificate") of the Secretary or an Assistant
Secretary of CRIIMI MAE, certifying the incumbency and specimen signatures of
officers and agents of CRIIMI MAE (such officers and agents being hereinafter
called "Company Officers") authorized to act, and to give instructions and
notices, on behalf of CRIIMI MAE hereunder. Until the Collateral Agent receives
a subsequent Company Incumbency Certificate, the Collateral Agent shall be
entitled to rely on the last such Company Incumbency Certificate delivered to it
for purposes of determining the authorized Company Officers.
ARTICLE IV
Assigned Collateral
-------------------
Section 4.1 Assignment of Assigned Collateral and Agreements. In
------------------------------------------------
order to secure and to provide for the repayment of the Obligations, CRIIMI MAE
hereby assigns, conveys, transfers, delivers pledges, mortgages and sets over
unto the Collateral Agent for the benefit of the Secured Parties, and hereby
grants the Collateral Agent for the benefit of the Secured Parties, a security
interest in, all of CRIIMI MAE's right, title
-11-
<PAGE>
and interest in the following assets, whether now or hereafter existing, and
unless and until all or part of such assets shall be released or substituted as
provided in Sections 4.7 or 4.8 (all such assets being referred to as the
"Assigned Collateral"):
(i) the Eligible Participations listed on the initial
Collateral Valuation Certificate delivered pursuant to Section 6.01(j)
of the Credit Agreement, any other Eligible Participations delivered
to the Collateral Agent from time to time pursuant to this Agreement
and the Certificates of Participation evidencing such Eligible
Participations;
(ii) all of CRIIMI MAE's rights under or pursuant to any
Participation Agreements and Servicing Agreements with respect to the
Eligible Participations referred to in clause (i), including, without
limitation, the rights of CRIIMI MAE to enforce such Participation
Agreements and Servicing Agreements against the mortgagee of record
and the Servicer, respectively, and the obligations of the mortgagee
of record and the Servicer thereunder, and to give to the mortgagee of
record and the Servicer or withhold from the mortgagee of record and
the Servicer any and all consents, requests, notices, directions,
approvals, extensions or waivers under or with respect to such
Participation Agreement and Servicing Agreement, respectively, or the
obligations of the mortgagee of record and the Servicer thereunder to
the same extent as CRIIMI MAE might do but for the security interest
granted to the Collateral Agent in this Section 4.1;
(iii) all Mortgage-Backed Securities listed on the initial
Collateral Valuation Certificate delivered pursuant to Section 6.01(j)
of the Credit Agreement, any other Mortgage-Backed Securities
delivered to the Collateral Agent from time to time pursuant to this
Agreement and any certificates evidencing such Mortgage-Backed
Securities;
(iv) the Cash Collateral Account, together with any and all
monies and investments on deposit therein from time to time, including
the Deposited Funds and Permitted Investments thereof;
(v) any and all proceeds of or distributions on the
foregoing, including any guarantees thereon and any contractual or
other rights arising from any disposition of the foregoing; and
(vi) all rights and privileges of CRIIMI MAE with respect
to the foregoing.
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<PAGE>
Notwithstanding the assignment and security interest so granted to the
Collateral Agent, prior to the occurrence and continuance of an Event of
Default, CRIIMI MAE shall nevertheless be permitted, subject to the provisions
of Section 3.2, to give all consents, requests, notices, directions, approvals,
extensions or waivers, if any, which are required to be given pursuant to the
specific terms of the Eligible Participations and the related Participation
Agreements and Servicing Agreements. The assignment and security interest so
granted to the Collateral Agent shall not relieve CRIIMI MAE from the
performance of any term, covenant, condition or agreement on CRIIMI MAE's part
to be performed or observed under or in connection with the Eligible
Participations or any other Assigned Collateral, or impose any obligation on the
Secured Parties to perform or observe any such term, covenant, condition or
agreement on CRIIMI MAE's part to be so performed or observed or impose any
liability on the Secured Parties for any act or omission on the part of CRIIMI
MAE relative thereto or for any breach of any representation or warranty on the
part of CRIIMI MAE contained therein, or made in connection therewith.
Section 4.2 Delivery of the Assigned Collateral. Without the prior
-----------------------------------
written consent of the Lenders, CRIIMI MAE will not take any action to cause the
Assigned Collateral delivered to the Collateral Agent pursuant to this Agreement
to be removed from the possession of the Collateral Agent, to revert to CRIIMI
MAE or any interest therein to be assigned to any other Person except as
permitted by Sections 4.7 or 4.8.
Section 4.3 Liquidation of Assigned Collateral. (a) Without
----------------------------------
limiting Sections 5.2 or 6.1, if a Termination Notice has been delivered or
deemed delivered pursuant to Section 9 of the Credit Agreement, the Collateral
Agent shall, at the written direction of the Administrative Agent, apply all
monies and Permitted Investments in the Cash Collateral Account to the payment
or prepayment in full of all accrued and unpaid Obligations, in the order of
priority specified in Section 2.1.
(b) Without limiting Section 6.1, if a Termination Notice has been
delivered or deemed delivered pursuant to Section 9 of the Credit Agreement,
then, if the Required Lenders shall give the Administrative Agent instructions
regarding the liquidation of the Assigned Collateral or, if a Major Default has
occurred and is continuing and the Required Lenders shall fail to give such
instructions by the tenth Business Day following the delivery of a Termination
Notice, an Electing Lender (subject to the proviso below) shall give the
Administrative Agent such instructions, the Administrative Agent shall give
written notice (the "Liquidation Notice") to the Collateral Agent to liquidate
the Assigned Collateral and apply the proceeds thereof to the payment of the
Obligations, which notice shall direct the Collateral Agent to liquidate the
Assigned Collateral at the time and in the manner directed by the Required
Lenders as set forth
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<PAGE>
in such notice, and the Collateral Agent shall liquidate the Assigned Collateral
in the time and in the manner set forth in the Liquidation Notice; provided,
--------
that, if the amount of CRIIMI MAE's unpaid obligations to such Electing Lender
after payment, if any, is made by CRIIMI MAE is less than the greater of (i)
$2,000,000, (ii) 10% of the amount of CRIIMI MAE's obligations to such Electing
Lender at the time of the occurrence of the related Major Default, or (iii) 5%
of the aggregate amount of the Commitments (at the time of the occurrence of the
related Major Default), then such Electing Lender may not instruct the
Administrative Agent to deliver the Liquidation Notice unless the Required
Lenders have failed to give such instructions by the fortieth Business Day
following the delivery of a Termination Notice.
(c) For purposes of determining the application to be made of monies
and other cash proceeds to a Lender pursuant to clause Third or Fifth of Section
----- -----
2.1, the Collateral Agent may rely exclusively upon a certificate or other
statement (a copy of which shall also be provided to CRIIMI MAE) of the
Administrative Agent as to the amounts then owing to such Lender and, if
applicable, the nature of any claim for indemnification. For purposes of
determining the application to be made of such monies and other cash proceeds to
the Administrative Agent or a Lender pursuant to clause Second or Fourth of
------ ------
Section 2.1, the Collateral Agent may rely exclusively upon a certificate or
statement of the Administrative Agent as to the amount owing to the
Administrative Agent or such Lender. Any application to be made by the
Collateral Agent of monies and other cash proceeds pursuant to clause First of
-----
Section 2.1 may be made upon the Collateral Agent's certificate or statement
delivered to CRIIMI MAE and the Administrative Agent and setting forth in
reasonable detail the nature of the Collateral Agent's claim and the amount
owing to the Collateral Agent on account thereof. The Collateral Agent shall
not be liable for any application of the monies and other cash proceeds received
by the Collateral Agent pursuant to this Article made in accordance with any
certificate or direction delivered pursuant to this Section 4.3; provided,
--------
however, that no application of the monies and other cash proceeds received by
- -------
the Collateral Agent pursuant to this Article in accordance with any certificate
delivered pursuant to this Section 4.3 shall be deemed to restrict or limit the
right of CRIIMI MAE to contest with the purported obligee its respective
liability in respect of the amount set forth in such certificate.
Section 4.4 Notice of Default. CRIIMI MAE agrees to give the
-----------------
Administrative Agent and the Collateral Agent prompt written notice of each
default of which CRIIMI MAE becomes or should have become aware on the part of
any obligor in respect of an Eligible Mortgage Investment to the extent that
such default may result in any claim being made against HUD insurance with
respect thereto.
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<PAGE>
Section 4.5 Location of Records. CRIIMI MAE hereby covenants and
-------------------
agrees that its chief place of business and chief executive office, and the
place where its records pertaining to the Assigned Collateral will be kept,
shall at all times be located in the County of Montgomery, the State of
Maryland. CRIIMI MAE agrees to notify the Collateral Agent in writing at least
thirty (30) days prior to any change in its name, identity or corporate
structure.
Section 4.6 Obligations Absolute; Enforceability by the Lenders or
------------------------------------------------------
the Collateral Agent. CRIIMI MAE hereby acknowledges that its obligations under
- --------------------
this Agreement are and shall be, to the extent permitted by Applicable Law,
absolute and unconditional under any and all circumstances, including, without
limitation, the following circumstances: (a) any amendment, modification,
supplement or waiver of or to any provision of the Credit Agreement, the Notes,
this Agreement or any other Basic Document, or the illegality, invalidity,
irregularity or unenforceability of the Credit Agreement, the Notes, this
Agreement, any other Basic Document, or any Loans made to CRIIMI MAE, or (b) the
breach or falsity (whether or not material) of any representation or warranty on
the part of CRIIMI MAE contained or reaffirmed and repeated in this Agreement,
the Credit Agreement, or otherwise made to the Collateral Agent, the
Administrative Agent or the Lenders under or in connection with any of the Basic
Documents, or (c) any failure on the part of the Administrative Agent, a Lender
or the Collateral Agent to perform or observe any term, covenant or agreement on
its part to be performed or observed under the Credit Agreement, the Notes, this
Agreement or any other Basic Document or (d) the existence of any setoff,
counterclaim, recoupment, defense or other right or claim which CRIIMI MAE may
at any time have or have had against the Administrative Agent, the Collateral
Agent or a Lender, or (e) the dissolution, bankruptcy, insolvency or
reorganization of CRIIMI MAE or the appointment of a receiver, trustee,
custodian or liquidator for any of CRIIMI MAE's assets, including, without
limitation, CRIIMI MAE's interest in the Assigned Collateral, or (f) the
existence of any law, rule, regulation, order, writ, judgment, decree,
determination or award purporting in any manner to affect the Credit Agreement,
the Notes, this Agreement, or any other Basic Document or any Loans made to
CRIIMI MAE, or (g) the value, existence or release of any collateral for, or any
obligor with respect to, any obligation of CRIIMI MAE under the Credit
Agreement, the Notes, this Agreement or any other Basic Document, or (h) any
other circumstances whatsoever which would otherwise constitute an excuse for
nonperformance by CRIIMI MAE of its obligations hereunder, whether similar or
dissimilar to any of the circumstances specified in clauses (a) through (g)
above.
Section 4.7 Release of Collateral. (a) Upon the delivery to the
---------------------
Collateral Agent of each Collateral Valuation Certificate, other than a
Collateral Valuation Certificate delivered by CRIIMI MAE as the result of the
delivery of a
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<PAGE>
Termination Notice under Section 9 of the Credit Agreement, CRIIMI MAE shall be
entitled to request release of a portion of the then Assigned Collateral such
that, immediately after such release, the Borrowing Base is at least equal to
the principal amount of all Outstanding Loans; provided, that there shall not
--------
have occurred and be continuing a Default. Each such request shall be made in
writing delivered to the Collateral Agent and the Administrative Agent at least
three Business Days prior to the requested release and shall specify in
reasonable detail the Assigned Collateral that is to be released.
(b) CRIIMI MAE shall deliver to the Collateral Agent and the
Administrative Agent a Collateral Valuation Certificate two Business Days prior
to any date on which CRIIMI MAE desires to withdraw cash on deposit in the Cash
Collateral Account. CRIIMI MAE shall be entitled to request withdrawal of cash
on deposit in the Cash Collateral Account only to the extent that, immediately
after such withdrawal, the Borrowing Base is at least equal to the principal
amount of all Outstanding Loans; provided, that there shall not have occurred
--------
and be continuing a Default. Each request for a withdrawal of cash on deposit
in the Cash Collateral Account shall be made in writing delivered to the
Collateral Agent and the Administrative Agent.
(c) Subject to receipt by the Collateral Agent and the Administrative
Agent of the written request of CRIIMI MAE, the Collateral Agent shall release
such of the Assigned Collateral (including any monies then remaining in the Cash
Collateral Account) as specified in such written request unless otherwise
instructed in writing by the Administrative Agent. The Collateral Agent shall
have no obligation or duty to determine whether any such release is permitted
other than to verify that, based solely upon the information in the Collateral
Valuation Certificate delivered to the Collateral Agent in connection with such
release of Assigned Collateral, the Borrowing Base, after giving effect to such
release, is at least equal to the principal amount of all Outstanding Loans.
After making such verification, the Collateral Agent shall be fully protected in
making any such release requested by CRIIMI MAE unless the Collateral Agent
shall have received contrary written instructions from the Administrative Agent
not later than 12:00 noon (New York City time) on the proposed date of release.
(d) The Collateral Agent agrees that it shall, at CRIIMI MAE's
expense, reassign, without recourse to or any representation or warranty
whatsoever by, the Collateral Agent, and deliver to CRIIMI MAE any Assigned
Collateral released pursuant to Section 4.7 and, if requested by CRIIMI MAE,
shall execute and deliver to CRIIMI MAE for recording or filing such
assignments, releases and other documents as CRIIMI MAE may determine to be
necessary or appropriate and required or permitted by law in order to release
and terminate the Collateral
-16-
<PAGE>
Agent's security interest in any Assigned Collateral released pursuant to
Section 4.7.
(e) Each such request for release or withdrawal under this Section
4.7 shall be deemed to be a representation and warranty by CRIIMI MAE that no
Default has occurred and is continuing and that, after giving effect to such
release or withdrawal, no Default will have occurred and be continuing and the
Borrowing Base will be at least equal to the principal amount of all Outstanding
Loans.
Section 4.8 Substitution of Collateral. (a) In the event that the
--------------------------
Borrowing Base is equal to or greater than the aggregate principal amount of
Outstanding Loans and provided, that there shall not have occurred and be
--------
continuing a Default, CRIIMI MAE may, upon written notice to the Collateral
Agent and the Administrative Agent at least three Business Days prior thereto,
substitute additional Qualified Investments for Assigned Collateral consisting
of Qualified Investments. Such additional Qualified Investments shall be
delivered to the Collateral Agent in the manner provided in Section 7.1 for
Qualified Investments of such type.
(b) On the substitution date CRIIMI MAE shall deliver to the
Collateral Agent and the Administrative Agent a Collateral Valuation Certificate
dated the substitution date containing information regarding the Qualified
Investments to be released and the Qualified Investments to be substituted and
showing that the Borrowing Base, after giving effect to such substitution, is
equal to or greater than the principal amount of all Loans Outstanding.
(c) Upon any such substitution, the Collateral Agent agrees that it
shall, at CRIIMI MAE's expense, reassign, without recourse to or any
representation or warranty whatsoever by, the Collateral Agent, and deliver to
CRIIMI MAE any Qualified Investment released pursuant to this Section 4.8 and,
if requested by CRIIMI MAE, shall execute and deliver such other documents as
CRIIMI MAE may determine to be necessary or appropriate and required or
permitted by law in order to release and terminate the Collateral Agent's
security interest in any Assigned Collateral released pursuant to Section 4.8.
(d) Each such request for substitution under this Section 4.8 shall
be deemed to be a representation and warranty by CRIIMI MAE that no Default has
occurred and is continuing and that, after giving effect to such substitution,
no Default will have occurred and be continuing and the Borrowing Base will be
at least equal to the principal amount of all Outstanding Loans.
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<PAGE>
ARTICLE V
Cash Collateral Account
-----------------------
Section 5.1 Establishment of Cash Collateral Account. (a) For the
----------------------------------------
purpose of facilitating the transactions contemplated by this Agreement and the
Credit Agreement, the Collateral Agent shall at all times during the term of
this Agreement maintain a restricted demand deposit account in the name of
CRIIMI MAE (said account being herein called the "Cash Collateral Account")
under the sole dominion and control of the Collateral Agent. CRIIMI MAE shall
not be entitled to withdraw funds from the Cash Collateral Account except with
the consent of the Collateral Agent as provided in Section 4.7.
(b) CRIIMI MAE may from time to time deliver cash to the Collateral
Agent for deposit in the Cash Collateral Account to be held as Assigned
Collateral hereunder. In addition, whenever there shall occur and be continuing
a Default, there shall be deposited in the Cash Collateral Account, cash and
proceeds received from time to time by CRIIMI MAE or the Collateral Agent in
respect of any of the Assigned Collateral, including, without limitation, (i)
amounts constituting the payment of principal of and interest, if any, on
Eligible Participations, and (ii) amounts constituting the payment of principal
of and interest, if any, on Mortgage-Backed Securities.
Section 5.2 Application of Funds in Cash Collateral Account;
------------------------------------------------
Statements of Account. (a) Upon the occurrence and during the continuance of a
- ---------------------
Default, all rights of CRIIMI MAE to request the Collateral Agent to withdraw
funds from the Cash Collateral Account pursuant to Section 4.7 shall cease, and
the Collateral Agent shall have the right and, at the direction (which direction
shall be in writing or by telephone (confirmed in writing promptly thereafter))
of the Administrative Agent, shall have the obligation, at any time and from
time to time, to appropriate and apply the monies and Permitted Investments in
the Cash Collateral Account to the payment or prepayment in full of all
outstanding Obligations in accordance with Section 2.1.
(b) The Collateral Agent from time to time shall, upon the request of
the Administrative Agent, provide CRIIMI MAE and the Administrative Agent with
statements of account relative to the Cash Collateral Account or any other
account maintained by the Collateral Agent for the purposes of this Agreement in
accordance with the Collateral Agent's customary practices.
Section 5.3 Application of Deposited Funds. For purposes of
------------------------------
determining the payment to be made to any Person pursuant to Section 5.2, the
Collateral Agent may rely on certificates or statements furnished to or by it in
accordance with the provisions of Section 4.3(c).
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<PAGE>
Section 5.4 Permitted Investments. (a) Monies held in the Cash
---------------------
Collateral Account or any other account maintained by the Collateral Agent for
the purposes of this Agreement shall be invested and the proceeds of investments
shall be reinvested by the Collateral Agent, pursuant to the written direction
of CRIIMI MAE, on each Business Day on which the monies in the Cash Collateral
Account exceed $10,000, which written direction shall specify the investments to
be made. CRIIMI MAE shall direct such investment only in (i) obligations with
maturities of less than ninety days issued by, or the principal of and interest
on which is fully guaranteed by, the United States of America or any agency or
instrumentality thereof; (ii) commercial paper with maturities of less than
ninety days rated at the time of purchase (a) A-1 or A-1+ by Standard & Poor's
Ratings Group ("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"), and
(b) in one of the two highest categories by any nationally recognized
statistical rating organization other than the one providing a rating pursuant
to clause (a) of this subpart (ii); (iii) certificates of deposit, other
deposits or bankers' acceptances with maturities of less than ninety days issued
by or established with commercial banks having unimpaired capital and unimpaired
surplus of at least $250,000,000 and whose commercial paper (or commercial paper
which is supported by such bank's letter of credit or commitment to lend) is
rated at the time of purchase (a) A-1 or A-1+ by S&P or P-1 by Moody's, and (b)
in one of the two highest categories by any nationally recognized statistical
rating organization other than the one providing a rating pursuant to subclause
(a) of this clause (iii); and (iv) repurchase agreements involving any of the
investments described in clauses (i) through (iii) above; provided, however,
-------- -------
that investments referred to in clause (ii) above and repurchase agreements with
respect thereto shall be supported, secured or guaranteed by a letter of credit,
guaranty or other similar credit support issued by a bank or bank of the type
described in clause (iii) above (all such investments referred to as "Permitted
Investments"). Until the Collateral Agent receives subsequent written
notification from CRIIMI MAE of a different investment selection, the Collateral
Agent may rely on the selection contained in the last written advice furnished
by CRIIMI MAE. The Collateral Agent shall not be responsible or liable for any
investment made in accordance with the written direction of CRIIMI MAE or for
any loss resulting from the investment performance of any investment or
reinvestment of monies held in the Cash Collateral Account or any other account
maintained by the Collateral Agent for the purposes of this Agreement or from
the sale or liquidation thereof. The Collateral Agent shall have no obligation
to pay, or liability for, interest on uninvested funds held by it from time to
time hereunder.
(b) CRIIMI MAE shall instruct the Collateral Agent in writing as to,
and the Collateral Agent shall take, upon receipt of such instructions or
written instructions from the
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<PAGE>
Administrative Agent, such actions as may be necessary or appropriate to perfect
the security interest in the Permitted Investments granted hereunder. The
Collateral Agent shall, promptly after each investment of Deposited Funds
hereunder, provide to CRIIMI MAE and the Administrative Agent written
confirmation of such investment.
(c) The Collateral Agent may liquidate any investment when required
to make an application pursuant to Sections 2.1, 4.3 or 5.2 in accordance with
written instructions from CRIIMI MAE or the Administrative Agent. CRIIMI MAE
agrees, in connection with its requests, to use its best efforts to schedule the
maturity of such investments so as to avoid the necessity of liquidating the
same. All such investments shall be made in the name of, and shall be payable
to, the Collateral Agent.
ARTICLE VI
Default
-------
Section 6.1 Rights and Obligations of the Collateral Agent upon a
-----------------------------------------------------
Default. Whenever an Event of Default shall have occurred and be continuing, in
- -------
addition to the rights under this Agreement and the Credit Agreement:
(a) The Collateral Agent may, and at the direction (which direction
shall be in writing or by telephone (confirmed in writing promptly thereafter))
of the Administrative Agent shall, from time to time, withdraw amounts in the
Cash Collateral Account for application as provided in this Agreement and may,
and at the direction (which direction shall be in writing or by telephone
(confirmed in writing promptly thereafter)) of the Administrative Agent shall,
also exercise from time to time any rights and remedies available to it under
this Agreement in respect of the Assigned Collateral and under Applicable Law.
Any amounts obtained by the Collateral Agent on account of or as a result of the
exercise by the Collateral Agent of any right of offset or banker's Lien or
right of attachment or garnishment with respect to any funds at any time and
from time to time on deposit in, or otherwise to the credit of, the Cash
Collateral Account, shall be held by the Collateral Agent as additional
collateral security for the repayment of the Obligations and shall be applied as
provided in Sections 2.1, 4.3 and 5.2.
(b) The Collateral Agent may, and at the direction (which direction
shall be in writing or by telephone, confirmed in writing promptly thereafter)
of the Administrative Agent shall, exercise all rights, remedies, powers,
privileges and claims of CRIIMI MAE with respect to the Assigned Collateral and
give any consent, request, notice, direction, approval, extension or waiver
thereunder, and any right of CRIIMI MAE to take such action shall be suspended.
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<PAGE>
(c) The Collateral Agent shall be entitled to exercise all the rights
and remedies of a secured party on default under the Uniform Commercial Code and
also may, and at the direction of the Administrative Agent (which direction
shall be in writing or by telephone, confirmed in writing promptly thereafter)
shall, without notice, except as specified below, sell, or grant options to
purchase, all or part of the Assigned Collateral, or any interest therein, at
any public or private sale, without demand of performance, advertisement or
notice of intention to sell or of the time or place of sale or adjournment
thereof or otherwise dispose of the Assigned Collateral for cash, on credit or
for future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. CRIIMI MAE agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to CRIIMI MAE of the time
and place of any public sale or the time after which any private sale is to be
make shall constitute reasonable notification. The Collateral Agent shall not
be obligated to make any sale of Assigned Collateral regardless of notice of
sale having been given. The purchaser at any such sale shall hold the property
so sold absolutely free from any claim or right on the part of CRIIMI MAE, and
CRIIMI MAE hereby waives and releases to the fullest extent permitted by law any
rights with respect to the Assigned Collateral, including any rights of
marshalling the Assigned Collateral or of stay or appraisal. At any such sale,
unless prohibited by Applicable Law, any Secured Party shall have the right to
purchase all or part of the Assigned Collateral free from any such right.
(d) The Collateral Agent may, and upon the request of the
Administrative Agent (which request shall be in writing or by telephone
confirmed in writing promptly thereafter) shall, cause any certificates
evidencing registered Mortgage-Backed Securities and any Certificates of
Participation to be registered in the name of the Collateral Agent or its
nominee.
(e) Unless the Administrative Agent shall have delivered a
Liquidation Notice under Section 4.3(b), the Collateral Agent may and, upon the
request of the Administrative Agent (which request shall be in writing or by
telephone, confirmed in writing promptly thereafter), shall, continue to hold
the Assigned Collateral, collect payment in respect thereof for deposit in the
Cash Collateral Account and apply such amounts as provided herein.
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<PAGE>
ARTICLE VII
Mortgage-Backed Securities;
Certificates of Participation;
Collateral Valuation Certificate
--------------------------------
Section 7.1 Possession of Qualified Investments. For purposes of
-----------------------------------
this Agreement, transfer and delivery of Qualified Investments shall be made in
compliance with the procedures set forth in this Section and the party to whom
such transfer and delivery is made shall be deemed to be in possession of the
Qualified Investments upon compliance with the procedures set forth in this
Section 7.1 with respect to such Qualified Investments. The Collateral Agent
and CRIIMI MAE shall comply with the procedures set forth in this Section 7.1
with respect to all Qualified Investments received by the Collateral Agent
pursuant to this Agreement; provided, however, that (i) failure to so comply
-------- -------
shall not be construed to affect or limit the security interest granted in this
Agreement by CRIIMI MAE to the Collateral Agent for the benefit of the Secured
Parties or to render such security interest unperfected if such security
interest is perfected under Applicable Law and (ii) the provisions of this
Section 7.1 shall not be deemed to limit CRIIMI MAE's obligation to take, or to
cause the Collateral Agent to take, such action as may be necessary or
appropriate to grant to the Collateral Agent, for the benefit of the Secured
Parties, a valid and perfected first priority security interest in the Assigned
Collateral.
(a) Bearer Mortgage-Backed Securities. In the case of Mortgage-
---------------------------------
Backed Securities issued in bearer form, the certificates evidencing such
Mortgage-Backed Securities shall be physically delivered to the possession of
the Collateral Agent. Such certificates shall be segregated from all other
securities or other assets of CRIIMI MAE or any other Person held by the
Collateral Agent in any capacity other than as Collateral Agent for the benefit
of the Secured Parties. The possession by the Collateral Agent of the Mortgage-
Backed Security or Mortgage-Backed Securities referred to in this subparagraph
(a) shall be deemed to begin upon delivery to the Collateral Agent of the
certificate or certificates.
(b) Registered Mortgage-Backed Securities - Definitive Form. Except
-------------------------------------------------------
as provided in subparagraph (d) below, in the case of Mortgage-Backed Securities
issued in registered form and evidenced by a certificate, CRIIMI MAE shall
provide, or cause to be provided (in the case of Mortgage-Backed Securities
registered in the name of a Person other than CRIIMI MAE), the certificate and
an assignment to the Collateral Agent, as agent for the benefit of the Secured
Parties, executed on a separate form, which shall be the form, if any, provided
for such purposes by a Federal Reserve Bank or other fiscal agent of the issuer
(for example, Department of the Treasury Form PD 1832), indicating the
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<PAGE>
Collateral Agent as transferee and specifically identifying the Mortgage-Backed
Securities to be transferred. The certificate or certificates and the
assignment form, if any, shall be physically delivered to the possession of the
Collateral Agent but unless and until there shall occur and be continuing an
Event of Default, the Collateral Agent shall not submit the certificate or
certificates to the issuer of the Mortgage-Backed Security or to the fiscal
agent of the issuer of the Mortgage-Backed Security for registration of
transfer. The Collateral Agent shall segregate such certificate or certificates
from all other securities or other assets of CRIIMI MAE or any other Person held
by the Collateral Agent in any capacity other than as Collateral Agent hereunder
for the benefit of the Secured Parties. The possession by the Collateral Agent
of the Mortgage-Backed Security or Mortgage-Backed Securities referred to in
this subparagraph (b) shall be deemed to begin when the Collateral Agent
receives the certificate or certificates accompanied by a signed assignment form
as provided herein.
(c) Registered Mortgage-Backed Securities - Book-Entry Form. In the
-------------------------------------------------------
case of registered Mortgage-Backed Securities maintained by a Federal Reserve
Bank in book-entry form for the account of a member bank of the Federal Reserve
System (a "Member Bank") and maintained by such Member Bank for the account of
CRIIMI MAE, CRIIMI MAE shall instruct the Member Bank to instruct the Federal
Reserve Bank to transfer the Mortgage-Backed Security or Mortgage-Backed
Securities on the records of the Federal Reserve Bank to the Collateral Agent,
as agent. The Collateral Agent shall enter the Mortgage-Backed Security or
Mortgage-Backed Securities on its records as held by it as Collateral Agent
hereunder for the benefit of the Secured Parties identifying the Mortgage-Backed
Security or Mortgage-Backed Securities and recording the amounts and maturities
thereof. The possession by the Collateral Agent of the Mortgage-Backed Security
or Mortgage-Backed Securities referred to in this subparagraph (c) shall be
deemed to begin when the Collateral Agent receives a copy of the advice
confirming the transaction issued by the Federal Reserve Bank.
(d) U.S. Mortgage-Backed Securities. In the case of U.S. Mortgage-
-------------------------------
Backed Securities held through the Participants Trust Corporation ("PTC") for
the account of a participant in PTC (a "Participant") and maintained by such
Participant for the account of CRIIMI MAE or a financial intermediary for CRIIMI
MAE ("Intermediary"), CRIIMI MAE shall instruct the Participant (or, if an
Intermediary is involved, shall instruct the Intermediary to instruct such
Participant (a copy of which instructions will be delivered to the Secured
Parties)) to instruct PTC to transfer such U.S. Mortgage-Backed Security on the
records of PTC to the Collateral Agent, as agent for the Secured Parties. The
Collateral Agent shall enter such U.S. Mortgage-Backed Security on its records
as held by it as Collateral Agent hereunder for the benefit of the Secured
Parties, identifying such U.S.
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<PAGE>
Mortgage-Backed Security by CUSIP number or numbers (if applicable), pool number
(if applicable) and certificate number (if applicable) and recording the amounts
and maturities thereof. The possession by the Collateral Agent of such
Mortgage-Backed Security referred to in this subparagraph (d) shall be deemed to
begin when the Collateral Agent receives the advice issued by PTC confirming the
transfer of such Collateral to the account of the Collateral Agent at the PTC.
(e) Certificates of Participation. CRIIMI MAE shall deliver or cause
-----------------------------
to be delivered to the Collateral Agent in respect of each Eligible
Participation constituting Assigned Collateral a Certificate of Participation
evidencing CRIIMI MAE's undivided beneficial ownership interest in the Eligible
Mortgage Investment and CRIIMI MAE's Ancillary Rights with respect thereto,
together with an assignment thereof duly executed in blank and on a separate
form, which shall be the form, if any, provided or required for such purposes,
sufficient to permit the Collateral Agent to obtain a new Certificate of
Participation in the name of the Collateral Agent with respect to the Eligible
Participation upon the Collateral Agent's compliance with any Applicable Law.
The Collateral Agent shall segregate such Certificate or Certificates from all
other securities or assets of CRIIMI MAE or any other Person held by the
Collateral Agent in any capacity other than as Collateral Agent for the benefit
of the Secured Parties. CRIIMI MAE agrees that it shall, unless it provides
evidence satisfactory to the Required Lenders that such recording is not
required to perfect the security interest hereunder, cause the Certificate of
Participation (or a Notice thereof) and the assignment thereof with respect to
such Eligible Participation to be recorded in the land records where the related
Eligible Mortgage Investment is recorded; provided, that CRIIMI MAE shall
--------
deliver a copy of such Certificate of Participation (or Notice thereof) and the
assignment thereof to be so recorded no later than 14 days (or such longer time
as permitted under Section 3.2(m) with respect to the Eligible Participations
listed on the initial Collateral Valuation Certificate) following any delivery
of a Certificate of Participation to the Collateral Agent pursuant to this
Section 7.1(e). The possession by the Collateral Agent of an Eligible
Participation shall be deemed to begin when the Collateral Agent receives the
related Certificate of Participation, accompanied by the executed assignment
form.
(f) Collateral Agent's Receipt. Upon receipt by the Collateral Agent
--------------------------
of Qualified Investments pursuant to this Section 7.1, the Collateral Agent
shall execute and deliver to CRIIMI MAE and the Administrative Agent a receipt
and confirmation in the form of Exhibit A.
Section 7.2 Collateral Valuation Certificate. (a) The Collateral
--------------------------------
Agent shall, on Wednesday of each week (or, if any such Wednesday is not a
Business Day, on the next
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succeeding Business Day), deliver to CRIIMI MAE and the Administrative Agent a
schedule of the Assigned Collateral in its possession as of Tuesday of such
week; provided, however, that, if such schedule as of each such Tuesday does not
-------- -------
differ from the most recently delivered schedule, the Collateral Agent shall
deliver such schedule only if the next Collateral Valuation Certificate
delivered by CRIIMI MAE does not accurately reflect the Assigned Collateral in
the Collateral Agent's possession, whereupon the Collateral Agent shall deliver
such schedule to CRIIMI MAE within three Business Days; provided, further, that
-------- -------
if a Termination Notice is delivered pursuant to Section 9 of the Credit
Agreement, the Collateral Agent shall provide a schedule of the Assigned
Collateral in its possession as of the date of the Termination Notice to CRIIMI
MAE and the Administrative Agent on the Business Day immediately succeeding the
date of receipt of the Termination Notice.
(b) CRIIMI MAE shall, on Tuesday of each week, commencing the first
week following delivery of the initial Collateral Valuation Certificate
hereunder (or, if any such Tuesday is not a Business Day on the next succeeding
Business Day), deliver to the Collateral Agent, the Administrative Agent and
each Lender a Collateral Valuation Certificate showing the Loan Value of the
Assigned Collateral as of such day; provided, however, that if the Value of the
-------- -------
Unencumbered Assets, as set forth in the most recent Unencumbered Assets
Valuation Certificate, is less than an amount equal to 5% of the Loans
Outstanding at such time, the Administrative Agent may, in its sole discretion,
require the delivery of Collateral Valuation Certificates prepared by CRIIMI MAE
on a more frequent basis, but in no event may the Administrative Agent require
the delivery of more than one Collateral Valuation Certificate per day;
provided, further, that if a Termination Notice is delivered pursuant to Section
- -------- -------
9 of the Credit Agreement, CRIIMI MAE shall use its best efforts, by the close
of business on the second Business Day (but in no event later than the fifth
Business Day) following CRIIMI MAE's receipt of the Termination Notice, to
deliver a Collateral Valuation Certificate valuing the Assigned Collateral as of
the date of the Termination Notice. If CRIIMI MAE shall not deliver a
Collateral Valuation Certification on the fifth Business Day following CRIIMI
MAE's receipt of the Termination Notice, the Administrative Agent may (but shall
not be obligated to) prepare, or cause to be prepared, a Collateral Valuation
Certificate on the sixth Business Day following its receipt of such Termination
Notice, valuing the Assigned Collateral as of the date of such Termination
Notice. After the delivery of the Collateral Valuation Certificate as provided
in the second proviso to the second preceding sentence, CRIIMI MAE shall deliver
a Collateral Valuation Certificate on each Business Day, valuing the Assigned
Collateral as of the immediately preceding Business Day.
(c) If a Collateral Valuation Certificate indicates that the
Borrowing Base is less than the principal amount of all
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Outstanding Loans, CRIIMI MAE shall, without limiting its obligation to prepay
the Loans and the Notes as provided in Section 2.08(b) of the Credit Agreement
so as to eliminate such deficiency, within five (5) days after the delivery of
such Collateral Valuation Certificate, either deposit cash in the Cash
Collateral Account, deliver Permitted Investments to the Collateral Agent or
pledge or substitute additional Eligible Participations or Mortgage-Backed
Securities so as to eliminate the deficiency, together with a Collateral
Valuation Certificate as to such additional Assigned Collateral showing that the
Loan Value thereof equals or exceeds the amount of such deficiency; provided,
--------
however, that if the Value of the Unencumbered Assets as set forth in the most
- -------
recent Unencumbered Asset Valuation Certificate is less than an amount equal to
5% of the Loans Outstanding at such time, CRIIMI MAE shall deposit such cash,
deliver such Permitted Investments or pledge or substitute such Eligible
Participations and/or Mortgage-Backed Securities so as to eliminate the
deficiency described in the immediately preceding proviso within two (2)
Business Days after the delivery of such Collateral Valuation Certificate;
provided, further, that if CRIIMI MAE notifies (which notification shall be
- -------- -------
telephonic and confirmed in writing within 24 hours) the Administrative Agent at
or prior to 10:00 a.m., New York City time, on the last Business Day of the
applicable cure period that it is unable to deposit such cash, deliver such
Permitted Investments or pledge or substitute such Eligible Participations
and/or Mortgage-Backed Securities prior to the expiration of such cure period,
which notification shall also state what actions, if any, are proposed to be
taken by CRIIMI MAE with respect to the deficiency, the Administrative Agent
shall promptly notify each Lender of the notification received from CRIIMI MAE.
Each Lender shall advise the Administrative Agent of its decision with respect
to CRIIMI MAE's proposal no later than 3:30 p.m., New York City time, on the
Business Day it receives notification of such proposal. If a Lender does not so
advise the Administrative Agent by 3:30 p.m., New York City time, on such
Business Day, such Lender shall be deemed to have appointed the Administrative
Agent as its attorney-in-fact for the purpose of making a decision with respect
to, and responding to, CRIIMI MAE's proposal. The Administrative Agent shall
notify (which notification shall be telephonic and confirmed in writing within
24 hours) CRIIMI MAE of the decision of the Required Lenders regarding CRIIMI
MAE's proposal by 4:00 p.m., New York City time, on such Business Day. Any
notification received from CRIIMI MAE after 10:00 a.m., New York City time, on
any Business Day shall be deemed to have been received on the next succeeding
Business Day. Any decision with respect to CRIIMI MAE's proposal shall be in
the sole discretion of the Required Lenders. If CRIIMI MAE's proposal would
permit the extension of the applicable cure period, and such extension would not
have been approved by the Required Lenders but for the Administrative Agent's
acting as attorney-in-fact for such Lender or Lenders, as the case may be, such
extension cannot extend the cure period for more than 24 hours beyond the
original expiration
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thereof. Notwithstanding the foregoing, if the cure period shall be extended
for no more than 24 hours in accordance with the immediately preceding sentence
and there has been no rejection of the extension by the Required Lenders
(without the Administrative Agent's acting as attorney-in-fact) subsequent to
the initial granting of such extension, CRIIMI MAE may resubmit such proposal to
the Administrative Agent for reconsideration by each Lender at or prior to 10:00
a.m., New York City time, on the last day of the cure period, as extended by the
Administrative Agent. If the Required Lenders elect to extend such cure period,
such additional extension may only be for one additional 24-hour period beyond
the extended expiration date if such additional extension would not have been
approved by the Required Lenders but for the Administrative Agent acting as
attorney-in-fact for such Lender or Lenders, as the case may be. If the
Administrative Agent does not advise CRIIMI MAE of the approval of CRIIMI MAE's
proposal with respect to the actions it proposes to take in respect of the
deficiency by 4:00 p.m., New York City time, on the applicable Business Day,
such proposal shall be deemed to be rejected by each Lender. The Administrative
Agent shall from time to time furnish to CRIIMI MAE a certificate identifying
the names and telephone numbers of officers and employees who are authorized to
give notices to, or receive notices from, CRIIMI MAE under this Section 7.2.
Until CRIIMI MAE receives a subsequent certificate from the Administrative
Agent, CRIIMI MAE shall be entitled to rely on the last such certificate
delivered to it for purposes of determining the officers and employees of the
Administrative Agent who are authorized to give notices to, or receive notices
from, CRIIMI MAE under this Section 7.2.
Section 7.3 Interest and Principal Payable on Qualified Investments.
-------------------------------------------------------
So long as (i) no Default shall have occurred and be continuing and (ii) the
Borrowing Base (as shown in the most recently delivered Collateral Valuation
Certificate) is at least equal to the aggregate amount of Loans Outstanding, all
interest and principal payable on Assigned Collateral consisting of Qualified
Investments shall be paid by the Collateral Agent, if received by the Collateral
Agent, to CRIIMI MAE. Such interest and principal, if any, as shall be received
by the Collateral Agent shall be remitted promptly upon receipt by the
Collateral Agent by wire transfer to CRIIMI MAE or to such account as shall be
designated for such purpose by CRIIMI MAE to the Collateral Agent. If a Default
shall occur and be continuing or if the condition set forth in clause (ii) of
the second preceding sentence is not satisfied, then (1) the Collateral Agent
shall, upon written notification by the Administrative Agent, retain all
interest and principal paid on Qualified Investments and deposit the same in the
Cash Collateral Account and (2) CRIIMI MAE shall deposit any such interest and
principal as may be received by it in such Cash Collateral Account. The
Collateral Agent shall have no obligation or duty to retain interest or
principal received by it on Qualified Investments
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unless and until the Collateral Agent shall have received a written notice from
the Administrative Agent instructing it to do so and shall be fully protected in
remitting such principal and interest to CRIIMI MAE prior to such receipt.
ARTICLE VIII
The Collateral Agent
--------------------
Section 8.1 Appointment and Powers of the Collateral Agent. (a) The
----------------------------------------------
Administrative Agent and each Lender each hereby appoints the Collateral Agent
its agent hereunder, and each hereby authorizes the Collateral Agent to take
such action on its behalf and to exercise such rights, remedies, powers and
privileges hereunder as are specifically authorized to be exercised by the
Collateral Agent by the terms hereof, together with such rights, remedies,
powers and privileges as are reasonably incidental thereto. The Collateral
Agent may execute any of its duties as agent hereunder by or through agents or
employees and shall be entitled to retain experts (including counsel) and to act
in reliance upon the advice of such experts concerning all matters pertaining to
the agencies hereby created and its duties hereunder, and shall not be liable
for any action taken or omitted to be taken by it in good faith in accordance
with the advice of such experts selected by it.
(b) The Collateral Agent shall have no duty to exercise any
discretionary right, power, remedy or privilege granted to it hereby, or to take
any affirmative action hereunder, unless directed to do so by the Administrative
Agent in writing, and shall not, without the prior written approval of the
Administrative Agent, consent to any departure by CRIIMI MAE from the terms
hereof or of the Assigned Collateral, waive any default on the part of CRIIMI
MAE hereunder or under the Assigned Collateral or amend, modify, supplement or
terminate, or agree to any surrender of, this Agreement or the Assigned
Collateral; provided, however, that the foregoing limitation on the authority of
-------- -------
the Collateral Agent is for the benefit of the Administrative Agent, and shall
not impose any obligation on CRIIMI MAE to investigate or inquire into the
authority of the Collateral Agent in any circumstances, and CRIIMI MAE shall be
fully protected in carrying out any request, direction or instruction made or
given to CRIIMI MAE by the Collateral Agent in the exercise of any right, power,
remedy or privilege granted to the Collateral Agent hereby, receiving or acting
upon any consent or waiver granted to CRIIMI MAE hereunder by the Collateral
Agent, or entering into any amendment or modification of, or supplement to, this
Agreement, and CRIIMI MAE shall not be subject to the claims of the
Administrative Agent or any Lender by reason of the lack of authority of the
Collateral Agent to take any such action nor shall the lack of authority on the
part of the Collateral Agent in any circumstances give rise to any claim on the
part of CRIIMI
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MAE against any Lender; provided, further, that the Collateral Agent shall not
-------- -------
be required to take any action which exposes the Collateral Agent to personal
liability or which is contrary to this Agreement, or any other agreement or
instrument relating to the Assigned Collateral or Applicable Law.
(c) Neither the Collateral Agent nor any of its directors, officers,
employees or agents, shall be liable for any action taken or omitted to be taken
by it or them hereunder, or in connection herewith, except for its or their own
gross negligence or wilful misconduct; nor shall the Collateral Agent be
responsible for the validity, effectiveness, value, sufficiency or
enforceability against CRIIMI MAE of this Agreement or any other document
furnished pursuant hereto or in connection herewith, or of the Assigned
Collateral (or any part thereof), the investments made pursuant to Section 5.4
(or any part thereof) or the Cash Collateral Account (or any part thereof) or
for the perfection or priority of any security interest purported to be granted
hereunder. Without limiting the generality of the foregoing, the Collateral
Agent (i) makes no warranty or representation to any party hereto or beneficiary
hereof and shall not be responsible for any statements, warranties or
representations made by CRIIMI MAE in or in connection with this Agreement or
any other document relating to the Assigned Collateral; and (ii) shall not have
any duty, except as expressly provided herein, to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement or any other agreement or instrument relating to the Assigned
Collateral on the part of any party hereto or thereto or to inspect any books
and records relating to the Assigned Collateral.
(d) The Collateral Agent shall be entitled to rely on any
communication, instrument, paper or other document believed by it to be genuine
and correct and to have been signed or sent by the proper Person or Persons.
The Collateral Agent shall be entitled to assume that no Default or Event of
Default shall have occurred and be continuing, unless the Collateral Agent has
received written notice at its Corporate Trustee Administration Department from
the Administrative Agent that such a Default or an Event of Default has occurred
and is continuing and specifying the nature thereof. Notwithstanding any other
provision of this Agreement, the Collateral Agent shall not be liable for taking
any action or failing to take any action which it is prohibited or required to
take following a Default or an Event of Default, unless the Collateral Agent
shall have received such written notice. The Collateral Agent shall be under no
duty to confirm that any assignment form relating to the Assigned Collateral
delivered to it is in proper form. The Collateral Agent may accept deposits
from, lend money to and generally engage in any kind of business with CRIIMI MAE
and its affiliates as if it were not the agent of the Lenders and the
Administrative Agent.
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Section 8.2 Successor Collateral Agent. The Collateral Agent acting
--------------------------
hereunder at any time may resign by an instrument in writing addressed and
delivered to the Administrative Agent and CRIIMI MAE, and may be removed at any
time with or without cause by an instrument in writing duly executed by or on
behalf of the Administrative Agent. Subject to the provisions of Section 8.3,
the Administrative Agent shall also have the right to appoint, subject to the
approval of CRIIMI MAE, a successor to the Collateral Agent upon any such
resignation or removal by an instrument of substitution complying with the
requirements of applicable law, or, in the absence of any such requirements,
without formality other than appointment and designation in writing. Upon the
making and acceptance of such appointment, the execution and delivery by such
successor Collateral Agent of a ratifying instrument pursuant to which such
successor Collateral Agent agrees to assume the duties and obligations imposed
on the Collateral Agent by the terms of this Agreement, and the delivery to such
successor Collateral Agent of the Assigned Collateral and documents and
instruments then held by the retiring Collateral Agent, including the transfer
of registration of any book-entry Mortgage-Backed Securities included in the
Assigned Collateral, such successor Collateral Agent shall thereupon succeed to
and become vested with all the estate, rights, powers, remedies, privileges,
immunities, indemnities, duties and obligations hereby granted to or conferred
or imposed upon the Collateral Agent named herein, and on such appointment and
designation shall not exhaust the right to appoint and designate further
successor Collateral Agents hereunder. No Collateral Agent shall be discharged
from its duties or obligations hereunder until the Assigned Collateral and
documents and instruments then held by such Collateral Agent shall have been
transferred or delivered to the successor Collateral Agent, including the
transfer of registration of any book-entry Mortgage-Backed Securities included
in the Assigned Collateral, until all Deposited Funds held in the Cash
Collateral Account maintained with the retiring Collateral Agent shall have been
transferred to the new Cash Collateral Account, until all UCC-3 Financing
Statements with respect to the Assigned Collateral and, if required by the
Collateral Agent, at the direction of the Administrative Agent to perfect any
security interest, any notices of the assignment of Certificates of
Participation with respect to the Eligible Participations shall have been filed
in the appropriate recording offices and until such retiring Collateral Agent
shall have executed and delivered to the successor Collateral Agent appropriate
instruments assigning the retiring Collateral Agent's security or other interest
in the Assigned Collateral to the successor Collateral Agent. The retiring
Collateral Agent shall not be required to make any representation or warranty in
connection any such transfer or assignment. If no successor Collateral Agent
shall be appointed, as aforesaid, or, if appointed, shall not have accepted its
appointment, within thirty (30) days after resignation or removal of the
retiring Collateral Agent, then,
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subject to the provisions of Section 8.3, the Collateral Agent may appoint a
successor Collateral Agent. Each such successor Collateral Agent shall provide
CRIIMI MAE and the Administrative Agent with its address, and telephone, telex
and facsimile numbers, to be used for purposes of Section 10.3, in a notice
complying with the terms of said Section 10.3. Notwithstanding the resignation
or removal of any Collateral Agent hereunder, the provisions of this Article and
Section 10.4 shall continue to inure to the benefit of such Collateral Agent in
respect of any action taken or omitted to be taken by such Collateral Agent in
its capacity as such while it was Collateral Agent under this Agreement.
Section 8.3 Qualifications of Collateral Agent. Any Collateral Agent
----------------------------------
at any time acting hereunder must at all times be a bank or trust company with a
combined capital and surplus, as shown by its most recent report of condition
published pursuant to the requirements of the Board of Governors of the Federal
Reserve System, of at least $50,000,000 having an office in The City of New York
which is authorized to conduct a trust business.
Section 8.4 Instructions of the Administrative Agent. In any
----------------------------------------
instance in which the Collateral Agent is permitted to take action hereunder,
the Collateral Agent shall act in accordance with the instructions received, if
any, from the Administrative Agent; provided that, notwithstanding any
--------
instructions received from the Administrative Agent hereunder, the Collateral
Agent shall not be required to take any action hereunder which exposes the
Collateral Agent to personal liability, or which is contrary to this Agreement
or any other agreement or instrument relating to the Assigned Collateral or
Applicable Law, or which would adversely affect the rights and immunities of the
Collateral Agent hereunder. The Collateral Agent is serving as such at the
request of and for the convenience of the Administrative Agent and the Lenders
and shall be fully protected in acting or refraining to act hereunder in
accordance with any instructions received from the Administrative Agent
hereunder. In furtherance of the foregoing, the Administrative Agent and the
Lenders agree to pay, ratably in accordance with the aggregate principal amount
of the Loans of the Lenders (or if no Loans are outstanding, the respective
Commitments), to the Collateral Agent, on demand, all amounts that the
Collateral Agent shall be entitled to receive from CRIIMI MAE pursuant to
Section 10.4 to the extent not paid by CRIIMI MAE within thirty days of demand
therefor by the Collateral Agent. The Administrative Agent agrees to furnish to
the Collateral Agent with the delivery of this Agreement a certificate
certifying the incumbency and specified signatures of officers and agents of the
Administrative Agent authorized to act, and to give instructions and notices on
behalf of the Administrative Agent hereunder and the Collateral Agent shall be
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entitled to rely on such certificate until a new certificate is delivered
hereunder.
ARTICLE IX
Amendments, Modifications,
Waivers and Consents
--------------------------
Section 9.1 Execution of Amendments, etc. No amendment,
-----------------------------
modification, supplement, termination or waiver of or to any provision of this
Agreement, nor any consent to any departure by CRIIMI MAE from any provision of
this Agreement, shall be effective unless the same shall be in writing and
signed on behalf of the Collateral Agent, the Administrative Agent (acting with
the consent of the Required Lenders or all the Lenders as provided in Section
11.04 of the Credit Agreement) and CRIIMI MAE. Any waiver of any provision of
this Agreement, and any consent to any departure by CRIIMI MAE from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or demand
upon CRIIMI MAE in any instance hereunder shall entitle CRIIMI MAE to any other
or further notice or demand in similar or other circumstances.
ARTICLE X
Miscellaneous
-------------
Section 10.1 Further Assurances. CRIIMI MAE agrees that it will join
------------------
with the Collateral Agent in executing and, at its own expense, recording,
filing and refiling, or permit the Collateral Agent to record, file and refile,
such assignments, financing statements, continuation statements and other
documents (including this Agreement) in such offices as the Collateral Agent,
the Administrative Agent or any Lender may deem necessary or appropriate and
wherever required or permitted by law in order to perfect and preserve the
rights and interests granted to the Collateral Agent hereby, and authorizes the
Collateral Agent to file financing statements and amendments thereto and
continuation statements relative to all or any part thereof without the
signature of CRIIMI MAE where permitted by law, and agrees to do such further
acts and things, and to execute and deliver to the Collateral Agent such
additional assignments, agreements, powers and instruments, as the Collateral
Agent or the Administrative Agent reasonably determines to be necessary or
appropriate to carry into effect the purposes of this Agreement or to better
assure and confirm unto the Collateral Agent its rights, powers and remedies
hereunder or to perfect and preserve its security interest in the Assigned
Collateral. CRIIMI MAE further agrees that it will deliver or cause to be
delivered to the Collateral Agent all instruments, certificates, assignments or
registrations
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of transfer as the Collateral Agent, the Administrative Agent or any Lender may
deem necessary or appropriate and wherever required or permitted by law, in
order to perfect and preserve the rights and interests granted to the Collateral
Agent hereby in that Assigned Collateral which the Collateral Agent possesses to
have a valid and perfected first priority security interest.
Section 10.2 No Waiver; Cumulative Remedies. No failure on the part
------------------------------
of the Collateral Agent to exercise, and no delay on the part of the Collateral
Agent in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by the Collateral Agent preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies that may be
available to the Collateral Agent, whether at law, in equity or otherwise.
Section 10.3 Notices, etc. Except where telephonic (which shall be
-------------
confirmed in writing promptly) instructions or notices are authorized herein to
be given, all notices, demands, instructions and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
personally delivered or sent by registered, certified or express mail, postage
prepaid, return receipt requested, or by tested telex, facsimile, TWX or
telegram (with messenger delivery specified in the case or a telegram), and
shall be deemed to be given for purposes of this Agreement on the date on which
such writing is delivered or sent to the intended recipient thereof in
accordance with the provisions of this Section 10.3 (except that any notice sent
by registered or certified mail shall be deemed to have been given on the fifth
Business Day after such notice is deposited for delivery in the United States
mail). Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section 10.3, notices, demands,
instructions and other communications in writing shall be given to or made upon
the respective parties hereto at their respective addresses (or their respective
facsimile, telex or TWX numbers) indicated below, and, in the case of telephonic
instructions or notices, by calling the telephone number or numbers indicated
for such party below:
(a) with respect to CRIIMI MAE:
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852
Attention: Mr. William B. Dockser
Mr. Jay R. Cohen
Office of General Counsel
Telephone: (301) 468-9200
Facsimile: (301) 231-0396
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(b) with respect to the Collateral Agent:
Chemical Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trustee
Administration Department
Telephone: (212) 613-7711
Facsimile: (212) 971-8567/8568
(c) with respect to the Administrative Agent:
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Attention: Ms. Arlene Tellerman
Telephone: (212) 856-3695
Facsimile: (212) 856-3763
Any party may designate a different or additional address for the
delivery of notices by providing notice thereof to the other party. Except as
provided to the contrary above, all notices, demands, and other communications
shall be effective upon personal delivery or upon the date of receipt by the
addressee as shown on the return receipt. Rejection or other refusal to accept
notices, demands, or other communications which are rejected or acceptance of
which is refused shall be deemed to be effective upon the date on which the same
were rejected or refused.
Section 10.4 Fee; Costs and Expenses, etc. CRIIMI MAE shall pay to
-----------------------------
the Collateral Agent such fee for its services as shall be agreed upon by CRIIMI
MAE and the Collateral Agent. CRIIMI MAE hereby agrees to reimburse the
Collateral Agent, on demand, for all reasonable costs and expenses incurred by
the Collateral Agent in connection with the administration and enforcement of
this Agreement and agrees to defend, indemnify and hold harmless the Collateral
Agent, the Administrative Agent and each Lender from and against any and all
losses, costs, claims, damages, penalties, causes of action, suits, judgments,
liabilities and expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by the Collateral Agent (in its capacity as
Collateral Agent), the Administrative Agent or a Lender hereunder or in
connection herewith, unless such liability shall be due to wilful misconduct or
gross negligence on the part of the party being indemnified or its agents or
employees. If CRIIMI MAE shall fail to do any act or thing which it has
covenanted to do hereunder or any representation or warranty on the part of
CRIIMI MAE contained herein or repeated and reaffirmed herein shall be breached,
the Collateral Agent may, with the consent of the Administrative
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Agent (but shall not be obligated to), do the same or cause it to be done or
remedy any such breach, and may expend its funds for such purpose. Any and all
amounts so expended by the Collateral Agent shall be repayable to it by CRIIMI
MAE upon the Collateral Agent's demand therefor. The obligations of CRIIMI MAE
under this Section 10.4 shall survive the termination or this Agreement, the
resignation of the Collateral Agent, and the discharge of the other obligations
of CRIIMI MAE hereunder and shall also survive the termination of the
Commitments in accordance with the provisions of the Credit Agreement.
Section 10.5 Collateral Agent Appointed Attorney-in-Fact. Until all
-------------------------------------------
Obligations are paid, CRIIMI MAE hereby appoints the Collateral Agent its
attorney-in-fact, with full power of substitution, for the purpose of taking
such action and executing agreements, instruments and other documents, in the
name of CRIIMI MAE, as the Collateral Agent, the Administrative Agent or any
Lender may deem necessary or advisable to accomplish the purposes hereof, which
appointment is coupled with an interest and is irrevocable.
Section 10.6 Termination. This Agreement and the assignments,
-----------
pledges and security interests created or granted hereby shall create a
continuing security interest in the Assigned Collateral and shall terminate only
when (a) all Obligations shall have been fully paid and satisfied, (b) the
Commitments and obligations of each Lender under the Credit Agreement and
related documents have terminated, and (c) the Collateral Agent receives a
certificate from the parties hereto certifying as to the matters in clauses (a)
and (b) above, at which time the Collateral Agent shall reassign, without
recourse upon, or any representation or warranty whatsoever by, the Collateral
Agent, and deliver to CRIIMI MAE all Assigned Collateral and documents then in
the custody or possession or the Collateral Agent and, if requested by CRIIMI
MAE, shall execute and deliver to CRIIMI MAE for recording or filing in each
office in which any assignment or financing statement relative to the Assigned
Collateral or the agreements relating thereto or any part thereof, shall have
been filed or recorded, a termination statement or release under applicable law
(including, if relevant the Uniform Commercial Code) releasing the Collateral
Agent's interest therein, and such other documents and instruments as CRIIMI MAE
may reasonably request, all without recourse upon or representation or warranty
whatsoever by, the Collateral Agent, and at the cost and expense of CRIIMI MAE.
Section 10.7 Governing Law; Binding Character; Assignment. This
--------------------------------------------
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. This Agreement shall be binding upon and shall inure to
the benefit of CRIIMI MAE and the Secured Parties, and their respective
successors and assigns; provided, however, that CRIIMI MAE may not assign its
-------- -------
rights hereunder or in connection herewith or any
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<PAGE>
interest herein to any other Person or have any of its obligations hereunder
assumed by any other Person (voluntarily, by operation of law or otherwise)
without the prior written consent of the Administrative Agent (acting with the
consent of all the Lenders) and the Collateral Agent. This Agreement shall not
be construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and the parties to the Credit Agreement and each of
their respective successors and assigns.
Section 10.8 Severability of Provisions. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 10.9 Headings. Article and Section headings used in this
--------
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
Section 10.10 Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts, when
taken together, shall constitute one and the same Agreement.
Section 10.11 Reinstatement. This Agreement shall continue to be
-------------
effective, or be reinstated, as the case may be, if at any time any amount
received by the Collateral Agent, the Administrative Agent or any Lender in
respect of the Assigned Collateral is rescinded or must otherwise be restored or
returned by the Collateral Agent, the Administrative Agent or such Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of CRIIMI
MAE or intervenor or conservator of, or trustee or similar officer for, CRIIMI
MAE or any substantial part of its respective properties, or otherwise, all as
though such payment had not been made.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CRIIMI MAE Inc.
By [SIGNATURE OF H. WILLIAM WILLOUGHBY APPEARS HERE]
--------------------------------------------------
Name: H. William Willoughby
Title: President
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as Administrative Agent
By
-----------------------------------------------
Name:
Title:
CHEMICAL BANK, as Collateral Agent
By
-----------------------------------------------
Name:
Title:
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CRIIMI MAE Inc.
By
--------------------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as Administrative Agent
By [SIGNATURE OF DANIEL J. CONLON APPEARS HERE]
-----------------------------------------------
Name: Daniel J. Conlon
Title: Authorized Signature
CHEMICAL BANK, as Collateral Agent
By
-----------------------------------------------
Name:
Title:
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CRIIMI MAE Inc.
By
--------------------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as Administrative Agent
By
-----------------------------------------------
Name:
Title:
CHEMICAL BANK, as Collateral Agent
By [SIGNATURE OF P. MORABITO APPEARS HERE]
-----------------------------------------------
Name: P. Morabito
Title: Senior Trust Officer
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<PAGE>
EXHIBIT A
to
Security Agreement
[Letterhead of Collateral Agent]
Re: CRIIMI MAE INC.
Chemical Bank, in its capacity as Collateral Agent under the Security
Agreement dated as of February 28, 1994 (the "Security Agreement") among CRIIMI
MAE Inc. ("CRIIMI MAE"), Canadian Imperial Bank of Commerce, New York Agency, as
agent (the "Administrative Agent"), and the undersigned, as Collateral Agent,
hereby certifies that there has been delivered to the undersigned, and the
undersigned now has possession of, Qualified Investments of the type, and in the
amount, set forth in the schedule attached hereto and confirms that such
Qualified Investments are held by us solely for account of the Secured Parties.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Security Agreement. As provided in
Article VII of the Security Agreement, the undersigned further certifies that
with respect to all of the Mortgage-Backed Securities set forth on the schedule
attached hereto, there has been delivered to it and it is in possession of (i)
in the case of certificated Mortgage-Backed Securities, the certificates
evidencing the Mortgage-Backed Securities, in each case either issued in bearer
form or issued in registered form and, in the case of such certificates issued
in registered form, executed assignment forms on Department of the Treasury Form
PD 1832 in favor of the undersigned, as Collateral Agent under the Security
Agreement, (a) duly executed and certified by a Company Officer (as defined in
the Security Agreement) in the case of Mortgage-Backed Securities registered in
the name of CRIIMI MAE, and (b) executed, with signatures guaranteed, by the
registered owners thereof, in the case of Mortgage-Backed Securities registered
in the name of any Person other than CRIIMI MAE, (ii) in the case of Mortgage-
Backed Securities maintained by a Federal Reserve Bank in book-entry form for
the account of a Member Bank or held through the PTC for the account of a
Participant and maintained by such Member Bank or Participant for the account of
CRIIMI MAE or an Intermediary, the original advice confirming the transfer of
such Mortgage-Backed Securities on the records of the Federal Reserve Bank or
PTC (as applicable) to the Collateral Agent, as agent (and the Collateral Agent
has made appropriate entries on its books and records) and (iii) in the case of
Eligible Participations, the Certificates of Participation evidencing such
Eligible Participations, together with assignment forms executed in blank.
The undersigned has examined each of such certificates and there is no
evidence on the face of such certificates or any
<PAGE>
accompanying document or any other written notice received by the undersigned
of the title or interest of any person other than CRIIMI MAE and the
undersigned, as Collateral Agent under the Security Agreement, or of any
security interest or other right or interest inconsistent with a first
security interest of the undersigned pursuant to the Security Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
____ day of _____________, 199_.
CHEMICAL BANK, as Collateral Agent
By
__________________________________
Authorized Signatory
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